_________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
February 28, 1994
WorldCorp, Inc.
(Exact name of registrant as specified in its charter)
Delaware 1-5351 94-3040585
(State or other (Commission (I.R.S. Employer
Jurisdiction of File Numbers) Identification No.)
Incorporation)
13873 Park Center Road
Suite 490
Herndon, Virginia 22071
(Address of principal executive offices)
Registrant's telephone number, including area code:
(703) 834-9200
_________________________________________________________________
<PAGE>
Item 2. Acquisition or Disposition of Assets.
On October 30, 1993, WorldCorp, Inc. ("WorldCorp"), World Airways, Inc.
("World Airways") and Malaysian Helicopter Services Berhad ("MHS") entered
into a Stock Purchase Agreement (the "Stock Purchase Agreement") pursuant to
which MHS, subject to satisfactory completion of its due diligence
investigations, agreed to purchase 24.9% of World Airways' common stock for
$27.4 million in cash. Under this Agreement, World Airways would receive
$12.4 million upon closing (the "Closing"), which it intends to use to fund
its working capital requirements. The remaining $15 million would be paid
to WorldCorp, which it intends to add to its cash reserves. At the time of
the signing of the Stock Purchase Agreement, World Airways was a wholly-
owned subsidiary of WorldCorp.
On February 28, 1994, WorldCorp, World Airways and MHS concluded the
transaction according to the terms described above (the "Closing Date"). As
a result of this transaction, WorldCorp will recognize a gain of
approximately $27.0 million. The MHS investment is governed by the terms
and conditions of: (i) a Registration Rights Agreement dated as of October
30, 1993, between World Airways and MHS (the "Registration Rights
Agreement"); (ii) a Shareholders Agreement dated as of February 3, 1994,
among WorldCorp, World Airways and MHS (the "Original Shareholders
Agreement"), as amended by that certain Amendment No.1 to Shareholders
Agreement dated as of February 28, 1994, among WorldCorp, World Airways and
MHS ("Amendment No. 1") (the Original Shareholders Agreement and Amendment
No. 1 being hereinafter referred to collectively as the "Shareholders
Agreement"); and (iii) a Right of First Refusal Agreement dated as of
February 28, 1994, between US Order, Inc. ("US Order") and Technology
Resources, Inc. Berhad ("TRI") (the "Right of First Refusal Agreement").
MHS recently announced that it will acquire 32% of Malaysian Airline
System Berhad ("MAS"), the flag carrier of Malaysia. MAS is one of World
Airways' largest commercial customers.
According to the terms of the Registration Rights Agreement, if at any
time occurring subsequent to the third anniversary of the date of the
Agreement (i.e., at any time after October 30, 1996), World Airways proposes
to register any of its Common Stock under the Securities Act of 1933, as
amended, World Airways is required to give prompt, written notice to MHS of
its intention to do so, and it is required to include in such registration
any shares that MHS shall so specify, subject to certain exclusions set
forth in the Registration Rights Agreement.
Subject to certain exceptions as hereinafter described, MHS agrees not
to sell or transfer any of its World Airways shares for three (3) years
after the Closing Date.
MHS is permitted to sell or transfer all or a portion of its shares to
a wholly-owned subsidiary.
If without the prior written consent of MHS: (1) World Airways sells
all or substantially all of its business; or (2) World Airways fundamentally
changes its line of business (these events being hereinafter referred to as
"Fundamental Change Events"), then MHS has the option (a) to sell or
transfer all or a portion of its shares to a third party notwithstanding the
aforementioned three-year holding period; and/or (b) to require WorldCorp to
purchase all or part of MHS's shares at fair market value (the "Put
<PAGE>
Rights"). Fair market value must not be less than the aggregate of the
costs borne by MHS in acquiring and holding its World Airways shares.
If without the prior written consent of MHS, WorldCorp disposes of its
holdings in World Airways so that WorldCorp's ownership in World Airways
falls below 51% of the voting capital stock of World Airways (a "Disposal
Event"), then MHS has the option (a) to sell or transfer all or a portion of
its World Airways shares to a third party notwithstanding the three-year
holding period; or (b) to require WorldCorp to sell to the party purchasing
WorldCorp's shares in World Airways as a result of such Disposal Event a
percentage of the total voting capital stock of World Airways held by MHS
that is not less than the percentage by which WorldCorp's ownership falls
below 51% (the "Co-Sale Rights"). By way of example, if WorldCorp sold
voting capital stock of World Airways so that its ownership fell to 45%, MHS
would have the option to require WorldCorp to sell to the party purchasing
the WorldCorp shares in World Airways an amount of the total voting capital
stock of World Airways held by MHS equal to 6% of the total voting capital
stock of World Airways.
In the event World Airways wishes to issue, or WorldCorp wishes to
sell, transfer or otherwise dispose of any or all of its World Airways
Common Stock, and WorldCorp or World Airways has received a bona fide offer
from a third party to purchase any or all of said shares, WorldCorp or World
Airways, as the case may be, shall, before conveying any interest in such
shares, offer such shares to MHS on the same terms.
In addition to MHS's rights of first refusal, MHS has the right to
purchase shares of World Airways in order to maintain its percentage
ownership of World Airways issued and outstanding shares. World Airways is
required to deliver to MHS a written notice (the "Dilution Notice")
indicating the number of shares (the "Additional Shares") that MHS may
acquire in order to maintain its ownership position in connection with any
increase in World Airways issued and outstanding shares. The Dilution
Notice is to set forth the per share price for such Additional Shares which
shall be (i) the same price as the per share price proposed in any Bona Fide
Offer received from a third party, or (ii) in the case of a public offering,
the cash price per share at which World Airways shares are offered in such
offering.
Each party to the Shareholders Agreement is entitled to that number of
Directors that as nearly as possible reflects its proportionate voting
rights in respect of World Airways common stock, and in any event, MHS is
entitled to a minimum of two (2) directors.
Attached to the Shareholders Agreement is a Schedule of so-called
"Reserved Matters." These are matters that cannot be approved without the
consent of the MHS directors. For example, the World Airways Board of
Directors may not, without the concurrence of the MHS Directors, do or
suffer to be done any act or thing whereby World Airways may be wound up
(whether voluntarily or involuntarily), except as otherwise expressly
provided for in the Shareholders Agreement and cannot acquire any securities
or assets, create any guarantees, or incur any debt or other expenditure in
excess of $500,000, unless in the ordinary course of aviation or travel
business.
According to the terms of the Right of First Refusal Agreement, in the
event that US Order wishes to license its Licensed Technology (which term is
defined in the Right of First Refusal Agreement) in Malaysia, and US Order
has received from a third party a bona fide offer to license US Order's
<PAGE>
Licensed Technology in Malaysia, US Order is required, before granting any
such license, to offer to TRI the right of first refusal to license the
Licensed Technology in Malaysia on the same terms as set forth in such bona
fide offer. WorldCorp is a significant shareholder in US Order and TRI is a
significant shareholder in MHS.
The foregoing descriptions do not purport to be complete and are
qualified in their entirety by reference to the Stock Purchase Agreement,
the Registration Rights Agreement, the Shareholders Agreement, and the Right
of First Refusal Agreement, copies of which are filed as Exhibits to this
Current Report on Form 8-K.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits
(a) Financial statements of businesses acquired
Not applicable
(b) Pro Forma financial information
<PAGE>
WORLDCORP, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
(in thousands)
(Unaudited)
(Unaudited) Pro Forma
September 30, Pro Forma September 30,
1993 Adjustments 1993
_____________ ___________ _____________
CURRENT ASSETS
Cash and cash equivalents,
including $1,062
restricted cash at
September 30, 1993 $ 3,263 $ 27,390(a) $ 30,653
Restricted short-term
investments 1,289 1,289
Trade accounts receivable,
less allowance for
doubtful accounts
of $14 at September 30,
1993 3,786 3,786
Other receivables 7,404 7,404
Prepaid expenses and
other current assets 2,859 2,859
_______ _______ _______
Total current assets 18,601 27,390 45,991
_______ _______ _______
ASSETS HELD FOR SALE 8,914 8,914
EQUIPMENT AND PROPERTY
Flight and other
equipment 49,913 49,913
Equipment under capital
leases 13,655 13,655
_______ _______
63,568 63,568
Less accumulated
depreciation and
amortization $ 19,983 $ 19,983
_______ _______
Net equipment and
property $ 43,585 $ 43,585
_______ _______
LONG-TERM OPERATING
DEPOSITS 9,579 9,579
OTHER ASSETS AND
DEFERRED CHARGES 5,540 5,540
<PAGE>
INTANGIBLE ASSETS
Net of accumulated
amortization of $617
at September 30, 1993 6,587 6,587
_______ _______ _______
TOTAL ASSETS $ 92,806 $ 27,390 $ 120,196
======= ======= =======
<PAGE>
LIABILITIES AND COMMON STOCKHOLDERS' DEFICIT
(in thousands except share data)
(Unaudited)
(Unaudited) Pro Forma
September 30, Pro Forma September 30,
1993 Adjustments 1993
_____________ ___________ _____________
CURRENT LIABILITIES
Note payable to bank $ 3,500 $ 3,500
Current maturities of
long-term obligations 7,719 7,719
Accounts payable 15,539 15,539
Unearned revenue 1,203 1,203
Accrued maintenance in
excess of reserves
paid $ 15,501 $ 15,501
Accrued salaries and
wages $ 4,823 $ 4,823
Accrued interest 2,392 2,392
Accrued taxes 1,660 1,660
_______ _______
Total current
liabilities 52,337 52,337
_______ _______
LONG-TERM OBLIGATIONS, NET
Subordinated convertible
debt 65,000 65,000
Subordinated notes, net 24,922 24,922
Equipment financing and
other long-term
obligations 23,528 23,528
_______ _______
Total long-term
obligations, net 113,450 113,450
_______ _______
OTHER LIABILITIES
Deferred gain from sale
leaseback transactions,
net of accumulated
amortization of $29,243
at September 30, 1993 11,474 11,474
Accrued postretirement
benefits 2,359 2,359
Accrued maintenance in
excess of reserves
paid 4,585 4,585
Other $ 2,109 $ 2,109
_______ _______
Total other
liabilities $ 20,527 $ 20,527
_______ _______
TOTAL LIABILITIES 186,314 186,314
_______ _______
<PAGE>
MINORITY INTEREST 389 (b) 389
COMMON STOCKHOLDERS'
DEFICIT
Common stock, $1 par value,
(60,000,000 shares
authorized, 14,699,558
shares issued and
14,636,973 shares
outstanding at
September 30, 1993) 14,699 14,699
Additional paid-in
capital 31,112 31,112
Retained deficit (136,975) 27,001 (c) (109,974)
ESOP guaranteed bank
loan (2,004) (2,004)
Treasury stock, at cost (340) (340)
_______ _______ _______
Total common stock-
holders' deficit (93,508) 27,001 (66,507)
_______ _______ _______
COMMITMENTS AND
CONTINGENCIES
TOTAL LIABILITIES AND
STOCKHOLDERS' DEFICIT $ 92,806 $ 27,390 $ 120,196
======= ======= =======
<PAGE>
WORLDCORP, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except share data)
(Unaudited)
Pro Forma
For the twelve For the twelve
months ended months ended
December 31, Pro Forma December 31,
1992 Adjustments 1992
_____________ ___________ ______________
OPERATING REVENUES
Contract flight
operations $ 183,705 $ 183,705
Flight operations
subcontracted to
other carriers 11,499 11,499
Other 5,170 5,170
Transaction processing
-US Order 36 36
_______ _______
Total operating
revenues 200,410 200,410
_______ _______
OPERATING EXPENSES
Flight 52,302 52,302
Maintenance 34,458 34,458
Aircraft costs 35,135 35,135
Fuel 37,811 37,811
Flight operations
subcontracted to
other carriers 11,612 11,612
Depreciation and
amortization 5,872 5,872
Selling and
administrative 18,725 18,725
Transaction process-
ing-US Order 3,893 3,893
Loss from operation
of Key Airlines 6,041 6,041
Loss from sale of
Key Airlines $ 31,416 $ 31,416
_______ _______
Total operating
expenses $ 237,265 $ 237,265
_______ _______
OPERATING LOSS (36,855) (36,855)
_______ _______
<PAGE>
OTHER INCOME (EXPENSE)
Interest expense (11,243) (11,243)
Interest income 3,996 3,996
Gain on sale of
World Airways, Inc. -- 27,001 (c) 27,001
Gain on investments, net 126 126
Other, net (716) (716)
_______ _______ _______
Total other income
(expense) (7,837) 27,001 19,164
_______ _______ _______
LOSS BEFORE INCOME TAXES
AND MINORITY INTEREST (44,692) (17,691)
PROVISION FOR INCOME
TAXES (28) (28)
MINORITY INTEREST 1,829 (1,605) (d) 224
_______ _______ _______
LOSS BEFORE EXTRAORDINARY
ITEM AND CHANGE IN
ACCOUNTING PRINCIPLE $(42,891) $ 25,396 $ (17,495)
======= ======= =======
LOSS BEFORE EXTRAORDINARY
ITEM AND CHANGE IN
ACCOUNTING PRINCIPLE
PER COMMON SHARE
Primary:
Loss before extraordinary
item and change in
accounting principle $ (3.02) $ 1.79 $ (1.23)
======= ======= =======
Fully diluted:
Loss before extraordinary
item and change in
accounting principle $ * $ * $ *
======= ======= =======
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING
Primary 14,175,065 14,175,065
========== ==========
Fully diluted 14,175,065 14,175,065
========== ==========
* Fully diluted earnings per share are anti-dilutive
<PAGE>
WORLDCORP, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except share data)
(Unaudited)
Pro Forma
For the nine For the nine
months ended months ended
September 30, Pro Forma September 30,
1993 Adjustments 1993
_____________ ___________ ______________
OPERATING REVENUES
Contract flight
operations $ 155,730 $ 155,730
Flight operations
subcontracted to
other carriers 1,221 1,221
Other 1,173 1,173
Transaction process-
ing-US Order 742 742
_______ _______
Total operating
revenues 158,866 158,866
_______ _______
OPERATING EXPENSES
Flight 49,432 49,432
Maintenance 23,505 23,505
Aircraft costs 37,988 37,988
Fuel 33,138 33,138
Flight operations
subcontracted to
other carriers 1,308 1,308
Depreciation and
amortization 5,229 5,229
Selling and
administrative 14,638 14,638
Transaction process-
ing-US Order 7,227 7,227
Loss from operation
of Key Airlines $ 837 $ 837
Loss from sale of
Key Airlines -- --
_______ _______
Total operating
expenses $ 173,302 $ 173,302
_______ _______
OPERATING LOSS (14,436) (14,436)
_______ _______
OTHER INCOME (EXPENSE)
Interest expense (7,975) (7,975)
Interest income 609 609
Other, net (365) (365)
_______ _______
Total other income (7,731) (7,731)
_______ _______
<PAGE>
INCOME (LOSS) BEFORE
INCOME TAXES AND
MINORITY INTEREST (22,167) (22,167)
PROVISION FOR INCOME
TAXES (7) (7)
MINORITY INTEREST 2,368 1,376 (e) 3,744
======= ======= =======
NET LOSS $ (19,806) $ 1,376 $ (18,430)
======== ======= =======
NET LOSS PER
COMMON SHARE
Primary:
Net loss $ (1.37) $ 0.09 $ (1.28)
======= ======= =======
Fully diluted
Net loss $ (1.37) $ 0.09 $ (1.28)
======= ======= =======
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING
Primary 14,424,192 14,424,192
========== ==========
Fully diluted 14,424,192 14,424,192
========== ==========
<PAGE>
WORLDCORP, INC.
SUMMARY
The pro forma condensed consolidated balance sheets reflect the adjustments
necessary to record the sale of a 24.9% interest in World Airways, Inc., as
if the sale had occurred as of September 30, 1993.
The pro forma condensed consolidated income statements reflect the
adjustments necessary to reflect the sale of a 24.9% interest in World
Airways, Inc., as if the sale had occurred as of January 1, 1992. The
estimated gain on sale has been calculated based on the estimated amount of
WorldCorp's investment in World Airways, Inc. as of February 28, 1994, the
date of sale. No pro forma adjustments have been made for possible interest
cost savings from the proceeds received at the time of the sale.
DESCRIPTION OF PRO FORMA ADJUSTMENTS
(a) Record cash received from Malaysian Helicopter Services
Berhad ("MHS") for the sale of 24.9% interest in World
Airways, Inc. $15 million of this amount is received by
WorldCorp in exchange for 1,363,636 of its shares in World
Airways, Inc., and $12.4 million is received by World
Airways, Inc. from the sale of 1,126,364 shares of its
common stock to MHS.
(b) Establish 24.9% minority interest in World Airways, Inc.
(c) Estimated gain on sale of 24.9% interest in World Airways,
Inc.
(d) Portion of World Airways, Inc. 1992 net income which is
allocated to the minority interest.
(e) Portion of World Airways, Inc. net loss for the nine months
ended September 30, 1993 which is allocated to the minority
interest.
<PAGE>
(c) Exhibits
10.1 Stock Purchase Agreement by and among World Airways, Inc.,
WorldCorp, Inc., and Malaysian Helicopter Services Berhad dated as
of October 30, 1993.
10.2 Stock Registration Rights Agreement between World Airways, Inc.,
and Malaysian Helicopter Services Berhad dated as of October 30,
1993.
10.3 Shareholders Agreement between Malaysian Helicopter Services
Berhad and WorldCorp, Inc. and World Airways, Inc., dated as of
February 3, 1994.
10.4 Amendment No. 1 to Shareholders Agreement dated as of February 28,
1994, among WorldCorp, World Airways and MHS.
10.5 Right of First Refusal Agreement dated as of February 28, 1994,
between US Order, Inc. ("US Order") and Technology Resources, Inc.
Berhad ("TRI").
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WORLDCORP, INC.
By: /s/ Andrew M. Paalborg
Vice President and General Counsel
March 14, 1994
<PAGE>
INDEX TO EXHIBITS
Exhibit No.
10.1 Stock Purchase Agreement by and among World Airways, Inc., WorldCorp,
Inc., and Malaysian Helicopter Services Berhad dated as of October 30,
1993.
10.2 Stock Registration Rights Agreement between World Airways, Inc., and
Malaysian Helicopter Services Berhad dated as of October 30, 1993.
10.3 Shareholders Agreement between Malaysian Helicopter Services Berhad and
WorldCorp, Inc. and World Airways, Inc., dated as of February 3, 1994.
10.4 Amendment No. 1 to Shareholders Agreement dated as of February 28,
1994, among WorldCorp, World Airways and MHS.
10.5 Right of First Refusal Agreement dated as of February 28, 1994, between
US Order, Inc. ("US Order") and Technology Resources, Inc. Berhad
("TRI").
STOCK PURCHASE AGREEMENT
BY AND AMONG
WORLD AIRWAYS, INC.,
(the "Company"),
WORLDCORP, INC.,
(the "Shareholder"),
AND
MALAYSIAN HELICOPTER SERVICES BERHAD,
(the "Buyer")
Dated as of October 30, 1993
<PAGE>
CONTENTS
ARTICLE I
PURCHASE AND SALE OF SHARES
Page
1.01 Purchase and Sale of Shares. . . . . . . . . . . . . . . . . .
1.02 Payment of Purchase Price for Shares . . . . . . . . . . . . .
1.03 Deposit. . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.04 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE II
REPRESENTATIONS AND WARRANTIES BY THE COMPANY AND THE SHAREHOLDER
2.01 Title to Shares; Other Rights. . . . . . . . . . . . . . . . .
2.02 Organization . . . . . . . . . . . . . . . . . . . . . . . . .
2.03 Authorization. . . . . . . . . . . . . . . . . . . . . . . . .
2.04 Capitalization . . . . . . . . . . . . . . . . . . . . . . . .
2.05 No Conflict. . . . . . . . . . . . . . . . . . . . . . . . . .
2.06 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . .
2.07 Financial Statements; Absence of Undisclosed Liabilities . . .
2.08 Absence of Changes . . . . . . . . . . . . . . . . . . . . . .
2.09 Tax Matters. . . . . . . . . . . . . . . . . . . . . . . . . .
2.10 Litigation and Orders. . . . . . . . . . . . . . . . . . . . .
2.11 Approvals; Compliance with Regulations and Orders. . . . . . .
2.12 Title to Properties; Encumbrances. . . . . . . . . . . . . . .
2.13 Environmental. . . . . . . . . . . . . . . . . . . . . . . . .
2.14 Officers and Directors . . . . . . . . . . . . . . . . . . . .
2.15 Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . .
2.16 Interested Transactions. . . . . . . . . . . . . . . . . . . .
2.17 Statements True and Correct. . . . . . . . . . . . . . . . . .
ARTICLE III
REPRESENTATIONS AND WARRANTIES BY THE PURCHASER
3.01 Organization . . . . . . . . . . . . . . . . . . . . . . . . .
3.02 Authorization. . . . . . . . . . . . . . . . . . . . . . . . .
3.03 No Conflict. . . . . . . . . . . . . . . . . . . . . . . . . .
3.04 Resale of Shares . . . . . . . . . . . . . . . . . . . . . . .
3.05 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.06 Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . .
3.07 Statements True and Correct. . . . . . . . . . . . . . . . . .
ARTICLE IV
SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND INDEMNIFICATION
4.01 Survival of Representations, Warranties and Covenants. . . . .
4.02 Indemnity for Breach of Representations of Warranties. . . . .
4.03 Notice of Loss or Asserted Liability . . . . . . . . . . . . .
4.04 Opportunity to Contest . . . . . . . . . . . . . . . . . . . .
4.05 Limitation on Indemnification. . . . . . . . . . . . . . . . .
4.06 Subrogation Rights . . . . . . . . . . . . . . . . . . . . . .
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER
<PAGE>
5.01 Due Diligence. . . . . . . . . . . . . . . . . . . . . . . . .
5.02 Shareholders' Agreement. . . . . . . . . . . . . . . . . . . .
5.03 Right of First Refusal . . . . . . . . . . . . . . . . . . . .
5.04 Representations True and Covenants Performed at Closing. . . .
5.05 Schedules and Exhibits Completed . . . . . . . . . . . . . . .
5.06 No Injunction, Etc.. . . . . . . . . . . . . . . . . . . . . .
5.07 Incumbency Certificate . . . . . . . . . . . . . . . . . . . .
5.08 Board Membership . . . . . . . . . . . . . . . . . . . . . . .
5.09 Governmental and Shareholder Approvals . . . . . . . . . . . .
5.10 Good Standing Certificates . . . . . . . . . . . . . . . . . .
5.11 Resolutions. . . . . . . . . . . . . . . . . . . . . . . . . .
5.12 Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . .
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SHAREHOLDER AND THE COMPANY
6.01 Representations True and Covenants Performed at Closing. . . .
6.02 No Injunction, Etc.. . . . . . . . . . . . . . . . . . . . . .
6.03 Governmental Approvals . . . . . . . . . . . . . . . . . . . .
6.04 Resolutions. . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE VII
ADDITIONAL AGREEMENTS
7.01 Exclusivity. . . . . . . . . . . . . . . . . . . . . . . . . .
7.02 Right to Purchase Additional Shares. . . . . . . . . . . . . .
7.03 Access . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.04 Consents and Approvals . . . . . . . . . . . . . . . . . . . .
7.05 Public Announcements . . . . . . . . . . . . . . . . . . . . .
7.06 Closing Conditions . . . . . . . . . . . . . . . . . . . . . .
7.07 Supplements to Schedules . . . . . . . . . . . . . . . . . . .
7.08 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE VIII
REGISTRATION RIGHTS
8.01 Registration Rights Agreement. . . . . . . . . . . . . . . . .
ARTICLE IX
TERMINATION
9.01 Method of Termination. . . . . . . . . . . . . . . . . . . . .
ARTICLE X
CONFIDENTIALITY
10.01 Confidentiality . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE XI
DEFINITIONS
11.01 "Affiliate" . . . . . . . . . . . . . . . . . . . . . . . . .
11.02 "Agreement" . . . . . . . . . . . . . . . . . . . . . . . . .
11.03 "Business". . . . . . . . . . . . . . . . . . . . . . . . . .
11.04 "Closing" . . . . . . . . . . . . . . . . . . . . . . . . . .
11.05 "Closing Date". . . . . . . . . . . . . . . . . . . . . . . .
11.06 "Code". . . . . . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
11.07 "Common Stock". . . . . . . . . . . . . . . . . . . . . . . .
11.08 "Company Shares". . . . . . . . . . . . . . . . . . . . . . .
11.09 "Contract". . . . . . . . . . . . . . . . . . . . . . . . . .
11.10 "Default" . . . . . . . . . . . . . . . . . . . . . . . . . .
11.11 "Employee Benefit Plan" . . . . . . . . . . . . . . . . . . .
11.12 "Environmental Claim" . . . . . . . . . . . . . . . . . . . .
11.13 "Environmental Laws". . . . . . . . . . . . . . . . . . . . .
11.14 "ERISA" . . . . . . . . . . . . . . . . . . . . . . . . . . .
11.15 "Financial Statements". . . . . . . . . . . . . . . . . . . .
11.16 "GAAP". . . . . . . . . . . . . . . . . . . . . . . . . . . .
11.17 "Governmental Authority". . . . . . . . . . . . . . . . . . .
11.18 "Hazardous Substance" . . . . . . . . . . . . . . . . . . . .
11.19 "IRS" . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11.20 "Knowledge of the Shareholder" or "
Knowledge of the Company". . . . . . . . . . . . . . . . . .
11.21 "Leased Personal Property". . . . . . . . . . . . . . . . . .
11.22 "Leased Real Property". . . . . . . . . . . . . . . . . . . .
11.23 "Liability" . . . . . . . . . . . . . . . . . . . . . . . . .
11.24 "License" . . . . . . . . . . . . . . . . . . . . . . . . . .
11.25 "Lien". . . . . . . . . . . . . . . . . . . . . . . . . . . .
11.26 "Litigation". . . . . . . . . . . . . . . . . . . . . . . . .
11.27 "Loss". . . . . . . . . . . . . . . . . . . . . . . . . . . .
11.28 "Material Adverse Change" or "Material Adverse Effect". . . .
11.29 "Order" . . . . . . . . . . . . . . . . . . . . . . . . . . .
11.30 "Permitted Liens" . . . . . . . . . . . . . . . . . . . . . .
11.31 "Person". . . . . . . . . . . . . . . . . . . . . . . . . . .
11.32 "Personal Property" . . . . . . . . . . . . . . . . . . . . .
11.33 "Purchase Price". . . . . . . . . . . . . . . . . . . . . . .
11.34 "Real Property" . . . . . . . . . . . . . . . . . . . . . . .
11.35 "Registration Rights Agreement" . . . . . . . . . . . . . . .
11.36 "Regulation . . . . . . . . . . . . . . . . . . . . . . . . .
11.37 "Related Person". . . . . . . . . . . . . . . . . . . . . . .
11.38 "Schedules" . . . . . . . . . . . . . . . . . . . . . . . . .
11.39 "Shareholder Shares". . . . . . . . . . . . . . . . . . . . .
11.40 "Shares". . . . . . . . . . . . . . . . . . . . . . . . . . .
11.41 "Subsidiary". . . . . . . . . . . . . . . . . . . . . . . . .
11.42 "Taxes" . . . . . . . . . . . . . . . . . . . . . . . . . . .
11.43 "Tax Returns" . . . . . . . . . . . . . . . . . . . . . . . .
11.44 "Third Parties" . . . . . . . . . . . . . . . . . . . . . . .
11.45 "Undisclosed Liabilities" . . . . . . . . . . . . . . . . . .
ARTICLE XII
MISCELLANEOUS
12.01 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . .
12.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . .
12.03 Further Assurances. . . . . . . . . . . . . . . . . . . . . .
12.04 Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . .
12.05 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . .
12.06 Binding Effect. . . . . . . . . . . . . . . . . . . . . . . .
12.07 Remedies Not Exclusive. . . . . . . . . . . . . . . . . . . .
12.08 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . .
12.09 Severability. . . . . . . . . . . . . . . . . . . . . . . . .
12.10 Governing Law; Consent to Jurisdiction. . . . . . . . . . . .
12.11 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . .
12.12 Time of Essence . . . . . . . . . . . . . . . . . . . . . . .
12.13 Amendments. . . . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
INDEX OF SCHEDULES
Schedule 2.02 - Foreign Qualification
Schedule 2.05 - Conflicts
Schedule 2.07 - Financial Statements
Schedule 2.09 - Taxes
Schedule 2.10 - Litigation
Schedule 2.11(a) - Consents
Schedule 2.12 - Title to Properties; Liens
Schedule 2.13 - Environmental
Schedule 2.14 - Officers and Directors
Schedule 2.15(a) - Material Contracts
Schedule 2.15(b) - Defaults
Schedule 2.15(c) - Assurances
Schedule 2.16 - Interested Transactions
Schedule 3.03 - Purchaser: No Conflict
Schedule 3.05 - Purchaser: Consents
Schedule 3.06 - Purchaser: Balance Sheet
<PAGE>
INDEX OF EXHIBITS
Exhibit 5.10 Form of Opinion of Andrew M.
Paalborg, Vice President
and General Counsel to the
Shareholder and the Company
Exhibit 8.01 Form of Registration Rights
Agreement
<PAGE>
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") dated as of the
30th, day of October, 1993, is made and entered into by and among WORLD
AIRWAYS, INC., a Delaware corporation (the "Company"), WORLDCORP, INC., a
Delaware corporation (the "Shareholder"), and MALAYSIAN HELICOPTER SERVICES
BERHAD, a Malaysian corporation (the "Purchaser"). This Agreement sets
forth the terms and conditions on which the Purchaser will purchase from the
Shareholder and the Company 24.9% of the issued and outstanding shares of
capital stock of the Company in consideration for the Purchase Price (as
such term is herein defined). Certain capitalized terms used in this
Agreement are defined in Articles XI hereof. All amounts referenced in this
Agreement are in United States Dollars.
In consideration of the foregoing, the mutual agreements, covenants,
representations and warranties contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
and subject to the terms and conditions hereinafter set forth, the parties
hereto hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF SHARES
1.01 Purchase and Sale of Shares. Subject to the terms and
conditions hereinafter set forth, at the Closing, the Shareholder and the
Company shall sell, assign, transfer and deliver to the Purchaser, and the
Purchaser shall purchase and acquire from the Shareholder and the Company,
24.9% of the issued and outstanding Shares of the Company. At the Closing,
the Shareholder and the Company shall deliver to the Purchaser
certificate(s) representing 24.9% of the issued and outstanding Shares of
the Company, together with the accompanying stock powers or instruments of
assignment, duly endorsed in blank for the transfer of such Shares to the
Purchaser with signatures guaranteed and with all necessary transfer taxes
paid or other revenue stamps affixed thereto.
1.02 Payment of Purchase Price for Shares. Subject to the terms
and conditions of this Agreement, the Purchaser shall pay to the Shareholder
and the Company as the total Purchase Price for all of the Shares, the sum
of Twenty Seven Million Three Hundred Ninety Thousand Dollars and No Cents
(US$27,390,000) which amount shall be payable as follows:
(a) Shareholder Shares. The Purchaser shall pay to the
Shareholder at Closing the sum of Fifteen Million Dollars and No Cents
($15,000,000) minus the Deposit (as such term is defined in Section 1.03
hereof) for the 1,363,636.363 shares of the Common Stock, par value $.001
per share (the "Common Stock") of the Company, owned by Shareholder (the
"Shareholder Shares").
(b) Company Shares. The Purchaser shall pay to the
Company at Closing the sum of Twelve Million Three Hundred Ninety Thousand
Dollars and No Cents ($12,390,000) for the 1,126,363.637 shares of Common
Stock of the Company to be issued by the Company to the Purchaser (the
"Company Shares").
1.03 Deposit.
<PAGE>
As security for the Purchaser's obligations hereunder and to confirm
the Purchaser's good faith intent to consummate the transactions
contemplated hereby, the Purchaser agrees to pay to the Shareholder upon the
signing of this Agreement a deposit (the "Deposit") in the amount of Two
Million Seven Hundred Thirty Nine Thousand ($2,739,000). The Deposit shall
be repaid immediately to the Purchaser, with accrued interest: (i) if there
is any material inaccuracy in any representation or warranty or any material
breach of any material covenant or agreement made or to be performed by the
Company or the Shareholder in connection with this Agreement; or (ii) if, in
the opinion of Malaysian counsel reasonably acceptable to the Purchaser, the
Company and the Shareholder, the Agreement and the transactions contemplated
hereby may not be consummated under Malaysian law or regulation; otherwise
the Deposit shall be non-refundable. The Deposit shall be wire transferred
to the Shareholder's Account No.86712072, at American Security Bank,
Washington, D.C., ABA No. 054000551, for credit to the account of: Account
of WorldCorp, Inc. not later than close of business Kuala Lumpur local time,
November 2, 1993.
1.04 Closing. Subject to the terms and conditions hereof, the
Closing shall take place at 10:00 a.m. on a date (the "Closing Date") that
is mutually agreeable to the parties, but not later than February 28, 1994.
The closing shall take place in the offices of Malaysian Helicopter Services
Berhad, Petaling Jaya, West Malaysia. The parties agree that time is of the
essence with respect to all of their obligations under this Agreement.
Accordingly, the parties agree to use of their best efforts to fulfill each
term and condition hereof and to work cooperatively and diligently to
facilitate the Closing by the Closing Date.
ARTICLE II
REPRESENTATIONS AND WARRANTIES BY THE COMPANY AND THE
SHAREHOLDER
The Company and the Shareholder, jointly and severally, hereby
represent and warrant to the Purchaser as follows:
2.01 Title to Shares; Other Rights.
(a) On the date herof, the Company is authorized to
issue 1,000 shares of Common Stock, par value $1.00 per share, of which 100
shares are issued and oustanding. On the date hereof, the Shareholder is
the owner of all right, title and interest (beneficial and of record) in and
to the 100 shares of the common stock (the "Original Shares"), free and
clear of all Liens. Except as specifically contemplated by this Agreement,
no Person has any Contract or any right (whether pre-emptive or contractual)
for the purchase of any of the Original Shares, or any Contract or option or
any right (whether pre-emptive or contractual) for the purchase,
subscription or issuance of any unissued shares of common stock or other
securities of the Company. No shares of common stock are reserved for
issuance.
(b) On or before the Closing, the Company will amend
its Certificate of Incorporation to be authorized to issue 20,000,000 shares
of Common Stock, par value $.001 per share (the "Common Stock"), of which
10,000,000 shall be issued and outstanding to the Shareholder and the
Purchaser at Closing.
<PAGE>
(c) At the Closing, the Shareholder shall sell to the
Purchaser 1,363,636.363 shares of its 8,873,636.363 shares of Common Stock
of the Company, par value $.001 per share (the "Shareholder Shares"), and
the Company will newly issue 1,126,363.636 shares of Common Stock of the
Company, par value $.001 per share, directly to the Purchaser (the "Company
Shares"). For purposes of this Agreement, the Shareholder Shares and the
Company Shares are hereinafter referred to collectively as the "Shares".
2.02 Organization. Each of the Company and the Shareholder is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and each has full corporate power and
authority to own, lease and operate its assets and to carry on its business.
The Company is duly qualified and licensed to do business as a foreign
corporation and is in good standing in each of the jurisdictions set forth
in Schedule 2.02, which are all the jurisdictions in which such
qualification is required except jurisdictions, individually or in the
aggregate, in which the Company's failure to so qualify to do business will
have no Material Adverse Effect. The Shareholder agrees to deliver to the
Purchaser complete and correct copies of (i) the Certificate of
Incorporation of the Company, and all amendments thereto, and the By-Laws of
the Company, and all amendments thereto, and (ii) records of the proceedings
of incorporators, stockholders and directors (and all committees thereof) of
the Company set forth in the Company's minute books. The Company shall also
deliver to the Purchaser before the Closing Date, a certified copy of the
amendment to the Company's Certificate of Incorporation, authorizing the
Company to issue the 20,000,000 shares of Common Stock of the Company, par
value $.001 per share.
2.03 Authorization. Each of the Company and the Shareholder has
the full corporate power and authority necessary to enter into and perform
its obligations under this Agreement and to consummate the transactions
contemplated hereby. The Boards of Directors of the Company and the
Shareholder have approved this Agreement and the transactions contemplated
hereby, and no other corporate or shareholder proceedings on the part of the
Company or the Shareholder are necessary to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by duly authorized officers of each of the Company and the
Shareholder, and constitutes a legal, valid and binding obligation of the
Company and the Shareholder, as the case may be, enforceable against each in
accordance with their respective terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditor's rights and except that the availability of
the equitable remedy of specific performance or injunctive relief is subject
to the discretion of the court before which any proceeding is brought.
2.04 Capitalization.
(a) The authorized capital stock of the Company on the
date hereof consists of 1,000 shares, par value $1.00 per share, of which
100 shares are issued and outstanding to the Shareholder. All of the issued
and outstanding shares are duly and validly issued and outstanding, are
fully paid and nonassessable and were issued pursuant to a valid exemption
from registration under the Securities Act of 1933, as amended (the "Act"),
and all applicable state securities laws. Except as contemplated in Article
VIII hereof, there are no outstanding rights to either demand registration
of any Shares under the Securities Act of 1933, as amended, or to sell any
shares in connection with such a registration of Common Stock.
<PAGE>
(b) As previously described in Section 2.01 hereof, the
Shareholder and the Company hereby agree to amend the Certificate of
Incorporation of the Company so that, at Closing, the Company will be
authorized to issue Twenty Million (20,000,000) shares of Common Stock of
the Company, par value $.001 per share. 8,873,636.363 shares of the newly-
authorized Common Stock shall be issued to the Shareholder in replacement of
the old shares held by the Shareholder. At the Closing, the Shareholder
shall sell 1,363,636.363 of its new shares of Common Stock (previously
defined in Section 2.01(c) as the "Shareholder Shares") to the Purchaser and
the Company shall sell 1,126,363.636 shares of the newly-authorized Common
Stock (previously defined in Section 2.01(c) as the "Company Shares")
directly to the Purchaser. On the Closing Date, the Shareholder Shares and
the Company Shares will constitute all of the issued and outstanding Shares
of the Company. The Shares at Closing shall be duly and validly issued and
outstanding, and shall be fully paid and nonassessable and issued pursuant
to a valid exemption from registration under the Act and all applicable
state securities laws. Except as contemplated in Article VIII hereof, there
shall be no outstanding rights to either demand registration of any Shares
under the Act or to sell any Shares in connection with such a registration
of Common Stock.
2.05 No Conflict. Except as stated in Schedule 2.05 and Schedule
2.11, neither the execution, delivery and performance of this Agreement by
the Company or the Shareholder, as the case may be, nor the consummation by
the Company or the Shareholder of the transactions contemplated hereby or
thereby will (i) conflict with or result in a violation, contravention or
breach of any of the terms, conditions or provisions of the Certificate of
Incorporation, as amended, or By-Laws, as amended, of the Company or the
Shareholder, (ii) result in a Default under or require the consent or
approval of any party to any material Contract of the Shareholder or the
Company other than such consents or approvals as which have been obtained,
(iii) result in the violation of any Regulation or Order the violation of
which would have a Material Adverse Effect, or (iv) result in the creation
or imposition of any Lien upon any asset of the Company or the Shares.
2.06 Subsidiaries. The Company has not in the past had, and does
not currently have, any Subsidiaries other than World Airways Cargo, Inc., a
Delaware corporation.
2.07 Financial Statements; Absence of Undisclosed Liabilities.
The Financial Statements, correct and complete copies of which are included
in Schedule 2.07 (i) are in accordance with the books and records of the
Company, which have been maintained in accordance with good business
practices; (ii) present fairly the financial condition of the Company as of
the dates and for the periods indicated in accordance with GAAP; (iii) have
been prepared in accordance with GAAP; and (iv) reflect adequate reserves
for all known material Liabilities and reasonably anticipated Losses in
accordance with GAAP. The Financial Statements contain all adjustments,
which are solely of a normal recurring nature, necessary to present fairly
the financial condition and the results of operations, changes in
shareholders' equity and changes in financial position or cash flows of the
Company in accordance with GAAP.
2.08 Absence of Changes. There shall not have occurred any
Material Adverse Change in the business of the Company between the date
hereof and the Closing Date.
<PAGE>
2.09 Tax Matters.
(a) The Company has (or the Shareholder on behalf of
the Company has) either (i) timely filed with the appropriate Governmental
Authorities or (ii) obtained valid extensions of time for filing (which
extensions have not expired) from the appropriate Governmental Authorities,
all Tax Returns (including any consolidated or combined Tax Return in which
the Company joins) required to be filed on or prior to the date hereof by
the Company in all jurisdictions in which such Tax Returns are required to
be filed, and, to the knowledge of the Shareholder and the Company, such Tax
Returns are correct and complete and properly reflect the Liabilities for
Taxes of the Company (or any other Person joining in a Tax Return of the
Company ) for the periods, property or events covered thereby. All Taxes
and deposits for Taxes attributable to the Company (or any other Person
joining in a Tax Return of the Company) required to be paid or deposited
prior to the Closing Date with respect to any period ending on or before the
Closing Date have been paid and appropriate deposits made therefor and to
the extent required to be paid or deposited on or after the Closing Date
will be fully paid, in each instance to the extent not accrued or reserved
for in the September 30, 1993 Balance Sheet (excluding deferred Taxes). No
basis exists for any additional assessment of any Taxes.
(b) The reserves for Taxes (except for deferred Taxes)
in the September 30, 1993 Balance Sheet are sufficient for the payment of
all unpaid Liabilities for Taxes of the Company (whether or not disputed)
for all activities which occurred and all assets owned during the periods
ended on or before the September 30, 1993 Balance Sheet Date. Since the
September 30, 1993 Balance Sheet Date, the Company has not incurred any
Liability for Taxes other than in the ordinary course of business consistent
with past practice. Except as disclosed on Schedule 2.09, the Company has
not been delinquent in the payment of any Tax, assessment, deposit or other
charge by any Governmental Authority and no Liability is pending or has been
assessed, asserted or threatened against the Company or any of its assets in
connection with any Tax and there is no basis for any such claim or
Liability. Except as disclosed on Schedule 2.09, the Company has not
received any notice of assessment or proposed assessment in connection with
any Tax Returns that have not been previously resolved and paid in full and
to the Knowledge of the Shareholder or the Company there are no pending Tax
examinations of or Tax claims asserted against the Company or any of its
assets, including without limitation, any claim by any Governmental
Authority in any jurisdiction where the Company did not file Tax Returns
that the Company is or may be subject to or liable for Taxes imposed by that
Governmental Authority or jurisdiction. There are no Liens except for
Permitted Liens for any Taxes on any of the assets of the Company.
(c) The United States federal income tax returns of the
Company (including consolidated federal income tax returns of which the
Company is a member) are closed by statute for all periods through December
31, 1989. Except as identified on Schedule 2.09, there are no currently
pending examinations or audits and there is not now in force any extension
of time with respect to the date on which any Tax Return was or is due to be
filed by or with respect to the Company or any other Person joining in a Tax
Return of the Company or either of their assets, or any extension (by
waiver, agreement or otherwise) of time for the assessment or collection of
any Tax. Except as disclosed on Schedule 2.09, there is no claim or
assessment pending or, to the Shareholder's or the Company's Knowledge,
threatened against the Company or any of its Affiliates with which it files
<PAGE>
a consolidated or combined income tax return ("Tax Affiliates") for any
alleged deficiency in Taxes, and neither the Shareholder nor the Company
knows of any audit or investigation with respect to any Liability of the
Company or any of its Tax Affiliates. Except as disclosed on Schedule 2.09,
neither the Company nor any other Person joining in a Tax Return of the
Company has (a) granted any extension of the limitation period applicable to
any Tax claims or (b) filed any consent under Section 341(f) of the Code,
relating to collapsible corporations. No Tax is required to be withheld
pursuant to Section 1445 of the Code as a result of any of the transfers
contemplated by this Agreement and the Company will provide any certificate
requested by the Purchaser at Closing with respect thereto. There is no
Contract or intercompany account system in existence under which the Company
has, or may at any time in the future have an obligation to contribute to
the payment of any portion of a Tax determined on a consolidated, combined
or unitary basis with respect to a group of corporations of which the
company is or was a part.
2.10 Litigation and Orders. Except as disclosed on Schedule
2.10, there are no outstanding Orders applicable to or binding upon the
Company, its assets, or the Shareholder, with respect to the Shares, and,
except as disclosed on Schedule 2.10, there is no Litigation pending, or, to
the Knowledge of the Shareholder or the Company, threatened or contemplated,
and to the Knowledge of the Shareholder or the Company, there is no basis
for any such Litigation or any state of facts or occurrence of any event
which is reasonably likely to give rise to the foregoing. Except as
disclosed on Schedule 2.10, the Company has not been advised by any attorney
representing it that there are any "loss contingencies" (as defined in
Statement of Financing Accounting Standards No. 5 issued by the Financial
Accounting Standards Board in March 1975 ("FASB 5")), which would be
required by FASB 5 to be disclosed or accrued in financial statements of the
Company, were such financial statements prepared as of the date hereof and
which have not been so accrued or disclosed in the Financial Statements.
2.11 Approvals; Compliance with Regulations and Orders.
(a) Except as set forth in Schedule 2.11(a), no
consent, approval or authorization of, prior filing, registration,
declaration with or notice to, or other action by, any U.S. Governmental
Authority, including without limitation, the U.S. Department of
Transportation, the Federal Aviation Administration or the Department of
Justice is required to be obtained by the Company or the Shareholder in
connection with the authorization, execution, delivery and performance by
the Shareholder or the Company of this Agreement or the consummation of the
transactions contemplated herein or therein, which if not obtained would
result in a material Liability to the Company or the Purchaser.
(b) Since January 1, 1990, neither the Company nor any
officer, director, shareholder, or, to the knowledge of the Shareholder or
the Company, any agent or other representative of the Company acting or
purporting to act on behalf of the Company or, to the knowledge of the
Shareholder or the Company, any business enterprise with which the Company
has been associated or affiliated, has, directly or indirectly, made or
authorized any payment, contribution or gift of money, property, or
services, in violation of the Foreign Corrupt Trade Practices Act (i) as a
kickback or bribe to any Person or (ii) to any political organization or the
holder of, or any aspirant to, any elective or appointive office of any
<PAGE>
nation, state, political subdivision thereof, or other Governmental
Authority.
(c) Notwithstanding the foregoing, no representation is
made in this Section 2.11 with respect to the matters addressed in Sections
2.09 and 2.13.
2.12 Title to Properties; Encumbrances. Except as disclosed on
Schedule 2.12, the Company has good, valid and marketable title to all of
its assets, other than Leased Personal Property and Leased Real Property,
free and clear of any and all Liens except Permitted Liens, and the Company
has, and after the Closing shall have, the exclusive right to use all of its
Leased Personal Property and Leased Real Property pursuant to the terms of
the applicable Contracts. A list of all documents evidencing the Liens
(other than Permitted Liens) upon the assets of the Company that are
disclosed on Schedule 2.12 are included in Schedule 2.12. The assets of the
Company (including without limitation, the Leased Personal Property and the
Leased Real Property) are all the assets required to operate the Business as
it is currently operated, other than assets owned or used by the Shareholder
in providing certain administrative and financial services to the Company.
2.13 Environmental. To the knowledge of the Shareholder or the
Company, except as set forth in Schedule 2.13, (a) there are no
Environmental Claims (or any Litigation against any Person whose Liability,
or any portion thereof, for violation of or liability under Environmental
Laws the Company has retained or assumed contractually or by operation of
Law) pending or, to the knowledge of the Shareholder, threatened against the
Company with respect to (i) the ownership, use, condition or operation of
any of the Business, the assets of the Company or any asset formerly held
for use or sale by the Company or any of its predecessors in the Business or
(ii) any violation or alleged violation of any Environmental Law or any
Order issued under an Environmental Law. There are no existing violations
of (i) any applicable Environmental Law, or (ii) any Order issued under an
Environmental Law, in each case with respect to the ownership, use,
condition or operation by the Company of the Business, any assets of the
Company or any asset formerly held for use or sale by the Company or any of
its predecessors in the Business. There are no past or present actions,
activities, circumstances, conditions, events or incidents, that could
reasonably be anticipated to form the basis of (i) any Environmental Claim
against the Company or (ii) any Litigation against any Person whose
Liability (or any portion thereof) under any Environmental Laws the Company
has retained or assumed contractually or by operation of law. Neither the
Company nor any of its predecessors in the Business nor, to the Knowledge of
the Shareholder or the Company, anyone else has used any Real Property of
the Company or any of its predecessors in the Business or any part thereof
for the, treatment, storage, or disposal of any Hazardous Substances. The
disclosure of facts set forth in Schedule 2.13 shall not relieve the
Shareholder of any of its obligations under this Agreement, specifically
including, without limitation, the obligation to indemnify Purchaser as set
forth in Articles IV hereof.
(b) No release, discharge, spillage or disposal of any
Hazardous Substances in violation of any applicable Environmental Laws has
occurred on any Real Property of the Company or any of its predecessors in
the Business or any part thereof while or before such premises were owned,
leased, or operated by the Company.
<PAGE>
(c) No soil or water in, under or adjacent to any Real
Property of the Company or assets formerly held for use or sale by the
Company or any of its predecessors in the Business has been contaminated by
any Hazardous Substance in violation of any applicable Environmental Laws
while or before such Real Property was owned, leased, or operated by the
Company or any of its predecessors in the Business.
(d) All waste containing any Hazardous Substances
generated, used, handled, stored, treated or disposed of (directly or
indirectly) by the Company or any of its predecessors has been released or
disposed of in compliance with all applicable requirements under any
applicable requirements under any applicable Environmental Laws and there is
no Environmental Claim pending or, to the Knowledge of the Shareholder or
the Company, threatened with respect to any such release or disposal.
(e) Neither the Company nor any of its predecessors in
the Business has ever owned, leased or operated any regulated underground
storage tank.
(f) All hazardous waste under applicable Environmental
Laws that has been stored for disposal on any Real Property for forty-five
(45) days or longer as of the date of this Agreement has been removed from
all Real Property of the Company and its predecessors in the Business. All
hazardous waste stored for disposal for less than forty-five (45) days is
stored and labeled in compliance with all applicable Environmental Laws.
(g) The Company and each of its predecessors in the
Business have complied with all applicable reporting requirements under all
Environmental Laws concerning the disposal or release of Hazardous
Substances, and neither the Company nor any of its predecessors in the
Business has made any such reports.
(h) No building or portion thereof on any Real Property
owned, leased or operated by the Company contains any friable asbestos
material requiring repair or removal.
(i) No polychlorinated biphenyls (PCB's) are used or
stored on or in any Real Property owned, leased or operated by the Company.
2.14 Officers and Directors. Schedule 2.14 lists the names of
all directors and officers of the Company.
2.15 Contracts.
(a) Material Contracts. A list or brief description of
all of the Company's material written Contracts, and correct and complete
descriptions of all of the Company's material oral Contracts (other than
ground handling agreements) is set forth in Schedule 2.15(a) hereto.
(b) No Default. Except as set forth in Schedule
2.15(b), the Company is not in material Default under any of its material
Contracts referred to in Schedule 2.15(a); and, to the Knowledge of the
Shareholder, other parties to such Contracts are not in material Default
thereunder nor is there any basis for any claim of material Default
thereunder with respect to such other parties.
<PAGE>
(c) Assurances. Each of the Contracts referred to in
this Section 2.15 is in full force and effect and constitutes a valid, legal
and binding agreement of the parties thereto, enforceable in accordance with
its terms except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors'
rights generally and except as otherwise set forth in Schedule 2.15(d).
2.16 Interested Transactions. Except as set forth in Schedule
2.16 and except for relationships with the Shareholder, the Company is not
currently a party to any Contract, loan or other transaction with any
Affiliate or any Related Party to any Affiliate, or in which any Affiliate
or any Related Party to any Affiliate has any direct or indirect interest
(other than as a shareholder or employee of the Company). Except as
described in Schedule 2.16, except for the Shareholder, no officer,
director, shareholder or Affiliate of the Company or any Related Party to
any Affiliate owns or during the last two (2) years has owned, directly or
indirectly, or has during the last (2) years had a substantial ownership
interest in, any business, corporate or otherwise, which is a party to, or
in any property which is the subject of, business arrangements with the
Company, and except for the Shareholder, no officer, director, shareholder
or Affiliate of the Company or any Related Party to any Affiliate owns
directly or indirectly, or has an interest in, any business, corporate or
otherwise, which is in competition with the Company.
2.17 Statements True and Correct. No representation or warranty
made by the Company or the Shareholder to the Purchaser pursuant to this
Agreement contains or will contain any untrue statement of material fact or
omits or will omit to state a material fact necessary to make the statements
contained therein not misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES BY THE PURCHASER
The Purchaser hereby represents and warrants to the Shareholder and
to the Company jointly and severally as follows:
3.01 Organization. The Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and has full corporate power and authority to own, lease and
operate its assets and to carry on its business. The Purchaser will have
delivered to the Company and the Shareholder prior to the Closing date,
complete and correct copies of its Articles of Incorporation and all
amendments thereto, and its By-Laws, or their respective equivalents under
Malaysian law.
3.02 Authorization. The Purchaser has the full corporate power
and authority necessary to enter into and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby. Except
for shareholder approval, which Purchaser agrees to obtain within 120 days
after the date hereof, this Agreement and the transactions contemplated
hereby and thereby have been approved by all necessary corporate action.
This Agreement has been duly and validly executed and delivered by the
Purchaser and constitutes the legal, valid and binding obligation of the
Purchaser, enforceable against the Purchaser, in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditor's
<PAGE>
rights and except that the availability of the equitable remedy of specific
performance or injunctive relief is subject to the discretion of the court
before which any proceeding is brought.
3.03 No Conflict. Except as disclosed in Schedule 3.03, neither
the execution, delivery or performance of this Agreement nor the
consummation of the transactions contemplated hereby or thereby will (i)
conflict with or result in a violation, contravention or breach of any of
the terms, conditions or provisions of the Articles of Incorporation, as
amended, or By-Laws, as amended, or their equivalents under Malaysian law of
the Purchaser or their equivalents under Malaysian law, (ii) result in a
Default under or require the consent or approval of any party to any
material Contract of the Purchaser or (iii) result in the violation of any
Regulation or Order.
3.04 Resale of Shares. The Purchaser is acquiring the Shares
hereunder for investment purposes only and not with a view to, or for resale
in connection with, the distribution thereof and with no intention of
distributing or selling any thereof except in compliance with Federal or
State securities laws, and will make no sale or other transfer of the Shares
except in compliance with Federal or State securities laws. The Purchaser
agrees not to pledge, sell or transfer, or make any Contracts or agreements
to pledge, sell or transfer, any of the Shares for three (3) years after the
Closing Date. The Purchaser has had, and will continue to have, the
opportunity to ask questions of and receive answers or obtain additional
information from representatives of the Shareholder and the Company
concerning the financial and other affairs of the Company and the terms and
conditions of the sale of the Shares. Based upon its knowledge and
experience in financial and business matters, the Purchaser is familiar with
the investments of the sort which it is undertaking herein; the Purchaser is
fully aware of the problems and risks involved in making an investment of
this type and is capable of evaluating the merits and risks of this
investment.
3.05 Consents. Except as set forth on Schedule 3.05, no consent,
approval or authorization of, prior filing, registration, declaration with
or notice to, or other action by, any Malaysian Governmental Authority,
including without limitation, the Government of Malaysia or any subdivision
or agency thereof, including, without limitation, the Malaysian Department
of Civil Aviation, or any other Third Party is required to be obtained by
the Purchaser in connection with the authorization, execution, delivery and
performance by the Purchaser of this Agreement or the consummation of the
transactions contemplated herein or therein.
3.06 Balance Sheet. The Financial Statements of the Purchaser,
correct and complete copies of which are included in Schedule 3.06, (i) are
in accordance with the books and records of the Purchaser, which have been
maintained in accordance with good business practices; (ii) present fairly
the financial condition of the Purchaser as of the dates and for the periods
indicated in accordance with GAAP; (iii) have been prepared in accordance
with GAAP; and (iv) reflect adequate reserves for all known material
Liabilities and reasonably anticipated Losses in accordance with GAAP. The
Financial Statements of the Purchaser contain all adjustments, which are
solely of a normal recurring nature, necessary to present fairly the
financial condition of the Purchaser in accordance with GAAP.
<PAGE>
3.07 Statements True and Correct. No representation or warranty
made by the Purchaser to the Shareholder and/or the Company pursuant to this
Agreement contains or will contain any untrue statement of material fact or
omits to state a material fact necessary to make the statements contained
therein not misleading.
<PAGE>
ARTICLE IV
SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND
INDEMNIFICATION
4.01 Survival of Representations, Warranties and Covenants.
(a) All representations, warranties, agreements,
covenants and obligations made or undertaken by the Shareholder or the
Company in this Agreement are material, have been relied upon by the
Purchaser and shall survive the Closing and shall not merge in the
performance of any obligation by any party hereto and shall terminate and
expire on October 30, 1995.
(b) All representations, warranties, agreements,
covenants and obligations made by the Purchaser in this Agreement are
material, have been relied upon by the Shareholder and the Company and shall
survive the Closing and shall not merge in the performance of any obligation
by any party hereto and shall terminate and expire on October 30, 1995.
(c) The Shareholder and the Company acknowledge and
agree that prior to the Closing Date the Purchaser intends to perform such
investigation of the Company as it may deem necessary or appropriate;
however, no investigation by the Purchaser will diminish or obviate any of
the representations, warranties, covenants, agreements or indemnities made
or to be performed by the Shareholder or the Company pursuant to this
Agreement or the Purchaser's right to fully rely upon such representations,
warranties, covenants, agreements and indemnities. Notwithstanding the
foregoing sentence, neither of the Shareholder, the Company nor the
Purchaser shall have any liability hereunder for any claim for
indemnification pursuant to Section 4.02 hereof of which the Person making a
claim for indemnification hereunder had actual Knowledge prior to Closing.
(d) The representations and warranties made by the
Shareholder, the Company, and the Purchaser and contained in Articles II and
III of this Agreement are deemed by the parties hereto to have been made by
the Shareholder, the Company, and the Purchaser, as the case may be, on and
as of the date hereof and the Closing Date with the same force and effect as
if this Agreement was executed by the Shareholder, the Company, and the
Purchaser on each of the date hereof and the Closing Date.
4.02 Indemnity for Breach of Representations or Warranties. The
Purchaser shall be entitled to indemnification from the Company and the
Shareholder, and the Company and the Shareholder shall be entitled to
indemnification from the Purchaser, as the case may be (the "Indemnifying
Party", as defined in Section 4.03 hereof), for any loss caused to any
Indemnitee (as defined in Section 4.03 hereof) by virtue of the fact that
(i) any representation or warranty made by the Indemnifying Party was false
or misleading when made, or (ii) the Indemnifying Party made, to the
detrimental reliance of any Indemnitee, an untrue statement of material fact
or omitted to state a material fact necessary to make the statements
contained therein not misleading.
4.03 Notice of Loss or Asserted Liability. Promptly after (a)
becoming aware of circumstances that reasonably would be expected to result
in a Loss for which any party hereto (the "Indemnitee") intends to seek
indemnification under this Article IV or (b) receipt by the Indemnitee of
written notice of any demand, claim or circumstances which, with the lapse
<PAGE>
of time, the giving of notice or both, would give rise to a claim or the
commencement (or threatened commencement) of any Litigation (an "Asserted
Liability") that may result in a Loss, the Indemnitee shall give notice
thereof (the "Claims Notice") to any other party obligated to provide
indemnification pursuant to this Article IV (the "Indemnifying Party");
provided, however, that the failure of the Indemnitee to give notice
promptly shall not relieve the Indemnifying Party of its obligations under
this Article IV except to the extent (if any) that the Indemnifying Party
shall have been prejudiced thereby. Any Loss or Asserted Liability for
which a Claims Notice has been delivered shall hereinafter be defined as a
"Claim." The Claims Notice shall describe the Claim in reasonable detail,
and shall indicate the amount (estimated, if necessary) of the Claim that
has been or may be suffered by the Indemnitee. The Claims Notices may be
amended on one or more occasions with respect to the amount of the Claims at
any time prior to final resolution of the obligation to indemnify relating
to the Claim.
4.04 Opportunity to Contest. The Indemnifying Party may elect to
compromise or contest, at its own expense and by its own counsel, any
Asserted Liability. If the Indemnifying Party elects to compromise or
contest such Asserted Liability, it shall within thirty (30) days (or
sooner, if the nature of the Asserted Liability so requires) notify the
Indemnitee or Indemnitees of its intent to do so by sending a notice to the
Indemnitee or Indemnitees (the "Contest Notice"), and the Indemnitee shall
cooperate, at the expense of the Indemnifying Party, in the compromise or
contest of such Asserted Liability. If the Indemnifying Party elects not to
compromise or contest the Asserted Liability, fails to notify the Indemnitee
of its election as herein provided or contests its obligation to indemnify
under this Agreement, the Indemnitee (upon further notice to the
Indemnifying Party) shall have the right to pay, compromise or contest such
Asserted Liability on behalf of and for the account and risk of the
Indemnifying Party, subject to the right of the Indemnifying Party to assume
the compromise or contest of such Asserted Liability at any time before
final settlement of determination thereof. Anything in this Section 4.04 to
the contrary notwithstanding, (i) the Indemnitee shall have the right, at
its own cost and expense and for its own account to compromise or contest
any Asserted Liability, and (ii) the Indemnifying Party shall not, without
the Indemnitee's written consent, settle or compromise any Asserted
Liability or consent to entry of any judgment which does not include an
unconditional term releasing the Indemnitee from all liability in respect of
such Asserted Liability. If the Indemnifying Party chooses to contest any
Asserted Liability the Indemnitee shall make available to the Indemnifying
Party any books, records or other documents within its control that are
necessary or appropriate for, shall make its officers and employees
available, on a basis reasonably consistent with their other duties, in
connection with, and shall otherwise cooperate with, such defense.
4.05 Limitation on Indemnification. Notwithstanding anything to
the contrary contained in this Agreement, neither the Company nor the
Shareholder shall be obligated to make cash payments to the Purchaser or any
of the other Persons specified in Article IV in excess of the total amount
of actual cash payments made by the Purchaser to the Shareholder and the
Company pursuant to this Agreement.
4.06 Subrogation Rights. In the event that the Indemnifying
Party shall be obligated to indemnify the Indemnitee pursuant to this
Article IV, the Indemnifying Party shall, upon payment of such indemnity in
<PAGE>
full, be subrogated to all rights of the Indemnitee with respect to the Loss
to which such indemnification relates; provided, however, that the
Indemnifying Party shall only be subrogated to the extent of any amount paid
by it pursuant to this Article IV in connection with such Loss.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER
The obligations of the Purchaser to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction, on or
before the Closing Date, of each and every one of the following conditions,
all or any of which may be waived, in whole or in part, by the Purchaser for
purposes of consummating such transactions; but without prejudice to any
other right or remedy which the Purchaser may have hereunder as a result of
any misrepresentation by or breach of any agreement, covenant or warranty of
the Shareholder or the Company prior to Closing contained in this Agreement:
5.01 Due Diligence. The Purchaser shall have performed, to the
reasonable satisfaction of the Purchaser, due diligence on the Company on
those issues mutually agreed upon by the parties on the date of this
Agreement. The Purchaser shall have thirty (30) calendar days after the
date hereof to complete said due diligence.
5.02 Shareholders' Agreement. The Company, the Shareholder and
the Purchaser shall have entered into a Shareholders' Agreement in form and
substance mutually agreeable to the parties prior to the closing date.
5.03 Right of First Refusal. The Shareholder's 51% owned
subsidiary, US Order, Inc., a Delaware corporation ("US Order"), shall have
granted to the Purchaser's significant shareholder, Technology Resources
Industries Berhad, a Malaysian corporation ("TRI"), in a document which is
in form and substance reasonably satisfactory to the Purchaser and to TRI, a
right of first refusal to become the exclusive licensee of US Order's
patented automated order and payment system technology in Malaysia.
5.04 Representations True and Covenants Performed at Closing.
The representations and warranties made by the Shareholder and the Company
in this Agreement shall be correct and complete in all material respects on
the Closing Date with the same force and effect as if such representations
and warranties had been made on and as of the Closing Date. The Shareholder
and the Company shall have duly performed and complied in all material
respects with all of the agreements, covenants, acts and undertakings to be
performed or complied with by each of them on or prior to the Closing Date.
The Shareholder and the Company shall deliver to the Purchaser a certificate
dated as of the Closing Date executed by the Shareholder and the Company,
certifying the fulfillment of the conditions of this Section 5.02.
5.05 Schedules and Exhibits Completed.
(a) Within thirty (30) days after the date hereof, the
Company and the Shareholder shall have provided the Purchaser with all of
the information required by each Schedule hereto and the Company and the
Shareholder shall have delivered to the Purchaser by such date, copies of
each Schedule hereto, certified by a Secretary or Assistant Secretary of the
Company to be accurate and complete.
<PAGE>
(b) On the Closing Date the Company and the Shareholder
shall have delivered to the Purchaser signed copies of all of the Exhibits
required by the terms of this Agreement.
5.06 No Injunction, Etc. No Litigation, Regulation, Order or
legislation shall have been instituted, threatened or proposed before or by
any court or U.S. or Malaysian Governmental Authority to enjoin, restrain,
prohibit, or obtain damages in respect of this Agreement or the consummation
of the transactions contemplated hereby, if such Litigation, Regulation,
Order or legislation, in the reasonable judgment of the Purchaser, would
make it unlawful to consummate such transactions.
5.07 Incumbency Certificate. Each of the Company and the
Shareholder shall have delivered to the Purchaser an incumbency certificate
or certificates dated the Closing Date certifying the incumbency of all
officers of the Company and the Shareholder, as the case may be, who have
executed this Agreement. These certificates shall contain specimens of the
signatures of each of such officers whose incumbency or authority is
certified and shall be executed by an officer of the Company and the
Shareholder, as the case may be, but not an officer whose incumbency or
authority is certified.
5.08 Board Membership. On the Closing Date the Purchaser shall
have received a copy, certified by the Secretary or Assistant Secretary of
the Company, of resolutions of the Board of Directors of the Company and the
Shareholders of the Company electing a representative of the Purchaser to
the Company's Board of Directors, effective the Closing Date.
5.09 Governmental and Shareholder Approvals.
(a) All consents and approvals of U.S. and Malaysian
Governmental Authorities and Third Parties, if any, necessary to permit the
consummation of the transactions contemplated by this Agreement shall have
been received by the Purchaser.
(b) Before the closing date, the Purchaser shall have
obtained the approval of its shareholders necessary to permit the
consummation of the transactions contemplated by this Agreement.
Notwithstanding the foregoing, within 30 days after the date hereof, the
Purchaser shall use its best endeavors to procure the agreement of TRI, its
significant shareholder, to vote its shares in MHS in favor of: (i) MHS's
acquisition of 24.9% of the Common Stock of the Company: and (ii) MHS's
entrance into, and performance of this Agreement, the Registration Rights
Agreement, and all other documents, instruments, and agreements necessary to
consummate the transactions contemplated hereby or thereby.
5.10 Good Standing Certificates. The Purchaser shall have
received (i) a certificate of the Secretary of State of the State of
Delaware, stating that the Company is a corporation in existence under the
laws of the State of Delaware, and (ii) certificates of the appropriate
officials of the Commonwealth of Virginia, stating that the Company is duly
qualified and in good standing to transact business as a foreign corporation
in Virginia.
5.11 Resolutions. The Purchaser shall have received resolutions
of the Boards of Directors of the Shareholder and the Company authorizing
and approving the transactions contemplated by this Agreement, certified by
<PAGE>
the Secretary or Assistant Secretary of each of the Shareholder and the
Company.
5.12 Opinions of Counsel. The Purchaser shall have received
opinions, which are reasonable and customary for the protection of a
purchaser in a stock purchase transaction, dated the Closing Date: (i) of
Andrew M. Paalborg, Vice President and General Counsel to the Shareholder
and the Company, substantially in the form attached hereto as Exhibit 5.10
(a); and (ii) of an outside counsel mutually satisfactory to the parties who
is licensed to practice law in the State of Virginia, in the form attached
hereto as Exhibit 5.10 (b).
ARTICLE VI
CONDITIONS PRECEDENT TO
OBLIGATIONS OF THE SHAREHOLDER AND THE COMPANY
The obligations of the Shareholder and the Company to consummate the
transactions contemplated by this Agreement shall be subject to the
satisfaction, on or before the Closing Date, of each and every one of the
following conditions, all or any of which may be waived, in whole or in
part, by the Shareholder and the Company, jointly, but not severally, for
purposes of consummating such transactions; but without prejudice to any
other right or remedy which the Shareholder or the Company may have
hereunder as a result of any misrepresentation by, or breach of any
agreement, covenant or warranty of Purchaser contained in this Agreement.
6.01 Representations True and Covenants Performed at Closing.
The representations and warranties made by the Purchaser in this Agreement
shall be correct and complete on the Closing Date with the same force and
effect as though such representations and warranties had been made on and as
of the Closing Date. The Purchaser shall have duly performed all of the
agreements, covenants, acts and undertakings to be performed by it on or
prior to the Closing Date. The Purchaser shall deliver to the Shareholder
and the Company a certificate dated as of the Closing Date certifying as to
the fulfillment of the conditions of this Section 6.01.
6.02 No Injunction, Etc. No Litigation, Order, Regulation, Order
or legislation shall have been instituted, threatened or proposed before any
court or U.S. or Malaysian Governmental Authority to enjoin, restrain,
prohibit, or obtain damages in respect of this Agreement or the consummation
of the transactions contemplated hereby, if such Litigation, Regulation or
legislation, in the reasonable judgment of the Shareholder and the Company
would make it unlawful to consummate such transactions.
6.03 Governmental Approvals. All consents and approvals of U.S.
and Malaysian Governmental Authorities and Third Parties, if any, necessary
to permit the consummation of the transactions contemplated by this
Agreement shall have been received by the Shareholder and the Company.
6.04 Resolutions. The Purchaser shall have delivered to the
Shareholder resolutions of its Board of Directors and Shareholders (or their
equivalent under Malaysian law) authorizing and approving the transactions
contemplated by this Agreement, certified by the Secretary or Assistant
Secretary of the Purchaser (or his equivalent under Malaysian law).
<PAGE>
ARTICLE VII
ADDITIONAL AGREEMENTS
7.01 Exclusivity. From the date hereof until the earlier of the
Closing Date or the termination of this Agreement prior to Closing pursuant
to Article VIII, the Shareholder shall negotiate solely with the Purchaser
concerning the transactions described herein and not directly, or through an
agent or Third Party acting directly or indirectly on behalf of the Company
or the Shareholder, solicit or negotiate any offers or indications of
interest from any other Person or Persons or enter into any Contract with
any other Person or Persons regarding any business combination or sale of
stock of the Company or any sale or transfer of assets of the Company and
other than the sale of services in the ordinary course of business
consistent with past practices.
7.02 Right to Purchase Additional Shares. In the event that the
Company issues any additional shares of its capital stock after the Closing
Date, the Purchaser shall have a right of first refusal to acquire such
additional shares up to the limits permitted by U.S. law. The Purchaser's
right of first refusal shall not apply, however, to any issuance of capital
stock by the Company to its employees pursuant to any Employee Benefit Plan.
7.03 Access. From the date hereof until the Closing Date, the
Company will: (a) afford to the Purchaser and its respective
representatives, during regular business hours and upon reasonable notice,
such access to the personnel, plants, offices, warehouse, properties,
aircraft and related equipment, books and records of the Company as the
Purchaser may reasonably request in connection with the transactions
contemplated by this Agreement and (b) furnish to the Purchaser and its
respective representatives, during regular business hours and upon
reasonable notice, such access to additional financial and operating data as
the Purchaser may reasonably request in connection with the transactions
contemplated by this Agreement; provided however, that any investigation
made by the Purchaser shall be conducted in such a manner as not to
interfere with the operation of the Business of the Company; and provided
further, however, that the Shareholder shall not be obligated to cause the
Company to afford to the Purchaser or its respective representatives access
to any materials if such access would impair any attorney-client privilege
of the Shareholder or the Company.
7.04 Consents and Approvals. The Shareholder, the Company and
the Purchaser agree to obtain, not later than 120 days after the date
hereof, the waiver, consent and approval of all Persons, including, without
limitation, all U.S. and Malaysian Governmental Authorities, whose waiver,
consent or approval (i) is required in order to consummate the transactions
contemplated by this Agreement, or (ii) is required by any Contract or
License of the Company, the Shareholder or the Purchaser or any Order or
License to which the Company, the Shareholder or the Purchaser is a party or
subject on the Closing Date, and (x) which would prohibit, or require the
waiver, consent or approval of any Person to, such transactions, or (y)
under which such transactions would, without such waiver, consent or
approval, constitute a Default under the provisions thereunder or violation
thereof. All written waivers, consents and approvals obtained by the
Shareholder, the Company or the Purchaser, as the case may be, shall be
produced any time prior to or at Closing in form and content reasonably
satisfactory to the Purchaser or the Shareholder, as the case may be.
<PAGE>
7.05 Public Announcements. The parties agree to publicly
announce the existence and purpose of this Agreement at a mutually agreeable
time. Other than this initial public announcement, however, none of the
Company, the Purchaser, or the Shareholder, nor any of their
representatives, shall make any public announcement or disclosure to any
Person without a need to know in connection with this Agreement or the
transactions contemplated hereby without the prior consent of the Purchaser
or the Shareholder, as the case may be, unless required by Regulation or
judicial process, in which case notification shall be given and a copy of
any proposed release delivered to the Purchaser or the Shareholder, as the
case may be, prior to such disclosure.
7.06 Closing Conditions. Each of the Company, the Purchaser and
the Shareholder agrees to use its commercially reasonable efforts to satisfy
the closing conditions required to be satisfied by it or them as set forth
in Articles V and VI of this Agreement.
7.07 Supplements to Schedules. The Company and the Shareholder
shall from time to time after the date hereof, prior to the Closing Date,
supplement or amend the Schedules referred to in Article II with respect to
any matter arising after the date hereof which, if existing or occurring at
the date hereof, would have been required to be set forth or describe in
such Schedules.
7.08 Expenses. Unless otherwise provided in this Agreement, the
Purchaser, the Company and the Shareholder shall bear their respective
expenses incurred in connection with the preparation, execution and
performance of this Agreement and the transactions contemplated hereby,
including, without limitation, all fees and expenses of agents,
representatives, attorneys and accountants.
ARTICLE VIII
REGISTRATION RIGHTS
8.01 Registration Rights Agreement. Prior to or at the Closing,
the Company and the Purchaser shall enter into a registration rights
agreement (the "Registration Rights Agreement") substantially in the form of
Exhibit 8.01 hereto.
ARTICLE IX
TERMINATION
9.01 Method of Termination. This Agreement and the transactions
contemplated by it may be terminated at any time prior to the Closing Date:
(a) by the mutual consent of the Shareholder, the
Company and the Purchaser;
(b) by the Purchaser if (i) any representation or
warranty made by either the Company or the Shareholder is false or
misleading when made, or (ii) if either the Shareholder or the Company makes
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading;
<PAGE>
(c) by the Company or the Shareholder if (i) any
representation or warranty made by the Purchaser is false or misleading when
made, or (ii) if the Purchaser makes any untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements
made, in light of the circumstances under which they were made, not
misleading; or
(d) by either the Purchaser, the Shareholder or the
Company upon the Material breach (in the case of the Purchaser's right to
terminate, a material breach on the part of the Company and/or the
Shareholder, and in the case of the Shareholder's or the Company's right to
terminate, a material breach on the part of the Purchaser) of the terms of
this Agreement, unless the defaulting party or parties cures said material
breach within thirty (30) days of its occurrence.
ARTICLE X
CONFIDENTIALITY
10.01 Confidentiality. Each of the parties hereto agrees that for
three years after the date hereof it will not, and will use its best efforts
to ensure that none of its representatives, agents or employees will,
without the prior written consent of the party to whom the information
belongs, use in the conduct of its business (except as contemplated by this
Agreement), or submit or disclose to or file with any other person, any
confidential or non-public information relating to any other party hereto,
except for a disclosure that shall be required by Regulation or judicial
process.
ARTICLE XI
DEFINITIONS
The following terms (in their singular and plural forms as
appropriate) as used in this Agreement shall have the meanings set forth
below unless the context requires otherwise:
11.01 "Affiliate" of a Person shall mean: (i) any Person
directly, or indirectly through one or more intermediaries, controlling,
controlled by or under common control with the other Person, or (ii) any
officer, director, partner, employee, or direct or indirect beneficial owner
of any ten percent (10%) or greater equity or voting interest of the other
Person, (iii) or any entity for which any Person described in clause (ii)
above acts in any capacity.
11.02 "Agreement" means this Stock Purchase Agreement, including
the Exhibits and Schedules delivered pursuant hereto and each of which is
incorporated in and made a part of this Agreement by this reference and each
of which may be referred to in this Agreement without being attached hereto.
11.03 "Business" means the business of leasing and operating
aircraft and providing regularly scheduled and charter airline service to
passengers as presently conducted by the Company.
11.04 "Closing" shall mean the consummation of the stock
acquisition and the other transactions contemplated by this Agreement.
<PAGE>
11.05 "Closing Date" shall mean 10:00 o'clock a.m. local time in
Petaling Jaya, West Malaysia on a date mutually agreed to by the parties,
but not later than February 28, 1994.
11.06 "Code" means the Internal Revenue Code of 1986, as amended,
and all Regulations promulgated thereunder.
11.07 "Common Stock" means on the date hereof, the 1,000 shares
of common stock $1.00 par value of the Company, of which 100 shares are
issued and outstanding, all of which are owned by the Shareholder on the
date hereof. On or before the Closing, the Certificate of Incorporation of
the Company will be amended to authorize the Company to issue 20,000,000
shares of common stock, $.001 per share, 10,000,000 shares of which will be
issued outstanding to the Shareholder and the Purchaser on the Closing Date.
On and after the date of said amendment, therefore, the term "Common Stock"
means the 20,000,000 shares of common stock of the Company $.001 par value
per share.
11.08 "Company Shares" means the 1,126,363.636 shares of Common
Stock of the Company, par value $.001 per share, to be issued by the Company
on the Closing Date and sold to the Purchaser pursuant to the terms hereof.
11.09 "Contract" means any material written or oral contract,
agreement, lease, plan, debt instrument, commitment, undertaking to which
any person is a party, or practice that as a matter of law is binding on any
Person.
11.10 "Default" means (1) a material breach of or material
default under any Contract or License, (2) the occurrence of an event that
with the passage of time or the giving of notice or both would constitute a
material breach of or material default under any Contract or License, or (3)
the occurrence of an event that with or without the passage of time or the
giving of notice or both would give rise to a right to terminate, change the
material terms of, or renegotiate any Contract or License or to accelerate,
increase, or impose any material Liability under any Contract or License or
to otherwise materially and adversely affect any of a Person's rights or
obligations under any Contract or License.
11.11 "Employee Benefit Plan" means collectively, each pension,
retirement, profit-sharing, deferred compensation, stock option, employee
stock ownership, severance pay, vacation, bonus or other material incentive
plan, any other written or unwritten material employee program, arrangement,
agreement or understanding, whether arrived at through collective bargaining
or otherwise, any medical, vision, dental or other health plan, any life
insurance plan, or any other material employee benefit plan or material
fringe benefit plan, including, without limitation, any "employee benefit
plan," as that term is defined in Section 3(3) of ERISA, currently or
previously adopted, maintained by, sponsored in whole or in part by, or
contributed to by the Company or any ERISA Affiliate thereof for the benefit
of employees, retirees, directors or independent contractors of the Company
(or their dependents, spouses, or other beneficiaries) and under which any
such employees, retirees, dependents, spouses, directors, independent
contractors, or other beneficiaries are eligible to participate. Any of the
Employee Benefit Plans which is an "employee pension benefit plan," as that
term is defined in Section 3(2) of ERISA, or an "employee welfare benefit
plan" as that term is defined in Section 3(1) of ERISA, is referred to
<PAGE>
herein as an "ERISA Plan." The term "ERISA Affiliate" is defined in Section
2.25(a) hereof.
11.12 "Environmental Claim" means any proceeding in any court or
before or by any Governmental Authority or private arbitrator, mediator, or
tribunal, or any claim, demand, complaint or investigation asserted or
brought against the Business, the Company or its assets (including, without
limitation, notice or other communication (written or oral) by any Person
alleging potential liability for investigatory costs, cleanup costs, private
or governmental response or remedial costs, natural resources damages,
property damages, personal injuries, or penalties) arising out of, based
upon, or resulting from (i) any Environmental Matter or (ii) any
circumstances or state of facts forming the basis of any Liability or
alleged Liability under, or any violation or alleged violation of, any
Environmental Law.
11.13 "Environmental Laws" means all Regulations regulating
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, the Comprehensive
Environmental Response, Compensation and Liability Act, as amended,
42 U.S.C. Sections 9601 et seq. ("CERCLA"), the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. Sections 9601 et seq. ("RCRA"), the
Toxic Substance Control Act, 15 U.S.C. Sections 2601-2604, and other
Regulations relating to emissions, discharges, releases or threatened
releases of any Hazardous Substance, or otherwise regulating the generation,
use, treatment, storage, disposal or transport of any Hazardous Substance.
.
11.14 "ERISA" means Employee Retirement Income Security Act of
1974, as amended.
11.15 "Financial Statements" the balance sheets of the Company as
at the end of each of the last three (3) fiscal years and the statements of
income and cash flow for the years then ended, together with the notes and
schedules thereto and the balance sheets as at September 30, 1993, and the
statements of income and cash flows for the quarter and nine (9) months
then-ended.
11.16 "GAAP" shall mean generally accepted accounting principles,
consistently applied, or the equivalent thereof for Malaysian Corporations.
11.17 "Governmental Authority" shall mean any federal, state,
county, local, foreign or other governmental agency ministry, department,
instrumentality, commission, authority board or subdivision thereof, or any
foreign equivalent therefor.
11.18 "Hazardous Substance" means (i) any hazardous substance,
hazardous material, hazardous waste, regulated substance or toxic substance
(as those terms are defined by any applicable Environmental Laws) and (ii)
any petroleum, petroleum products, or oil.
11.19 "IRS" means the United States Internal Revenue Service.
11.20 "Knowledge of the Shareholder" or "Knowledge of the Company"
means the matters that either the Shareholder or the Company either actually
knows or would have known from a reasonable review of all relevant records
of the Company and the Shareholder.
<PAGE>
11.21 "Leased Personal Property" means all Personal Property that
is not owned by the Company that the Company either uses or has the right to
use.
11.22 "Leased Real Property" means all Real Property that is not
owned in fee simple by the Company that the Company either occupies or uses
or has the right to occupy or use.
11.23 "Liability" means any direct or indirect, primary or
secondary, liability, indebtedness, penalty, obligation, expense (including,
without limitation, costs of investigation, collection and defense) claim,
deficiency, guaranty or endorsement of or by any Person (other than
endorsements) of notes, bills and checks presented to banks for collection
or deposit in the ordinary course of business) of any type, whether accrued,
absolute, contingent, liquidated, unliquidated, matured, unmatured, known or
unknown or otherwise.
11.24 "License" means any license, franchise, notice, permit,
easement, right, certificate, authorization, approval or filing to which any
Person is a party or that is binding on any Person or its securities, assets
or business.
11.25 "Lien" means any mortgage, lien, security interest, pledge,
hypothecation, encumbrance, restriction, reservation, encroachment,
infringement, easement, conditional sale agreement, title retention or other
security arrangement, defect of title, adverse right or interest, charge or
claim of any nature whatsoever of, on, or with respect to any property or
property interest.
11.26 "Litigation" means any judicial or administrative action or
other proceeding, arbitration, cause of action, claim, complaint, criminal
prosecution, demand, hearing, inquiry, investigation (governmental or
otherwise), notice (written or oral) by any Person alleging potential
Liability relating to or affecting the Company, its assets, the Business, or
the transactions contemplated by this Agreement.
11.27 "Loss" means any and all demands, claims, payments,
obligations, recoveries, deficiencies, fines, penalties, interest,
assessments, actions, causes of action, suits, losses, damages, punitive,
exemplary or any other damages or losses that would be incurred or suffered,
Liabilities, costs, expenses (including without limitation, (i) interest,
penalties and reasonable attorneys' fees and expenses, (ii) reasonable
attorneys' fees and expenses necessary to enforce rights to indemnification
hereunder, and (iii) consultant's fees and other costs of defense or
investigation), and interest on any amount payable to a Third Party as a
result of the foregoing, whether accrued, absolute, contingent, known,
unknown, or otherwise as of the Closing Date.
11.28 "Material Adverse Change" or "Material Adverse Effect"
means (a) any material adverse change in or effect on (i) the business,
operations, assets, Liabilities, condition (financial or otherwise),
financial position, cash flow, results of operations or prospects of such
Person from the financial condition of the Company's Business set forth in
Attachment C to a letter dated 21 October, 1993 from T. Coleman Andrews,
III, President and Chief Executive Officer of the Shareholder, to Wan Malek
Ibrahim, Executive Director of the Purchaser, (ii) the ability of such party
to consummate the transactions contemplated by this Agreement, or (iv) the
<PAGE>
ability of such party to perform any of its obligations under this Agreement
if such change or effect materially impairs the ability of such party to
perform its obligations hereunder or thereunder, taken as a whole.
11.29 "Order" means any decree, injunction, judgment, order,
ruling, writ, quasi-judicial decision or award or administrative decision or
award of any federal, state, local, foreign, or other court, arbitrator,
mediator, tribunal, administrative agency or Governmental Authority to which
any Person is a party.
11.30 "Permitted Liens" means (i) Liens for taxes not yet due and
payable, (ii) Liens disclosed in Schedules 3.10 and 2.12 and (iii) Liens
which have arisen in the ordinary course of business and which do not, in
the aggregate, materially impair the use or value of the property or assets
encumbered.
11.31 "Person" shall mean a natural person or any legal,
commercial or governmental entity, such as, but not limited to, a
corporation, general partnership, joint venture, limited partnership,
limited liability company, trust, business association or any person acting
in a representative capacity.
11.32 "Personal Property" means collectively all of the personal
property or interests therein owned, leased, used or controlled by the
Company including, without limitation, aircraft, machinery, tools, equipment
(including office equipment and supplies), furniture, furnishings, fixtures,
vehicles, leasehold improvements, all other tangible personal property other
than Inventory (which is specifically excluded from the Personal Property).
11.33 "Purchase Price" means the consideration to be paid to the
Shareholder and the Company by the Purchaser for the purchase and sale of
the Shares pursuant to this Agreement and which shall be paid in accordance
with Section 1.02 hereof.
11.34 "Real Property" means collectively all the real property or
interests therein owned, leased, occupied, used or controlled by the
Company, together with all rights, easements, tenements, hereditaments,
appurtenances, privileges, immunities, and other benefits belonging or
appertaining thereto which run with said real property.
11.35 "Registration Rights Agreement" means that certain
Registration Rights Agreement dated the date hereof, between the Company and
the Purchaser, substantially in the form of Exhibit 8.01 hereto.
11.36 "Regulation" means any code, law, order, ordinance,
regulation, rule, or statute existing and as in effect on the date hereof of
any Governmental Authority or of any other type of regulatory body or
authority.
11.37 "Related Person" means, with regard to any natural Person,
his spouse, parent, sibling, child, aunt, uncle, niece, nephew, in-law,
grandparent and grandchild (including by adoption) and any trustees or other
fiduciaries for the benefit of such relatives.
11.38 "Schedules" means the disclosure schedules referenced to in
Article II of this Agreement or other schedules referred to herein, each of
<PAGE>
which is incorporated herein and made a part hereof by this reference.
11.39 "Shareholder Shares" means the 1,363,636.363 shares of
Common Stock of the Company, par value $.001 per share, owned by the
Shareholder which are to be sold by the Shareholder to the Purchaser
pursuant to the terms hereof.
11.40 "Shares" means collectively, the Shareholder's shares and
the Company's Shares of Common Stock, par value $.001 per share, of the
Company.
11.41 "Subsidiary" means any corporation of which at least a
majority of the securities or interests having by the terms thereof ordinary
voting power to elect a majority of the board of directors or others
performing similar functions with respect to such corporation which is at
the time directly or indirectly owned or controlled by another corporation,
or by any one or more Subsidiaries of such other corporation, or by such
other corporation and one or more of its Subsidiaries.
11.42 "Taxes" means any federal, state, county, local, foreign or
other tax, assessment, charge, fee, or similar imposition, including without
limitation, charges in lieu of taxes and interest or penalties thereon or
with respect thereto.
11.43 "Tax Returns" means all returns, reports, filings,
declarations and statements that relate to taxes and that are required to be
filed, recorded, or deposited with any Governmental Authority.
11.44 "Third Parties" means any Person that is none of the
Purchaser, the Company or the Shareholder or an Affiliate of any of the
Purchaser, the Company or the Shareholder.
11.45 "Undisclosed Liabilities" means any known or unknown
Liability that is not fully reflected or reserved against in the Financial
Statements or fully disclosed in a Schedule or is not required to be
disclosed in a Schedule by the terms of this Agreement other than a
Liability incurred by the Company in the ordinary course of business after
September 30, 1993.
ARTICLE XII
MISCELLANEOUS
12.01 Entire Agreement. This Agreement and the documents
specifically referred to herein or executed and delivered concurrently
herewith, constitute the entire agreement, understanding, representations
and warranties of the parties hereto and supersede any prior agreement,
understanding, representation, warranty, documents or drafts relating to the
subject matter of this Agreement including, without limitation, that certain
Memorandum of Understanding dated October 14, 1993 between the Purchaser and
the Shareholder. The language of this Agreement has been negotiated and
accepted by all parties and their counsel and no party shall be considered
the draftsman and this Agreement shall be construed literally and not more
harshly against any one party than any other party.
12.02 Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have
<PAGE>
been duly given, if delivered in person, by cable, telecopy, telegram or
telex, or three (3) days after delivery by mail (certified or registered
postage prepaid, return receipt requested), or one (1) day after depositing
with a nationally recognized overnight courier service for next day
delivery, to the respective parties as follows:
(a) If to the Purchaser:
Malaysian Helicopter Services Berhad
No. 9A, Jalan Kemajuan, Section 13
46200 Petaling Jaya
Selangor Darul Ehsan
West Malaysia
Attention: Mr. Wan Malek Ibrahim
Fax: 011-60-3-755-3823
(b) If to the Shareholder and/or the Company:
WorldCorp, Inc.
13873 Park Center Road, Suite 490
Herndon, Virginia 22071
USA
Attention: Mr. T. Coleman Andrews, III
Fax: (703) 834-9211
or (c) to such other address as the party to be notified shall have
furnished to the other parties in writing. Any notice given in accordance
with this Section 12.02 shall be effective only upon receipt by the party to
whom sent.
12.03 Further Assurances. Each party covenants that at any time,
and from time to time, after the Closing Date, it will execute such
additional instruments and take such actions as may be reasonably requested
by the other parties to confirm or perfect or otherwise to carry out the
intent and purposes of this Agreement.
12.04 Waiver. Any failure on the part of any party hereto to
comply with any of its obligations, agreements or conditions hereunder may
be waived by any other party to whom such compliance is owed. No waiver of
any provision of this Agreement shall be deemed, or shall constitute, a
waiver of any other provision, whether or not similar, nor shall any waiver
constitute a continuing waiver.
12.05 Assignment. This Agreement shall not be assignable by any
of the parties hereto without the written consent of the other parties
hereto.
12.06 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, legal
representatives, executors, administrators, successors and assigns.
12.07 Remedies Not Exclusive. No remedy conferred by any of the
specific provisions of this Agreement is intended to be exclusive of any
other remedy.
12.08 Headings. The section and other headings in this Agreement
are inserted solely as a matter of convenience and for reference, and are
not a part of this Agreement.
<PAGE>
12.09 Severability. Any provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall be ineffective to the
extent of such invalidity or unenforceability without invalidating or
rendering unenforceable the remaining provisions hereof, and any such
invalidity or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
12.10 Governing Law; Consent to Jurisdiction. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF VIRGINIA INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
Each of the Purchaser, the Company, and the Shareholder (i) hereby
irrevocably submits itself to the non-exclusive jurisdiction of the courts
of the Commonwealth of Virginia, Fairfax County, Virginia, of the United
States, and to the non-exclusive jurisdiction of the District Court for the
Eastern District of Virginia, for the purposes of any suit, action or other
proceeding arising out of this Agreement or the Registration Rights
Agreement, the subject matter hereof or thereof or any of the transactions
contemplated hereby or thereby brought by any of the parties hereto or
thereto or their successors and assigns, (ii) hereby waives, and agrees not
to assert, by way of motion, as a defense, or otherwise, in any such suit,
action or proceeding, to the extent permitted by applicable law, that the
suit, action or proceeding referred to in clause (i) above is brought in any
inconvenient forum, that the venue of such suit, action or proceeding is
improper, or that this Agreement or the Registration Rights Agreement or the
subject matter hereof or thereof may not be enforced in or by such courts.
Final judgment against any of the parties hereto or to the Registration
Rights Agreement in any suit in any court referred to in clause (i) above
shall be conclusive, and may be enforced in other jurisdictions by suit on
the judgment, a certified or true copy of which shall be conclusive evidence
of the fact and of the amount of any indebtedness or liability of the
parties therein described; provided that the plaintiff may at its option
bring suit, or institute other judicial proceedings, against any party or
any of its assets in the courts of any country or place where such party or
such assets may be found.
12.11 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12.12 Time of Essence. Time is of the essence in this Agreement.
12.13 Amendments. This Agreement may be amended or modified only
by a written instrument executed by each of the parties hereto, or by their
respective successors and assigns.
<PAGE>
IN WITNESS WHEREOF, the Company, the Purchaser and the Shareholder
have duly executed this Agreement as of the date first above written.
THE COMPANY: THE PURCHASER:
WORLD AIRWAYS, INC. MALAYSIAN HELICOPTER SERVICES
BERHAD
By: /s/ T. Coleman Andrews, III By: Wan Malek Ibrahim
Its: CEO Its: Executive Director
Attest: Attest:
/s/ Ahmad M. Khatib /s/ Ma'som Mahadi
Senior Vice President Commercial Director
[CORPORATE SEAL] [CORPORATE SEAL]
THE SHAREHOLDER:
WORLDCORP, INC.
By: /s/ T. Coleman Andrews, III
Its: CEO and President
Attest:
/s/ Ahmad M. Khatib
Senior Vice President
[CORPORATE SEAL]
<PAGE>
Schedule 2.02
Foreign Qualification of World Airways, Inc.
1. California
2. Florida
3. Massachusetts
4. New Jersey
5. New York
6. Pennsylvania
7. South Carolina
8. Virginia
<PAGE>
Schedule 2.05
Conflicts
None
<PAGE>
Schedule 2.07
Financial Statements
1. Consolidated Financial Statements of World Airways, Inc. as of and
for the Year Ended December 31, 1992 and Unaudited Consolidated
Financial Statements of World Airways, Inc. as of and for the Nine
Months Ended September 30, 1993.*
2. Consolidated Financial Statements of World Airways, Inc. as of and
for the Year Ended December 31, 1992 and Year Ended December 31,
1991.*
3. Consolidated Financial Statements of World Airways, Inc. as of and
for the Year Ended December 31, 1991 and Year Ended December 31,
1990.*
4. Consolidated Financial Statements of World Airways, Inc. as of and
for the Years Ended December 31, 1990 and Year Ended December 31,
1989.*
5. Consolidated Financial Statements of World Airways, Inc. as of and
for the Years Ended December 31, 1989 and Year Ended December 31,
1988.*
6. Form 10-Q Quarterly Report of WorldCorp, Inc. for the Quarter Ended
September 30, 1993, filed with the Securities and Exchange
Commission on November 15, 1993.
* Previously delivered to the Buyer.
<PAGE>
Schedule 2.09
Taxes
None
<PAGE>
Schedule 2.10
Litigation
On August 11, 1992, the Company, WorldCorp, Inc., and certain other
commercial paper customers of Washington Bancorporation ("WBC") were
served with a complaint by WBC as debtor-in-possession by and
through the Committee of Unsecured Creditors of WBC (the
"Committee"). The complaint arises from investment proceeds
totalling $6.8 million received by WorldCorp and the Company from
WBC in May 1990 in connection with the maturity of WBC commercial
paper. The Committee seeks to recover this amount on the grounds
that these payments constituted voidable preferences and/or
fraudulent conveyances under the United States Bankruptcy Code and
under applicable state law. WorldCorp filed a motion to dismiss
this litigation as it pertains to it and to the Company on June 9,
1993 and the Company intends to vigorously contest the liability.
No assurances can be given of the eventual outcome of this
litigation.
There is a dispute between Mutual Life Insurance Company of New York
("MONY"), as supported by WBC, and other significant creditors as to
the benefits of the continued prosecution of the litigation. MONY
and WBC have moved for authorization for MONY to prosecute the
adversary proceedings and the FDIC has opposed the motion.
<PAGE>
Schedule 2.11(a)
Necessary Reviews
1. United States Department of Transportation
2. United States Federal Trade Commission
3. United States Department of Justice
4. Committee on Foreign Investment in the United States (Interagency
committee chaired by the Secretary of the United States Department
of Treasury)
5. Defense Investigative Service of the United States Department of
Defense
<PAGE>
Schedule 2.12
Titles to Properties; Liens
1. Security interest held by BNY Financial Corporation in the Company's
interest in one GE CF6-D1A aircraft engine (Serial No. 451-109),
spare parts used in McDonnell Douglas DC-10-30 aircraft and Boeing
727 aircraft, together with certain inventory, equipment, general
intangibles, receivables, aircraft and aircraft leases.
2. Security interest held by International Lease Finance Corporation
("ILFC") in the Company's interest in spare parts for use on the
ILFC MD-11 aircraft.
3. Security interest held by Wilmington Trust Company, as Trustee
("WTC") for the benefit of GATX Capital Corporation ("GATX") in the
Company's interest in spare parts for use on the GATX MD-11
aircraft.
4. Security Interest held by McDonnell Douglas Corporation ("MDC") in
the Company's interest in spare parts for use on MD-11 aircraft.
5. Security interest held by Terandon Leasing Corporation in the
Company's interest in one GE CF6-50C2 aircraft engine (Serial No.
455-788).
6. Security interest held by First Security Bank of Utah, N.A., as
Trustee for the benefit of Potomac Capital Investment Corportion, in
the Company's interest in a McDonnell Douglas DC-10-30CF aircraft
(Serial No. 46836, N107WA) and 3 GE engines (Serial Nos. 517-423,
517-438 & 517-466) and in the Lease Agreement for such aircraft and
engines.
7. Security interest held by The Connecticut National Bank, as Trustee
for the benefit of McDonnell Douglas Finance Corporation and Mitsui
& Co. (U.S.A.), Inc., in the Company's interest in 3 McDonnell
Douglas DC-10-30CF aircraft (Serial Nos. 46835, N106WA; 46837,
N108WA; and 47820, N112WA), 9 GE CF6-50C2 engines (Serial Nos. 517-
629, 517-478 & 517-437; 517-630, 517-464 & 517-422; and 517-644,
517-465 & 517-496) and 2 spare GE CF6-50C2 engines (Serial Nos. 517-
471 & 517-628).
8. Security interest held by PK AirFinance International Corporation in
the Company's interest in a GE CF6-50C2 engine (Serial No. 517-309)
(First Lien).
9. Security interest held by GATX in the Company's interest in a GE
CF6-50C2 engine (Serial No. 517-309) (Second Lien).
10. Security interest held by Svenska Finans International BV in the
Company's interest in a GE CF6-50C2 engine (Serial No. 517-338).
<PAGE>
Schedule 2.13
Environmental
None
<PAGE>
Schedule 2.14
Officers and Directors of World Airways, Inc.
Officers
Chairman of the Board and
Chief Executive Officer. . . . . . . . . . . . . . .T. Coleman Andrews, III
President . . . . . . . . . . . . . . . . . . . . . . . .Charles W. Pollard
Chief Financial Officer and Treasurer . . . . . . . . . . . A. Scott Andrews
Executive Vice President-Sales and Marketing. . . . . . . . .Ahmad M. Khatib
Executive Vice President-Operations . . . . . . . . . . Joseph J. Shallcross
Senior Vice President-
Government and Legal Affairs and
Assistant Secretary. . . . . . . . . . . . . . . . . . . . . . . Vance Fort
Vice President and Secretary. . . . . . . . . . . . . . . Andrew M. Paalborg
Vice President-Sales and Marketing. . . . . . . . . . . . . .Robert M. Perry
Vice President-Pax Sales/Service. . . . . . . . . . . . . .Stephen I. Berger
Vice President-Cargo Sales/Service. . . . . . . . . . . . K.M. (Joe) Fralick
Vice President-Flight Operations. . . . . . . . . . . . . . . .Peter Villano
Vice President-Technical Services . . . . . . . . . . . . . . James A. Smith
Vice President-Customer Services. . . . . . . . . . . . . . .Russell Rumenik
Directors
1. T. Coleman Andrews, III
2. Charles W. Pollard
3. A. Scott Andrews
4. Russell L. Ray, Jr.
5. Alan Bruce Magary
<PAGE>
Schedule 2.15(a)
Material Contracts
Leases of Aircraft and Engines
1. Agreement among World Airways, Inc. (the "Company"),
WorldCorp, Inc., International Lease Finance Corporation
("ILFC"), McDonnell Douglas Corporation ("MDC") and
McDonnell Douglas Finance Corporation ("MDFC"), dated July
9, 1993, regarding the assignment and assumption of two
McDonnell Douglas DC-10-30 aircraft.
a. Assignment and Assumption and Consent and Release,
among the Company, WorldCorp, Inc., MDC, and MDFC,
dated July 9, 1993, for a McDonnell Douglas DC-10-
30 (N114WA) aircraft.
b. Assignment and Assumption and Consent and Release,
among the Company, WorldCorp, Inc., MDC, and MDFC,
dated July 9, 1993, for a McDonnell Douglas DC-10-
30 (N115WA) aircraft.
2. Aircraft Lease Agreement between the Company and Wilmington
Trust Company ("WTC")/GATX Capital Corporation ("GATX"),
dated January 15, 1993, for a MD-11 aircraft (Serial No.
48458, N280WA) and 3 Pratt & Whitney engines (Serial Nos.
P724032, P723802 & P723811), as supplemented by a Lease
Supplement, dated April 23, 1993.
a. Spare Parts Lease Agreement between the Company and
GATX, dated April 15, 1993.
b. Letter Agreement between the Company and GATX,
dated October 29, 1993 regarding rent deferrals.
3. Aircraft Lease Agreement between the Company and ILFC, dated
September 30, 1992, for a MD-11 aircraft (Serial No. 48518,
N271WA) and 3 Pratt & Whitney engines (Serial Nos. P723942,
P723945 & P723943), as amended by Amended and Restated Side
Letter No. 1, dated September 30, 1992, Side Letter No. 2,
dated September 30, 1992, Amendment No. 1 to Aircraft Lease
Agreement, dated November, 1992, and Amendment No. 2 to
Aircraft Lease Agreement, dated March 8, 1993.
a. Agency Agreement between the Company and ILFC,
dated January 15, 1993.
b. Assignment of Rights (Airframe) between the Company
and ILFC, dated March 8, 1993.
c. Assignment of Rights (Engines) between the Company
and ILFC, dated March 1, 1993.
<PAGE>
4. Aircraft Lease Agreement between the Company and ILFC, dated
September 30, 1992, for a MD-11 aircraft (Serial No. 48437,
N272WA) and 3 Pratt & Whitney engines (Serial Nos. P723913,
P723912 & P723914), as amended by Amended and Restated Side
Letter No. 1, dated September 30, 1992, Side Letter No. 2,
dated September 30, 1992, Amendment No. 1 to Aircraft Lease
Agreement, dated October 27, 1992, Amendment No. 2 to
Aircraft Lease Agreement, dated March 31, 1993, and
Amendment No. 3 to Aircraft Lease Agreement, dated April 15,
1993.
a. Agency Agreement between the Company and ILFC,
dated January 15, 1993.
b. Assignment of Rights (Airframe) between the Company
and ILFC, dated April 15, 1993.
c. Assignment of Rights (Engines) between the Company
and ILFC, dated April 15, 1993.
5. Aircraft Lease Agreement between the Company and ILFC, dated
September 30, 1992, for a MD-11 aircraft (Serial No. 48519,
N273WA) and 3 Pratt & Whitney engines (Serial Nos. P723957,
P723958 & P723956), as amended by Amended and Restated Side
Letter No. 1, dated September 30, 1992, Side Letter No. 2,
dated September 30, 1992, Amendment No. 1 to Aircraft Lease
Agreement, dated October 27, 1992, and Amendment No. 2 to
Aircraft Lease Agreement, dated April 22, 1993.
a. Agency Agreement between the Company and ILFC,
dated January 15, 1993.
b. Assignment of Rights (Airframe) between the Company
and ILFC, dated April 22, 1993.
c. Assignment of Rights (Engines) between the Company
and ILFC, dated March 1, 1993.
6. Aircraft Lease Agreement between the Company and ILFC, dated
September 30, 1992, as amended by Amended and Restated Side
Letter No. 1, dated September 30, 1992, and Side Letter No.
2, dated September 30, 1992.
7. Aircraft Lease Agreement between the Company and ILFC, dated
September 30, 1992, as amended by Amended and Restated Side
Letter No. 1, dated September 30, 1992, and Side Letter No.
2, dated September 30, 1992.
8. Aircraft Lease Agreement between the Company and ILFC, dated
September 30, 1992, as amended by Amended and Restated Side
Letter No. 1, dated September 30, 1992, and Side Letter No.
2, dated September 30, 1992.
9. General Terms Engine Lease Agreement between the Company and
Terandon Leasing Corporation, dated April 26, 1991, for one
GE CF6-50C2 aircraft engine (Serial No. 455-788), and
accompanying Aircraft Engine Lease Agreement of same date.
<PAGE>
10. Lease Agreement between the Company and First Security Bank
of Utah ("FSBU"), as trustee (as assigned to Potomac Capital
Investment Corporation ("Potomac") and Heller Financial,
Inc. ("Heller")), dated January 15, 1991, for a McDonnell
Douglas DC-10-30CF aircraft (Serial No. 46836, N107WA) and 3
GE engines (Serial Nos. 517-423, 517-438 & 517-466), as
supplemented by Lease Supplement No. 1, dated January 15,
199[0] [sic].
a. Participation Agreement between the Company,
Potomac, Heller, DPF Airlease, Inc. VIII, and FSBU,
dated January 15, 1991.
b. Tax Indemnity Agreement between the Company and DPF
Airlease, Inc. VIII, dated January 15, 1991.
c. Letter Agreement between the Company and Potomac,
dated September 17, 1993, regarding rent deferrals.
d. Promissory Note from the Company to Potomac in the
amount of $1,802,755.04.
e. Letter Agreement between the Company and Heller,
dated November 2, 1993, regarding rent deferrals.
f. Promissory Note from the Company to Heller in the
amount of $485,600, dated November 30, 1993.
11. Lease Agreement between the Company and Michael A. Meagher
as trustee (assigned to Aircraft 46891, Inc.), dated
February 8, 1988, for a McDonnell Douglas DC-10-30CF
aircraft (Serial No. 46891, N105WA) and 3 GE engines (Serial
Nos. 517-316, 517-218 & 455-196), as amended by Amendment to
Lease Agreement, dated February 25, 1988, Amendment No. 2 to
Lease Agreement, dated March 7, 1988, Amendment No. 3 to
Lease Agreement, dated March 11, 1988, Amendment No. 4 to
Lease Agreement, dated March 18, 1988, Lease Supplement No.
1, dated October 13, 1988, and Amendment to Lease Agreement,
dated October 13, 1988.
a. Guaranty by WorldCorp, Inc., dated February 8,
1988.
b. Letter Agreement between the Company, The CIT
Group/Equipment Financing, Inc. ("CIT"), and
WorldCorp, Inc., dated October 19, 1993, regarding
the termination of the lease and the return of the
aircraft and the engines to CIT.
12. Lease Agreement between the Company and The Connecticut
National Bank (assigned to Federal Express Corporation),
dated March 30, 1987, for 3 McDonnell Douglas DC-10-30CF
aircraft (Serial Nos. 46835, N106WA; 46837, N108WA; and
47820, N112WA), 9 GE CF6-50C2 engines (Serial Nos. 517-629,
517-478 & 517-437; 517-630, 517-464 & 517-422; and 517-644,
517-465 &517-496) and 2 spare GE CF6-50C2 engines (Serial
<PAGE>
Nos. 517-471 & 517-628), as supplemented by Lease Supplement
No. 1, dated April 1, 1987, and as amended by Amendment No.
1, dated May 14, 1993, and Amendment No. 2, dated May 14,
1993.
a. Guaranty and Amendment Agreement by WorldCorp,
Inc., dated June 23, 1987.
b. Memorandum of Understanding between the Company,
McDonnell Douglas Corporation, and WorldCorp, Inc.,
dated November 8, 1993 regarding rent deferrals.
13. Lease Agreement between the Company and Heleasco Twenty-Two,
Inc. for 1 GE CF6-50C2 engine (Serial No. 517-715), dated
July 1, 1980.
Loans
1. Accounts Receivable Management and Security Agreement
between the Company and BNY Financial Corporation for $20
million line of credit, dated December 7, 1993.
a. Aircraft Parts Security Agreement between the
Company and BNY Financial Corporation, dated
December 7, 1993.
2. Sale, Loan and Security Agreement between the Company and
MDC, dated March 8, 1993.
a. Promissory Note from the Company in the amount of
$24,000,000 (of which $5,000,000 has been drawn
down by the Company).
3. Security Agreement between the Company and ILFC, dated
February 15, 1993.
a. Promissory Note from the Company in the amount of
$5,200,000 (of which $4,250,000 has been drawn down
by the Company).
4. Letter of Credit Facility, among the Company, WorldCorp,
Inc. and American Security Bank, N.A., dated December 22,
1992.
5. Aircraft Engine Security Agreement between the Company and
PK Finans International Corporation for 1 GE CF6-50C2 engine
(Serial No. 517-309), dated December 1, 1989.
a. Secured Promissory Note from the Company in the
amount of $3,080,000.
b. Guaranty by WorldCorp, Inc., dated December 1,
1989.
6. Aircraft Engine Loan and Security Agreement between the
Company and Cirrus Capital Corporation of Florida (assigned
<PAGE>
to Svenska Finans International BV) for 1 GE CF6-50C2 engine
(Serial No. 517-338), dated November 30, 1989, as amended
by First Amendment to Aircraft Engine Loan and Security
Agreement, dated March, 1990.
a. Promissory Note from the Company in the amount of
$2,820,000, as amended by a Letter Agreement dated
March, 1990.
b. Guaranty by WorldCorp, Inc., dated November 30,
1989.
Engine Contracts
1. PW4462 Propulsion System Support Proposal for World Airways,
Inc. from United Technologies Corporation (Pratt & Whitney
Group), dated August 26, 1992.
Maintenance Contracts
1. Maintenance Agreement between KLM Royal Dutch Airlines and
Swissair for the Company, dated November 18, 1993.
2. Maintenance Services Agreement between the Company and P.T.
Garuda Indonesia, dated October 14, 1991.
3. Aircraft Maintenance Agreement between the Company and Triad
International Maintenance Corporation, dated October 1,
1991, as amended by a Letter of Amendment, dated October 31,
1991, and a Letter of Amendment, dated December 9, 1991.
4. Agreement Number EPB/WO/20/06 between the Company and
British Airways PLC, dated September 11, 1991.
5. Agreement Number EPB/WO/20/04 between the Company and
British Airways PLC, dated June 1, 1991.
6. Aircraft Maintenance Services Agreement between the Company
and Mobile Aerospace Engineering, dated February 16, 1991.
7. Agreement Number EPB/WO/20/02 between the Company and
British Airways PLC, dated February 15, 1991.
8. Agreement between the Company and Caledonian Airmotive
Limited, dated November 1, 1989.
Aircraft Airlift Services/Charter Agreements
1. Cargo Aircraft Charter Agreement between the Company and UPS
Worldwide Forwarding, Inc., dated December 6, 1993.
2. Award/Contract between the Company and the Air Mobility
Command, dated October 1, 1993.
<PAGE>
3. Passenger Aircraft Charter Agreement between the Company and
Charters & Compagnies, dated October 1, 1993.
4. Cargo Aircraft Charter Agreement between the Company and
International Enterprises Group, S.A. (I.E.G.S.A.), dated
September 22, 1993.
5. Passenger Aircraft Charter Agreement between the Company and
Jetsave Limited, dated July 29, 1993.
6. Cargo Aircraft Charter Agreement between the Company and
Burlington Air Express, dated May 10, 1993.
7. Long Term Aircraft Charter Agreement between the Company and
Malaysian Airline System Berhad, dated August 30, 1986, as
amended by a Letter Agreement, dated May 9, 1988, as further
amended by Amendment No.2 to Long Term Aircraft Charter
Agreement, dated April 10, 1991.
Joint Venture Agreements
1. Revised and Restated Agreement between the Company, Emery
Worldwide Airlines, Inc., Evergreen International Airlines,
Inc., Rich International Airways, Inc., and Sun Country
Airlines, dated May 7, 1993.
Consignment Agreements
1. Consignment Agreement between the Company and The Memphis
Group, Inc., dated September 30, 1993, for spare parts for
use on McDonnell Douglas DC-10-30 aircraft.
2. Consignment Agreement between the Company and The Ages
Group, a Limited Partnership, dated April 26, 1992, for
rotable and expendable parts for use on McDonnell Douglas
DC-10-10 aircraft.
Collective Bargaining Agreements
1. Agreement between the Company and Flight Attendants employed
by the Company, July 1, 1987 - June 30, 1992 (See Schedule
2.17(a) for description of current negotiations).
2. Agreement between the Company and Cockpit Crewmembers
employed by the Company, July 1, 1986 - July 30, 1992 (See
Schedule 2.17(a) for description of current negotiations).
3. Agreement between the Company and the Dispatchers employed
by the Company, January 1, 1990 - June 30, 1993 (See
Schedule 2.17(a) for description of current negotiations).
Employee Benefit Plans
<PAGE>
1. 401(k) Plan between the Company and Scudder Trust Company,
dated June 10, 1992.
2. World Airways, Inc. Flight Attendants Pension Plan dated
December 31, 1987, as amended by Second Amendment to World
Airways, Inc. Flight Attendants Pension Plan dated August
22, 1989.
3. World Airways, Inc. Crewmembers Target Benefit Plan dated
January 1, 1989.
Real Estate Leases
1. Lease Agreement between the Company and Mattei Corporation,
dated June 1, 1993, for office and warehouse space in
Wilmington, Delaware.
2. Agreement of Lease between the Company and Tinicum
Properties Associates Limited Partnership, dated March 30,
1993, for flight attendant training center in Lester,
Pennsylvania, as amended by First Amendment to Lease, dated
July 9, 1993.
3. Lease between WorldCorp, Inc. and Jensen & Mayta Properties,
dated December 2, 1992, for print shop and training center
for the Company, as amended by Letter Agreement, dated
January 29, 1993.
4. Agreement of Lease between I-295 Business Center and Robessa
Enterprises, Inc. (the Company has an informal sublease),
dated September 28, 1992.
5. Office Lease between the Company and GT Renaissance Centre
Limited Partnership, dated September 20, 1989, for office
space in Herndon, Virginia, as amended by Addendum to Lease,
(undated).
Insurance Contracts
1. Aviation Hull and Liability issued by various insurance
companies, effective December 1, 1993 through December 1,
1994.
2. Aviation Hull War and Allied Perils issued by Lloyd's of
London (Policy No. AV313/02 92), effective December 1, 1993
through December 1, 1994.
3. Aviation Hull and Spares Deductible issued by Insurance
Company of North America (Policy No. AV313/03 92), effective
December 1, 1993 through December 1, 1994.
4. Aviation All Risks Hull Total Loss Only issued by Lloyd's of
London (Policy No. AV313/08 92), effective December 1, 1993
through December 1, 1994.
<PAGE>
5. Aviation Hull War Total Loss Only issued by Lloyd's of
London (Policy No. AV313/09 92), effective December 1, 1993
through December 1, 1994.
6. Mexican Aircraft Liability issued by Seguros America (Policy
No. 5AA061556), effective March 5, 1993 through March 5,
1994.
7. FAA Hull and Liability War Risk issued by the United States
of America (Policy Nos. NON-PR-HMR-WO-401 and NON-PR-LWR-WO-
401A), effective October 30, 1987 until further notice.
8. FAA Department of State Hull and Liability War Risk issued
by the United States of America (Policy Nos. NON-PR-HMR-WO-
S401 and NON-PR-LWR-WO-S401A), effective February 27, 1991
until further notice.
9. Automobile (All States) issued by Continental Insurance
Company (Policy No. CLP 5156636), effective August 1, 1993
through August 1, 1994.
10. Cargo Legal Liability issued by Federal Insurance Company
(Policy No. 654-95-36), effective May 1, 1993 through May 1,
1994.
11. Crime (3-D) issued by National Union Fire of Pittsburgh,
Pennsylvania (Policy No. 440-88-71), effective April 16,
1993 through April 16, 1994.
12. Directors and Officers Liability issued by National Union
Fire of Pittsburgh, Pennsylvania (Policy No. 441-18-72),
effective June 15, 1993 through June 15, 1994.
13. Personal Property issued by Federal Insurance Company
(Policy No. 654-95-37), effective May 1, 1993 through May 1,
1994.
14. Workers Compensation and Employer's Liability issued by
American Motorists Insurance Company (Policy No. 3CM898037-
05), effective July 1, 1993 through July 1, 1994.
Service Mark
1. Certificate of Registration (Reg. No. 1,648,372) issued and
registered by the United States Patent and Trademark Office
on June 18, 1991.
Other Agreements
1. Consulting Agreement between the Company and David W.
Morley, dated September 1, 1993.
2. Mutual Confidentiality and Nondisclosure Agreement between
the Company and USAfrica Airways, Inc., dated May 26, 1993.
<PAGE>
3. Military Air Transportation Agreement Number 2 between the
Company and Military Traffic Management Command, dated
February 22, 1991.
<PAGE>
Schedule 2.15(b)
Defaults
See Letter Agreement between the Company, The CIT Group/Equipment
Financing, Inc. ("CIT"), and WorldCorp, Inc., dated October 19,
1993, regarding the termination of the lease and the return of the
aircraft and the engines to CIT.
<PAGE>
Schedule 2.15(c)
Assurances
None
<PAGE>
Schedule 2.16
Interested Transactions
None
<PAGE>
Schedule 2.17(a)
Collective Bargaining Negotiations
1. Cockpit Crewmembers. The amendable date of the collective
bargaining agreement between the Company and the cockpit crewmembers
was July 1, 1992. Bargaining did not begin in earnest until August
of 1992 due to the Company's spring operations. Since that time the
negotiating committees have met on a regular basis. There have been
approximately ten to twelve bargaining sessions which normally last
anywhere from three to five days. In December of 1992 the parties
jointly agreed to utilize the services of the National Mediation
Board and requested that the Board appoint a mediator to assist in
the negotiations. The mediator appointed has been involved in all
contract negotiation sessions in 1993.
The National Mediation Board Rules and Regulations and the Railway
Labor Act contemplate a lengthy and complex process. The purpose of
this lengthy and complex process is to avoid work stoppages.
2. Flight Attendants. The amendable date of the collective bargaining
agreement between the Company and the flight attendants was July 1,
1992. The parties exchanged their opening proposals in 1992 and
have had several contract negotiation sessions. The Airline
Division of the International Brotherhood of Teamsters (the
"Teamsters") changed the representative responsible for the
Company's flight attendant negotiations, and as a result there have
been very few meetings. The new Teamsters representative and the
bargaining committee recently submitted a completely revised opening
proposal to the Company which negates some of the discussions that
have already been held. As a result, these negotiations are moving
more slowly. There has been no mediator assigned to these
negotiations either by request of the parties or by initiation of
the National Mediation Board, so it is likely that these
negotiations may not be concluded until after the cockpit
crewmembers' contract is finalized.
3. Dispatchers. This group of employees is represented by The
Transport Workers Union of America AFL-CIO (the "TWU") and the
amendable date of the contract was June 30, 1993. The TWU
representative assigned to the Company retired at the end of 1992
and a new representative has been assigned. The TWU committee
presented opening proposals in the summer of 1993, but no bargaining
sessions have been scheduled yet. Since there are relatively few
Company employees covered by this collective bargaining agreement,
it is anticipated that these negotiations will be resolved more
expeditiously than the pilot and flight attendant groups, however,
no bargaining has actually begun.
<PAGE>
Schedule 2.17(b)
Government Authorizations
for the Conduct of Commercial
Air Transportation by
World Airways, Inc.
1. Certificate of Public Convenience and Necessity for Charter
Air Transportation, authorizing the Company to engage in
overseas and foreign charter air transportation (March 24,
1982) (DOT Order 82-3-137).
2. Certificate of Public Convenience and Necessity, authorizing
the Company to engage in interstate and overseas air
transportation of persons, property and mail between all
points in the United States, its territories and possessions
(December 22, 1981) (DOT Order 81-12-131).
3. Certificate of Public Convenience and Necessity, authorizing
the Company to engage in scheduled all-cargo foreign air
transportation between the United States and the following
points (June 19, 1981, amended January 25, 1991) (DOT Order
91-1-44):
Afghanistan
Algeria
Australia
Austria
Bahrain
Belgium
Bermuda
Brunei
Dakar, Senegal
Denmark
Egypt
Fiji
Finland
France
Germany
Greece
Hong Kong
India
Indonesia
Shannon, Ireland
Tel Aviv, Israel
Italy
Jamaica
Kenya
Korea
Liberia
Libya
Luxemborg
<PAGE>
Malaysia
Morocco
The Netherlands
New Zealand
Nigeria
Norway
Oman
Pakistan
Portugal
Romania
Singapore
Spain
Sri Lanka
Sweden
Switzerland
Taiwan
Thailand
Tunisia
Turkey
The United Arab Emirates
The United Kingdom
Yugoslavia
Zimbabwe
4. Certificate of Public Convenience and Necessity, authorizing
the Company to engage in scheduled foreign combination
service between the United States and the following points
(June 19, 1981) (DOT Order 81-8-113):
Belgium Korea
Costa Rica Luxemborg
Finland Malaysia
France Netherlands
Germany Shannon, Ireland
Hong Kong Singapore
Israel Switzerland
Jamaica Taiwan
Jordan Tel Aviv, Israel
Thailand
5. Air Carrier Operating Certificate (Federal Aviation
Regulation Part 121).
6. Certificates of Aircraft Registration with respect to each
Company aircraft.
7. Certificates of Airworthiness with respect to each Company
aircraft.
<PAGE>
Schedule 2.17(c)
Dividends
Section 12(m)(ii) of the BNY agreement provides that World may not pay
dividends, distributions, redemptions, etc. on or of its capital stock,
except that World
"may make quarterly dividends so long as (x) in any six
month period such dividends do not exceed the lesser of
$4,500,000 or 50% of World's aggregate net income for the
previous six months and (y) after giving effect to such
dividend, there exists not less than $7,500,000 of cash or
cash equivalents on [World's] balance sheet".
STOCK REGISTRATION RIGHTS AGREEMENT
Dated As Of October 30, 1993
Between
WORLD AIRWAYS, INC.
And
MALAYSIAN HELICOPTER SERVICES BERHAD
<PAGE>
THIS REGISTRATION RIGHTS AGREEMENT dated as of October 30,
1993, is entered into between World Airways, Inc. (the "Company") and
Malaysian Helicopter Services Berhad ("MHS").
RECITALS
WHEREAS, the Company and MHS are parties to a Stock Purchase
Agreement dated as of the date hereof (the "Stock Purchase Agreement")
pursuant to which MHS has agreed to purchase shares (collectively, the
"Shares") of the Common Stock of the Company, par value $.001 per share
("Common Stock") from the Company and the Company's parent, WorldCorp, Inc.
("WorldCorp"); and
WHEREAS, in order to facilitate the sale or other
disposition of the Shares by MHS the parties desire to enter into this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
covenants and agreements hereinafter set forth, the parties hereto,
intending to be legally bound hereby, agree as follows:
1. Incidental Registration. If at any time occurring
subsequent to the third anniversary hereof, the Company proposes to register
any of its Common Stock under the Securities Act of 1933, as amended (the
"Act") for its own account or for the account of any other person (other
than any registration of an offering solely to employees of the Company or
its subsidiaries), it shall promptly give written notice to MHS of its
intention to do so, and the Company shall include in such registration,
subject to Section 2 hereof, all Shares that MHS shall specify in a written
notice delivered to the Company within 20 days after its receipt of the
Company's notice of the proposed filing of the registration statement,
provided that the Company shall not be required to include in such
registration any Shares that MHS shall so specify if, in the unqualified
opinion of counsel to the Company reasonably acceptable to MHS so
specifying, registration under the Act is not required for the transfer of
such Shares in the manner requested by MHS or that a post-effective
amendment to an existing registration statement would be legally sufficient
for such transfer and the Company shall have obtained such a post-effective
amendment. MHS shall not have any incidental or other registration rights
prior to the third anniversary hereof.
2. Exclusion. If the proposed or required
registration is to be underwritten (whether on a "best efforts" or a "firm
commitment" basis), the managing underwriter shall have the right to exclude
all or any part of MHS's Shares if the underwriter advises the Company in
writing that it reasonably believes that such securities should be withdrawn
therefrom. Any exclusion of Shares shall be made pro rata among MHS and all
other persons participating in the registration in proportion to the
respective number of Shares or other securities for which MHS and each such
other person have requested registration.
3. Further Obligations and Conditions Relating to
Registration of Shares. Registration of Shares pursuant to Section 1 shall
be subject to the following:
(i) Information, Documents, Assignments, etc.
MHS shall furnish to the Company such information as the Company may
reasonably request and as shall be required in connection with any
<PAGE>
registration, qualification or compliance referred to herein. The Company
shall permit MHS's counsel to participate in meetings in connection with the
preparation of any registration statement prepared pursuant to Section 1
(but MHS shall be under no obligation to participate in any such meetings
and shall incur no liability for his failure to so participate). Before
filing any such registration statement or amendment or supplement thereto,
the Company shall furnish to MHS copies of all such documents proposed to be
filed. The Company shall promptly deliver to MHS copies of each such
registration statement and each amendment or supplement thereto as filed
with the Securities and Exchange Commission ("SEC"). The Company shall
furnish to MHS the number of prospectuses, offering circulars or other
documents, and all amendments or supplements thereto, incident to each
registration, qualification or compliance as from time to time MHS may
reasonably request.
(ii) Underwriting Agreement. The Company and
MHS shall enter into an underwriting agreement in customary form with
respect to the registration of the Shares pursuant to Section 1 hereof with
the underwriter or underwriters selected for such underwriting by the
Company, which underwriting agreement shall provide for the completion of
the offering within 90 days of the effective date of the registration
statement, provided, however, that such underwriting agreement shall not
require MHS to indemnify the underwriter for any losses, claims, damages,
liabilities or actions except those arising out of or based on an untrue
statement or omission made in reliance upon and in conformity with written
information furnished to the underwriter by MHS for specific use in the
registration statement, prospectus, preliminary prospectus, amendment or
supplement.
(iii) Filing of Amendments. The Company shall file
such amendments and supplements to the registration statement and the
related prospectus and take such other action as may be necessary to keep
the registration statement effective and to comply with the Act for such
period, not exceeding 90 days from the original effective date of the
registration statement.
(iv) Blue Sky. The Company shall do any and all
acts and things which may be necessary or advisable to enable MHS to
consummate the sale, transfer or other disposition of the Shares and take
such action under the securities laws of such states as MHS shall reasonably
request, provided, however, that the Company shall not be required to file
any general consent to service of process, to qualify to do business as a
foreign corporation, or to otherwise subject itself to taxation in
connection with any such action, in any state.
(v) Expenses. The Company shall bear all of
the costs of registration and all related blue sky costs, including, but not
limited to, printing expenses, registration and filing fees, and fees and
disbursements of counsel and accountants for the Company (subject, however,
to subsection (vi) below), except that MHS shall pay the fees and
disbursements of its own counsel and the underwriting fees and selling
commissions applicable to the Shares. Notwithstanding the foregoing
provisions of this subsection, the Company shall not be required to pay any
of the costs or such expenses with respect to registration statements
prepared pursuant to Section 1 hereof unless the aggregate value of the
total number of Shares to be registered, including all Common Stock to be
registered by any other person, exceeds $5,000,000. In the event that the
<PAGE>
Company shall not be required to pay any of such costs or expenses, each
person participating in the registration shall bear its pro rata portion of
such costs or expenses.
(vi) Audits. The Company shall not be required
to furnish any audited statements at the request of MHS other than those
statements customarily prepared at the end of its fiscal year, unless MHS
shall agree to reimburse the Company for the out-of-pocket costs incurred by
the Company in the preparation of such other audited financial statements.
The Company shall, however, furnish, without charge, copies of all such
unaudited financial statements as MHS shall reasonably request.
(vii) Indemnification. The Company shall indemnify
and hold harmless MHS, each person who under the Act is deemed a controlling
person of MHS, and each underwriter for MHS against any losses, claims,
damages or liabilities to which MHS, controlling person or underwriter may
become subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) shall arise out of or
be based upon any untrue or allegedly untrue statement of any material fact
contained in the registration statement, upon any related prospectus or
preliminary prospectus or any amendment or supplement to the registration
statement or any prospectus or preliminary prospectus or upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
shall reimburse any legal or other expenses reasonably incurred by MHS,
controlling person or underwriter in connection with investigating or
defending against any such loss, claim, damage, liability or action;
provided, however, that the Company shall not be liable to MHS, controlling
person or underwriter for any losses, claims, damages, liabilities or
actions insofar as the same shall arise out of or be based upon any such
untrue statement or omission made in reliance upon and in conformity with
written information furnished by MHS, controlling person or underwriter
seeking indemnification hereunder to the Company for use in the registration
statement, prospectus, preliminary prospectus, amendment or supplement. MHS
and each underwriter for MHS shall similarly indemnify and hold harmless the
Company and its controlling persons and underwriters and all persons
participating in the registration against any such losses, claims, damages,
liabilities or actions but only insofar as the same shall arise out of or be
based upon any untrue statement or omission made in reliance upon and in
conformity with written information furnished by such indemnifying person to
the Company for use in the registration statement, prospectus, preliminary
prospectus, amendment or supplement.
4. Contribution. In order to provide for just and
equitable contribution in circumstances in which the indemnification
provided for in Section 3 above is due in accordance with its terms but is
for any reason held by a court to be unavailable from the Company, the
Company shall contribute to the aggregate losses, claims, damages, and
liabilities (or actions in respect thereof) to which MHS may be subject in
such proportion so that the Company is responsible for that portion of such
losses, claims, charges, and liabilities for which it has agreed to
indemnify MHS pursuant to Section 3 above, provided that in no event shall
the Company be required to contribute to any losses, claims, damages or
liabilities that arise solely out of or are based upon written information
furnished by MHS to the Company for specific use in the registration
statement, prospectus, preliminary prospectus, amendment or supplement.
<PAGE>
5. Change in SEC Procedures or Forms. If the SEC
adopts new procedures or forms for public resales of restricted securities,
the Company shall take such action as may be demanded by MHS in order to
permit public resales of the Shares pursuant to such new procedures or forms
so long as the economic or other burden of compliance is not materially
greater than the burden contemplated by Sections 1-4 above.
6. Transfer of Registration Rights. It is expressly
understood and agreed that, to the extent MHS is permitted to transfer the
Shares under the Stock Purchase Agreement, MHS may transfer all of its
registration rights hereunder to any person; provided, however, that MHS
shall notify the Company of any such transfer and any transferee shall, if
such transferee desires to exercise registration rights hereunder, agree to
be bound with respect to such registration rights by the terms of the
Agreement.
IN WITNESS WHEREOF, the undersigned have duly executed, or
have duly executed on its behalf, this Agreement as of the day and year
first above written.
WORLD AIRWAYS, INC.
By: /s/ T. Coleman Andrews, III
T. Coleman Andrews, III
CEO
MALAYSIAN HELICOPTER SERVICES BERHAD
By: /s/ Wan Malek Ibrahim
Wan Malek Ibrahim
Executive Director
DATED THE 3RD DAY OF FEBRUARY, 1994
***************************************************
BETWEEN
MALAYSIAN HELICOPTER SERVICES BERHAD
AND
WORLDCORP, INC.
AND
WORLD AIRWAYS,INC.
***********************************
SHAREHOLDERS AGREEMENT
***********************************
Prepared By:-
Skrine & Co
Advocates & Solicitors
Kuala Lumpur
File Ref KTN/142664.3/93
<PAGE>
INDEX
Clause Heading
Recitals. . . . . . . . . . . . . . . . . . . . . . . . .
1. Definitions . . . . . . . . . . . . . . . . . . . . . . .
2. Condition Precedent . . . . . . . . . . . . . . . . . . .
3. Exercise of Powers. . . . . . . . . . . . . . . . . . . .
4. Business of the Company . . . . . . . . . . . . . . . . .
5. Funding . . . . . . . . . . . . . . . . . . . . . . . . .
6. Board of Directors. . . . . . . . . . . . . . . . . . . .
7. Dividend Policy . . . . . . . . . . . . . . . . . . . . .
8. Procedural Matters. . . . . . . . . . . . . . . . . . . .
9. No Partnership. . . . . . . . . . . . . . . . . . . . . .
10. Force Majeure . . . . . . . . . . . . . . . . . . . . . .
11. Articles. . . . . . . . . . . . . . . . . . . . . . . . .
12. No Assignment . . . . . . . . . . . . . . . . . . . . . .
13. Binding Effect. . . . . . . . . . . . . . . . . . . . . .
14. Termination . . . . . . . . . . . . . . . . . . . . . . .
15. Notice. . . . . . . . . . . . . . . . . . . . . . . . . .
16. Appointment of Outside Counsel. . . . . . . . . . . . . .
17. Amendment . . . . . . . . . . . . . . . . . . . . . . . .
18. Governing Law . . . . . . . . . . . . . . . . . . . . . .
19. Dispute Resolution. . . . . . . . . . . . . . . . . . . .
20. No Waiver . . . . . . . . . . . . . . . . . . . . . . . .
21. Further Assurances. . . . . . . . . . . . . . . . . . . .
22. Confidentiality . . . . . . . . . . . . . . . . . . . . .
23. Publicity . . . . . . . . . . . . . . . . . . . . . . . .
24. Representations and Warranties. . . . . . . . . . . . . .
25. Entire Agreement. . . . . . . . . . . . . . . . . . . . .
Schedule Reserved Matters
Appendix I Articles of Incorporation
Appendix II Bylaws
<PAGE>
SHAREHOLDERS AGREEMENT
AN AGREEMENT made the 3rd day of February, 1994, between:
(1) MALAYSIAN HELICOPTER SERVICES BERHAD, a company
incorporated in Malaysia with its registered office
at No. 9A, Jalan Kemajuan, Section 13, 46200
Petaling Jaya, Selangor Darul Ehsan, West Malaysia;
Telephone: 011-60-3-756-1177, Telex: MA 36430,
Facsimile: 011-60-3-755-3823 ("MHS");
(2) WORLDCORP, INC, a company incorporated in the State
of Delaware, U.S.A., with its registered office at
13873 Park Center Road, Suite 490, Herndon,
Virginia 22071, U.S.A., Telephone: (703) 834-9201;
Telex: 335479; Facsimile: (703) 834-9211
("WORLDCORP"); And
(3) WORLD AIRWAYS INC, a company incorporated in the
State of Delaware, U.S.A., with its registered
office at 13873 Park Center Road, Suite 490,
Herndon, Virginia 22071 U.S.A., Telephone: (703)
834-9201; Telex: 335479; Facsimile: (703) 834-9211
(the "COMPANY").
WHEREAS:
A. The COMPANY is a subsidiary of WORLDCORP.
B. MHS has entered into an agreement dated 30 October
1993 (the "Stock Purchase Agreement") with
WORLDCORP and the COMPANY to acquire a 24.9%
interest in the COMPANY. It is a term of the Stock
Purchase agreement that the Parties shall enter
into a Shareholders Agreement.
C. Pursuant thereto the Parties now execute this
Agreement to co-operate with each other in relation
to their investment in the COMPANY and to regulate
and govern their relationship as shareholders of
the COMPANY upon the terms and subject to the
conditions hereinafter contained.
IT IS AGREED as follows:-
1. DEFINITIONS
1.1 In this Agreement, unless the context
otherwise requires, the following expressions shall have the following
meanings:
"Articles" means the Memorandum and Articles of
Association of the COMPANY, or the Certificate of
Incorporation of the COMPANY, as the case may be.
"Associated Company" means any company in which the
COMPANY has a direct or indirect shareholding.
<PAGE>
"Board" means the Board of Directors for the time
being of the COMPANY.
"Bona Fide Offer" means any offer, in writing,
including all the terms and conditions thereof, to
purchase Common Stock.
"Business" means the business of the COMPANY as
more particularly described in Clause 4;
"Business Plan" means programs of activities and
operations, budgets, borrowings and funding of
programs, credit limits, actual and projected
revenue statements and pricing policy of the
services provided by the
COMPANY relating to its current fiscal year, plus a
projection thereof for each of the four (4)
succeeding fiscal years.
"Common Stock" means, unless the context otherwise
requires, post-split shares of the Common Stock of
the COMPANY, par value $.001 per share.
"Director" means any director for the time being of
the COMPANY.
"Parties" means MHS and WORLDCORP and "Party" shall
be construed accordingly.
"Reserved Matters" means the matters set out in the
Schedule.
"Shareholder" means any person who is a shareholder
in the COMPANY at the relevant time.
"Shares" means shares (of whatever class or
description) in the share capital of the COMPANY,
and includes any shares issued and allotted
following any increase in the share capital of the
COMPANY.
1.2 Words importing the singular include the
plural and vice-versa, words importing a gender include
every gender and references to persons include bodies
corporate and unincorporate.
1.3 All references to statutes include
amendments to such statutes and re-enactments thereof as
well as rules, regulations and all other subsidiary
legislation made under the statutes and all amendments to
and re-enactments of such subsidiary legislation.
1.4 The headings to the Clauses and Schedules
of this Agreement are for convenience only and have no legal
effect. All references to Clauses and Schedules are to
clauses in and schedules to this Agreement.
<PAGE>
2. CONDITION PRECEDENT
2.1 This Agreement shall not be binding on the
Parties until and unless MHS acquires a 24.9% shareholding
in the COMPANY as contemplated in the Stock Purchase
Agreement.
2.2 MHS agrees not to pledge, sell or transfer
any of the said 24.9% Shares for three (3) years after the
Closing Date (as defined in the Stock Purchase Agreement)
without the prior written consent of WORLDCORP (which shall
not be unreasonably withheld); Provided however that MHS may
at any time transfer Shares to a wholly-owned subsidiary.
3. EXERCISE OF POWERS
3.1 The Parties agree to exercise their rights
as shareholders of the COMPANY in a manner which is
consistent with the provisions of this Agreement, including
using their best endeavours to procure that any Directors
nominated by either Party also act in such a consistent
manner in relation to the performance of their duties and
functions as Directors. The provisions of this Clause 3.1
shall apply to the COMPANY and, mutatis mutandis, to every
Associated Company.
3.2 If, without the prior written consent of
MHS: (1) the COMPANY sells all or substantially all of the
COMPANY's business; (2) the COMPANY fundamentally changes
its line of business (the events described in clauses (1)
and (2) herein being hereinafter referred to as the
"Fundamental Change Events"); or (3) WORLDCORP disposes of
its holdings in the COMPANY so that WORLDCORP's ownership in
the COMPANY falls below 51% of the voting capital stock of
the COMPANY (a "Disposal Event"), then MHS shall have the
option (a) to declare Clause 2.2 to be null and void and to
sell all or a portion of the Shares to a third party; and/or
(b) to require WORLDCORP to purchase all or part of MHS's
Shares at fair market value; Provided Always that such value
shall not be less than the aggregate of the costs borne by
MHS in acquiring and holding those Shares. For this
purpose, the holding costs of MHS shall be computed by
applying the Prescribed Interest (as hereinafter defined) to
the costs borne by MHS in acquiring those Shares calculated
on a daily basis commencing from the date such acquisition
costs were incurred to the date of the Disposal Event, or
the Fundamental Change Event, as the case may be. For
purposes of this Paragraph 3.2, the term "Prescribed
Interest" means a rate equivalent to the average of the base
lending rate of MALAYSIAN BANKING BERHAD during the
aforesaid period.
3.3 Without MHS's prior written consent, which
consent shall not be unreasonably withheld, WORLDCORP agrees
not to take any action that would cause MHS's ownership of
the COMPANY to fall below 20%.
<PAGE>
3.4 In the event the COMPANY wishes to issue,
or WORLDCORP wishes to sell, transfer or otherwise dispose
of any or all of their Common Stock, except for: (1) the
purposes of corporate liquidity; (2) any compensation plan
for officers, directors and/or employees of the Company; (3)
an initial public offering of Shares of the COMPANY; and (4)
any shares issued to a prospective strategic partner of the
COMPANY in Latin America, and the COMPANY or WORLDCORP
(herein, the "Seller") has received, from a third party
(herein, a "Purchaser"), a Bona Fide Offer to purchase or
otherwise take delivery of any or all of said shares, the
Seller shall, before conveying any interest in such shares,
offer such shares to MHS on the following terms and
conditions:
(a) The Seller shall provide written notice (a
"Transfer Notification") to MHS of the Bona
Fide Offer to sell or otherwise dispose of
such shares. The Transfer Notification
shall (i) include a copy of the Bona Fide
Offer setting forth all of the terms of the
proposed transaction, including, without
limitation, the name and address of the
Purchaser, the number of shares to be
conveyed, the date of the Bona Fide Offer
and the terms of payment (if any) for such
shares; (ii) include the terms of any
transactions between the Seller and
Purchaser that reasonably could be expected
to influence the terms and conditions of
the Bona Fide Offer; and (iii) offer the
shares subject to the proposed transaction
to MHS at the price offered by the
Purchaser in the Bona Fide Offer.
(b) If MHS decides to purchase any or all of
the shares subject to the Bona Fide Offer,
MHS shall, within ten (10) days of receipt
of the Transfer Notification, (i) notify
the Seller, in writing, of MHS's intent to
exercise its right of first refusal to
purchase the shares subject to the Bona
Fide Offer and (ii) offer, in writing, to
purchase such shares at a price equal to
the price offered in the Bona Fide Offer
(hereinafter referred to as the "First
Refusal Offer").
(c) MHS's failure to provide the Seller with a
First Refusal Offer in accordance with the
provisions of paragraph 3.4(b) of this
Clause 3 shall constitute a waiver of MHS's
right of first refusal with respect to the
shares subject to the Bona Fide Offer for a
period of sixty (60) days from the
expiration of the ten (10) day period
specified in paragraph 3.4(b) of this
Clause 3 for the sole purpose of permitting
<PAGE>
the Seller to accept the Bona Fide Offer on
the exact terms set forth therein. MHS's
right of first refusal shall reattach to
the shares subject to the Bona Fide Offer
in the event the Bona Fide Offer is not so
accepted within such sixty (60) day period.
(d) If MHS has agreed to pay the price offered
in the Bona Fide Offer or the Seller has
accepted the First Refusal Offer, the
Seller shall, within ten (10) days of such
acceptance or receipt of the First Refusal
Offer, whichever occurs first, submit the
appropriate share certificates to MHS
properly endorsed for transfer to MHS and
upon receipt of appropriate certificates so
endorsed, MHS shall remit to the Seller an
amount equal to the purchase price of such
shares.
4. BUSINESS OF THE COMPANY
4.1 The Parties agree that the business
objectives of the COMPANY and its Associated Companies is
the performance of air transportation, and services related
thereto, pursuant to Certificates of Public Convenience and
Necessity issued by the Department of Transportation and
operating certificates issued by the Federal Aviation
Administration. If the Company fundamentally changes its
line of business from the performance of air transportation,
MHS shall have the remedies set forth in Paragraph 3.2
hereof.
4.2 In keeping with the intent of Clause 4.1,
the COMPANY affirmatively covenants that it will take all
actions necessary to keep its certificates and licenses in
full force and effect.
5. FUNDING
5.1 In keeping with its responsibilities for
the overall supervision and management of the affairs of the
COMPANY, the Board of the COMPANY shall decide from time to
time on the funding requirements of the COMPANY, and
shall approve the structure and terms of any debt financing
involving the COMPANY, subject to the other provisions of
this Agreement, including the Reserved Matters.
5.2 In acknowledgment of the fact that
WORLDCORP and the COMPANY currently share common premises
and a common staff of employees (including executives,
administrative and support personnel), the Parties agree
that from time to time, they will mutually agree upon the
allocation of administrative expenses in order to achieve a
proper allocation of such expenses.
<PAGE>
6. BOARD OF DIRECTORS
6.1 Each Party shall be entitled to nominate a
number of Directors that as nearly as possible reflects its
proportionate voting rights in respect of the COMPANY, and,
in any event, MHS shall be entitled to nominate a minimum of
two (2) Directors. MHS and WORLDCORP shall cast their votes
in their capacities as Shareholders to ensure that each
other's nominees are elected as Directors. Either Party may
at any time and in its sole discretion by notice in writing
to the other terminate the nomination of any Director
nominated by it and nominate another person in his place and
each Party shall cooperate in effecting such change of
Directors. And, in any event, in no instance shall a
Director nominated by MHS be removed from his office without
the consent of the Parties.
6.2 Without prejudice to Clause 6.1, MHS and
WORLDCORP hereby agree to consult with each other with
respect to the appointment of Directors. Any casual vacancy
on the Board of Directors of the COMPANY caused by a MHS or
WORLDCORP nominated Director ceasing to be a Director shall
be filled on the basis of maintaining the ratios referred to
in Clause 6.1.
6.3 The Parties shall endeavour to ensure
that:-
(a) all Board meetings shall be held at least
at quarterly intervals and not less than
fourteen (14) days notice of such meetings
together with details of the agenda and all
Board papers supporting the items on the
agenda shall be given to all Directors;
(b) upon receipt of the agenda and prior to the
meeting the Directors endeavour to consult
with each other on every item on the
agenda;
(c) no Board meeting shall proceed unless at
least one Director elected as a nominee of
MHS and one Director elected as a nominee
of WORLDCORP is present at that meeting;
and
(d) all costs associated with attending Board
meeting by Directors including travelling
and accommodation and all costs incurred by
Directors in attending to the Business of
the COMPANY shall be re-imbursed by the
COMPANY in accordance with its
reimbursement policy.
6.4 The Board shall be responsible for
formulating the implementing the general policy of the
COMPANY and supervising the operation and management of the
Business in accordance with this Agreement, the Articles and
resolutions of Shareholders and shall report from time to
<PAGE>
time and in any event at intervals of not more than three
(3) months to the Shareholders. The Board shall set
financial targets for the operation of the COMPANY and, in
setting such targets, the Board shall take all steps to
ensure the payment of dividends to the shareholders of the
COMPANY on a regular basis, consistent with applicable law,
while ensuring sufficient reserves for the COMPANY are
maintained and that the dividend policy referred to in
Clause 7 is adhered to.
6.5 The COMPANY shall provide MHS with monthly
financial statements and reports of the COMPANY's
performance and provide MHS with a copy of the Business Plan
and the annual budget once they have been approved by the
Board. Any material deviation from the Business Plan or the
budget, once they have been adopted, must be approved by the
Board.
6.6 No resolution for any of the Reserved
Matters shall be passed unless each Party, or directors
nominated by each Party, as the case may be, votes in the
affirmative.
6.7 MHS shall, if it so requests WORLDCORP in
writing, be entitled to have its nominees appointed to the
boards of directors of all Associated Companies of the
COMPANY in the same ratios as those
referred to in Clause 6.1, and WORLDCORP shall exercise
WORLDCORP's rights so as to support such appointments.
6.8 The provisions of this Clause 6 shall apply
to the COMPANY and, mutatis mutandis, to every Associated
Company.
6.9 The nominee directors of MHS shall have no
liability for, and shall be indemnified by the COMPANY and
by WorldCorp for and against, any and all losses, claims,
damages and causes of action, arising out of, connected
with, or related to, any environmental issues or matters
involving the COMPANY. WORLDCORP and the COMPANY shall
cause to be reported to the Board all environmental issues
or matters involving the COMPANY under Federal, state and
other applicable laws, and the proper disposition of said
environmental issues or matters.
6.10 WORLDCORP shall disclose in writing any
beneficial interest, directly or indirectly, in any
transaction that WORLDCORP, any of its directors, officers,
employees or affiliates has or proposes to have in the said
transaction to the Board before the said transaction is
approved by the Board. The Directors nominated by WORLDCORP
shall abstain from voting the approval of any transaction in
excess of $100,000 and not in the ordinary course of the
COMPANY's or WORLDCORP's business, in which WORLDCORP, any
of its directors, officers, employees or affiliates has or
proposes to have any said beneficial interest.
<PAGE>
7. DIVIDEND POLICY
7.1 The COMPANY shall declare and distribute
the amount properly payable in dividends subject to the
requirements of law and general overall financial prudence.
7.2 The Parties shall approve the
recommendations of the Board regarding declarations of
dividends which are made in accordance with Clause 7.1, and
each distribution of a declared dividend shall be made
within sixty (60) days of the completion of the final audit
of the financial statements of the COMPANY at the end of
each fiscal year of the COMPANY.
7.3 The dividend policies in this Clause 7
shall be applied to the COMPANY and, mutatis mutandis, to
all Associated Companies.
7.4 WORLDCORP and the COMPANY agree to made an
election pursuant to [Proposed] Treasury Regulations 1.1502-
95, in the time and manner provided therein, apportioning
the entire section 382 limitation (including the entire
"value element" and the entire "adjustment element" as such
terms are described in [Proposed] Treasury Regulations
1.1502-95) to the COMPANY, and shall not revoke such
election without the written consent of MHS.
8. PROCEDURAL MATTERS
8.1 The Parties shall use their best efforts to
confer with each other, and to cause their nominated
Directors to confer with each other, as the case may be,
before any meeting at which a decision which is subject to
this Agreement is to be made, so as to ensure that decisions
will be in accordance with this Agreement. If necessary, a
meeting shall be deferred so as to enable the Parties or the
Directors to so confer.
8.2 The Parties agree:-
(a) to exercise all voting rights and
powers of control in relation to
the COMPANY so as to give full
effect to the provisions of this
Agreement;
(b) to procure that the Directors
nominated by each of them act as
contemplated in this Agreement, and
to procure that all persons
directly or indirectly under their
control shall refrain from acting
in a manner which will hinder or
prevent giving full effect to this
Agreement; and
(c) generally to use all reasonable
endeavours to promote the Business
and the interests of the COMPANY.
<PAGE>
8.3 This Clause 8 shall be applied to the
COMPANY and, mutatis mutandis, to all Associated Companies.
9. NO PARTNERSHIP
9.1 None of the provisions of this Agreement
shall be deemed to constitute a partnership between the
Parties and neither Party shall have authority to bind each
other in any way.
10. FORCE MAJEURE
10.1 If any Party is rendered wholly or partly
unable to carry out its obligations under this Agreement by
reason of events beyond its control ("force majeure
events"), including, but not limited to, fire, flood,
explosion, action of the elements, acts of God, accidents,
epidemics, strikes, lockouts, other labour disputes,
inability to obtain or shortages of supplies, equipment or
transportation, insurrections, riots or other civil
commotions, war, enemy action, acts, demands or requirements
of governments or by other causes which it could not
reasonably be expected to avoid, then the performance of the
obligations of such Party as are affected by such causes
shall be excused during the continuance of any inability so
caused, but such inability shall as far as possible be
remedied by the taking of precautions, any reasonable
alternative measures or otherwise with all reasonable
dispatch.
10.2 Within fourteen (14) days of an occurrence
of a force majeure event which renders a Party unable to
carry out its obligations under this Agreement, the Party so
affected shall give notice to the other of the specific
nature of the occurrence and as far as possible, estimate
its duration.
11. ARTICLES
11.1 In the event of a conflict or inconsistency
between the terms of this Agreement and the Articles, this
Agreement shall prevail and the Parties agree to use their
reasonable endeavours to procure the amendment of the
Articles to remove as far as possible any such conflict or
inconsistency.
12. NO ASSIGNMENT
12.1 No Party to this Agreement may assign or
transfer or propose to assign or transfer its rights or
interest under this Agreement without the prior written
consent of the other except in the case of an assignment or
transfer to a wholly owned subsidiary of such assignor
provided that such subsidiary shall execute a Deed in
accordance with the provisions of Clause 13 and the assignor
shall guarantee the due performance of the assignee's
obligations pursuant to that Deed and this Agreement.
<PAGE>
13. BINDING EFFECT
13.1 This Agreement shall enure for the benefit
of and shall be binding on the respective successors in
title and permitted assigns of each Party who shall procure
in transferring its interest hereunder or any of its Shares
that each such transferee shall execute a Deed with the
other Parties, by which the transferee agrees to be bound by
terms identical, mutatis mutandis, to the terms of this
Agreement (including the terms of this Clause as regards any
subsequent transfer of the Shares or such interest).
14. TERMINATION
14.1 This Agreement shall continue in full force
and effect until the first to occur of the following:
(a) either Party ceasing to be a
Shareholder of no less than five
per cent (5%) Shares respectively,
or
(b) both Parties unanimously agreeing
in writing to terminate this
Agreement.
14.2 Termination of this Agreement shall not
affect the rights and obligations of the Parties pursuant to
this Agreement which are intended to survive such
termination. Termination shall be without prejudice to any
actions, claims or rights which may have accrued to any of
the Parties prior to termination.
15. NOTICE
15.1 Any notice or communication to be given
under this Agreement shall either be delivered personally,
sent by registered post or by telex. The address for
service of each Party shall be those addresses mentioned
above or as notified to the other from time to time. A
notice shall be deemed to have been served as follows:-
(a) if personally delivered, at the time of
delivery;
(b) if posted, at the expiration of fourteen
(14) days after the envelope containing the
notice was delivered into the custody of
the postal authorities; or
(c) if sent by telex, on receipt by the sender
of the answerback code, of the addressee
after transmission of the telex.
15.2 In proving such service it shall be
sufficient to prove that personal delivery was made, that
the envelope containing such notice was properly addressed
and delivered to the appropriate postal authority as a
prepaid registered letter, or that the telex was sent to the
<PAGE>
telex number as notified by the recipient to the other Party
to this Agreement.
16. APPOINTMENT OF OUTSIDE COUNSEL
16.1 In recognition of the importance of proper
legal representation, the Parties agree that the appointment
of outside litigation counsel shall be mutually agreeable to
the Parties.
17. AMENDMENT
17.1 The Parties to this Agreement agree to meet
periodically to review the provisions and practical
operation and performance of this Agreement.
17.2 No modification or alteration of, or
addition to, any of the provisions of this Agreement shall
be made unless agreed to by all the Parties in writing.
17.3 The Parties agree that the Articles of
Incorporation and the Bylaws of the Company, appended to
this Agreement as Appendix I and Appendix II, are as stated,
and that, notwithstanding any other provisions of the
applicable law, the Articles of Incorporation and the
Bylaws, as hereto appended, shall not be amended without the
express written consent of the Parties.
18. GOVERNING LAW
18.1 This Agreement shall be governed by, and
interpreted in accordance with the laws of Virginia, and the
Parties consent to the non-exclusive jurisdiction of the
courts in Virginia.
19. DISPUTE RESOLUTION
19.1 In the event of:-
(a) a material breach of an obligation
under this Agreement; or
(b) a dispute relating to any other
matter arising out of this
Agreement, the Party alleging the
breach or the dispute shall
forthwith give notice to the other
Party:-
(i) in the case of a material breach to
remedy the breach within thirty
(30) days of such notice; or
(ii) in the case of a dispute, to enter
into informal negotiations to
settle the dispute amicably within
thirty (30) days of such notice.
<PAGE>
19.2 Where the breach is not remedied or where
the dispute is not settled within the thirty (30) day period
stipulated in Clause 19.1, the matter shall be termed a
"Declared Dispute" and referred to the Executive Director of
MHS and the President of WORLDCORP respectively or
equivalent officer of the Parties ("CEO's").
19.3 If the Declared Dispute is not resolved by
agreement between the CEO's within thirty (30) days of its
referral, then either Party may refer the matter for
arbitration to the American Arbitration Association,
Washington, DC. The arbitration shall take place in
Washington, D.C. The arbitration panel shall consist of
three arbitrators, one of which shall be selected by MHS and
one of which shall be selected by the COMPANY. The
arbitrators selected by MHS and the COMPANY shall, not later
than fifteen (15) days after their appointment, appoint a
third neutral arbitrator to the panel. If the MHS and the
COMPANY appointed arbitrators cannot agree within said
fifteen (15) day period upon the appointment of the neutral
third arbitrator, said neutral arbitrator shall be chosen
according to the rules of the American Arbitration
Association then in effect. The decision of the panel of
three (3) arbitrators shall be final and binding on the
Parties, and the Parties may enforce the arbitration
decision in any court of appropriate jurisdiction.
20. NO WAIVER
20.1 A Party may exercise a right, power or
remedy at its discretion, and separately or concurrently
with another right, power or remedy. A single or partial
exercise of a right, power or remedy by a Party shall not
prevent a further exercise of that or of any other right,
power or remedy. Failure by a Party to exercise, or any
delay in exercising a right, power or remedy shall not
prevent its exercise and shall not amount to a waiver.
21. FURTHER ASSURANCES
21.1 At the request of another Party a Party
shall, at its own expense, execute the documents and do
everything reasonably necessary to give effect to this
Agreement and the transactions contemplated by it.
22. CONFIDENTIALITY
22.1 All information exchanged between the
Parties under this Agreement or during the negotiations
preceding this Agreement and relating to the terms and
conditions of this Agreement or to any of the activities
contemplated by this Agreement is confidential to them,
their employees, legal advisers and other consultants and
may not be disclosed to any other person except:-
(a) to Shareholders of at least 15% of
the Parties or their parent
companies;
<PAGE>
(b) for the purposes of this Agreement
or otherwise with the consent of
the Party who supplied the
information;
(c) if the information is, at the date
this Agreement is entered into,
lawfully in the possession of the
recipient of the information
through sources other than the
Party who supplied the information;
(d) if required by law or regulatory
authorities;
(e) in connection with legal
proceedings relating to this
Agreement; or
(f) if the information is generally and
publicly available.
22.2 Each Party shall use reasonable endeavours
to ensure that any person to whom confidential information
is disclosed by that Party undertakes to observe the
confidentiality undertakings herein. Each Party shall treat
all confidential information of the other Party in the same
manner in which it treats its own confidential information.
23. PUBLICITY
23.1 No Party to this Agreement shall make any
media or other announcements or releases relating to this
Agreement and the transactions the subject of this Agreement
without the approval of the other Party unless that
announcement or release is required to be made by law or
regulatory authorities.
24. REPRESENTATIONS AND WARRANTIES
24.1 Except as previously disclosed, MHS and
WORLDCORP and the COMPANY each represents and warrants to
the other that:-
(a) it has the full corporate power and
authority to enter into and perform
this Agreement and all transactions
and undertakings contemplated
herein and that all corporate and
other actions required to authorise
it to enter into and perform this
Agreement have been or will be
properly taken;
(b) it is a corporation duly organised
and validly existing under the laws
of the applicable state or country
of incorporation and is duly
<PAGE>
qualified and in good standing in every
other state or jurisdiction in which the
nature of its business requires such
qualification;
(c) it has capital sufficient to carry
on its business and all businesses
in which it is about to engage;
(d) except as disclosed in the Stock
Purchase Agreement, there is no
pending or threatened litigation,
actions or proceedings which
involve the possibility of
materially and adversely affecting
its business, assets, operations,
condition or prospects, financial
or otherwise or the ability of it
to perform this Agreement;
(e) this Agreement will not cause a
breach of any covenants contained
in any loan or lease agreements to
which WORLDCORP or the COMPANY are
parties;
(f) it is not bankrupt or insolvent, it
has not committed any act of
bankruptcy, and there is no pending
threat of bankruptcy or insolvency;
(g) it is currently capable of paying
its debts when due; and
(h) this Agreement has been duly
executed by it and is valid and
binding upon it in accordance with
its terms.
24.2 All representations and warranties made by
MHS, the COMPANY or WORLDCORP under this Clause 24 are made
on and as of the Closing Date (as defined in the Stock
Purchase Agreement) and shall not survive said Closing Date.
25. ENTIRE AGREEMENT
25.1 This Agreement is intended to regulate the
relationship between and amongst the Parties in their
capacities as Shareholders, and shall be construed and given
effect to as such. This Agreement constitutes the entire
agreement between the Parties in relation to the subject
matter hereof.
<PAGE>
SCHEDULE
RESERVED MATTERS
The following are Reserved Matters:-
1. do or suffer to be done any act or thing
whereby the COMPANY may be wound up
(whether voluntarily or compulsorily),
except as otherwise expressly provided for
in this Agreement;
2. other than in the ordinary course of the
airline business described in Clause 4:
(a) acquire, purchase or subscribe for
any shares, debentures, mortgages
or securities (or any other
interest therein) in any company,
trust or other body;
(b) acquire any assets in excess of US
Dollars $100,000/-;
(c) creating any guarantee, indemnity
or loan by the COMPANY in excess of
US Dollars $100,000/-;
(d) the raising of any debt in excess
of US Dollars $100,000/-; and
(e) approval of any other expenditures
in excess of US Dollars $50,000/-.
3. sale of all or substantially all of the
COMPANY's business or a fundamental change
in the line of business;
4. any increase or reduction in the Share
capital or the issue of any new Shares
which in any way impacts MHS's 24.9%
interest in the COMPANY, except for: (i)
the purposes of corporate liquidity; (ii)
any compensation plan for officers,
directors and/or employees of the COMPANY;
(iii) an initial public offering of Shares
of the COMPANY; and (iv) shares issued to a
prospective strategic partner of
the COMPANY in Latin America;
5. the appointment of outside auditors; and
6. the appointment of any committee of the
Directors, or delegation of any of the
powers of the Directors to a committee,
unless the ratio of Directors on such
committee is consistent with the ratio
specified in Clause 6.1.
<PAGE>
IN WITNESS WHEREOF, the duly authorised
representatives of the Parties have executed this Agreement on the date
first above-written.
Signed by Wan Malek Ibrahim )
) /s/ Wan Malek Ibrahim
for and on behalf of )
MALAYSIAN HELICOPTER SERVICES BHD )
in the presence of:-
/s/ Zakaria Abd. Hamid
Signed by T. Coleman Andrews, III )
) /s/ T. Coleman Andrews, III
for and on behalf of )
WORLDCORP, INC. )
in the presence of:- )
/s/ Andrew M. Paalborg
Signed by T. Coleman Andrews, III )
) /s/ T. Coleman Andrews, III
for and on behalf of )
WORLD AIRWAYS, INC. )
in the presence of:- )
/s/ Andrew M. Paalborg
Disk Loc: Drew # 5
File Loc: sharagre
AMENDMENT NO 1 TO SHAREHOLDERS AGREEMENT
This AMENDMENT NO 1 TO SHAREHOLDERS AGREEMENT (the
"Amendment"), dated February 28, 1994 is by and among Malaysian Helicopter
Services Berhad ("MHS"), WorldCorp, Inc. ("WORLDCORP") and World Airways,
Inc. (the "COMPANY").
WHEREAS, MHS, WORLDCORP and the COMPANY (the "Parties") have
entered into that certain Shareholders Agreement dated February 3, 1994 (the
"Agreement"); and
WHEREAS, the parties desire to amend the Shareholders
Agreement in order to satisfy certain concerns of the United States
Department of Transportation; and
WHEREAS, all capitalized terms used but not otherwise
defined herein shall have the meaning assigned to such terms in the
Agreement.
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:-
1. The Parties agree that Clause 3.2 of the Agreement
shall be deleted in its entirety and that the following provision shall be
inserted in lieu thereof:
3.2 If, without the prior written consent of MHS:
(1) the COMPANY sells all or substantially all of
the COMPANY'S business; or (2) the COMPANY
fundamentally changes its line of business (the
events described in clauses (1) and (2) herein
being hereinafter referred to as the "Fundamental
Change Events"), then MHS shall have the option (a)
to declare Clause 2.2 to be null and void and to
sell all or a portion of the Shares to a third
party; and/or (b) to require WORLDCORP to purchase
all or part of MHS's Shares at fair market value;
Provided Always that such value shall not be less
than the aggregate of the costs borne by MHS in
acquiring and holding those Shares. For this
purpose, the holding costs of MHS shall be computed
by applying the Prescribed Interest (as hereinafter
defined) to the costs borne by MHS in acquiring
those Shares calculated on a daily basis commencing
from the date such acquisition costs were incurred
to the date of the Fundamental Change Event. For
purposes of this Paragraph 3.2, the term
"Prescribed Interest" means a rate equivalent to
the average of the base lending rate of MALAYAN
BANKING BERHAD during the aforesaid period.
2. The Parties agree that Clause 3.3 of the Agreement
shall be deleted in its entirety and that the following provision shall be
inserted in lieu thereof:
3.3 If, without the prior consent of MHS,
WORLDCORP disposes of its holdings in the COMPANY
so that WORLDCORP's ownership in the COMPANY falls
below 51% of the voting capital stock of the
COMPANY (a "Disposal Event"), then notwithstanding
<PAGE>
any other provision of the Stock Purchase Agreement
or this Agreement, MHS shall have the option (a) to
declare Clause 2.2 null and void and to sell all or
a portion of the Shares to a third party or (b) to
require WORLDCORP to sell to the party purchasing
WORLDCORP's shares in the COMPANY as a result of
such Disposal Event a percentage of the total
voting capital stock of the COMPANY held by MHS
that is not less than the percentage by which
WORLDCORP's ownership falls below 51%. As an
example and for the avoidance of doubt, if
WORLDCORP sold voting capital stock of the COMPANY
so that its ownership of the COMPANY fell 45%,
WORLDCORP would be required to sell to the Party
purchasing the WORLDCORP shares in the COMPANY an
amount of the total voting capital stock of the
COMPANY held by MHS equal to 6% of the total voting
capital stock of the COMPANY.
3. The Parties agree that Clause 3.4 of the Agreement
shall be deleted in its entirety and that the following provision shall be
inserted in lieu thereof;
In the event the COMPANY wishes to issue, or
WORLDCORP wishes to sell, transfer or otherwise dispose of any or all of
their Common Stock, and the COMPANY or WORLDCORP (herein, the "Seller") has
received, from a third party (herein a "Purchaser"), a Bona Fide Offer to
purchase or otherwise take delivery of any or all of the said shares, the
Seller shall, before conveying any interest in such shares, offer such
shares to MHS on the following terms and conditions:
(a) The Seller shall provide written notice (a
"Transfer Notification") to MHS of the Bona
Fide Offer to sell or otherwise dispose of
such shares. The Transfer Notification
shall (i) include a copy of the Bona Fide
Offer setting forth all of the terms of the
proposed transaction, including, without
limitation, the name and address of the
Purchaser, the number of shares to be
conveyed, the date of the Bona Fide Offer
and the terms of payment (if any) for such
shares; (ii) include the terms of any
transactions between the Seller and
Purchaser that reasonably could be expected
to influence the terms and conditions of
the Bona Fide Offer; and (iii) offer the
shares subject to the proposed transaction
to MHS at the price offered by the
Purchaser in the Bona Fide Offer.
(b) If MHS decides to purchase any or all of
the shares subject to the Bona Fide Offer,
MHS shall, within ten (10) days of receipt
of the Transfer Notification (i) notify the
Seller, in writing, of MHS's intent to
exercise its right of first refusal to
purchase the shares subject to the Bona
<PAGE>
Fide Offer and (ii) offer, in writing, to
purchase such shares at a price equal to
the price offered in the Bona Fide Offer
(hereinafter referred to as the "First
Refusal Offer").
(c) MHS's failure to provide the Seller with a
First Refusal Offer in accordance with the
provisions of paragraph 3.4(b) of this
Clause 3 shall constitute a waiver of MHS's
right of first refusal with respect to the
shares subject to the Bona Fide Offer for a
period of sixty (60) days from the
expiration of the ten (10) day period
specified in paragraph 3.4(b) of this
Clause 3 for the sole purpose of permitting
the Seller to accept the Bona Fide Offer on
the exact terms set forth therein. MHS's
right of first refusal shall reattach to
the shares subject to the Bona Fide Offer
in the event the Bona Fide Offer is not so
accepted within such sixty (60) day period.
(d) If MHS has agreed to pay the price offered
in the Bona Fide Offer or the Seller has
accepted the First Refusal Offer, the
Seller shall, within ten (10) days of such
acceptance of receipt of the first Refusal
Offer, whichever occurs first, submit the
appropriate share certificates to MHS
properly endorsed for transfer to MHS and
upon receipt of appropriate certificates so
endorsed, MHS shall remit to the Seller an
amount equal to the purchase price of such
shares.
(e) Notwithstanding paragraphs 3.4(a) through
3.4(d), the purchase of such shares by MHS
may not impair the COMPANY's U.S.
citizenship under the Federal Aviation Act
of 1958, as amended.
4. The Parties agree to add a new Clause 3.5 to the
Agreement as follows:
3.5 In the addition to the rights specified in
Clause 3.4, MHS shall have the right to purchase
shares of the COMPANY in order to maintain its
percentage ownership of the COMPANY's issued and
outstanding shares. The COMPANY shall deliver to
MHS a written notice (the "Dilution Notice")
indicating the number of additional shares (the
"Additional Shares") that MHS may acquire in order
to maintain its ownership position in connection
with any increase in the COMPANY's issued and
outstanding shares. Such Dilution Notice shall
also set forth the per share price for such
<PAGE>
Additional Shares which shall be (a) the same price
as the per share price proposed in any Bona Fide
Offer under Clause 3.4 or (b) in the case of a
public offering, the cash price per share at which
shares of the COMPANY are offered in such offering.
If within 30 days of the delivery of such Dilution
Notice, MHS advises the COMPANY in writing of its
desire to purchase such additional shares, the
COMPANY, or the underwriter in the case of a public
offering, shall sell and MHS shall purchase such
additional shares.
5. The Parties agree that Clause 6.1 of the Agreement
shall be deleted in its entirety and that the following provision shall be
inserted in lieu thereof:
6.1 Each Party shall be entitled to nominate a
number of Directors that as nearly as possible
reflects its proportionate voting rights in respect
of the COMPANY and in any event MHS shall be
entitled to nominate a minimum of two (2)
Directors, and MHS and WORLDCORP shall cast their
votes in their capacities as Shareholders to ensure
that each other's nominees are elected as
Directors. Either Party may at any time and in its
sole discretion by notice in writing to the other
terminate the nomination of any Director nominated
by it and nominate another person in his place and
each Party shall cooperate in effecting such change
of Directors. And in any event, in no instance
shall a Director nominated by MHS be removed from
his office without the consent of the Parties,
provided, however, that any Director of the
COMPANY, including a Director nominated by MHS, may
be removed for conduct defined in Article
Thirteenth of the COMPANY's Articles of
Incorporation as acts for which a Director may not
be indemnified by the COMPANY.
6. The Parties agree to add a new Clause 6.11 of the
Agreement as follows:
6.11 The nominee Directors of MHS shall not
constitute more than one-third of the Directors
appointed to serve on any Committee of the Board
established pursuant to Article III, Section 8 of
the COMPANY's By-Laws.
7. The Parties agree that Clause 17.3 of the Agreement
shall be deleted in its entirety and that the following provision shall be
inserted in lieu thereof:
17.3 The Parties agree that the Articles of
Incorporation and the Bylaws of the COMPANY,
appended to this Agreement as Appendix I and
Appendix II, are as stated, and that,
notwithstanding any other provision of the
<PAGE>
applicable law, the Articles of Incorporation and
the Bylaws, as hereto appended, shall not be
amended so as to reduce the percentage of the
voting stock of the COMPANY held by MHS without the
express written consent of the Parties.
8. The Parties agree to delete in its entirety the
Schedule of Reserved Matters referenced in Section 1.1 of the Agreement and
to insert in lieu thereof the Schedule attached to this Amendment.
9. Except as expressly amended hereby, all terms and
conditions of the Agreement shall continue to be in full force and effect.
10. This Amendment shall be governed by, and
interpreted in accordance with, the laws of Virginia.
<PAGE>
IN WITNESS WHEREOF the duly authorized representatives of
the Parties have executed this Agreement on the date first above-written.
Signed by Wan Malek Ibrahim )
) /s/ Wan Malek Ibrahim
for and on behalf of )
MALAYSIAN HELICOPTER SERVICES BHD )
in the presence of:-
Signed by Andrew M. Paalborg )
) /s/ Andrew M. Paalborg
for and on behalf of )
WORLDCORP, INC )
in the presence of:- )
/s/ Charles W. Pollard
Signed by Charles W. Pollard )
) /s/ Charles W. Pollard
for and on behalf of )
WORLD AIRWAYS, INC )
in the presence of:- )
/s/ Andrew M. Paalborg
<PAGE>
SCHEDULE
RESERVED MATTERS
The following are Reserved Matters:
1. do or suffer to be done any act or thing whereby the Company
may be wound up (whether voluntarily or compulsorily),
except as otherwise expressly provided for in this
Agreement;
2. other than in the ordinary course of the aviation or travel
business:
(a) acquire, purchase or subscribe for any shares,
debentures, mortgage or securities (or any other
interest therein) in excess of US Dollars
$500,000/- in any company, trust or other body;
(b) acquire any assets in excess of US Dollars
$500,000/-;
(c) creating any guarantee, indemnity or loan by the
Company in excess of US Dollars $500,000/-;
(d) the raising of any debt in excess of US Dollars
$500,000/-; or
(e) approval of any other expenditures in excess of US
Dollars $500,000/-;
3. sale of all or substantially all of the Company's business
or a fundamental change in the line of business;
4. the appointment of outside auditors; and
5. the appointment of any committee of the Directors, or
delegation of any of the powers of the Directors to a
committee, unless the ratio Directors on such committee is
consistent with the ratio specified in Clause 6.1.
RIGHT OF FIRST REFUSAL AGREEMENT
AN AGREEMENT made the 28th day of February 1994
Between:
(1) US ORDER INC, a company incorporated in Delaware
USA with its registered office at 13873 Park Center
Road, Suite 230, Herndon, Virginia 22071
("Grantor"); and
(2) TECHNOLOGY RESOURCES INDUSTRIES BHD, a company
incorporated in Malaysia with its registered office
at 23rd Floor, Menara TR, 161B Jalan Ampang, 50450
Kuala Lumpur ("Grantee").
WHEREAS:
A. WORLDCORP INC ("WC") is a significant shareholder
in the Grantor while the Grantee is presently a significant shareholder in
MALAYSIAN HELICOPTER SERVICES BHD ("MHS").
B. The Grantor is the registered and beneficial owner
of the Licensed Technology (as hereinafter defined).
C. It is a condition of a Stock Purchase Agreement
dated 30 October 1993 between WORLD AIRWAYS INC, WC and MHS ("Stock Purchase
Agreement") that the Grantor shall grant to the Grantee a right of first
refusal to become the exclusive licensee of the Patent in Malaysia.
D. The Grantee was induced to cause MHS to enter into
the Stock Purchase Agreement by WC's covenant that it shall cause the
Grantor to enter into this Agreement with the Grantee.
E. Pursuant thereto the Grantor now agrees to grant to
the Grantee the right of first refusal upon the terms and subject to the
conditions hereinafter contained.
IT IS AGREED as follows:-
1. DEFINITIONS
1.1 In this Agreement, unless the context otherwise
requires, the following expressions shall have the following meanings:-
"Bona Fide Offer" means any offer, in writing,
including all the terms thereof, to license the
Licensed Technology in Malaysia:
"Licensee" means the sole and exclusive licensee of
the Licensed Technology in Malaysia;
"Licensed Technology" means all intellectual
property rights of Grantor including, without
limitation, all patent (including the Patent),
copyright, trademark, trade secret and any other
intellectual property right held by Grantor in any
jurisdiction in connection with Grantor's current
application and operating system software for both
front-end terminal devices as well as the back-end
<PAGE>
host and any communications in-between, together
with all updates and derivative works;
"Patent" means that certain "Automated Order and
Payment System" patent, United States Patent Number
4,947,028, granted August 7, 1990, and the
Reexamination Certificate issued June 8, 1993, for
an automated order and payment system for use by
consumers to rapidly order products and services
from any location at which the consumer is present
at the time of ordering (See Attachment 1 hereto);
1.2 Words importing the singular include the plural and
vice-versa, words importing a gender include every gender and references to
persons include bodies corporate and unincorporate.
1.3 The headings to the Clauses and Schedules of this
Agreement are for convenience only and have no legal effect. All references
to Recitals, Clauses and Schedules are to recitals of, clauses in and
schedules to this Agreement.
2. RIGHT OF FIRST REFUSAL
2.1 In the event that Grantor wishes to license the
Licensed Technology in Malaysia, and Grantor has received from a third party
(herein, a "Licensee"), a Bona Fide Offer to license Grantor's Licensed
Technology in Malaysia, Grantor shall, before granting any such license,
offer to Grantee the right of first refusal to license the Licensed
Technology and on the following terms and conditions:-
(a) Grantor shall provide written notice (the
"License Notification") to Grantee of the
Bona Fide Offer to license Grantor's
Licensed Technology. The License
Notification shall (i) include a copy of
the Bona Fide Offer setting forth all of
the terms of the proposed license; (ii)
include the terms of any transactions
between the Grantor and the proposed
licensee that reasonably could be expected
to influence the terms of the license; and
(iii) offer to license the Licensed
Technology to Grantee first on the same
terms as set forth in the Bona Fide Offer.
(b) If Grantee decides to license the Licensed
Technology according to the terms of the
Bona Fide Offer, Grantee shall, within
twenty one (21) days of receipt of the
License Notification (i) notify the
Grantor, in writing, of Grantee's intent to
exercise its right of first refusal to
license the Licensed Technology, and (ii)
offer, in writing, to license the Licensed
Technology on the same terms set forth in
<PAGE>
the Bona Fide Offer (hereinafter referred
to as the "First Refusal Offer").
(c) Grantee's failure to provide Grantor with a
First Refusal Offer in accordance with the
provisions of paragraph 2(b) of this Clause
2 shall constitute a waiver of Grantee's
right of first refusal with respect to the
license of the Licensed Technology for a
period of sixty (60) days from the
expiration of the twenty one (21) day
period specified in paragraph 2(b) of this
Clause 2 for the sole purpose of permitting
the Grantor to accept the Bona fide Offer
on the exact terms set forth therein.
Grantee's right of first refusal shall
reattach to the Licensed Technology subject
to the Bona Fide Offer in the event the
Bona Fide Offer is not so accepted within
such sixty (60) day period.
(d) If Grantee has agreed to license the
Licensed Technology according to the exact
terms of the Bona Fide Offer or Grantor has
accepted the First Refusal Offer, Grantor
shall, within ten (10) days of such
acceptance or receipt of the First Refusal
Offer, whichever occurs first, execute a
written license agreement and remit to
Grantee any payments due under said license
to Grantor.
2.1 Nothing in this Clause 2 shall preclude Grantee
from making an offer to Grantor to license Grantor's Licensed Technology,
even if Grantor has not received a Bona Fide Offer from a third party. In
the event Grantee desires to license Grantor's Licensed Technology, Grantee
shall so notify Grantor in writing and Grantor and Grantee shall promptly
negotiate, execute and deliver license agreement covering the Licensed
Technology in a form mutually acceptable to Grantor and Grantee.
3. WARRANTIES
3.1 The Grantor warrants and represents to and
undertakes with the Grantee as follows:-
(a) that it is the registered and beneficial
owner of the Patent; and
(b) that until the expiry of the right of first
refusal set forth in Clause 2 hereof, the
Grantor shall not grant any license in
respect of the Licensed Technology to any
other person in Malaysia without first
following the procedures set forth in
Clause 2 hereof.
<PAGE>
3.2 The Grantor undertakes with the Grantee that it
shall indemnify and keep the Grantee fully indemnified against any damages,
losses, costs (including legal costs on a solicitor
and client basis) and expenses which the Grantee may suffer or incur in
connection with or arising from any breach (es) by the Grantor of any of its
obligations or warranties herein.
4. SPECIFIC PERFORMANCE
4.1 In the event of a breach of any of the provisions
of this Agreement by any party, the other party shall be entitled to the
right of specific performance and it is hereby agreed that in such event an
alternative remedy of monetary compensation shall not be regarded as
compensation or sufficient compensation for such breach.
5. NOTICE
5.1 Any notice or communication to be given under this
Agreement shall either be delivered personally, sent by registered post or
by telex. The address for service of each Party shall be those addressed
mentioned above or as notified to the other from time to time. A notice
shall be deemed to have been served as follows:-
(a) if personally delivered, at the time of
delivery;
(b) if posted, at the expiration of fourteen
(14) days after the envelope containing the
notice was delivered into the custody of
the postal authorities; or
(c) if sent by telex, on receipt by the sender
of the answer back code of the addressee
after transmission of the telex.
5.2 In proving such service it shall be sufficient to
prove that personal delivery was made, that the envelope containing such
notice was properly addressed and delivered to the appropriate postal
authority as a prepaid registered letter, or that the telex was sent to the
telex number as notified by the recipient to the other party to this
Agreement.
6. MISCELLANEOUS
6.1 ENTIRE CONTRACT
This Agreement constitutes the entire agreement and
understanding between the parties in connection with the subject matter
described herein.
6.2 AMENDMENT
<PAGE>
No modification or alteration of, or addition to
any of the provisions of this Agreement shall be made unless agreed to by
all the Parties in writing.
6.3 WAIVER
A party may exercise a right, power or remedy at
its discretion, and separately or concurrently with another right, power or
remedy. A single or partial exercise of a right, power or remedy by a party
shall not prevent a further exercise of that or of any other right, power or
remedy. Failure by a party to exercise, or any delay in exercising a right,
power or remedy shall not prevent its exercise and shall not amount to a
waiver.
6.4 RELEASE
Any liability to a party under this Agreement may
in whole or in part be released compounded or compromised or time and
indulgence given by that party in its absolute discretion as regards the
other party under such liability without in any way prejudicing of affecting
its rights against that other party in respect of the same or a like
liability or otherwise.
6.5 BINDING EFFECT
This Agreement shall be binding on and shall ensure
for the benefit of each party's successors and assigns.
6.6 COSTS
Each party shall bear its own legal costs incurred
in relation to the preparation of this Agreement.
6.7 TIME OF THE ESSENCE
Time for the performance of the obligations under
this Agreement shall be of the essence in this Agreement.
6.8 GOVERNING LAW
This Agreement shall be governed by and interpreted
in accordance with the laws of Malaysia, and the parties consent to the non-
exclusive jurisdiction of the courts in Malaysia.
6.9 SEVERABILITY
In the event that any one or more provisions of
this Agreement shall be determined to be illegal or unenforceable by any
court of law or other competent authority, such provision shall be
ineffective to the extent of such illegality or unenforceability, without
invalidating the remaining provisions hereof.
<PAGE>
6.10 FURTHER ASSURANCE
At the request of the other, a party shall, at its
own expense, execute the documents and do everything reasonably necessary to
give effect to this Agreement and the transactions contemplated by it.
6.11 ASSIGNMENT
The Grantee shall be at liberty to assign or
transfer in whole or in part its rights, interest and benefit in and under
this Agreement to any person.
<PAGE>
<PAGE>
IN WITNESS WHEREOF the duly authorised
representatives of the parties have executed this Agreement on the date
first above-written.
Signed by William F. Gorog )
) /s/ William F. Gorog
for and on behalf of )
US ORDER INC )
in the presence of:- )
/s/ Fraser Bullock
Signed by Tajudin Ramli ) /s/ Tajudin Ramli
)
for and on behalf of )
TECHNOLOGY RESOURCES INDUSTRIES BHD )
in the presence of:- )
