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EXHIBIT 4.3
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT dated January 28, 1987 (the "Agreement"), between
DELTA AIR LINES, INC., a Delaware corporation (the "Purchaser"), and SKYWEST,
INC., a Utah corporation (the "Company").
WHEREAS, SkyWest Airlines, Inc. ("SkyWest Airlines"), a subsidiary of the
Company, is currently a party to a joint marketing and code sharing agreement
with Western Air Lines, Inc. ("Western") and;
WHEREAS, the Purchaser has acquired Western and Western is now a
wholly-owned subsidiary of the Purchaser; and
WHEREAS, it is contemplated that Western will be merged into the Purchaser
on or about April 1, 1987; and
WHEREAS, SkyWest Airlines and the Purchaser have entered into a joint
marketing and code sharing agreement which will supersede the agreement between
the Company and Western, such agreement to be known as the "Delta Connection
Agreement"; and
WHEREAS, the Company and the Purchaser believe that it may be desirable for
the Purchaser to acquire a significant equity interest in the Company which
would, among other things, provide additional capital for expansion of the
Purchaser's operations and thus for greater mutual benefits under the Delta
Connection Agreement.
NOW, THEREFORE, in consideration of the foregoing, the Purchaser entering
into the Delta Connection Agreement and of the mutual covenants and agreements
set forth herein, the parties hereto agree as follows:
I. OPTION TO PURCHASE SHARES
1.1 Option to Purchase Shares. Subject to the terms and conditions of this
Agreement, the Company hereby grants to the Purchaser an irrevocable option,
exercisable as provided herein (the "Option"), to purchase the number of shares
(the "Shares") of the Company's authorized but unissued common stock, no par
value (the "Common Stock"), which, after giving effect to the issuance of such
stock, would represent 20% of the votes represented by all then outstanding
voting securities of the Company. For purposes of this Section 1.2, the term
"voting securities" shall have the meaning set forth in Section 5.4(c) of this
Agreement. The price payable for each of the Shares (the "Option Price") shall
be the average closing price of the Common Stock as reported by the National
Association of Securities Dealers Automated Quotation System National Market
System for the ten consecutive trading days ending on the day before the date on
which the Exercise Notice (as hereinafter defined) is given. The Option shall be
exercisable by the Purchaser in whole at any time and in part from time to time
for a period of one year from the date of this Agreement (the "Option Period").
To exercise the Option, the Purchaser shall give the Company written notice of
such exercise (the "Exercise Notice") within said one year period, which notice
shall state the number of Shares as to which the Option is exercised. The
Exercise Notice shall be sent to the Company at the address specified in Section
8.11 hereof by Certified or Registered Mail, Return Receipt Requested, and shall
be deemed to be given when so mailed. If an Exercise Notice is given, the
Closing shall take place, as provided in Section 2.3 hereof, with respect to the
number of Shares specified in the Exercise Notice. If the Option is not
exercised within the Option Period, the Option shall expire and this Agreement
shall be deemed terminated, except as provided below. If at the end of the
Option Period the Purchaser has not exercised the Option with respect to all of
the Shares, by mutual agreement the parties may extend the Option Period for an
additional six months during which time the Option may be exercised by the
Purchaser with respect to the remaining Shares.
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II. SALE AND PURCHASE OF THE SHARES
2.1 Shares to Be Sold. Subject to the terms and conditions of this
Agreement, at the closing provided for in Section 2.3 hereof (the "Closing"),
the Company will issue, sell and deliver to the Purchaser, and the Purchaser
will purchase from the Company, the number of Shares specified in the Exercise
Notice (the "Exercised Shares") for a price per share equal to the Option Price.
2.2 Consideration. Subject to the terms and conditions of this Agreement,
in reliance on the representations, warranties and agreements of the Company
contained herein and in full payment for the Exercised Shares, at the Closing
the Purchaser will deliver to the Company, in immediately available funds by
wire transfer into an account designated by the Company, an amount equal to the
Option Price multiplied by the number of Exercised Shares. At the Closing, the
Company will deliver to the Purchaser certificates representing the Exercised
Shares, duly executed by the Company and registered in the name of the Purchaser
or its designee, such shares to bear the legend provided for in Section 8.5
hereof.
2.3 Closing. Following the giving of the Exercise Notice by the Purchaser,
the Closing of the purchase and sale of the Exercised Shares contemplated by
this Agreement shall take place at the offices of the Purchaser at 10:00 A.M.,
local time, on the next business day following the satisfaction (or, if
permitted, waiver) of the conditions set forth in Article VI hereof or at such
other time and place as the parties shall mutually agree.
III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchaser as follows:
3.1 Organization and Qualification. The Company is a duly incorporated and
validly existing corporation in good standing under the laws of the State of
Utah and has the requisite power and authority (corporate and otherwise) to own,
operate and lease the properties it now owns, operates and leases and to conduct
its business as it is now being conducted. The Company is duly qualified to do
business as a foreign corporation and is in good standing in each of the
jurisdictions in which the character of its properties owned or held under lease
or the nature of its activities makes such qualification necessary, except where
failure to be so qualified would not, either individually or in the aggregate,
have a material adverse effect on the business, financial condition or results
of operations of the Company and Subsidiaries (as hereinafter defined) taken as
a whole. The Company has previously delivered to the Purchaser accurate and
complete copies of its Certificate of Incorporation and By-Laws as in effect on
the date hereof.
3.2 Authority Relative to this Agreement. The Company has the requisite
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by the Board of Directors of the Company and no other
corporate proceedings on the part of the Company are necessary to authorize this
Agreement and the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by the Company and (assuming that this
Agreement is a valid and binding agreement of the Purchaser) constitutes a valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms.
3.3 Capitalization. The authorized capital stock of the Company consists
of 20,000,000 shares of Common Stock and 5,000,000 shares of preferred stock
(the "Preferred Stock"). As of the date of this Agreement, 4,105,230 shares of
Common Stock are issued and outstanding, no shares of Common Stock are held in
the Company's treasury, and no shares of the Preferred Stock are outstanding. In
addition, as of the date of this Agreement, 253,918 shares of Common Stock are
reserved for issuance upon the exercise of outstanding stock options granted to
directors, officers, management personnel and Zions First National Bank; 250,000
shares are reserved for the possible grant of stock options under an Employee
Stock Option Plan adopted in fiscal 1985, none of which have been granted; and
200,000 shares are reserved for the possible grant of stock options under a
Non-Qualified Stock Option Plan adopted on March 31, 1986, none of which have
been granted. All of the issued and outstanding shares of capital stock of the
Company are validly issued, fully paid and non-assessable and are not subject
to, nor were they issued in violation of any pre-emptive rights.
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Except as set forth in this Section 3.3, there are no outstanding options,
warrants or other rights, agreements or commitments of any kind obligating the
Company to issue any additional shares of its capital stock.
3.4 Subsidiaries. The Company has previously delivered to the Purchaser a
schedule containing an accurate and complete list of the name, jurisdiction of
incorporation and capitalization of each Subsidiary (as hereinafter defined) of
the Company. Except as set forth in such schedule, the Company does not own
directly or indirectly, any capital stock or other equity securities of any
corporation or other entity or have any direct or indirect equity or ownership
interest in any business. All of the outstanding shares of capital stock of each
Subsidiary of the Company are validly issued, fully paid and nonassessable, and
are owned directly or indirectly by the Company, free and clear of all options,
liens, claims, charges or encumbrances of any kind whatsoever; and there are no
outstanding options, rights, agreements or arrangements of any kind relating to
the issuance, sale or transfer of any capital stock or other equity securities
of any such Subsidiary. Each Subsidiary of the Company is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation; has the corporate power and authority to
carry on its business as it is presently being conducted and to own and lease
the properties and assets that it presently being conducted and to own and lease
the properties and assets that it presently owns and leases; and is duly
qualified or licensed to do business as a foreign corporation and is in good
standing in each jurisdiction in which the properties owned or leased or the
nature of the business conducted by it makes such qualification or licensing
necessary. The Company has heretofore delivered to the Purchaser complete and
correct copies of the Certificate of Incorporation and by-laws of each
Subsidiary of the Company, as presently in effect. As used herein, the term
"Subsidiary" of the Company shall mean any corporation of which the Company
directly indirectly owns or controls outstanding shares of capital stock which
have voting power to elect a majority of the board of directors of such
corporation.
3.5 Validity of the Shares; Etc. The Shares have been duly authorized for
issuance and, when issued and paid for in accordance with the terms of this
Agreement, will be validly issued, fully paid and nonassessable. The Purchaser
will acquire good and valid title to the Shares, free of all claims, liens,
options, charges, encumbrances and restrictions of any kind whatsoever, except
as provided herein and restrictions on their transferability under the
Securities Act of 1933, as amended (the "Securities Act").
3.6 SEC Reports and Financial Statements. The Company has previously
delivered to the Purchaser a true and complete copy of its (i) Registration
Statement on Form S-1 (No. 33-5823) as filed with the Securities and Exchange
Commission (the "SEC") on June 26, 1986 (except that the Company has not
delivered to the Purchaser the exhibits to such Registration Statement, which
exhibits the Company shall furnish to the Purchaser upon request); (ii)
Quarterly Reports on Form 10-Q for the three months ended June 30, 1986, and for
the six months ended September 30, 1986, as filed with the SEC; (iii) all other
reports, statements and registration statements (including Current Reports on
Form 8-K) filed by it with the SEC since June 26, 1986 (collectively, the "SEC
Filings"), if any. As of their respective dates, the SEC Filings did not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
financial statements of the Company included in the SEC Filings were prepared in
accordance with generally accepted accounting principles applied on a consistent
basis (except as otherwise indicated in such financial statements or the notes
thereto) and present fairly the financial condition, results of operations and
changes in financial position of the Company as at the dates or for the periods
indicated therein.
3.7 Absence of Certain Changes or Events. Except as set forth in the SEC
Filings, since March 31, 1986, the Company has conducted its business only in
the ordinary and usual course and there has not been any event, change, or
development which has affected or may affect materially and adversely the
business, financial condition or results of operations of the Company.
3.8 No Violation. Neither the execution and delivery of this Agreement by
the Company, nor the consummation of the transactions contemplated hereby, will
(i) violate, conflict with or result in a breach of any of the provisions of the
Certificate of Incorporation or By-Laws of the Company or any of its
Subsidiaries or any note, bond, mortgage, indenture, deed of trust or other
material agreement to which the Company or
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any of its Subsidiaries is a party or to which the Company or any of its
Subsidiaries or any of their respective properties or assets may be subject or
bound or (ii) violate any judgment, ruling, order, writ, injunction, decree,
statute, ordinance, law, rule or regulation applicable to the Company or any of
its Subsidiaries or any of their respective properties or assets; except in each
case, for such violations, conflicts or breaches which, either individually or
in the aggregate, would not have any material adverse effect on the business,
financial condition or results of operations of the Company and its Subsidiaries
taken as a whole.
3.9 Governmental Approvals. No notice to, filing or registration with, or
permit, authorization, consent or approval of, any governmental or regulatory
agency or authority is necessary or required in connection with the execution
and delivery of this Agreement by the Company or the consummation by the Company
of the transactions contemplated hereby, except for (i) filings with and
approval of, or exemption by, the United States Department of Transportation
(the "DOT") pursuant to the Federal Aviation Act of 1958, if required, (ii)
filings under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx "XXX
Xxx"), if required, (iii) filings with the Securities and Exchange Commission,
and (iv) other filings, registrations, permits, authorizations, consents or
approvals relating to matters which, either individually or in the aggregate,
are not material to the business, financial condition or results of operations
of the Company.
IV. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Company as follows:
4.1 Authority Relative to this Agreement. The Purchaser has the requisite
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by the Board of Directors of the Purchaser and no other
corporate proceedings on the part of the Purchaser are necessary to authorize
this Agreement and the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by the Purchaser and (assuming that this
Agreement is a valid and binding agreement of the Company) constitutes a valid
and binding agreement of the Purchaser, enforceable against the Purchaser in
accordance with its terms.
4.2 Investment Intent. The Purchaser understands that the Shares and any
other voting securities issued pursuant to this Agreement will not be registered
under the Securities Act and may not be sold or transferred for value without a
registration or pursuant to an exemption from registration under that Act. Sales
made under Securities and Exchange Commission Rule 144 may be made only under
the applicable holding period, volume and other limitations of that Rule.
Furthermore, Purchaser understands that the Company has no plans or obligations
to register such Shares or other voting securities except as set forth in this
Agreement.
V. COVENANTS
5.1 The Company's Board of Directors. The Company agrees that, if the
Purchaser shall so request, (i) as promptly as practicable after the Closing in
which the Purchaser obtains 10% or more of the outstanding Common Stock, it will
take such action as may be necessary to cause the election to the Company's
Board of Directors of one designee selected by the Purchaser and reasonably
acceptable to the Company and (ii) for as long as the Purchaser owns at least
10% of the outstanding Common Stock, the Company will include at least one
designee of the Purchaser reasonably acceptable to the Company on the slate of
nominees for election as directors nominated by the Company's Board of Directors
and will use its reasonable best efforts to assure that such individual is
elected to the Company's Board of Directors (including, without limitation, by
soliciting proxies in favor of such election).
5.2 Equity Accounting. The Company will furnish to the Purchaser all
information that is required by generally accepted accounting principles to
enable the Purchaser to account for its investment in the Company pursuant to
the equity method if the Purchaser elects or is required by generally accepted
accounting principles to do so. To the extent reasonably requested by the
Purchaser, the Company will, and will cause its employees, independent public
accountants and other representatives to, provide information regarding the
Company to, and otherwise cooperate with, the Purchaser so as to enable the
Purchaser to prepare financial
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statements in accordance with generally accepted accounting principles and to
comply with its reporting requirements and other disclosure obligations under
applicable Federal securities laws and regulations.
5.3 Registration Rights.
(a) Demand Rights. If, at any time after the Purchaser obtains any of
the Shares hereunder, the Purchaser shall desire to sell any or all of the
Shares or any voting securities acquired by the Purchaser pursuant to
Section 5.4 hereof (for purposes of this Section 5.3 "Shares" shall include
such voting securities), under circumstances requiring registration under
the Securities Act, and shall so advise the Company by written notice
(which notice shall specify the number of Shares proposed to be sold,
describe the method of proposed sale and contain an undertaking by the
Purchaser to provide all such information and to take all such action as
may be required in order to permit the Company to comply with all
applicable requirements of the SEC and to obtain acceleration of the
effective date of such registration statement), the Company shall promptly
prepare and file a registration statement with the SEC relating to such
Shares and use its reasonable best efforts to cause such registration
statement to become effective and remain effective for a period of not less
than six months (or such lesser period as the parties may agree); provided,
however, that the Company shall not be obligated to effect more than two
such registrations. If the plan of distribution specified by the Purchaser
with respect to any such registration involves the selection of a managing
underwriter or underwriters, such managing underwriter or underwriters
shall be chosen by the Purchaser, subject to the approval of the Company,
which approval shall not be unreasonably withheld. In connection with any
such registration, the Company will make such filings, and will use its
reasonable best efforts to cause such filings to become effective, so that
the Shares proposed to be sold shall be registered or qualified for sale
under the securities or Blue Sky laws of such jurisdictions as shall be
reasonably appropriate for the distribution of the Shares covered by the
registration statement; provided, however, that the Company shall not be
required to register as a broker or dealer in any jurisdiction where it is
not then so registered or to qualify to do business as a foreign
corporation in any jurisdiction where it is not then so qualified or to
file any general consent to service of process.
(b) Piggyback Rights. If, at any time following the Closing, the
Company shall propose the registration under the Securities Act of an
underwritten offering of shares of capital stock, the Company shall give
written notice to the Purchaser of such proposed registration and will use
its reasonable best efforts to include in such registration such number of
Shares as the Purchaser shall request in writing within 15 days after the
receipt of the Company's notice and to cause such Shares to be offered to
the public on the same terms (including the method of distribution and, in
the case of shares of the same class of stock, the offering price)
applicable to the other shares of capital stock to be included in such
offering; provided, however, that if the managing underwriter or
underwriters of such offering shall determine in good faith and so advise
the Company in writing that the number of shares of capital stock proposed
to be sold in such offering (including the Shares proposed to be sold by
the Purchaser) exceeds the number which can be sold in such offering, the
Company shall be required to include in such offering only such number of
Shares, which, when added to the number of shares of capital stock proposed
to be sold by the Company in such offering, can, in the good faith judgment
of the managing underwriter or underwriters, be sold without adversely
affecting the success of the offering (it being understood, however, that
if other holders of capital stock of the Company shall have requested the
inclusion of their shares in such registration, the number of Shares held
by the Purchaser and the number of shares of capital stock of the Company
held by such other holders to be included in such offering shall be
determined on a pro-rata basis).
(c) Expenses. The Company shall pay all fees and expenses in
connection with any registration effected pursuant to this Section 5.3,
except for underwriting discounts and commissions to brokers or dealers
attributable to the Shares being sold by the Purchaser and the fees and
disbursements of any counsel and accountants retained by the Purchaser in
connection with such registration.
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(d) Indemnification. In the case of any registration effected
pursuant to this Section 5.3, the Company and the Purchaser will each
provide the other and any underwriter retained in connection therewith with
customary indemnities.
5.4. Preemptive Rights
(a) If at any time after the issuance and sale of Shares representing
at least 10% of the Outstanding Common Stock and for so long as the
Purchaser owns at least 10% of the outstanding Common Stock and the Delta
Connection Agreement or an agreement substantially similar thereto is in
effect between SkyWest Airlines and the Purchaser, the Company proposes to
issue any additional voting securities (excluding, however, up to 253,918
shares of Common Stock issuable pursuant to the outstanding stock options
referred to in Section 3.3 of this Agreement), the Company shall promptly
advise the Purchaser in writing of the terms on which such voting
securities are to be issued. The Purchaser shall have the right, which may
be exercised at any time within 15 days following receipt of such notice,
to acquire on the same terms and conditions as such proposed issuance (or,
in the case of the issuance of any voting securities for consideration
other than cash, at a cash price equal to the fair market value of such
non-cash consideration on the date that the Company first agrees to issue
such voting securities) the number of similar voting securities set forth
hereinafter. The number of voting securities covered by each such right of
the Purchaser shall be that number which, when added to all voting
securities then owned by the Purchaser, would provide the Purchaser with
the number of votes equal to the Purchaser's Current Percent of the total
number of votes represented by all outstanding voting securities, after
giving effect to the issuance of the voting securities giving rise to the
operation of this Section 5.4 and the voting securities issuable to the
Purchaser pursuant to this Section 5.4.
(b) Notwithstanding the foregoing, the Company need not notify the
Purchaser of the issuance of voting securities which in the aggregate
represent less than 1% of the total number of votes represented by all then
outstanding voting securities, but shall notify the Purchaser within 15
days after the end of each fiscal quarter of the Company (or more
frequently if requested by the Purchaser) as to the number of voting
securities so issued during such quarter. The Purchaser's right to purchase
additional voting securities under this Section 5.4 by reason of the
issuance of such voting securities may, at the election of the Purchaser,
be exercised at any time within 30 days following receipt of such notice or
shall cumulate and may be carried forward and exercised by the Purchaser at
the time of and together with the subsequent purchase of additional voting
securities by the Purchaser pursuant to the next notice received by the
Purchaser under Section 5.4(a).
(c) For purposes of this Section 5.4, (i) the term "voting securities"
shall mean any securities of the Company entitled to vote generally on the
election of directors; (ii) the term "Purchaser's Current Percent" shall
mean that percentage derived by dividing the total number of votes
represented by all voting securities then held by the Purchaser by the
total number of votes represented by all of the Company's outstanding
voting securities immediately prior to the issuance of voting securities
giving rise to the operation of this Section 5.4; and (iii) the term "fair
market value" of any non-cash consideration on the date in question shall
mean the fair market value of such consideration as mutually agreed by the
Company and the Purchaser, or if such parties are unable to agree, as
determined by an investment banking firm mutually agreeable to both
parties. In the event that the parties are unable to agree on an investment
banking firm, then each party shall name its own investment banking firm
and such firms shall select a third investment banking firm to determine
the "fair market value" of any non-cash consideration. The fees and
expenses of such third investment banking firm shall be borne equally by
the Company and the Purchaser.
(d) If and when Purchaser exercises any purchase rights under this
Section 5.4, the purchase shall be closed within 20 days of the date of the
notice of such exercise.
5.5 Right of First Refusal. If at a time when the Purchaser owns at least
5% of the outstanding Common Stock, the Purchaser proposes to sell any voting
securities (as defined in Section 5.4(c)) then owned by it either (i) to five or
fewer persons pursuant to a registration statement prepared as a result of
Purchaser's exercise of its demand rights under Section 5.3(a), or (ii) in a
private sale without registration
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under the Securities Act, the Purchaser shall promptly advise the Company in
writing of the price and terms on which such voting securities are to be sold
and, if known, the intended purchaser of such voting securities. The Company or
its designee shall have the right, which may be exercised at any time within 15
days following receipt of such notice, to purchase all, but not less than all,
of the voting securities proposed to be sold at the same price and on the same
terms as such proposed sale; provided, however, that if such price is payable in
whole or in part in consideration other than cash, the price payable by the
Company shall be payable in cash and shall be equal to the fair market value of
such non-cash consideration on the date the Purchaser first agrees to sell such
voting securities, determined as provided in Section 5.4(c). If and when the
Company exercises any purchase rights under this Section 5.5, the purchase shall
be closed within 20 days of the date of the notice of such exercise. If the
Company does not exercise its right to purchase the voting securities proposed
to be sold, the Purchaser shall be free to sell such voting securities at the
same price and on the same terms contained in the Purchaser's written notice to
the Company within the one hundred twenty (120) day period following the
expiration of the Company's fifteen (15) day exercise period.
5.6 Covenant to Satisfy Conditions. Each of the parties hereto will use
their respective reasonable best efforts, and cooperate with the other, to
insure that the conditions set forth in Article VI hereof are satisfied as
promptly as practicable.
5.7 Reservation of Shares. During the period in which the Option may be
exercised, the Company shall take all necessary corporate action to reserve and
keep available for issuance the Shares.
VI. CONDITIONS
6.1 Conditions to Each Party's Obligations. The respective obligations of
the Purchaser and the Company under this Agreement are subject to the
satisfaction, at or prior to each Closing, of each of the following conditions:
(a) no preliminary or permanent injunction or other order, decree or
ruling issued by any court of competent jurisdiction nor any statute, rule,
regulation or order promulgated or enacted by any governmental, regulatory
or administrative agency or authority shall be in effect which would
prevent the consummation of the transactions contemplated hereby;
(b) any applicable waiting periods under the HSR Act relating to the
purchase and sale of the Shares pursuant to this Agreement shall have
expired or been terminated; and
(c) any required approval of, or exemption by, the DOT shall have been
obtained.
6.2 Conditions to Obligation of the Company. The obligations of the
Company under this Agreement are subject to the satisfaction, at or prior to
each Closing, of each of the following conditions:
(a) the Purchaser shall have performed and complied in all material
respects with all obligations and agreements required by this Agreement to
be so performed and complied with by it at or prior to the Closing;
(b) the representations and warranties of the Purchaser contained in
this Agreement shall be true and correct in all material respects at and as
of the Closing as if made at and as of such date; and
(c) no action, suit, claim, investigation or proceeding before any
court, governmental agency, commission, or administrative or regulatory
authority, domestic or foreign, shall have been commenced and be pending
which seeks to restrain, prevent or delay or to change the transactions
contemplated hereby or which otherwise questions the validity or legality
of any such transactions; provided, however, that in the case of any
action, suit, claim or proceeding brought by a person other than a
governmental or regulatory authority, the condition set forth in this
Section 6.2(c) shall be deemed to have been satisfied if the Company shall
have received an opinion of counsel, reasonably satisfactory to the
Company, to the effect that it is more likely than not that the relief
sought therein will not be granted.
6.3 Conditions to Obligations of the Purchaser. The obligations of the
Purchaser under this Agreement are subject to the satisfaction, at or prior to
each Closing, of each of the following additional conditions:
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(a) the Company shall have performed or complied in all material
respects with all obligations and agreements required by this Agreement to
be so performed or complied with by it at or prior to the Closing;
(b) the representations and warranties of the Company contained in
this Agreement shall be true and correct in all material respects at and as
of the Closing as if made at and as of such date; and
(c) no action, suit, claim, investigation or proceeding before any
court, governmental agency, commission, or administrative or regulatory
authority, domestic or foreign, shall have been commenced and be pending
which seeks to restrain, prevent or delay or to change the transactions
contemplated hereby or which otherwise questions the validity or legality
of any such transactions; provided, however, that in the case of any
action, suit, claim or proceeding brought by a person other than a
governmental or regulatory authority, the condition set forth in this
Section 6.3(c) shall be deemed to have been satisfied if the Purchaser
shall have received an opinion of counsel, reasonably satisfactory to the
Purchaser, to the effect that it is more likely than not that the relief
sought therein will not be granted.
VII. TERMINATION
7.1 Termination. This Agreement may be terminated and the purchase and
sale of the Shares contemplated hereby may be abandoned at any time prior to
acquisition of all of the Shares:
(a) by mutual consent of the Purchaser and the Company;
(b) by the Purchaser if, after the date in Exercise Notice is given,
there shall have occurred any event, change, or development which has
affected or may affect materially and adversely the business, financial
condition or results of operations of the Company and its Subsidiaries
taken as a whole.
7.2 Effect of Termination. In the event of the termination of this
Agreement by either the Purchaser or the Company as provided above, this
Agreement shall thereafter become void and there shall be no liability on the
part of either party hereto or their respective directors, officers,
stockholders or agents, except that any such termination shall be without
prejudice to the rights of either party hereto arising out of the willful breach
by the other party of any covenant or agreement contained in this Agreement.
VIII. MISCELLANEOUS
8.1 Brokers. The Company and the Purchaser each represent and warrant to
the other that neither has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated hereby. The Purchaser and the Company each
agree to indemnify and hold each other harmless from and against any and all
claims, liabilities or obligations with respect to any such fees or commissions
asserted by any person on the basis of any act or statement alleged to have been
made by such party.
8.2 Expenses. Each party shall pay its own expenses incurred in connection
with this Agreement and the transactions contemplated hereby.
8.3 Survival of Representations. All representations, warranties and
agreements made by the Company and the Purchaser in this Agreement shall survive
each Closing hereunder and any investigation at any time made by or on behalf of
any party hereto.
8.4 Adjustments. In the event of any change in the Common Stock by reason
of stock dividend, split-up, recapitalization, combination, exchange of shares
or the like, the number and kind of shares subject to this Agreement and the
Option Price shall be appropriately adjusted.
8.5 Legend. The certificates representing the Shares to be issued and
delivered to the Purchaser pursuant to this Agreement shall bear a legend in
substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED FOR
SALE, SOLD OR TRANSFERRED EXCEPT PURSUANT TO (i) AN EFFEC-
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TIVE REGISTRATION STATEMENT UNDER SUCH ACT OR (ii) AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT, AND IN COMPLIANCE WITH THE APPLICABLE LAWS OF
ANY STATE OR OTHER JURISDICTION. THE SALE, TRANSFER OR OTHER DISPOSITION OF
THE SHARES REPRESENTED BY THIS CERTIFICATE IS ALSO SUBJECT TO RESTRICTIONS
CONTAINED IN A STOCK OPTION AGREEMENT DATED JANUARY 28, 1987, BETWEEN DELTA
AIR LINES, INC. AND THE COMPANY, A COPY OF WHICH IS ON FILE AT THE OFFICE
OF THE SECRETARY OF THE COMPANY AND WILL BE MAILED TO ANY SHAREHOLDER
WITHOUT CHARGE WITHIN 5 DAYS AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR.
8.6 Entire Agreement. This Agreement contains the entire understanding of
the parties hereto with respect to its subject matter. There are no
restrictions, agreements, promises, warranties, covenants or undertakings with
respect to the subject matter hereof other than those expressly set forth
herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to its subject matter.
8.7 Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
8.8 Amendment; Waiver. This Agreement may be amended only by a written
instrument duly executed by both the parties hereto. To the extent permitted by
law, any condition to a party's obligations hereunder may be waived in writing
by such party.
8.9 Parties in Interest. This Agreement will be binding upon, inure to the
benefit of and be enforceable by the Company and the Purchaser and their
respective successors and assigns. This Agreement may not be assigned by the
parties hereto, except that the Purchaser may assign its rights hereunder to any
directly or indirectly wholly owned subsidiary of Purchaser; provided, however,
that no such assignment shall relieve the Purchaser of any of its obligations
hereunder.
8.10 Specific Performance. The Company acknowledges and agrees that the
Purchaser would not have an adequate remedy at law and would be irreparably
harmed in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the Purchaser shall be entitled to injunctive relief
to prevent breaches of this Agreement and to specifically enforce the terms and
provisions hereof, in addition to any other remedy to which it may be entitled,
at law or in equity.
8.11 Notices. All notices, claims, certificates, requests, demands and
other communications hereunder ("notices") will be given in writing and will be
deemed to have been duly given if delivered or mailed (registered or certified
mail, postage prepaid, return receipt requested) as follows:
(a) If to the Purchaser, to:
Delta Air Lines, Inc.
Xxxxxxxxxx Atlanta International Airport
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
Copy to:
Senior Vice President -- General Counsel & Secretary
Delta Air Lines, Inc.
Xxxxxxxxxx Atlanta International Airport
Xxxxxxx, Xxxxxxx 00000
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(b) If to the Company:
SkyWest, Inc.
00 Xxxx 000 Xxxxx, Xxxxx 000
Xx. Xxxxxxx, Xxxx 00000
Attention: Xx. Xxxxx X. Xxxxx
Chief Executive Officer
Copy to:
J. Xxxxx Xxxxx, Esq.
Senior Vice President, General Counsel & Secretary
SkyWest, Inc.
00 Xxxx 000 Xxxxx, Xxxxx 000
Xx. Xxxxxx, Xxxx 00000
or, in either case, such other address as the person to whom notice is to be
given may have previously furnished to the others in the manner set forth above.
8.12 Governing Law. This Agreement will be governed by and construed in
accordance with the internal laws of the State of Delaware, without regard to
the principales of conflicts of law.
8.13 Conterparts. This Agreement may be executed simultaneously in
counterparts, each of which will be deemed to be an original but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
DELTA AIR LINES, INC.
By
-----------------------------------
Title
--------------------------------
Chairman of the Board
and Chief Operations Officer
SKYWEST, INC.
By
-----------------------------------
Title
--------------------------------
President
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