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to perform, or liability of COLONIAL for failure to perform, made impossible by the delivery and sale of assets and cessation of operations, herein contemplated, on the part of COLONIAL, as well as any liabilities of COLONIAL existing or incurred by reason of any transfers, assignments, conveyances, or sales made in accordance herewith, but, excluding, however, any liabilities or obligations which COLONIAL may have incurred on the Closing Date by reason of the violation of any of the representations or covenants made by it (COLONIAL) in this Agreement and any expenses which it may incur by reason of such violation or violations. 4. Except to the extent otherwise provided in agreements between PURCHASER and the respective employees of PURCHASER and COLONIAL made prior to or subsequent to the Closing Date, and except to the extent that the rights of the employees of PURCHASER and COLONIAL in relation to this Agreement are prescribed by valid orders of the Civil Aeronautics Board, it (PURCHASER) will take over on the Closing Date as employees of PURCHASER all employees of COLONIAL with no reduction in their rate of pay and will provide continued employment for them with PURCHASER to the same extent as if they had been originally employed by PURCHASER; and employees of each Company will be allowed seniority privileges within the appropriate seniority unit as of the date of their employment in such seniority unit by their respective Companies. Supervisory personnel will be integrated into the combined operation in position of comparable responsibility with the option of the employee to return to the seniority list without loss in seniority in their respective employment classifications in which they have had prior training and experience and in which they have seniority rights. It is the intent of the foregoing sentence that COLONIAL supervisory employees shall be assigned to supervisory positions which in the opinion of PURCHASER are reasonably comparable to the positions held in COLONIAL and if such supervisory employees do not wish to accept such positions for any reason they shall have the option above mentioned. Employees of COLONIAL who are Officers of COLONIAL on the date of this Agreement and any replacements of such Officers will be employed in executive positions which in the opinion of PURCHASER are suitable. 5. It will designate the routes of COLONIAL and the operations over such routes as the COLONIAL DIVISION OF (PURCHASER). THIRTIETH. 1. If all or part of the options held by T. J. Dunnion described in Article SECOND are validly exercised before the Closing Date, PURCHASER, in addition to the shares required to be issued herein, will deliver to COLONIAL one (1) share of its stock for each two (2) shares of COLONIAL stock issued to Dunnion pursuant to such options. 2. If all or a part of the Dunnion options are exercised after the Closing Date but before the final termination of COLONIAL'S corporate existence, PURCHASER will, in addition to the shares required to be issued herein, upon delivery to PURCHASER of the proceeds of the COLONIAL shares issued to Dunnion (at $12.25 per share), deliver to COLONIAL one (1) share of its stock for each two (2) shares of COLONIAL issued pursuant to the said option subject to appropriate adjustment in the event PURCHASER retires a part of its Capital stock, prior to the exercise of said option. 3. (a) COLONIAL represents that there is now pending in the United States District Court for the Southern District of New York an action brought by COLONIAL against Sigmund Janas, Sr. for the rescission and cancellation of the stock option agreement mentioned in Article SECOND. COLONIAL agrees that it will diligently prosecute said action and that it will not, without the approval of the PURCHASER, discontinue or settle said action. COLONIAL further agrees that it will not, without the approval of PURCHASER, issue any stock in accordance with said option agreement unless a judgment or decree of the above-mentioned court, after all appeals therefrom shall have been taken, denies the rescission and cancellation of said option as sought in said action. (b) In the event stock be issued pursuant to said option agreement and in accordance with the terms and conditions outlined in (a) above: (i) If all or part of the options held by Sigmund Janas, Sr. described in Article SECOND are validly exercised before the Closing Date, PURCHASER, in addition to the shares required to be issued herein, will deliver to COLONIAL one (1) share of its stock for each two (2) shares of COLONIAL stock issued to Janas pursuant to such options. (ii) If all or part of the Janas options are exercised after the Closing Date but before the final termination of COLONIAL'S corporate existence, PURCHASER will, in addition to the shares 7