Exhibit 10.1
THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER THE SECURITIES ACT UNLESS AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE
US AIRWAYS GROUP, INC.
WARRANT TO PURCHASE COMMON STOCK
NO. PW-1 September 27, 2005
VOID AFTER January 18, 2012
THIS CERTIFIES THAT, for value received, Air Transportation Stabilization
Board, with its principal office at 1120 Vermont Avenue, Suite 970, Washington,
DC 20005, and/or its transferees and assigns (individually or collectively, the
"HOLDER"), is entitled to purchase at the Exercise Price (defined below) from US
Airways Group, Inc., a Delaware corporation, with its principal office at 111
West Rio Salado Parkway, Tempe, AZ 85281 (the "COMPANY"), 7,735,770 shares of
common stock, par value $0.01 per share, of the Company (the "COMMON STOCK"), as
provided herein. This Warrant is being delivered to the Holder in replacement of
and upon delivery for cancellation by the Holder to America West Holdings
Corporation ("AMERICA WEST HOLDINGS") of the warrant issued to the Holder on
January 18, 2002 by America West Holdings.
1. DEFINITIONS. As used herein, the following terms shall have the
following respective meanings:
"AFFILIATE" shall mean, as to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control," when used with respect to any Person, means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise and the terms
"affiliated," "controlling" and "controlled" have meanings correlative to the
foregoing.
"APPLICABLE PRICE" shall mean:
(i) for purposes of any issuance of Additional Shares of Common Stock (as
defined below) under Section 5.4, the greater of (A) the Fair Market Value of a
share of the class of Common Stock being issued (or, if being issued in an
underwritten offering, the Market Price on the day that such offering is being
priced), and (B) the then effective Exercise Price; and
(ii) for purposes of any issuance under Section 5.1(b), the greater of (A)
the Market Price on the date of such issuance, and (B) the then effective
Exercise Price.
"AWA LOAN AGREEMENT" means that certain Amended and Restated Loan Agreement
dated as of the date hereof among America West Airlines, Inc. as borrower
thereunder, the Company, the subsidiaries of the Company from time to time party
thereto, Citibank, N.A., in its capacity as Initial Lender thereunder, Citibank,
N.A., in its capacity as agent thereunder, Wilmington Trust Company, as
Collateral Agent and the Air Transportation Stabilization Board
"BUSINESS DAY" shall mean each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to close.
"COMMON STOCK" shall mean the Common Stock of the Company, and all other
stock of any class or classes (however designated) of the Company from time to
time outstanding, the holders of which have the right, without limitation as to
amount, either to all or to a share of the balance of current dividends or
liquidating distributions after the payment of dividends and distributions on
any shares entitled to preference.
"EXERCISE PERIOD" shall mean the time period commencing with the date
hereof and ending at 5:00 p.m. New York time on the tenth anniversary of the
date hereof.
"EXERCISE PRICE" shall mean seven dollars and twenty seven cents ($7.27)
per share, subject to adjustment pursuant to Section 5 below.
"EXERCISE SHARES" shall mean the shares of the Common Stock issuable upon
exercise of this Warrant, subject to adjustment pursuant to the terms herein,
including but not limited to adjustment pursuant to Section 5 below and shall
also mean any other shares, securities, assets or property otherwise issuable
upon exercise of this Warrant.
"EXCLUDED ISSUANCE" shall mean:
(a) shares of Common issued upon exercise of this Warrant or the warrants
issued on or prior to the date hereof to General Electric Capital Corporation,
AFS Cayman Limited, debis AirFinance Leasing USA I, Inc. and Citibank N.A. (this
Warrant and such other warrants, collectively, the "Loan Warrants") or upon
conversion of the America West Holding's outstanding 7.5% Convertible Senior
Notes due 2009 or in exchange for America West Airlines, Inc. 7.25% Senior
Exchangeable Notes due 2023;
(b) shares of Common Stock issued (i) in connection with the plan of
reorganization of the Company and its domestic subsidiaries (the "PLAN OF
REORGANIZATION"), (ii) pursuant to an underwritten public offering pursuant to
the Company's registration statement on Form S-1, File No. 333-126226 (the
"PUBLIC OFFERING"), (iii) upon exercise of certain options granted pursuant to
the Letter Agreement, dated September 16, 2005 between the Company, America West
Holdings, Par Investment Partners, L.P., Peninsula Investment Partners, L.P.,
ACE Aviation Holdings Inc., Eastshore Aviation, LLC, Wellington Investors and
Tudor Investors, (iv) upon conversion of convertible notes issued pursuant to a
private placement of $125 million in principal amount of convertible notes, plus
the initial purchasers' over-allotment option (the "PRIVATE PLACEMENT") or (v)
upon the exercise of options granted to the Air Line Pilots Association
("ALPA")as contemplated by the Letter Agreement between the Company, US Airways
and ALPA, dated as of September 14, 2005.
(c) (i) shares of Common Stock granted as restricted stock units pursuant
to the US Airways Group, Inc. 2005 Equity Incentive Plan ("RSUS") or ( ii)
shares of Common Stock and/or options, warrants or other Common Stock purchase
rights issued and the Common Stock issued pursuant to such options, warrants or
other rights after the date hereof to employees,
2.
officers or directors of, or consultants or advisors to the Company or any
subsidiary pursuant to stock purchase or stock option plans or other
arrangements that are approved by the Board (the "PLANS"); provided that such
shares, options, warrants or other Common Stock purchase rights (other than
RSUs) and the Common Stock issued pursuant to such options, warrants or other
rights shall not be Excluded Issuances in any case where the grantee acquires
the shares, or options, warrants or other rights to purchase Common Stock at a
price per share less than the Market Price on the date of grant;
(d) shares of Common Stock issued pursuant to the exercise of rights,
options, warrants or convertible securities outstanding as of the date hereof;
and
(e) shares of Common Stock issued to any charitable organization described
in Section 170(c) of the Internal Revenue Code of 1986, as amended, provided
that no more than 50,000 shares are issued in any fiscal year pursuant to this
clause (e).
"FAIR MARKET VALUE" shall mean,
(i) with respect to a share of Common Stock, or any other security of the
Company or any other issuer:
(a) the average daily Market Price during the period of the most
recent twenty (20) Trading Days, ending on the last Trading Day before the date
of determination of Fair Market Value, if such class of Common Stock or other
security is (i) traded on a national securities exchange or admitted to unlisted
trading privileges on such an exchange, or (ii) is quoted on the National Market
System of the Nasdaq Stock Market (the "NATIONAL MARKET SYSTEM") or the Nasdaq
Small Cap Market (the "SMALL CAP MARKET"); or
(b) if such class of Common Stock or other security is not then so
listed, admitted to trading or quoted, the Fair Market Value shall be the Market
Price on the last Business Day before the date of determination of Fair Market
Value; or
(ii) with respect to any assets or property other than cash or Common Stock
or other securities, the fair market value as determined in accordance with the
Valuation Procedure.
"MARKET PRICE" shall be, as of any specified date with respect to any share
of any class of Common Stock or any other security of the Company or any other
issuer, if such class of Common Stock or other security is traded on a national
securities exchange or admitted to unlisted trading privileges on such an
exchange, or is quoted on the National Market System or the Small Cap Market,
the last reported share or unit sale price of such class of Common Stock or
other security on such exchange or on the National Market System or the Small
Cap Market on such date or if no such sale is made on such day, the mean of the
closing bid and asked prices for such day on such exchange or on the National
Market System or the Small Cap Market; provided that if such class of Common
Stock or other security is not so listed or admitted to unlisted trading
privileges or quoted, the Market Price as of a specified date shall be the mean
of the last bid and asked prices reported on such date (x) by the Nasdaq or (y)
if reports are unavailable under clause (x) above by the National Quotation
Bureau Incorporated; provided further that if such class of Common Stock or
other security is not so listed or admitted to unlisted trading privileges or
quoted and bid and ask prices are not reported, the Market Price shall be
determined in accordance with the Valuation Procedure.
3.
"PARTICIPATING SECURITIES" shall mean, (i) any equity security (other than
Common Stock) that entitles the holders thereof to participate in liquidations
or other distributions with the holders of Common Stock or otherwise participate
in the capital of the Company other than through a fixed or floating rate of
return on capital loaned or invested, and (ii) any stock appreciation rights,
phantom stock rights, or any other profit participation rights with respect to
any of the Company's capital stock or other equity ownership interest, or any
rights or options to acquire any such rights; provided that any stock
appreciation rights, phantom stock rights or any other profit participation
rights, or any rights or options to acquire such rights, issued pursuant to any
of the Plans shall not be deemed a Participating Security if their grant or
issuance would constitute an Excluded Issuance.
"PERSON" shall mean any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust, estate,
unincorporated organization or government or any agency or political subdivision
thereof, or any entity whatsoever.
"RECORD DATE" shall mean, with respect to any dividend, other distribution
or issuance, the record date for the determination of stockholders entitled to
receive such dividend, distribution or issuance, or if no such record date
exists, the date of such dividend, distribution or issuance.
"TRADING DAY" shall mean, with respect to any class of Common Stock or any
other security of the Company or any other issuer a day (i) on which the
securities exchange or other trading platform applicable for purposes of
determining the Market Price of a share or unit of such class of Common Stock or
other security shall be open for business or (ii) for which quotations from such
securities exchange or other trading platform of the character specified for
purposes of determining such Market Price shall be reported.
"US AIRWAYS LOAN AGREEMENT" means that certain Amended and Restated Loan
Agreement dated as of the date hereof among US Airways, Inc., as borrower
thereunder, the Company, the subsidiaries of the Company from time to time party
thereto, the several lenders from time to time party thereto, Citibank, N.A., as
Agent, Citicorp North America, Inc., as Govco Administrative Agent, Wilmington
Trust Company, as Collateral Agent and the Air Transportation Stabilization
Board.
"VALUATION PROCEDURE" shall mean a determination made in good faith by the
Board of Directors of the Company (the "BOARD") that is set forth in resolutions
of the Board that are certified by the Secretary of the Company, which certified
resolutions (i) set forth the basis of the Board's determination, which, in the
case of a valuation in excess of $10.0 million, shall include the Board's
reliance on the valuation of a nationally recognized investment banking or
appraisal firm, and (ii) are delivered to the Holder within ten (10) Business
Days following such determination. A Valuation Procedure with respect to the
value of any capital stock shall be based on the price that would be paid for
all of the capital stock of the issuer in an arm's-length transaction between a
willing buyer and a willing seller (neither acting under compulsion).
2. EXERCISE OF WARRANT.
2.1 EXERCISE. This Warrant may be exercised in whole or in part at any
time during the Exercise Period, by delivery of the following to the Company at
its address set forth above (or at such other address as it may designate by
notice in writing to the Holder):
4.
(a) an executed Notice of Exercise in the form attached hereto;
(b) payment of the Exercise Price (i) in cash or by check, (ii)
by cancellation of indebtedness, including, without limitation, indebtedness
owing to the Holder under the US Airways Loan Agreement and the AWA Loan
Agreement or (iii) pursuant to Section 2.2 hereof; and
(c) this Warrant.
Upon the exercise of this Warrant, a certificate or certificates (or other
evidence of ownership generally provided to holders of Common Stock) for the
Exercise Shares so purchased, registered in the name of the Holder or such other
Person as may be designated by the Holder (to the extent such transfer is not
validly restricted and upon payment of any transfer taxes that are required to
be paid by the Holder in connection with any such transfer), shall be issued and
delivered to the Holder or such other Person as soon as practicable (and in any
event within five Business Days) after this Warrant shall have been exercised.
If this Warrant shall not have been exercised in full, a new Warrant exercisable
for the number of Exercise Shares remaining shall be executed by the Company and
delivered at the same time as the certificate for the Exercise Shares that are
being issued.
The Person in whose name any certificate or certificates (or other
applicable evidence of ownership) for the Exercise Shares are to be issued upon
exercise of this Warrant shall be deemed to have become the holder of record of
such shares on the date on which this Warrant was surrendered and payment of the
Exercise Price was made, irrespective of the date of delivery of such
certificate or certificates, except that, if the date of such surrender and
payment is a date when the stock transfer books of the Company are closed, such
Person shall be deemed to have become the holder of such shares at the close of
business on the next succeeding date on which the stock transfer books are open
(whether before or after the end of the Exercise Period).
2.2 NET EXERCISE. Notwithstanding any provision herein to the
contrary, if the Market Price of one share of the Common Stock is greater than
the Exercise Price (at the date of calculation as set forth below), in lieu of
exercising this Warrant by payment of cash, check or cancellation of
indebtedness, the Holder may elect (the "CONVERSION RIGHT") to receive shares
equal to the value (as determined below) of this Warrant (or the portion thereof
being canceled) by surrender of this Warrant at the principal office of the
Company together with the properly endorsed Notice of Exercise in which event
the Company shall issue to the Holder a number of shares of Common Stock
computed using the following formula:
X = Y (A-B)
-------
A
Where X = the number of shares of Common Stock to be issued
Y = the number of shares of Common Stock purchasable under this Warrant or,
if only a portion of this Warrant is being exercised, the portion of this
Warrant being exercised (at the date of such calculation)
A = the Market Price of one share of the Common Stock (at the date of such
calculation)
5.
B = Exercise Price (as adjusted pursuant to Section 5 hereof to the date of
such calculation)
The Company shall pay all reasonable administrative costs incurred by the
Holder in connection with the exercise of the Conversion Right by the Holder
pursuant to this Section 2.2.
3. COVENANTS AND REPRESENTATIONS OF THE COMPANY; SECURITIES MATTERS.
3.1. COVENANTS AS TO EXERCISE SHARES.
(a) The Company covenants and agrees that all Exercise Shares
that may be issued upon the exercise of this Warrant will, upon issuance, be
validly authorized, issued and outstanding, fully paid and nonassessable, free
of preemptive rights and free from all taxes, liens and charges with respect to
the issuance thereof. If the Common Stock or the class of securities of any
other Exercise Shares is then listed or quoted on a national securities
exchange, the National Market System or the Small Cap Market, all such Exercise
Shares upon issuance shall also be so listed or quoted. The Company further
covenants and agrees that the Company will at all times during the Exercise
Period, have authorized and reserved solely for purposes of the exercise of this
Warrant, free from preemptive rights, a sufficient number of shares of its
Common Stock or the class of securities of any other Exercise Shares to provide
for the exercise in full of this Warrant (without taking into account any
possible exercise pursuant to Section 2.2 hereof). If at any time during the
Exercise Period the number of authorized but unissued shares of Common Stock or
the class of securities of any other Exercise Shares shall not be sufficient to
permit exercise in full of this Warrant (without taking into account any
possible exercise pursuant to Section 2.2 hereof), the Company will take such
corporate action as shall be necessary to increase its authorized but unissued
shares of Common Stock or the class of securities of any other Exercise Shares
to such number of shares as shall be sufficient for such purposes.
(b) In the event that at any time, including as a result of any
provision of Section 5, the Exercise Shares shall include any shares or other
securities other than shares of Common Stock, or any other property or assets,
the terms of this Warrant shall be modified or supplemented (in the absence of
express written documentation thereof, shall be deemed to be so modified or
supplemented), and the Company shall take all actions as may be necessary to
preserve, in a manner and on terms as nearly equivalent as practicable to the
provisions of this Warrant as they apply to the Common Stock, the rights of the
Holder hereunder (including, without limitation, the provisions of Section 5
hereof), including any equitable replacements of the term "Common Stock" with
the term "Exercise Shares" and adjustments of any formula included herein.
(c) The Company's filings under the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT"), will comply in all material respects as
to form with the Exchange Act and the rules and regulations thereunder.
(d) Without prior written consent of the holders of Loan Warrants
exercisable for a majority of the securities issuable upon exercise of the
outstanding Loan Warrants, the Company shall not permit any Significant
Subsidiary (as defined by Rule 1-02(w) of Regulation S-X under the Securities
Act or any successor rule) to issue or grant (i) any capital
6.
stock or equity ownership interest, including any Participating Security; (ii)
any rights, options, warrants or convertible security that is exercisable for or
convertible into any capital stock or other equity ownership interest, including
any Participating Security; or (iii) any stock appreciation rights, phantom
stock rights, or any other profit participation rights, or any rights or options
to acquire any such rights, in each case of clauses (i), (ii) and (iii) above,
to any Person other than the Company or its wholly-owned subsidiaries.
3.2. NO IMPAIRMENT. Except and to the extent as waived or consented to
in writing by the Holder, the Company will not, by amendment of its Certificate
of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Company, but will at all
times in good faith assist in the carrying out of all the provisions of this
Warrant and in the taking of all such action as may be necessary or appropriate
in order to protect the exercise rights of the Holder against impairment
consistent with the intent and principles expressed in Section 5.9 below.
3.3. NOTICES OF RECORD DATE. In the event (i) the Company takes a
record of the holders of any class of securities for the purpose of determining
the holders thereof who are entitled to receive any dividend or other
distribution, (ii) the Company authorizes the granting to the holders of Common
Stock (or holders of the class of securities of any other Exercise Shares) of
rights to subscribe to or purchase any shares of capital stock of any class or
securities convertible into any shares of capital stock or of any other right,
(iii) the Company authorizes any reclassification of, or any recapitalization
involving, any class of Common Stock or any consolidation or merger to which the
Company is a party and for which approval of the stockholders of the Company is
required, or of the sale or transfer of all or substantially all of the assets
of the Company, (iv) the Company authorizes or consents to or otherwise
commences the voluntary or involuntary dissolution, liquidation or winding up of
the Company or (v) the Company authorizes or takes any other action that would
trigger an adjustment in the Exercise Price or the number or amount of shares of
Common Stock or other Exercise Shares subject to this Warrant (other than a
stock split or combination), the Company shall mail to the Holder, at least ten
(10) days prior to the earlier of the record date for any such action or
stockholder vote and the date of such action, a notice specifying (a) which
action is to be taken and the date on which any such record is to be taken for
the purpose of any such action, (b) the date that any such action is to take
place and (c) the amount and character of any stock, other securities or
property and amounts, or rights or options with respect thereto, proposed to be
issued, granted or delivered to each holder of Common Stock (or holders of the
class of securities of any other Exercise Shares).
3.4. REPRESENTATIONS AND WARRANTIES. The Company hereby represents and
warrants to the Holder, as of the date hereof, that:
(a) The Company: (i) is a corporation duly organized, validly
existing and in good standing under the laws of the state of its formation; (ii)
is duly qualified to do business and is in good standing in every jurisdiction
where the nature of its business requires it to be so qualified (except where
the failure to so qualify could not reasonably be expected to have a material
adverse effect, individually or in the aggregate, on its business, financial
condition or operations of the Company and its subsidiaries taken as a whole or
on its ability to pay or
7.
perform its obligations under this Warrant and the Registration Rights Agreement
(as defined below) (collectively, the "WARRANT DOCUMENTS")); (iii) has received
all permits necessary to conduct the businesses now operated by it and has not
received notice of proceedings relating to the revocation or modification of any
permit that, if adversely determined, would reasonably be expected to have,
individually or in the aggregate, a material adverse effect on its business,
financial condition or operations of the Company and its subsidiaries taken as a
whole, or on its ability to pay or perform its obligations under the Warrant
Documents; (iv) has all requisite power and authority to own its properties and
to carry on its business as now conducted and as proposed to be conducted, and
to execute and deliver the Warrant and to perform its obligations hereunder and
under the Registration Rights Agreement; and (v) is in compliance in all
material respects with all applicable law, rules, regulations and orders;
(b) The execution, delivery and performance by the Company of the
Warrant and the performance by the Company of the Registration Rights Agreement
and the consummation of the transactions contemplated herein and therein: (i)
are within its powers and have been duly authorized by all necessary corporate
and stockholder action; (ii) do not contravene its charter documents or any law,
rule, regulation or administrative or court order binding on or affecting the
Company or its property; and (iii) do not conflict with or constitute a breach
of, or default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company pursuant to any
material contract, indenture, mortgage, loan agreement, note or other instrument
to which it is a party, by which it may be bound or to which its assets may be
subject;
(c) The Warrant has been duly authorized, executed and delivered
and each of the Warrant Documents constitutes a valid and binding obligation of
the Company, enforceable against it in accordance with its terms, except as the
enforceability thereof may be subject to or limited by bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws relating to or
affecting the rights of creditors generally and general equitable principles
(whether applied in an action at law or a suit in equity);
(d) There is no action, suit or proceeding affecting the Company
pending or, to its knowledge, threatened before any court, arbitrator, or
governmental authority, domestic or foreign, which would reasonably be expected
to have, individually or in the aggregate, a material adverse effect on its
ability to pay or perform its obligations under the Warrant Documents or on the
business, financial condition or operations of the Company and its subsidiaries
taken as a whole;
(e) The authorized capital stock of the Company consists of
200,000,000 shares of Common Stock, par value $0.01 per share of which no more
than 68,263,680 shares of Common Stock are expected to be outstanding
immediately following the effective time of the merger of Barbell Acquisition
Corp. with and into America West Holdings pursuant to the Agreement and Plan of
Merger, dated as of May 19, 2005, by and among the Company, America West
Holdings and Barbell Acquisition Corp. All of the outstanding shares of Common
Stock have been duly authorized and validly issued, fully paid and nonassessable
and are free of any preemptive rights and the shares of Common Stock deliverable
upon exercise of this Warrant have been, and at all times will be, duly
authorized and reserved for issuance upon such exercise,
8.
and, when delivered upon such exercise, will be validly issued, fully paid and
nonassessable and free of any preemptive rights;
(f) Except as set forth in the Plan of Reorganization or the
Company's Registration Statement on Form S-1, File No. 333-126226, there are not
outstanding nor are there any commitments or obligations to issue or grant (i)
any securities, rights, options, warrants or subscriptions giving any Person the
right to acquire from the Company, or requiring that the Company or any of its
subsidiaries issue any capital stock or other equity interest in the Company or
any of its subsidiaries; (ii) any stock appreciation rights, phantom stock
rights, or any other profit participation rights with respect to any capital
stock or other equity ownership interest in the Company or any of its
subsidiaries, or any rights or options to acquire any such rights; or (iii) any
contracts, agreements, arrangements or understandings to which the Company or
any of its subsidiaries is party or by which any of them is bound, giving any
Person any rights of exchange, preemptive rights (statutory or contractual),
anti-dilution rights, rights of first refusal, rights of first offer or
registration rights with respect to any capital stock of the Company or any of
its subsidiaries;
(g) The offer and issuance by the Company of this Warrant are,
and the issuance of the Common Stock upon exercise of this Warrant by the Air
Transportation Stabilization Board will be, exempt from the registration
requirements under the Securities Act;
(h) No authorization, approval, consent or order of any court or
governmental authority or agency or any other Person is required in connection
with the issuance by the Company of this Warrant, or the consummation by the
Company of any of the transactions contemplated by the Warrant Documents, there
is no requirement to obtain stockholder approval of the transactions
contemplated by the Warrant Documents or any requirement to deliver notice to
the stockholders of such transactions;
(i) The Company's filings under the Exchange Act do not include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading and complied, or will comply in all
material respects as to form with the Exchange Act and the rules and regulations
thereunder; and
(j) Neither the Company nor any Affiliate of the Company has
directly, or though any agent, (i) sold, offered for sale, solicited offers to
buy or otherwise negotiated in respect of any security (as defined in the
Securities Act) which is or will be integrated with the issuance of this
Warrant, or the Exercise Shares issuable upon exercise of this Warrant, in a
manner that would require the registration under the Securities Act of this
Warrant or the Exercise Shares, or (ii) engaged in any form of general
solicitation or general advertising in connection with the offering of this
Warrant or the Exercise Shares (as those terms are used in Regulation D under
the Securities Act) or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act.
(k) (i) To the extent the initial Holder is not an "accredited
investor" as defined in Rule 501(a) under the Securities Act, the Company has
heretofore delivered to the initial Holder, at a reasonable time prior to the
issuance hereof, the information required to be
9.
delivered to such Holder pursuant to Rule 502(b)(ii) under the Securities Act;
and (ii) the Company has heretofore delivered to the initial Holder, the
following financial statements and information: (A) the audited consolidated
balance sheets of the Company as at December 31, 2004, and the related
consolidated statements of income, stockholders' equity and cash flows for the
fiscal year then ended, and (B) the unaudited consolidated balance sheet of the
Company as at June 30, 2005 and the related unaudited statements of income,
stockholders' equity and cash flows for the six months then ended. All such
consolidated statements were prepared in conformity with United States generally
accepted accounting principles and fairly present the consolidated financial
position of the Company as at the respective dates thereof and the consolidated
results of operations and cash flows of the Company for each of the periods then
ended subject, in the case of the unaudited consolidated statements, to year-end
audit and adjustments. Except as disclosed in writing to the initial Holder
prior to the date of this Warrant, the Company has no material contingent
liability or liability for taxes, long-term lease or unusual forward or
long-term commitment that is not reflected in the foregoing consolidated
financial statements or the notes thereto and which in any such case is material
in relation to the business, operations, properties, assets or condition
(financial or otherwise) of the Company.
(l) The representations and warranties made by US Airways, Inc.
("US AIRWAYS") in the US Airways Loan Agreement are true and correct as of the
date hereof.
(m) All of the issued and outstanding capital stock of US Airways
is owned beneficially and of record by the Company.
4. REPRESENTATIONS OF HOLDER.
4.1. ACCREDITED INVESTOR; ACQUISITION OF WARRANT FOR PERSONAL ACCOUNT.
The Holder is an "accredited investor" as defined in Rule 501(a) of the
Securities Act, or alternatively, the Holder has received the information
specified in Section 3(k)(i) above. The Holder represents and warrants that it
is acquiring this Warrant and, to the extent this Warrant is exercised, the
Exercise Shares solely for its account for investment and not with a view to or
for sale or distribution of said Warrant or Exercise Shares or any part thereof,
other than potential transfers between Affiliates (including affiliated funds)
or transfers pursuant to an effective registration statement under, or an
exemption from the registration requirements of, the Securities Act.
4.2. SECURITIES ARE NOT REGISTERED.
(a) The Holder understands that this Warrant and the Exercise
Shares have not been registered under the Securities Act, on the basis that no
distribution or public offering is being effected.
(b) The Holder recognizes that this Warrant and the Exercise
Shares may not be sold unless they are subsequently registered under the
Securities Act or an exemption from such registration is available.
4.3 DISPOSITION OF WARRANT AND EXERCISE SHARES.
(a) The Holder further agrees not to make any disposition of all
or any part of this Warrant or Exercise Shares in any event unless:
10.
(i) The Company shall have received a letter secured by the
Holder from the Securities and Exchange Commission stating that no action will
be recommended to the Commission with respect to the proposed disposition;
(ii) There is then in effect a registration statement under
the Act covering such proposed disposition and such disposition is made in
accordance with said registration statement;
(iii) Pursuant to Rule 144; or
(iv) The Holder shall have notified the Company of the
proposed disposition and shall have furnished the Company with a statement of
the circumstances surrounding the proposed disposition and if reasonably
requested by the Company, the Holder shall have furnished the Company with an
opinion of counsel for the Holder, reasonably satisfactory to the Company, to
the effect that such disposition will not require registration of such Warrant
or Exercise Shares under the Securities Act or any applicable state securities
laws.
(b) The Holder is aware that neither this Warrant nor the
Exercise Shares may be sold pursuant to Rule 144 adopted under the Securities
Act unless the applicable conditions thereof are met, including, among other
things, the required holding period under Rule 144 and the number of shares
being sold during any three month period not exceeding specified limitations.
(c) The Holder understands and agrees that all certificates
evidencing the Exercise Shares may bear the following legend (unless such shares
have been disposed of in accordance with clause (a)(ii) or (iii) or such legend
is no longer required to comply with applicable securities laws):
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO SUCH SECURITIES UNDER THE SECURITIES ACT UNLESS AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE."
5. ADJUSTMENT OF EXERCISE PRICE, SHARES OF COMMON STOCK PURCHASABLE AND
NUMBER OF WARRANTS
5.1. ADJUSTMENT OF EXERCISE PRICE. The Exercise Price as defined in
Section 1 shall be subject to adjustment from time to time as follows:
(a) If the Company after the date hereof shall (i) pay a dividend
or make a distribution to holders of any class of Common Stock in shares of
Common Stock, (ii) split or otherwise subdivide the outstanding shares of Common
Stock, or (iii) combine the outstanding shares of Common Stock into a smaller
number of shares, then in any such case the Exercise Price in effect immediately
prior thereto shall be adjusted to a price obtained by multiplying such Exercise
Price by a fraction of which the numerator shall be the number of
11.
shares of Common Stock outstanding prior to such action and the denominator
shall be the number of shares of Common Stock outstanding after giving effect to
such action. An adjustment made pursuant to clause (i) of this subsection (a)
shall become effective retroactively immediately after the Record Date for such
dividend or distribution, and an adjustment made pursuant to clause (ii) or
(iii) of this subsection (a) shall become effective immediately after the
effective date of such subdivision or combination.
(b) If the Company after the date hereof shall issue rights,
options or warrants to holders of any class of Common Stock to subscribe for or
purchase shares of Common Stock or securities convertible into Common Stock at a
price per share less than the Applicable Price per share on the issuance date
thereof, the Exercise Price in effect immediately prior thereto shall be
adjusted to a price obtained by multiplying such Exercise Price by a fraction of
which (i) the numerator shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights, options or warrants plus the
number of shares of the class of Common Stock subject to such rights, options or
warrants which the aggregate consideration for the total number of shares so to
be offered would purchase at the Applicable Price of a share of the class of
Common Stock subject to such rights, options or warrants, and (ii) the
denominator shall be the number of shares of Common Stock outstanding on the
date of issuance of such rights, options or warrants plus the number of
additional shares of Common Stock to be offered for subscription or purchase;
provided, however, that no adjustment shall be made if the Company issues or
distributes to the Holder the rights, options or warrants which the Holder would
have been entitled to receive had this Warrant been exercised prior to the
Record Date (and, if applicable, had this Warrant been exercisable for the class
of Common Stock receiving such issuance or distribution). Any such adjustments
shall be made whenever such rights, options or warrants are issued and shall
become effective retroactively immediately after the Record Date for the
determination of stockholders entitled to receive such rights, options or
warrants unless such rights, options or warrants are not immediately
exercisable, in which case, any such adjustments shall be made at such time such
rights, options or warrants become exercisable. Upon expiration of the period
during which any such rights, options or warrants may be exercised, any
adjustment previously made pursuant to the foregoing provisions shall be
recalculated to take into consideration only those rights, options or warrants
actually exercised during the applicable period for exercise and notice of any
such further adjustment to the Exercise Price shall be given to Holder as herein
provided.
(c) If the Company after the date hereof shall issue or
distribute to holders of any class of Common Stock evidences of its
indebtedness, cash or other assets, shares of capital stock of any class or any
other securities (other than the Common Stock) or rights to subscribe therefor
(excluding those referred to in subsection (b) above), in each such case the
Exercise Price in effect immediately prior thereto shall be adjusted to a price
obtained by multiplying such Exercise Price by a fraction of which (i) the
numerator shall be the sum of the amount, for each class of Common Stock then
outstanding, of the Fair Market Value per share of such class of Common Stock,
multiplied by the number of outstanding shares of such class of Common Stock, in
each case on the Record Date, less the Fair Market Value of the assets, cash or
evidences of indebtedness so distributed, or shares of capital stock or other
securities or rights to subscribe therefor so issued, and (ii) the denominator
shall be the sum of the amount, for each class of Common Stock then outstanding,
of the Fair Market Value per share of such class of
12.
Common Stock, multiplied by the number of outstanding shares of such class of
Common Stock, in each case on the Record Date; provided, however, that no
adjustment shall be made if the Company issues or distributes to the Holder the
evidence of indebtedness, cash, other assets, capital stock or other securities
or subscription rights referred to above in this subsection (c) that the Holder
would have been entitled to receive had this Warrant been exercised in full
prior to the Record Date (and, if applicable, had this Warrant been exercisable
for the class of Common Stock receiving such issuance or distribution). The
Company shall provide the Holder, upon receipt of a written request therefor,
with any indenture or other instrument defining the rights of the holders of any
indebtedness, assets, capital stock or other securities or subscription rights
referred to in this subsection 5.1(c). Any such adjustment shall be made
whenever any such distribution is made, and shall become effective retroactively
immediately after the Record Date. Upon expiration of the period during which
any subscription rights granted pursuant to this subsection (c) may be
exercised, any adjustment previously made pursuant to the foregoing provisions
shall be recalculated to take into consideration only those subscription rights
actually exercised during the applicable period for exercise and notice of any
such further adjustment to the Exercise Price shall be given to the Holder as
herein provided.
(d) For purposes of Sections 5.1(a), 5.1(b) and 5.1(c), any
dividend or distribution to which Section 5.1(c) is applicable that also
includes shares of Common Stock, a subdivision of Common Stock or a combination
of Common Stock to which Section 5.1(a) applies, or rights or warrants to
subscribe for or purchase shares of Common Stock to which Section 5.1(b) applies
(or any combination thereof), shall be deemed instead to be:
(i) a dividend or distribution of the evidences of
indebtedness, cash, other assets, shares of capital stock, other securities or
subscription rights, other than such shares of Common Stock, such subdivision or
combination or such rights, options or warrants to which Sections 5.1(a) and
5.1(b) apply, respectively (and any Exercise Price reduction required by Section
5.1(c) with respect to such dividend or distribution shall then be made),
immediately followed by
(ii) a dividend or distribution of such shares of Common
Stock, such subdivision or combination or such rights, options or warrants to
which Sections 5.1(a) and 5.1(b) apply (and any further Exercise Price reduction
required by Sections 5.1(a) and (b) with respect to such dividend or
distribution shall then be made).
(e) In case a tender or exchange offer (other than an odd lot
offer) by the Company for any Common Stock is consummated at a price in excess
of the Market Price of the Common Stock subject to such tender or exchange offer
at the expiration of such tender or exchange offer, the Exercise Price in effect
immediately prior thereto shall be adjusted to a price obtained by multiplying
such Exercise Price by a fraction of which (i) the numerator shall be such
Market Price, less the amount of the excess of the value of the tender or
exchange offer price over the Market Price, and (ii) the denominator shall be
the Market Price, such adjustment to become effective immediately prior to the
opening of business on the day following such date of expiration.
(f) In the case the Company shall, by dividend or otherwise,
declare a distribution to holders of any class of Common Stock of rights or
warrants issued by the
13.
Company and having the characteristics described in Section 11.4(d)(iii) of the
Indenture, dated as of January 18, 2002, between the America West Holdings
Corporation and Wilmington Trust Company, as Trustee (the "Indenture") then upon
the occurrence of a Trigger Event (as defined in Section 11.4(d)(iii) of the
Indenture), the Company shall make such adjustments to the Exercise Price as are
necessary to preserve, without dilution, the purchase rights represented by this
Warrant, such adjustments to be substantially consistent with the adjustments
that would have been made to the Conversion Price (as defined in the Indenture)
upon such Trigger Event pursuant to Section 11.4(d) of the Indenture.
5.2. ADJUSTMENT OF SHARES OF EXERCISE SHARES PURCHASABLE UPON EXERCISE
OF WARRANTS. Upon each adjustment of the Exercise Price pursuant to Section 5.1
or 5.4 hereof the number of Exercise Shares purchasable upon exercise of this
Warrant shall be adjusted to the number of Exercise Shares, calculated to the
nearest one-hundredth of a share, obtained by (i) multiplying the number of
Exercise Shares purchasable immediately prior to such adjustment by the Exercise
Price in effect prior to such adjustment, and (ii) dividing the product so
obtained by the Exercise Price in effect after such adjustment of the Exercise
Price.
5.3. RIGHTS UPON CONSOLIDATION, MERGER, SALE, TRANSFER,
RECLASSIFICATION OR RECAPITALIZATION.
(a) In case of any consolidation or merger of the Company with
another Person (other than a merger or consolidation in which the Company is the
continuing Person and the Common Stock is not exchanged for securities, property
or assets issued, delivered or paid by another Person), or in case of any lease,
sale or conveyance to another Person of all or substantially all of the property
or assets of the Company, this Warrant shall thereafter (until the end of the
Exercise Period) evidence the right to receive, upon its exercise, in lieu of
the shares of Common Stock deliverable upon such exercise immediately prior to
such consolidation, merger, lease, sale or conveyance the kind and amount of
shares and/or other securities and/or property and assets and/or cash that the
Holder would have been entitled to receive upon such consolidation, merger,
lease, sale or conveyance had the Holder exercised this Warrant immediately
prior to such consolidation, merger, lease, sale or conveyance.
(b) In case of any reclassification or change of, or
recapitalization involving, the Common Stock issuable upon exercise of this
Warrant (other than a change in par value, or from par value to no par value, or
as a result of a subdivision or combination), including any such
reclassification, change or recapitalization effected in connection with a
consolidation or merger of the Company with another Person in which the Company
is the continuing Person and the holders of Common Stock receive shares and/or
other securities and/or property or assets and/or cash issued, delivered or paid
by the Company in exchange for such shares of Common Stock (including for this
purpose shares reflecting a change in par value or from par value to no par
value or as a result of a subdivision or combination of the shares of Common
Stock), this Warrant shall thereafter (until the end of the Exercise Period)
evidence the right to receive, upon its exercise, in lieu of the shares of
Common Stock deliverable upon such exercise immediately prior to such
reclassification, change or recapitalization, the kind and amount of shares
and/or other securities and/or property and assets and/or cash that the Holder
would have been entitled to receive upon such reclassification, change,
consolidation or merger
14.
had the Holder exercised this Warrant immediately prior to such
reclassification, change, consolidation or merger.
(c) The Company shall not consummate any transaction that effects
or permits any such event or occurrence unless each Person whose shares of
stock, securities or assets will be issued, delivered or paid to the holders of
the Common Stock (including the Company with respect to clause (ii) below),
prior to or simultaneously with the consummation of the transaction, (i) is a
corporation organized and existing under the laws of the United States of
America or any State or the District of Columbia, and (ii) expressly assumes, or
in the case of the Company, acknowledges, by a Warrant Supplement or other
document in a form substantially similar hereto, executed and delivered to the
Holder hereof, the obligation to deliver to such Holder such shares of stock,
securities or assets as, in accordance with the foregoing provisions of this
Section 5.3, such Holder is entitled to purchase, and all other obligations and
liabilities under this Warrant, including obligations and liabilities in respect
of subsequent adjustments that are required under this Warrant.
(d) The above provisions of this Section 5.3 shall similarly
apply to successive reclassifications and changes of Exercise Shares and to
successive consolidations, mergers, leases, sales or conveyances, mutatis
mutandis.
5.4. SALE OF SHARES BELOW APPLICABLE PRICE.
(A) If at any time or from time to time after the date hereof, the
Company issues or sells, or is deemed by the express provisions of this Section
5.4 to have issued or sold, Additional Shares of Common Stock (as defined
below), other than as provided in Section 5.1, 5.2 or 5.3 above, for an
Effective Price (as defined below) less than the Applicable Price (such issue, a
"QUALIFYING DILUTIVE ISSUANCE"), then and in each such case, the then effective
Exercise Price shall be reduced, effective as of the opening of business on the
date of such issue or sale (or if earlier, the date on which a binding agreement
providing for such issue or sale was entered into), to a price determined by
multiplying the Exercise Price in effect immediately prior to such issuance or
sale by a fraction:
(i) the numerator of which shall be (A) the number of shares
of Common Stock outstanding immediately prior to such issue or sale, plus (B)
the number of shares of the class of Common Stock being issued or sold or deemed
to be issued or sold which the aggregate consideration received by the Company
for the total number of Additional Shares of Common Stock so issued or deemed to
be so issued would purchase at the Applicable Price, and
(ii) the denominator of which shall be the number of shares
of Common Stock outstanding immediately prior to such issue or sale plus the
total number of Additional Shares of Common Stock so issued or deemed to be so
issued.
(b) For the purpose of the adjustment required under this Section
5.4, if the Company issues or sells (x) stock or other securities convertible
into, shares of Common Stock (such convertible stock or securities being herein
referred to as "CONVERTIBLE SECURITIES") or (y) rights, options or warrants for
the purchase of shares of Common Stock or Convertible
15.
Securities and if the Effective Price of such shares of Common Stock is less
than the Applicable Price, in each case the Company shall be deemed to have
issued at the time of the issuance of such rights, options or warrants or
Convertible Securities the maximum number of Additional Shares of Common Stock
issuable upon exercise or conversion thereof and to have received as
consideration for the issuance of such shares an amount equal to the total
amount of the consideration, if any, received by the Company for the issuance or
sale of such rights, options or warrants or Convertible Securities plus the
minimum amounts of consideration, if any, payable to the Company upon the
exercise or conversion of such rights, options or warrants or Convertible
Securities (other than by cancellation of liabilities or obligations evidenced
by such Convertible Securities); provided that
(i) subject to paragraph (d) below, if the minimum amounts
of such consideration cannot be ascertained, but are a function of antidilution
or similar protective clauses, the Company shall be deemed to have received the
minimum amounts of consideration without reference to such clauses; and
(ii) if the minimum amount of consideration payable to the
Company upon the exercise or conversion of such rights, options, warrants or
Convertible Securities is reduced over time or on the occurrence or
non-occurrence of specified events other than by reason of antidilution
adjustments, the Effective Price shall be recalculated using the figure to which
such minimum amount of consideration is reduced; provided further, that if the
minimum amount of consideration payable to the Company upon the exercise or
conversion of such rights, options, warrants or Convertible Securities is
subsequently increased, the Effective Price shall be again recalculated using
the increased minimum amount of consideration payable to the Company upon the
exercise or conversion of such rights, options, warrants or Convertible
Securities.
No further adjustment of the Exercise Price, as adjusted upon the issuance
of such rights, options, warrants or Convertible Securities, shall be made as a
result of the actual issuance of Additional Shares of Common Stock upon the
exercise of any such rights, options or warrants or the conversion of any such
Convertible Securities. If any such rights, options or warrants or the
conversion privilege represented by any such Convertible Securities shall expire
without having been exercised, the Exercise Price as adjusted upon the issuance
of such rights, options, or warrants or Convertible Securities shall be
readjusted to the Exercise Price which would have been in effect had an
adjustment been made on the basis of only the Additional Shares of Common Stock,
if any, actually issued or sold on the exercise or conversion of such rights,
options, warrants or Convertible Securities, and on the basis that such
Additional Shares of Common Stock, if any, were issued or sold for the
consideration actually received by the Company upon such exercise or conversion
(other than by cancellation of liabilities or obligations evidenced by such
Convertible Securities), plus the consideration, if any, actually received by
the Company for the issue or sale of all such rights, options, warrants and
Convertible Securities, whether or not exercised, provided that such
readjustment shall not apply to prior exercises of this Warrant.
(c) For the purpose of making any adjustment to the Exercise
Price of the Exercise Shares required under this Section 5.4, "ADDITIONAL SHARES
OF COMMON STOCK" shall mean all shares of Common Stock issued by the Company or
deemed to be issued pursuant
16.
to this Section 5.4 (including shares of Common Stock subsequently reacquired or
retired by the Company), other than any Excluded Issuance.
References to Common Stock in the preceding sentence shall mean all shares
of Common Stock issued by the Company or deemed to be issued pursuant to this
Section 5.4. The "EFFECTIVE PRICE" of Additional Shares of Common Stock shall
mean the quotient determined by dividing the total number of Additional Shares
of Common Stock issued or sold, or deemed to have been issued or sold by the
Company under this Section 5.4, into the aggregate consideration received, or
deemed to have been received by the Company for such issue under this Section
5.4, for such Additional Shares of Common Stock.
(d) In the event that the Company issues or sells, or is deemed
to have issued or sold, Additional Shares of Common Stock in a Qualifying
Dilutive Issuance (the "FIRST DILUTIVE ISSUANCE"), then in the event that the
Company issues or sells, or is deemed to have issued or sold, Additional Shares
of Common Stock in a Qualifying Dilutive Issuance other than the First Dilutive
Issuance (a "SUBSEQUENT DILUTIVE ISSUANCE") pursuant to the same instruments as
the First Dilutive Issuance, then and in each such case upon a Subsequent
Dilutive Issuance the Exercise Price shall be reduced to the Exercise Price that
would have been in effect had the First Dilutive Issuance and each Subsequent
Dilutive Issuance all occurred on the closing date of the First Dilutive
Issuance.
5.5. ADDITIONAL ADJUSTMENTS TO EXERCISE PRICE. Notwithstanding
anything to the contrary contained in this Section 5, but subject to Section
5.7, the Company shall be entitled, but not required, to make such reductions in
the Exercise Price, in addition to those required by Section 5.1, 5.3 or 5.4, as
it, in its sole discretion, shall determine to be advisable, including, without
limitation, in order that any dividend in or distribution of shares of Common
Stock or shares of capital stock of any class other than Common Stock,
subdivision, reclassification or combination of shares of Common Stock, issuance
of rights, options, or warrants, or any other transaction having a similar
effect, shall not be treated as a distribution of property by the Company to its
stockholders under Section 305 of the Internal Revenue Code of 1986, as amended,
or any successor provision and shall not be taxable to them.
5.6. DE MINIMUS ADJUSTMENTS. No adjustment pursuant to Section 5.1,
5.3 or 5.4 hereof shall be required unless such adjustment would require an
increase or decrease of at least $0.03 in the Exercise Price then subject to
adjustment; provided, however, that any adjustments that are not made by reason
of this Section 5.6 shall be carried forward and taken into account in any
subsequent adjustment. In case the Company shall at any time issue Common Stock
by way of dividend on any stock of the Company or split or otherwise subdivide
or combine the outstanding shares of Common Stock, said amount of $0.03
specified in the preceding sentence (as theretofore increased or decreased, if
said amount shall have been adjusted in accordance with the provisions of this
Section 5.6) shall forthwith be proportionately increased in the case of such a
combination or decreased in the case of such a subdivision or stock dividend so
as appropriately to reflect the same. All calculations under this Section 5
shall be made to the nearest hundredth of a cent.
17.
5.7. CONDITION PRECEDENT TO REDUCTION OF EXERCISE PRICE BELOW PAR
VALUE OF SHARES OF COMMON STOCK OR INCREASE IN PAR VALUE TO ABOVE EXERCISE
PRICE.
(a) Before taking any action that would cause an adjustment
reducing the Exercise Price to below the then par value of any of the shares of
Common Stock issuable upon exercise of this Warrant, the Company will take any
corporate action that may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and non-assessable
shares of such Common Stock at such adjusted Exercise Price.
(b) Before taking any action that would increase the par value of
the Common Stock issuable upon exercise of this Warrant to an amount that is
greater than the then effective Exercise Price, the Company will take such
corporate action that is necessary in order that the Company may validly and
legally issue fully paid and non-assessable shares of such Common Stock at such
then effective Exercise Price.
5.8. CERTIFICATE OF ADJUSTMENT. In each case of an adjustment or
readjustment of the Exercise Price, the Company, at its sole expense, shall
compute such adjustment or readjustment in accordance with the provisions hereof
and prepare a certificate showing such adjustment or readjustment, and shall
mail such certificate, by first class mail, postage prepaid, to the Holder at
the Holder's address as shown in the Company's books no later than five (5)
Business Days following the effective date of such adjustment or readjustment.
The certificate shall set forth such adjustment or readjustment, showing in
detail the facts upon which such adjustment or readjustment is based, including
a statement of (i) the number of Additional Shares of Common Stock issued or
sold or deemed to have been issued or sold; (ii) the consideration received or
deemed to be received by the Company for any Additional Shares of Common Stock
issued or sold or deemed to have been issued or sold, (iii) the Exercise Price
at the time in effect, and (iv) the type and amount, if any, of other property
which would be received upon exercise of this Warrant.
5.9. OTHER DILUTIVE EVENTS. If any event or occurrence shall occur as
to which the provisions of this Section 5 are not strictly applicable but as to
which the failure to make any adjustment to the Exercise Price and/or the number
of shares or other assets or property subject to this Warrant would adversely
affect the purchase rights or value represented by this Warrant in accordance
with the essential intent and principles of this Section 5, including any
issuance of Participating Securities, then, in each such case, the Company shall
determine the adjustment, if any, on a basis consistent with the essential
intent and principles established in this Section 5, necessary to preserve,
without dilution, the purchase rights represented by this Warrant. If such
determination involves or is based on a determination of the Fair Market Value
of any securities or other assets or property, such determination shall be made
in accordance with the Valuation Procedure.
5.10. GENERAL ADJUSTMENT PROVISIONS.
(a) Notwithstanding anything to the contrary contained in this
Warrant, no adjustments to the Exercise Price or the number of shares of Common
Stock purchasable upon exercise of this Warrant shall be made solely as a result
of any Excluded Issuance.
18.
(b) In any case in which this Section 5 shall require that an
adjustment be made retroactively immediately following a Record Date, the
Company may elect to defer (but only until five Business Days following the
mailing by the Company to the Holder of the certificate as required by Section
5.8) issuing to the Holder, in the event of any exercise of this Warrant after
such Record Date, the shares of the Common Stock issuable upon such exercise in
excess of the shares of Common Stock issuable upon such exercise prior to such
adjustment, if any.
(c) The provisions and adjustments provided for in this Section 5
shall apply to successive events or occurrences of the types described in this
Section 5.
(d) For the purpose of making any adjustment required under this
Section 5 that requires a determination of the aggregate consideration received
by the Company for any sale, issue or distribution of securities, the aggregate
consideration received by the Company shall equal the sum of: (i) to the extent
it consists of cash, the net amount of cash received by the Company after
deduction of any underwriting or similar commissions, compensation or
concessions paid or allowed by the Company in connection with such issue or sale
but without deduction of any expenses payable by the Company, and (ii) to the
extent it consists of property or assets other than cash, the Fair Market Value
of the property or assets.
6. FRACTIONAL SHARES. No fractional shares shall be issued upon the
exercise of this Warrant as a consequence of any adjustment pursuant hereto. All
Exercise Shares (including fractions) issuable upon exercise of this Warrant may
be aggregated for purposes of determining whether the exercise would result in
the issuance of any fractional share. If, after aggregation, the exercise would
result in the issuance of a fractional share, the Company shall, in lieu of
issuance of any fractional share, pay the Holder otherwise entitled to such
fraction a sum in cash equal to the product resulting from multiplying such
fractional amount by the Fair Market Value of one share of Common Stock.
7. REGISTRATION RIGHTS. The Company shall file with the Securities and
Exchange Commission a registration statement on Form S-3 relating to the Warrant
and the shares of Common Stock into which the Warrant may be exercised as
promptly as practicable, but in no event later than October 7, 2005. The Holder
shall have the registration rights with respect to the Common Stock as set forth
in that certain Registration Rights Agreement, dated as of January 18, 2002 (the
"REGISTRATION RIGHTS AGREEMENT"), between America West Holdings Corporation and
the Air Transportation Stabilization Board, and the term Registrable Securities
defined therein shall mean this Warrant and the shares of Common Stock issued or
issuable upon exercise of this Warrant (including any shares of Common Stock
issued or issuable thereon upon any stock split, stock combination, stock
dividend or the like or as a result of any anti-dilutions adjustment under the
Warrant), upon original issuance thereof and at all times subsequent thereto,
and associated related rights, if any, until the earliest of (i) the date on
which the resale thereof has been effectively registered under the Securities
Act and such securities have been disposed of in accordance with the
Registration Statement relating thereto, (ii) the date on which the securities
have been distributed to the public pursuant to Rule 144 or (iii) the date on
which the securities cease to be outstanding; provided, that the rights under
Section 2(b) of the Registration Rights Agreement shall not be applicable to the
Public Offering or to any registration statement filed in connection with the
Private Placement. To the extent that this
19.
Warrant becomes exercisable for Exercise Shares other than the Common Stock, the
Company agrees to grant the Holder hereof the same registration rights with
respect to such Exercise Shares as are currently granted to Holder in respect of
the Registrable Securities pursuant to the Registration Rights Agreement. The
Company shall provide the Holder with the same registration rights with respect
to the issuance of the Exercise Shares upon exercise of the Warrant by Holders
other than the initial Holder, as are currently granted to Holder pursuant to
the Registration Rights Agreement. In addition, the Company shall use its best
efforts, upon the reasonable request of the Holder, to cause the Warrant to be
listed or quoted on a national securities exchange, the National Market System
or the SmallCap Market.
8. NO STOCKHOLDER RIGHTS OR LIABILITIES. This Warrant in and of itself
shall not entitle the Holder to any voting rights or other rights as a
stockholder of the Company (subject to the provisions of Section 5 above). No
provision of this Warrant, in the absence of affirmative action by the Holder to
exercise this Warrant in exchange for shares of Common Stock, and no mere
enumeration herein of the rights or privileges of the Holder, shall give rise to
any liability of the Holder for the Exercise Price or as a stockholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.
9. TRANSFER OF WARRANT. Subject to the restriction on transfers set forth
in the legend on the first page of this Warrant and in Section 4.3 and
applicable laws, this Warrant and all rights hereunder, in whole or in part, are
transferable, by the Holder in person or by duly authorized attorney, upon
delivery of this Warrant and the form of assignment attached hereto to any
transferee designated by Holder.
10. PAYMENT OF TAXES ON STOCK CERTIFICATE ISSUES UPON EXERCISE. The initial
issuance of certificates of Common Stock upon any exercise of this Warrant shall
be made without charge to the exercising Holder for any transfer, stamp or
similar tax or for any other governmental charges that may be imposed in respect
of the issuance of such stock certificates, and such stock certificates shall be
issued in the respective names of, or in such names as may be directed by, the
Holder; provided, however, that the Company shall not be required to pay any tax
or such other charges that may be payable in respect of any transfer involved in
the issuance and delivery of any such stock certificate, any new Warrants or
other securities in a name other than that of the Holder upon exercise of this
Warrant (other than to an Affiliate), and the Company shall not be required to
issue or deliver such certificates or other securities unless and until the
Person or Persons requesting the issuance thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.
11. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this Warrant is lost,
stolen, mutilated or destroyed, the Company may, on such terms as to indemnity
or otherwise as it may reasonably impose (which shall, in the case of a
mutilated Warrant, include the surrender thereof), issue a new Warrant of like
denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed.
Any such new Warrant shall constitute an original contractual obligation of the
Company, whether or not the allegedly lost, stolen, mutilated or destroyed
Warrant shall be at any time enforceable by anyone.
20.
12. EXCHANGE OF WARRANT; DIVISIBILITY OF WARRANT. Subject to compliance
with Section 4.3 hereof, this Warrant is exchangeable, without charge to any
Holder, upon the surrender hereof by the Holder at the office or agency of the
Company, for one or more new Warrants of the tenor representing in the aggregate
the right to subscribe for and purchase the number of shares of Common Stock
which may be subscribed for and purchased hereunder, each of such new Warrants
to represent the right to subscribe for and purchase such number of shares as
shall be designated by said Holder at the time of such surrender.
13. CLOSING OF BOOKS. The Company will at no time close its transfer books
against the transfer of any Warrant or of any shares of Common Stock issued or
issuable upon the exercise or conversion of any Warrant in any manner which
interferes with the timely exercise or conversion of this Warrant.
14. NOTICES, ETC. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified, (b) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient or if not, then on the next
Business Day, (c) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (d) one (1)
Business Day after deposit with a nationally recognized overnight courier,
specifying next Business Day delivery, with written verification of receipt. All
notices and other communications shall be sent to the Company at the address
listed on the signature page and to Holder at the address set forth below or at
such other address as the Company or Holder may designate by ten (10) days
advance written notice to the other parties hereto:
Air Transportation Stabilization Board
1120 Vermont Avenue, Suite 970
Washington, DC 20005
Attn: Executive Director
with a copy to:
United States Department of the Treasury
1500 Pennsylvania Avenue, N.W.
Washington, D.C. 20220
Attn: Deputy Assistant Secretary (Government Financial Policy)
15. ACCEPTANCE. Receipt of this Warrant by the Holder shall constitute
acceptance of and agreement to all of the terms and conditions contained herein.
16. BINDING EFFECT ON SUCCESSORS. This Warrant shall be binding upon any
Person succeeding the Company by merger, consolidation or acquisition of all or
substantially all of the Company's assets (to the extent provided in Section 5),
and all of the obligations of the Company relating to the Common Stock issuable
upon the exercise or conversion of this Warrant shall survive the exercise,
conversion and termination of this Warrant and all of the covenants and
agreements of the Company shall inure to the benefit of the successors and
assigns of the Holder.
21.
17. GOVERNING LAW. This Warrant and all rights, obligations and liabilities
hereunder shall be governed and construed in accordance with Federal law, if and
to the extent such Federal law is applicable, and otherwise in accordance with
the law of the State of New York.
22.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its duly authorized officer as of September 27, 2005.
US AIRWAYS GROUP, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address: 111 West Rio Salado Parkway
Tempe, AZ 85281
NOTICE OF EXERCISE
TO: US AIRWAYS GROUP, INC.
(1) [ ] The undersigned hereby elects to purchase ________ shares of the
Common Stock of US Airways Group, Inc. (the "COMPANY") pursuant to the terms of
the attached Warrant, and tenders herewith or is delivering by wire transfer to
account number __________ at _____________________ (bank) payment of the
exercise price in full.
[ ] The undersigned hereby elects to purchase ________ shares of the
Common Stock of US Airways Group, Inc. (the "COMPANY") pursuant to the terms of
the net exercise provisions set forth in Section 2.2 of the attached Warrant.
(2) Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:
----------------------------------------
(Name)
----------------------------------------
----------------------------------------
(Address)
- ------------------------------------- ----------------------------------------
(Date) (Signature)
----------------------------------------
(Print name)
1.
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply
required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the right to purchase _______ shares of Common Stock
pursuant to the foregoing Warrant and all other rights evidenced thereby are
hereby assigned to
Name: __________________________________________________________________________
(Please Print)
Address: _______________________________________________________________________
(Please Print)
Dated:
------------------------------
Holder's
Signature:
--------------------------
Holder's
Address:
----------------------------
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of this Warrant, without alteration or enlargement or any
change whatever. Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Warrant.