REVISED INVESTMENT AGREEMENT
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March 11, 1994
America West Airlines, Inc.
4000 East Sky Harbor Boulevard
Phoenix, AZ 85034
Attention: William A. Franke
Chairman of the Board
Gentlemen:
This letter agreement (this "Agreement") sets forth the
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agreement between America West Airlines, Inc., a Delaware
corporation (including, on or after the effective date of the
Plan, as defined herein, its successors, as reorganized pursuant
to the Bankruptcy Code, as defined herein) (the "Company"), and
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AmWest Partners, L.P., a Texas limited partnership ("Investor").
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The Company will issue and sell to Investor, and
Investor hereby agrees and commits to purchase from the Company,
a package of securities of the Company for $220 million in cash
(subject to adjustment as herein provided), consisting of (i)
shares of Class A Common Stock of the Company ("Class A Common"),
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(ii) shares of Class B Common Stock of the Company ("Class B
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Common" and, together with the Class A Common, "Common Stock"),
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(iii) senior unsecured notes of the Company ("Notes") and (iv)
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warrants to purchase shares of Class B Common ("Warrants") , all
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on the terms and subject to the terms and conditions hereinafter
set forth.
Investor s purchase of the securities referred to above
(the "Investment") will be made in connection with and as part of
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the transactions to be consummated pursuant to a joint Plan of
Reorganization of the Company (the "Plan") and an order (the
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"Confirmation Order") confirming the Plan issued by the
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Bankruptcy Court, as defined herein. The Plan will contain
provisions called for by, or otherwise consistent with, this
Agreement.
In consideration of the agreements of Investor
hereunder, and as a precondition and inducement to the execution
of this Agreement by Investor, the Company has entered into the
Interim Procedures Agreement with Investor, dated the date hereof
(the "Procedures Agreement").
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SECTION 1. Definitions. For purposes of this
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Agreement, except as expressly provided herein or unless the
context otherwise requires, the following terms shall have the
following respective meanings:
"Affiliate" shall mean (i) when used with reference to
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any partnership, any Person that, directly or indirectly,
owns or controls 10% or more of either the capital or profit
interests of such partnership or is a partner of such
partnership or is a Person in which such partnership has a
10% or greater direct or indirect equity interest and (ii)
when used with reference to any corporation, any Person
that, directly or indirectly, owns or controls 10% or more
of the outstanding voting securities of such corporation or
is a Person in which such corporation has a 10% or greater
direct or indirect equity interest. In addition, the term
"Affiliate," when used with reference to any Person, shall
also mean any other Person that, directly or indirectly,
controls or is controlled by or is under common control with
such Person. As used in the preceding sentence, (A) the
term "control" means the possession, directly or indirectly,
of the power to direct or cause the direction of the
management and policies of the entity referred to, whether
through ownership of voting securities, by contract or
otherwise and (B) the terms "controlling" and "controls"
shall have meanings correlative to the foregoing.
Notwithstanding the foregoing, the Company will be deemed
not to be an Affiliate of Investor or any of its partners.
"Alliance Agreements" shall have the meaning specified
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in Section 5.
"Approvals" shall have the meaning specified in Section
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8(b).
"Average Closing Price" shall have the meaning specified
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in Section 4(a)(2)(v)(B).
"Bankruptcy Code" shall mean Chapter 11 of the United
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States Bankruptcy Code.
"Bankruptcy Court" shall mean the United States
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Bankruptcy Court for the District of Arizona.
"Business Combination" means:
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(i) any merger or consolidation of the Company with
or into Investor or any Affiliate of Investor;
(ii) any sale, lease, exchange, transfer or
other disposition of all or any substantial part
of the assets of the Company to Investor or any
Affiliate of Investor;
(iii) any transaction with or involving
the Company as a result of which Investor or
any of Investor s Affiliates will, as a result of
issuances of voting securities by the Company (or any
other securities convertible into or exchangeable for
such voting securities) acquire an increased percentage
ownership of such voting securities, except pursuant to
a transaction open on a pro rata basis to all holders of
Class B Common; or
(iv) any related series or combination of
transactions having or which will have, directly
or indirectly, the same effect as any of the foregoing.
"Class A Common" shall have the meaning specified in the
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second paragraph of this Agreement.
"Class B Common" shall have the meaning specified in the
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second paragraph of this Agreement.
"Common Stock" shall have the meaning specified in the
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second paragraph of this Agreement.
"Company" shall have the meaning specified in the first
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paragraph of this Agreement.
"Confirmation Date" shall mean the date on which the
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Confirmation Order is entered by the Bankruptcy Court.
"Confirmation Order" shall have the meaning specified in
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the third paragraph of this Agreement.
"Continental" shall mean Continental Airlines, Inc.
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"Creditors Committee" shall mean the Official Committee
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of the Unsecured Creditors of America West Airlines, Inc.
appointed in the Company's Chapter 11 case pending in the
Bankruptcy Court.
"Disclosure Statement" shall mean a disclosure statement
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with respect to the Plan.
"Effective Date" shall mean the effective date of the
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Plan; provided, that in no event shall the Effective Date be
(a) earlier than 11 days after the Bankruptcy Court approves
and enters the Confirmation Order providing for the
confirmation of the Plan or (b) before all material
Approvals are obtained.
"Electing Party" shall have the meaning specified in
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Section 4(a)(2)(ii).
"Equity Committee" shall mean the Official Committee of
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Equity Holders of America West Airlines, Inc. appointed in
the Company's Chapter 11 case pending in the Bankruptcy
Court.
"Equity Holders" shall mean the Company's equity
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security holders (including holders of common stock and
preferred stock) of record as of the applicable record date
fixed by the Bankruptcy Court.
"Escrow Shares" shall have the meaning specified in
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Section 4(a)(2)(v).
"Governance Agreements" shall have the meaning specified
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in Section 6.
"GPA" shall mean GPA Group plc or, if applicable, any
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direct or indirect subsidiary thereof.
"GPA Put Agreement" shall have the meaning specified in
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Section 7(j).
"Independent Directors" shall have the meaning specified
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in Section 6(a)(ii).
"Initial Order" shall have the meaning specified in
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Section 8(a).
"Investment" shall have the meaning specified in the
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third paragraph of this Agreement.
"Investor" shall have the meaning specified in the first
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paragraph of this Agreement.
"Mesa" shall mean Mesa Airlines, Inc.
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"Monthly Targets" shall mean the amounts specified in
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the Monthly Targets Schedule.
"Monthly Targets Schedule" shall mean the letter
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agreement between the Company and Investor dated the date
hereof.
"Non-Contingent Shares" shall have the meaning specified
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in Section 4(a)(2)(v)(A).
"Notes" shall have the meaning specified in the second
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paragraph of this Agreement.
"Outside Date" shall mean August 15, 1994; provided that
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Investor shall have the right from time to time to
irrevocably extend the Outside Date to a date not later than
November 30, 1994, but only if Investor gives the Company
prior written notice of its election to extend the then
current Outside Date (which notice shall specify the new
Outside Date) and then only if, at the time of the giving of
such notice, Investor is not in breach of any of its
representations, warranties, covenants or obligations under
this Agreement, the Procedures Agreement or any Related
Agreement (excluding any breach by Investor which is not
willful or intentional and which is capable of being cured
on or before the new Outside Date). Unless waived by the
Company, any notice given pursuant to this definition shall
be delivered to the Company not less than 15 days prior to
the then current Outside Date except that, in the event the
Effective Date has not occurred for any reason arising
within such 15-day period not due to a breach by Investor of
any of its representations, warranties, covenants or
agreements hereunder, such notice shall be given as soon as
practicable but in no event later than the then current
Outside Date.
"Person" means a natural person, a corporation, a
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partnership, a trust, a joint venture, any Regulatory
Authority or any other entity or organization.
"Plan" shall have the meaning specified in the third
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paragraph of this Agreement.
"Plan 9" means the Company's Plan Revision No. 9 which
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consists of the Summary Pro Forma Financial Statements: June
1993 Through December 1994, dated July 15, 1993.
"Plan R-2" shall mean the Company's Summary Pro Forma
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Financial Statements, 5 Year Plan: 1994 Through 1998, Plan
No. R-2, dated January 13, 1994.
"Prepetition Claims" shall mean, as of any date, the
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aggregate amount of the allowed or allowable prepetition
unsecured claims without priority of the Unsecured Creditors
(other than the Electing Parties) under Section 502 of the
Bankruptcy Code as of such date as determined by a final
order of the Bankruptcy Court, provided that the first such
determination shall be made at an estimation hearing to be
held on or before the date of the hearing on the
Confirmation Order.
"Procedures Agreement" shall have the meaning specified
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in the fourth paragraph of this Agreement.
"Projections" shall mean the projections set forth in
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Plan 9 on pages 15 and 18 of Tab E and pages 7 and 8 of Tab
F.
"Purchase Price" shall have the meaning specified in
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Section 2.
"Regulatory Approvals" shall mean all approvals,
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permits, authorizations, consents, licenses, rulings,
exemptions and agreements required to be obtained from, or
notices to or registrations or filings with, any Regulatory
Authority (including the expiration of all applicable
waiting periods, if any, under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended) that are
necessary or reasonably appropriate to permit the Investment
and the other transactions contemplated hereby and by the
Related Agreements and to permit the Company to carry on its
business after the Investment in a manner consistent in all
material respects with the manner in which it was carried on
prior to the Effective Date or proposed to be carried on by
the reorganized Company.
"Regulatory Authority" shall mean any authority, agency,
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commission, official or other instrumentality of the United
States, any foreign country or any domestic or foreign
state, county, city or other political subdivision.
"Related Agreements" shall have the meaning specified in
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Section 3.
"Securities" shall mean the securities of the Company
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issued to the Unsecured Parties, Investor and GPA under this
Agreement. The Securities are described in Section 4.
"Shortfall" shall mean, as of any date, the amount by
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which (i) the aggregate amount determined by the Bankruptcy
Court as required for full recovery as of the Effective Date
for the holders of the Prepetition Claims exceeds (ii) the
value of the Non-Contingent Shares as of the date of such
determination.
"Unsecured Creditors" shall mean, as of any date, the
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Persons holding of record as of such date the allowed or
allowable prepetition unsecured claims without priority of
the Company.
"Unsecured Parties" shall mean the Equity Holders and
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the Unsecured Creditors.
"Warrants" shall have the meaning specified in the
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second paragraph of this Agreement.
SECTION 2. Commitment to Make Investment. Subject to
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the terms and conditions of this Agreement and the Procedures
Agreement, on the Effective Date, the Company shall issue and
sell and Investor shall purchase Securities in accordance with
this Agreement and the Plan. Such Securities shall be issued,
sold and delivered to Investor, its designees and/or one or more
third party investors, and the $220 million purchase price
therefor, as such purchase price may be adjusted pursuant hereto
(the "Purchase Price"), shall be paid by wire transfer of
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immediately available funds on the Effective Date.
SECTION 3. Related Agreements. The agreements necessary
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to effect the Investment (the "Related Agreements", such term
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to include the Alliance Agreements and the Governance Agreements)
shall be in form and substance reasonably satisfactory to
Investor and the Company, and shall contain terms and provisions,
including representations, warranties, covenants, warranty
termination periods, materiality exceptions, cure opportunities,
conditions precedent, anti-dilution provisions (as appropriate),
and indemnities, as are in form and substance reasonably
satisfactory to such parties; provided, however, that the Related
Agreements shall contain provisions called for by, or otherwise
consistent with, this Agreement.
SECTION 4. Capitalization. (a) Upon consummation of
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the Plan, the capitalization of the Company shall be as follows:
(1) Class A Common. There shall be 1,200,000 shares of
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Class A Common, all of which shares shall, in accordance
with the Plan, be issued to Investor. Investor shall pay
$7,964,444 for the Class A Common. At the option of the
holders thereof, shares of Class A Common shall be
convertible into shares of Class B Common on a share for
share basis.
(2) Class B Common. There shall be 43,800,000 shares of
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Class B Common, all of which shares shall, in accordance
with the Plan, be issued as follows:
(i) Investor. Investor shall be issued 15,675,000
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shares plus the number of shares (if any) to be acquired
by Investor pursuant to clause (ii) below minus the
number of shares, if any, issued to the Equity Holders
pursuant to clause (iii) below. For each share of Class
B Common issued to it, Investor shall pay $7.147;
provided that (A) for each share acquired by Investor
pursuant to clause (ii) below, Investor shall pay $8.889
and (B) for each share not purchased by the Equity
Holders pursuant to clause (iii) below, Investor shall
pay $8.296.
(ii) Unsecured Creditors. The Unsecured
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Creditors (or a trust created for their benefit) shall
be issued 20,250,000 shares. Notwithstanding the
foregoing, each Unsecured Creditor shall have the right
to elect to receive cash equal to 8.889 for each share
of Class B Common otherwise allocable to it under this
clause (ii). The election of each such Person (the
"Electing Party") must be made on or before the date
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fixed by the Bankruptcy Court for voting with respect to
the Plan; provided, however, that in the event that such
elections of all Electing Parties aggregate to more than
$100 million, then (A) the amount of cash so paid shall
be limited to $100 million and (B) the Electing Parties
shall each receive proportionate amounts of cash and
Class B Common in accordance with the Plan. Subject to
the foregoing proviso, Investor shall increase the
Investment by the amount necessary to pay all Electing
Parties the cash amounts payable to them under this
clause (ii) in respect of the shares of Class B Common
specified in their elections and, upon payment of such
amounts, such shares shall be issued to Investor without
further consideration. Notwithstanding the foregoing,
Investor s acquisition of shares of Class B Common
pursuant to this clause (ii) shall, if permitted by
applicable securities and other laws, be consummated
immediately after the issuance of such shares to the
Electing Parties on the Effective Date. If such shares
are not so acquired post-consummation of the Plan, all
shares of Class B Common acquired by Investor pursuant
to this clause (ii) shall, for all purposes hereof, be
deemed to be part of the Securities acquired by Investor
hereunder.
(iii) Equity Holders. The Equity Holders shall
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have the right to purchase up to 1,808,036 shares
allocable to Investor pursuant to clause (i) above at
$8.296 per share. Such election must be made by each
Equity Holder on or before the date fixed by the
Bankruptcy Court for voting with respect to the Plan.
The Plan shall set forth the terms and conditions on
which the foregoing rights may be exercised.
(iv) GPA. 3,375,000 shares shall be issued to
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GPA.
(v) Escrow Shares. 4,500,000 shares (the "Escrow
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Shares") shall be issued to the Unsecured Parties as
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follows:
(A) All of the Escrow Shares shall be issued to
the Equity Holders if the Bankruptcy Court
determines on the Confirmation Date that the
Non Contingent Shares will provide a full recovery,
as of the Effective Date, for the holders of
Prepetition Claims. As used herein, "Non-Contingent
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Shares" means the 20,250,000 shares of Class B
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Common issuable to the Unsecured Creditors pursuant
to clause (ii) above less the number of such shares
to be acquired by Investor pursuant to the
provisions of such clause.
(B) If, however, the Bankruptcy Court determines
on the Confirmation Date that the value of the
Non-Contingent Shares does not, as of the Effective
Date, provide a full recovery for the holders of the
Prepetition Claims, then the Escrow Shares will be
placed in escrow with a bank or trust company
reasonably acceptable to the Creditors' Committee
and the Equity Committee (the "Escrow Agent") for a
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period of one year ending on the first anniversary
of the Effective Date ("First Anniversary"). If, on
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any date prior to the First Anniversary, the Closing
Price of the Non-Contingent Shares for any ten out
of 15 consecutive trading days ending on or before
such date is equal to or exceeds the Closing Price
at which the Bankruptcy Court determines the holders
of the Prepetition Claims shall have received a full
recovery as of the Effective Date, the Escrow Agent
shall terminate the escrow and release the Escrow
Shares therefrom for distribution to the Equity
Holders. As used herein, "Closing Price" for any
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trading day means (i) if shares of Class B Common
are traded on the New York Stock Exchange or the
American Stock Exchange, the closing price of Class
B Common for such trading day or (ii) if shares of
Class B Common are traded on NASDAQ or otherwise in
the over the counter markets, the final bid price of
the Class B Common for such trading day. If the
escrow is not terminated early as aforesaid, then
(x) the value of the Non-Contingent Shares shall be
determined on the First Anniversary based on the
average of the Closing Prices for the 20 consecutive
trading days prior to the First Anniversary (the
"Average Closing Price"), (y) the Unsecured
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Creditors shall be distributed such number of the
Escrow Shares as shall equal the quotient determined
by dividing (aa) the amount of the Shortfall as of
the First Anniversary (if any) by (bb) the Average
Closing Price and (z) the remaining Escrow Shares,
if any, shall be distributed to the Equity Holders.
(3) Warrants. There shall be Warrants to purchase
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6,428,572 shares of Class B Common at the exercise price as
specified in and subject to the terms of Exhibit A hereto,
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and such Warrants shall, in accordance with the Plan, be
issued as follows:
(i) Warrants to purchase up to 2,571,429 shares of
Class B Common shall be issued to Investor; and
(ii) Warrants to purchase up to 2,571,429 shares
of Class B Common shall be issued to the Equity Holders
or a trust or trusts created for their benefit; and
(iii) Warrants to purchase up to 1,285,714 shares
of Class B Common shall be issued to GPA.
(4) Senior Unsecured Notes. There shall be issued $103
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million principal amount of Notes on the terms set forth in
and subject to the terms of Exhibit B hereto, and such Notes
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shall, in accordance with the Plan, be issued (i) 100
million principal amount to Investor against payment in cash
of not less than 99% of the principal amount thereof and
(ii) $3 million principal amount to GPA.
(b) Holders of the Class A Common shall have fifty votes
per share. Holders of Class B Common shall have one vote per
share. Holders of Class A Common and holders of Class B Common
shall vote together as a single class except as otherwise
required by law or the provisions of this Agreement. Investor
may elect, with respect to any shares of Class B Common held by
it, to suspend the voting rights relating to such shares by
giving prior written notice to the Company, which notice shall
describe such shares in reasonable detail and state whether or
not the voting suspension is permanent or temporary and, if
temporary, specify the period thereof. All Escrow Shares shall
be counted for purposes of determining a quorum at any meeting of
the Company's stockholders. In the case of each matter submitted
for a vote by the holders of Class B Common, the Escrow Agent
shall vote all of the Escrow Shares in the same proportion as all
other shares of Class B Common are voted with respect to such
matter.
SECTION 5. Business Alliance Agreements. Continental
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and the Company shall enter into mutually acceptable business
alliance agreements on the Effective Date, which agreements may
include, but shall not be limited to, agreements to share ticket
counter space, ground handling agreements, agreements to link
frequent flier programs, and combined purchasing agreements, and
schedule coordination and code sharing agreements. On the
Effective Date, Mesa shall enter into agreements with the Company
extending the existing contractual arrangements between the
Company and Mesa for five years from the Effective Date and
modifying the termination provisions thereof consistent with such
extension. Such agreements with Continental and Mesa are herein
collectively referred to as the "Alliance Agreements".
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SECTION 6. Governance Agreements. On the Effective
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Date, the Company, Investor and Investor s partners (other than
any such partner holding shares of Class B Common the voting
rights with respect to which have been suspended as contemplated
by Section 4(b)) shall enter into one or more written agreements
(the "Governance Agreements") effectively providing as follows:
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(a) At all times during the three-year period commencing
on the Effective Date, the Company's board of directors
shall consist of 15 members designated as follows:
(i) nine members (at least 8 of whom are U.S.
citizens) shall be designated by Investor, with certain
of the partners of Investor having the right to
designate certain of Investor s designated directors;
(ii) four members (the "Independent Directors")
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(at least two of whom are U.S. citizens) shall be
designated by a majority of the Stockholder
Representatives; provided that each such member shall be
reasonably acceptable to Investor at the time of his or
her initial designation; and
(iii) two members shall be designated by GPA for
so long as GPA shall own at least 4% of the voting
equity securities of the Company; provided that each
such member shall be reasonably acceptable to Investor
at the time of his or her initial designation.
As used herein, "Stockholder Representatives" shall mean,
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collectively, (A) three individuals who, on the date hereof,
are serving as directors of the Company, (B) one individual
who, on the date hereof, is serving as a member of the
Creditors' Committee and (C) one individual who, on the date
hereof, is serving as a member of the Equity Committee. The
initial Stockholder Representatives shall be selected on or
before the Effective Date (x) by the Company's board of
directors in the case of the three individuals referred to
in clause (A) above, (y) by the Creditors' Committee in the
case of the individual referred to in clause (B) above and
(z) by the Equity Committee in the case of the individual
referred to in clause (C) above. In the case of the death,
resignation, removal or disability of a Stockholder
Representative after the Effective Date, his or her
successor shall be designated by a majority of the remaining
Stockholder Representatives.
(b) Until the third anniversary of the Effective Date,
Investor will vote and cause to be voted all shares of
Common Stock (other than those the voting rights of which
have been suspended) owned by Investor or any of its
partners or by the assignees or transferees of all or
substantially all of the Common Stock owned by Investor or
any of its partners (other than a Person who acquires such
stock pursuant to a tender or exchange offer open to all
stockholders of the Company) in favor of the election as
directors of any and all individuals designated for such
election as contemplated by clauses (ii) and (iii) of
paragraph (a) above.
(c) No director nominated by Investor shall be an
officer or employee of Continental. All Company directors,
if any, who are selected by, or who are directors of,
Continental shall recuse themselves from voting on, or
otherwise receiving any confidential Company information
regarding, matters in connection with negotiations between
Continental and the Company (including, without limitation,
those relating to the Alliance Agreements) and matters in
connection with any action involving direct competition
between Continental and the Company. All Company directors,
if any, who are selected by, or who are directors, officers
or employees of, Mesa shall recuse themselves from voting
on, or otherwise receiving any confidential Company
information regarding, matters in connection with
negotiations between Mesa and the Company (including,
without limitation, those relating to the Alliance
Agreements) and matters in connection with any action
involving direct competition between Mesa and the Company.
(d) During the three-year period commencing on the
Effective Date, the Company will not consummate any Business
Combination unless such transaction shall be approved in
advance by at least three Independent Directors or by a
majority of the stock voted at the meeting held to consider
such transaction which is owned by stockholders of the
Company other than Investor or any of its Affiliates;
provided, however, that neither Mesa nor any Fidelity Fund
(or any of their non-Affiliated transferees) will be deemed
an Affiliate of Investor for purposes of voting on any
Business Combination involving Continental.
SECTION 7. Plan of Reorganization. The Plan shall (i)
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be proposed jointly by the Company and Investor, (ii) contain
terms and conditions reasonably satisfactory to Investor and the
Company, and (iii) include the following provisions; provided
that Investor and the Company may, by mutual agreement, modify
the Plan or otherwise restructure the Investment in a manner
consistent with the contemplated economic consequences to the
Company, Investor, the Unsecured Parties and GPA in order to
enable the Company, as reorganized, to more fully utilize its
existing tax attributes:
(a) Debtor-in-Possession Financing. The Company's
---------------------------------
debtor-in-possession financing shall be repaid in full in
cash on the Effective Date.
(b) Administrative Claims. All allowed administrative
----------------------
claims shall be paid as required pursuant to Section 1129(a)
of the Bankruptcy Code, provided that such claims do not
exceed the amount set forth in Plan R-2 plus $15 million,
and provided further that payment of such claims in excess
of those set forth in Plan R-2 would not, if payment was to
be made in the month immediately preceding the Effective
Date, cause the Company to fail to meet any of the Monthly
Targets for such month.
(c) Tax Claims. All priority tax claims shall be paid
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over the maximum term permitted by the Bankruptcy Code, as
determined by the Bankruptcy Court, with interest accruing
at a rate determined by the Bankruptcy Court, provided that
such claims do not exceed the amounts set forth in Plan R-2
plus $8.5 million, and provided further that payment of such
claims in excess of those set forth in Plan R-2 would not,
if payment was to be made in the month immediately preceding
the Effective Date, cause the Company to fail to meet any of
the Monthly Targets for such month .
(d) Nontax Priority Claims. All nontax priority claims
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shall be paid as required pursuant to Section 507 of the
Bankruptcy Code, provided that such claims do not exceed the
amounts set forth in Plan R-2.
(e) Secured Claims. Secured debt claims shall be
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treated as provided in Plan R-2 subject to (i) modification
based on updated appraisals of collateral values to be
conducted by the Company and consistent with the applicable
provisions of the Bankruptcy Code, or (ii) such other terms
as shall be reasonably satisfactory to the Company and
Investor.
(f) Unsecured Creditors. In consideration for (A) the
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shares and cash issued or paid, as the case may be, to the
Unsecured Creditors pursuant to Section 4(a)(2)(ii), and (B)
the shares, if any, issued to the Unsecured Creditors
pursuant to Section 4(a)(2)(v)(B), the unsecured claims of
the Unsecured Creditors shall be cancelled as specified in
the Plan.
(g) Equity Holders. In consideration for (A) the right
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to purchase shares pursuant to Section 4(a)(2)(iii), (B) the
shares, if any, issued to the Equity Holders pursuant to
Section 4(a)(2)(v), and (C) the Warrants issued to the
Equity Holders pursuant to Section 4(a)(3)(ii), the equity
interests of the Equity Holders shall be cancelled as
specified in the Plan.
(h) Leases. All aircraft leases which have been assumed
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prior to the date hereof will be honored by the Company in
accordance with their terms and without reduction of rentals
thereunder, provided that with the consent of the Company,
Investor and any applicable lessor, any such lease may be
amended to reduce the rentals payable thereunder, it being
understood that, in consideration of any such amendment and
with the consent of the Creditors' Committee, securities of
the Company may be issued to such lessors from securities
otherwise allocable to the Unsecured Parties to the extent
consistent with any agreement in writing entered into by
Investor and the Equity Committee on or before the date
hereof.
(i) Kawasaki. The contractual right of Kawasaki Leasing
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International Inc. ("Kawasaki") to require the Company to
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lease certain aircraft and aircraft engines shall be
modified on terms satisfactory to the Company, Investor and
Kawasaki or, in the absence of such modification, honored.
(j) GPA. In consideration for (A) the shares to be
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issued to GPA pursuant to Section 4(a)(2)(iv), (B) the
Warrants to be issued to GPA pursuant to Section
4(a)(3)(iii), (C) the Notes to be issued to GPA pursuant to
Section 4(a)(4) and (D) the granting to GPA on the Effective
Date of the right (the "New GPA Put") to require the Company
-----------
to lease from GPA on or prior to June 30, 1999, up to eight
aircraft of types consistent with the fleet currently
operated by the Company, GPA shall, as specified in the
Plan, cancel and waive all rights to put any aircraft to the
Company which it may have pursuant to the Put Agreement
between GPA and the Company, dated as of June 25, 1991 (the
"GPA Put Agreement") and/or the related Agreement Regarding
------------------
Rights of First Refusal for A320 Aircraft, dated as of
September 1, 1992 (the "First Refusal Agreement") and all
------------------------
other claims of any kind or nature arising out of or in
connection with the GPA Put Agreement and/or the First
Refusal Agreement (other than claims for reimbursement of
expenses incurred by GPA in connection therewith). Each
such lease shall provide for the payment by the Company of a
fair market rental (determined at or about the time of
delivery of the related aircraft to the Company on the basis
of rentals then prevailing in the marketplace for comparable
leases of comparable aircraft to lessees of comparable
creditworthiness); and each such lease shall have such other
terms and provisions and be in such form as is agreed upon
by the Company and GPA with the approval of Investor (which
approval shall not be unreasonably withheld or delayed) and
attached to the agreement pursuant to which GPA is granted
the New GPA Put.
(k) Prepetition Aircraft Purchase Contracts. The
--------------------------------------------
prepetition contract for the purchase of aircraft between
the Company and The Boeing Company shall either be modified
on terms satisfactory to Investor, the Company and The
Boeing Company or, in the absence of such agreement,
rejected. The Company's aircraft purchase contract with
AVSA, S.A.R.L. ("Airbus") shall be amended on terms
------
consistent with the provisions of the AmWest - A320 Term
Sheet, dated as of February 23, 1994 by and between Investor
and Airbus.
(l) Employees. The Company shall have the right to
---------
release employees from all currently existing obligations to
the Company in respect of shares of Company stock purchased
by such employees pursuant to the Company's stock purchase
plan, such release to be in consideration for the
cancellation of such shares.
(m) Exculpation. The Plan will contain customary
------------
exculpation provisions for the benefit of the Creditors'
Committee and the Equity Committee and their respective
professionals.
SECTION 8. Conditions to Investor's Obligations
--------------------------------------------
Relating to the Investment. The obligations of Investor to
----------------------------
consummate the Investment and the other transactions contemplated
herein shall be subject to the satisfaction, or the written
waiver by Investor, of the following conditions:
(a) an initial order approving the Procedures Agreement,
which order shall be in form and substance reasonably
satisfactory to Investor (the "Initial Order"), shall have
-------------
been entered by the Bankruptcy Court on or prior to
March 31, 1994 and, once entered, shall be in effect and
shall not be modified in any material respect or stayed;
(b) subject to Section 10(b), the Company and Investor,
as applicable, shall have received all Regulatory Approvals,
which shall have become final and nonappealable or any
period of objection by Regulatory Authorities shall have
expired, as applicable, and all other material approvals,
permits, authorizations, consents, licenses and agreements
from other third parties that are necessary or appropriate
to permit the Investment and the other transactions
contemplated hereby and by the Related Agreements and to
permit the Company to carry on its business after the
Effective Date in a manner consistent in all material
respects with the manner in which it was carried on prior to
the Effective Date (collectively with Regulatory Approvals,
the "Approvals"), which Approvals shall not contain any
---------
condition or restriction that, in Investor's reasonable
judgment, materially impairs the Company's ability to carry
on its business in a manner consistent in all material
respects with prior practice or as proposed to be carried on
by the reorganized Company;
(c) the certificate of incorporation and bylaws of the
Company shall contain the terms contemplated by this
Agreement and shall otherwise be reasonably satisfactory to
Investor;
(d) there shall be in effect no injunction, stay,
restraining order or decree issued by any court of competent
jurisdiction, whether foreign or domestic, staying the
effectiveness of any of the Approvals, the Initial Order or
the Confirmation Order, and there shall not be pending any
request or motion for any such injunction, stay, restraining
order or decree; provided, however, that the foregoing
condition shall not apply to any such injunction, stay,
order or decree requested, initiated or supported by
Investor or any of its partners or other Affiliates or to
any such request or motion made, initiated or supported by
Investor or any its partners or other Affiliates;
(e) there shall not be threatened or pending any suit,
action, investigation, inquiry or other proceeding
(collectively, "Proceedings") by or before any court of
-----------
competent jurisdiction or Regulatory Authority (excluding
the Company's bankruptcy case, but including adversary
proceedings and contested matters in such bankruptcy case,
and excluding any such Proceedings fully and accurately
disclosed by the Company in Schedule I hereto), or any
-----------
adverse development occurring since December 31, 1993 in any
such Proceedings, which Proceedings or development, singly
or in the aggregate, in the good faith judgment of Investor,
are reasonably likely to have a material adverse effect on
the Company's ability to carry on its business in a manner
consistent in all material respects with prior practices or
are reasonably likely to impair in any material respect
Investor's ability to realize the intended benefits and
value of this Agreement, the Procedures Agreement or any
Related Agreement; provided, however, that the foregoing
condition shall not apply to any such Proceeding or
development requested, initiated or supported by Investor or
any of its partners or other Affiliates;
(f) the Company shall have delivered to Investor
appropriate closing documents, including the instruments
evidencing the Securities being issued to Investor,
certifications of the Company officers (including, but not
limited to, incumbency certificates, and certificates as to
the truth and correctness of statements made in the
Disclosure Statement or any other offering document
distributed in connection with any securities issued in
respect of this Agreement or the Related Agreements) and
opinions of legal counsel, all of which shall be reasonably
satisfactory to Investor;
(g) by no later than March 31, 1994, the Company shall
have delivered to Investor audited financial statements as
of December 31, 1993, and for the year then ended, which
statements shall reflect a financial performance and a
financial position of the Company consistent in all material
respects with the unaudited results previously announced by
the Company for such year, and, if requested by Investor,
the Company shall have discussed such financial statements
with Investor and provided an opportunity for Investor to
discuss such financial statements with the Company's
auditors;
(h) since December 31, 1993, except for the matters
disclosed in Schedule I hereto, no material adverse change
-----------
in the Company's condition (financial or otherwise),
business, assets, properties, operations or relations with
employees or labor unions shall have occurred and no matter
(except for the matters disclosed in Schedule I hereto)
----------
shall have occurred or come to the attention of Investor
that, in the reasonable judgment of Investor, is likely to
have any such material adverse effect;
(i) the following shall be true in all material respects
(in each case based on the Company's actual monthly or daily
financial statements, which shall be prepared by the Company
in a manner consistent in all material respects with its
historical monthly and daily financial statements previously
furnished to Investor): (A) the Company's actual monthly
Operating Cash Flow (as defined on the Monthly Targets
Schedule) shall not, in any month, be less than the minimum
amount therefor established as part of the Monthly Targets,
(B) the Company's actual 4 month Rolling Cash Flow (as
defined on the Monthly Targets Schedule) shall not be less,
as of the end of any four calendar month period, than the
minimum amount therefor established as part of the Monthly
Targets, (C) the Company's actual end of month Reported Cash
Balance (as defined in the Monthly Targets Schedule) shall
not, as of the end of any calendar month, be less than the
minimum amount therefor established as part of the Monthly
Targets, (D) the Company's actual five-day average Minimum
Cash Balance (as defined in the Monthly Targets Schedule)
shall not be, as of the end of any five day period, less
than the minimum amount therefor established as part of the
Monthly Targets; (E) the Company shall not have taken any
actions which the Company knew or reasonably should have
known would likely impair or hinder in any material respect
the Company's ability to achieve the Projections; (F) the
amount and nature of the obligations and liabilities
(including, without limitation, tax liabilities and
administrative expense claims) required to be paid by the
Company on the Effective Date or to be paid by the Company
following the Effective Date pursuant to obligations assumed
by the Company during the course of its bankruptcy
proceedings shall not be in excess of the amounts reflected
in Plan R-2 plus any additional allowances provided in
Section 7 (as reduced by any repayments of the existing
debtor-in-possession loan made on or prior to the Effective
Date) and shall not be materially different in nature than
those specified in Plan R-2 (except with respect to
administrative claims not known to the Company when Plan R-2
was developed); and (G) the Company shall have paid all fees
and expenses due Investor under the Procedures Agreement;
(j) since the date hereof, there shall have occurred no
outbreak or escalation of hostilities or other international
or domestic calamity, crisis or change in political,
financial or economic conditions or other adverse change in
the financial markets that impairs (or could reasonably be
expected to impair) in any material respect the Company's
ability to carry on its business in a manner consistent in
all material respects with prior practice or impairs (or
could reasonably be expected to impair) in any material
respect Investor s ability to realize the intended benefits
and value of this Agreement or any Related Agreement;
(k) the Related Agreements, including all Alliance
Agreements, to be executed by the Company shall have been
executed by the Company on or before the Effective Date and,
once executed, shall not have been modified without the
consent of Investor, shall be in effect and shall not have
been stayed;
(l) the Company shall have performed in all material
respects all obligations on its part required to be
performed on or before the Effective Date under this
Agreement, the Procedures Agreement and the Related
Agreements and all orders of the Bankruptcy Court in respect
thereof that are consistent with the provisions of such
intruments;
(m) all representations and warranties of the Company
under this Agreement, the Procedures Agreement and the
Related Agreements shall be true in all material respects as
of the Effective Date;
(n) the Plan and Disclosure Statement each shall have
been filed by the Company on or prior to May 1, 1994, and,
once filed, shall have been served by the Company on all
appropriate parties and, once served, shall not have been
modified in any material respect without the prior consent
of Investor (which consent shall not be unreasonably
withheld), withdrawn by the Company or dismissed;
(o) the Disclosure Statement (in the form approved by
the Bankruptcy Court and as amended or supplemented, if
applicable) shall have been true and correct in all material
respects as of the date first mailed to Unsecured Parties
and as of the date fixed by the Bankruptcy Court for voting
on the Plan and such Disclosure Statement shall not contain
any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made
therein (taken as a whole), in light of the circumstances
under which they were made, not misleading; provided,
however, that the foregoing condition shall not apply to
statements or other information furnished or provided by
Investor or any of its Affiliates for use in the Disclosure
Statement;
(p) the order approving the Disclosure Statement shall
have been entered by the Bankruptcy Court on or prior to
June 15, 1994, and, once entered, shall not have been
modified in any material respect, shall be in effect and
shall not have been stayed;
(q) the Plan (including all securities of the Company to
be issued pursuant thereto and all contracts, instruments,
agreements and other documents to be entered into in
connection therewith), the Disclosure Statement and the
Confirmation Order shall be consistent with the terms of
this Agreement and otherwise reasonably satisfactory in form
and substance to Investor;
(r) the Confirmation Order shall have been entered by
the Bankruptcy Court in form reasonably satisfactory to
Investor on or before August 1, 1994, and, once entered,
shall not have been modified in any material respect, shall
be in effect and shall not have been stayed and shall not be
subject to any appeal;
(s) the Effective Date shall have occurred on or prior
to the Outside Date unless the reason therefor shall be
attributable to the breach by Investor or its Affiliates of
any of their respective representations, warranties,
covenants or obligations contained herein or in the
Procedures Agreement or any Related Agreement;.
(t) either pursuant to the Confirmation Order or
otherwise, the Bankruptcy Court shall have established one
or more bar dates for administrative expense claims pursuant
to an order reasonably acceptable to Investor, which bar
date or dates shall occur on or before dates reasonably
acceptable to Investor; and
(u) the Securities and Exchange Commission shall have
declared effective a shelf registration statement with
respect to the Securities issuable to Investor.
In the event any of the conditions set forth in clause (a) (n),
(p) or (r) is not satisfied by the date specified in such clause
(the "Deadline"), then, on the 15th day following the then
current Deadline, the Deadline shall be automatically extended on
a day-to-day basis unless the Company and Investor otherwise
agree in writing or unless Investor gives a notice of termination
to the Company pursuant to Section 20(b) of the Procedures
Agreement within such 15-day period. If any Deadline is
automatically extended as aforesaid, Investor may thereafter
establish a new Deadline by giving notice to the Company
specifying the new Deadline, provided that the new Deadline may
not be sooner than 30 days after the date of such notice.
SECTION 9. Conditions to Company's Obligations Relating
---------------------------------------------
to Investment. The Company's obligations to consummate or to
--------------
cause the consummation of the issuance and sale of the Securities
and the other transactions contemplated by this Agreement shall
be subject to the satisfaction, or to the effective written
waiver by the Company, of the condition described in Section 8(b)
and the following additional conditions:
(a) payment of the Purchase Price;
(b) Investor shall have delivered to the Company
appropriate closing documents, including, but not limited
to, executed counterparts of the Related Agreements and
certifications of officers, and opinions of legal counsel,
all of which shall be reasonably satisfactory to the
Company;
(c) there shall be in effect no injunction, stay,
restraining order or decree issued by any court of competent
jurisdiction, whether foreign or domestic, staying the
effectiveness of any of the Approvals, the Initial Order or
the Confirmation Order, and there shall not be pending any
request or motion for any such injunction, stay, restraining
order or decree; provided, however, that the foregoing
condition shall not apply to any such injunction, stay,
order or decree requested, initiated or supported by the
Company or to any such request or motion made, initiated or
supported by the Company;
(d) the Related Agreements to be executed by Investor
or any of its partners shall have been executed by such
parties on or before the Effective Date and, once executed,
shall not have been modified without the consent of the
Company, shall be in effect and shall not have been stayed;
(e) Investor, Continental and Mesa shall have performed
in all material respects all obligations on their part
required to be performed on or before the Effective Date
under this Agreement, the Procedures Agreement and the
Related Agreements and all orders of the Bankruptcy Court in
respect thereof that are consistent with the provisions of
such instruments;
(f) all representations and warranties of Investor,
Continental and Mesa under this Agreement, the Procedures
Agreement and the Related Agreements shall be true and
correct in all material respects as of the Effective Date;
(g) the Company shall be reasonably satisfied that the
Alliance Agreements, when fully implemented, shall result in
an increase to the Company's pretax income of not less than
$40 million per year;
(h) since the date hereof, there shall have occurred (A)
no outbreak or escalation of hostilities or other
international or domestic calamity, crisis or change in
political, financial or economic conditions or other adverse
change in the financial markets or (B) any adverse change in
the condition (financial or otherwise), business, assets,
properties or prospects of Continental or Mesa, in each case
that materially impairs the ability of either Continental or
Mesa to perform its obligations under the Alliance
Agreements or the Company's ability to realize the intended
benefits and value of this Agreement, the Alliance
Agreements (as contemplated by clause (g) above) or the
other Related Agreements;
(i) since the time of their initial filing by the
Company, neither the Plan nor the Disclosure Statement shall
have been modified in any material respect without the prior
consent of the Company (which consent shall not be
unreasonably withheld or delayed), withdrawn by Investor or
dismissed;
(j) the certificate of incorporation and bylaws of the
Company shall contain the terms contemplated by this
Agreement and shall otherwise be reasonably satisfactory to
the Company;
(k) the Plan (including all Securities to be issued
pursuant thereto and all contracts, instruments, agreements
and other documents to be entered into in connection
therewith), the Disclosure Statement and the Confirmation
Order shall be consistent with the terms of this Agreement
and otherwise reasonably satisfactory in form and substance
to the Company;
(l) the Confirmation Order shall have been entered by
the Bankruptcy Court in form reasonably acceptable to the
Company and, once entered, shall not have been modified in
any material respect, shall be in effect and shall not have
been stayed and shall not be subject to any appeal; and
(m) the Effective Date shall have occurred on or prior
to the Outside Date unless the reason therefor shall be
attributable to the breach by the Company of any of its
representations, warranties, covenants or obligations
contained herein or in the Procedures Agreement or any
Related Agreement.
SECTION 10. Cooperation.
-----------
(a) The Company and Investor will cooperate in a
commercially reasonable manner, and will use their respective
commercially reasonable efforts, to consummate the transactions
contemplated hereby, including all commercially reasonable
efforts to satisfy the conditions specified in this
Agreement. The Company will use commercially reasonable efforts,
and Investor will cooperate in a commercially reasonable manner
in seeking, to obtain all Approvals.
(b) Notwithstanding anything in Section 8 or 9 to the
contrary, if prior to the Outside Date, the Department of Justice
or any other Regulatory Authority raises any antitrust objection
to the consummation of the Investment or the implementation of
any Alliance Agreement, which objection has not been resolved on
or before the Outside Date, Investor nevertheless shall be
required to consummate the Investment and, to that end, agrees
to timely make such adjustment to the composition of its
partnership and to the Alliance Agreements as required to resolve
such antitrust objection; provided, however, that nothing in this
paragraph (b) shall affect the rights of the Company under
Section 9(g) or obligate the Company to enter into or approve any
adjustment or modification of the Alliance Agreements which, in
the Company's reasonable judgment, is prejudicial to the Company
or the Unsecured Parties in any material respect and which, if
entered into or approved, would materially impair the Company's
ability to realize the reasonably anticipated benefits of such
Alliance Agreements.
SECTION 11. Registration Rights Agreement. Investor
------------------------------
and the Company will enter into a registration rights agreement
on terms acceptable to Investor and the Company. The
registration rights agreement will reflect the understanding of
the parties with respect to their registration rights and
obligations and will provide that Investor, its partners and any
assignees and transferees, shall have the right to cause the
Company to (i) include the Securities issuable to Investor
pursuant to the Plan (including any such Securities issued or
issuable in respect of the Warrants or by way of any stock
dividend or stock split or in connection with any combination of
shares, merger, consolidation or similar transaction), on
customary terms, in "piggyback" underwritings and registrations
and (ii) to effect, on customary terms, one demand registration
under the Securities Act for the public offering and sale of the
Securities issued to Investor under the Plan at any time after
the third anniversary of the Effective Date.
SECTION 12. Applicable Provisions of Law and
-----------------------------------------
Regulations. It is understood and agreed that this Agreement
-----------
shall not create any obligation of, or restriction upon, the
Company or Investor or the partners of Investor that would
violate applicable provisions of law or regulation relating to
ownership or control of a U.S. air carrier. At all times after
the Effective Date, the certificate of incorporation of the
Company shall provide that, in the event persons who are not U.S.
citizens shall own (beneficially or of record) or have voting
control over shares of Common Stock, the voting rights of such
persons shall be subject to automatic suspension as required to
ensure that the Company is in compliance with applicable
provisions of law or regulation relating to ownership or control
of a U.S. air carrier.
SECTION 13. Representations and Warranties of the
------------------------------------------
Company. The Company represents and warrants to Investor as
-------
follows:
(a) The Company has complied in all material respects
with the terms of all orders of the Bankruptcy Court in
respect of the Investment, this Agreement and the Procedures
Agreement.
(b) The Company has delivered to Investor copies of the
audited balance sheets of the Company as of December 31,
1992 and the statements of income, stockholders' equity and
cash flows for the years then ended, together with the notes
thereto. Such financial statements, and when delivered to
Investor the financial statements of the Company referred to
in Section 8(g) will, present fairly, in accordance with
generally accepted accounting principles (applied on a
consistent basis except as disclosed in the footnotes
thereto), the financial position and results of operations
of the Company as of the dates and for the periods therein
set forth.
(c) When delivered to Investor, the unaudited financial
statements of the Company referred to in Section 15(b)(ii)
will (i) present fairly, in accordance with generally
accepted accounting principles (applied on a consistent
basis except as disclosed therein and subject to normal
year-end audit adjustments), the financial position and
results of operations of the Company as of the date and for
the period therein set forth, it being understood and
agreed, however, that the foregoing representation relating
to conformity with generally accepted accounting principles
is being made only to the extent such principles are
applicable to interim unaudited reports and (ii) reflect a
financial position and results of operations not materially
worse than those set forth in the pro forma financial
statements contained in Plan 9.
(d) The Projections and the Monthly Targets were
prepared in good faith on a reasonable basis, and when
prepared represented the Company's best judgment as to the
matters set forth therein, taking into account all relevant
facts and circumstances known to the Company. Nothing has
come to the Company's attention since the dates on which the
Projections and the Monthly Targets, respectively, were
prepared which causes the Company to believe that any of the
projections and other information contained therein were
misleading or inaccurate in any material respect as of such
dates. It is specifically understood and agreed that the
delivery of the Projections and the Monthly Targets shall
not be regarded as a representation, warranty or guarantee
that the particular results reflected therein will in fact
be achieved or are likely to be achieved.
(e) No written statement, memorandum, certificate,
schedule or other written information provided (or to be
provided) to Investor or any of its representatives by or on
behalf of the Company in connection with the transactions
contemplated hereby, when viewed together with all other
written statements and information provided to Investor and
its representatives by or on behalf of the Company, in light
of the circumstances under which they were made, (i)
contains or will contain any materially misleading statement
or (ii) omits or will omit to state any material fact
necessary to make the statements therein not misleading.
(f) The board of directors of the Company has approved
the Investment and Investor's acquisition of Securities
hereunder for purposes of, and in accordance with the
provisions and requirements of, Section 203(a)(1) of the
General Corporation Law of the State of Delaware and, as a
consequence, Investor will not be subject to the provisions
of such Section with respect to any business combination
between Investor and the Company (as such term is defined in
said Section 203).
SECTION 14. Representations and Warranties of
----------------------------------------
Investor. Investor represents and warrants to the Company as
--------
follows:
(a) The general and limited partners of Investor (other
than one such partner which will elect to suspend the voting
rights of its Securities as contemplated by Section 4(b))
are U.S. citizens within the meaning of Section 101(16) of
the Federal Aviation Act of 1958, as amended.
(b) Investor has, or has commitments for, sufficient
funds to pay the Purchase Price and otherwise perform its
obligations under this Agreement.
(c) No written statement, memorandum, certificate,
schedule or other written information provided (or to be
provided) to the Company or any of its representatives by or
on behalf of Investor in connection with the transactions
contemplated by the Alliance Agreements, when viewed
together with all other written statements and information
provided to the Company and its representatives by or on
behalf of Investor, in light of the circumstances under
which they were made, (i) contains or will contain any
materially misleading statement or (ii) omits or will omit
to state any material fact necessary to make the statements
therein not misleading.
SECTION 15. Covenants.
---------
(a) Investor covenants (i) to support, subject to
management's recommendation, increases in employee compensation
through 1995 at least equal to those set forth in Plan R-2 and
(ii) after the Effective Date, to cause the board of directors of
the Company to consider implementation of a broad based employee
incentive compensation plan and a management stock incentive plan.
(b) The Company covenants (i) to use commercially
reasonable efforts to cause the shelf registration statement
referred to in Section 8(u) to remain effective for three years
following its effective date and (ii) as soon as available, to
deliver to Investor a copy of the unaudited balance sheet of the
Company as of the end of each fiscal quarter of the Company prior
to the Effective Date and the unaudited statements of income and
cash flows for the periods then ended.
SECTION 16. Certain Taxes. The Company shall bear and
-------------
pay all transfer, stamp or other similar taxes (if any are not
exempted under Section 1146 of the Bankruptcy Code) imposed in
connection with the issuance and sale of the Securities.
SECTION 17. Administrative Expense. All amounts owed
-----------------------
to Investor by the Company under this Agreement, the Related
Agreements, the Procedures Agreement and all orders of the
Bankruptcy Court in respect thereof shall be treated as an
allowed administrative expense priority claim under Section
507(a)(1) of the Bankruptcy Code.
SECTION 18. Incorporation by Reference. The
------------------------------
provisions set forth in the Procedures Agreement, including, but
not limited to, the provisions regarding confidentiality,
liability indemnity and termination, are hereby incorporated by
reference and such provisions shall have the same force and
effect herein as if they were expressly set forth herein in full.
SECTION 19. Notices. All notices, requests and other
-------
communications hereunder must be in writing and will be deemed to
have been duly given only if delivered personally or by facsimile
transmission or mailed (first class postage prepaid) or by
prepaid express courier to the parties at the following addresses
or facsimile numbers:
If to the Company: America West Airlines, Inc.
4000 East Sky Harbor Boulevard
Phoenix, Arizona 85034
Attention: William A. Franke and
Martin J. Whalen
Fax Number: (602) 693-5904
with a copy to: LeBoeuf, Lamb, Greene & MacRae
633 17th Street, Suite 2800
Denver, Colorado 80202
Attention: Carl A. Eklund
Fax Number: (303) 297-0422
and a copy to: Andrews & Kurth L.L.P.
4200 Texas Commerce Tower
Houston, Texas 77002
Attention: David G. Elkins
Fax Number: (713) 220-4285
and a copy to: Murphy, Weir & Butler
101 California Street, 39th Floor
San Francisco, California 94111
Attention: Patrick A. Murphy
Fax Number: (415) 421-7879
and a copy to: Lord, Bissell and Brook
115 South LaSalle Street
Chicago, IL 60603
Attention: Benjamin Waisbren
Fax Number: (312) 443-0336
If to Investor: AmWest Partners, L.P.
201 Main Street, Suite 2420
Fort Worth, Texas 76102
Attention: James G. Coulter
Fax Number: (817) 871-4010
with a copy to: Arnold & Porter
1200 New Hampshire Ave., N.W.
Washington, D.C. 20036
Attention: Richard P. Schifter
Fax Number: (202) 872-6720
and a copy to: Jones, Day, Reavis & Pogue
North Point 901 Lakeside Avenue
Cleveland, Ohio 44114
Attention: Lyle G. Ganske
Fax Number: (216) 586-7864
and a copy to: Murphy, Weir & Butler
101 California Street, 39th Floor
San Francisco, California 94111
Attention: Patrick A. Murphy
Fax Number: (415) 421-7879
and a copy to: Lord, Bissell and Brook
115 South LaSalle Street
Chicago, IL 60603
Attention: Benjamin Waisbren
Fax Number: (312) 443-0336
All such notices, requests and other communications will (i) if
delivered personally to the address as provided in this Section,
be deemed given upon delivery, (ii) if delivered by facsimile
transmission to the facsimile number as provided in this Section,
be deemed given upon receipt, and (iii) if delivered by mail or
by express courier in the manner described above to the address
as provided in this Section, be deemed given upon receipt (in
each case regardless of whether such notice is received by any
other person to whom a copy of such notice, request or other
communication is to be delivered pursuant to this Section).
Either party from time to time may change its address, facsimile
number or other information for the purpose of notices to that
party by giving notice specifying such change to the other party
hereto.
SECTION 20. Governing Law. Except to the extent
--------------
inconsistent with the Bankruptcy Code, this Agreement shall in
all respects be governed by and construed in accordance with the
laws of the State of Arizona, without reference to principles of
conflicts or choice of law under which the law of any other
jurisdiction would apply.
SECTION 21. Amendment. This Agreement may only be
---------
amended, waived, supplemented or modified by a written instrument
signed by authorized representatives of Investor and the Company.
Investor may extend the time for satisfaction of the conditions
set forth in Section 8 (prior to or after the relevant date) by
notifying the Company in writing. The Company may extend the
time for satisfaction of the conditions set forth in Section 9
(prior to or after the relevant date) by notifying Investor in
writing.
SECTION 22. No Third Party Beneficiary. This
--------------------------------
Agreement and the Procedures Agreement are made solely for the
benefit of the Company and Investor, and no other Person
(including, without limitation, employees, stockholders and
creditors of the Company) shall have any right, claim or cause of
action under or by virtue of this Agreement or the Procedures
Agreement, except to the extent such Person is entitled to
protection as contemplated by Section 28(b) or to expense
reimbursement pursuant to the Procedures Agreement or may assert
a claim for indemnity pursuant to the Procedures Agreement.
SECTION 23. Assignment. Except as otherwise provided
----------
herein, Investor may assign all or part of its rights under this
Agreement to any of its partners (each of whom may assign all or
part to its Affiliates) or to any fund or account managed or
advised by Fidelity Management Trust Company and may assign any
Securities (or the right to purchase any Securities) to any
lawfully qualified Person or Persons, and the Company may assign
this Agreement to any Person with which it may be merged or
consolidated or to whom substantially all of its assets may be
transferred in facilitation of the consummation of the Plan and
the effectuation of the issuance and sale of the Securities as
contemplated hereby or by the Related Agreements. None of such
assignments shall relieve the Company or Investor of any
obligations hereunder, under the Procedures Agreement or under
the Related Agreements.
SECTION 24. Counterparts. This Agreement may be
------------
executed by the parties hereto in counterparts and by telecopy,
each of which shall be deemed to constitute an original and all
of which together shall constitute one and the same instrument.
With respect to signatures transmitted by telecopy, upon request
by either party to the other party, an original signature of such
other party shall promptly be substituted for its facsimile.
SECTION 25. Invalid Provisions. If any provision of
------------------
this Agreement is held to be illegal, invalid or unenforceable
under any present or future laws, rules or regulations, and if
the rights or obligations of Investor and the Company under this
Agreement will not be materially and adversely affected thereby,
(a) such provision will be fully severable, (b) this Agreement
will be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof, (c)
the remaining provisions of this Agreement will remain in full
force and effect and will not be affected by the illegal, invalid
or unenforceable provision or by its severance herefrom, and (d)
in lieu of such illegal, invalid or unenforceable provision,
there will be added automatically as a part of this Agreement a
legal, valid and enforceable provision as similar in terms to
such illegal, invalid or unenforceable provision as may be
possible. If the rights and obligations of Investor or the
Company will be materially and adversely affected by any such
provision held to be illegal, invalid or unenforceable, then
unless such provision is waived in writing by the affected party
in its sole discretion, this Agreement shall be null and void.
SECTION 26. Tagalong Rights. On the Effective Date,
----------------
Investor shall enter into a written agreement for the benefit of
all holders of Class B Common (other than Investor and its
Affiliates) whereby Investor shall agree, for a period of three
years after the Effective Date, not to sell, in a single
transaction or related series of transactions, shares of Common
Stock representing 51% or more of the combined voting power of
all shares of Common Stock then outstanding unless such holders
shall have been given a reasonable opportunity to participate
therein on a pro rata basis and at the same price per share and
on the same economic terms and conditions applicable to Investor;
provided, however, that such obligation of Investor shall not
apply to any sale of shares of Common Stock made by Investor (i)
to any Affiliate of Investor, (ii) to any Affiliate of Investor s
partners, (iii) pursuant to a bankruptcy or insolvency
proceeding, (iv) pursuant to judicial order, legal process,
execution or attachment, (v) in a widespread distribution
registered under the Securities Act of 1933, as amended
("Securities Act") or (vi) in compliance with the volume
---------------
limitations of Rule 144 (or any successor to such Rule) under the
Securities Act.
SECTION 27. Stock Legend. All Notes issued to Investor
------------
pursuant to the Plan and all certificates representing shares of
Common Stock issued to Investor pursuant to the Plan shall be
conspicuously endorsed with an appropriate legend to the effect
that such Notes or shares may not be sold, transferred or
otherwise disposed of except in compliance with (i) Section 26
and (ii) applicable securities laws.
SECTION 28. Directors' Liability and Indemnification.
------------------------------------------
(a) Upon, and at all times after, consummation of the
Plan, the certificate of incorporation of the Company shall
contain provisions which (i) eliminate the personal liability
of the Company's former, present and future directors for monetary
damages resulting from breaches of their fiduciary duties to the
fullest extent permitted by applicable law and (ii) require the
Company, subject to appropriate procedures, to indemnify the
Company's former, present and future directors and executive
officers to the fullest extent permitted by applicable law. In
addition, upon consummation of the Plan, the Company shall enter
into written agreements with each person who is a director or
executive officer of the Company on the date hereof providing for
similar indemnification of such person and providing that no
recourse or liability whatsoever with respect to this Agreement,
the Procedures Agreement, the Related Agreements, the Plan or the
consummation of the transactions contemplated hereby or thereby
shall be had, directly or indirectly, by or in the right of the
Company against such person. Notwithstanding anything contained
herein to the contrary, the provisions of this Section 28(a)
shall not be applicable to any person who ceased being a director
of the Company at any time prior to March 1, 1994.
(b) Investor agrees, on behalf of itself and its
partners, that no recourse or liability whatsoever (except as
provided by applicable law for intentional fraud, bad faith or
willful misconduct) shall be had, directly or indirectly, against
any person who is a director or executive officer of the Company
on the date hereof with respect to this Agreement, the Procedures
Agreement, the Related Agreements, the Plan or the consummation
of the transactions contemplated hereby or thereby, such recourse
and liability, if any, being expressly waived and released by
Investor and its partners as a condition of, and in consideration
for, the execution and delivery of this Agreement.
SECTION 29. Bankruptcy Court Approval. This Agreement
--------------------------
shall not become effective for any purpose unless and until the
Bankruptcy Court shall have entered the Confirmation Order.
SECTION 30. Jurisdiction of Bankruptcy Court. The
-----------------------------------
parties agree that the Bankruptcy Court shall have and retain
exclusive jurisdiction to enforce and construe the provisions of
this Agreement.
SECTION 31. Interpretation. In this Agreement, unless
--------------
a contrary intention appears, (i) the words "herein", "hereof"
and "hereunder" and other words of similar import refer to this
Agreement as a whole and not to any particular Section or other
subdivision and (ii) reference to any Section means such Section
hereof. The Section headings herein are for convenience only and
shall not affect the construction hereof. No provision of this
Agreement shall be interpreted or construed against either party
solely because such party or its legal representative drafted
such provision.
SECTION 32. Termination. This Agreement shall
-----------
terminate concurrently with the termination of the Procedures
Agreement.
AMWEST PARTNERS, L.P.
By: AmWest Genpar, Inc.,
its General Partner
By: _______________________________
Title: ____________________________
Accepted and Agreed to
this 11th day of March, 1994.
AMERICA WEST AIRLINES, INC.
as Debtor and Debtor-in-Possession
By: _______________________________
Title: ____________________________
SCHEDULE I
TO
INVESTMENT AGREEMENT
1. On October 26, 1993, the National Mediation board
certified the Airline Pilots Association as
collective bargaining agent for the Company's
flight deck crew members in NMB Case No. R-6213.
As of March 3, 1994, the union remained in a
process of internal organization consisting of a
membership drive and election of local union
officers. No proposals for a collective bargaining
agreement have yet been tendered. The Company
anticipates a formal exchange of opening proposals
as contemplated by the Railway Labor Act to occur
in mid-April.
2. On February 15, 1989 in NMB Case No. R-5817, the
Association of Flight Attendants lost an election
to determine whether the Association would be the
bargaining agent for certain of the Company's
Customer Service Representatives. The NMB has
ordered a rerun election and a determination of
eligibility to vote in such a rerun election is
on-going. No date for a rerun election has yet
been set by the NMB.
3. The Company is subject to an informal inquiry by a
governmental agency as described in the letter,
dated February 22, 1994, from Martin J. Whalen, Sr.
Vice President and General Counsel of the Company,
to Richard P. Schifter, counsel for Investor.
Exhibit A
---------
Stock Purchase Warrants
Indicative Summary of Key Terms and Conditions
Issuer America West (the "Company").
-------
Issue Stock Purchase Warrants (the
"Warrants").
--------
Number Warrants to purchase 6,428,572
shares of the Company's Class B
Common Stock ("Common Stock").
------------
Exercise Price The Exercise Price for the Warrants
will be determined by the
Bankruptcy Court based on a per
share price for the Common Stock
which assumes that all holders of
Prepetition Claims have received
full recovery in respect thereof as
of the Effective Date.
Expiration The Warrants will be exercisable by
the holders thereof at any time on
or prior to the fifth anniversary
of the Effective Date.
Redemption The Warrants will not be
redeemable.
Anti-Dillution Adjustments The number of shares of Common
Stock purchasable upon exercise of
each Warrant will be adjusted upon
(i) payment of a dividend payable
in, or other distribution of,
Common Stock to all of the then
current holders of Common Stock,
(ii) a combination, subdivision or
reclassification of Common Stock,
and (iii) rights issuances.
Common Stock When delivered, the Common Stock
purchased upon exercise of the
Warrants will be fully paid and
nonassessable.
Voting Rights The holders of the Warrants will
not have any voting rights in
respect thereof.
Merger The holders of the Warrants will be
protected in the case of a merger
or other similar transaction
involving the Company.
Exhibit B
---------
Senior Unsecured Notes
Indicative Summary of Key Terms and Conditions
Issuer (Reorganized) America West
Airlines, Inc. (the "Company").
-------
Issue Senior Unsecured Notes (the
"Notes").
-----
Principal Amount $103,000,000.
Maturity Seven years from issuance.
Interest Rate The Notes will bear interest,
payable semiannually, in arrears at
a fixed rate equal to 10% per
annum.
Ranking The Notes will rank pari passu with
all existing and future senior
unsecured indebtedness of the
Company.
Operational Redemption The Notes will not be redeemable
during the first three years except
that the Company may redeem up to
$30 million in principal amount of
the Notes issued to Investor and up
to 1 million in principal amount
of the Notes issued to GPA, in each
case from the Net Proceeds of any
underwritten offering of primary
shares of the Company's Class B
Common Stock at a purchase price
equal to 108% of principal plus
accrued interest as of the date of
redemption. Thereafter, the Notes
are redeemable at the Company's
option, in whole or in part, after
30 days notice. The redemption
price will be equal to the
following percentage of the
principal amount redeemed in each
of the following years plus accrued
interest:
Year 4: 108%
Year 5: 105.3%
Year 6: 102.7%
Year 7: 100.1%
Mandatory Redemption None.
Covenants and Other Provisions Purchasers will negotiate
in good faith standard
covenants and provisions,
including, but not limited
to, limitations on
additional indebtedness,
liens, restricted payments,
investments, mergers,
asset sales, transactions
with affiliates, and the
like.