<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 2)*
Great Lakes Aviation, Ltd.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock
- --------------------------------------------------------------------------------
(Title of Class of Securities)
39054K 108
---------------------------------------------
(CUSIP Number)
David L. Donlin, Esq.
Briggs and Morgan, P.A.
2400 IDS Center
Minneapolis, MN 55402
(612) 334-8564
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
August 31, 1998
----------------------------------------------------------
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
______________________
*The remainder of this cover page shall be filed out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
(Continued on following page(s))
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- --------------------------------------------------------------------------------
CUSIP No. 39054K 108 13D Page 2 of 7 Pages
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Douglas G. Voss
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
PF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
2,925,000
- --------------------------------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 5,275,000
OWNED BY -----------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 2,925,000
WITH -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
5,275,000
- --------------------------------------------------------------------------------
1 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1 5,275,000
- --------------------------------------------------------------------------------
1 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
2 / /
- --------------------------------------------------------------------------------
1 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3 61%
- --------------------------------------------------------------------------------
1 TYPE OF REPORTING PERSON*
4 IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
Douglas G. Voss ("Doug Voss") hereby amends his statement on Schedule 13D
(the "Schedule 13D") originally filed on October 28, 1996, and amended on April
28, 1997, with respect to his beneficial ownership of shares of common stock par
value $.01 per share ("Common Stock"), of Great Lakes Aviation, Ltd. ("Great
Lakes"), an Iowa corporation.
Item 1 of the Schedule 13D is hereby amended and restated as follows:
Item 1: Security and Issuer
The Name of the Issuer is Great Lakes Aviation, Ltd. and the address of its
principal office is 1965 330th Street, Spencer, Iowa 51301. The title of the
class of equity security to which this statement relates is Common Stock. The
Doug Voss beneficially owns 5,275,000 shares of Common Stock.
Item 5 of the Schedule 13D is hereby amended and restated as follows:
Item 2: Interest in Securities of the Issuer
(a) As of the date of this Schedule 13D, Doug Voss beneficially owned
5,275,000 shares of Common Stock constituting approximately 61% of
outstanding Common Stock of the Issuer.
(b) Doug Voss is the record owner of 2,425,000 shares of Common Stock.
Doug Voss is also the sole shareholder of Iowa Great Lakes Flyers,
Inc. the record owner of 500,000 shares of Common Stock. Doug Voss'
ex-spouse has granted to him an Irrevocable Proxy to vote 2,350,000
shares of Common Stock of the Issuer owned of record by her and has
entered into a Buy-Sell Agreement with her with respect to all such
shares. See Item 6 of this Schedule 13D.
(c) On August 31, 1998, Iowa Great Lakes Flyers, Inc., of which Doug Voss
is the sole shareholder, acquired 500,000 shares of Common Stock in a
private placement transaction with Great Lakes at a price of $2.00 per
share.
(d) Not applicable.
(e) Not applicable.
Item 6 of the Schedule 13D is hereby amended and restated as follows:
Item 6: Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer
Doug Voss' ex-spouse, Gayle R. Voss, who is the record owner of
approximately 27% of the Common Stock of the Issuer, has granted to Doug Voss an
Irrevocable Proxy to vote all of her shares of Common Stock (the "Shares") until
June 28, 2010.
<PAGE>
Doug Voss and Ms. Voss have entered into a Shareholder Buy-Sell Agreement
(the "Buy-Sell Agreement") with respect to the Shares. The term of the Buy-Sell
Agreement (the "Term") is until June 28, 2010 or until such time as Ms. Voss
does not own any Shares or Great Lakes is dissolved or liquidated. Pursuant to
the Buy-Sell Agreement Ms. Voss may not sell any Shares until June 28, 1999 at
which time she may sell 470,000 Shares and an additional 235,000 in each year
thereafter. Doug Voss, however, has been granted a right of first refusal to
purchase for the market price any Shares which Ms. Voss desires to so sell. The
Buy-Sell Agreement also provides Doug Voss the option to purchase any Shares at
any time during the Term for the market price of the Common Stock. The Buy-Sell
Agreement provides that in any transaction in which Doug Voss sells greater than
5% of his Common Stock, Doug Voss has the right to compel Ms. Voss to include
the Shares held by her in such transaction on the same terms as the shares of
Common Stock of Doug Voss. In turn, Ms. Voss has the right to have her Shares
included by Doug Voss in any such transaction on a pro rata basis.
The Buy-Sell Agreement also provides Doug Voss with the right to purchase
the Shares of Ms. Voss for the market price upon the death of the Ms. Voss and
an involuntary disposition of the Shares held by Ms. Voss. Pursuant to the
Buy-Sell, Doug Voss will vote all shares of Common Stock beneficially owned by
him (including the Shares) for the election of Ms. Voss to the Board of
Directors of the Issuer.
Doug Voss, as the sole shareholder of Iowa Great Lakes Flyers, Inc.
("Flyers"), and Tennenbaum & Co., LLC have entered into a Co-Sale Agreement with
respect to the shares of Common Stock held by Doug Voss and Flyers. Pursuant to
the Co-Sale Agreement, neither Doug Voss nor Flyers may, either singly or
jointly, in any one transaction or any series of related transactions, directly
or indirectly sell or otherwise dispose of a number of shares of Common Stock of
Great Lakes which would constitute fifteen percent (15%) or more of the total
number of shares of Common Stock then issued and outstanding to any third party
or group of third parties (the "Third Party Offer") unless the terms and
conditions of such Third Party Offer shall include an offer to include in the
sale or other disposition to the third party the 500,000 shares of Common Stock
which were acquired by Tennenbaum & Co., LLC on August 31, 1998 on the same
terms as the sale by Mr. Voss and/or Flyers. The right of co-sale provided by
such Co-Sale Agreement does not apply to any sale of Common Stock by Doug Voss
pursuant to the exercise of the option granted by Doug Voss to Ms. Voss to
acquire his shares of Common Stock upon the death of Doug Voss as set forth in
the Buy-Sell Agreement as described above.
Item 7 of the Schedule 13D is hereby amended and restated as follows:
Item 7: Material to be Filed as Exhibits
Exhibit 1 Stock Purchase Agreement, dated August 31, 1998, by and between
Great Lakes Aviation, Ltd. and Iowa Great Lakes Flyers, Inc. and
Tennenbaum & Co., LLC
<PAGE>
Exhibit 2 Irrevocable Proxy, dated June 28, 1996 from Gayle R. Voss to the
Reporting Person.*
Exhibit 3 Shareholder Buy-Sell Agreement, dated June 28, 1996, by and
between the Reporting Person and Gayle R. Voss.*
__________________
* Previously filed by Reporting Person as an Exhibit to Schedule 13D, filed with
the Securities and Exchange Commission on October 28, 1996.
<PAGE>
Signature
After reasonable inquiring and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: September 8, 1998
/s/ Douglas G. Voss
------------------------------
Douglas G. Voss
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
EXHIBIT DOCUMENT
------- --------
<S> <C>
Exhibit 1 Stock Purchase Agreement, dated August
31, 1998, by and between Great Lakes
Aviation, Ltd. and Iowa Great Lakes
Flyers, Inc. and Tennenbaum & Co., LLC.
Exhibit 2 Irrevocable Proxy, dated June 28, 1996
from Gayle R. Voss to the Reporting
Person.*
Exhibit 3 Shareholder Buy-Sell Agreement, dated
June 28, 1996, by and between the
Reporting Person and Gayle R. Voss.*
</TABLE>
__________________
* Previously filed by Reporting Person as an Exhibit to Schedule 13D, filed with
the Securities and Exchange Commission on October 28, 1996.
<PAGE>
EXHIBIT 1
--------------------------------
GREAT LAKES AVIATION, LTD.
--------------------------------
STOCK PURCHASE AGREEMENT
--------------------------------
August 31, 1998
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C>
1. Authorization of Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Sale and Purchase of Securities. . . . . . . . . . . . . . . . . . . . . . . . . . 1
3. Closing; Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
4. Restriction on Transfer of Securities. . . . . . . . . . . . . . . . . . . . . . . 2
4.1 Restrictions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
4.2 Legend; Stop Transfer Order . . . . . . . . . . . . . . . . . . . . . . . . . 2
4.3 Removal of Legend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
5. Representations and Warranties of the Company. . . . . . . . . . . . . . . . . . . 3
5.1 Organization, Standing, etc . . . . . . . . . . . . . . . . . . . . . . . . . 3
5.2 Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
5.3 Authorization; Non-Contravention; Approvals . . . . . . . . . . . . . . . . . 3
5.4 Status of Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
5.5 SEC Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
5.6 Forecast. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5.7 Litigation; Governmental Proceedings. . . . . . . . . . . . . . . . . . . . . 5
5.8 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5.9 No Material Adverse Change. . . . . . . . . . . . . . . . . . . . . . . . . . 6
5.10 Debt Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5.11 Fairness Opinion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5.12 Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
6. Representations and Warranties of Purchasers . . . . . . . . . . . . . . . . . . . 6
6.1 Investment Intent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
6.2 Location of Principal Office and Qualification as Accredited Investor . . . . 7
6.3 Acts and Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
6.4 No Brokers or Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
7. Registration Statement on Form S-3 . . . . . . . . . . . . . . . . . . . . . . . . 8
7.1 Demand Registration Right . . . . . . . . . . . . . . . . . . . . . . . . . . 8
7.2 Limitation on Resales . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
7.3 Eligibility for S-3 Registration. . . . . . . . . . . . . . . . . . . . . . . 10
7.4 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
7.5 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7.6 Registrable Securities Defined; Applicability of Registration Right . . . . . 12
i
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8. General Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
9. Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
10. Changes, Waivers. etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
11. Understanding Among Purchasers . . . . . . . . . . . . . . . . . . . . . . . . . . 13
12. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
13. Survival of Representations and Warranties etc . . . . . . . . . . . . . . . . . . 13
14. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
15. Choice of Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
16. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
17. Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
</TABLE>
Schedule A - List of Purchasers
Exhibit 1 - Fairness Opinion
Exhibit 2 - Co-Sale Agreement
ii
<PAGE>
GREAT LAKES AVIATION, LTD.
STOCK PURCHASE AGREEMENT
As of August 31, 1998
To Each of the Persons Named in
Schedule A to this Agreement
(the "Purchasers")
Gentlemen:
In consideration of the agreement of the Purchasers to purchase the Shares
(as hereinafter defined), as provided for herein, the undersigned GREAT LAKES
AVIATION, LTD., an Iowa corporation (the "Company"), hereby agrees with each of
the Purchasers as follows:
3. AUTHORIZATION OF SECURITIES. The Company proposes to authorize, issue
and sell an aggregate of up to 1,000,000 shares of its common stock, par value
$.01 per share (the "Shares").
4. SALE AND PURCHASE OF SECURITIES. Subject to the terms and conditions
hereof, the Company hereby agrees to sell to each Purchaser, and each Purchaser
hereby agrees to purchase from the Company, the number of Shares set forth
opposite such Purchaser's name in Schedule A hereto, at the purchase price set
forth opposite such Purchaser's name in Schedule A hereto.
5. CLOSING; PAYMENT. The closing of the sale to, and purchase by, the
Purchasers of the Shares (the "Closing") shall occur at the offices of Briggs
and Morgan, Professional Association, 2400 IDS Center, 80 South Eighth Street,
Minneapolis, Minnesota, at the hour of 5:00 P.M., Minneapolis time, on
August 31, 1998 or on such other day or at such other time or place as the
Purchasers and the Company shall agree upon (the "Closing Date").
As soon as practicable after the Closing, the Company will deliver to the
Purchasers certificates representing the Shares being purchased by the
Purchasers, registered in their respective names as stated in Schedule A hereto
(or in the names of their respective nominees as may be specified to the Company
at least 48 hours prior to the Closing Date).
Each Purchaser will deliver to the Company checks or wire transfers in the
amounts set forth after their respective names in Schedule A hereto, against
delivery of the certificates for the Shares, in payment of the total purchase
price of the Shares being purchased by the
<PAGE>
Purchasers; provided, however, that with respect to Iowa Great Lakes Flyers,
Inc. ("Flyers"), one of the Purchasers, payment shall be made by the
cancellation of indebtedness of the Company owed to Flyers in an amount of up to
$550,000, with the balance paid in cash. Flyers agrees to execute and deliver
such documents as may be reasonably requested by counsel to the Company to
evidence such cancellation of indebtedness.
6. RESTRICTION ON TRANSFER OF SECURITIES.
6.1 RESTRICTIONS. The Shares are transferable only pursuant to (a) a
public offering registered under the Securities Act of 1933 (the "Securities
Act"), (b) Rule 144 (or any similar rule then in effect) adopted under the
Securities Act, if such rule is available, and (c) subject to the conditions
elsewhere specified in this Section 4, any other legally available means of
transfer.
6.2 LEGEND; STOP TRANSFER ORDER.
(a) LEGEND. Each certificate representing Shares shall be
endorsed with the following legend:
"The securities evidenced hereby were not issued in a transaction
registered under the Securities Act of 1933 or any applicable
state securities laws, and may not be transferred except (i)
pursuant to an exemption from the registration requirements of
the Securities Act of 1933 and all applicable state securities
laws or (ii) such registration."
The aforesaid legend shall be removed with respect to securities
held for at least two years by a person who has not been an affiliate
of the Company (as defined in Rule 144 under the Securities Act)
during the three months preceding the request for removal of such
legend. The foregoing legend removal requirement is based on Rule
144(k) under the Securities Act as currently in force, and assumes
that such Rule (or a successor thereto) in substantially its current
form shall be in effect at the time of any such request for legend
removal.
(b) STOP TRANSFER ORDER. A stop transfer order shall be placed
with the Company's transfer agent preventing transfer of any of the
securities referred to in paragraph (a) above pending compliance with
the conditions set forth in any such legend (except as otherwise
provided in paragraph (a) above).
2
<PAGE>
6.3 REMOVAL OF LEGEND. Any legend endorsed on a certificate or
instrument evidencing a security pursuant to Section 4.2 hereof shall be
removed, and the Company shall issue a certificate or instrument without such
legend to the holder of such security, (a) in accordance with Section 4.2(a)
hereof, (b) if such security is being disposed of pursuant to registration under
the Securities Act and any applicable state acts or pursuant to Rule 144 or any
similar rule then in effect, or (c) if such holder provides the Company with an
opinion of counsel satisfactory to the Company to the effect that a sale,
transfer, assignment, offer pledge or disposition for value of such security may
be made without registration and that such legend is not required to satisfy the
applicable exemption from registration.
7. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to the Purchasers as follows:
7.1 ORGANIZATION, STANDING, ETC. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Iowa, and has the requisite corporate power and authority to own its properties
and to carry on its business in all material respects as it is now being
conducted. The Company has the requisite corporate power and authority to issue
the Shares and to otherwise perform its obligations under this Agreement. The
copies of the Articles of Incorporation and Bylaws of the Company made available
or delivered to the Purchasers or their agents prior to the execution of this
Agreement are true and complete copies of the duly and legally adopted Articles
of Incorporation and Bylaws of the Company in effect as of the date of this
Agreement.
7.2 QUALIFICATION. The Company is duly qualified or licensed as a
foreign corporation in good standing in each jurisdiction wherein the nature of
its activities or of its properties owned or leased makes such qualification or
licensing necessary and failure to be so qualified or licensed would have a
material adverse impact on its business, properties or prospects.
7.3 AUTHORIZATION; NON-CONTRAVENTION; APPROVALS.
(a) The execution, delivery and performance of this Agreement
has been approved by the board of directors of the Company. No additional
corporate proceedings on the part of the Company are necessary to authorize
the execution and delivery of this Agreement and the consummation by the
Company of the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by the Company, and, assuming the
due authorization, execution and delivery by the Purchasers, constitutes
the valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors' rights or by general
equitable
3
<PAGE>
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(b) The execution and delivery of this Agreement by the Company
does not, and the consummation by the Company of the transactions
contemplated hereby will not, conflict, violate or result in a breach of
any provision of, or constitute a default (or an event which, with notice
or lapse of time or both, would constitute a default) under, or result in
the termination of, or accelerate the performance required by, or result in
a right of termination or acceleration under any of the terms, conditions
or provisions of (i) the Articles of Incorporation or Bylaws of the
Company, (ii) any law applicable to the Company or any of its properties or
assets or (iii) any note, bond, mortgage, indenture, deed of trust,
license, franchise, permit, concession, contract, lease or other
instrument, obligation or agreement of any kind to which the Company is now
a party or by which the Company or any of its properties or assets may be
bound or affected.
(c) Except for such filings as are required under federal or
state securities laws, no declaration, filing or registration with, or
notice to, or authorization, consent or approval of, any governmental
authority, court or other third party is necessary for the execution and
delivery of this Agreement by the Company or the performance of and
consummation by the Company of the transactions contemplated hereby.
7.4 STATUS OF SHARES. The Shares to be issued to each Purchaser
pursuant to this Agreement are duly authorized and, when issued in accordance
with the terms of this Agreement, will be validly issued, fully paid and
nonassessable and free and clear of all encumbrances, except for encumbrances
resulting from restrictions on transferability imposed by federal and state
securities laws.
7.5 SEC FILINGS. The Company has filed with the SEC all material
forms, statements, reports and documents required to be filed by it prior to the
date hereof under each of the Securities Act, the Securities Exchange Act of
1934 (the "Exchange Act"), and the respective rules and regulations thereunder,
(a) all of which, as amended, if applicable, complied when filed in all material
respects with all applicable requirements of the applicable Act and the rules
and regulations thereunder, and (b) none of which, as amended, if applicable,
including any financial statements or schedules included therein, contains any
untrue statement of material fact or omits to state a material fact required to
be stated therein or necessary in order to make the statements made therein, in
the light of the circumstances under which they were made, not misleading. True
and correct copies of the forms, statements, reports and documents filed by the
Company with the SEC since December 31, 1997 (the "SEC Reports," with the
Company's Form 10-Q for the quarter ended June 30,
4
<PAGE>
1998 being referred to as the "Most Recent SEC Report"), together with any and
all responses by the SEC thereto, have been furnished to the Purchasers. The
consolidated statements of financial position and the related consolidated
statements of income, shareholders' equity and cash flows (including the related
notes thereto) of the Company included in the SEC Reports (the "Financial
Statements") complied as to form in all material respects with applicable
accounting requirements and the rules and regulations of the SEC with respect
thereto, are in accordance with the books and records of the Company, have been
prepared in accordance with GAAP applied on a basis consistent with prior
periods, and, except for the absence of notes to the unaudited Financial
Statements, present fairly the consolidated financial position of the Company as
of their respective dates, and the results of its operations and cash flows for
the periods presented therein.
7.6 FORECAST. The 1998-1999 forecast dated August 3, 1998 (the
"Forecast") furnished to the Purchasers, by way of a disclosure letter dated
August 7, 1998, was prepared by the Company and is based on assumptions which
management believes, to the best of their knowledge, are reasonable under the
circumstances. Based on information as of the date of this Agreement, the
Company expects to meet or exceed the forecasted results for the months of July
and August, 1998.
7.7 LITIGATION; GOVERNMENTAL PROCEEDINGS. Except as described in a
separate schedule furnished to the Purchasers, by way of a disclosure letter
dated August 7, 1998, there are no legal actions, suits, arbitrations or other
legal, administrative or governmental proceedings or investigations pending
involving the Company or any officer of the Company (to the extent it pertains
to any officer's duties involving the Company) or, to the knowledge of the
Company, threatened against the Company, its properties, assets or business.
The Company is not in default with respect to any judgment, order or decree of
any court or any governmental agency or instrumentality. The Company has not
been threatened with any action or proceeding under any ordinance, law or
regulation.
7.8 CAPITAL STOCK. The authorized , issued and outstanding capital
stock of the Company, without giving effect to the sale of the Shares, is as set
forth in the Most Recent SEC Report. All of the outstanding shares of capital
stock of the Company were duly authorized and validly issued and are fully paid
and nonassessable. There are no outstanding subscriptions, options, warrants,
calls, contracts, demands, commitments, convertible securities or other
agreements or arrangements of any character or nature whatever, except as
disclosed in the SEC Reports (and except for employee stock options granted
under the Company's 1993 Stock Option Plan since the date of the Most Recent SEC
Report) under which the Company is or may be obligated to issue capital stock or
other securities of any kind representing an ownership interest or contingent
ownership interest in the Company.
5
<PAGE>
7.9 NO MATERIAL ADVERSE CHANGE. Since the date of the Most Recent
SEC Report and the preparation of the Forecast, the business of the Company has
been carried on in the ordinary and usual course, and the Company has not
sustained since such date any material loss or interference with its business
from fire, explosion, accident, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or government action, order or
decree. Since the date of the Most Recent SEC Report there has not been any
material change or, to the actual knowledge of any executive officer of the
Company, any development involving a prospective material change, in the
business, operations, results of operations or financial condition of the
Company.
7.10 DEBT OBLIGATIONS. The Pro Forma Summary of Notes Payable and
Long-Term Debt dated as of August 31, 1998 previously furnished to the
Purchasers, by way of a disclosure letter dated August 28, 1998, is a complete
and accurate description of all the Company's debt obligations. As of the date
hereof, the Company is not in default under any debt obligation.
7.11 FAIRNESS OPINION. Attached hereto as Exhibit 1, is a complete
and accurate copy of the fairness opinion prepared by Dougherty Summit
Securities LLC, which was received by the Company, pertaining to the sale of the
Shares.
7.12 DISCLOSURE. Neither this Agreement nor any certificate,
schedule, statement or other document furnished or to be furnished to any
Purchaser pursuant hereto or in connection with the transactions contemplated
hereby contains or will contain any untrue statement of a material fact or omits
or will omit to state any material fact required to be stated herein or therein
or necessary to make the statements herein or therein not misleading.
8. REPRESENTATIONS AND WARRANTIES OF PURCHASERS. Each of the Purchasers
severally and not jointly represents and warrants for itself that:
8.1 INVESTMENT INTENT. The Shares being acquired by such Purchaser
hereunder are being purchased for such Purchaser's own account (except with
respect to Tennenbaum & Co., LLC which intends to transfer the right to a
portion of its Shares to certain of its employees who will hold such Shares for
investment purposes) and not with the view to, or for resale in connection with,
any distribution or public offering thereof within the meaning of the Securities
Act. Such Purchaser understands that the Shares have not been registered under
the Securities Act or any applicable state laws by reason of their issuance or
contemplated issuance in a transaction exempt from the registration and
prospectus delivery requirements of the Securities Act and such laws, and that
the reliance of the Company upon this exemption is predicated in part upon this
representation and warranty. Such Purchaser further understands that the Shares
may not be transferred or resold without
6
<PAGE>
(a) registration under the Securities Act and any applicable state securities
laws, or (b) an exemption from the requirements of the Securities Act and
applicable state securities laws.
Such Purchaser understands that a sale of the Shares pursuant to Rule
144 may not be effected prior to the expiration of a one-year period after such
Purchaser has acquired the Shares. Such Purchaser understands that any sales
pursuant to Rule 144 may only be made in full compliance with the provisions of
Rule 144.
8.2 LOCATION OF PRINCIPAL OFFICE AND QUALIFICATION AS ACCREDITED
INVESTOR. The state in which such Purchaser's principal office (or domicile, if
such Purchaser is an individual) is located is set forth in such Purchaser's
address in Schedule A hereto. Unless otherwise indicated on such Purchaser's
Certification attached to this Agreement, such Purchaser qualifies as an
accredited investor within the meaning of Rule 501 under the Securities Act for
the reasons specified on such Certification. Such Purchaser has such knowledge
and experience in financial and business matters that such Purchaser is capable
of evaluating the merits and risks of the investment to be made hereunder by
such Purchaser. Such Purchaser has and has had access to all of the Company's
material books and records and access to the Company's executive officers has
been provided to such Purchaser or to such Purchaser's qualified agents. Such
Purchaser specifically acknowledges that the Forecast which has been furnished
to Purchaser constitutes a "forward-looking statement" as defined in the Private
Securities Litigation Reform Act of 1995 and that many factors may cause the
Company's actual results to differ substantially from such forecast, including:
general industry conditions, changes in fuel prices or fuel availability, labor
difficulties, changes in local or national economic conditions, changes in the
Company's relationship with United Airlines, changes in public subsidy rates for
the Essential Air Service Program, and other risks detailed from time to time in
the Company's SEC Reports.
8.3 ACTS AND PROCEEDINGS. This Agreement has been duly authorized by
all necessary action on the part of such Purchaser, has been duly executed and
delivered by such Purchaser, and is a valid and binding agreement upon the part
of such Purchaser, except as the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, reorganization or other similar laws
affecting the enforcement of creditors' rights generally, and except for
judicial limitations on the enforcement of the remedy of specific enforcement
and other equitable remedies.
8.4 NO BROKERS OR FINDERS. No person, firm or corporation has or
will have, as a result of any act or omission by such Purchaser, any right,
interest or valid claim against the Company for any commission, fee or other
compensation as a finder or broker, or in any similar capacity, in connection
with the transactions contemplated by this Agreement. Such Purchaser will
indemnify and hold the Company harmless against any and all liability with
respect to any such commission, fee or other compensation which may be payable
or
7
<PAGE>
determined to be payable as a result of the actions of such Purchaser in
connection with the transactions contemplated by this Agreement.
9. REGISTRATION STATEMENT ON FORM S-3.
9.1 DEMAND REGISTRATION RIGHT. Upon receipt of a written request
from any Purchaser at any time after August 31, 1999, the Company shall file
with the SEC a Registration Statement on Form S-3 or any successor short-form
registration statement promulgated by the SEC ("Registration Statement") to
register the resale by the Purchasers of the Registrable Securities or any
portion thereof (as defined in Section 7.6 below) under the Securities Act.
After the Registration Statement is filed, the Company shall use reasonable best
efforts to (i) have the Registration Statement declared effective by the SEC,
(ii) thereafter prepare and file, as the Company shall determine may be required
under the Securities Act and the rules and regulations thereunder, a prospectus
supplement or supplements to the prospectus contained in the Registration
Statement or a post-effective amendment or amendments to the Registration
Statement and, with respect to any post-effective amendment, cause such
post-effective amendment to be declared effective by the SEC, (iii) maintain the
effectiveness of the Registration Statement until the earlier of (A) the date
two years from the date of effectiveness of the Registration Statement, (B) the
sale of all of the Registrable Securities pursuant to the Registration
Statement, or (C) such time as the Purchaser having Registrable Securities
included in the Registration Statement is eligible to sell all of such
Registrable Securities within a single three month period pursuant to Rule 144
under the Securities Act. The Company further agrees that it will (i) furnish
to the Purchasers and to the underwriters of the Registrable Securities, if any,
such reasonable number of copies of the Registration Statement, preliminary
prospectus and prospectus supplement, final prospectus and prospectus supplement
and such other documents as such Purchasers may reasonably request in order to
facilitate the public offering of the Registrable Securities, (ii) use its
reasonable best efforts to register or qualify the Registrable Securities
covered by the Registration Statement under such state securities or blue sky
laws of such jurisdictions as the Purchasers may reasonably request in writing
within 20 days following the original filing of the Registration Statement,
except that the Company shall not for any purpose be required to execute a
general consent to service of process or to qualify to do business as a foreign
corporation in any jurisdiction wherein it is not so qualified, (iii) notify the
Purchasers, promptly after it shall receive notice thereof, of the time when the
Registration Statement has become effective or a supplement to any prospectus
forming a part of the Registration Statement has been filed, (iv) notify the
Purchasers promptly of any request by the SEC for the amending or supplementing
of the Registration Statement or prospectus or prospectus supplement or for
additional information, (v) prepare and file with the SEC, promptly upon the
request of any Purchaser, any amendments or supplements to the Registration
Statement or prospectus or prospectus supplement which, in the opinion of
counsel for the Purchasers (and concurred in by counsel for the Company), is
required under
8
<PAGE>
the Securities Act or the rules and regulations thereunder in connection with
the distribution of the Registrable Securities by such Purchaser, (vi) prepare
and promptly file with the SEC and promptly notify the Purchasers of the filing
of such amendment or supplement to the Registration Statement or prospectus or
prospectus supplement as may be necessary to correct any statements or omissions
if, at the time when a prospectus relating to such securities is required to be
delivered under the Securities Act, any event shall have occurred as the result
of which any such prospectus or any other prospectus or prospectus supplement as
then in effect would include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances in which they were made, not misleading, and (vii) advise
the Purchasers, promptly after the Company shall receive notice or obtain
knowledge thereof, of the issuance of any stop order by the SEC suspending the
effectiveness of the Registration Statement or the initiation or threatening of
any proceeding for that purpose and promptly use its reasonable best efforts to
prevent the issuance of any stop order or to obtain its withdrawal if such stop
order should be issued. Each Purchaser hereby agrees to cooperate with all
reasonable requests by the Company necessary to effectuate the preparation and
filing of the Registration Statement and agrees to provide the Company with all
information required in connection therewith in a timely manner and to comply
with the procedures specified in Section 7.2 below. Notwithstanding anything in
this Section 7.1 to the contrary, the Company's obligation to register the
Registrable Securities shall terminate with respect to each Purchaser at such
time as such Purchaser is eligible to sell all of its shares within any single
three month period pursuant to Rule 144 under the Securities Act.
9.2 LIMITATION ON RESALES. Prior to any sales of Registrable
Securities under the Registration Statement by a Purchaser, the Purchaser
contemplating the sales will provide the Company with written notice of such
intention, addressed to the Company's Chief Financial Officer (a "Sale Notice").
The Company will notify such Purchaser within two (2) business days following
receipt of the Sale Notice as to whether sales by the Purchaser may be made or
will be limited as provided below. Upon notice from the Company permitting sales
by the Purchaser, for a period beginning on the date of receipt by the Purchaser
of such notice and ending 45 days thereafter (the "Window Period"), the
Purchaser may offer and sell Registrable Securities from time to time pursuant
to the Registration Statement. Anything in this Agreement to the contrary
notwithstanding, the ability of a Purchaser to sell Registrable Securities
pursuant to the Registration Statement and this Agreement shall be suspended in
the event that, upon receiving a Sale Notice or during any Window Period, the
Company's Chief Financial Officer certifies to the Purchasers that, in the good
faith judgment of such officer (upon consultation to the extent practicable with
the Board of Directors of the Company), (A) the sale would interfere in any
material respect with any financing, acquisition, corporate reorganization or
other similar material transaction under consideration by the Company, or (B)
there is some other material development relating to the condition (financial or
otherwise) of the Company that has not been generally publicly
9
<PAGE>
disclosed and as to which the Company deems advisable upon the advice of counsel
at the time of the Sale Notice not to publicly disclose; provided, however,
that, upon any such event specified in (A) or (B) above, the Company may not
suspend sales by Purchasers under the Registration Statement for a period of
more than ninety (90) days from the date of such certification by the Company's
Chief Financial Officer. If, upon receipt of the Sale Notice, the Company has
reasonably determined that it is necessary to file and cause to be declared
effective a post-effective amendment to the Registration Statement or file a new
or amended prospectus supplement or to otherwise cause disclosure to be made
under the Exchange Act and incorporated by reference into the Registration
Statement, and the Company determines not to rely on the proviso set forth in
the preceding sentence in order to delay the making of such disclosure, the
Company will take such action within seven (7) business days following receipt
of the applicable Sale Notice. Nothing in this Section 7.2 shall restrict a
Purchaser in selling any shares in a sale not made under the Registration
Statement, including without limitation any private sales or sales pursuant to
Rule 144 under the Securities Act.
9.3 ELIGIBILITY FOR S-3 REGISTRATION. If at any time following the
first anniversary of the Closing Date, the Company shall be ineligible to
register its securities on Form S-3 (other than by reason of gross negligence or
willful violation of the Company's obligations hereunder) then (i) the Company
shall not be obligated to effect any registration of the Registrable Securities
under Section 7.1 until such time as the Company becomes eligible to use Form
S-3 (provided, however, that if at the time such eligibility is restored all of
the Registrable Securities held by a Purchaser are then eligible for sale during
any given three (3) month period under Rule 144 under the Securities Act, the
Company will have no further registration obligation under Section 7.1 with
respect to such Purchaser's Registrable Securities); and (ii) if the
Registration Statement has become effective under the Securities Act, the
Company may file an amendment to the Registration Statement deregistering any
Registrable Securities remaining unsold at the time that the Company became
ineligible to use Form S-3. In the event that the Company becomes ineligible to
use Form S-3 through its gross negligence or willful misconduct and such
ineligibility remains uncured for a period of 10 days, the Company's obligation
to register the Registrable Securities will be deemed to extend to registration
on Form S-1, S-2 or other applicable forms promulgated by the SEC. The Company
will provide prompt notice to the Purchasers of any ineligibility to use Form
S-3 and of any deregistration of the Registrable Securities under this Section.
9.4 FEES AND EXPENSES. In connection with the registration of the
Registrable Securities, the Company shall bear the following fees, costs and
expenses: all registration and filing fees, NASD and Nasdaq or exchange listing
fees, printing expenses, fees and disbursements of counsel and accountants for
the Company, all internal Company expenses and all legal fees and disbursements
and other expenses of complying with state securities or blue sky laws of any
jurisdictions in which the Registrable Securities are to be registered or
qualified. Fees and disbursements of counsel and accountants for the
10
<PAGE>
Purchasers, underwriting discounts and commissions and transfer taxes relating
to the Registrable Securities included in the offering, and any other expenses
incurred by the Purchasers not expressly included above, shall be borne by the
Purchasers.
9.5 INDEMNIFICATION. With respect to such registration:
(a) Subject to compliance with Section 7.2, the Company will
indemnify and hold harmless each Purchaser having Registrable
Securities included in the Registration Statement, and any underwriter
(as defined in the Securities Act) for such Purchaser and each person,
if any, who controls such Purchaser or such underwriter within the
meaning of the Securities Act, from and against, and will reimburse
such Purchaser and each such underwriter and controlling person with
respect to, any and all loss, damage, liability, cost and expense to
which such Purchaser or any such underwriter or controlling person may
become subject under the Securities Act or otherwise, insofar as such
losses, damages, liabilities, costs or expenses are caused by any
untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, any prospectus or prospectus
supplement contained therein or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; provided,
however, that the Company will not be liable in any such case to the
extent that any such loss, damage, liability, cost or expense arises
out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission so made in conformity with
information furnished by such Purchaser, such underwriter or such
controlling person in writing specifically for use in the preparation
thereof.
(b) Each Purchaser having Registrable Securities included in the
Registration Statement will indemnify and hold harmless the Company,
its directors and officers, and any controlling person thereof and any
underwriter from and against, and will reimburse the Company, its
directors and officers, and any such controlling person and any
underwriter with respect to, any and all loss, damage, liability, cost
or expense to which the Company or any controlling person and any
underwriter may become subject under the Securities Act or otherwise,
insofar as such losses, damages, liabilities, costs or expenses are
caused by any untrue or alleged untrue statement of any material fact
contained in the Registration Statement, any prospectus or prospectus
supplement contained therein or any amendment or supplement thereto,
or arise out of or are based upon the omission or the alleged omission
11
<PAGE>
to state therein a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances in which they
were made, not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was so made in reliance upon and in strict conformity
with written information furnished by such Purchaser specifically for use
in the preparation thereof.
9.6 REGISTRABLE SECURITIES DEFINED; APPLICABILITY OF REGISTRATION
RIGHT. For the purposes of this Section 7, the term "Registrable Securities"
shall mean (i) the Shares, and (ii) any shares of common stock issued or
issuable with respect to such Shares by way of a stock dividend or stock split
or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or a sale of substantially all of the
Company's assets. It is specifically agreed that the obligation of the Company
to register the Registrable Securities is personal to the Purchasers and may not
be assigned or transferred in any manner without the prior express written
consent of the Company.
10. GENERAL INDEMNITY. The Company hereby agrees to indemnify and hold
the Purchasers harmless from and against any and all loss, damage, liability,
cost and expense (including reasonable attorneys' fees and disbursements)
arising out of any third party claims relating to the Purchasers' purchase of
Shares pursuant to this Agreement.
11. OTHER AGREEMENTS.
(a) AGREEMENT AMONG PURCHASERS. Contemporaneously with the
execution of this Agreement, Tennenbaum & Co., LLC, one of the
Purchasers ("TCO"), Flyers and Douglas G. Voss, the sole shareholder
of Flyers, have entered into that certain Co-Sale Agreement attached
hereto as Exhibit 2, pursuant to which Flyers and Mr. Voss have
granted TCO certain rights of co-sale on their shares of the Company's
common stock.
(b) AMENDMENT OF CERTAIN LETTER AGREEMENT. Contemporaneously
with the execution of this Agreement, Tennenbaum Securities, LLC, an
affiliate of TCO, and the Company have agreed to amend that certain
letter agreement dated December 11, 1997 between Tennenbaum
Securities, LLC and the Company.
12. CHANGES, WAIVERS. ETC. Neither this Agreement nor any provision
hereof may be changed, waived, discharged or terminated orally, but only by a
statement in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought.
12
<PAGE>
13. UNDERSTANDING AMONG PURCHASERS. The determination by each of the
Purchasers to purchase the Shares pursuant to this Agreement has been made by
such Purchaser independent of the other Purchasers, and independent of any
statements or opinions as to the advisability of such purchase or as to the
properties, business, prospects or condition (financial or otherwise) of the
Company which may have been made or given by the other Purchaser or by any agent
or employee of the other Purchaser. In addition, it is acknowledged by each of
the Purchasers that the other Purchaser has not acted as such Purchaser's agent
in connection with making its investment hereunder.
14. NOTICES. All notices, requests, consents and other communications
required or permitted hereunder shall be in writing and shall be delivered, or
mailed first-class postage prepaid, registered or certified mail,
(a) if to any Purchaser, addressed to such Purchaser at its
address as shown on Schedule A hereto, or at such other address as
such holder may specify by written notice to the Company, or
(b) if to the Company, addressed to the Company, 1965 330th
Street, Spencer, Iowa 51301, attention Chief Financial Officer, or to
such other address as the Company may specify by written notice to the
Purchasers,
and such notices and other communications shall for all purposes of this
Agreement be treated as being effective or having been given if delivered
personally, or, if sent by mail, when received.
15. SURVIVAL OF REPRESENTATIONS AND WARRANTIES ETC. All representations
and warranties contained herein shall survive the execution and delivery of this
Agreement and the sale and purchase of the Shares and payment therefor.
16. HEADINGS. The headings of the Sections and paragraphs of this
Agreement have been inserted for convenience of reference only and do not
constitute a part of this Agreement.
17. CHOICE OF LAW. It is the intention of the parties that the laws of
the state of Iowa shall govern the validity of this Agreement, the construction
of its terms and the interpretation of the rights and duties of the parties.
18. COUNTERPARTS. This Agreement may be executed concurrently in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
13
<PAGE>
19. PUBLIC ANNOUNCEMENTS. The Company agrees not to issue any press
release or make any other public announcement concerning this Agreement which
identifies a Purchaser without first receiving the prior consent of such
Purchaser, which consent shall not be unreasonably withheld, provided, however,
that nothing herein shall limit the Company's right to make such disclosures as
may be required under the Securities Act or Exchange Act (including the filing
of this Agreement as an Exhibit to any Exchange Act report).
[THIS SPACE INTENTIONALLY LEFT BLANK]
14
<PAGE>
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart of this letter and return the same to the
undersigned, whereupon this letter shall become a binding contract among you and
the undersigned.
Very truly yours,
GREAT LAKES AVIATION, LTD.
By: /s/ Douglas G. Voss
-----------------------------------
Its: President and Chief Executive
-----------------------------
Officer
-------
***Stock Purchase Agreement dated August 31, 1998***
<PAGE>
The foregoing Agreement is hereby accepted as of the date first above
written.
Iowa Great Lakes Flyers, Inc.
By: /s/ Douglas G. Voss
---------------------------------------------
Its: President and Chief Executive Officer
----------------------------------------
Tennenbaum & Co., LLC
By: /s/ Michael E. Tennenbaum
---------------------------------------------
Its: Managing Member
----------------------------------------
***Stock Purchase Agreement dated August 31, 1998***
<PAGE>
PURCHASER CERTIFICATION
The undersigned, in connection with the Stock Purchase Agreement dated
August 31, 1998 among Great Lakes Aviation, Ltd. (the "Company") and certain
Purchasers listed in Schedule A thereto, hereby makes each of the
representations contained in Section 6 of such Stock Purchase Agreement. The
undersigned further represents that: he/she/it qualifies as an "accredited
investor", as that term is used in Regulation D promulgated under the Securities
Act of 1933 (the "Act"), because (check one):
(1)____ it is a bank as defined in Section 3(a)(2) of the Act, or a savings
and loan association or other institution as defined in Section
3(a)(5) of the Act, whether acting in its individual or fiduciary
capacity; a broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934; an insurance company as defined in
Section2(13) of the Act; an investment company registered under the
Investment Company Act of 1940 or a business development company as
defined in Section 2(a)(48) of that act; a Small Business Investment
Company licensed by the U.S. Small Business Administration under
Section 301(c) or (d) of the Small Business Investment Act of 1958; a
plan established and maintained by a state, its political
subdivisions, or any instrumentality of a state or its subdivisions,
for the benefit of its employees, if such plan has total assets in
excess of $5,000,000; an employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974, if the
investment decision is made by a plan fiduciary, as defined in Section
3(21) of such act, which is either a bank, savings and loan
association, insurance company or registered investment adviser, or if
the employee benefit plan has total assets in excess of $5,000,000 or,
if a self-directed plan, with investment decisions made solely by
persons that are accredited investors;
(2)____ it is a private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
(3)____ it is an organization described in Section 501(c)(3) of the Internal
Revenue Code, a corporation, Massachusetts or similar business trust,
or partnership, not formed for the specific purpose of acquiring the
securities offered, with total assets in excess of $5,000,000;
(4)____ he or she is a director or executive officer of the Company,
<PAGE>
(5)____ he or she is an individual who has an individual net worth, or Joint
net worth with his or her spouse, in excess of $ 1,000,000;
(6)____ he or she is an individual who had an income in excess of $200,000 in
each of the two most recent years or joint income with his or her
spouse in excess of $300,000 in each of those years and who reasonably
expects an income in excess of the same level in the current year;
(7)____ it is a trust with total assets in excess of $5,000,000, not formed
for the specific purpose of acquiring the securities offered, whose
purchase is directed by a sophisticated person as described in Rule
506(b)(2)(ii) under the Act, or
(8)____ it is an entity, all of whose equity owners are accredited investors;
or
Signature:
----------------------------
Print Name:
----------------------------
----------------------------
----------------------------
SSN or EIN:
----------------------------
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Number of Price
Shares per Aggregate
Names and Addresses of Purchasers To be Purchased Share Purchase Price
- --------------------------------- --------------- ------- --------------
<S> <C> <C> <C>
Iowa Great Lakes Flyers, Inc. 500,000 $2.00 $1,000,000
Attn: Douglas G. Voss
1965 330th Street
Spencer, IA 51301
Tennenbaum & Co., LLC 500,000 $2.00 $1,000,000
1999 Avenue of the Stars, Suite 1010
Los Angeles, CA 90067-6022
</TABLE>
A-1
<PAGE>
EXHIBIT 1: TO STOCK PURCHASE AGREEMENT
FAIRNESS OPINION
DOUGHERTY SUMMIT SECURITIES LLC
August 31, 1998
Board of Directors
Great Lakes Aviation, LTD
1965 330th Street
Spencer, IA 51301
Members of the Board:
We understand that Great Lakes Aviation, LTD ("Great Lakes" or the
"Company"), Iowa Great Lakes Flyers, Inc. ("Flyers"), an entity owned by Mr.
Douglas G. Voss ("Douglas Voss"), and Tennenbaum & Company, LLC ("Tennenbaum"),
propose to enter into a Stock Purchase Agreement (the "Agreement"), pursuant to
which Flyers and Tennenbaum will each acquire 500,000 shares of unregistered
common stock of Great Lakes at a price of $2.00 per share (the "Transaction").
We further understand that of the $2,000,000 in total consideration to be
received by Great Lakes, approximately $550,000 will be payable by cancellation
of indebtedness of Great Lakes owed to Flyers. We also understand that the
Company must obtain additional equity capital in order to maintain the listing
of its common stock on the Nasdaq SmallCap Market, and that the Transaction will
enable the Company to maintain such a listing.
You have requested our opinion as to whether the consideration to be
received by Great Lakes is fair from a financial point of view to the common
stockholders of Great Lakes, other than Douglas Voss.
Dougherty Summit Securities LLC, as part of its investment banking
business, is regularly engaged in the valuation of businesses and their
securities in connection with mergers and acquisitions, underwritings, private
placements and valuations for corporate and other purposes.
A-2
<PAGE>
In developing our opinion, we have, among other things:
1. Reviewed certain publicly available financial statements and other
information of the Company;
2. Reviewed certain internal financial statements and other financial and
operating data concerning the Company prepared by the management of
the Company;
3. Analyzed certain financial projections prepared by the management of
the Company;
4. Discussed with senior executives of the Company, the past and current
operations and financial condition and the prospects of the Company
including financing alternatives reasonably believed to be available
to the Company;
5. Reviewed the reported prices and trading activity for the Great Lakes
common stock;
6. Compared the financial performance of the Company and the prices of
the common stock with that of certain other comparable publicly-traded
companies and their securities;
7. Reviewed the financial terms and the implied discount to the market
trading price of certain private placement transactions generally
comparable to the Transaction;
8. Considered the likely impairment on the market liquidity for Great
Lakes common stock due to delisting from the Nasdaq SmallCap Market
absent the Transaction;
9. Reviewed a draft of the Agreement dated August 27, 1998; and
10. Performed such other analyses and considered such other factors as we
deemed appropriate.
In our review and analysis, and in arriving at our opinion, we have relied
upon and assumed the completeness and accuracy of all the factual, historical,
financial and other information and data publicly available or furnished to us
by Great Lakes. We have assumed that the financial projections provided to us
were reasonably prepared on bases reflecting the best currently available
estimates and judgments of the senior management of Great Lakes.
A-3
<PAGE>
In addition, we have not made nor been provided with an independent evaluation
or appraisal of the assets of Great Lakes. Our opinion is necessarily based on
economic, market, financial and other conditions as they exist on, and on the
information made available to us as of the date of this letter. This opinion
has been prepared solely for the use and the benefit of the Board of Directors
of Great Lakes.
Based on the foregoing, we are of the opinion as of the date hereof that
the consideration to be received by Great Lakes pursuant to the Agreement is
fair from a financial point of view to the common stockholders of Great Lakes,
other than Douglas Voss.
Very truly yours,
/s/ DOUGHERTY SUMMIT SECURITIES LLC
DOUGHERTY SUMMIT SECURITIES LLC
A-4
<PAGE>
EXHIBIT 2: TO STOCK PURCHASE AGREEMENT
CO-SALE AGREEMENT
This Co-Sale Agreement (the "Agreement"), effective as of August 31, 1998,
is entered into by and among Douglas G. Voss ("Doug Voss"), Iowa Great Lakes
Flyers, Inc. ("Flyers"), and Tennenbaum & Co., LLC ("TCO").
RECITALS
WHEREAS, TCO has purchased 500,000 shares of common stock (the "TCO
Shares") of Great Lakes Aviation, Ltd. (the "Company") pursuant to that certain
Stock Purchase Agreement of even date herewith; and
WHEREAS, as a condition to TCO's purchase of the TCO Shares, Doug Voss and
Flyers have agreed to grant TCO certain rights of co-sale with respect to their
shares of the Company.
NOW, THEREFORE in consideration of the foregoing premises and of the
agreements and undertakings hereinafter set forth, it is agreed as follows:
1. RIGHT OF CO-SALE. Neither Doug Voss nor Flyers shall, either singly
or jointly, in any one transaction or any series of related transactions,
directly or indirectly sell or otherwise dispose of a number of shares of common
stock of the Company (the "Common Stock") which would constitute fifteen percent
(15%) or more of the total number of shares of Common Stock then issued and
outstanding to any third party or group of third parties (the "Third Party
Offer") unless the terms and conditions of such Third Party Offer shall include
an offer to include in the sale or other disposition to the third party, the TCO
Shares. If Doug Voss receives and intends to accept such a Third Party Offer,
Doug Voss shall cause the Third Party Offer to be reduced to writing and shall
send written notice of the Third Party Offer to TCO. The notice shall be
accompanied by a true and correct copy of the Third Party Offer. At any time
within thirty (30) days after receipt of such notice, TCO may accept the offer
included in the notice, either as to all of the TCO Shares or any portion
thereof, by furnishing written notice of such acceptance to Doug Voss and
delivering to him the certificate or certificates representing the TCO Shares to
be sold or otherwise disposed of pursuant to the terms of such Third Party
Offer.
2. TERMS OF SALE. The purchase from TCO shall be on the terms and
conditions, including the price per share, as are received by Doug Voss and/or
Flyers and stated in the notice.
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3. NOTIFICATION OF COMPLETION OF SALE; PAYMENT OF PURCHASE PRICE AND
FEES. Simultaneously with the consummation of the sale or other disposition of
the TCO Shares pursuant to the Third Party Offer, Doug Voss shall notify TCO
thereof, shall cause the third party purchaser to remit to TCO the total sale
price of the TCO Shares sold or otherwise disposed of pursuant thereto, and
shall furnish such other evidence of the completion of such sale or other
disposition and the terms thereof as may be reasonably requested by TCO. Doug
Voss may deduct from the sales price payable to TCO a pro rata portion of the
direct out-of-pocket fees and expenses payable in respect of the completion of
such sale, including without limitation, reasonable brokers', legal and
accounting fees and expenses, provided, however, that Doug Voss agrees to
consult with TCO prior to incurring any such fees in the event such fees are
expected to exceed 2% of the total sales price of all shares being sold.
4. WAIVER OF RIGHTS. If within (30) days after the receipt of the
notice, TCO has not accepted the offer contained in the notice, it will be
deemed to have waived any and all rights with respect to the sale or other
disposition of shares described in the notice and Doug Voss shall have ninety
(90) days in which to sell or otherwise dispose of not more than the amount of
shares of Common Stock described in the notice, on terms not more favorable to
him than were set forth in the notice.
5. LIMITATION ON CO-SALE RIGHT. The right of co-sale provided hereby
shall not apply to any sale of Common Stock by Doug Voss pursuant to the
exercise of the option granted by Doug Voss to Gayle R. Voss to acquire his
shares of Common Stock upon the death of Doug Voss, as set forth in Section 9 of
that certain Shareholder Buy-Sell Agreement by and among Doug Voss and Gayle R.
Voss dated as of June 28, 1996.
6. LEGEND. All certificates evidencing shares now owned by Doug Voss or
Flyers shall bear the following legend, but the absence of this legend on any
certificate shall not make this Agreement unenforceable:
The shares represented by this certificate are subject to and transferable
only in accordance with the terms and conditions of a Co-Sale Agreement
dated as of August 31, 1998.
7. CHOICE OF LAW. It is the intention of the parties that the laws of
the state of Iowa shall govern the validity of this Agreement, the construction
of its terms and the interpretation of the rights and duties of the parties.
8. COUNTERPARTS. This Agreement may be executed concurrently in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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9. CHANGES, WAIVERS; COMPLETE AGREEMENT. Neither this Agreement nor any
provision hereof may be changed, waived, discharged or terminated orally, but
only by a statement in writing signed by the party against which enforcement of
the change, waiver, discharge or termination is sought. This Agreement sets
forth the complete understanding and agreement of the parties hereto concerning
the subject matter hereof, and supercedes all prior negotiations and agreements,
with respect to the subject matter hereof.
10. SUCCESSORS AND ASSIGNS. TCO shall have the right to assign its rights
under this Agreement to certain of its employees (the "TCO Employees") upon
transfer of any of the TCO Shares to such TCO Employees. In addition, TCO and
each of the TCO Employees shall have the right to assign this Agreement to one
(1) assignee in connection with a transfer of any of the TCO Shares to such
assignee. For any such assignment to be effective, TCO or the TCO Employee, as
the case may be, must provide written notice to Doug Voss of such assignment and
the address of the assignee to which any notice required hereunder may be sent.
Other than as set forth herein, this Agreement and TCO's rights hereunder may
not be assigned without the prior written consent of Doug Voss.
11. NOTICES. All notices, requests, consents and other communications
required or permitted hereunder shall be in writing and shall be delivered, or
mailed first-class postage prepaid, registered or certified mail,
a. if to TCO, to 1999 Avenue of the Stars, Suite 1010, Los Angeles,
California 90067-6022, or at such other address as TCO may specify by
written notice to Doug Voss, or
b. if to Doug Voss or Flyers, to 1965 330th Street, Spencer, Iowa
51301, or at such other address as Doug Voss or Flyers may specify by
written notice to TCO,
and such notices and other communications shall for all purposes of this
Agreement be treated as being effective or having been given if delivered
personally, or, if sent by mail, three (3) days after deposit with the U.S.
Postal Service.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement on the day
and year first above written.
Douglas G. Voss
Iowa Great Lakes Flyers, Inc.
By: /s/ Douglas G. Voss
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Its: President and Chief Executive
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Officer
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Tennenbaum & Co., LLC
By: /s/ Michael E. Tennenbaum
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Its: Managing Member
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***Co-Sale Agreement dated August 31, 1998***
