Exhibit A-1 to the
Merger Agreement
INVESTMENT AGREEMENT
dated as of May 19, 2005
among
US AIRWAYS GROUP, INC.,
AMERICA WEST HOLDINGS CORPORATION
and
ACE AVIATION HOLDINGS INC.
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS.............................................................................................2
Section 1.01 Definitions.....................................................................................2
ARTICLE II ISSUANCE AND PURCHASE OF NEW COMMON STOCK..............................................................8
Section 2.01 Issuance and Purchase of New Common Stock.......................................................8
Section 2.02 Closing.........................................................................................8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY.........................................................8
Section 3.01 Incorporation by Reference of Representations and Warranties in the Merger Agreement............8
Section 3.02 Authorization; No Contravention.................................................................9
Section 3.03 Consents; No Conflicts..........................................................................9
Section 3.04 Court Orders....................................................................................9
Section 3.05 Capitalization; Securities.....................................................................10
Section 3.06 Information Provided...........................................................................10
Section 3.07 Financial Advisors and Brokers.................................................................10
Section 3.08 Regulatory Status..............................................................................10
Section 3.09 Commercial Opportunity.........................................................................10
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF WEST................................................................11
Section 4.01 Incorporation by Reference of Representations and Warranties in the Merger Agreement...........11
Section 4.02 Authorization; No Contravention................................................................11
Section 4.03 Consents; No Conflicts.........................................................................11
Section 4.04 Court Orders...................................................................................12
Section 4.05 Information Provided...........................................................................12
Section 4.06 Financial Advisors and Brokers.................................................................12
Section 4.07 Commercial Opportunity.........................................................................12
ARTICLE V REPRESENTATIONS AND WARRANTIES OF INVESTOR.............................................................12
Section 5.01 Organization...................................................................................12
Section 5.02 Authorization; No Contravention................................................................12
Section 5.03 Consents; No Conflicts.........................................................................12
Section 5.04 Financial Advisors and Brokers.................................................................13
Section 5.05 Ownership of Equity Securities; Purpose of Investment..........................................13
Section 5.06 Financing......................................................................................13
ARTICLE VI PRE-CLOSING COVENANTS.................................................................................13
Section 6.01 Taking of Necessary Action.....................................................................13
Section 6.02 Notifications..................................................................................15
Section 6.03 Financial and Other Information................................................................15
Section 6.04 Delivery of Reports............................................................................15
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Section 6.05 Amendments to Merger Agreement; Etc............................................................15
Section 6.06 Publicity......................................................................................16
Section 6.07 Investor Financing.............................................................................16
Section 6.08 Issuances of Equity Securities.................................................................16
Section 6.09 Transfer Taxes.................................................................................17
Section 6.10 Bankruptcy Covenants...........................................................................17
ARTICLE VII CONDITIONS...........................................................................................18
Section 7.01 Conditions to Investor's Obligations...........................................................18
Section 7.02 Conditions to the Company's Obligations........................................................22
ARTICLE VIII TERMINATION.........................................................................................24
Section 8.01 Termination of Agreement.......................................................................24
Section 8.02 Effect of Termination..........................................................................25
ARTICLE IX MISCELLANEOUS.........................................................................................25
Section 9.01 Fees and Expenses..............................................................................25
Section 9.02 Survival of Representations, Warranties and Covenants..........................................25
Section 9.03 Specific Performance...........................................................................26
Section 9.04 General Interpretive Principles................................................................26
Section 9.05 Notices........................................................................................26
Section 9.06 Entire Agreement; Amendment....................................................................26
Section 9.07 No Other Representations or Warranties.........................................................26
Section 9.08 Counterparts...................................................................................27
Section 9.09 Governing Law..................................................................................27
Section 9.10 Successors and Assigns.........................................................................27
Section 9.11 No Third-Party Beneficiaries...................................................................27
Section 9.12 Confidentiality................................................................................27
EXHIBIT A Merger Agreement
EXHIBIT B Commercial Agreements
EXHIBIT C Stockholders Agreement
Schedule 1 New Common Stock
Schedule 3.05 Capitalization
Schedule 7.01(q) Terms of Revised Profit Sharing Plan
Schedule 9.05 Notices Information
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INVESTMENT AGREEMENT
THIS INVESTMENT AGREEMENT (together with all exhibits and
schedules hereto and as the same may be amended, supplemented or otherwise
modified from time to time in accordance with the terms hereof, the
"Agreement"), dated as of May 19, 2005, by and among ACE Aviation Holdings Inc.,
a company organized under the laws of Canada (the "Investor"), US Airways Group,
Inc., a Delaware corporation, and its successors (including, as the context may
require, on or after the Effective Date, as reorganized pursuant to the
Bankruptcy Code) (the "Company"), and America West Holdings Corporation, a
Delaware corporation ("West").
W I T N E S S E T H:
WHEREAS, on September 12, 2004, the Company and certain of its
Subsidiaries (the "Debtor Subsidiaries" and together with the Company, the
"Debtors") filed voluntary petitions (the "Cases") for protection under chapter
11 of the United States Bankruptcy Code (the "Bankruptcy Code") in the United
States Bankruptcy Court for the Eastern District of Virginia, Alexandria
Division (the "Bankruptcy Court") to enable the Debtors to be restructured
pursuant to one or more plans of reorganization (collectively, the "Plan");
WHEREAS, the Debtors have continued in the possession of their
assets and in the management of their businesses pursuant to Sections 1107 and
1108 of the Bankruptcy Code;
WHEREAS, pursuant to the Plan, the Company intends to cancel
all of the existing outstanding Equity Securities of the Company upon the
Effective Date and issue the New Common Stock;
WHEREAS, pursuant to the Plan, the Company, Barbell
Acquisition Corp., a Delaware corporation ("Merger Sub"), and West have entered
into an Agreement and Plan of Merger (together with all of the schedules,
exhibits and other attachments thereto, the "Merger Agreement"), attached as
Exhibit A hereto;
WHEREAS, subject to the other terms and conditions contained
herein, the Investor desires to commit to provide equity financing to the
Company;
WHEREAS, the Company intends to issue and sell to Investor,
and Investor intends to purchase from the Company, shares of New Common Stock
(such purchase, issuance and sale, the "Investment") in exchange for the
Investment Price, all on the terms provided in this Agreement;
WHEREAS, the Company and the Investor intend to enter into
certain commercial arrangements, on terms substantially as set forth in Exhibits
B-1 through B-4, and in form and substance satisfactory to the Company and
Investor ("Commercial Agreements");
WHEREAS, pursuant to the Other Investment Agreements, the
Company intends to issue and sell to Par Investment Partners, L.P., Peninsula
Investment Partners, L.P. and Eastshore Aviation, LLC (the "Other Investors")
shares of New Common Stock pursuant to
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investment agreements entered into by the Other Investors in the forms
previously provided to Investor;
WHEREAS, the Investor intends to enter into a Stockholders
Agreement (the "Stockholders Agreement"), substantially in the form of Exhibit C
hereto, with the Company and the Other Investors;
WHEREAS, the parties intend that the transactions contemplated
hereby will be implemented by and take effect simultaneously with the
implementation of the Plan on the Effective Date (except as to those
transactions that are expressly intended to take effect at another date);
WHEREAS, the parties intend that all of the transactions
contemplated hereby are intended to be treated as a single integrated
transaction subject to the approval of the Bankruptcy Court as soon as
reasonably practicable after the date hereof; and
WHEREAS, the Company, West and the Investor desire to make
certain representations, warranties, covenants and agreements in connection with
the transactions contemplated herein.
NOW, THEREFORE, in consideration of the premises and the
mutual representations, warranties, covenants and agreements contained herein,
the parties hereto agree as follows, in the case of the Company, subject to
Bankruptcy Court approval of this Agreement:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. As used in this Agreement, the
following terms shall have the meanings set forth below:
"Affiliate" means, with respect to any specified Person, a
Person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the specified
Person, where "control" (including the terms "controlling," "controlled by" and
"under common control with") means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract, or
otherwise; provided, however, that when used with respect to the Company,
"Affiliate" shall not include Investor or any Affiliate thereof.
"Agreement" has the meaning set forth in the preamble hereto.
"Air Wisconsin DIP Agreement" means the Junior Secured
Debtor-in-Possession Credit Facility Agreement, dated as of February 18, 2005,
by and among US Airways, Inc., as Borrower, certain affiliates thereof as
guarantors, and Eastshore Aviation, LLC, as lender, as amended, supplemented or
otherwise modified from time to time.
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"Alternative Transaction" means (a) any reorganization of the
Company or (b) any sale, merger, consolidation, joint venture, recapitalization,
sale of assets or equity interests or other combination or disposition or
similar transaction or series of transactions involving at least 40%, on a fair
market value basis, of the assets of the Company and its Operating Subsidiaries,
taken as a whole, or 40% of the equity securities of the Company.
"Approvals" has the meaning set forth in Section 7.01(e)
hereof.
"ATSB" means the Air Transportation Stabilization Board,
created pursuant to Section 102 of the Air Transportation Safety and System
Stabilization Act, P.L. 107-42, as the same may be amended from time to time.
"Bankruptcy Code" has the meaning set forth in the recitals
hereto.
"Bankruptcy Court" has the meaning set forth in the recitals
hereto.
"Board" means the board of directors of the Company
(including, with respect to periods following the Effective Date, the Company).
"Business Day" means any day other than a Saturday, Sunday or
a day on which banking institutions of the State of New York are authorized by
law or executive order to close.
"Bylaws" means the bylaws of the Company, as amended from time
to time (including, with respect to periods following the Effective Date).
"Cases" has the meaning set forth in the recitals hereto.
"Certificate of Incorporation" means the Certificate of
Incorporation of the Company, as amended from time to time, including any
certificate of designation relating to any Equity Securities of the Company
(including, in each case, with respect to periods following the Effective Date).
"Certificated Air Carrier" means a Citizen of the United
States holding an aircraft operating certificate issued pursuant to Chapter 447
of Title 49 of the United States Code or any analogous successor provision of
the United States Code, for aircraft capable of carrying ten or more individuals
or 6,000 pounds or more of cargo or that otherwise is certified or registered to
the extent required to fall within the purview of 11 U.S.C. Section 1110 or any
analogous successor provision of the Bankruptcy Code.
"Chapter 11" means Chapter 11 of the Bankruptcy Code.
"Citizen of the United States" has the meaning given to such
term in Section 40102(a)(15) of Title 49 of the Transportation Code, or any
subsequent legislation that amends, supplements or supersedes such provisions.
"Closing" means the closing of the issuance, sale and purchase
of the New Common Stock pursuant to Section 2.01 hereof.
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"Closing Date" has the meaning set forth in Section 2.02(a)
hereof.
"Company" has the meaning set forth in the preamble hereto.
"Confirmation Order" means a Final Order of the Bankruptcy
Court approving the Plan.
"Debtors" has the meaning set forth in the recitals hereto.
"Debtor Subsidiaries" has the meaning set forth in the
recitals hereto.
"Disclosure Statement" means a disclosure statement with
respect to the Plan.
"Effective Date" means the effective date of the Plan.
"Equity Securities" shall mean (i) capital stock of, or other
equity interests in, any Person, (ii) securities or other instruments
convertible into or exchangeable for shares of capital stock, voting securities
or other equity interests in such Person or (iii) options, warrants, investment
agreements or other rights to acquire the securities described in clauses (i)
and (ii), whether fixed or contingent, matured or unmatured, contractual, legal,
equitable or otherwise.
"Fair Market Value" shall mean the fair market value of the
New Common Stock, as determined by the Board. If the New Common Stock is traded
on an over-the-counter securities market or national securities exchange, "Fair
Market Value" shall mean the closing sales price of the New Common Stock
reported on such over-the-counter market or such national securities exchange on
the applicable date or, if no sales of New Common Stock have been reported for
that date, on the next preceding date for which sales where reported.
"Final Order" means an order or judgment of the Bankruptcy
Court, or other court of competent jurisdiction, as entered on the docket in the
Cases or the docket of any other court of competent jurisdiction, that has not
been reversed, stayed, modified or amended, and as to which the time to appeal
or seek reargument, reconsideration, or certiorari has expired and no appeal,
motion for reconsideration or reargument or petition for certiorari has been
timely taken, or as to which any appeal that has been taken or any petition for
certiorari, motion for reconsideration or reargument that has been or may be
filed has been resolved by the highest court to which the order or judgment was
appealed or from which reargument, reconsideration, or certiorari was sought and
the time to take any further appeal, petition for certiorari or move for
reargument shall have expired.
"Fully Diluted Basis" means the number of shares of New Common
Stock, without duplication, which are issued and outstanding or owned or held,
as applicable, at the date of determination plus the number of shares of New
Common Stock issuable pursuant to any Equity Securities then outstanding
convertible into or exchangeable or exercisable for (whether or not subject to
contingencies or passage of time, or both) shares of New Common Stock.
"Governmental Authority" means the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising
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executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.
"Hearing" means the hearing conducted in the Cases in the
Bankruptcy Court seeking approval of the Motion.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the regulations promulgated thereunder.
"Investor" has the meaning set forth in the preamble hereto.
"Investor Director" means any member of the Board of the
Company nominated by Investor in accordance with the Stockholders Agreement.
"Investment" has the meaning set forth in the recitals hereto.
"Investment Price" has the meaning set forth in Section 2.01
hereof.
"Law" means any law, treaty, statute, ordinance, code, rule or
regulation of a Governmental Authority or judgment, decree, order, writ, award,
injunction or determination of a court or other Governmental Authority.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge, or
preference, priority or other security interest or preferential arrangement of
any kind or nature whatsoever intended for security (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).
"Material Adverse Effect" on any Person means (x) a material
adverse effect on the financial condition, assets, liabilities, business or
results of operations of such Person and its Subsidiaries taken as a whole,
excluding any such effect resulting from (I) changes or conditions generally
affecting the U.S. economy or financial markets, (II) changes or conditions
generally affecting any of the segments of the airline industry in which such
Person or any of its Subsidiaries operates, to the extent such conditions or
changes do not disproportionately impact such Person or its Subsidiaries (III)
changes or conditions resulting from divestiture required in order to satisfy
Section 5.1(b) of the Merger Agreement or (IV) the announcement or consummation
of the Merger Agreement, or (y) an effect that would prevent, materially delay
or materially impair the ability of such Person to consummate the Merger or the
ability of such Person or the Investor to consummate the transactions
contemplated by this Agreement or to enter into or perform obligations under the
Commercial Agreements. For purposes of this definition, any suspension of
commercial air travel in the United States for a period of 72 hours or more
shall be deemed to have a Material Adverse Effect on the Company and West.
"Merger" has the meaning assigned to such term in the Merger
Agreement.
"Merger Agreement" has the meaning set forth in the recitals
hereto.
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"Merger Sub" has the meaning set forth in the recitals hereto.
"Motion" means the motion and any supporting papers seeking
approval of the Transactions, in form and substance reasonably acceptable to
Investor and providing, inter alia, not less than a ten (10) day notice period
prior to the Hearing and providing for confidential treatment of portions of the
Transaction Documents as mutually agreed by the Company and the Investor.
"New Common Stock" means the class of common stock of the
Company authorized under the Certificate of Incorporation attached as Exhibit C
to the Merger Agreement and to be issued to West shareholders pursuant to the
Merger.
"Operating Companies" means, with respect to the Company, US
Airways, PSA Airlines, Inc., a Pennsylvania corporation, Piedmont Airlines,
Inc., a Maryland corporation and Material Services Company, Inc., a Delaware
corporation.
"Other Investors" has the meaning set forth in the recitals
hereto.
"Other Investments" means the purchase, issuance and sale by
the Company to the Other Investors of shares of New Common Stock pursuant to the
Other Investment Agreements.
"Other Investment Agreements" means the investment agreements
among the Company, West and each of the Other Investors.
"Person" means any individual, corporation, company,
association, partnership, limited liability company, joint venture, trust,
unincorporated organization, or Governmental Authority.
"Plan" has the meaning set forth in the recitals hereto.
"Postpetition," when used with respect to any agreement,
instrument or any obligation arising thereunder, any claim or proceeding or any
other matter, means an agreement or instrument that was first entered into or
first became effective, an obligation, claim or proceeding that first arose or
was first instituted, or another matter that first occurred, after the
commencement of the Cases, or that was entered into or became effective, or
arose, was instituted or occurred, before commencement of the Cases but has been
assumed in the Cases.
"Regulatory Approvals" means, to the extent necessary in
connection with the consummation of the transactions contemplated by the
Transaction Documents, any and all certificates, permits, licenses, franchises,
concessions, grants, consents, approvals, orders, registrations, authorizations,
waivers, variances or clearances from, or filings or registrations with,
Governmental Authorities (and shall not include clearance or approval under the
HSR Act or any other Law that may require waiting periods prior to consummation
of the Transactions).
"Representatives" means, with respect to any Person, such
Person's officers, directors, employees, agents, attorneys, accountants,
consultants, equity financing partners or financial advisors or other Person
associated with, or acting on behalf of, such a Person.
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"Republic" means Republic Airways Holdings Inc., a Delaware
corporation.
"SEC" means the U.S. Securities and Exchange Commission.
"Securities Act" means the U.S. Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Stockholders Agreement" has the meaning set forth in the
recitals hereto.
"Subsidiary" means as to any Person, any other Person of which
more than fifty percent (50%) of the shares of the voting stock or other
ownership interests are owned or controlled, or the ability to select or elect
more than fifty percent (50%) of the directors or similar managers is held,
directly or indirectly, by such first Person or one or more of its Subsidiaries
or by such first Person and one or more of its Subsidiaries.
"Title 49" means Title 49 of the Code of Federal Regulations,
as amended and in effect from time to time.
"Transactions" means the Merger, the execution, delivery and
performance of this Agreement and each Other Investment Agreement (including the
issuance of New Common Stock hereunder and thereunder), the Stockholders
Agreement, the Commercial Agreements and the execution, delivery and performance
of the documents described in Articles II and VI hereof, in each case by the
applicable party thereto.
"Transaction Contracts" means all of the Transaction Documents
other than the Plan, the Confirmation Order and the order of the Bankruptcy
Court approving the break-up fee set forth in Section 8.02(b).
"Transaction Documents" means this Agreement, the Plan, the
Confirmation Order, the Merger Agreement, the Commercial Agreements, each Other
Investment Agreement, the Stockholders Agreement, the order of the Bankruptcy
Court approving the break-up fee set forth in Section 8.02(b), the documents
described in Articles II and VI and all other documents necessary to consummate
the Transactions and other arrangements contemplated hereby.
"Transportation Code" means Title 49 of the United States Code
which, among other things, recodified and replaced the U.S. Transportation Code
of 1958 and the regulations promulgated thereunder, or any subsequent
legislation that amends, supplements or supersedes such provisions.
"US Airways" means US Airways, Inc., a Delaware corporation.
"West" has the meaning set forth in the preamble hereto.
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ARTICLE II
ISSUANCE AND PURCHASE OF NEW COMMON STOCK
Section 2.01 Issuance and Purchase of New Common Stock. Upon
the terms and subject to the conditions set forth in this Agreement, at the
Closing, the Company will issue, sell and deliver to Investor, and Investor will
purchase from the Company, that number of shares of New Common Stock set forth
opposite Investor's name on Schedule 1 hereto, for the aggregate purchase price
set forth opposite Investor's name on Schedule 1 hereto (the "Investment
Price").
Section 2.02 Closing. (a) Subject to the satisfaction or, if
permissible, waiver of the conditions set forth in Sections 7.01 and 7.02
hereof, the Closing shall take place at the offices of Arnold & Porter LLP, 555
Twelfth Street, NW, Washington D.C. 20004, at 10:00 a.m., Washington D.C. time,
on the first Business Day following the Effective Time (as such term is defined
in the Merger Agreement) or at such other time, date and place as the parties
may agree (the date on which the Closing occurs, the "Closing Date"); provided
that the parties shall use reasonable best efforts to have the Closing take
place on the first Business Day following the Effective Time.
(b) At the Closing, (i) the Company shall deliver to
Investor certificates representing the shares of New Common Stock to be
purchased by, and sold to, Investor pursuant to Section 2.01 hereof (registered
in the names and in the denominations designated by Investor at least two
Business Days prior to the Closing Date), together with the other documents,
certificates and opinions to be delivered pursuant to Section 7.01 hereof, and
(ii) Investor, in full payment for the shares of New Common Stock to be
purchased by, and sold to, Investor pursuant to Section 2.01 hereof, shall pay
to the Company as provided in Section 2.01 hereof (in immediately available
funds by wire transfer to the account designated by the Company, or by such
other means as may be agreed between the parties hereto), Investor's Investment
Price (less any amounts due as of the Closing Date to Investor pursuant to
Section 9.01 hereof), and shall deliver the certificate required pursuant to
Section 7.02(b) hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Investor as
follows:
Section 3.01 Incorporation by Reference of Representations and
Warranties in the Merger Agreement. The Company hereby incorporates by
reference, for the benefit of Investor as though set forth herein, the following
representations and warranties (including the defined terms and disclosure items
included therein and related thereto) in the Merger Agreement: Sections 3.2(a),
(f), (g), (h), (i), (j), (k), (l), (n), (o), (p), (q), (r), (s), (t), (u), (v),
(w) and (x). Each such representation which states that "East" (i.e., US Airways
Group, Inc.) "has made available to West" certain materials shall be deemed to
read "has made available to Investor" for purposes of this incorporation by
reference.
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Section 3.02 Authorization; No Contravention. The Transactions
to be consummated by the Company and the Operating Companies and the performance
of the Transaction Contracts are within the respective corporate power and
authority of the Company and the Operating Companies (subject and after giving
effect to any required approvals of the Bankruptcy Court (including, without
limitation, to the extent applicable, the Confirmation Order) and the Plan) and
have been, and each of the Commercial Agreements will be when executed and at
Closing, duly authorized by all necessary corporate and, if required,
stockholder action. This Agreement, the Merger Agreement, each Other Investment
Agreement, the Stockholders Agreement and each other Transaction Contract
entered into as of the date hereof have been duly executed and delivered by the
Company and the Operating Companies party thereto (as applicable) and constitute
(subject and after giving effect to any required approvals of the Bankruptcy
Court (including, without limitation, to the extent applicable, the Confirmation
Order) and the Plan), a legal, valid and binding obligation of the Company and
such Operating Companies, respectively, enforceable in accordance with its
terms.
Section 3.03 Consents; No Conflicts. Other than the notices,
reports, filings, consents, registrations, approvals, permits or authorizations
required under the Hart Scott Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), with respect to the Company and the Operating
Companies, the execution and delivery of each of the Transaction Contracts and
the consummation of the Transactions (i) does not require any consent or
approval of, registration or filing with, or any other action by, any
Governmental Authority (subject and after giving effect to any required
approvals of the Bankruptcy Court (including, without limitation, to the extent
applicable, the Confirmation Order) and the Plan), except such as have been
obtained or made and are in full force and effect and except where failure to
obtain such consent, approval, registration, filing or other action would not
reasonably be expected to have a Material Adverse Effect on the Company, (ii)
will not violate, conflict with or result in a breach, violation or default
under (A) any applicable law, rule or regulation or any order of or restriction
imposed by any Governmental Authority and except, in each case, where such
violation of applicable law or regulation would not reasonably be expected to
have a Material Adverse Effect on the Company or (B) the Certificate of
Incorporation or Bylaws or any other organizational documents of the Company or
any of its Subsidiaries, (iii) will not violate, conflict with or result in a
breach, or default under any Postpetition agreement, contract or obligation or
Postpetition loan agreement or any other Postpetition indebtedness agreement or
instrument of indebtedness binding upon the Company, any Operating Company or
any of their respective Subsidiaries or its assets except where such default,
breach or violation would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company and (iv) will not
result in the creation or acceleration of any obligations or imposition of any
Lien on any assets or properties of the Company or any of its Subsidiaries.
Section 3.04 Court Orders. Subject and after giving effect to
any required approvals of the Bankruptcy Court (including, without limitation,
to the extent applicable, the Confirmation Order) and the Plan, the performance
of any action by the Company or the Operating Companies required or contemplated
by this Agreement or any other Transaction Document is not restrained or
enjoined by any order of the Bankruptcy Court or by any Governmental Authority
(either temporarily, preliminarily or permanently).
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Section 3.05 Capitalization; Securities. Upon the Closing and
after giving effect to the Confirmation Order, the Plan, the Merger, the
Investment and the Other Investments, the issued and outstanding capital stock
of the Company shall consist solely of New Common Stock as provided on Schedule
3.05. Except as set forth on Schedule 3.05, upon the Closing and after giving
effect to the Confirmation Order, the Plan, the Merger, the Investment and the
Other Investments, there will not be any outstanding subscriptions, options,
warrants, commitments, agreements or arrangements related to the issuance or
sale of outstanding Equity Securities or securities or other instruments
convertible into or exchangeable for any Equity Securities of the Company Upon
the Closing Date, the New Common Stock to be issued and delivered to the
Investor pursuant to the terms hereof, shall have been duly authorized and
validly issued, fully paid, nonassessable and not subject to preemptive or
similar rights of third parties or reserved for issuance in accordance with the
terms of the Plan and Confirmation Order. The rights, preferences and privileges
of the capital stock of the Company shall be as set forth in the Certificate of
Incorporation of the Company, as amended pursuant to the Plan and in effect upon
the Closing in the form attached as Exhibit C to the Merger Agreement.
Section 3.06 Information Provided. A true and correct copy of
the Merger Agreement, and of each Other Investment Agreement, including each
schedule, exhibit and other attachment or related agreement thereto and
including in each case any amendments, supplements and modifications through the
date hereof, has been provided to Investor. There are no other agreements,
arrangements, understandings or commitments, written or oral, of any nature,
between any of the Other Investors or their affiliates, on the one hand, and the
Company, West or any of their affiliates on the other, relating to the
transactions contemplated by the Transaction Documents.
Section 3.07 Financial Advisors and Brokers. Except for
Seabury Aviation Advisors LLC and/or its Affiliates ("Seabury"), no Person has
acted, directly or indirectly, as a broker, finder or financial advisor of the
Company or any of the Operating Companies in connection with the Transaction
Documents or the transactions contemplated thereby, and except for fees payable
to Seabury by the Company, no Person acting for or on behalf of the Company or
any of the Operating Companies is entitled to receive any broker's, finder's or
similar fee or commission in respect thereof based in any way on any agreement,
arrangement or understanding made by or on behalf of the Company or any of the
Operating Companies.
Section 3.08 Regulatory Status. Neither the Company, nor any
Operating Company nor any of their respective Subsidiaries is (i) an "investment
company" as defined in, or subject to regulation under, the Investment Company
Act of 1940 or (ii) a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935. US Airways is a
Certificated Air Carrier.
Section 3.09 Commercial Opportunity. The Company believes in
good faith (after consultation with West) that the Company, West and their
Subsidiaries will have, in the aggregate, not less than US$280,000,000 per annum
of Maintenance, Repair and Overhaul services work immediately available to be
outsourced to Investor or its affiliates as of the Closing Date.
10
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF WEST
West hereby represents and warrants to Investor as follows:
Section 4.01 Incorporation by Reference of Representations and
Warranties in the Merger Agreement. West hereby incorporates by reference, for
the benefit of Investor as though set forth herein, the following
representations and warranties (including the defined terms and disclosure items
related thereto) in the Merger Agreement: Sections 3.1(a), (b), (e), (f), (g),
(h), (i), (j), (k), (m), (n), (o), (p), (q), (r), (s), (t), (u), (v) and (w).
Each such representation which states that "West" (i.e., America West Holdings
Corporation) "has made available to East" certain materials shall be deemed to
read "has made available to Investor" for purposes of this incorporation by
reference.
Section 4.02 Authorization; No Contravention. The Transactions
to be consummated by West and performance of the Transaction Contracts to which
West is or will be a party are within the corporate power and authority of West
and have been, and each of the Commercial Agreements to which West will be a
party will be, when executed and at Closing, duly authorized by all necessary
corporate and, if required, stockholder action. This Agreement, the Merger
Agreement, each Other Investment Agreement, and each other Transaction Contract
to which West is a party, entered into as of the date hereof, have been duly
executed and delivered by West and constitute a legal, valid and binding
obligation of West, enforceable in accordance with its terms.
Section 4.03 Consents; No Conflicts. Other than the notices,
reports, filings, consents, registrations, approvals, permits or authorizations
required under the HSR Act, with respect to West, the execution and delivery of
each of the Transaction Contracts to which West is or will be a party and the
consummation of the Transactions (i) does not require any consent or approval
of, registration or filing with, or any other action by, any Governmental
Authority (subject and after giving effect to any required approvals of the
Bankruptcy Court (including, without limitation, to the extent applicable, the
Confirmation Order) and the Plan), except such as have been obtained or made and
are in full force and effect and except where failure to obtain such consent,
approval, registration, filing or other action would not reasonably be expected
to have a Material Adverse Effect on West, (ii) will not violate, conflict with
or result in a breach, violation or default under (A) any applicable law, rule
or regulation or any order of or restriction imposed by any Governmental
Authority and except, in each case, where such violation of applicable law or
regulation would not reasonably be expected to have a Material Adverse Effect on
West or (B) the Certificate of Incorporation or Bylaws or any other
organizational documents of West or any of its Subsidiaries, (iii) will not
violate, conflict with or result in a breach, or default under any agreement,
contract or obligation or loan agreement or any other indebtedness agreement or
instrument of indebtedness binding upon West or any of its Subsidiaries or its
assets except where such default, breach or violation would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect on
West and (iv) will not result in the creation or acceleration of any obligations
or imposition of any Lien on any assets or properties of West or any of its
Subsidiaries.
11
Section 4.04 Court Orders. Subject and after giving effect to
any required approvals of the Bankruptcy Court (including, without limitation,
to the extent applicable, the Confirmation Order) and the Plan, the performance
of any action by West required or contemplated by this Agreement or any other
Transaction Document is not restrained or enjoined by any order of the
Bankruptcy Court or by any Governmental Authority (either temporarily,
preliminarily or permanently).
Section 4.05 Information Provided. West has delivered to
Investor a true and correct copy of the Merger Agreement, including any
amendments, supplements and modifications through the date hereof.
Section 4.06 Financial Advisors and Brokers. Except for
Greenhill & Co., LLC and/or its Affiliates ("Greenhill") and TPG Partners, L.P.
and/or its Affiliates ("TPG"), no Person has acted, directly or indirectly, as a
broker, finder or financial advisor of West in connection with the Transaction
Documents or the transactions contemplated thereby, and except for fees payable
to Greenhill and TPG by West, no Person acting for or on behalf of West is
entitled to receive any broker's, finder's or similar fee or commission in
respect thereof based in any way on any agreement, arrangement or understanding
made by or on behalf of West.
Section 4.07 Commercial Opportunity. West believes in good
faith (after consultation with the Company) that the Company, West and their
Subsidiaries will have, in the aggregate, not less than US$280,000,000 per annum
of Maintenance, Repair and Overhaul services work immediately available to be
outsourced to Investor or its affiliates as of the Closing Date.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF INVESTOR
Investor represents and warrants to the Company as follows:
Section 5.01 Organization. It is an entity duly organized
under the laws of the jurisdiction of its formation having all requisite power
and authority and all requisite governmental licenses, authorizations, consents
and approvals to execute, deliver and perform its obligations under this
Agreement and the Stockholders Agreement.
Section 5.02 Authorization; No Contravention. The Transactions
to be consummated by Investor and performance of the Transaction Contracts to
which Investor is or will be a party are within the corporate power and
authority of Investor and each of the Commercial Agreements to which Investor
will be a party will be, when executed and at Closing, duly authorized by all
necessary corporate and, if required, stockholder action. This Agreement, and
each other Transaction Contract to which Investor is a party, entered into as of
the date hereof, have been duly executed and delivered by Investor and
constitute a legal, valid and binding obligation of Investor, enforceable in
accordance with its terms.
Section 5.03 Consents; No Conflicts. Except for (i) the filing
of a notification and report form under the HSR Act and the termination or
expiration of the waiting period under the HSR Act, (ii) the filing of any other
required applications or notices with any Governmental
12
Authority and approval of such applications and notices, and (iii) approval by
the Bankruptcy Court, no Approval is necessary or required in connection with
the execution, delivery or performance by, or enforcement against, Investor of
this Agreement or the Transaction Contracts to which Investor is or will be a
party and the consummation of the Transactions contemplated hereby and thereby,
except for such Approvals that would not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the ability of
Investor to consummate the Investment, and all of which have been duly obtained,
taken, given or made and are in full force and effect, except for Approvals that
would not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the ability of Investor to consummate the Investment.
Section 5.04 Financial Advisors and Brokers. Except for
Goldman, Sachs & Co. and/or its Affiliates ("Goldman") and Affiliates of
Investor, no Person has acted directly or indirectly as a broker, finder or
financial advisor of the Investor in connection with this Agreement, the
Stockholders Agreement or the transactions contemplated hereby or thereby, and,
other than fees that may be payable to Goldman or Affiliates of Investor by
Investor, no Person acting for or on behalf of Investor is entitled to receive
any broker's, finder's or similar fee or commission in respect thereof based in
any way on any agreement, arrangement or understanding made by or on behalf of
Investor.
Section 5.05 Ownership of Equity Securities; Purpose of
Investment. Investor is acquiring the New Common Stock under this Agreement
solely for the purpose of investment and not with a view to, or for sale in
connection with, any distribution thereof in violation of the Securities Act and
applicable state securities or "blue sky laws". Investor is an "Accredited
Investor" as such term is defined in Regulation D of the Securities Act.
Section 5.06 Financing. Investor (or its assignee, as
permitted by Section 9.10 who acquires the New Common Stock hereunder at the
Closing) has sufficient and adequate resources to consummate the transactions
contemplated by this Agreement.
ARTICLE VI
PRE-CLOSING COVENANTS
Section 6.01 Taking of Necessary Action. (a) The Company, West
and Investor (solely with respect to the Investment) shall cooperate with each
other and use (and shall cause their respective Subsidiaries to use) their
respective reasonable best efforts to take or cause to be taken all actions, and
do or cause to be done all things, necessary, proper or advisable on its part
under this Agreement and applicable Law to consummate and make effective the
Transactions as soon as practicable, including preparing and filing as promptly
as practicable all documentation to effect all necessary notices, reports and
other filings (including, without limitation, appropriate filings pursuant to
the HSR Act) and to obtain as promptly as practicable all consents,
registrations, approvals, permits and authorizations necessary or advisable to
be obtained from any third party and/or any Governmental Authority in order to
consummate the Transactions. In exercising the foregoing rights, the Company,
West and Investor shall act reasonably and as promptly as practicable. The
Company's, West's and (solely with respect to the Investment) Investor's
obligations under this Section 6.01 shall include, without limitation,
13
the obligation to use their respective reasonable best efforts to defend any
lawsuits or legal proceedings, whether judicial or administrative, or any other
actions by a Governmental Authority, challenging the Transactions, including
using reasonable best efforts to seek to have any stay or other injunctive
relief which would prevent or materially delay or impair the consummation of the
Transactions entered by any court or other Governmental Authority reversed on
appeal or vacated. For purposes of this Section 6.01, as it relates to Investor,
"reasonable best efforts" shall include Investor's agreement to (i) hold the
Investor's equity interest in the Company in one or more subsidiaries separate
from the company that holds its airline assets, if any, and (ii) nominate an
Investor Director (as defined in the Stockholders Agreement) whose service would
not conflict with applicable law. Except as provided in the immediately
preceding sentence, Investor shall not be required (1) to divest, or agree to
divest, any of its businesses or assets or any interest therein, or (2) to take
or agree to take any other action or agree to any limitation, restriction or
condition that could reasonably be expected to materially impair the benefits to
Investor expected, as of the date of this Agreement, to be realized from the
transactions contemplated hereby.
(b) Without limiting the foregoing, the parties
hereto agree to work in good faith to negotiate and document definitive
Commercial Agreements having the terms set forth on Exhibits B-1 through B-4
hereto, and with such additional terms as may be necessary to give effect
thereto, as promptly as practicable and, if possible, within the timeframe
specified in any such Exhibits. All parties agree that claims by Investor and
its Affiliates, on the one hand, and claims by East, West and/or their
respective Affiliates, on the other hand, may be offset and netted against one
another as if Investor and its Affiliates were one entity and East, West and
their respective Affiliates were one entity, and the definitive Commercial
Agreement shall so provide.
(c) Each of the Company, West and Investor shall,
in connection with obtaining the approvals referenced in Section 6.01(a), unless
unrelated to the Investor, the Investment or the Commercial Agreements, use its
reasonable best efforts to (i) subject to applicable law, permit the other party
or the other party's outside counsel to review in advance any proposed written
communication between it and any Governmental Authority, (ii) promptly inform
each other of any communication (or other correspondence or memoranda) received
by such party from, or given by such party to, any other Governmental Authority
and of any material communication received or given in connection with any
proceeding by a private party, in each case regarding any of the transactions
contemplated hereby, (iii) consult with each other in advance to the extent
practicable of any meeting or conference with any Governmental Authority or, in
connection with any proceeding by a private party, with any other Person, and to
the extent permitted by the applicable Governmental Authority or other Person,
give the other party the opportunity to attend and participate in such meetings
and conferences, and (iv) furnish each other with copies of all correspondence,
filings and written communications between them or their Subsidiaries or
Affiliates on one hand, and any such Governmental Authority or its respective
staff on the other hand, with respect to this Agreement and the transactions
contemplated hereby, except that (A) any materials concerning Investor's
valuation of the transaction may be redacted and (B) any proprietary information
of one party not previously disclosed to the other party may be disclosed only
to the other party's outside counsel, at the option of the disclosing party.
14
(d) The Company shall, in coordination with Investor
(i) file with the Bankruptcy Court a bidding procedures motion, reasonably
satisfactory to Investor, seeking approval of the break-up fee set forth in
Section 8.02(b) hereof and the expense reimbursement provisions set forth in
Section 9.01 hereof, (ii) diligently seek approval of the Transactions
(consistent with the Bidding Procedures, as hereinafter defined), and (ii) if
the Company has determined that the Merger represents a highest and best
Qualified Competing Plan Proposal (as defined in the order approving the bidding
procedures), (A) file with the Bankruptcy Court, and diligently seek approval
of, the Disclosure Statement (with the Plan attached as an exhibit thereto)
reasonably satisfactory to Investor and (B) seek to obtain, as expeditiously as
possible, a Confirmation Order with respect to the Plan that is reasonably
satisfactory to the Investors.
Section 6.02 Notifications. At all times prior to the Closing
Date, Investor shall promptly notify the Company and each of the Company and
West shall promptly notify Investor in writing of any fact, change, condition,
circumstance or occurrence or nonoccurrence of any event that will or is
reasonably likely to result in such party's representations and warranties to be
untrue or inaccurate in any material respect or the failure to satisfy the
conditions to be complied with or satisfied by it hereunder; provided, however,
that the delivery of any notice pursuant to this Section 6.02 shall not be
deemed to alter or amend such party's representations or warranties or limit or
otherwise affect the remedies available hereunder to any party giving or
receiving such notice.
Section 6.03 Financial and Other Information. From and after
the date hereof, each of the Company and West shall, and shall cause each of
their respective Subsidiaries and Representatives to, afford to Investor, its
Affiliates and their respective Representatives, including qualified prospective
lenders to Investor that sign appropriate confidentiality agreements, complete
access, upon reasonable notice and in such manner as will not unreasonably
interfere with the conduct of such companies' respective businesses, to their
and their respective Subsidiaries respective facilities, properties, books,
contracts, commitments, records (including information regarding any material
pending or threatened legal proceeding to which any of such companies is, or
reasonably expects to be, a party and negotiations relating to any labor
agreements or labor disputes involving the Company, West or any of their
respective Subsidiaries), key personnel, officers, independent accountants and
legal counsel; provided, however, that neither the Company nor West will be
required to provide access to employee personnel files if providing such files
would be unreasonable or a violation of applicable Law.
Section 6.04 Delivery of Reports. Each of the Company and West
and their respective Subsidiaries shall deliver to Investor, promptly following
delivery to the ATSB, the reports concerning the weekly and monthly operating
and financial data of the Company or West, as applicable, and their respective
Subsidiaries that are delivered to the ATSB.
Section 6.05 Amendments to Merger Agreement; Etc. Other than
pursuant to and in accordance with Section 4.20 of the Merger Agreement, the
Company and West will not amend the Merger Agreement, the Plan, any Other
Investment Agreement or any other Transaction Document, in each case without the
prior written approval of the Investor, such approval not to be unreasonably
withheld (it being understood that in such connection Investor is not required
to consider the interests of any other person), and, notwithstanding the
foregoing, neither the Company nor West shall waive any condition to the
consummation of the Merger or the Plan without the prior written approval of
Investor.
15
Section 6.06 Publicity. Prior to the Closing, except as
required by Law or by obligations pursuant to any listing agreement with or
requirement of any national securities exchange or national quotation system on
which the Common Stock, New Common Stock or the common stock of West is listed,
admitted to trading or quoted, neither the Company (nor any of its
Subsidiaries), West (nor any of its Subsidiaries) nor Investor (nor any of its
Affiliates) shall, without the prior written consent of each other party hereto,
which consent shall not be unreasonably withheld or delayed, make any public
announcement or issue any press release with respect to the transactions
contemplated by this Agreement or the Transaction Documents. Prior to making any
public disclosure required by applicable Law or pursuant to any listing
agreement with or requirement of any relevant national exchange or national
quotation system, the disclosing party shall consult with the other parties
hereto, to the extent feasible, as to the content and timing of such public
announcement or press release. To the extent any party is required to file this
Agreement or any Transaction Document with the SEC or any other Governmental
Authority (including the Bankruptcy Court), the parties shall consult with each
other concerning information for which confidential treatment will be requested.
Section 6.07 Investor Financing. Investor shall maintain
sufficient and adequate resources to consummate the transactions contemplated by
this Agreement at the Closing.
Section 6.08 Issuances of Equity Securities. The Company shall
not accept subscriptions for, offer, issue, sell, or agree, commit or obligate
itself to offer, issue or sell, any Equity Securities other than New Common
Stock (a) issued to Investor pursuant to this Agreement, (b) issued to other
Persons pursuant to other investment agreements entered into on terms and
conditions, including without limitation purchase price, that are no more
favorable to such Persons than the terms and conditions provided herein and in
the Stockholders Agreement are to the Investor up to an aggregate amount of
$500,000,000 including the investments of the Investor and the Other Investors,
(c) issued to West's equityholders pursuant to the Merger Agreement as set forth
on Schedule 3.05, and (d) issued to existing equityholders and creditors of the
Company pursuant to the Plan, (e) issued by the Company on or prior to the
Effective Date pursuant to a rights offering by the Company to existing Company
and West stakeholders to purchase shares of New Common Stock at a price per
share no less than the purchase price per share of New Common Stock paid by
Investor under this Agreement and in an aggregate amount not to exceed the
difference between $650,000,000 and the aggregate amount of the Investment and
the Other Investments, and (f) issued by the Company on or prior to the
Effective Date at a purchase price that is no less than the purchase price per
share of New Common Stock paid by Investor under this Agreement and for proceeds
in excess of $650,000,000 provided that (i) the sole use of such proceeds is the
redemption or repurchase of Equity Securities from existing Company and West
stakeholders at a repurchase or redemption price that values the Equity
Securities redeemed or repurchased (on an as-converted basis in the case of
convertible securities and, in the case of Equity Securities of West, taking
into account the Class B Merger Exchange Ratio (as such term is defined in the
Merger Agreement)) at a price per share no more than the purchase price per
share of New Common Stock paid by Investor under this Agreement, (ii) the
aggregate value of the New Common Stock (valued on the same basis as the New
Common Stock to be issued pursuant to this Agreement) issued pursuant to this
clause (f) shall not exceed $200,000,000 and (iii) Investor is provided the
right to purchase, at its option, up to $15,000,000 of the New Common Stock to
be issued pursuant to this clause (f) at a price per share equal to the purchase
price per share of New Common Stock paid by Investor under this Agreement.
16
Notwithstanding the foregoing, in connection with the implementation of the
Plan, the Company may authorize and reserve for issuance under the Company's
equity incentive plan a number of shares of New Common Stock not to exceed 12.5%
of the outstanding number of shares of New Common Stock on a Fully Diluted Basis
as of the Effective Date, provided that any awards of such shares of New Common
Stock made or committed to be made at anytime before the second anniversary of
the Effective Date, (x) may only consist of options with an exercise price not
less than the lesser of (a) Fair Market Value as of the date of grant and (b)
the Investment Price (as appropriately adjusted to reflect stock splits, stock
dividends, reverse splits and similar changes with respect to the New Common
Stock effected after the Closing Date); provided that the exercise price for any
options granted as of or immediately following the Effective Date shall be not
less than the Investment Price and (y) shall not be effective unless such awards
are approved or ratified by the Board (as constituted from and after the
Effective Date as set forth in Section 1.8(a) of the Merger Agreement) or by a
committee with appropriate authority granted by such Board.
Section 6.09 Transfer Taxes. All transfer taxes, fees and
duties under applicable law incurred in connection with the Investment under
this Agreement will be borne and paid by the Company and it shall promptly
reimburse Investor for any such tax, fee or duty which Investor is required to
pay under applicable law.
Section 6.10 Bankruptcy Covenants. (a)Notwithstanding anything
herein to the contrary, the Company shall not, and shall cause each of the other
Debtors not to, offer, agree to, or seek approval from the Bankruptcy Court for,
and shall use their best efforts to object to any request by any other party
for, any break-up fee, work fee, expense reimbursement or any other benefit or
protection for any Person in connection with any proposed acquisition of or
investment in any of the Debtors, other than (i) West, (ii) Investor, (iii) any
Other Investor, and (iv) any other Person making an investment pursuant to
Section 6.08(b); provided that (A) such other Person is purchasing at least
$50,000,000 of New Common Stock on terms, and conditions, including without
limitation purchase price, that are no more favorable to such other Person than
the terms and conditions provided herein and in the Stockholders Agreement are
to the Investor and (B) without limitation of the preceding clause (A), any
break-up or similar fee payable to such other Person shall not exceed three
percent (3.0%) of the aggregate amount of financing to be provided by such other
Person.
(b) Each of the Debtors agrees that if the Merger Agreement
becomes the Approved Proposal (as defined in the Merger Agreement), it shall use
its best efforts to cause any order approving the Approved Proposal to prohibit
the Debtors (and any Person purporting to act on behalf of the estate of any
Debtor) from violating the provisions of Section 4.4(a) of the Merger Agreement
or from otherwise pursuing in any way any East Acquisition Proposal (as defined
in the Merger Agreement) other than the Merger Agreement unless the Merger
Agreement shall have previously been terminated in accordance with its terms.
(c) In connection with any proceedings in the Bankruptcy Court
related to the Bidding Procedures (as hereinafter defined), the order approving
the Approved Proposal or the transactions contemplated by the Merger Agreement
or this Agreement (or any Qualified Competing Plan Proposal (as defined in the
Bidding Procedures)) (a) the Company shall provide to Investor copies of all
motions, objections, pleadings, notices, proposed orders and other
17
documents that are filed by or on behalf of any Debtor as soon as reasonably
practicable prior to filing thereof with the Bankruptcy Court and (b) West shall
provide to Investor copies of all motions, objections, pleadings, notices,
proposed orders and other documents that are filed by or on behalf of West as
soon as reasonably practicable prior to filing thereof with the Bankruptcy
Court.
(d) Except in connection with a Qualified Competing Plan Proposal
in accordance with the Bidding Procedures, (a) the Company and West shall not,
and shall not authorize or permit any of their Subsidiaries or any of the
Company's or West's or such Subsidiaries' Representatives, directly or
indirectly, to, solicit, negotiate or enter into any letter of intent, agreement
in principle, term sheet, agreement or other similar arrangement that would be
or is intended to be an alternative to, or in lieu of, or to replace any portion
of any of the Commercial Agreements.
(e) Except in accordance with the Bidding Procedures, the Company
and West shall not, and shall not authorize or permit any of their Subsidiaries
or any of the Company's or West's or such Subsidiaries' Representatives,
directly or indirectly, to, (i) solicit, initiate, or take any action designed
to induce a proposal or offer for an Alternative Proposal, (ii) participate in
any discussions or negotiations regarding any Alternative Proposal, or (iii)
enter into any letter of intent, agreement in principle, acquisition agreement
or other similar agreement related to any Alternative Proposal. "Alternative
Proposal" means (x) any Alternative Transaction, or proposal therefor, or (y)
any proposed investment that would, or is intended to, replace all or a material
portion of the investment contemplated by this Agreement.
ARTICLE VII
CONDITIONS
Section 7.01 Conditions to Investor's Obligations. The
obligation of Investor to make the Investment pursuant to Section 2.01 hereof is
subject to satisfaction or waiver of each of the following conditions precedent:
(a) Definitive Documents. Definitive Transaction
Documents (in form and substance reasonably satisfactory to Investor) shall have
been prepared, negotiated and, to the extent applicable, duly executed by the
parties (or, as applicable, their Affiliates), and approval by the Bankruptcy
Court of such documents pursuant to a Final Order, to the extent necessary,
shall have been obtained. Such Transaction Documents shall not have been
modified, amended, waived or supplemented without the consent of Investor, shall
be in effect and the consummation of the transactions contemplated thereby shall
not be stayed, and, except with respect to conditions in the Commercial
Agreements intended or permitted under the terms thereof to be satisfied after
the Closing, all conditions to the obligations of the parties under such
Transaction Documents shall have been satisfied or waived. All corporate and
other proceedings to be taken by the Company, West or any of their respective
Subsidiaries in connection with such Transaction Documents and the transactions
contemplated thereby to be completed at the Closing and documents incident
thereto shall have been completed in form and substance reasonably satisfactory
to Investor, and Investor shall have received all such counterpart originals or
certified or other copies of such Transaction Documents and such other documents
18
as it may reasonably request. Without limiting the generality of the foregoing,
in connection with the consummation of the Plan, the Company and the Other
Investors and shall have entered into the Stockholders Agreement.
(b) Company Representations and Warranties;
Covenants. The representations and warranties of the Company set forth in
Article III hereof (without giving effect to any material adverse effect,
materiality or similar qualifier) shall have been true and correct in all
respects on and as of the date hereof and at the Closing as if made on the
Closing Date (except where such representation and warranty speaks by its terms
of a different date, in which case it shall be true and correct as of such
date), except to the extent that such inaccuracies in any such representation or
warranty have not had, and would not, individually or in the aggregate, have a
Material Adverse Effect on the Company. The Company shall have performed in all
material respects all obligations and complied in all material respects with all
agreements, undertakings, covenants and conditions required to be performed by
it hereunder at or prior to the Closing, and the Company shall have delivered to
Investor at the Closing a certificate dated the Closing Date and signed by the
chief executive officer and the chief financial officer of the Company to the
effect that the conditions set forth in this Section 7.01(b) and in Section
7.01(r) have been satisfied.
(c) West Representations and Warranties; Covenants.
The representations and warranties of West set forth in Article IV hereof
(without giving effect to any material adverse effect, materiality or similar
qualifier) shall have been true and correct in all respects on and as of the
date hereof and at the Closing as if made on the Closing Date (except where such
representation and warranty speaks by its terms of a different date, in which
case it shall be true and correct as of such date), except to the extent that
such inaccuracies in any such representation or warranty have not had, and would
not, individually or in the aggregate, have a Material Adverse Effect on West.
West shall have performed in all material respects all obligations and complied
in all material respects with all agreements, undertakings, covenants and
conditions required to be performed by it hereunder at or prior to the Closing,
and West shall have delivered to Investor at the Closing a certificate dated the
Closing Date and signed by the chief executive officer and the chief financial
officer of West to the effect that the conditions set forth in this Section
7.01(c) and in Section 7.01(r) have been satisfied.
(d) Compliance with Laws, No Adverse Action or
Decision. Since the date hereof, (i) no Law shall have been promulgated, enacted
or entered that restrains, enjoins, prevents, materially delays, prohibits or
otherwise makes illegal the performance of any of the Transaction Documents;
(ii) no preliminary or permanent injunction or other order by any Governmental
Authority that restrains, enjoins, prevents, delays, prohibits or otherwise
makes illegal the performance of any of the Transaction Documents shall have
been issued and remain in effect, except for such injunctions that, if obtained,
could not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the ability of Investor, the Company or West or their
respective Affiliates to consummate the Transactions; (iii) no Governmental
Authority shall have instituted any legal proceeding that seeks to restrain,
enjoin, prevent, delay, prohibit or otherwise make illegal the performance of
any of the Transaction Documents, except for any such legal proceedings which
have a significant possibility of being brought to a conclusion which could not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of Investor, the Company or West or their
respective
19
Affiliates to consummate the Transactions, and (iv) there is no pending or
threatened investigation or litigation by any other Person relating to the
Transactions which, if determined adversely to the Company, West or Investor,
would materially impair or limit the rights and benefits of Investor under the
Transaction Documents or the economic benefits to Investor of the Transactions
in the aggregate and which Investor reasonably believes, based on the advice of
counsel, has a reasonable likelihood of success.
(e) Approvals. The Company, Investor and West shall
have received (i) all material Regulatory Approvals, which shall have become
final (provided that, if an appeal of such Regulatory Approval is pending and
such appeal has a significant possibility of being resolved adversely to the
Company, Investor or West in a manner that would reasonably be expected to have
a material adverse effect on the ability of Investor, the Company or West or
their respective Affiliates to consummate the Transactions, this clause (i)
shall be deemed not to be satisfied), and (ii) all other material approvals,
permits, authorizations, exemptions, consents, licenses and agreements from
other third parties that are necessary to permit the Transactions to be
completed or performed as contemplated by the Transaction Documents and to
permit the Investor and its Affiliates and Company and its Affiliates (including
West and its Subsidiaries) to carry on its business after such transactions in a
manner not materially inconsistent with the manner in which it was carried on
prior to the Effective Date (together with the Regulatory Approvals, the
"Approvals"), which Approvals shall not contain any condition or restriction
that materially impairs the ability of the Investor and its Affiliates or the
ability of the Company (including West and its Subsidiaries) to carry on its
business. All waiting periods imposed by applicable Law (including, without
limitation, under the HSR Act) in connection with the Transactions shall have
expired or been terminated without any action having been taken by any court of
competent jurisdiction restraining, preventing or imposing materially adverse
conditions upon such transactions or upon the conduct of the business of
Investor, East, West or their respective Affiliates.
(f) Plan of Reorganization. The Plan shall be in a
form reasonably acceptable to the Investor, such Plan shall have been confirmed
by the Bankruptcy Court, and such Plan shall among other things (i) not conflict
with any material term of this Agreement, the Commercial Agreements, the
Stockholders Agreement or the other Transaction Documents, (ii) be substantially
consistent in all material respects with the terms of the Financial Plan
including, without limitation, concessions obtained and to be obtained from the
Debtors' employees, creditors, lessors and other claimants, and (iii) reflect a
corporate and capital structure (including liabilities) of the Company
consistent with the Financial Plan. All conditions to the effectiveness of the
Plan, other than the consummation of this Agreement, shall have been satisfied,
and a Confirmation Order in a form reasonably acceptable to the Investor shall
have been entered and become a Final Order no later than December 31, 2005.
(g) Additional East Equity. In connection with the
emergence of the Company and the Operating Companies from chapter 11 and the
consummation of the Plan, the Company will have received on the Effective Date
cash equity investments aggregating not less than $375,000,000 and not more than
$500,000,000 pursuant to this Agreement and the Other Investment Agreements (and
including any loans converted into equity under the Air Wisconsin DIP
Agreement), all on terms, including without limitation purchase price, no more
favorable to the Other Investors and Eastshore Aviation LLC than the terms of
the Investment being made by
20
Investor pursuant to this Agreement and the Stockholders Agreement, which with
all other equity capital of the Company, will be invested only in a single class
of common stock, the New Common Stock, with all such New Common Stock having the
same voting rights, and shall have no other class of capital stock authorized in
its charter other than the New Common Stock. The Company alone, and not any
Affiliate of the Company, shall have issued Equity Securities in connection with
the consummation of the Plan.
(h) Contracts. All material executory contracts and
unexpired leases, the assumption, assignment, rejection or renegotiation of
which is necessary for the successful implementation of the Plan and the
operation of the Company's business as such business is contemplated in the
Financial Plan to be conducted, shall have been assumed, assigned, rejected or
renegotiated, as applicable.
(i) Effective Date and Merger. The Effective Time (as
defined in the Merger Agreement) shall have occurred, or shall occur
concurrently with the Closing, and the Merger shall have been, or will
concurrently with the Closing be, consummated in accordance with the terms of
the Merger Agreement without amendment or waiver other than as permitted in
accordance with Section 6.05 of this Agreement.
(j) Conversion of Air Wisconsin DIP. Eastshore
Aviation LLC shall have converted the existing debt owed to it pursuant to the
Air Wisconsin DIP Agreement into New Common Stock in an amount not less than
$125,000,000 and on terms, including without limitation valuation of the New
Common Stock, no more favorable than the terms of the Investment in New Common
Stock being made by Investor pursuant to this Agreement and the Stockholders
Agreement.
(k) No Conversion to Chapter 7. Neither the Company's
Chapter 11 Case nor US Airways Chapter 11 Case shall have been converted to a
case under Chapter 7 of the Bankruptcy Code and no trustee shall have been
appointed under any chapter of the Bankruptcy Code in respect of either such
case.
(l) Certificate of Incorporation and Bylaws. The
Certificate of Incorporation and Bylaws, substantially in the forms attached as
Exhibits C and D, respectively, to the Merger Agreement, shall have been filed
with and accepted by the Secretary of State of the State of Delaware and shall
have become effective. As of the Closing Date, the Company shall have delivered
to Investor a complete and correct copy of the certificates of incorporation and
the bylaws or comparable governing instruments of each of the Operating
Companies, in full force and effect as of the Closing Date.
(m) Delivery. The Company shall have executed and
delivered to Investor the shares of New Common Stock pursuant to and in
accordance with Section 2.01 hereof.
(n) Board Representation. The composition of the
Board shall be as set forth in Section 1.8(a) of the Merger Agreement and, as
contemplated by the Stockholders Agreement, the Investor Director designated by
Investor, if so designated, shall have been elected or appointed to the Board
for an initial term of three years, with such election or
21
appointment effective as of the date that is two business days following the
Closing Date; provided, however, that Investor shall not be entitled to
designate an Investor Director if any Person other than the Other Investors
shall have invested more than $75,000,000 in the Company (other than by virtue
of the Merger), in which case the condition in this Section 7.01(n) shall be
automatically waived.
(o) Directors' and Officers' Insurance. The Company
shall have procured and maintained in full force and effect directors' and
officers' liability insurance with respect to members of the Board of Directors
of the Company, which insurance shall be at least $100 million, and shall cover
such risks, as is customary for a corporation in the Company's and its
Affiliates respective businesses or other similar businesses.
(p) Absence of Changes. From the date of this
Agreement through the Closing Date, there shall not have occurred any change,
event, occurrence, condition or development that has or could reasonably be
expected to have a material adverse effect on the financial condition, assets,
liabilities, business or results of operations of East or West or that would
prevent, materially delay or materially impair the ability of such East, West or
Investor to consummate the transactions contemplated by this Agreement or to
enter into or perform obligations under the Commercial Agreements. The Company's
financial and operational performance from the period from March 31, 2005 to the
Closing Date shall not have deviated materially and adversely from the
performance indicated in the Financial Plan.
(q) Profit Sharing Plan. The Company's employee
profit sharing plan shall have been amended on terms no less favorable to
Investor than those set forth on Schedule 7.01(q).
(r) Commercial Opportunity. The Company and West
shall have not less than US$280,000,000 per annum of Maintenance, Repair and
Overhaul services work immediately available to be outsourced to Investor or its
affiliates as of the Closing Date in accordance with the term sheet governing
such services set forth on Exhibit B-1.
Section 7.02 Conditions to the Company's Obligations. The
obligation of the Company to issue and sell the New Common Stock pursuant to
Section 2.01 hereof at the Closing is subject to the satisfaction or waiver of
each of the following conditions precedent:
(a) Definitive Documents. Definitive Transaction
Documents (in form and substance reasonably satisfactory to the Company)
necessary to consummate the transactions contemplated herein shall have been
prepared, negotiated and, to the extent applicable, executed by the parties (or,
as applicable, their Affiliates), and approval by the Bankruptcy Court of such
documents, as necessary, shall have been obtained. Such Transaction Documents
shall not have been modified, shall be in effect and the consummation of the
transactions contemplated thereby shall not be stayed, and, except with respect
to conditions in the Commercial Agreements intended or permitted under the terms
thereof to be satisfied after the Closing, all conditions to the obligations of
the parties under the Transaction Documents shall have been satisfied or
effectively waived. All corporate and other proceedings to be taken by Investor
its Affiliates in connection with the Transaction Documents and the transactions
contemplated thereby to be completed at the Closing and documents incident
thereto shall have been completed in form and
22
substance reasonably satisfactory to the Company, and the Company shall have
received all such counterpart originals or certified or other copies of the
Transaction Documents and such other documents as it may reasonably request.
(b) Investor Representations and Warranties;
Covenants. The representations and warranties of Investor set forth in Article V
hereof (without giving effect to any material adverse effect, materiality or
similar qualifier) shall have been true and correct in all respects, on and as
of the date hereof and at the Closing as if made on the Closing Date (except
where such representation and warranty speaks by its terms as of a different
date, in which case it shall be true and correct as of such date), except to the
extent that such inaccuracies have not had, and would not, individually or in
the aggregate, reasonably be expected to have a material adverse effect on the
ability of Investor or its Affiliates to consummate the Transactions. Investor
shall have performed in all material respects all obligations and complied in
all material respects with all agreements, undertakings, covenants and
conditions required to be performed by it at or prior to the Closing, and
Investor shall have delivered to the Company and West at the Closing a
certificate dated the Closing Date and signed on behalf of a member of Investor
to the effect that the conditions set forth in this Section 7.02(b) have been
satisfied.
(c) Compliance with Laws; No Adverse Action or
Decision. Since the date hereof, (i) no Law shall have been promulgated, enacted
or entered that restrains, enjoins, prevents, materially delays, prohibits or
otherwise makes illegal the performance of any of the Transaction Documents with
respect to the transactions contemplated thereby to be completed at the Closing;
(ii) no preliminary or permanent injunction or other order by any Governmental
Authority or other Person that restrains, enjoins, prevents, delays, prohibits
or otherwise makes illegal the performance of any of the Transaction Documents
shall have been issued and remain in effect, except for such injunctions that,
if obtained, could not, individually or in the aggregate, reasonably be expected
to have a material adverse effect on the ability of Investor, the Company or
West or their respective Affiliates to consummate the Transactions; and (iii) no
Governmental Authority shall have instituted any legal proceeding that seeks to
restrain, enjoin, prevent, delay, prohibit or otherwise make illegal the
performance of any of the Transaction Documents, except for any legal
proceedings which have a significant possibility of being brought to a
conclusion which could not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the ability of Investor, the
Company or West or their respective Affiliates to consummate the Transactions.
(d) Approvals. The Company and West shall have
received (i) all material Regulatory Approvals (other than waiting periods
imposed by applicable Law as referred to later in this paragraph), which shall
have become final (provided that, if an appeal of such Regulatory Approval is
pending and such appeal has a significant possibility of being resolved
adversely to the Company or West in a manner that would reasonably be expected
to have a material adverse effect on the ability of Investor, the Company or
West or their respective Affiliates to consummate the Transactions, this clause
(i) shall be deemed not to be satisfied), and (ii) all other Approvals, which
Approvals shall not contain any condition or restriction that, in the Company's
reasonable judgment, materially impairs the Company's ability to carry on its
business. Without limiting the generality of clause (ii), any and all required
approvals under any material financing agreements to which the Company, West or
any of their respective Subsidiaries is a party shall have been obtained. All
waiting periods imposed by applicable Law
23
(including, without limitation, under the HSR Act) in connection with the
transactions contemplated by the Transaction Documents shall have expired or
been terminated without any action having been taken by any court of competent
jurisdiction restraining, preventing or imposing materially adverse conditions
upon such transactions.
(e) Confirmation Order. The Confirmation Order,
satisfactory in form and substance in all respects to the Company, shall have
been entered by the Bankruptcy Court and, once entered, shall not have been
modified without the Company's and West's prior written consent in any manner
materially adverse to the Company, shall be in effect and shall not have been
stayed.
(f) Effective Date and the Merger. The Effective Date
and the satisfaction or waiver of all conditions to the closing of the Merger
shall have occurred not later than the Closing.
ARTICLE VIII
TERMINATION
Section 8.01 Termination of Agreement. Subject to Section 8.02
hereof, this Agreement may be terminated by notice in writing at any time prior
to the Closing by:
(a) Investor or the Company, if (i) the Closing shall
not have occurred on or before December 31, 2005 or (ii) the Merger Agreement
shall have been terminated in accordance with its terms on or before December
31, 2005;
(b) Investor, if (i) a bidding procedures order
approving the break-up fee set forth in Section 8.02(b) hereof and the expense
reimbursement provisions set forth in Section 9.01 (the "Bidding Procedures")
hereof shall not have been entered within thirty (30) days following the date
hereof, but in no event later than June 30, 2005, (ii) the Merger and the
transactions contemplated by the Merger Agreement and this Agreement shall not
have been determined by the Bankruptcy Court to be the Approved Proposal within
sixty-five (65) days after the entry by the Bankruptcy Court of the order
approving the Bidding Procedures contemplated by the preceding clause (i), (iii)
there shall have been a breach by the Company or West of any material
representation, warranty, covenant or agreement contained in this Agreement,
which breach would result in the failure to satisfy any condition set forth in
Section 7.01 hereof to Investor's obligations and that has not been cured within
thirty (30) days following receipt by the Company or West of written notice from
Investor of such breach, (iv) any condition set forth in Section 7.01 hereof to
Investor's obligations is not capable of being satisfied, (v) the Company shall
enter into a written agreement or letter of intent or agreement in principle
providing for an Alternative Proposal, or (vi) the Bankruptcy Court shall have
ordered the Company to terminate this Agreement in order to accept an
Alternative Proposal;
(c) the Company, if (i) there shall have been a
breach by Investor of any material representation, warranty, covenant or
agreement contained in this Agreement which breach would result in the failure
to satisfy any condition set forth in Section 7.02 hereof to the Company's
obligations and that has not been cured within thirty (30) days following
receipt by
24
Investor of written notice from the Company of such breach, or (ii) any
condition set forth in Section 7.02 hereof to the Company's obligations is not
capable of being satisfied; or
(d) mutual agreement in writing by the Company and
Investor.
Section 8.02 Effect of Termination
(a) If this Agreement is terminated in accordance
with Section 8.01 hereof and the transactions contemplated hereby are not
consummated, this Agreement shall become null and void and of no further force
and effect except that (i) the terms and provisions of this Section 8.02 and
Article IX hereof shall survive the termination of this Agreement, and (ii) any
termination of this Agreement shall not relieve any party hereto from any
liability for any willful breach of its obligations hereunder. A termination
shall not void or affect any of the constituent transactions consummated prior
to such termination or any sections hereof which by their terms survive
termination.
(b) In the event that (i) the Investment is not
consummated, (ii) Investor is not in breach of any material representation,
warranty, covenant or agreement contained in this Agreement and (iii) an
Alternative Transaction is effectuated, with or without a merger with West, the
Company shall on the date of the closing of such Alternative Transaction pay to
Investor, by wire transfer of immediately available funds, a break-up fee equal
to $2,250,000.
ARTICLE IX
MISCELLANEOUS
Section 9.01 Fees and Expenses. (a) Except as expressly
provided herein or in any Transaction Document, each party shall bear its own
costs and expenses incurred in connection with this Agreement or any of the
Transactions. Notwithstanding the foregoing, at the Closing, the Company shall
reimburse Investor for the reasonable out-of-pocket expenses of Investor
relating to: (i) Investor's due diligence investigation of the Debtors and West;
(ii) the negotiation of this Agreement, the Stockholders Agreement, the Plan and
any draft term sheets related thereto; (iii) participation in the Bankruptcy
Court proceedings; (iv) the consummation of the transactions contemplated by
this Agreement, the Stockholders Agreement, the Term Sheet, the Plan and the
Merger; and (v) the enforcement of Investor's rights under the Term Sheet, this
Agreement and/or the Stockholders Agreement; provided, however, that
reimbursement pursuant to clause (i) through (iv) above shall not exceed the sum
of (x) $350,000 plus (y) filing fees, incurred in connection with any required
filings under the HSR Act.
(b) All amounts payable under this Agreement shall be
paid in immediately available funds to an account or accounts designated by the
recipient of such amounts, except as otherwise provided herein.
Section 9.02 Survival of Representations, Warranties and
Covenants. None of the representations, warranties or covenants contained in
this Agreement shall survive the Closing Date.
25
Section 9.03 Specific Performance. The parties hereto
specifically acknowledge that monetary damages are not an adequate remedy for
violations of this Agreement, and that any party hereto may, in its sole
discretion, apply to a court of competent jurisdiction for specific performance
or injunctive or such other relief as such court may deem just and proper in
order to enforce this Agreement or prevent any violation hereof and, to the
extent permitted by applicable Law and to the extent the party seeking such
relief would be entitled to the merits to obtain such relief, each party waives
any objection to the imposition of such relief.
Section 9.04 General Interpretive Principles. Whenever used in
this Agreement, except as otherwise expressly provided or unless the context
otherwise requires, any noun or pronoun shall be deemed to include the plural as
well as the singular and to cover all genders. The name assigned this Agreement
and the Section captions used herein are for convenience of reference only and
shall not be construed to affect the meaning, construction or effect hereof.
Unless otherwise specified, any references to a party's "judgment",
"satisfaction" or words of a similar import shall mean in such party's sole
judgment. Unless otherwise specified, the terms "hereof," "herein" and similar
terms refer to this Agreement as a whole (including the Exhibits and Schedules
hereto), and references herein to Articles or Sections refer to Articles or
Sections of this Agreement.
Section 9.05 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given, if
delivered personally, by telecopier or sent by first class mail, postage
prepaid, to the addresses set forth on Schedule 9.05.
Section 9.06 Entire Agreement; Amendment. The Commerical
Agreements and this Agreement effectuate one integrated and non-severable
transaction. This Agreement and the documents described herein (including the
Plan) or attached or delivered pursuant hereto (including, without limitation,
the other Transaction Documents) set forth the entire agreement between the
parties hereto with respect to the transactions contemplated by this Agreement.
Any provision of this Agreement may only be amended, modified or supplemented in
whole or in part at any time by an agreement in writing among the parties hereto
executed in the same manner as this Agreement. No failure on the part of any
party to exercise, and no delay in exercising, any right shall operate as waiver
thereof, nor shall any single or partial exercise by either party of any right
preclude any other or future exercise thereof or the exercise of any other
right.
Section 9.07 No Other Representations or Warranties. Except
for the representations and warranties contained in this Agreement, neither East
nor West, nor any agent, Affiliate, officer, director, employee or
representative of either or them, nor any other Person, makes, or shall be
deemed to make, any representation or warranty to Investor, express or implied,
at law or in equity, on behalf of East or West, and East and West hereby exclude
and disclaim any such representation or warranty whether by either East or West
or any or their respective agents, Affiliates, officers, directors, employees or
representatives or any other Person, notwithstanding the delivery or disclosure
to Investor or any of their respective officers, directors, partners, employees
or representatives or any other Person of any documentation or other information
by East or West or any of their respective agents, Affiliates, officers,
directors, employees or representatives or any other Person with respect to any
one or more of the foregoing.
26
Section 9.08 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to constitute an
original, but all of which together shall constitute one and the same document.
Section 9.09 Governing Law. To the extent not governed by the
Bankruptcy Code, this Agreement shall be governed by, and interpreted in
accordance with, the Laws of the State of New York applicable to contracts made
and to be performed in that State without reference to its conflict of laws
rules. The parties hereto agree that the appropriate and exclusive forum for any
disputes arising out of this Agreement solely between the Company and Investor
shall be the Bankruptcy Court, or if such court will not hear any such suit, the
U.S. District Court for the Southern District of New York, and, the parties
hereto irrevocably consent to the exclusive jurisdiction of such courts, and
agree to comply with all requirements necessary to give such courts
jurisdiction. The parties hereto further agree that the parties will not bring
suit with respect to any disputes arising out of this Agreement except as
expressly set forth below for the execution or enforcement of judgment, in any
jurisdiction other than the above specified courts. Each of the parties hereto
irrevocably consents to the service of process in any action or proceeding
hereunder by the mailing of copies thereof by registered or certified airmail,
postage prepaid, to the address specified in Section 9.05 hereof. The foregoing
shall not limit the rights of any party hereto to serve process in any other
manner permitted by the Law or to obtain execution of judgment in any other
jurisdiction. The parties further agree, to the extent permitted by Law, that
final and non-appealable judgment against any of them in any action or
proceeding contemplated above shall be conclusive and may be enforced in any
other jurisdiction within or outside the United States by suit on the judgment,
a certified or exemplified copy of which shall be conclusive evidence of the
fact and the amount of indebtedness. THE PARTIES AGREE TO WAIVE ANY AND ALL
RIGHTS THAT THEY MAY HAVE TO A JURY TRIAL WITH RESPECT TO DISPUTES ARISING OUT
OF THIS AGREEMENT.
Section 9.10 Successors and Assigns. Except as otherwise
expressly provided herein, the provisions hereof shall inure to the benefit of,
and be binding upon, the Company's, West's and Investor's successors and
permitted assigns. Neither this Agreement nor any rights or obligations
hereunder shall be assignable by any party hereto without the prior written
consent of the other parties hereto.
Section 9.11 No Third-Party Beneficiaries. This Agreement is
for the sole benefit of the parties hereto and their respective successors and
permitted assigns and nothing herein, express or implied, is intended or shall
confer upon any other Person any legal or equitable right, benefit or remedy of
any nature whatsoever under or by reason of this Agreement.
Section 9.12 Confidentiality. A version of this Agreement with
certain competitively sensitive information redacted will be filed by the
Company with the Motion. Each party hereto agrees not to disclose the unredacted
version of this Agreement to any third parties (other than disclosure required
by the SEC or any other Governmental Authority (including the Bankruptcy Court)
or pursuant to any listing agreement with or requirement of any relevant
national exchange or national quotation system) without appropriate
confidentiality agreements with such third parties being in place that are
reasonably acceptable to the other parties hereto.
27
IN WITNESS WHEREOF, this Agreement has been executed on behalf of the
parties hereto by their respective duly authorized officers, all as of the date
first above written.
ACE AVIATION HOLDINGS INC.
By: /s/ Sydney John Isaacs
-----------------------------------
Name: Sydney John Isaacs
Title: SVP Corporate Development
US AIRWAYS GROUP, INC.
By: /s/ Bruce R. Lakefield
-----------------------------------
Name: Bruce R. Lakefield
Title: Chief Executive Officer
AMERICA WEST HOLDINGS CORPORATION
By: /s/ W. Douglas Parker
-----------------------------------
Name: W. Douglas Parker
Title: Chairman and Chief Executive
Officer
28
Exhibit A-2 to the
Merger Agreement
INVESTMENT AGREEMENT
dated as of May 19, 2005
among
US AIRWAYS GROUP, INC.,
AMERICA WEST HOLDINGS, INC.
and
PAR INVESTMENT PARTNERS, L.P.
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS.............................................................................................2
Section 1.01 Definitions.....................................................................................2
ARTICLE II ISSUANCE AND PURCHASE OF NEW COMMON STOCK..............................................................7
Section 2.01 Issuance and Purchase of New Common Stock.......................................................7
Section 2.02 Closing.........................................................................................8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY.........................................................8
Section 3.01 Incorporation by Reference of Representations and Warranties in the Merger
Agreement.......................................................................................8
Section 3.02 Authorization; No Contravention.................................................................8
Section 3.03 Consents; No Conflicts..........................................................................9
Section 3.04 Court Orders....................................................................................9
Section 3.05 Capitalization; Securities......................................................................9
Section 3.06 Information Provided...........................................................................10
Section 3.07 Financial Advisors and Brokers.................................................................10
Section 3.08 Regulatory Status..............................................................................10
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF WEST................................................................10
Section 4.01 Incorporation by Reference of Representations and Warranties in the Merger
Agreement......................................................................................10
Section 4.02 Authorization; No Contravention................................................................11
Section 4.03 Consents; No Conflicts.........................................................................11
Section 4.04 Court Orders...................................................................................11
Section 4.05 Information Provided...........................................................................11
Section 4.06 Financial Advisors and Brokers.................................................................11
Section 4.07 Financial Plan.................................................................................12
ARTICLE V REPRESENTATIONS AND WARRANTIES OF INVESTOR.............................................................12
Section 5.01 Organization...................................................................................12
Section 5.02 Authorization; No Contravention................................................................12
Section 5.03 Consents; No Conflicts.........................................................................12
Section 5.04 Financial Advisors and Brokers.................................................................12
Section 5.05 Ownership of Equity Securities; Purpose of Investment..........................................13
Section 5.06 Financing......................................................................................13
Section 5.07 Citizenship....................................................................................13
ARTICLE VI PRE-CLOSING COVENANTS.................................................................................13
Section 6.01 Taking of Necessary Action.....................................................................13
Section 6.02 Notifications..................................................................................14
Section 6.03 Financial and Other Information................................................................14
Section 6.04 Delivery of Reports............................................................................15
i
Section 6.05 Amendments to Merger Agreement; Etc............................................................15
Section 6.06 Publicity......................................................................................15
Section 6.07 Investor Financing.............................................................................15
Section 6.08 Issuances of Equity Securities.................................................................15
Section 6.09 Transfer Taxes.................................................................................16
Section 6.10 Bankruptcy Covenants...........................................................................17
ARTICLE VII CONDITIONS...........................................................................................18
Section 7.01 Conditions to Investor's Obligations...........................................................18
Section 7.02 Conditions to the Company's Obligations........................................................22
ARTICLE VIII TERMINATION.........................................................................................23
Section 8.01 Termination of Agreement.......................................................................23
Section 8.02 Effect of Termination..........................................................................24
ARTICLE IX MISCELLANEOUS.........................................................................................25
Section 9.01 Fees and Expenses..............................................................................25
Section 9.02 Survival of Representations, Warranties and Covenants..........................................25
Section 9.03 Specific Performance...........................................................................25
Section 9.04 General Interpretive Principles................................................................25
Section 9.05 Notices........................................................................................26
Section 9.06 Entire Agreement; Amendment....................................................................26
Section 9.07 No Other Representations or Warranties.........................................................26
Section 9.08 Counterparts...................................................................................26
Section 9.09 Governing Law..................................................................................26
Section 9.10 Successors and Assigns.........................................................................27
Section 9.11 No Third-Party Beneficiaries...................................................................27
Section 9.12 Confidentiality................................................................................27
EXHIBIT A Merger Agreement
EXHIBIT B Stockholders Agreement
Schedule 1 New Common Stock
Schedule 3.05 Capitalization
Schedule 7.01(q) Terms of Revised Profit Sharing Plan
Schedule 9.05 Notices Information
ii
INVESTMENT AGREEMENT
THIS INVESTMENT AGREEMENT (together with all exhibits and
schedules hereto and as the same may be amended, supplemented or otherwise
modified from time to time in accordance with the terms hereof, the
"Agreement"), dated as of May 19, 2005, by and among Par Investment Partners,
L.P., a Delaware limited partnership (the "Investor"), US Airways Group, Inc., a
Delaware corporation, and its successors (including, as the context may require,
on or after the Effective Date, as reorganized pursuant to the Bankruptcy Code)
(the "Company"), and America West Holdings Corporation, a Delaware corporation
("West").
W I T N E S S E T H:
WHEREAS, on September 12, 2004, the Company and certain of its
Subsidiaries (the "Debtor Subsidiaries" and together with the Company, the
"Debtors") filed voluntary petitions (the "Cases") for protection under chapter
11 of the United States Bankruptcy Code (the "Bankruptcy Code") in the United
States Bankruptcy Court for the Eastern District of Virginia, Alexandria
Division (the "Bankruptcy Court") to enable the Debtors to be restructured
pursuant to one or more plans of reorganization (collectively, the "Plan");
WHEREAS, the Debtors have continued in the possession of their
assets and in the management of their businesses pursuant to Sections 1107 and
1108 of the Bankruptcy Code;
WHEREAS, pursuant to the Plan, the Company intends to cancel
all of the existing outstanding Equity Securities of the Company upon the
Effective Date and issue the New Common Stock;
WHEREAS, pursuant to the Plan, the Company, Barbell
Acquisition Corp., a Delaware corporation ("Merger Sub"), and West have entered
into an Agreement and Plan of Merger (together with all of the schedules,
exhibits and other attachments thereto, the "Merger Agreement"), attached as
Exhibit A hereto;
WHEREAS, subject to the other terms and conditions contained
herein, the Investor desires to commit to provide equity financing to the
Company;
WHEREAS, the Company intends to issue and sell to Investor,
and Investor intends to purchase from the Company, shares of New Common Stock
(such purchase, issuance and sale, the "Investment") in exchange for the
Investment Price, all on the terms provided in this Agreement;
WHEREAS, pursuant to the Other Investment Agreements, the
Company intends to issue and sell to ACE Aviation Holdings Inc., Peninsula
Investment Partners, L.P. and Eastshore Aviation, LLC (the "Other Investors")
shares of New Common Stock pursuant to investment agreements entered into by the
Other Investors in the forms previously provided to Investor and on terms and
conditions, including without limitation purchase price, that are no more
favorable to the Other Investors than the terms and conditions provided herein
and in the Stockholders Agreement are to the Investor;
1
WHEREAS, the Investor intends to enter into a Stockholders
Agreement (the "Stockholders Agreement"), substantially in the form of Exhibit B
hereto, with the Company and the Other Investors;
WHEREAS, the parties intend that the transactions contemplated
hereby will be implemented by and take effect simultaneously with the
implementation of the Plan on the Effective Date (except as to those
transactions that are expressly intended to take effect at another date);
WHEREAS, the parties intend that all of the transactions
contemplated hereby are intended to be treated as a single integrated
transaction subject to the approval of the Bankruptcy Court as soon as
reasonably practicable after the date hereof; and
WHEREAS, the Company, West and the Investor desire to make
certain representations, warranties, covenants and agreements in connection with
the transactions contemplated herein.
NOW, THEREFORE, in consideration of the premises and the
mutual representations, warranties, covenants and agreements contained herein,
the parties hereto agree as follows, in the case of the Company, subject to
Bankruptcy Court approval of this Agreement:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. As used in this Agreement, the
following terms shall have the meanings set forth below:
"Affiliate" means, with respect to any specified Person, a
Person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the specified
Person, where "control" (including the terms "controlling," "controlled by" and
"under common control with") means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract, or
otherwise; provided, however, that when used with respect to the Company,
"Affiliate" shall not include Investor or any Affiliate thereof.
"Agreement" has the meaning set forth in the preamble hereto.
"Air Wisconsin DIP Agreement" means the Junior Secured
Debtor-in-Possession Credit Facility Agreement, dated as of February 18, 2005,
by and among US Airways, Inc., as Borrower, certain affiliates thereof as
guarantors, and Eastshore Aviation, LLC, as lender, as amended, supplemented or
otherwise modified from time to time.
"Alternative Transaction" means (a) any reorganization of the
Company or (b) any sale, merger, consolidation, joint venture, recapitalization,
sale of assets or equity interests or other combination or disposition or
similar transaction or series of transactions involving at least
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40%, on a fair market value basis, of the assets of the Company and its
Operating Subsidiaries, taken as a whole, or 40% of the equity securities of the
Company.
"Approvals" has the meaning set forth in Section 7.01(e)
hereof.
"ATSB" means the Air Transportation Stabilization Board,
created pursuant to Section 102 of the Air Transportation Safety and System
Stabilization Act, P.L. 107-42, as the same may be amended from time to time.
"Bankruptcy Code" has the meaning set forth in the recitals
hereto.
"Bankruptcy Court" has the meaning set forth in the recitals
hereto.
"Board" means the board of directors of the Company
(including, with respect to periods following the Effective Date, the Company).
"Business Day" means any day other than a Saturday, Sunday or
a day on which banking institutions of the State of New York are authorized by
law or executive order to close.
"Bylaws" means the bylaws of the Company, as amended from time
to time (including, with respect to periods following the Effective Date).
"Cases" has the meaning set forth in the recitals hereto.
"Certificate of Incorporation" means the Certificate of
Incorporation of the Company, as amended from time to time, including any
certificate of designation relating to any Equity Securities of the Company
(including, in each case, with respect to periods following the Effective Date).
"Certificated Air Carrier" means a Citizen of the United
States holding an aircraft operating certificate issued pursuant to Chapter 447
of Title 49 of the United States Code or any analogous successor provision of
the United States Code, for aircraft capable of carrying ten or more individuals
or 6,000 pounds or more of cargo or that otherwise is certified or registered to
the extent required to fall within the purview of 11 U.S.C. Section 1110 or any
analogous successor provision of the Bankruptcy Code.
"Chapter 11" means Chapter 11 of the Bankruptcy Code.
"Citizen of the United States" has the meaning given to such
term in Section 40102(a)(15) of Title 49 of the Transportation Code, or any
subsequent legislation that amends, supplements or supersedes such provisions.
"Closing" means the closing of the issuance, sale and purchase
of the New Common Stock pursuant to Section 2.01 hereof.
"Closing Date" has the meaning set forth in Section 2.02(a)
hereof.
"Company" has the meaning set forth in the preamble hereto.
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"Confirmation Order" means a Final Order of the Bankruptcy
Court approving the Plan.
"Debtors" has the meaning set forth in the recitals hereto.
"Debtor Subsidiaries" has the meaning set forth in the
recitals hereto.
"Disclosure Statement" means a disclosure statement with
respect to the Plan.
"Effective Date" means the effective date of the Plan.
"Equity Securities" shall mean (i) capital stock of, or other
equity interests in, any Person, (ii) securities or other instruments
convertible into or exchangeable for shares of capital stock, voting securities
or other equity interests in such Person or (iii) options, warrants, investment
agreements or other rights to acquire the securities described in clauses (i)
and (ii), whether fixed or contingent, matured or unmatured, contractual, legal,
equitable or otherwise.
"Fair Market Value" shall mean the fair market value of the
New Common Stock, as determined by the Board. If the New Common Stock is traded
on an over-the-counter securities market or national securities exchange, "Fair
Market Value" shall mean the closing sales price of the New Common Stock
reported on such over-the-counter market or such national securities exchange on
the applicable date or, if no sales of New Common Stock have been reported for
that date, on the next preceding date for which sales where reported.
"Final Order" means an order or judgment of the Bankruptcy
Court, or other court of competent jurisdiction, as entered on the docket in the
Cases or the docket of any other court of competent jurisdiction, that has not
been reversed, stayed, modified or amended, and as to which the time to appeal
or seek reargument, reconsideration, or certiorari has expired and no appeal,
motion for reconsideration or reargument or petition for certiorari has been
timely taken, or as to which any appeal that has been taken or any petition for
certiorari, motion for reconsideration or reargument that has been or may be
filed has been resolved by the highest court to which the order or judgment was
appealed or from which reargument, reconsideration, or certiorari was sought and
the time to take any further appeal, petition for certiorari or move for
reargument shall have expired.
"Fully Diluted Basis" means the number of shares of New Common
Stock, without duplication, which are issued and outstanding or owned or held,
as applicable, at the date of determination plus the number of shares of New
Common Stock issuable pursuant to any Equity Securities then outstanding
convertible into or exchangeable or exercisable for (whether or not subject to
contingencies or passage of time, or both) shares of New Common Stock.
"Governmental Authority" means the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
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"Hearing" means the hearing conducted in the Cases in the
Bankruptcy Court seeking approval of the Motion.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the regulations promulgated thereunder.
"Investor" has the meaning set forth in the preamble hereto.
"Investor Director" means any member of the Board of the
Company nominated by Investor in accordance with the Stockholders Agreement.
"Investment" has the meaning set forth in the recitals hereto.
"Investment Price" has the meaning set forth in Section 2.01
hereof.
"Law" means any law, treaty, statute, ordinance, code, rule or
regulation of a Governmental Authority or judgment, decree, order, writ, award,
injunction or determination of a court or other Governmental Authority.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge, or
preference, priority or other security interest or preferential arrangement of
any kind or nature whatsoever intended for security (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).
"Material Adverse Effect" on any Person means (x) a material
adverse effect on the financial condition, assets, liabilities, business or
results of operations of such Person and its Subsidiaries taken as a whole,
excluding any such effect resulting from (I) changes or conditions generally
affecting the U.S. economy or financial markets, (II) changes or conditions
generally affecting any of the segments of the airline industry in which such
Person or any of its Subsidiaries operates, to the extent such conditions or
changes do not disproportionately impact such Person or its Subsidiaries (III)
changes or conditions resulting from divestiture required in order to satisfy
Section 5.1(b) of the Merger Agreement or (IV) the announcement or consummation
of the Merger Agreement, or (y) an effect that would prevent, materially delay
or materially impair the ability of such Person to consummate the Merger or the
ability of such Person or the Investor to consummate the transactions
contemplated by this Agreement. For purposes of this definition, any suspension
of commercial air travel in the United States for a period of 72 hours or more
shall be deemed to have a Material Adverse Effect on the Company and West.
"Merger" has the meaning assigned to such term in the Merger
Agreement.
"Merger Agreement" has the meaning set forth in the recitals
hereto.
"Merger Sub" has the meaning set forth in the recitals hereto.
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"Motion" means the motion and any supporting papers seeking
approval of the Transactions, in form and substance reasonably acceptable to
Investor and providing, inter alia, not less than a ten (10) day notice period
prior to the Hearing and providing for confidential treatment of portions of the
Transaction Documents as mutually agreed by the Company and the Investor.
"New Common Stock" means the class of common stock of the
Company authorized under the Certificate of Incorporation attached as Exhibit C
to the Merger Agreement and to be issued to West shareholders pursuant to the
Merger.
"Operating Companies" means, with respect to the Company, US
Airways, PSA Airlines, Inc., a Pennsylvania corporation, Piedmont Airlines,
Inc., a Maryland corporation and Material Services Company, Inc., a Delaware
corporation.
"Other Investors" has the meaning set forth in the recitals
hereto.
"Other Investments" means the purchase, issuance and sale by
the Company to the Other Investors of shares of New Common Stock pursuant to the
Other Investment Agreements.
"Other Investment Agreements" means the investment agreements
among the Company, West and each of the Other Investors.
"Person" means any individual, corporation, company,
association, partnership, limited liability company, joint venture, trust,
unincorporated organization, or Governmental Authority.
"Plan" has the meaning set forth in the recitals hereto.
"Postpetition," when used with respect to any agreement,
instrument or any obligation arising thereunder, any claim or proceeding or any
other matter, means an agreement or instrument that was first entered into or
first became effective, an obligation, claim or proceeding that first arose or
was first instituted, or another matter that first occurred, after the
commencement of the Cases, or that was entered into or became effective, or
arose, was instituted or occurred, before commencement of the Cases but has been
assumed in the Cases.
"Regulatory Approvals" means, to the extent necessary in
connection with the consummation of the transactions contemplated by the
Transaction Documents, any and all certificates, permits, licenses, franchises,
concessions, grants, consents, approvals, orders, registrations, authorizations,
waivers, variances or clearances from, or filings or registrations with,
Governmental Authorities (and shall not include clearance or approval under the
HSR Act or any other Law that may require waiting periods prior to consummation
of the Transactions).
"Representatives" means, with respect to any Person, such
Person's officers, directors, employees, agents, attorneys, accountants,
consultants, equity financing partners or financial advisors or other Person
associated with, or acting on behalf of, such a Person.
"Republic" means Republic Airways Holdings Inc., a Delaware
corporation.
6
"SEC" means the U.S. Securities and Exchange Commission.
"Securities Act" means the U.S. Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Stockholders Agreement" has the meaning set forth in the
recitals hereto.
"Subsidiary" means as to any Person, any other Person of which
more than fifty percent (50%) of the shares of the voting stock or other
ownership interests are owned or controlled, or the ability to select or elect
more than fifty percent (50%) of the directors or similar managers is held,
directly or indirectly, by such first Person or one or more of its Subsidiaries
or by such first Person and one or more of its Subsidiaries.
"Title 49" means Title 49 of the Code of Federal Regulations,
as amended and in effect from time to time.
"Transactions" means the Merger, the execution, delivery and
performance of this Agreement and each Other Investment Agreement (including the
issuance of New Common Stock hereunder and thereunder), the Stockholders
Agreement, and the execution, delivery and performance of the documents
described in Articles II and VI hereof, in each case by the applicable party
thereto.
"Transaction Contracts" means all of the Transaction Documents
other than the Plan, the Confirmation Order and the order of the Bankruptcy
Court approving the break-up fee set forth in Section 8.02(b).
"Transaction Documents" means this Agreement, the Plan, the
Confirmation Order, the Merger Agreement, each Other Investment Agreement, the
Stockholders Agreement, the order of the Bankruptcy Court approving the break-up
fee set forth in Section 8.02(b), the documents described in Articles II and VI
and all other documents necessary to consummate the Transactions and other
arrangements contemplated hereby.
"Transportation Code" means Title 49 of the United States Code
which, among other things, recodified and replaced the U.S. Transportation Code
of 1958 and the regulations promulgated thereunder, or any subsequent
legislation that amends, supplements or supersedes such provisions.
"US Airways" means US Airways, Inc., a Delaware corporation.
"West" has the meaning set forth in the preamble hereto.
ARTICLE II
ISSUANCE AND PURCHASE OF NEW COMMON STOCK
Section 2.01 Issuance and Purchase of New Common Stock. Upon
the terms and subject to the conditions set forth in this Agreement, at the
Closing, the Company will issue, sell and deliver to Investor, and Investor will
purchase from the Company, that number of shares
7
of New Common Stock set forth opposite Investor's name on Schedule 1 hereto, for
the aggregate purchase price set forth opposite Investor's name on Schedule 1
hereto (the "Investment Price").
Section 2.02 Closing. (a) Subject to the satisfaction or, if
permissible, waiver of the conditions set forth in Sections 7.01 and 7.02
hereof, the Closing shall take place at the offices of Arnold & Porter LLP, 555
Twelfth Street, NW, Washington D.C. 20004, at 10:00 a.m., Washington D.C. time,
on the first Business Day following the Effective Time (as such term is defined
in the Merger Agreement) or at such other time, date and place as the parties
may agree (the date on which the Closing occurs, the "Closing Date"); provided
that the parties shall use reasonable best efforts to have the Closing take
place on the first Business Day following the Effective Time.
(b) At the Closing, (i) the Company shall deliver to
Investor certificates representing the shares of New Common Stock to be
purchased by, and sold to, Investor pursuant to Section 2.01 hereof (registered
in the names and in the denominations designated by Investor at least two
Business Days prior to the Closing Date), together with the other documents,
certificates and opinions to be delivered pursuant to Section 7.01 hereof, and
(ii) Investor, in full payment for the shares of New Common Stock to be
purchased by, and sold to, Investor pursuant to Section 2.01 hereof, shall pay
to the Company as provided in Section 2.01 hereof (in immediately available
funds by wire transfer to the account designated by the Company, or by such
other means as may be agreed between the parties hereto), Investor's Investment
Price (less any amounts due as of the Closing Date to Investor pursuant to
Section 9.01 hereof), and shall deliver the certificate required pursuant to
Section 7.02(b) hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Investor as
follows:
Section 3.01 Incorporation by Reference of Representations and
Warranties in the Merger Agreement. The Company hereby incorporates by
reference, for the benefit of Investor as though set forth herein, the following
representations and warranties (including the defined terms and disclosure items
included therein and related thereto) in the Merger Agreement: Sections 3.2(a),
(f), (g), (h), (i), (j), (k), (l), (n), (o), (p), (q), (r), (s), (t), (u), (v),
(w) and (x). Each such representation which states that "East" (i.e., US Airways
Group, Inc.) "has made available to West" certain materials shall be deemed to
read "has made available to Investor" for purposes of this incorporation by
reference.
Section 3.02 Authorization; No Contravention. The Transactions
to be consummated by the Company and the Operating Companies and the performance
of the Transaction Contracts are within the respective corporate power and
authority of the Company and the Operating Companies (subject and after giving
effect to any required approvals of the Bankruptcy Court (including, without
limitation, to the extent applicable, the Confirmation Order) and the Plan) and
have been duly authorized by all necessary corporate and, if required,
stockholder action. This Agreement, the Merger Agreement, each Other Investment
Agreement,
8
the Stockholders Agreement and each other Transaction Contract entered into as
of the date hereof have been duly executed and delivered by the Company and the
Operating Companies party thereto (as applicable) and constitute (subject and
after giving effect to any required approvals of the Bankruptcy Court
(including, without limitation, to the extent applicable, the Confirmation
Order) and the Plan), a legal, valid and binding obligation of the Company and
such Operating Companies, respectively, enforceable in accordance with its
terms.
Section 3.03 Consents; No Conflicts. Other than the notices,
reports, filings, consents, registrations, approvals, permits or authorizations
required under the Hart Scott Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), with respect to the Company and the Operating
Companies, the execution and delivery of each of the Transaction Contracts and
the consummation of the Transactions (i) does not require any consent or
approval of, registration or filing with, or any other action by, any
Governmental Authority (subject and after giving effect to any required
approvals of the Bankruptcy Court (including, without limitation, to the extent
applicable, the Confirmation Order) and the Plan), except such as have been
obtained or made and are in full force and effect and except where failure to
obtain such consent, approval, registration, filing or other action would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company, (ii) will not violate, conflict with or result in
a breach, violation or default under (A) any applicable law, rule or regulation
or any order of or restriction imposed by any Governmental Authority and except,
in each case, where such violation of applicable law or regulation would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company or (B) the Certificate of Incorporation or Bylaws
or any other organizational documents of the Company or any of its Subsidiaries,
(iii) will not violate, conflict with or result in a breach, or default under
any Postpetition agreement, contract or obligation or Postpetition loan
agreement or any other Postpetition indebtedness agreement or instrument of
indebtedness binding upon the Company, any Operating Company or any of their
respective Subsidiaries or its assets except where such default, breach or
violation would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on the Company and (iv) will not result in the
creation or acceleration of any obligations or imposition of any Lien on any
assets or properties of the Company or any of its Subsidiaries.
Section 3.04 Court Orders. Subject and after giving effect to
any required approvals of the Bankruptcy Court (including, without limitation,
to the extent applicable, the Confirmation Order) and the Plan, the performance
of any action by the Company or the Operating Companies required or contemplated
by this Agreement or any other Transaction Document is not restrained or
enjoined by any order of the Bankruptcy Court or by any Governmental Authority
(either temporarily, preliminarily or permanently).
Section 3.05 Capitalization; Securities. Upon the Closing and
after giving effect to the Confirmation Order, the Plan, the Merger, the
Investment and the Other Investments, the issued and outstanding capital stock
of the Company shall consist solely of New Common Stock as provided on Schedule
3.05. Except as set forth on Schedule 3.05, upon the Closing and after giving
effect to the Confirmation Order, the Plan, the Merger, the Investment and the
Other Investments, there will not be any outstanding subscriptions, options,
warrants, commitments, agreements or arrangements related to the issuance or
sale of outstanding Equity Securities or securities or other instruments
convertible into or exchangeable for any Equity Securities of the
9
Company Upon the Closing Date, the New Common Stock to be issued and delivered
to the Investor pursuant to the terms hereof, shall have been duly authorized
and validly issued, fully paid, nonassessable and not subject to preemptive or
similar rights of third parties or reserved for issuance in accordance with the
terms of the Plan and Confirmation Order. The rights, preferences and privileges
of the capital stock of the Company shall be as set forth in the Certificate of
Incorporation of the Company, as amended pursuant to the Plan and in effect upon
the Closing in the form attached as Exhibit C to the Merger Agreement.
Section 3.06 Information Provided. A true and correct copy of
the Merger Agreement, and of each Other Investment Agreement, including each
schedule, exhibit and other attachment or related agreement thereto and
including in each case any amendments, supplements and modifications through the
date hereof, has been provided to Investor. There are no other agreements,
arrangements, understandings or commitments, written or oral, of any nature,
between any of the Other Investors or their affiliates, on the one hand, and the
Company, West or any of their affiliates on the other, relating to the
transactions contemplated by the Transaction Documents.
Section 3.07 Financial Advisors and Brokers. Except for
Seabury Aviation Advisors LLC and/or its Affiliates ("Seabury"), no Person has
acted, directly or indirectly, as a broker, finder or financial advisor of the
Company or any of the Operating Companies in connection with the Transaction
Documents or the transactions contemplated thereby, and except for fees payable
to Seabury by the Company, no Person acting for or on behalf of the Company or
any of the Operating Companies is entitled to receive any broker's, finder's or
similar fee or commission in respect thereof based in any way on any agreement,
arrangement or understanding made by or on behalf of the Company or any of the
Operating Companies.
Section 3.08 Regulatory Status. Neither the Company, nor any
Operating Company nor any of their respective Subsidiaries is (i) an "investment
company" as defined in, or subject to regulation under, the Investment Company
Act of 1940 or (ii) a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935. US Airways is a
Certificated Air Carrier.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF WEST
West hereby represents and warrants to Investor as follows:
Section 4.01 Incorporation by Reference of Representations and
Warranties in the Merger Agreement. West hereby incorporates by reference, for
the benefit of Investor as though set forth herein, the following
representations and warranties (including the defined terms and disclosure items
related thereto) in the Merger Agreement: Sections 3.1(a), (b), (e), (f), (g),
(h), (i), (j), (k), (m), (n), (o), (p), (q), (r), (s), (t), (u), (v) and (w).
Each such representation which states that "West" (i.e., America West Holdings
Corporation) "has made available to East" certain materials shall be deemed to
read "has made available to Investor" for purposes of this incorporation by
reference.
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Section 4.02 Authorization; No Contravention. The Transactions
to be consummated by West and performance of the Transaction Contracts to which
West is or will be a party are within the corporate power and authority of West
and have been duly authorized by all necessary corporate and, if required,
stockholder action. This Agreement, the Merger Agreement, each Other Investment
Agreement, and each other Transaction Contract to which West is a party, entered
into as of the date hereof, have been duly executed and delivered by West and
constitute a legal, valid and binding obligation of West, enforceable in
accordance with its terms.
Section 4.03 Consents; No Conflicts. Other than the notices,
reports, filings, consents, registrations, approvals, permits or authorizations
required under the HSR Act, with respect to West, the execution and delivery of
each of the Transaction Contracts to which West is or will be a party and the
consummation of the Transactions (i) does not require any consent or approval
of, registration or filing with, or any other action by, any Governmental
Authority (subject and after giving effect to any required approvals of the
Bankruptcy Court (including, without limitation, to the extent applicable, the
Confirmation Order) and the Plan), except such as have been obtained or made and
are in full force and effect and except where failure to obtain such consent,
approval, registration, filing or other action would not reasonably be expected
to have a Material Adverse Effect on West, (ii) will not violate, conflict with
or result in a breach, violation or default under (A) any applicable law, rule
or regulation or any order of or restriction imposed by any Governmental
Authority and except, in each case, where such violation of applicable law or
regulation would not reasonably be expected to have a Material Adverse Effect on
West or (B) the Certificate of Incorporation or Bylaws or any other
organizational documents of West or any of its Subsidiaries, (iii) will not
violate, conflict with or result in a breach, or default under any agreement,
contract or obligation or loan agreement or any other indebtedness agreement or
instrument of indebtedness binding upon West or any of its Subsidiaries or its
assets except where such default, breach or violation would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect on
West and (iv) will not result in the creation or acceleration of any obligations
or imposition of any Lien on any assets or properties of West or any of its
Subsidiaries.
Section 4.04 Court Orders. Subject and after giving effect to
any required approvals of the Bankruptcy Court (including, without limitation,
to the extent applicable, the Confirmation Order) and the Plan, the performance
of any action by West required or contemplated by this Agreement or any other
Transaction Document is not restrained or enjoined by any order of the
Bankruptcy Court or by any Governmental Authority (either temporarily,
preliminarily or permanently).
Section 4.05 Information Provided. West has delivered to
Investor a true and correct copy of the Merger Agreement, including any
amendments, supplements and modifications through the date hereof.
Section 4.06 Financial Advisors and Brokers. Except for
Greenhill & Co., LLC and/or its Affiliates ("Greenhill") and TPG Partners, L.P.
and/or its Affiliates ("TPG"), no Person has acted, directly or indirectly, as a
broker, finder or financial advisor of West in connection with the Transaction
Documents or the transactions contemplated thereby, and except for fees payable
to Greenhill and TPG by West, no Person acting for or on behalf of West is
11
entitled to receive any broker's, finder's or similar fee or commission in
respect thereof based in any way on any agreement, arrangement or understanding
made by or on behalf of West.
Section 4.07 Financial Plan. The financial plan provided to
Investor on May 12, 2005 (the "Financial Plan") was prepared by West in good
faith using assumptions believed by West to be reasonable, and, as of the date
hereof, the Financial Plan represents West's reasonable, good faith estimate of
the future financial performance of the Company.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF INVESTOR
Investor represents and warrants to the Company as follows:
Section 5.01 Organization. It is an entity duly organized
under the laws of the jurisdiction of its formation having all requisite power
and authority and all requisite governmental licenses, authorizations, consents
and approvals to execute, deliver and perform its obligations under this
Agreement and the Stockholders Agreement.
Section 5.02 Authorization; No Contravention. The execution,
delivery and performance by Investor of this Agreement and the Stockholders
Agreement and the consummation of the transactions contemplated hereby and
thereby, are within Investor's powers and have been duly authorized by all
necessary action and do not and will not contravene the terms of Investor's
Agreement of Limited Partnership. This Agreement constitutes and, when executed
and delivered by Investor at Closing the Stockholders Agreement will constitute,
a legal, valid and binding obligation of Investor, enforceable against Investor
in accordance with its terms.
Section 5.03 Consents; No Conflicts. Except for (i) the filing
of a notification and report form under the HSR Act and the termination or
expiration of the waiting period under the HSR Act, (ii) the filing of any other
required applications or notices with any Governmental Authority and approval of
such applications and notices, and (iii) approval by the Bankruptcy Court, no
Approval is necessary or required in connection with the execution, delivery or
performance by, or enforcement against, Investor of this Agreement or the
Stockholders Agreement or for the consummation of the transactions contemplated
hereby and thereby, except for such Approvals that would not, individually or in
the aggregate, reasonably be expected to have a material adverse effect on the
ability of Investor to consummate the Investment, and all of which have been
duly obtained, taken, given or made and are in full force and effect, except for
Approvals that would not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the ability of Investor to
consummate the Investment.
Section 5.04 Financial Advisors and Brokers. Other than
Affiliates of Investor, no Person has acted directly or indirectly as a broker,
finder or financial advisor of the Investor in connection with this Agreement,
the Stockholders Agreement or the transactions contemplated hereby or thereby,
and, other than fees that may be payable to Affiliates of Investor by Investor,
no Person acting for or on behalf of Investor is entitled to receive any
broker's, finder's or
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similar fee or commission in respect thereof based in any way on any agreement,
arrangement or understanding made by or on behalf of Investor.
Section 5.05 Ownership of Equity Securities; Purpose of
Investment. Investor is acquiring the New Common Stock under this Agreement
solely for the purpose of investment and not with a view to, or for sale in
connection with, any distribution thereof in violation of the Securities Act and
applicable state securities or "blue sky laws". Investor is an "Accredited
Investor" as such term is defined in Regulation D of the Securities Act.
Section 5.06 Financing. Investor (or its assignee, as
permitted by Section 9.10 who acquires the New Common Stock hereunder at the
Closing) has sufficient and adequate resources to consummate the transactions
contemplated by this Agreement.
Section 5.07 Citizenship. Investor (or its assignee, as
permitted by Section 9.10 who acquires the New Common Stock hereunder at the
Closing) is a Citizen of the Untied States.
ARTICLE VI
PRE-CLOSING COVENANTS
Section 6.01 Taking of Necessary Action. (a) The Company, West
and Investor (solely with respect to the Investment) shall cooperate with each
other and use (and shall cause their respective Subsidiaries to use) their
respective reasonable best efforts to take or cause to be taken all actions, and
do or cause to be done all things, necessary, proper or advisable on its part
under this Agreement and applicable Law to consummate and make effective the
Transactions as soon as practicable, including preparing and filing as promptly
as practicable all documentation to effect all necessary notices, reports and
other filings (including, without limitation, appropriate filings pursuant to
the HSR Act) and to obtain as promptly as practicable all consents,
registrations, approvals, permits and authorizations necessary or advisable to
be obtained from any third party and/or any Governmental Authority in order to
consummate the Transactions. In exercising the foregoing rights, the Company,
West and Investor shall act reasonably and as promptly as practicable. The
Company's, West's and (solely with respect to the Investment) Investor's
obligations under this Section 6.01 shall include, without limitation, the
obligation to use their respective reasonable best efforts to defend any
lawsuits or legal proceedings, whether judicial or administrative, or any other
actions by a Governmental Authority, challenging the Transactions, including
using reasonable best efforts to seek to have any stay or other injunctive
relief which would prevent or materially delay or impair the consummation of the
Transactions entered by any court or other Governmental Authority reversed on
appeal or vacated. For purposes of this Section 6.01, as it relates to Investor,
"reasonable best efforts" shall include Investor's agreement to (i) hold its
airline assets, if any, in one or more subsidiaries separate from the company
that will hold the Investor's equity interest in the Company, and (ii) nominate
an Investor Director (as defined in the Stockholders Agreement) whose service
would not conflict with applicable law. Except as provided in the immediately
preceding sentence, Investor shall not be required (1) to divest, or agree to
divest, any of its businesses or assets or any interest therein, or (2) to take
or agree to take any other action or agree to any limitation, restriction or
condition that could reasonably be expected to
13
materially impair the benefits to Investor expected, as of the date of this
Agreement, to be realized from the transactions contemplated hereby.
(b) Each of the Company, West and Investor shall, to
the extent related to the Investment, in connection with obtaining the approvals
referenced in Section 6.01(a), use its reasonable best efforts to (i) subject to
applicable law, permit the other party or the other party's outside counsel to
review in advance any proposed written communication between it and any
Governmental Authority, (ii) promptly inform each other of any communication (or
other correspondence or memoranda) received by such party from, or given by such
party to, any other Governmental Authority and of any material communication
received or given in connection with any proceeding by a private party, in each
case regarding any of the transactions contemplated hereby, (iii) consult with
each other in advance to the extent practicable of any meeting or conference
with any Governmental Authority or, in connection with any proceeding by a
private party, with any other Person, and to the extent permitted by the
applicable Governmental Authority or other Person, give the other party the
opportunity to attend and participate in such meetings and conferences, and (iv)
furnish each other with copies of all correspondence, filings and written
communications between them or their Subsidiaries or Affiliates on one hand, and
any such Governmental Authority or its respective staff on the other hand, with
respect to this Agreement and the transactions contemplated hereby, except that
(A) any materials concerning Investor's valuation of the transaction may be
redacted and (B) any proprietary information of one party not previously
disclosed to the other party may be disclosed only to the other party's outside
counsel, at the option of the disclosing party.
(c) The Company shall, in coordination with Investor
(i) file with the Bankruptcy Court a bidding procedures motion, reasonably
satisfactory to Investor, seeking approval of the break-up fee set forth in
Section 8.02(b) hereof, the expense reimbursement provisions set forth in
Section 9.01 hereof and the provisions of Section 4.20 of the Merger Agreement,
and (ii) diligently seek approval of the Transactions (consistent with the
Bidding Procedures, as hereinafter defined), and (iii) if the Company has
determined that the Merger represents a highest and best Qualified Competing
Plan Proposal (as defined in the order approving the bidding procedures), (A)
file with the Bankruptcy Court, and diligently seek approval of, the Disclosure
Statement (with the Plan attached as an exhibit thereto) reasonably satisfactory
to Investor and (B) seek to obtain, as expeditiously as possible, a Confirmation
Order with respect to the Plan that is reasonably satisfactory to the Investors.
Section 6.02 Notifications. At all times prior to the Closing
Date, Investor shall promptly notify the Company and each of the Company and
West shall promptly notify Investor in writing of any fact, change, condition,
circumstance or occurrence or nonoccurrence of any event that will or is
reasonably likely to result in such party's representations and warranties to be
untrue or inaccurate in any material respect or the failure to satisfy the
conditions to be complied with or satisfied by it hereunder; provided, however,
that the delivery of any notice pursuant to this Section 6.02 shall not be
deemed to alter or amend such party's representations or warranties or limit or
otherwise affect the remedies available hereunder to any party giving or
receiving such notice.
Section 6.03 Financial and Other Information. From and after
the date hereof, each of the Company and West shall, and shall cause each of
their respective Subsidiaries and
14
Representatives to, afford to Investor, its Affiliates and their respective
Representatives, including qualified prospective lenders to Investor that sign
appropriate confidentiality agreements, complete access, upon reasonable notice
and in such manner as will not unreasonably interfere with the conduct of such
companies' respective businesses, to their and their respective Subsidiaries
respective facilities, properties, books, contracts, commitments, records
(including information regarding any material pending or threatened legal
proceeding to which any of such companies is, or reasonably expects to be, a
party and negotiations relating to any labor agreements or labor disputes
involving the Company, West or any of their respective Subsidiaries), key
personnel, officers, independent accountants and legal counsel; provided,
however, that neither the Company nor West will be required to provide access to
employee personnel files if providing such files would be unreasonable or a
violation of applicable Law.
Section 6.04 Delivery of Reports. Each of the Company and West
and their respective Subsidiaries shall deliver to Investor, promptly following
delivery to the ATSB, the reports concerning the weekly and monthly operating
and financial data of the Company or West, as applicable, and their respective
Subsidiaries that are delivered to the ATSB.
Section 6.05 Amendments to Merger Agreement; Etc. Other than
pursuant to and in accordance with Section 4.20 of the Merger Agreement, the
Company and West will not amend the Merger Agreement, the Plan, any Other
Investment Agreement or any other Transaction Document, in each case without the
prior written approval of the Investor, such approval not to be unreasonably
withheld (it being understood that in such connection Investor is not required
to consider the interests of any other Person), and, notwithstanding the
foregoing, neither the Company nor West shall waive any condition to the
consummation of the Merger or the Plan without the prior written approval of
Investor.
Section 6.06 Publicity. Prior to the Closing, except as
required by Law or by obligations pursuant to any listing agreement with or
requirement of any national securities exchange or national quotation system on
which the Common Stock, New Common Stock or the common stock of West is listed,
admitted to trading or quoted, neither the Company (nor any of its
Subsidiaries), West (nor any of its Subsidiaries) nor Investor (nor any of its
Affiliates) shall, without the prior written consent of each other party hereto,
which consent shall not be unreasonably withheld or delayed, make any public
announcement or issue any press release with respect to the transactions
contemplated by this Agreement or the Transaction Documents. Prior to making any
public disclosure required by applicable Law or pursuant to any listing
agreement with or requirement of any relevant national exchange or national
quotation system, the disclosing party shall consult with the other parties
hereto, to the extent feasible, as to the content and timing of such public
announcement or press release. To the extent any party is required to file this
Agreement or any Transaction Document with the SEC or any other Governmental
Authority (including the Bankruptcy Court), the parties shall consult with each
other concerning information for which confidential treatment will be requested.
Section 6.07 Investor Financing. Investor shall maintain
sufficient and adequate resources to consummate the transactions contemplated by
this Agreement at the Closing.
Section 6.08 Issuances of Equity Securities. The Company shall
not accept subscriptions for, offer, issue, sell, or agree, commit or obligate
itself to offer, issue or sell, any
15
Equity Securities other than New Common Stock (a) issued to Investor pursuant to
this Agreement, (b) issued to other Persons pursuant to other investment
agreements entered into on terms and conditions, including without limitation
purchase price, that are no more favorable to such Persons than the terms and
conditions provided herein and in the Stockholders Agreement are to the Investor
up to an aggregate amount of $500,000,000 including the investments of the
Investor and the Other Investors, (c) issued to West's equityholders pursuant to
the Merger Agreement as set forth on Schedule 3.05, and (d) issued to existing
equityholders and creditors of the Company pursuant to the Plan as set forth on
Schedule 3.05, (e) issued by the Company on or prior to the Effective Date
pursuant to a rights offering by the Company to existing Company and West
stakeholders to purchase shares of New Common Stock at a price per share no less
than the purchase price per share of New Common Stock paid by Investor under
this Agreement and in an aggregate amount not to exceed the difference between
$650,000,000 and the aggregate amount of the Investment, the Other Investments
and the investment of any other Person under clause (b) above, and (f) issued by
the Company on or prior to the Effective Date at a purchase price per share no
less than the purchase price per share of New Common Stock paid by Investor
under this Agreement and otherwise on terms and conditions that are no more
favorable than the terms and conditions provided herein and in the Stockholders
Agreement, for proceeds in excess of $650,000,000 provided that (i) the sole use
of such proceeds is the redemption or repurchase of Equity Securities from
existing Company and West stakeholders at a repurchase or redemption price that
values the Equity Securities redeemed or repurchased (on an as-converted basis,
in the case of convertible securities, and, in the case of Equity Securities of
West, taking into account the Class B Merger Exchange Ratio (as defined in the
Merger Agreement)) at a price per share no more than the purchase price per
share of New Common Stock paid by Investor under this Agreement, (ii) the
aggregate value of the New Common Stock (valued on the same basis as the New
Common Stock to be issued pursuant to this Agreement) issued pursuant to this
clause (f) shall not exceed $200,000,000 and (iii) Investor is provided the
right to purchase, at its option, up to $20,000,000 of the New Common Stock to
be issued pursuant to this clause (f) at a price per share equal to the purchase
price per share of New Common Stock paid by Investor under this Agreement.
Notwithstanding the foregoing, in connection with the implementation of the
Plan, the Company may authorize and reserve for issuance under the Company's
equity incentive plan a number of shares of New Common Stock not to exceed 12.5%
of the outstanding number of shares of New Common Stock on a Fully Diluted Basis
as of the Effective Date, provided that any awards of such shares of New Common
Stock made or committed to be made at anytime before the second anniversary of
the Effective Date, (x) may only consist of options with an exercise price not
less than the lesser of (a) Fair Market Value as of the date of grant and (b)
the Investment Price (as appropriately adjusted to reflect stock splits, stock
dividends, reverse splits and similar changes with respect to the New Common
Stock effected after the Closing Date); provided that the exercise price for any
options granted as of or immediately following the Effective Date shall be not
less than the Investment Price and (y) shall not be effective unless such awards
are approved or ratified by the Board (as constituted from and after the
Effective Date as set forth in Section 1.8(a) of the Merger Agreement) or by a
committee with appropriate authority granted by such Board.
Section 6.09 Transfer Taxes. All transfer taxes, fees and
duties under applicable law incurred in connection with the Investment under
this Agreement will be borne and paid by the Company and it shall promptly
reimburse Investor for any such tax, fee or duty which Investor is required to
pay under applicable law.
16
Section 6.10 Bankruptcy Covenants. (a)Notwithstanding anything
herein to the contrary, the Company shall not, and shall cause each of the other
Debtors not to, offer, agree to, or seek approval from the Bankruptcy Court for,
and shall use their best efforts to object to any request by any other party
for, any break-up fee, work fee, expense reimbursement or any other benefit or
protection for any Person in connection with any proposed acquisition of or
investment in any of the Debtors, other than (i) West, (ii) Investor, (iii) any
Other Investor, and (iv) any other Person making an investment pursuant to
Section 6.08(b); provided that (A) such other Person is purchasing at least
$50,000,000 of New Common Stock on terms, and conditions, including without
limitation purchase price, that are no more favorable to such other Person than
the terms and conditions provided herein and in the Stockholders Agreement are
to the Investor and (B) without limitation of the preceding clause (A), any
break-up or similar fee payable to such other Person shall not exceed three
percent (3.0%) of the aggregate amount of financing to be provided by such other
Person.
(b) Each of the Debtors agrees that if the Merger Agreement
becomes the Approved Proposal (as defined in the Merger Agreement), it shall use
its best efforts to cause any order approving the Approved Proposal to prohibit
the Debtors (and any Person purporting to act on behalf of the estate of any
Debtor) from violating the provisions of Section 4.4(a) of the Merger Agreement
or from otherwise pursuing in any way any East Acquisition Proposal (as defined
in the Merger Agreement) other than the Merger Agreement unless the Merger
Agreement shall have previously been terminated in accordance with its terms.
(c) In connection with any proceedings in the Bankruptcy Court
related to the Bidding Procedures (as hereinafter defined), the order approving
the Approved Proposal or the transactions contemplated by the Merger Agreement
or this Agreement (or any Qualified Competing Plan Proposal (as defined in the
Bidding Procedures)) (a) the Company shall provide to Investor copies of all
motions, objections, pleadings, notices, proposed orders and other documents
that are filed by or on behalf of any Debtor as soon as reasonably practicable
prior to filing thereof with the Bankruptcy Court and (b) West shall provide to
Investor copies of all motions, objections, pleadings, notices, proposed orders
and other documents that are filed by or on behalf of West as soon as reasonably
practicable prior to filing thereof with the Bankruptcy Court.
(d) Except in accordance with the Bidding Procedures, the Company
and West shall not, and shall not authorize or permit any of their Subsidiaries
or any of the Company's or West's or such Subsidiaries' Representatives,
directly or indirectly, to, (i) solicit, initiate, or take any action designed
to induce a proposal or offer for an Alternative Proposal, (ii) participate in
any discussions or negotiations regarding any Alternative Proposal, or (iii)
enter into any letter of intent, agreement in principle, acquisition agreement
or other similar agreement related to any Alternative Proposal. "Alternative
Proposal" means (x) any Alternative Transaction, or proposal therefor, or (y)
any proposed investment that would, or is intended to, replace all or a material
portion of the investment contemplated by this Agreement.
17
ARTICLE VII
CONDITIONS
Section 7.01 Conditions to Investor's Obligations. The
obligation of Investor to make the Investment pursuant to Section 2.01 hereof is
subject to satisfaction or waiver of each of the following conditions precedent:
(a) Definitive Documents. Definitive Transaction
Documents (in form and substance reasonably satisfactory to Investor) shall have
been prepared, negotiated and, to the extent applicable, duly executed by the
parties (or, as applicable, their Affiliates), and approval by the Bankruptcy
Court of such documents pursuant to a Final Order, to the extent necessary,
shall have been obtained. All such Transaction Documents shall have been
executed by the parties thereto (other than Investor and its Affiliates) on or
prior to the Effective Date, shall not have been modified, amended, waived or
supplemented without the consent of Investor, shall be in effect and the
consummation of the transactions contemplated thereby shall not be stayed, and
all conditions to the obligations of the parties under such Transaction
Documents shall have been satisfied or waived. All corporate and other
proceedings to be taken by the Company, West or any of their respective
Subsidiaries in connection with such Transaction Documents and the transactions
contemplated thereby to be completed at the Closing and documents incident
thereto shall have been completed in form and substance reasonably satisfactory
to Investor, and Investor shall have received all such counterpart originals or
certified or other copies of such Transaction Documents and such other documents
as it may reasonably request. Without limiting the generality of the foregoing,
in connection with the consummation of the Plan, the Company and the Other
Investors and shall have entered into the Stockholders Agreement.
(b) Company Representations and Warranties;
Covenants. The representations and warranties of the Company set forth in
Article III hereof (without giving effect to any material adverse effect,
materiality or similar qualifier) shall have been true and correct in all
respects on and as of the date hereof and at the Closing as if made on the
Closing Date (except where such representation and warranty speaks by its terms
of a different date, in which case it shall be true and correct as of such
date), except to the extent that such inaccuracies in any such representation or
warranty have not had, and would not, individually or in the aggregate, have a
Material Adverse Effect on the Company. The Company shall have performed in all
material respects all obligations and complied in all material respects with all
agreements, undertakings, covenants and conditions required to be performed by
it hereunder at or prior to the Closing, and the Company shall have delivered to
Investor at the Closing a certificate dated the Closing Date and signed by the
chief executive officer and the chief financial officer of the Company to the
effect that the conditions set forth in this Section 7.01(b) have been
satisfied.
(c) West Representations and Warranties; Covenants.
The representations and warranties of West set forth in Article IV hereof
(without giving effect to any material adverse effect, materiality or similar
qualifier) shall have been true and correct in all respects on and as of the
date hereof and at the Closing as if made on the Closing Date (except where such
representation and warranty speaks by its terms of a different date, in which
case it shall be true and correct as of such date), except to the extent that
such inaccuracies in any such
18
representation or warranty have not had, and would not, individually or in the
aggregate, have a Material Adverse Effect on West. West shall have performed in
all material respects all obligations and complied in all material respects with
all agreements, undertakings, covenants and conditions required to be performed
by it hereunder at or prior to the Closing, and West shall have delivered to
Investor at the Closing a certificate dated the Closing Date and signed by the
chief executive officer and the chief financial officer of West to the effect
that the conditions set forth in this Section 7.01(c) have been satisfied.
(d) Compliance with Laws, No Adverse Action or
Decision. Since the date hereof, (i) no Law shall have been promulgated, enacted
or entered that restrains, enjoins, prevents, materially delays, prohibits or
otherwise makes illegal the performance of any of the Transaction Documents;
(ii) no preliminary or permanent injunction or other order by any Governmental
Authority that restrains, enjoins, prevents, delays, prohibits or otherwise
makes illegal the performance of any of the Transaction Documents shall have
been issued and remain in effect, except for such injunctions that, if obtained,
could not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the ability of Investor, the Company or West or their
respective Affiliates to consummate the Transactions; (iii) no Governmental
Authority shall have instituted any legal proceeding that seeks to restrain,
enjoin, prevent, delay, prohibit or otherwise make illegal the performance of
any of the Transaction Documents, except for any such legal proceedings which
have a significant possibility of being brought to a conclusion which could not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of Investor, the Company or West or their
respective Affiliates to consummate the Transactions, and (iv) there is no
pending or threatened investigation or litigation by any other Person relating
to the Transactions which, if determined adversely to the Company, West or
Investor, would materially impair or limit the rights and benefits of Investor
under the Transaction Documents or the economic benefits to Investor of the
Transactions in the aggregate and which Investor reasonably believes, based on
the advice of counsel, has a reasonable likelihood of success.
(e) Approvals. The Company, Investor and West shall
have received (i) all material Regulatory Approvals, which shall have become
final (provided that, if an appeal of such Regulatory Approval is pending and
such appeal has a significant possibility of being resolved adversely to the
Company, Investor or West in a manner that would reasonably be expected to have
a material adverse effect on the ability of Investor, the Company or West or
their respective Affiliates to consummate the Transactions, this clause (i)
shall be deemed not to be satisfied), and (ii) all other material approvals,
permits, authorizations, exemptions, consents, licenses and agreements from
other third parties that are necessary to permit the Transactions to be
completed or performed as contemplated by the Transaction Documents and to
permit the Investor and its Affiliates and Company and its Affiliates (including
West and its Subsidiaries) to carry on its business after such transactions in a
manner not materially inconsistent with the manner in which it was carried on
prior to the Effective Date (together with the Regulatory Approvals, the
"Approvals"), which Approvals shall not contain any condition or restriction
that materially impairs the ability of the Investor and its Affiliates or the
ability of the Company (including West and its Subsidiaries) to carry on its
business. All waiting periods imposed by applicable Law (including, without
limitation, under the HSR Act) in connection with the Transactions shall have
expired or been terminated without any action having been taken by any court of
competent jurisdiction restraining, preventing or imposing materially adverse
conditions
19
upon such transactions or upon the conduct of the business of Investor, East,
West or their respective Affiliates.
(f) Plan of Reorganization. The Plan shall be in a
form reasonably acceptable to the Investor, such Plan shall have been confirmed
by the Bankruptcy Court, and such Plan shall among other things (i) not conflict
with any material term of this Agreement, the Stockholders Agreement or the
other Transaction Documents, (ii) be substantially consistent in all material
respects with the terms of the Financial Plan including, without limitation,
concessions obtained and to be obtained from the Debtors' employees, creditors,
lessors and other claimants, and (iii) reflect a corporate and capital structure
(including liabilities) of the Company consistent with the Financial Plan. All
conditions to the effectiveness of the Plan, other than the consummation of this
Agreement, shall have been satisfied, and a Confirmation Order in a form
reasonably acceptable to the Investor shall have been entered and become a Final
Order no later than December 31, 2005.
(g) Additional East Equity. In connection with the
emergence of the Company and the Operating Companies from chapter 11 and the
consummation of the Plan, the Company will have received on the Effective Date
cash equity investments aggregating not less than $375,000,000 and not more than
$500,000,000 pursuant to this Agreement and the Other Investment Agreements (and
including any loans converted into equity under the Air Wisconsin DIP
Agreement), all on terms, including without limitation purchase price, no more
favorable to the Other Investors and Eastshore Aviation LLC than the terms of
this Agreement and the Stockholders Agreement are to the Investor, which with
all other equity capital of the Company, will be invested only in a single class
of common stock, the New Common Stock, with all such New Common Stock having the
same voting rights, and shall have no other class of capital stock authorized in
its charter other than the New Common Stock. The Company alone, and not any
Affiliate of the Company, shall have issued Equity Securities in connection with
the consummation of the Plan.
(h) Contracts. All material executory contracts and
unexpired leases, the assumption, assignment, rejection or renegotiation of
which is necessary for the successful implementation of the Plan and the
operation of the Company's business as such business is contemplated in the
Financial Plan to be conducted, shall have been assumed, assigned, rejected or
renegotiated, as applicable.
(i) Effective Date and Merger. The Effective Time (as
defined in the Merger Agreement) shall have occurred, or shall occur
concurrently with the Closing, and the Merger shall have been, or will
concurrently with the Closing be, consummated in accordance with the terms of
the Merger Agreement without amendment or waiver other than as permitted in
accordance with Section 6.05 of this Agreement.
(j) Conversion of Air Wisconsin DIP. Eastshore
Aviation LLC shall have converted the existing debt owed to it pursuant to the
Air Wisconsin DIP Agreement into New Common Stock in an amount not less than
$125,000,000 and on terms, including without limitation valuation of the New
Common Stock, no more favorable than the terms of the Investment in New Common
Stock being made by Investor pursuant to this Agreement and the Stockholders
Agreement.
20
(k) No Conversion to Chapter 7. Neither the Company's
Chapter 11 Case nor US Airways Chapter 11 Case shall have been converted to a
case under Chapter 7 of the Bankruptcy Code and no trustee shall have been
appointed under any chapter of the Bankruptcy Code in respect of either such
case.
(l) Certificate of Incorporation and Bylaws. The
Certificate of Incorporation and Bylaws, substantially in the forms attached as
Exhibits C and D, respectively, to the Merger Agreement, shall have been filed
with and accepted by the Secretary of State of the State of Delaware and shall
have become effective. As of the Closing Date, the Company shall have delivered
to Investor a complete and correct copy of the certificates of incorporation and
the bylaws or comparable governing instruments of each of the Operating
Companies, in full force and effect as of the Closing Date.
(m) Delivery. The Company shall have executed and
delivered to Investor the shares of New Common Stock pursuant to and in
accordance with Section 2.01 hereof.
(n) Board Representation. The composition of the
Board shall be as set forth in Section 1.8(a) of the Merger Agreement and, as
contemplated by the Stockholders Agreement, the Investor Director designated by
Investor, if so designated, shall have been elected or appointed to the Board
for an initial term of three years, with such election or appointment effective
as of the date that is two business days following the Closing Date.
(o) Directors' and Officers' Insurance. The Company
shall have procured and maintained in full force and effect directors' and
officers' liability insurance with respect to members of the Board of Directors
of the Company, which insurance shall be at least $100 million, and shall cover
such risks, as is customary for a corporation in the Company's and its
Affiliates respective businesses or other similar businesses.
(p) Absence of Changes. From the date of this
Agreement through the Closing Date, there shall not have occurred any change,
event, occurrence, condition or development that has or could reasonably be
expected to have a material adverse effect on the financial condition, assets,
liabilities, business or results of operations of the Company or West or that
would prevent, materially delay or materially impair the ability of the Company,
West or Investor to consummate the transactions contemplated by this Agreement.
The Company's financial and operational performance from the period from March
31, 2005 to the Closing Date shall not have deviated materially and adversely
from the performance indicated in the Financial Plan.
(q) Profit Sharing Plan. The Company's employee
profit sharing plan shall have been amended on terms no less favorable to
Investor than those set forth on Schedule 7.01(q).
(r) Listing. The shares of New Common Stock to be
issued to Investor under this Agreement shall have been authorized for listing
or quotation, as applicable, on the New York Stock Exchange or NASDAQ Stock
Market upon official notice of issuance.
21
Section 7.02 Conditions to the Company's Obligations. The
obligation of the Company to issue and sell the New Common Stock pursuant to
Section 2.01 hereof at the Closing is subject to the satisfaction or waiver of
each of the following conditions precedent:
(a) Definitive Documents. Definitive Transaction
Documents (in form and substance reasonably satisfactory to the Company)
necessary to consummate the transactions contemplated herein shall have been
prepared, negotiated and, to the extent applicable, executed by the parties (or,
as applicable, their Affiliates), and approval by the Bankruptcy Court of such
documents, as necessary, shall have been obtained. All Transaction Documents
shall not have been modified, shall be in effect and the consummation of the
transactions contemplated thereby shall not be stayed, and all conditions to the
obligations of the parties under the Transaction Contracts shall have been
satisfied or effectively waived. All corporate and other proceedings to be taken
by Investor its Affiliates in connection with the Transaction Documents and the
transactions contemplated thereby to be completed at the Closing and documents
incident thereto shall have been completed in form and substance reasonably
satisfactory to the Company, and the Company shall have received all such
counterpart originals or certified or other copies of the Transaction Documents
and such other documents as it may reasonably request.
(b) Investor Representations and Warranties;
Covenants. The representations and warranties of Investor set forth in Article V
hereof (without giving effect to any material adverse effect, materiality or
similar qualifier) shall have been true and correct in all respects, on and as
of the date hereof and at the Closing as if made on the Closing Date (except
where such representation and warranty speaks by its terms as of a different
date, in which case it shall be true and correct as of such date), except to the
extent that such inaccuracies have not had, and would not, individually or in
the aggregate, reasonably be expected to have a material adverse effect on the
ability of Investor or its Affiliates to consummate the Transactions. Investor
shall have performed in all material respects all obligations and complied in
all material respects with all agreements, undertakings, covenants and
conditions required to be performed by it at or prior to the Closing, and
Investor shall have delivered to the Company and West at the Closing a
certificate dated the Closing Date and signed on behalf of a member of Investor
to the effect that the conditions set forth in this Section 7.02(b) have been
satisfied.
(c) Compliance with Laws; No Adverse Action or
Decision. Since the date hereof, (i) no Law shall have been promulgated, enacted
or entered that restrains, enjoins, prevents, materially delays, prohibits or
otherwise makes illegal the performance of any of the Transaction Documents with
respect to the transactions contemplated thereby to be completed at the Closing;
(ii) no preliminary or permanent injunction or other order by any Governmental
Authority or other Person that restrains, enjoins, prevents, delays, prohibits
or otherwise makes illegal the performance of any of the Transaction Documents
shall have been issued and remain in effect, except for such injunctions that,
if obtained, could not, individually or in the aggregate, reasonably be expected
to have a material adverse effect on the ability of Investor, the Company or
West or their respective Affiliates to consummate the Transactions; and (iii) no
Governmental Authority shall have instituted any legal proceeding that seeks to
restrain, enjoin, prevent, delay, prohibit or otherwise make illegal the
performance of any of the Transaction Documents, except for any legal
proceedings which have a significant possibility of being brought to a
conclusion which could not, individually or in the aggregate, reasonably be
expected to have a material
22
adverse effect on the ability of Investor, the Company or West or their
respective Affiliates to consummate the Transactions.
(d) Approvals. The Company and West shall have
received (i) all material Regulatory Approvals (other than waiting periods
imposed by applicable Law as referred to later in this paragraph), which shall
have become final (provided that, if an appeal of such Regulatory Approval is
pending and such appeal has a significant possibility of being resolved
adversely to the Company or West in a manner that would reasonably be expected
to have a material adverse effect on the ability of Investor, the Company or
West or their respective Affiliates to consummate the Transactions, this clause
(i) shall be deemed not to be satisfied), and (ii) all other Approvals, which
Approvals shall not contain any condition or restriction that, in the Company's
reasonable judgment, materially impairs the Company's ability to carry on its
business. Without limiting the generality of clause (ii), any and all required
approvals under any material financing agreements to which the Company, West or
any of their respective Subsidiaries is a party shall have been obtained. All
waiting periods imposed by applicable Law (including, without limitation, under
the HSR Act) in connection with the transactions contemplated by the Transaction
Documents shall have expired or been terminated without any action having been
taken by any court of competent jurisdiction restraining, preventing or imposing
materially adverse conditions upon such transactions.
(e) Confirmation Order. The Confirmation Order,
satisfactory in form and substance in all respects to the Company, shall have
been entered by the Bankruptcy Court and, once entered, shall not have been
modified without the Company's and West's prior written consent in any manner
materially adverse to the Company, shall be in effect and shall not have been
stayed.
(f) Effective Date and the Merger. The Effective Date
and the satisfaction or waiver of all conditions to the closing of the Merger
shall have occurred not later than the Closing.
(g) Citizenship. The Company and West shall have
received reasonably satisfactory assurances as it may request that Investor is a
Citizen of the United States.
ARTICLE VIII
TERMINATION
Section 8.01 Termination of Agreement. Subject to Section 8.02
hereof, this Agreement may be terminated by notice in writing at any time prior
to the Closing by:
(a) Investor or the Company, if (i) closing of the
Transactions (including the Closing) shall not have occurred on or before
December 31, 2005 or (ii) the Merger Agreement shall have been terminated in
accordance with its terms on or before December 31, 2005;
(b) Investor, if (i) a bidding procedures order
(substantially in the form attached as Exhibit E to the Merger Agreement)
approving the break-up fee set forth in Section 8.02(b) hereof, the expense
reimbursement provisions set forth in Section 9.01 and the provisions
23
of Section 4.20 of the Merger Agreement (in the form attached as Exhibit A to
this Agreement) (the "Bidding Procedures") hereof shall not have been entered by
the Bankruptcy Court within thirty (30) days following the date hereof, but in
no event later than June 30, 2005, (ii) the Merger and the transactions
contemplated by the Merger Agreement and this Agreement shall not have been
determined by the Bankruptcy Court to be the Approved Proposal within sixty-five
(65) days after the entry by the Bankruptcy Court of the order approving the
Bidding Procedures contemplated by the preceding clause (i), (iii) there shall
have been a breach by the Company or West of any material representation,
warranty, covenant or agreement contained in this Agreement, which breach would
result in the failure to satisfy any condition set forth in Section 7.01 hereof
to Investor's obligations and that has not been cured within thirty (30) days
following receipt by the Company or West of written notice from Investor of such
breach, (iv) any condition set forth in Section 7.01 hereof to Investor's
obligations is not capable of being satisfied, (v) the Company shall enter into
a written agreement or letter of intent or agreement in principle providing for
an Alternative Proposal, or (vi) the Bankruptcy Court shall have ordered the
Company to terminate this Agreement in order to accept an Alternative Proposal;
(c) the Company, if (i) there shall have been a
breach by Investor of any material representation, warranty, covenant or
agreement contained in this Agreement which breach would result in the failure
to satisfy any condition set forth in Section 7.02 hereof to the Company's
obligations and that has not been cured within thirty (30) days following
receipt by Investor of written notice from the Company of such breach, or (ii)
any condition set forth in Section 7.02 hereof to the Company's obligations is
not capable of being satisfied; or
(d) mutual agreement in writing by the Company and
Investor.
Section 8.02 Effect of Termination.
(a) If this Agreement is terminated in accordance
with Section 8.01 hereof and the transactions contemplated hereby are not
consummated, this Agreement shall become null and void and of no further force
and effect except that (i) the terms and provisions of this Section 8.02 and
Article IX hereof shall survive the termination of this Agreement, and (ii) any
termination of this Agreement shall not relieve any party hereto from any
liability for any willful breach of its obligations hereunder. A termination
shall not void or affect any of the constituent transactions consummated prior
to such termination or any sections hereof which by their terms survive
termination.
(b) In the event that (i) the Investment is not
consummated, (ii) Investor is not in breach of any material representation,
warranty, covenant or agreement contained in this Agreement and (iii) an
Alternative Transaction is effectuated, with or without a merger with West, the
Company shall on the date of the closing of such Alternative Transaction pay to
Investor, by wire transfer of immediately available funds, a break-up fee equal
to $3,000,000.
24
ARTICLE IX
MISCELLANEOUS
Section 9.01 Fees and Expenses. (a) Except as expressly
provided herein or in any Transaction Document, each party shall bear its own
costs and expenses incurred in connection with this Agreement or any of the
Transactions. Notwithstanding the foregoing, at the Closing, the Company shall
reimburse Investor for the reasonable out-of-pocket expenses of Investor
relating to: (i) Investor's due diligence investigation of the Debtors and West;
(ii) the negotiation of this Agreement, the Stockholders Agreement, the Plan and
the Term Sheet dated as of May 9, 2005 (the "Term Sheet"); (iii) participation
in the Bankruptcy Court proceedings; (iv) the consummation of the transactions
contemplated by this Agreement, the Stockholders Agreement, the Term Sheet, the
Plan and the Merger; and (v) the enforcement of Investor's rights under the Term
Sheet, this Agreement and/or the Stockholders Agreement; provided, however, that
reimbursement pursuant to clause (i) through (iv) above shall not exceed the sum
of (x) $350,000 plus (y) filing fees, incurred in connection with any required
filings under the HSR Act.
(b) All amounts payable under this Agreement shall be
paid in immediately available funds to an account or accounts designated by the
recipient of such amounts, except as otherwise provided herein.
Section 9.02 Survival of Representations, Warranties and
Covenants. None of the representations, warranties or covenants contained in
this Agreement shall survive the Closing Date.
Section 9.03 Specific Performance. The parties hereto
specifically acknowledge that monetary damages are not an adequate remedy for
violations of this Agreement, and that any party hereto may, in its sole
discretion, apply to a court of competent jurisdiction for specific performance
or injunctive or such other relief as such court may deem just and proper in
order to enforce this Agreement or prevent any violation hereof and, to the
extent permitted by applicable Law and to the extent the party seeking such
relief would be entitled to the merits to obtain such relief, each party waives
any objection to the imposition of such relief.
Section 9.04 General Interpretive Principles. Whenever used in
this Agreement, except as otherwise expressly provided or unless the context
otherwise requires, any noun or pronoun shall be deemed to include the plural as
well as the singular and to cover all genders. The name assigned this Agreement
and the Section captions used herein are for convenience of reference only and
shall not be construed to affect the meaning, construction or effect hereof.
Unless otherwise specified, any references to a party's "judgment",
"satisfaction" or words of a similar import shall mean in such party's sole
judgment. Unless otherwise specified, the terms "hereof," "herein" and similar
terms refer to this Agreement as a whole (including the Exhibits and Schedules
hereto), and references herein to Articles or Sections refer to Articles or
Sections of this Agreement.
25
Section 9.05 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given, if
delivered personally, by telecopier or sent by first class mail, postage
prepaid, to the addresses set forth on Schedule 9.05.
Section 9.06 Entire Agreement; Amendment. This Agreement and
the documents described herein (including the Plan) or attached or delivered
pursuant hereto (including, without limitation, the other Transaction Documents)
set forth the entire agreement between the parties hereto with respect to the
transactions contemplated by this Agreement. Any provision of this Agreement may
only be amended, modified or supplemented in whole or in part at any time by an
agreement in writing among the parties hereto executed in the same manner as
this Agreement. No failure on the part of any party to exercise, and no delay in
exercising, any right shall operate as waiver thereof, nor shall any single or
partial exercise by either party of any right preclude any other or future
exercise thereof or the exercise of any other right.
Section 9.07 No Other Representations or Warranties. Except
for the representations and warranties contained in this Agreement, neither East
nor West, nor any agent, Affiliate, officer, director, employee or
representative of either or them, nor any other Person, makes, or shall be
deemed to make, any representation or warranty to Investor, express or implied,
at law or in equity, on behalf of East or West, and East and West hereby exclude
and disclaim any such representation or warranty whether by either East or West
or any or their respective agents, Affiliates, officers, directors, employees or
representatives or any other Person, notwithstanding the delivery or disclosure
to Investor or any of their respective officers, directors, partners, employees
or representatives or any other Person of any documentation or other information
by East or West or any of their respective agents, Affiliates, officers,
directors, employees or representatives or any other Person with respect to any
one or more of the foregoing.
Section 9.08 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to constitute an
original, but all of which together shall constitute one and the same document.
Section 9.09 Governing Law. To the extent not governed by the
Bankruptcy Code, this Agreement shall be governed by, and interpreted in
accordance with, the Laws of the State of New York applicable to contracts made
and to be performed in that State without reference to its conflict of laws
rules. The parties hereto agree that the appropriate and exclusive forum for any
disputes arising out of this Agreement solely between the Company and Investor
shall be the Bankruptcy Court, or if such court will not hear any such suit, the
U.S. District Court for the Southern District of New York, and, the parties
hereto irrevocably consent to the exclusive jurisdiction of such courts, and
agree to comply with all requirements necessary to give such courts
jurisdiction. The parties hereto further agree that the parties will not bring
suit with respect to any disputes arising out of this Agreement except as
expressly set forth below for the execution or enforcement of judgment, in any
jurisdiction other than the above specified courts. Each of the parties hereto
irrevocably consents to the service of process in any action or proceeding
hereunder by the mailing of copies thereof by registered or certified airmail,
postage prepaid, to the address specified in Section 9.05 hereof. The foregoing
shall not limit the rights of any party hereto to serve process in any other
manner permitted by the Law or to obtain execution of judgment in any other
jurisdiction. The parties further agree, to the extent permitted
26
by Law, that final and non-appealable judgment against any of them in any action
or proceeding contemplated above shall be conclusive and may be enforced in any
other jurisdiction within or outside the United States by suit on the judgment,
a certified or exemplified copy of which shall be conclusive evidence of the
fact and the amount of indebtedness. THE PARTIES AGREE TO WAIVE ANY AND ALL
RIGHTS THAT THEY MAY HAVE TO A JURY TRIAL WITH RESPECT TO DISPUTES ARISING OUT
OF THIS AGREEMENT.
Section 9.10 Successors and Assigns. Except as otherwise
expressly provided herein, the provisions hereof shall inure to the benefit of,
and be binding upon, the Company's, West's and Investor's successors and
permitted assigns. Neither this Agreement nor any rights or obligations
hereunder shall be assignable by any party hereto without the prior written
consent of the other parties hereto.
Section 9.11 No Third-Party Beneficiaries. This Agreement is
for the sole benefit of the parties hereto and their respective successors and
permitted assigns and nothing herein, express or implied, is intended or shall
confer upon any other Person any legal or equitable right, benefit or remedy of
any nature whatsoever under or by reason of this Agreement.
Section 9.12 Confidentiality. A version of this Agreement with
certain competitively sensitive information redacted will be filed by the
Company with the Motion. Each party hereto agrees not to disclose the unredacted
version of this Agreement to any third parties (other than disclosure required
by the SEC or any other Governmental Authority (including the Bankruptcy Court)
or pursuant to any listing agreement with or requirement of any relevant
national exchange or national quotation system) without appropriate
confidentiality agreements with such third parties being in place that are
reasonably acceptable to the other parties hereto.
27
IN WITNESS WHEREOF, this Agreement has been executed on behalf of the
parties hereto by their respective duly authorized officers, all as of the date
first above written.
PAR INVESTMENT PARTNERS, L.P.
By: PAR GROUP, L.P.
its general partner
By: PAR CAPITAL MANAGEMENT, INC.
its general partner
/s/ Edward L. Shapiro
By: -------------------------------------------
Name: Edward L. Shapiro
Title: Vice President
US AIRWAYS GROUP, INC.
By: /s/ Bruce R. Lakefield
-------------------------------------------
Name: Bruce R. Lakefield
Title: Chief Executive Officer
AMERICA WEST HOLDINGS CORPORATION
By: /s/ W. Douglas Parker
-------------------------------------------
Name: W. Douglas Parker
Title: Chairman and Chief Executive Officer
28
Exhibit A-3 to the
Merger Agreement
INVESTMENT AGREEMENT
dated as of May 19, 2005
among
US AIRWAYS GROUP, INC.,
AMERICA WEST HOLDINGS, INC.
and
PENINSULA INVESTMENT PARTNERS, L.P.
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS.............................................................................................2
Section 1.01 Definitions.................................................................................2
ARTICLE II ISSUANCE AND PURCHASE OF NEW COMMON STOCK..............................................................7
Section 2.01 Issuance and Purchase of New Common Stock...................................................7
Section 2.02 Closing.....................................................................................8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY.........................................................8
Section 3.01 Incorporation by Reference of Representations and Warranties in the
Merger Agreement............................................................................8
Section 3.02 Authorization; No Contravention.............................................................8
Section 3.03 Consents; No Conflicts......................................................................9
Section 3.04 Court Orders................................................................................9
Section 3.05 Capitalization; Securities..................................................................9
Section 3.06 Information Provided.......................................................................10
Section 3.07 Financial Advisors and Brokers.............................................................10
Section 3.08 Regulatory Status..........................................................................10
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF WEST................................................................10
Section 4.01 Incorporation by Reference of Representations and Warranties in the
Merger Agreement...........................................................................10
Section 4.02 Authorization; No Contravention............................................................11
Section 4.03 Consents; No Conflicts.....................................................................11
Section 4.04 Court Orders...............................................................................11
Section 4.05 Information Provided.......................................................................11
Section 4.06 Financial Advisors and Brokers.............................................................11
Section 4.07 Financial Plan.............................................................................12
ARTICLE V REPRESENTATIONS AND WARRANTIES OF INVESTOR.............................................................12
Section 5.01 Organization...............................................................................12
Section 5.02 Authorization; No Contravention............................................................12
Section 5.03 Consents; No Conflicts.....................................................................12
Section 5.04 Financial Advisors and Brokers.............................................................12
Section 5.05 Ownership of Equity Securities; Purpose of Investment......................................13
Section 5.06 Financing..................................................................................13
ARTICLE VI PRE-CLOSING COVENANTS.................................................................................13
Section 6.01 Taking of Necessary Action.................................................................13
Section 6.02 Notifications..............................................................................14
Section 6.03 Financial and Other Information............................................................14
Section 6.04 Delivery of Reports........................................................................15
Section 6.05 Amendments to Merger Agreement; Etc........................................................15
i
Section 6.06 Publicity..................................................................................15
Section 6.07 Investor Financing.........................................................................15
Section 6.08 Issuances of Equity Securities.............................................................15
Section 6.09 Transfer Taxes.............................................................................16
Section 6.10 Bankruptcy Covenants.......................................................................16
ARTICLE VII CONDITIONS...........................................................................................18
Section 7.01 Conditions to Investor's Obligations.......................................................18
Section 7.02 Conditions to the Company's Obligations....................................................21
ARTICLE VIII TERMINATION.........................................................................................23
Section 8.01 Termination of Agreement...................................................................23
Section 8.02 Effect of Termination......................................................................24
ARTICLE IX MISCELLANEOUS.........................................................................................24
Section 9.01 Fees and Expenses..........................................................................24
Section 9.02 Survival of Representations, Warranties and Covenants......................................25
Section 9.03 Specific Performance.......................................................................25
Section 9.04 General Interpretive Principles............................................................25
Section 9.05 Notices....................................................................................25
Section 9.06 Entire Agreement; Amendment................................................................25
Section 9.07 No Other Representations or Warranties.....................................................25
Section 9.08 Counterparts...............................................................................26
Section 9.09 Governing Law..............................................................................26
Section 9.10 Successors and Assigns.....................................................................26
Section 9.11 No Third-Party Beneficiaries...............................................................26
Section 9.12 Confidentiality............................................................................27
EXHIBIT A Merger Agreement
EXHIBIT B Stockholders Agreement
Schedule 1 New Common Stock
Schedule 3.05 Capitalization
Schedule 7.01(q) Terms of Revised Profit Sharing Plan
Schedule 9.05 Notices Information
ii
INVESTMENT AGREEMENT
THIS INVESTMENT AGREEMENT (together with all exhibits and
schedules hereto and as the same may be amended, supplemented or otherwise
modified from time to time in accordance with the terms hereof, the
"Agreement"), dated as of May 19, 2005, by and among Peninsula Investment
Partners, L.P., a Delaware limited partnership (the "Investor"), US Airways
Group, Inc., a Delaware corporation, and its successors (including, as the
context may require, on or after the Effective Date, as reorganized pursuant to
the Bankruptcy Code) (the "Company"), and America West Holdings Corporation, a
Delaware corporation ("West").
W I T N E S S E T H:
WHEREAS, on September 12, 2004, the Company and certain of its
Subsidiaries (the "Debtor Subsidiaries" and together with the Company, the
"Debtors") filed voluntary petitions (the "Cases") for protection under chapter
11 of the United States Bankruptcy Code (the "Bankruptcy Code") in the United
States Bankruptcy Court for the Eastern District of Virginia, Alexandria
Division (the "Bankruptcy Court") to enable the Debtors to be restructured
pursuant to one or more plans of reorganization (collectively, the "Plan");
WHEREAS, the Debtors have continued in the possession of their
assets and in the management of their businesses pursuant to Sections 1107 and
1108 of the Bankruptcy Code;
WHEREAS, pursuant to the Plan, the Company intends to cancel
all of the existing outstanding Equity Securities of the Company upon the
Effective Date and issue the New Common Stock;
WHEREAS, pursuant to the Plan, the Company, Barbell
Acquisition Corp., a Delaware corporation ("Merger Sub"), and West have entered
into an Agreement and Plan of Merger (together with all of the schedules,
exhibits and other attachments thereto, the "Merger Agreement"), attached as
Exhibit A hereto;
WHEREAS, subject to the other terms and conditions contained
herein, the Investor desires to commit to provide equity financing to the
Company;
WHEREAS, the Company intends to issue and sell to Investor,
and Investor intends to purchase from the Company, shares of New Common Stock
(such purchase, issuance and sale, the "Investment") in exchange for the
Investment Price, all on the terms provided in this Agreement;
WHEREAS, pursuant to the Other Investment Agreements, the
Company intends to issue and sell to ACE Aviation Holdings Inc., Par Investment
Partners, L.P. and Eastshore Aviation, LLC (the "Other Investors") shares of New
Common Stock pursuant to investment agreements entered into by the Other
Investors in the forms previously provided to Investor and on terms and
conditions, including without limitation purchase price, that are no more
favorable to the Other Investors than the terms and conditions provided herein
and in the Stockholders Agreement are to the Investor;
1
WHEREAS, the Investor intends to enter into a Stockholders
Agreement (the "Stockholders Agreement"), substantially in the form of Exhibit B
hereto, with the Company and the Other Investors;
WHEREAS, the parties intend that the transactions contemplated
hereby will be implemented by and take effect simultaneously with the
implementation of the Plan on the Effective Date (except as to those
transactions that are expressly intended to take effect at another date);
WHEREAS, the parties intend that all of the transactions
contemplated hereby are intended to be treated as a single integrated
transaction subject to the approval of the Bankruptcy Court as soon as
reasonably practicable after the date hereof; and
WHEREAS, the Company, West and the Investor desire to make
certain representations, warranties, covenants and agreements in connection with
the transactions contemplated herein.
NOW, THEREFORE, in consideration of the premises and the
mutual representations, warranties, covenants and agreements contained herein,
the parties hereto agree as follows, in the case of the Company, subject to
Bankruptcy Court approval of this Agreement:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. As used in this Agreement, the
following terms shall have the meanings set forth below:
"Affiliate" means, with respect to any specified Person, a
Person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the specified
Person, where "control" (including the terms "controlling," "controlled by" and
"under common control with") means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract, or
otherwise; provided, however, that when used with respect to the Company,
"Affiliate" shall not include Investor or any Affiliate thereof.
"Agreement" has the meaning set forth in the preamble hereto.
"Air Wisconsin DIP Agreement" means the Junior Secured
Debtor-in-Possession Credit Facility Agreement, dated as of February 18, 2005,
by and among US Airways, Inc., as Borrower, certain affiliates thereof as
guarantors, and Eastshore Aviation, LLC, as lender, as amended, supplemented or
otherwise modified from time to time.
"Alternative Transaction" means (a) any reorganization of the
Company or (b) any sale, merger, consolidation, joint venture, recapitalization,
sale of assets or equity interests or other combination or disposition or
similar transaction or series of transactions involving at least
2
40%, on a fair market value basis, of the assets of the Company and its
Operating Subsidiaries, taken as a whole, or 40% of the equity securities of the
Company.
"Approvals" has the meaning set forth in Section 7.01(e)
hereof.
"ATSB" means the Air Transportation Stabilization Board,
created pursuant to Section 102 of the Air Transportation Safety and System
Stabilization Act, P.L. 107-42, as the same may be amended from time to time.
"Bankruptcy Code" has the meaning set forth in the recitals
hereto.
"Bankruptcy Court" has the meaning set forth in the recitals
hereto.
"Board" means the board of directors of the Company
(including, with respect to periods following the Effective Date, the Company).
"Business Day" means any day other than a Saturday, Sunday or
a day on which banking institutions of the State of New York are authorized by
law or executive order to close.
"Bylaws" means the bylaws of the Company, as amended from time
to time (including, with respect to periods following the Effective Date).
"Cases" has the meaning set forth in the recitals hereto.
"Certificate of Incorporation" means the Certificate of
Incorporation of the Company, as amended from time to time, including any
certificate of designation relating to any Equity Securities of the Company
(including, in each case, with respect to periods following the Effective Date).
"Certificated Air Carrier" means a Citizen of the United
States holding an aircraft operating certificate issued pursuant to Chapter 447
of Title 49 of the United States Code or any analogous successor provision of
the United States Code, for aircraft capable of carrying ten or more individuals
or 6,000 pounds or more of cargo or that otherwise is certified or registered to
the extent required to fall within the purview of 11 U.S.C. Section 1110 or any
analogous successor provision of the Bankruptcy Code.
"Chapter 11" means Chapter 11 of the Bankruptcy Code.
"Citizen of the United States" has the meaning given to such
term in Section 40102(a)(15) of Title 49 of the Transportation Code, or any
subsequent legislation that amends, supplements or supersedes such provisions.
"Closing" means the closing of the issuance, sale and purchase
of the New Common Stock pursuant to Section 2.01 hereof.
"Closing Date" has the meaning set forth in Section 2.02(a)
hereof.
"Company" has the meaning set forth in the preamble hereto.
3
"Confirmation Order" means a Final Order of the Bankruptcy
Court approving the Plan.
"Debtors" has the meaning set forth in the recitals hereto.
"Debtor Subsidiaries" has the meaning set forth in the
recitals hereto.
"Disclosure Statement" means a disclosure statement with
respect to the Plan.
"Effective Date" means the effective date of the Plan.
"Equity Securities" shall mean (i) capital stock of, or other
equity interests in, any Person, (ii) securities or other instruments
convertible into or exchangeable for shares of capital stock, voting securities
or other equity interests in such Person or (iii) options, warrants, investment
agreements or other rights to acquire the securities described in clauses (i)
and (ii), whether fixed or contingent, matured or unmatured, contractual, legal,
equitable or otherwise.
"Fair Market Value" shall mean the fair market value of the
New Common Stock, as determined by the Board. If the New Common Stock is traded
on an over-the-counter securities market or national securities exchange, "Fair
Market Value" shall mean the closing sales price of the New Common Stock
reported on such over-the-counter market or such national securities exchange on
the applicable date or, if no sales of New Common Stock have been reported for
that date, on the next preceding date for which sales where reported.
"Final Order" means an order or judgment of the Bankruptcy
Court, or other court of competent jurisdiction, as entered on the docket in the
Cases or the docket of any other court of competent jurisdiction, that has not
been reversed, stayed, modified or amended, and as to which the time to appeal
or seek reargument, reconsideration, or certiorari has expired and no appeal,
motion for reconsideration or reargument or petition for certiorari has been
timely taken, or as to which any appeal that has been taken or any petition for
certiorari, motion for reconsideration or reargument that has been or may be
filed has been resolved by the highest court to which the order or judgment was
appealed or from which reargument, reconsideration, or certiorari was sought and
the time to take any further appeal, petition for certiorari or move for
reargument shall have expired.
"Fully Diluted Basis" means the number of shares of New Common
Stock, without duplication, which are issued and outstanding or owned or held,
as applicable, at the date of determination plus the number of shares of New
Common Stock issuable pursuant to any Equity Securities then outstanding
convertible into or exchangeable or exercisable for (whether or not subject to
contingencies or passage of time, or both) shares of New Common Stock.
"Governmental Authority" means the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
4
"Hearing" means the hearing conducted in the Cases in the
Bankruptcy Court seeking approval of the Motion.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the regulations promulgated thereunder.
"Investor" has the meaning set forth in the preamble hereto.
"Investor Director" means any member of the Board of the
Company nominated by Investor in accordance with the Stockholders Agreement.
"Investment" has the meaning set forth in the recitals hereto.
"Investment Price" has the meaning set forth in Section 2.01
hereof.
"Law" means any law, treaty, statute, ordinance, code, rule or
regulation of a Governmental Authority or judgment, decree, order, writ, award,
injunction or determination of a court or other Governmental Authority.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge, or
preference, priority or other security interest or preferential arrangement of
any kind or nature whatsoever intended for security (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).
"Material Adverse Effect" on any Person means (x) a material
adverse effect on the financial condition, assets, liabilities, business or
results of operations of such Person and its Subsidiaries taken as a whole,
excluding any such effect resulting from (I) changes or conditions generally
affecting the U.S. economy or financial markets, (II) changes or conditions
generally affecting any of the segments of the airline industry in which such
Person or any of its Subsidiaries operates, to the extent such conditions or
changes do not disproportionately impact such Person or its Subsidiaries (III)
changes or conditions resulting from divestiture required in order to satisfy
Section 5.1(b) of the Merger Agreement or (IV) the announcement or consummation
of the Merger Agreement, or (y) an effect that would prevent, materially delay
or materially impair the ability of such Person to consummate the Merger or the
ability of such Person or the Investor to consummate the transactions
contemplated by this Agreement. For purposes of this definition, any suspension
of commercial air travel in the United States for a period of 72 hours or more
shall be deemed to have a Material Adverse Effect on the Company and West.
"Merger" has the meaning assigned to such term in the Merger
Agreement.
"Merger Agreement" has the meaning set forth in the recitals
hereto.
"Merger Sub" has the meaning set forth in the recitals hereto.
5
"Motion" means the motion and any supporting papers seeking
approval of the Transactions, in form and substance reasonably acceptable to
Investor and providing, inter alia, not less than a ten (10) day notice period
prior to the Hearing and providing for confidential treatment of portions of the
Transaction Documents as mutually agreed by the Company and the Investor.
"New Common Stock" means the class of common stock of the
Company authorized under the Certificate of Incorporation attached as Exhibit C
to the Merger Agreement and to be issued to West shareholders pursuant to the
Merger.
"Operating Companies" means, with respect to the Company, US
Airways, PSA Airlines, Inc., a Pennsylvania corporation, Piedmont Airlines,
Inc., a Maryland corporation and Material Services Company, Inc., a Delaware
corporation.
"Other Investors" has the meaning set forth in the recitals
hereto.
"Other Investments" means the purchase, issuance and sale by
the Company to the Other Investors of shares of New Common Stock pursuant to the
Other Investment Agreements.
"Other Investment Agreements" means the investment agreements
among the Company, West and each of the Other Investors.
"Person" means any individual, corporation, company,
association, partnership, limited liability company, joint venture, trust,
unincorporated organization, or Governmental Authority.
"Plan" has the meaning set forth in the recitals hereto.
"Postpetition," when used with respect to any agreement,
instrument or any obligation arising thereunder, any claim or proceeding or any
other matter, means an agreement or instrument that was first entered into or
first became effective, an obligation, claim or proceeding that first arose or
was first instituted, or another matter that first occurred, after the
commencement of the Cases, or that was entered into or became effective, or
arose, was instituted or occurred, before commencement of the Cases but has been
assumed in the Cases.
"Regulatory Approvals" means, to the extent necessary in
connection with the consummation of the transactions contemplated by the
Transaction Documents, any and all certificates, permits, licenses, franchises,
concessions, grants, consents, approvals, orders, registrations, authorizations,
waivers, variances or clearances from, or filings or registrations with,
Governmental Authorities (and shall not include clearance or approval under the
HSR Act or any other Law that may require waiting periods prior to consummation
of the Transactions).
"Representatives" means, with respect to any Person, such
Person's officers, directors, employees, agents, attorneys, accountants,
consultants, equity financing partners or financial advisors or other Person
associated with, or acting on behalf of, such a Person.
"Republic" means Republic Airways Holdings Inc., a Delaware
corporation.
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"SEC" means the U.S. Securities and Exchange Commission.
"Securities Act" means the U.S. Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Stockholders Agreement" has the meaning set forth in the
recitals hereto.
"Subsidiary" means as to any Person, any other Person of which
more than fifty percent (50%) of the shares of the voting stock or other
ownership interests are owned or controlled, or the ability to select or elect
more than fifty percent (50%) of the directors or similar managers is held,
directly or indirectly, by such first Person or one or more of its Subsidiaries
or by such first Person and one or more of its Subsidiaries.
"Title 49" means Title 49 of the Code of Federal Regulations,
as amended and in effect from time to time.
"Transactions" means the Merger, the execution, delivery and
performance of this Agreement and each Other Investment Agreement (including the
issuance of New Common Stock hereunder and thereunder), the Stockholders
Agreement, and the execution, delivery and performance of the documents
described in Articles II and VI hereof, in each case by the applicable party
thereto.
"Transaction Contracts" means all of the Transaction Documents
other than the Plan, the Confirmation Order and the order of the Bankruptcy
Court approving the break-up fee set forth in Section 8.02(b).
"Transaction Documents" means this Agreement, the Plan, the
Confirmation Order, the Merger Agreement, each Other Investment Agreement, the
Stockholders Agreement, the order of the Bankruptcy Court approving the break-up
fee set forth in Section 8.02(b), the documents described in Articles II and VI
and all other documents necessary to consummate the Transactions and other
arrangements contemplated hereby.
"Transportation Code" means Title 49 of the United States Code
which, among other things, recodified and replaced the U.S. Transportation Code
of 1958 and the regulations promulgated thereunder, or any subsequent
legislation that amends, supplements or supersedes such provisions.
"US Airways" means US Airways, Inc., a Delaware corporation.
"West" has the meaning set forth in the preamble hereto.
ARTICLE II
ISSUANCE AND PURCHASE OF NEW COMMON STOCK
Section 2.01 Issuance and Purchase of New Common Stock. Upon
the terms and subject to the conditions set forth in this Agreement, at the
Closing, the Company will issue, sell and deliver to Investor, and Investor will
purchase from the Company, that number of shares
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of New Common Stock set forth opposite Investor's name on Schedule 1 hereto, for
the aggregate purchase price set forth opposite Investor's name on Schedule 1
hereto (the "Investment Price").
Section 2.02 Closing. (a) Subject to the satisfaction or, if
permissible, waiver of the conditions set forth in Sections 7.01 and 7.02
hereof, the Closing shall take place at the offices of Arnold & Porter LLP, 555
Twelfth Street, NW, Washington D.C. 20004, at 10:00 a.m., Washington D.C. time,
on the first Business Day following the Effective Time (as such term is defined
in the Merger Agreement) or at such other time, date and place as the parties
may agree (the date on which the Closing occurs, the "Closing Date"); provided
that the parties shall use reasonable best efforts to have the Closing take
place on the first Business Day following the Effective Time.
(b) At the Closing, (i) the Company shall deliver to
Investor certificates representing the shares of New Common Stock to be
purchased by, and sold to, Investor pursuant to Section 2.01 hereof (registered
in the names and in the denominations designated by Investor at least two
Business Days prior to the Closing Date), together with the other documents,
certificates and opinions to be delivered pursuant to Section 7.01 hereof, and
(ii) Investor, in full payment for the shares of New Common Stock to be
purchased by, and sold to, Investor pursuant to Section 2.01 hereof, shall pay
to the Company as provided in Section 2.01 hereof (in immediately available
funds by wire transfer to the account designated by the Company, or by such
other means as may be agreed between the parties hereto), Investor's Investment
Price (less any amounts due as of the Closing Date to Investor pursuant to
Section 9.01 hereof), and shall deliver the certificate required pursuant to
Section 7.02(b) hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Investor as
follows:
Section 3.01 Incorporation by Reference of Representations and
Warranties in the Merger Agreement. The Company hereby incorporates by
reference, for the benefit of Investor as though set forth herein, the following
representations and warranties (including the defined terms and disclosure items
included therein and related thereto) in the Merger Agreement: Sections 3.2(a),
(f), (g), (h), (i), (j), (k), (l), (n), (o), (p), (q), (r), (s), (t), (u), (v),
(w) and (x). Each such representation which states that "East" (i.e., US Airways
Group, Inc.) "has made available to West" certain materials shall be deemed to
read "has made available to Investor" for purposes of this incorporation by
reference.
Section 3.02 Authorization; No Contravention. The Transactions
to be consummated by the Company and the Operating Companies and the performance
of the Transaction Contracts are within the respective corporate power and
authority of the Company and the Operating Companies (subject and after giving
effect to any required approvals of the Bankruptcy Court (including, without
limitation, to the extent applicable, the Confirmation Order) and the Plan) and
have been duly authorized by all necessary corporate and, if required,
stockholder action. This Agreement, the Merger Agreement, each Other Investment
Agreement,
8
the Stockholders Agreement and each other Transaction Contract entered into as
of the date hereof have been duly executed and delivered by the Company and the
Operating Companies party thereto (as applicable) and constitute (subject and
after giving effect to any required approvals of the Bankruptcy Court
(including, without limitation, to the extent applicable, the Confirmation
Order) and the Plan), a legal, valid and binding obligation of the Company and
such Operating Companies, respectively, enforceable in accordance with its
terms.
Section 3.03 Consents; No Conflicts. Other than the notices,
reports, filings, consents, registrations, approvals, permits or authorizations
required under the Hart Scott Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), with respect to the Company and the Operating
Companies, the execution and delivery of each of the Transaction Contracts and
the consummation of the Transactions (i) does not require any consent or
approval of, registration or filing with, or any other action by, any
Governmental Authority (subject and after giving effect to any required
approvals of the Bankruptcy Court (including, without limitation, to the extent
applicable, the Confirmation Order) and the Plan), except such as have been
obtained or made and are in full force and effect and except where failure to
obtain such consent, approval, registration, filing or other action would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company, (ii) will not violate, conflict with or result in
a breach, violation or default under (A) any applicable law, rule or regulation
or any order of or restriction imposed by any Governmental Authority and except,
in each case, where such violation of applicable law or regulation would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company or (B) the Certificate of Incorporation or Bylaws
or any other organizational documents of the Company or any of its Subsidiaries,
(iii) will not violate, conflict with or result in a breach, or default under
any Postpetition agreement, contract or obligation or Postpetition loan
agreement or any other Postpetition indebtedness agreement or instrument of
indebtedness binding upon the Company, any Operating Company or any of their
respective Subsidiaries or its assets except where such default, breach or
violation would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on the Company and (iv) will not result in the
creation or acceleration of any obligations or imposition of any Lien on any
assets or properties of the Company or any of its Subsidiaries.
Section 3.04 Court Orders. Subject and after giving effect to
any required approvals of the Bankruptcy Court (including, without limitation,
to the extent applicable, the Confirmation Order) and the Plan, the performance
of any action by the Company or the Operating Companies required or contemplated
by this Agreement or any other Transaction Document is not restrained or
enjoined by any order of the Bankruptcy Court or by any Governmental Authority
(either temporarily, preliminarily or permanently).
Section 3.05 Capitalization; Securities. Upon the Closing and
after giving effect to the Confirmation Order, the Plan, the Merger, the
Investment and the Other Investments, the issued and outstanding capital stock
of the Company shall consist solely of New Common Stock as provided on Schedule
3.05. Except as set forth on Schedule 3.05, upon the Closing and after giving
effect to the Confirmation Order, the Plan, the Merger, the Investment and the
Other Investments, there will not be any outstanding subscriptions, options,
warrants, commitments, agreements or arrangements related to the issuance or
sale of outstanding Equity Securities or securities or other instruments
convertible into or exchangeable for any Equity Securities of the
9
Company Upon the Closing Date, the New Common Stock to be issued and delivered
to the Investor pursuant to the terms hereof, shall have been duly authorized
and validly issued, fully paid, nonassessable and not subject to preemptive or
similar rights of third parties or reserved for issuance in accordance with the
terms of the Plan and Confirmation Order. The rights, preferences and privileges
of the capital stock of the Company shall be as set forth in the Certificate of
Incorporation of the Company, as amended pursuant to the Plan and in effect upon
the Closing in the form attached as Exhibit C to the Merger Agreement.
Section 3.06 Information Provided. A true and correct copy of
the Merger Agreement, and of each Other Investment Agreement, including each
schedule, exhibit and other attachment or related agreement thereto and
including in each case any amendments, supplements and modifications through the
date hereof, has been provided to Investor. There are no other agreements,
arrangements, understandings or commitments, written or oral, of any nature,
between any of the Other Investors or their affiliates, on the one hand, and the
Company, West or any of their affiliates on the other, relating to the
transactions contemplated by the Transaction Documents.
Section 3.07 Financial Advisors and Brokers. Except for
Seabury Aviation Advisors LLC and/or its Affiliates ("Seabury"), no Person has
acted, directly or indirectly, as a broker, finder or financial advisor of the
Company or any of the Operating Companies in connection with the Transaction
Documents or the transactions contemplated thereby, and except for fees payable
to Seabury by the Company, no Person acting for or on behalf of the Company or
any of the Operating Companies is entitled to receive any broker's, finder's or
similar fee or commission in respect thereof based in any way on any agreement,
arrangement or understanding made by or on behalf of the Company or any of the
Operating Companies.
Section 3.08 Regulatory Status. Neither the Company, nor any
Operating Company nor any of their respective Subsidiaries is (i) an "investment
company" as defined in, or subject to regulation under, the Investment Company
Act of 1940 or (ii) a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935. US Airways is a
Certificated Air Carrier.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF WEST
West hereby represents and warrants to Investor as follows:
Section 4.01 Incorporation by Reference of Representations and
Warranties in the Merger Agreement. West hereby incorporates by reference, for
the benefit of Investor as though set forth herein, the following
representations and warranties (including the defined terms and disclosure items
related thereto) in the Merger Agreement: Sections 3.1(a), (b), (e), (f), (g),
(h), (i), (j), (k), (m), (n), (o), (p), (q), (r), (s), (t), (u), (v) and (w).
Each such representation which states that "West" (i.e., America West Holdings
Corporation) "has made available to East" certain materials shall be deemed to
read "has made available to Investor" for purposes of this incorporation by
reference.
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Section 4.02 Authorization; No Contravention. The Transactions
to be consummated by West and performance of the Transaction Contracts to which
West is or will be a party are within the corporate power and authority of West
and have been duly authorized by all necessary corporate and, if required,
stockholder action. This Agreement, the Merger Agreement, each Other Investment
Agreement, and each other Transaction Contract to which West is a party, entered
into as of the date hereof, have been duly executed and delivered by West and
constitute a legal, valid and binding obligation of West, enforceable in
accordance with its terms.
Section 4.03 Consents; No Conflicts. Other than the notices,
reports, filings, consents, registrations, approvals, permits or authorizations
required under the HSR Act, with respect to West, the execution and delivery of
each of the Transaction Contracts to which West is or will be a party and the
consummation of the Transactions (i) does not require any consent or approval
of, registration or filing with, or any other action by, any Governmental
Authority (subject and after giving effect to any required approvals of the
Bankruptcy Court (including, without limitation, to the extent applicable, the
Confirmation Order) and the Plan), except such as have been obtained or made and
are in full force and effect and except where failure to obtain such consent,
approval, registration, filing or other action would not reasonably be expected
to have a Material Adverse Effect on West, (ii) will not violate, conflict with
or result in a breach, violation or default under (A) any applicable law, rule
or regulation or any order of or restriction imposed by any Governmental
Authority and except, in each case, where such violation of applicable law or
regulation would not reasonably be expected to have a Material Adverse Effect on
West or (B) the Certificate of Incorporation or Bylaws or any other
organizational documents of West or any of its Subsidiaries, (iii) will not
violate, conflict with or result in a breach, or default under any agreement,
contract or obligation or loan agreement or any other indebtedness agreement or
instrument of indebtedness binding upon West or any of its Subsidiaries or its
assets except where such default, breach or violation would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect on
West and (iv) will not result in the creation or acceleration of any obligations
or imposition of any Lien on any assets or properties of West or any of its
Subsidiaries.
Section 4.04 Court Orders. Subject and after giving effect to
any required approvals of the Bankruptcy Court (including, without limitation,
to the extent applicable, the Confirmation Order) and the Plan, the performance
of any action by West required or contemplated by this Agreement or any other
Transaction Document is not restrained or enjoined by any order of the
Bankruptcy Court or by any Governmental Authority (either temporarily,
preliminarily or permanently).
Section 4.05 Information Provided. West has delivered to
Investor a true and correct copy of the Merger Agreement, including any
amendments, supplements and modifications through the date hereof.
Section 4.06 Financial Advisors and Brokers. Except for
Greenhill & Co., LLC and/or its Affiliates ("Greenhill") and TPG Partners, L.P.
and/or its Affiliates ("TPG"), no Person has acted, directly or indirectly, as a
broker, finder or financial advisor of West in connection with the Transaction
Documents or the transactions contemplated thereby, and except for fees payable
to Greenhill and TPG by West, no Person acting for or on behalf of West is
11
entitled to receive any broker's, finder's or similar fee or commission in
respect thereof based in any way on any agreement, arrangement or understanding
made by or on behalf of West.
Section 4.07 Financial Plan. The financial plan provided to
Investor on May 12, 2005 (the "Financial Plan") was prepared by West in good
faith using assumptions believed by West to be reasonable, and, as of the date
hereof, the Financial Plan represents West's reasonable, good faith estimate of
the future financial performance of the Company.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF INVESTOR
Investor represents and warrants to the Company as follows:
Section 5.01 Organization. It is an entity duly organized
under the laws of the jurisdiction of its formation having all requisite power
and authority and all requisite governmental licenses, authorizations, consents
and approvals to execute, deliver and perform its obligations under this
Agreement and the Stockholders Agreement.
Section 5.02 Authorization; No Contravention. The execution,
delivery and performance by Investor of this Agreement and the Stockholders
Agreement and the consummation of the transactions contemplated hereby and
thereby, are within Investor's powers and have been duly authorized by all
necessary action and do not and will not contravene the terms of Investor's
Agreement of Limited Partnership. This Agreement constitutes and, when executed
and delivered by Investor at Closing the Stockholders Agreement will constitute,
a legal, valid and binding obligation of Investor, enforceable against Investor
in accordance with its terms.
Section 5.03 Consents; No Conflicts. Except for (i), if
required, the filing of a notification and report form under the HSR Act and the
termination or expiration of the waiting period under the HSR Act, (ii) the
filing of any other required applications or notices with any Governmental
Authority and approval of such applications and notices, and (iii) approval by
the Bankruptcy Court, no Approval is necessary or required in connection with
the execution, delivery or performance by, or enforcement against, Investor of
this Agreement or the Stockholders Agreement or for the consummation of the
transactions contemplated hereby and thereby, except for such Approvals that
would not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the ability of Investor to consummate the Investment,
and all of which have been duly obtained, taken, given or made and are in full
force and effect, except for Approvals that would not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
ability of Investor to consummate the Investment.
Section 5.04 Financial Advisors and Brokers. Other than
Affiliates of Investor, no Person has acted directly or indirectly as a broker,
finder or financial advisor of the Investor in connection with this Agreement,
the Stockholders Agreement or the transactions contemplated hereby or thereby,
and, other than fees that may be payable to Affiliates of Investor by Investor,
no Person acting for or on behalf of Investor is entitled to receive any
broker's, finder's or
12
similar fee or commission in respect thereof based in any way on any agreement,
arrangement or understanding made by or on behalf of Investor.
Section 5.05 Ownership of Equity Securities; Purpose of
Investment. Investor is acquiring the New Common Stock under this Agreement
solely for the purpose of investment and not with a view to, or for sale in
connection with, any distribution thereof in violation of the Securities Act and
applicable state securities or "blue sky laws". Investor is an "Accredited
Investor" as such term is defined in Regulation D of the Securities Act.
Section 5.06 Financing. Investor (or its assignee, as
permitted by Section 9.10 who acquires the New Common Stock hereunder at the
Closing) has sufficient and adequate resources to consummate the transactions
contemplated by this Agreement.
ARTICLE VI
PRE-CLOSING COVENANTS
Section 6.01 Taking of Necessary Action. (a) The Company, West
and Investor (solely with respect to the Investment) shall cooperate with each
other and use (and shall cause their respective Subsidiaries to use) their
respective reasonable best efforts to take or cause to be taken all actions, and
do or cause to be done all things, necessary, proper or advisable on its part
under this Agreement and applicable Law to consummate and make effective the
Transactions as soon as practicable, including preparing and filing as promptly
as practicable all documentation to effect all necessary notices, reports and
other filings (including, without limitation, appropriate filings pursuant to
the HSR Act) and to obtain as promptly as practicable all consents,
registrations, approvals, permits and authorizations necessary or advisable to
be obtained from any third party and/or any Governmental Authority in order to
consummate the Transactions. In exercising the foregoing rights, the Company,
West and Investor shall act reasonably and as promptly as practicable. The
Company's, West's and (solely with respect to the Investment) Investor's
obligations under this Section 6.01 shall include, without limitation, the
obligation to use their respective reasonable best efforts to defend any
lawsuits or legal proceedings, whether judicial or administrative, or any other
actions by a Governmental Authority, challenging the Transactions, including
using reasonable best efforts to seek to have any stay or other injunctive
relief which would prevent or materially delay or impair the consummation of the
Transactions entered by any court or other Governmental Authority reversed on
appeal or vacated. For purposes of this Section 6.01, as it relates to Investor,
"reasonable best efforts" shall include Investor's agreement to (i) hold its
airline assets, if any, in one or more subsidiaries separate from the company
that will hold the Investor's equity interest in the Company, and (ii) nominate
an Investor Director (as defined in the Stockholders Agreement) whose service
would not conflict with applicable law. Except as provided in the immediately
preceding sentence, Investor shall not be required (1) to divest, or agree to
divest, any of its businesses or assets or any interest therein, or (2) to take
or agree to take any other action or agree to any limitation, restriction or
condition that could reasonably be expected to materially impair the benefits to
Investor expected, as of the date of this Agreement, to be realized from the
transactions contemplated hereby.
13
(b) Each of the Company, West and Investor shall, to
the extent related to the Investment, in connection with obtaining the approvals
referenced in Section 6.01(a), use its reasonable best efforts to (i) subject to
applicable law, permit the other party or the other party's outside counsel to
review in advance any proposed written communication between it and any
Governmental Authority, (ii) promptly inform each other of any communication (or
other correspondence or memoranda) received by such party from, or given by such
party to, any other Governmental Authority and of any material communication
received or given in connection with any proceeding by a private party, in each
case regarding any of the transactions contemplated hereby, (iii) consult with
each other in advance to the extent practicable of any meeting or conference
with any Governmental Authority or, in connection with any proceeding by a
private party, with any other Person, and to the extent permitted by the
applicable Governmental Authority or other Person, give the other party the
opportunity to attend and participate in such meetings and conferences, and (iv)
furnish each other with copies of all correspondence, filings and written
communications between them or their Subsidiaries or Affiliates on one hand, and
any such Governmental Authority or its respective staff on the other hand, with
respect to this Agreement and the transactions contemplated hereby, except that
(A) any materials concerning Investor's valuation of the transaction may be
redacted and (B) any proprietary information of one party not previously
disclosed to the other party may be disclosed only to the other party's outside
counsel, at the option of the disclosing party.
(c) The Company shall, in coordination with Investor
(i) file with the Bankruptcy Court a bidding procedures motion, reasonably
satisfactory to Investor, seeking approval of the break-up fee set forth in
Section 8.02(b) hereof, the expense reimbursement provisions set forth in
Section 9.01 hereof and the provisions of Section 4.20 of the Merger Agreement,
and (ii) diligently seek approval of the Transactions (consistent with the
Bidding Procedures, as hereinafter defined), and (iii) if the Company has
determined that the Merger represents a highest and best Qualified Competing
Plan Proposal (as defined in the order approving the bidding procedures), (A)
file with the Bankruptcy Court, and diligently seek approval of, the Disclosure
Statement (with the Plan attached as an exhibit thereto) reasonably satisfactory
to Investor and (B) seek to obtain, as expeditiously as possible, a Confirmation
Order with respect to the Plan that is reasonably satisfactory to the Investors.
Section 6.02 Notifications. At all times prior to the Closing
Date, Investor shall promptly notify the Company and each of the Company and
West shall promptly notify Investor in writing of any fact, change, condition,
circumstance or occurrence or nonoccurrence of any event that will or is
reasonably likely to result in such party's representations and warranties to be
untrue or inaccurate in any material respect or the failure to satisfy the
conditions to be complied with or satisfied by it hereunder; provided, however,
that the delivery of any notice pursuant to this Section 6.02 shall not be
deemed to alter or amend such party's representations or warranties or limit or
otherwise affect the remedies available hereunder to any party giving or
receiving such notice.
Section 6.03 Financial and Other Information. From and after
the date hereof, each of the Company and West shall, and shall cause each of
their respective Subsidiaries and Representatives to, afford to Investor, its
Affiliates and their respective Representatives, including qualified prospective
lenders to Investor that sign appropriate confidentiality agreements, complete
access, upon reasonable notice and in such manner as will not
14
unreasonably interfere with the conduct of such companies' respective
businesses, to their and their respective Subsidiaries respective facilities,
properties, books, contracts, commitments, records (including information
regarding any material pending or threatened legal proceeding to which any of
such companies is, or reasonably expects to be, a party and negotiations
relating to any labor agreements or labor disputes involving the Company, West
or any of their respective Subsidiaries), key personnel, officers, independent
accountants and legal counsel; provided, however, that neither the Company nor
West will be required to provide access to employee personnel files if providing
such files would be unreasonable or a violation of applicable Law.
Section 6.04 Delivery of Reports. Each of the Company and West
and their respective Subsidiaries shall deliver to Investor, promptly following
delivery to the ATSB, the reports concerning the weekly and monthly operating
and financial data of the Company or West, as applicable, and their respective
Subsidiaries that are delivered to the ATSB.
Section 6.05 Amendments to Merger Agreement; Etc. Other than
pursuant to and in accordance with Section 4.20 of the Merger Agreement, the
Company and West will not amend the Merger Agreement, the Plan, any Other
Investment Agreement or any other Transaction Document, in each case without the
prior written approval of the Investor, such approval not to be unreasonably
withheld (it being understood that in such connection Investor is not required
to consider the interests of any other Person), and, notwithstanding the
foregoing, neither the Company nor West shall waive any condition to the
consummation of the Merger or the Plan without the prior written approval of
Investor.
Section 6.06 Publicity. Prior to the Closing, except as
required by Law or by obligations pursuant to any listing agreement with or
requirement of any national securities exchange or national quotation system on
which the Common Stock, New Common Stock or the common stock of West is listed,
admitted to trading or quoted, neither the Company (nor any of its
Subsidiaries), West (nor any of its Subsidiaries) nor Investor (nor any of its
Affiliates) shall, without the prior written consent of each other party hereto,
which consent shall not be unreasonably withheld or delayed, make any public
announcement or issue any press release with respect to the transactions
contemplated by this Agreement or the Transaction Documents. Prior to making any
public disclosure required by applicable Law or pursuant to any listing
agreement with or requirement of any relevant national exchange or national
quotation system, the disclosing party shall consult with the other parties
hereto, to the extent feasible, as to the content and timing of such public
announcement or press release. To the extent any party is required to file this
Agreement or any Transaction Document with the SEC or any other Governmental
Authority (including the Bankruptcy Court), the parties shall consult with each
other concerning information for which confidential treatment will be requested.
Section 6.07 Investor Financing. Investor shall maintain
sufficient and adequate resources to consummate the transactions contemplated by
this Agreement at the Closing.
Section 6.08 Issuances of Equity Securities. The Company shall
not accept subscriptions for, offer, issue, sell, or agree, commit or obligate
itself to offer, issue or sell, any Equity Securities other than New Common
Stock (a) issued to Investor pursuant to this Agreement, (b) issued to other
Persons pursuant to other investment agreements entered into on terms and
conditions, including without limitation purchase price, that are no more
favorable to
15
such Persons than the terms and conditions provided herein and in
the Stockholders Agreement are to the Investor up to an aggregate amount of
$500,000,000 including the investments of the Investor and the Other Investors,
(c) issued to West's equityholders pursuant to the Merger Agreement as set forth
on Schedule 3.05, and (d) issued to existing equityholders and creditors of the
Company pursuant to the Plan as set forth on Schedule 3.05, (e) issued by the
Company on or prior to the Effective Date pursuant to a rights offering by the
Company to existing Company and West stakeholders to purchase shares of New
Common Stock at a price per share no less than the purchase price per share of
New Common Stock paid by Investor under this Agreement and in an aggregate
amount not to exceed the difference between $650,000,000 and the aggregate
amount of the Investment, the Other Investments and the investment of any other
Person under clause (b) above, and (f) issued by the Company on or prior to the
Effective Date at a purchase price per share no less than the purchase price per
share of New Common Stock paid by Investor under this Agreement and otherwise on
terms and conditions that are no more favorable than the terms and conditions
provided herein and in the Stockholders Agreement, for proceeds in excess of
$650,000,000 provided that (i) the sole use of such proceeds is the redemption
or repurchase of Equity Securities from existing Company and West stakeholders
at a repurchase or redemption price that values the Equity Securities redeemed
or repurchased (on an as-converted basis, in the case of convertible securities,
and, in the case of Equity Securities of West, taking into account the Class B
Merger Exchange Ratio (as defined in the Merger Agreement)) at a price per share
no more than the purchase price per share of New Common Stock paid by Investor
under this Agreement, (ii) the aggregate value of the New Common Stock (valued
on the same basis as the New Common Stock to be issued pursuant to this
Agreement) issued pursuant to this clause (f) shall not exceed $200,000,000 and
(iii) Investor is provided the right to purchase, at its option, up to
$10,000,000 of the New Common Stock to be issued pursuant to this clause (f) at
a price per share equal to the purchase price per share of New Common Stock paid
by Investor under this Agreement. Notwithstanding the foregoing, in connection
with the implementation of the Plan, the Company may authorize and reserve for
issuance under the Company's equity incentive plan a number of shares of New
Common Stock not to exceed 12.5% of the outstanding number of shares of New
Common Stock on a Fully Diluted Basis as of the Effective Date, provided that
any awards of such shares of New Common Stock made or committed to be made at
anytime before the second anniversary of the Effective Date, (x) may only
consist of options with an exercise price not less than the lesser of (a) Fair
Market Value as of the date of grant and (b) the Investment Price (as
appropriately adjusted to reflect stock splits, stock dividends, reverse splits
and similar changes with respect to the New Common Stock effected after the
Closing Date); provided that the exercise price for any options granted as of or
immediately following the Effective Date shall be not less than the Investment
Price and (y) shall not be effective unless such awards are approved or ratified
by the Board (as constituted from and after the Effective Date as set forth in
Section 1.8(a) of the Merger Agreement) or by a committee with appropriate
authority granted by such Board.
Section 6.09 Transfer Taxes. All transfer taxes, fees and
duties under applicable law incurred in connection with the Investment under
this Agreement will be borne and paid by the Company and it shall promptly
reimburse Investor for any such tax, fee or duty which Investor is required to
pay under applicable law.
Section 6.10 Bankruptcy Covenants. (a) Notwithstanding
anything herein to the contrary, the Company shall not, and shall cause each of
the other Debtors not to, offer, agree
16
to, or seek approval from the Bankruptcy Court for, and shall use their best
efforts to object to any request by any other party for, any break-up fee, work
fee, expense reimbursement or any other benefit or protection for any Person in
connection with any proposed acquisition of or investment in any of the Debtors,
other than (i) West, (ii) Investor, (iii) any Other Investor, and (iv) any other
Person making an investment pursuant to Section 6.08(b); provided that (A) such
other Person is purchasing at least $50,000,000 of New Common Stock on terms,
and conditions, including without limitation purchase price, that are no more
favorable to such other Person than the terms and conditions provided herein and
in the Stockholders Agreement are to the Investor and (B) without limitation of
the preceding clause (A), any break-up or similar fee payable to such other
Person shall not exceed three percent (3.0%) of the aggregate amount of
financing to be provided by such other Person.
(b) Each of the Debtors agrees that if the Merger Agreement
becomes the Approved Proposal (as defined in the Merger Agreement), it shall use
its best efforts to cause any order approving the Approved Proposal to prohibit
the Debtors (and any Person purporting to act on behalf of the estate of any
Debtor) from violating the provisions of Section 4.4(a) of the Merger Agreement
or from otherwise pursuing in any way any East Acquisition Proposal (as defined
in the Merger Agreement) other than the Merger Agreement unless the Merger
Agreement shall have previously been terminated in accordance with its terms.
(c) In connection with any proceedings in the Bankruptcy Court
related to the Bidding Procedures (as hereinafter defined), the order approving
the Approved Proposal or the transactions contemplated by the Merger Agreement
or this Agreement (or any Qualified Competing Plan Proposal (as defined in the
Bidding Procedures)) (a) the Company shall provide to Investor copies of all
motions, objections, pleadings, notices, proposed orders and other documents
that are filed by or on behalf of any Debtor as soon as reasonably practicable
prior to filing thereof with the Bankruptcy Court and (b) West shall provide to
Investor copies of all motions, objections, pleadings, notices, proposed orders
and other documents that are filed by or on behalf of West as soon as reasonably
practicable prior to filing thereof with the Bankruptcy Court.
(d) Except in accordance with the Bidding Procedures, the Company
and West shall not, and shall not authorize or permit any of their Subsidiaries
or any of the Company's or West's or such Subsidiaries' Representatives,
directly or indirectly, to, (i) solicit, initiate, or take any action designed
to induce a proposal or offer for an Alternative Proposal, (ii) participate in
any discussions or negotiations regarding any Alternative Proposal, or (iii)
enter into any letter of intent, agreement in principle, acquisition agreement
or other similar agreement related to any Alternative Proposal. "Alternative
Proposal" means (x) any Alternative Transaction, or proposal therefor, or (y)
any proposed investment that would, or is intended to, replace all or a material
portion of the investment contemplated by this Agreement.
17
ARTICLE VII
CONDITIONS
Section 7.01 Conditions to Investor's Obligations. The
obligation of Investor to make the Investment pursuant to Section 2.01 hereof is
subject to satisfaction or waiver of each of the following conditions precedent:
(a) Definitive Documents. Definitive Transaction
Documents (in form and substance reasonably satisfactory to Investor) shall have
been prepared, negotiated and, to the extent applicable, duly executed by the
parties (or, as applicable, their Affiliates), and approval by the Bankruptcy
Court of such documents pursuant to a Final Order, to the extent necessary,
shall have been obtained. All such Transaction Documents shall have been
executed by the parties thereto (other than Investor and its Affiliates) on or
prior to the Effective Date, shall not have been modified, amended, waived or
supplemented without the consent of Investor, shall be in effect and the
consummation of the transactions contemplated thereby shall not be stayed, and
all conditions to the obligations of the parties under such Transaction
Documents shall have been satisfied or waived. All corporate and other
proceedings to be taken by the Company, West or any of their respective
Subsidiaries in connection with such Transaction Documents and the transactions
contemplated thereby to be completed at the Closing and documents incident
thereto shall have been completed in form and substance reasonably satisfactory
to Investor, and Investor shall have received all such counterpart originals or
certified or other copies of such Transaction Documents and such other documents
as it may reasonably request. Without limiting the generality of the foregoing,
in connection with the consummation of the Plan, the Company and the Other
Investors and shall have entered into the Stockholders Agreement.
(b) Company Representations and Warranties;
Covenants. The representations and warranties of the Company set forth in
Article III hereof (without giving effect to any material adverse effect,
materiality or similar qualifier) shall have been true and correct in all
respects on and as of the date hereof and at the Closing as if made on the
Closing Date (except where such representation and warranty speaks by its terms
of a different date, in which case it shall be true and correct as of such
date), except to the extent that such inaccuracies in any such representation or
warranty have not had, and would not, individually or in the aggregate, have a
Material Adverse Effect on the Company. The Company shall have performed in all
material respects all obligations and complied in all material respects with all
agreements, undertakings, covenants and conditions required to be performed by
it hereunder at or prior to the Closing, and the Company shall have delivered to
Investor at the Closing a certificate dated the Closing Date and signed by the
chief executive officer and the chief financial officer of the Company to the
effect that the conditions set forth in this Section 7.01(b) have been
satisfied.
(c) West Representations and Warranties; Covenants.
The representations and warranties of West set forth in Article IV hereof
(without giving effect to any material adverse effect, materiality or similar
qualifier) shall have been true and correct in all respects on and as of the
date hereof and at the Closing as if made on the Closing Date (except where such
representation and warranty speaks by its terms of a different date, in which
case it shall be true and correct as of such date), except to the extent that
such inaccuracies in any such
18
representation or warranty have not had, and would not, individually or in the
aggregate, have a Material Adverse Effect on West. West shall have performed in
all material respects all obligations and complied in all material respects with
all agreements, undertakings, covenants and conditions required to be performed
by it hereunder at or prior to the Closing, and West shall have delivered to
Investor at the Closing a certificate dated the Closing Date and signed by the
chief executive officer and the chief financial officer of West to the effect
that the conditions set forth in this Section 7.01(c) have been satisfied.
(d) Compliance with Laws, No Adverse Action or
Decision. Since the date hereof, (i) no Law shall have been promulgated, enacted
or entered that restrains, enjoins, prevents, materially delays, prohibits or
otherwise makes illegal the performance of any of the Transaction Documents;
(ii) no preliminary or permanent injunction or other order by any Governmental
Authority that restrains, enjoins, prevents, delays, prohibits or otherwise
makes illegal the performance of any of the Transaction Documents shall have
been issued and remain in effect, except for such injunctions that, if obtained,
could not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the ability of Investor, the Company or West or their
respective Affiliates to consummate the Transactions; (iii) no Governmental
Authority shall have instituted any legal proceeding that seeks to restrain,
enjoin, prevent, delay, prohibit or otherwise make illegal the performance of
any of the Transaction Documents, except for any such legal proceedings which
have a significant possibility of being brought to a conclusion which could not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of Investor, the Company or West or their
respective Affiliates to consummate the Transactions, and (iv) there is no
pending or threatened investigation or litigation by any other Person relating
to the Transactions which, if determined adversely to the Company, West or
Investor, would materially impair or limit the rights and benefits of Investor
under the Transaction Documents or the economic benefits to Investor of the
Transactions in the aggregate and which Investor reasonably believes, based on
the advice of counsel, has a reasonable likelihood of success.
(e) Approvals. The Company, Investor and West shall
have received (i) all material Regulatory Approvals, which shall have become
final (provided that, if an appeal of such Regulatory Approval is pending and
such appeal has a significant possibility of being resolved adversely to the
Company, Investor or West in a manner that would reasonably be expected to have
a material adverse effect on the ability of Investor, the Company or West or
their respective Affiliates to consummate the Transactions, this clause (i)
shall be deemed not to be satisfied), and (ii) all other material approvals,
permits, authorizations, exemptions, consents, licenses and agreements from
other third parties that are necessary to permit the Transactions to be
completed or performed as contemplated by the Transaction Documents and to
permit the Investor and its Affiliates and Company and its Affiliates (including
West and its Subsidiaries) to carry on its business after such transactions in a
manner not materially inconsistent with the manner in which it was carried on
prior to the Effective Date (together with the Regulatory Approvals, the
"Approvals"), which Approvals shall not contain any condition or restriction
that materially impairs the ability of the Investor and its Affiliates or the
ability of the Company (including West and its Subsidiaries) to carry on its
business. All waiting periods imposed by applicable Law (including, without
limitation, under the HSR Act) in connection with the Transactions shall have
expired or been terminated without any action having been taken by any court of
competent jurisdiction restraining, preventing or imposing materially adverse
conditions
19
upon such transactions or upon the conduct of the business of Investor, East,
West or their respective Affiliates.
(f) Plan of Reorganization. The Plan shall be in a
form reasonably acceptable to the Investor, such Plan shall have been confirmed
by the Bankruptcy Court, and such Plan shall among other things (i) not conflict
with any material term of this Agreement, the Stockholders Agreement or the
other Transaction Documents, (ii) be substantially consistent in all material
respects with the terms of the Financial Plan including, without limitation,
concessions obtained and to be obtained from the Debtors' employees, creditors,
lessors and other claimants, and (iii) reflect a corporate and capital structure
(including liabilities) of the Company consistent with the Financial Plan. All
conditions to the effectiveness of the Plan, other than the consummation of this
Agreement, shall have been satisfied, and a Confirmation Order in a form
reasonably acceptable to the Investor shall have been entered and become a Final
Order no later than December 31, 2005.
(g) Additional East Equity. In connection with the
emergence of the Company and the Operating Companies from chapter 11 and the
consummation of the Plan, the Company will have received on the Effective Date
cash equity investments aggregating not less than $375,000,000 and not more than
$500,000,000 pursuant to this Agreement and the Other Investment Agreements (and
including any loans converted into equity under the Air Wisconsin DIP
Agreement), all on terms, including without limitation purchase price, no more
favorable to the Other Investors and Eastshore Aviation LLC than the terms of
this Agreement and the Stockholders Agreement are to the Investor, which with
all other equity capital of the Company, will be invested only in a single class
of common stock, the New Common Stock, with all such New Common Stock having the
same voting rights, and shall have no other class of capital stock authorized in
its charter other than the New Common Stock. The Company alone, and not any
Affiliate of the Company, shall have issued Equity Securities in connection with
the consummation of the Plan.
(h) Contracts. All material executory contracts and
unexpired leases, the assumption, assignment, rejection or renegotiation of
which is necessary for the successful implementation of the Plan and the
operation of the Company's business as such business is contemplated in the
Financial Plan to be conducted, shall have been assumed, assigned, rejected or
renegotiated, as applicable.
(i) Effective Date and Merger. The Effective Time (as
defined in the Merger Agreement) shall have occurred, or shall occur
concurrently with the Closing, and the Merger shall have been, or will
concurrently with the Closing be, consummated in accordance with the terms of
the Merger Agreement without amendment or waiver other than as permitted in
accordance with Section 6.05 of this Agreement.
(j) Conversion of Air Wisconsin DIP. Eastshore
Aviation LLC shall have converted the existing debt owed to it pursuant to the
Air Wisconsin DIP Agreement into New Common Stock in an amount not less than
$125,000,000 and on terms, including without limitation valuation of the New
Common Stock, no more favorable than the terms of the Investment in New Common
Stock being made by Investor pursuant to this Agreement and the Stockholders
Agreement.
20
(k) No Conversion to Chapter 7. Neither the Company's
Chapter 11 Case nor US Airways Chapter 11 Case shall have been converted to a
case under Chapter 7 of the Bankruptcy Code and no trustee shall have been
appointed under any chapter of the Bankruptcy Code in respect of either such
case.
(l) Certificate of Incorporation and Bylaws. The
Certificate of Incorporation and Bylaws, substantially in the forms attached as
Exhibits C and D, respectively, to the Merger Agreement, shall have been filed
with and accepted by the Secretary of State of the State of Delaware and shall
have become effective. As of the Closing Date, the Company shall have delivered
to Investor a complete and correct copy of the certificates of incorporation and
the bylaws or comparable governing instruments of each of the Operating
Companies, in full force and effect as of the Closing Date.
(m) Delivery. The Company shall have executed and
delivered to Investor the shares of New Common Stock pursuant to and in
accordance with Section 2.01 hereof.
(n) Board Representation. The composition of the
Board shall be as set forth in Section 1.8(a) of the Merger Agreement.
(o) Directors' and Officers' Insurance. The Company
shall have procured and maintained in full force and effect directors' and
officers' liability insurance with respect to members of the Board of Directors
of the Company, which insurance shall be at least $100 million, and shall cover
such risks, as is customary for a corporation in the Company's and its
Affiliates respective businesses or other similar businesses.
(p) Absence of Changes. From the date of this
Agreement through the Closing Date, there shall not have occurred any change,
event, occurrence, condition or development that has or could reasonably be
expected to have a material adverse effect on the financial condition, assets,
liabilities, business or results of operations of the Company or West or that
would prevent, materially delay or materially impair the ability of the Company,
West or Investor to consummate the transactions contemplated by this Agreement.
The Company's financial and operational performance from the period from March
31, 2005 to the Closing Date shall not have deviated materially and adversely
from the performance indicated in the Financial Plan.
(q) Profit Sharing Plan. The Company's employee
profit sharing plan shall have been amended on terms no less favorable to
Investor than those set forth on Schedule 7.01(q).
(r) Listing. The shares of New Common Stock to be
issued to Investor under this Agreement shall have been authorized for listing
or quotation, as applicable, on the New York Stock Exchange or NASDAQ Stock
Market upon official notice of issuance.
Section 7.02 Conditions to the Company's Obligations. The
obligation of the Company to issue and sell the New Common Stock pursuant to
Section 2.01 hereof at the Closing is subject to the satisfaction or waiver of
each of the following conditions precedent:
21
(a) Definitive Documents. Definitive Transaction
Documents (in form and substance reasonably satisfactory to the Company)
necessary to consummate the transactions contemplated herein shall have been
prepared, negotiated and, to the extent applicable, executed by the parties (or,
as applicable, their Affiliates), and approval by the Bankruptcy Court of such
documents, as necessary, shall have been obtained. All Transaction Documents
shall not have been modified, shall be in effect and the consummation of the
transactions contemplated thereby shall not be stayed, and all conditions to the
obligations of the parties under the Transaction Contracts shall have been
satisfied or effectively waived. All corporate and other proceedings to be taken
by Investor its Affiliates in connection with the Transaction Documents and the
transactions contemplated thereby to be completed at the Closing and documents
incident thereto shall have been completed in form and substance reasonably
satisfactory to the Company, and the Company shall have received all such
counterpart originals or certified or other copies of the Transaction Documents
and such other documents as it may reasonably request.
(b) Investor Representations and Warranties;
Covenants. The representations and warranties of Investor set forth in Article V
hereof (without giving effect to any material adverse effect, materiality or
similar qualifier) shall have been true and correct in all respects, on and as
of the date hereof and at the Closing as if made on the Closing Date (except
where such representation and warranty speaks by its terms as of a different
date, in which case it shall be true and correct as of such date), except to the
extent that such inaccuracies have not had, and would not, individually or in
the aggregate, reasonably be expected to have a material adverse effect on the
ability of Investor or its Affiliates to consummate the Transactions. Investor
shall have performed in all material respects all obligations and complied in
all material respects with all agreements, undertakings, covenants and
conditions required to be performed by it at or prior to the Closing, and
Investor shall have delivered to the Company and West at the Closing a
certificate dated the Closing Date and signed on behalf of a member of Investor
to the effect that the conditions set forth in this Section 7.02(b) have been
satisfied.
(c) Compliance with Laws; No Adverse Action or
Decision. Since the date hereof, (i) no Law shall have been promulgated, enacted
or entered that restrains, enjoins, prevents, materially delays, prohibits or
otherwise makes illegal the performance of any of the Transaction Documents with
respect to the transactions contemplated thereby to be completed at the Closing;
(ii) no preliminary or permanent injunction or other order by any Governmental
Authority or other Person that restrains, enjoins, prevents, delays, prohibits
or otherwise makes illegal the performance of any of the Transaction Documents
shall have been issued and remain in effect, except for such injunctions that,
if obtained, could not, individually or in the aggregate, reasonably be expected
to have a material adverse effect on the ability of Investor, the Company or
West or their respective Affiliates to consummate the Transactions; and (iii) no
Governmental Authority shall have instituted any legal proceeding that seeks to
restrain, enjoin, prevent, delay, prohibit or otherwise make illegal the
performance of any of the Transaction Documents, except for any legal
proceedings which have a significant possibility of being brought to a
conclusion which could not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the ability of Investor, the
Company or West or their respective Affiliates to consummate the Transactions.
(d) Approvals. The Company and West shall have
received (i) all material Regulatory Approvals (other than waiting periods
imposed by applicable Law as referred to later
22
in this paragraph), which shall have become final (provided that, if an appeal
of such Regulatory Approval is pending and such appeal has a significant
possibility of being resolved adversely to the Company or West in a manner that
would reasonably be expected to have a material adverse effect on the ability of
Investor, the Company or West or their respective Affiliates to consummate the
Transactions, this clause (i) shall be deemed not to be satisfied), and (ii) all
other Approvals, which Approvals shall not contain any condition or restriction
that, in the Company's reasonable judgment, materially impairs the Company's
ability to carry on its business. Without limiting the generality of clause
(ii), any and all required approvals under any material financing agreements to
which the Company, West or any of their respective Subsidiaries is a party shall
have been obtained. All waiting periods imposed by applicable Law (including,
without limitation, under the HSR Act) in connection with the transactions
contemplated by the Transaction Documents shall have expired or been terminated
without any action having been taken by any court of competent jurisdiction
restraining, preventing or imposing materially adverse conditions upon such
transactions.
(e) Confirmation Order. The Confirmation Order,
satisfactory in form and substance in all respects to the Company, shall have
been entered by the Bankruptcy Court and, once entered, shall not have been
modified without the Company's and West's prior written consent in any manner
materially adverse to the Company, shall be in effect and shall not have been
stayed.
(f) Effective Date and the Merger. The Effective Date
and the satisfaction or waiver of all conditions to the closing of the Merger
shall have occurred not later than the Closing.
ARTICLE VIII
TERMINATION
Section 8.01 Termination of Agreement. Subject to Section 8.02
hereof, this Agreement may be terminated by notice in writing at any time prior
to the Closing by:
(a) Investor or the Company, if (i) closing of the
Transactions (including the Closing) shall not have occurred on or before
December 31, 2005 or (ii) the Merger Agreement shall have been terminated in
accordance with its terms on or before December 31, 2005;
(b) Investor, if (i) a bidding procedures order
(substantially in the form attached as Exhibit E to the Merger Agreement)
approving the break-up fee set forth in Section 8.02(b) hereof, the expense
reimbursement provisions set forth in Section 9.01 and the provisions of Section
4.20 of the Merger Agreement (in the form attached as Exhibit A to this
Agreement) (the "Bidding Procedures") hereof shall not have been entered by the
Bankruptcy Court within thirty (30) days following the date hereof, but in no
event later than June 30, 2005, (ii) the Merger and the transactions
contemplated by the Merger Agreement and this Agreement shall not have been
determined by the Bankruptcy Court to be the Approved Proposal within sixty-five
(65) days after the entry by the Bankruptcy Court of the order approving the
Bidding Procedures contemplated by the preceding clause (i), (iii) there shall
have been a breach by the
23
Company or West of any material representation, warranty, covenant or agreement
contained in this Agreement, which breach would result in the failure to satisfy
any condition set forth in Section 7.01 hereof to Investor's obligations and
that has not been cured within thirty (30) days following receipt by the Company
or West of written notice from Investor of such breach, (iv) any condition set
forth in Section 7.01 hereof to Investor's obligations is not capable of being
satisfied, (v) the Company shall enter into a written agreement or letter of
intent or agreement in principle providing for an Alternative Proposal, or (vi)
the Bankruptcy Court shall have ordered the Company to terminate this Agreement
in order to accept an Alternative Proposal;
(c) the Company, if (i) there shall have been a
breach by Investor of any material representation, warranty, covenant or
agreement contained in this Agreement which breach would result in the failure
to satisfy any condition set forth in Section 7.02 hereof to the Company's
obligations and that has not been cured within thirty (30) days following
receipt by Investor of written notice from the Company of such breach, or (ii)
any condition set forth in Section 7.02 hereof to the Company's obligations is
not capable of being satisfied; or
(d) mutual agreement in writing by the Company and
Investor.
Section 8.02 Effect of Termination.
(a) If this Agreement is terminated in accordance
with Section 8.01 hereof and the transactions contemplated hereby are not
consummated, this Agreement shall become null and void and of no further force
and effect except that (i) the terms and provisions of this Section 8.02 and
Article IX hereof shall survive the termination of this Agreement, and (ii) any
termination of this Agreement shall not relieve any party hereto from any
liability for any willful breach of its obligations hereunder. A termination
shall not void or affect any of the constituent transactions consummated prior
to such termination or any sections hereof which by their terms survive
termination.
(b) In the event that (i) the Investment is not
consummated, (ii) Investor is not in breach of any material representation,
warranty, covenant or agreement contained in this Agreement and (iii) an
Alternative Transaction is effectuated, with or without a merger with West, the
Company shall on the date of the closing of such Alternative Transaction pay to
Investor, by wire transfer of immediately available funds, a break-up fee equal
to $1,500,000.
ARTICLE IX
MISCELLANEOUS
Section 9.01 Fees and Expenses. (a) Except as expressly
provided herein or in any Transaction Document, each party shall bear its own
costs and expenses incurred in connection with this Agreement or any of the
Transactions. Notwithstanding the foregoing, at the Closing, the Company shall
reimburse Investor for (i) the reasonable out-of-pocket expenses of Investor
relating to the enforcement of Investor's rights under the Term Sheet dated as
of May 9, 2005, this Agreement and/or the Stockholders Agreement and (ii) filing
fees incurred in connection with any required filings under the HSR Act.
24
(b) All amounts payable under this Agreement shall be
paid in immediately available funds to an account or accounts designated by the
recipient of such amounts, except as otherwise provided herein.
Section 9.02 Survival of Representations, Warranties and
Covenants. None of the representations, warranties or covenants contained in
this Agreement shall survive the Closing Date.
Section 9.03 Specific Performance. The parties hereto
specifically acknowledge that monetary damages are not an adequate remedy for
violations of this Agreement, and that any party hereto may, in its sole
discretion, apply to a court of competent jurisdiction for specific performance
or injunctive or such other relief as such court may deem just and proper in
order to enforce this Agreement or prevent any violation hereof and, to the
extent permitted by applicable Law and to the extent the party seeking such
relief would be entitled to the merits to obtain such relief, each party waives
any objection to the imposition of such relief.
Section 9.04 General Interpretive Principles. Whenever used in
this Agreement, except as otherwise expressly provided or unless the context
otherwise requires, any noun or pronoun shall be deemed to include the plural as
well as the singular and to cover all genders. The name assigned this Agreement
and the Section captions used herein are for convenience of reference only and
shall not be construed to affect the meaning, construction or effect hereof.
Unless otherwise specified, any references to a party's "judgment",
"satisfaction" or words of a similar import shall mean in such party's sole
judgment. Unless otherwise specified, the terms "hereof," "herein" and similar
terms refer to this Agreement as a whole (including the Exhibits and Schedules
hereto), and references herein to Articles or Sections refer to Articles or
Sections of this Agreement.
Section 9.05 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given, if
delivered personally, by telecopier or sent by first class mail, postage
prepaid, to the addresses set forth on Schedule 9.05.
Section 9.06 Entire Agreement; Amendment. This Agreement and
the documents described herein (including the Plan) or attached or delivered
pursuant hereto (including, without limitation, the other Transaction Documents)
set forth the entire agreement between the parties hereto with respect to the
transactions contemplated by this Agreement. Any provision of this Agreement may
only be amended, modified or supplemented in whole or in part at any time by an
agreement in writing among the parties hereto executed in the same manner as
this Agreement. No failure on the part of any party to exercise, and no delay in
exercising, any right shall operate as waiver thereof, nor shall any single or
partial exercise by either party of any right preclude any other or future
exercise thereof or the exercise of any other right.
Section 9.07 No Other Representations or Warranties. Except
for the representations and warranties contained in this Agreement, neither East
nor West, nor any agent, Affiliate, officer, director, employee or
representative of either or them, nor any other Person, makes, or shall be
deemed to make, any representation or warranty to Investor, express or implied,
at law or in equity, on behalf of East or West, and East and West hereby exclude
and disclaim any such representation or warranty whether by either East or West
or any or their
25
respective agents, Affiliates, officers, directors, employees or representatives
or any other Person, notwithstanding the delivery or disclosure to Investor or
any of their respective officers, directors, partners, employees or
representatives or any other Person of any documentation or other information by
East or West or any of their respective agents, Affiliates, officers, directors,
employees or representatives or any other Person with respect to any one or more
of the foregoing.
Section 9.08 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to constitute an
original, but all of which together shall constitute one and the same document.
Section 9.09 Governing Law. To the extent not governed by the
Bankruptcy Code, this Agreement shall be governed by, and interpreted in
accordance with, the Laws of the State of New York applicable to contracts made
and to be performed in that State without reference to its conflict of laws
rules. The parties hereto agree that the appropriate and exclusive forum for any
disputes arising out of this Agreement solely between the Company and Investor
shall be the Bankruptcy Court, or if such court will not hear any such suit, the
U.S. District Court for the Southern District of New York, and, the parties
hereto irrevocably consent to the exclusive jurisdiction of such courts, and
agree to comply with all requirements necessary to give such courts
jurisdiction. The parties hereto further agree that the parties will not bring
suit with respect to any disputes arising out of this Agreement except as
expressly set forth below for the execution or enforcement of judgment, in any
jurisdiction other than the above specified courts. Each of the parties hereto
irrevocably consents to the service of process in any action or proceeding
hereunder by the mailing of copies thereof by registered or certified airmail,
postage prepaid, to the address specified in Section 9.05 hereof. The foregoing
shall not limit the rights of any party hereto to serve process in any other
manner permitted by the Law or to obtain execution of judgment in any other
jurisdiction. The parties further agree, to the extent permitted by Law, that
final and non-appealable judgment against any of them in any action or
proceeding contemplated above shall be conclusive and may be enforced in any
other jurisdiction within or outside the United States by suit on the judgment,
a certified or exemplified copy of which shall be conclusive evidence of the
fact and the amount of indebtedness. THE PARTIES AGREE TO WAIVE ANY AND ALL
RIGHTS THAT THEY MAY HAVE TO A JURY TRIAL WITH RESPECT TO DISPUTES ARISING OUT
OF THIS AGREEMENT.
Section 9.10 Successors and Assigns. Except as otherwise
expressly provided herein, the provisions hereof shall inure to the benefit of,
and be binding upon, the Company's, West's and Investor's successors and
permitted assigns. Neither this Agreement nor any rights or obligations
hereunder shall be assignable by any party hereto without the prior written
consent of the other parties hereto.
Section 9.11 No Third-Party Beneficiaries. This Agreement is
for the sole benefit of the parties hereto and their respective successors and
permitted assigns and nothing herein, express or implied, is intended or shall
confer upon any other Person any legal or equitable right, benefit or remedy of
any nature whatsoever under or by reason of this Agreement.
26
Section 9.12 Confidentiality. A version of this Agreement with
certain competitively sensitive information redacted will be filed by the
Company with the Motion. Each party hereto agrees not to disclose the unredacted
version of this Agreement to any third parties (other than disclosure required
by the SEC or any other Governmental Authority (including the Bankruptcy Court)
or pursuant to any listing agreement with or requirement of any relevant
national exchange or national quotation system) without appropriate
confidentiality agreements with such third parties being in place that are
reasonably acceptable to the other parties hereto.
27
IN WITNESS WHEREOF, this Agreement has been executed on behalf of the
parties hereto by their respective duly authorized officers, all as of the date
first above written.
PENINSULA INVESTMENT PARTNERS, L.P.
By: PENINSULA CAPITAL APPRECIATION LLC
its general partner
By: /s/ Ted Weschler
-------------------------------------------
Name: Ted Weschler
Title: Managing Member
US AIRWAYS GROUP, INC.
By: /s/ Bruce R. Lakefield
-------------------------------------------
Name: Bruce R. Lakefield
Title: Chief Executive Officer
AMERICA WEST HOLDINGS CORPORATION
By: /s/ W. Douglas Parker
-------------------------------------------
Name: W. Douglas Parker
Title: Chairman and Chief Executive Officer
28
Exhibit A-4 to the
Merger Agreement
INVESTMENT AGREEMENT
dated as of May 19, 2005
among
US AIRWAYS GROUP, INC.,
AMERICA WEST HOLDINGS, INC.
and
EASTSHORE AVIATION, LLC
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS.............................................................................................2
Section 1.01 Definitions.....................................................................................2
ARTICLE II ISSUANCE AND PURCHASE OF NEW COMMON STOCK..............................................................7
Section 2.01 Issuance and Purchase of New Common Stock.......................................................7
Section 2.02 Closing.........................................................................................7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY.........................................................8
Section 3.01 Incorporation by Reference of Representations and Warranties in the Merger
Agreement...................................................................................8
Section 3.02 Authorization; No Contravention.................................................................8
Section 3.03 Consents; No Conflicts..........................................................................9
Section 3.04 Court Orders....................................................................................9
Section 3.05 Capitalization; Securities......................................................................9
Section 3.06 Information Provided...........................................................................10
Section 3.07 Financial Advisors and Brokers.................................................................10
Section 3.08 Regulatory Status..............................................................................10
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF WEST................................................................10
Section 4.01 Incorporation by Reference of Representations and Warranties in the Merger
Agreement..................................................................................10
Section 4.02 Authorization; No Contravention................................................................10
Section 4.03 Consents; No Conflicts.........................................................................11
Section 4.04 Court Orders...................................................................................11
Section 4.05 Information Provided...........................................................................11
Section 4.06 Financial Advisors and Brokers.................................................................11
Section 4.07 Financial Plan.................................................................................12
ARTICLE V REPRESENTATIONS AND WARRANTIES OF INVESTOR.............................................................12
Section 5.01 Organization...................................................................................12
Section 5.02 Authorization; No Contravention................................................................12
Section 5.03 Consents; No Conflicts.........................................................................12
Section 5.04 Citizenship....................................................................................12
ARTICLE VI PRE-CLOSING COVENANTS.................................................................................12
Section 6.01 Taking of Necessary Action.....................................................................12
Section 6.02 Notifications..................................................................................14
Section 6.03 Financial and Other Information................................................................14
Section 6.04 Delivery of Reports............................................................................14
Section 6.05 Amendments to Merger Agreement; Etc............................................................14
Section 6.06 Publicity......................................................................................15
Section 6.07 Issuances of Equity Securities.................................................................15
i
Section 6.08 Transfer Taxes.................................................................................16
Section 6.09 Bankruptcy Covenants...........................................................................16
ARTICLE VII CONDITIONS...........................................................................................17
Section 7.01 Conditions to Investor's Obligations...........................................................17
Section 7.02 Conditions to the Company's Obligations........................................................21
ARTICLE VIII TERMINATION.........................................................................................23
Section 8.01 Termination of Agreement.......................................................................23
Section 8.02 Effect of Termination..........................................................................23
ARTICLE IX MISCELLANEOUS.........................................................................................24
Section 9.01 Fees and Expenses..............................................................................24
Section 9.02 Survival of Representations, Warranties and Covenants..........................................24
Section 9.03 Specific Performance...........................................................................24
Section 9.04 General Interpretive Principles................................................................24
Section 9.05 Notices........................................................................................24
Section 9.06 Entire Agreement; Amendment....................................................................24
Section 9.07 No Other Representations or Warranties.........................................................25
Section 9.08 Counterparts...................................................................................25
Section 9.09 Governing Law..................................................................................25
Section 9.10 Successors and Assigns.........................................................................26
Section 9.11 No Third-Party Beneficiaries...................................................................26
Section 9.12 Confidentiality................................................................................26
EXHIBIT A Merger Agreement
EXHIBIT B Stockholders Agreement
Schedule 1 New Common Stock
Schedule 3.05 Capitalization
Schedule 7.01(q) Terms of Revised Profit Sharing Plan
Schedule 9.05 Notices Information
ii
INVESTMENT AGREEMENT
THIS INVESTMENT AGREEMENT (together with all exhibits and
schedules hereto and as the same may be amended, supplemented or otherwise
modified from time to time in accordance with the terms hereof, the
"Agreement"), dated as of May 19, 2005, by and among Eastshore Aviation, L.L.C.,
a Delaware limited liability company (the "Investor"), US Airways Group, Inc., a
Delaware corporation, and its successors (including, as the context may require,
on or after the Effective Date, as reorganized pursuant to the Bankruptcy Code)
(the "Company"), and America West Holdings Corporation, a Delaware corporation
("West").
W I T N E S S E T H:
WHEREAS, on September 12, 2004, the Company and certain of its
Subsidiaries (the "Debtor Subsidiaries" and together with the Company, the
"Debtors") filed voluntary petitions (the "Cases") for protection under chapter
11 of the United States Bankruptcy Code (the "Bankruptcy Code") in the United
States Bankruptcy Court for the Eastern District of Virginia, Alexandria
Division (the "Bankruptcy Court") to enable the Debtors to be restructured
pursuant to one or more plans of reorganization (collectively, the "Plan");
WHEREAS, the Debtors have continued in the possession of their
assets and in the management of their businesses pursuant to Sections 1107 and
1108 of the Bankruptcy Code;
WHEREAS, pursuant to the Plan, the Company intends to cancel
all of the existing outstanding Equity Securities of the Company upon the
Effective Date and issue the New Common Stock;
WHEREAS, pursuant to the Plan, the Company, Barbell
Acquisition Corp. a Delaware corporation ("Merger Sub"), and West have entered
into an Agreement and Plan of Merger (together with all of the schedules,
exhibits and other attachments thereto, the "Merger Agreement"), attached as
Exhibit A hereto;
WHEREAS, the Investor, US Airways, as Borrower, and certain
affiliates thereof as guarantors, including the Company, are parties to the
Junior Secured Debtor-in-Possession Credit Facility Agreement, dated as of
February 18, 2005, as amended by Amendment No. 1 to the Junior Secured
Debtor-in-Possession Credit Facility Agreement dated as of the date hereof (the
"Credit Facility"), providing for, among other things, a DIP Credit Facility to
be provided by the Investor to US Airways;
WHEREAS, subject to the other terms and conditions contained
herein and in the Credit Facility, the Investor will convert the principal owed
to it pursuant to the Credit Facility into shares of New Common Stock (such
conversion, the "Investment") at the Investment Price;
WHEREAS, pursuant to the Other Investment Agreements, the
Company intends to issue and sell to ACE Aviation Holdings Inc., Par Investment
Partners, L.P. and Peninsula Investment Partners, L.P. (the "Other Investors")
shares of New Common Stock pursuant to investment agreements entered into by the
Other Investors in the forms previously provided to
1
Investor and on terms and conditions, including without limitation purchase
price, that are no more favorable to the Other Investors than the terms and
conditions provided herein and in the Stockholders Agreement are to the
Investor;
WHEREAS, at the Closing, the Investor will enter into a
Stockholders Agreement (the "Stockholders Agreement"), substantially in the form
of Exhibit B hereto, with the Company and the Other Investors;
WHEREAS, the parties intend that the transactions contemplated
hereby will be implemented by and take effect simultaneously with the
implementation of the Plan on the Effective Date (except as to those
transactions that are expressly intended to take effect at another date);
WHEREAS, the parties intend that all of the transactions
contemplated hereby are intended to be treated as a single integrated
transaction subject to the approval of the Bankruptcy Court as soon as
reasonably practicable after the date hereof; and
WHEREAS, the Company, West and the Investor desire to make
certain representations, warranties, covenants and agreements in connection with
the transactions contemplated herein.
NOW, THEREFORE, in consideration of the premises and the
mutual representations, warranties, covenants and agreements contained herein,
the parties hereto agree as follows, in the case of the Company, subject to
Bankruptcy Court approval of this Agreement:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. As used in this Agreement, the
following terms shall have the meanings set forth below:
"Affiliate" means, with respect to any specified Person, a
Person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the specified
Person, where "control" (including the terms "controlling," "controlled by" and
"under common control with") means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract, or
otherwise; provided, however, that when used with respect to the Company,
"Affiliate" shall not include Investor or any Affiliate thereof.
"Agreement" has the meaning set forth in the preamble hereto.
"Approvals" has the meaning set forth in Section 7.01(e)
hereof.
"ATSB" means the Air Transportation Stabilization Board,
created pursuant to Section 102 of the Air Transportation Safety and System
Stabilization Act, P.L. 107-42, as the same may be amended from time to time.
2
"Bankruptcy Code" has the meaning set forth in the recitals
hereto.
"Bankruptcy Court" has the meaning set forth in the recitals
hereto.
"Board" means the board of directors of the Company
(including, with respect to periods following the Effective Date, the Company).
"Business Day" means any day other than a Saturday, Sunday or
a day on which banking institutions of the State of New York are authorized by
law or executive order to close.
"Bylaws" means the bylaws of the Company, as amended from time
to time (including, with respect to periods following the Effective Date).
"Cases" has the meaning set forth in the recitals hereto.
"Certificate of Incorporation" means the Certificate of
Incorporation of the Company, as amended from time to time, including any
certificate of designation relating to any Equity Securities of the Company
(including, in each case, with respect to periods following the Effective Date).
"Certificated Air Carrier" means a Citizen of the United
States holding an aircraft operating certificate issued pursuant to Chapter 447
of Title 49 of the United States Code or any analogous successor provision of
the United States Code, for aircraft capable of carrying ten or more individuals
or 6,000 pounds or more of cargo or that otherwise is certified or registered to
the extent required to fall within the purview of 11 U.S.C. Section 1110 or any
analogous successor provision of the Bankruptcy Code.
"Chapter 11" means Chapter 11 of the Bankruptcy Code.
"Citizen of the United States" has the meaning given to such
term in Section 40102(a)(15) of Title 49 of the Transportation Code, or any
subsequent legislation that amends, supplements or supersedes such provisions.
"Closing" means the closing of the issuance, sale and purchase
of the New Common Stock pursuant to Section 2.01 hereof.
"Closing Date" has the meaning set forth in Section 2.02(a)
hereof.
"Company" has the meaning set forth in the preamble hereto.
"Confirmation Order" means a Final Order of the Bankruptcy
Court approving the Plan.
"Debtors" has the meaning set forth in the recitals hereto.
"Debtor Subsidiaries" has the meaning set forth in the
recitals hereto.
"Disclosure Statement" means a disclosure statement with
respect to the Plan.
3
"Effective Date" means the effective date of the Plan.
"Equity Securities" shall mean (i) capital stock of, or other
equity interests in, any Person, (ii) securities or other instruments
convertible into or exchangeable for shares of capital stock, voting securities
or other equity interests in such Person or (iii) options, warrants, investment
agreements or other rights to acquire the securities described in clauses (i)
and (ii), whether fixed or contingent, matured or unmatured, contractual, legal,
equitable or otherwise.
"Fair Market Value" shall mean the fair market value of the
New Common Stock, as determined by the Board. If the New Common Stock is traded
on an over-the-counter securities market or national securities exchange, "Fair
Market Value" shall mean the closing sales price of the New Common Stock
reported on such over-the-counter market or such national securities exchange on
the applicable date or, if no sales of New Common Stock have been reported for
that date, on the next preceding date for which sales where reported.
"Final Order" means an order or judgment of the Bankruptcy
Court, or other court of competent jurisdiction, as entered on the docket in the
Cases or the docket of any other court of competent jurisdiction, that has not
been reversed, stayed, modified or amended, and as to which the time to appeal
or seek reargument, reconsideration, or certiorari has expired and no appeal,
motion for reconsideration or reargument or petition for certiorari has been
timely taken, or as to which any appeal that has been taken or any petition for
certiorari, motion for reconsideration or reargument that has been or may be
filed has been resolved by the highest court to which the order or judgment was
appealed or from which reargument, reconsideration, or certiorari was sought and
the time to take any further appeal, petition for certiorari or move for
reargument shall have expired.
"Fully Diluted Basis" means the number of shares of New Common
Stock, without duplication, which are issued and outstanding or owned or held,
as applicable, at the date of determination plus the number of shares of New
Common Stock issuable pursuant to any Equity Securities then outstanding
convertible into or exchangeable or exercisable for (whether or not subject to
contingencies or passage of time, or both) shares of New Common Stock.
"Governmental Authority" means the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Hearing" means the hearing conducted in the Cases in the
Bankruptcy Court seeking approval of the Motion.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the regulations promulgated thereunder.
"Investor" has the meaning set forth in the preamble hereto.
"Investor Director" means any member of the Board of the
Company nominated by Investor in accordance with the Stockholders Agreement.
4
"Investment" has the meaning set forth in the recitals hereto.
"Investment Price" has the meaning set forth in Section 2.01
hereof.
"JSA Agreement" means that certain Jet Service Agreement,
dated February 18, 2005, as amended, between U.S. Airways and Air Wisconsin
Airlines Corporation, regarding the use and operation of up to seventy (70)
CRJ-200 aircraft.
"Law" means any law, treaty, statute, ordinance, code, rule or
regulation of a Governmental Authority or judgment, decree, order, writ, award,
injunction or determination of a court or other Governmental Authority.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge, or
preference, priority or other security interest or preferential arrangement of
any kind or nature whatsoever intended for security (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).
"Material Adverse Effect" on any Person means (x) a material
adverse effect on the financial condition, assets, liabilities, business or
results of operations of such Person and its Subsidiaries taken as a whole,
excluding any such effect resulting from (I) changes or conditions generally
affecting the U.S. economy or financial markets, (II) changes or conditions
generally affecting any of the segments of the airline industry in which such
Person or any of its Subsidiaries operates, to the extent such conditions or
changes do not disproportionately impact such Person or its Subsidiaries (III)
changes or conditions resulting from divestiture required in order to satisfy
Section 5.1(b) of the Merger Agreement or (IV) the announcement or consummation
of the Merger Agreement, or (y) an effect that would prevent, materially delay
or materially impair the ability of such Person to consummate the Merger or the
ability of such Person or the Investor to consummate the transactions
contemplated by this Agreement. For purposes of this definition, any suspension
of commercial air travel in the United States for a period of 72 hours or more
shall be deemed to have a Material Adverse Effect on the Company and West.
"Merger" has the meaning assigned to such term in the Merger
Agreement.
"Merger Agreement" has the meaning set forth in the recitals
hereto.
"Merger Sub" has the meaning set forth in the recitals hereto.
"Motion" means the motion and any supporting papers seeking
approval of the Transactions, in form and substance reasonably acceptable to
Investor and providing, inter alia, not less than a ten (10) day notice period
prior to the Hearing and providing for confidential treatment of portions of the
Transaction Documents as mutually agreed by the Company and the Investor.
5
"New Common Stock" means the class of common stock of the
Company authorized under the Certificate of Incorporation attached as Exhibit C
to the Merger Agreement and to be issued to West shareholders pursuant to the
Merger.
"Operating Companies" means, with respect to the Company, US
Airways, PSA Airlines, Inc., a Pennsylvania corporation, Piedmont Airlines,
Inc., a Maryland corporation and Material Services Company, Inc., a Delaware
corporation.
"Other Investors" has the meaning set forth in the recitals
hereto.
"Other Investments" means the purchase, issuance and sale by
the Company to the Other Investors of shares of New Common Stock pursuant to the
Other Investment Agreements.
"Other Investment Agreements" means the investment agreements
entered into by the Company with any of the Other Investors.
"Person" means any individual, corporation, company,
association, partnership, limited liability company, joint venture, trust,
unincorporated organization, or Governmental Authority.
"Plan" has the meaning set forth in the recitals hereto.
"Postpetition," when used with respect to any agreement,
instrument or any obligation arising thereunder, any claim or proceeding or any
other matter, means an agreement or instrument that was first entered into or
first became effective, an obligation, claim or proceeding that first arose or
was first instituted, or another matter that first occurred, after the
commencement of the Cases, or that was entered into or became effective, or
arose, was instituted or occurred, before commencement of the Cases but has been
assumed in the Cases.
"Regulatory Approvals" means, to the extent necessary in
connection with the consummation of the transactions contemplated by the
Transaction Documents, any and all certificates, permits, licenses, franchises,
concessions, grants, consents, approvals, orders, registrations, authorizations,
waivers, variances or clearances from, or filings or registrations with,
Governmental Authorities (and shall not include clearance or approval under the
HSR Act or any other Law that may require waiting periods prior to consummation
of the Transactions).
"Representatives" means, with respect to any Person, such
Person's officers, directors, employees, agents, attorneys, accountants,
consultants, equity financing partners or financial advisors or other Person
associated with, or acting on behalf of, such a Person.
"Republic" means Republic Airways Holdings Inc., a Delaware
corporation.
"SEC" means the U.S. Securities and Exchange Commission.
"Securities Act" means the U.S. Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
6
"Stockholders Agreement" has the meaning set forth in the
recitals hereto.
"Subsidiary" means as to any Person, any other Person of which
more than fifty percent (50%) of the shares of the voting stock or other
ownership interests are owned or controlled, or the ability to select or elect
more than fifty percent (50%) of the directors or similar managers is held,
directly or indirectly, by such first Person or one or more of its Subsidiaries
or by such first Person and one or more of its Subsidiaries.
"Title 49" means Title 49 of the Code of Federal Regulations,
as amended and in effect from time to time.
"Transactions" means the Merger, the execution, delivery and
performance of this Agreement and each Other Investment Agreement (including the
issuance of New Common Stock hereunder and thereunder), the Stockholders
Agreement, and the execution, delivery and performance of the documents
described in Articles II and VI hereof, in each case by the applicable party
thereto.
"Transaction Contracts" means all of the Transaction Documents
other than the Plan, the Confirmation Order.
"Transaction Documents" means this Agreement, the Plan, the
Confirmation Order, the Merger Agreement, each Other Investment Agreement, the
Stockholders Agreement, the documents described in Articles II and VI and all
other documents necessary to consummate the Transactions and other arrangements
contemplated hereby.
"Transportation Code" means Title 49 of the United States Code
which, among other things, recodified and replaced the U.S. Transportation Code
of 1958 and the regulations promulgated thereunder, or any subsequent
legislation that amends, supplements or supersedes such provisions.
"US Airways" means US Airways, Inc., a Delaware corporation.
"West" has the meaning set forth in the preamble hereto.
ARTICLE II
ISSUANCE AND PURCHASE OF NEW COMMON STOCK
Section 2.01 Issuance and Purchase of New Common Stock. Upon
the terms and subject to the conditions set forth in this Agreement, at the
Closing, the Company will issue, sell and deliver to Investor, and Investor will
purchase from the Company, that number of shares of New Common Stock set forth
opposite Investor's name on Schedule 1 hereto, through the conversion of the
amount of the principal outstanding as of the Closing under the Credit Facility
divided by the aggregate purchase price set forth opposite Investor's name on
Schedule 1 hereto (the "Investment Price").
Section 2.02 Closing. (a) Subject to the satisfaction or, if
permissible, waiver of the conditions set forth in Sections 7.01 and 7.02
hereof, the Closing shall take place at the
7
offices of Arnold & Porter LLP, 555 Twelfth Street, NW, Washington D.C. 20004,
at 10:00 a.m., Washington D.C. time, on the first Business Day following the
Effective Time (as such term is defined in the Merger Agreement) or at such
other time, date and place as the parties may agree (the date on which the
Closing occurs, the "Closing Date"); provided that the parties shall use
reasonable best efforts to have the Closing take place on the first Business Day
following the Effective Time.
(b) At the Closing, (i) the Company shall deliver to
Investor certificates representing the shares of New Common Stock to be
purchased by, and sold to, Investor pursuant to Section 2.01 hereof (registered
in the names and in the denominations designated by Investor at least two
Business Days prior to the Closing Date), together with the other documents,
certificates and opinions to be delivered pursuant to Section 7.01 hereof, and
(ii) the Company shall pay to the Investor (in immediately available funds by
wire transfer to the account designated by the Investor, or by such other means
as may be agreed between the parties hereto) all accrued and unpaid interest
under the Credit Facility as of the Closing and (iii) Investor, in full payment
for the shares of New Common Stock to be purchased by, and sold to, Investor
pursuant to Section 2.01 hereof, shall deliver to the Company for cancellation
the promissory notes issued to Investor pursuant to the Credit Facility, and
shall deliver the certificate required pursuant to Section 7.02(b) hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Investor as
follows:
Section 3.01 Incorporation by Reference of Representations and
Warranties in the Merger Agreement. The Company hereby incorporates by
reference, for the benefit of Investor as though set forth herein, the following
representations and warranties (including the defined terms and disclosure items
included therein and related thereto) in the Merger Agreement: Sections 3.2(a),
(f), (g), (h), (i), (j), (k), (l), (n), (o), (p), (q), (r), (s), (t), (u), (v),
(w) and (x). Each such representation which states that "East" (i.e., US Airways
Group, Inc.) "has made available to West" certain materials shall be deemed to
read "has made available to Investor" for purposes of this incorporation by
reference.
Section 3.02 Authorization; No Contravention. The Transactions
to be consummated by the Company and the Operating Companies and the performance
of the Transaction Contracts are within the respective corporate power and
authority of the Company and the Operating Companies (subject and after giving
effect to any required approvals of the Bankruptcy Court (including, without
limitation, to the extent applicable, the Confirmation Order) and the Plan) and
have been duly authorized by all necessary corporate and, if required,
stockholder action. This Agreement, the Merger Agreement, each Other Investment
Agreement, the Stockholders Agreement and each other Transaction Contract
entered into as of the date hereof have been duly executed and delivered by the
Company and the Operating Companies party thereto (as applicable) and constitute
(subject and after giving effect to any required approvals of the Bankruptcy
Court (including, without limitation, to the extent applicable, the
8
Confirmation Order) and the Plan), a legal, valid and binding obligation of the
Company and such Operating Companies, respectively, enforceable in accordance
with its terms.
Section 3.03 Consents; No Conflicts. Other than the notices,
reports, filings, consents, registrations, approvals, permits or authorizations
required under the Hart Scott Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), with respect to the Company and the Operating
Companies, the execution and delivery of each of the Transaction Contracts and
the consummation of the Transactions (i) does not require any consent or
approval of, registration or filing with, or any other action by, any
Governmental Authority (subject and after giving effect to any required
approvals of the Bankruptcy Court (including, without limitation, to the extent
applicable, the Confirmation Order) and the Plan), except such as have been
obtained or made and are in full force and effect and except where failure to
obtain such consent, approval, registration, filing or other action would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company, (ii) will not violate, conflict with or result in
a breach, violation or default under (A) any applicable law, rule or regulation
or any order of or restriction imposed by any Governmental Authority and except,
in each case, where such violation of applicable law or regulation would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company or (B) the Certificate of Incorporation or Bylaws
or any other organizational documents of the Company or any of its Subsidiaries,
(iii) will not violate, conflict with or result in a breach, or default under
any Postpetition agreement, contract or obligation or Postpetition loan
agreement or any other Postpetition indebtedness agreement or instrument of
indebtedness binding upon the Company, any Operating Company or any of their
respective Subsidiaries or its assets except where such default, breach or
violation would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on the Company and (iv) will not result in the
creation or acceleration of any obligations or imposition of any Lien on any
assets or properties of the Company or any of its Subsidiaries.
Section 3.04 Court Orders. Subject and after giving effect to
any required approvals of the Bankruptcy Court (including, without limitation,
to the extent applicable, the Confirmation Order) and the Plan, the performance
of any action by the Company or the Operating Companies required or contemplated
by this Agreement or any other Transaction Document is not restrained or
enjoined by any order of the Bankruptcy Court or by any Governmental Authority
(either temporarily, preliminarily or permanently).
Section 3.05 Capitalization; Securities. Upon the Closing and
after giving effect to the Confirmation Order, the Plan, the Merger, the
Investment and the Other Investments, the issued and outstanding capital stock
of the Company shall consist solely of New Common Stock as provided on Schedule
3.05. Except as set forth on Schedule 3.05, upon the Closing and after giving
effect to the Confirmation Order, the Plan, the Merger, the Investment and the
Other Investments, there will not be any outstanding subscriptions, options,
warrants, commitments, agreements or arrangements related to the issuance or
sale of outstanding Equity Securities or securities or other instruments
convertible into or exchangeable for any Equity Securities of the Company Upon
the Closing Date, the New Common Stock to be issued and delivered to the
Investor pursuant to the terms hereof, shall have been duly authorized and
validly issued, fully paid, nonassessable and not subject to preemptive or
similar rights of third parties or reserved for issuance in accordance with the
terms of the Plan and Confirmation Order. The rights,
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preferences and privileges of the capital stock of the Company shall be as set
forth in the Certificate of Incorporation of the Company, as amended pursuant to
the Plan and in effect upon the Closing in the form attached as Exhibit C to the
Merger Agreement.
Section 3.06 Information Provided. A true and correct copy of
the Merger Agreement, and of each Other Investment Agreement, including each
schedule, exhibit and other attachment or related agreement thereto and
including in each case any amendments, supplements and modifications through the
date hereof, has been provided to Investor. There are no other agreements,
arrangements, understandings or commitments, written or oral, of any nature,
between any of the Other Investors or their affiliates, on the one hand, and the
Company, West or any of their affiliates on the other, relating to the
transactions contemplated by the Transaction Documents.
Section 3.07 Financial Advisors and Brokers. Except for
Seabury Aviation Advisors LLC and/or its Affiliates ("Seabury"), no Person has
acted, directly or indirectly, as a broker, finder or financial advisor of the
Company or any of the Operating Companies in connection with the Transaction
Documents or the transactions contemplated thereby, and except for fees payable
to Seabury by the Company, no Person acting for or on behalf of the Company or
any of the Operating Companies is entitled to receive any broker's, finder's or
similar fee or commission in respect thereof based in any way on any agreement,
arrangement or understanding made by or on behalf of the Company or any of the
Operating Companies.
Section 3.08 Regulatory Status. Neither the Company, nor any
Operating Company nor any of their respective Subsidiaries is (i) an "investment
company" as defined in, or subject to regulation under, the Investment Company
Act of 1940 or (ii) a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935. US Airways is a
Certificated Air Carrier.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF WEST
West hereby represents and warrants to Investor as follows:
Section 4.01 Incorporation by Reference of Representations and
Warranties in the Merger Agreement. West hereby incorporates by reference, for
the benefit of Investor as though set forth herein, the following
representations and warranties (including the defined terms and disclosure items
related thereto) in the Merger Agreement: Sections 3.1(a), (b), (e), (f), (g),
(h), (i), (j), (k), (m), (n), (o), (p), (q), (r), (s), (t), (u), (v) and (w).
Each such representation which states that "West" (i.e., America West Holdings
Corporation) "has made available to East" certain materials shall be deemed to
read "has made available to Investor" for purposes of this incorporation by
reference.
Section 4.02 Authorization; No Contravention. The Transactions
to be consummated by West and performance of the Transaction Contracts to which
West is or will be a party are within the corporate power and authority of West
and have been duly authorized by all necessary corporate and, if required,
stockholder action. This Agreement, the Merger
10
Agreement, each Other Investment Agreement, and each other Transaction Contract
to which West is a party, entered into as of the date hereof, have been duly
executed and delivered by West and constitute a legal, valid and binding
obligation of West, enforceable in accordance with its terms.
Section 4.03 Consents; No Conflicts. Other than the notices,
reports, filings, consents, registrations, approvals, permits or authorizations
required under the HSR Act, with respect to West, the execution and delivery of
each of the Transaction Contracts to which West is or will be a party and the
consummation of the Transactions (i) does not require any consent or approval
of, registration or filing with, or any other action by, any Governmental
Authority (subject and after giving effect to any required approvals of the
Bankruptcy Court (including, without limitation, to the extent applicable, the
Confirmation Order) and the Plan), except such as have been obtained or made and
are in full force and effect and except where failure to obtain such consent,
approval, registration, filing or other action would not reasonably be expected
to have a Material Adverse Effect on West, (ii) will not violate, conflict with
or result in a breach, violation or default under (A) any applicable law, rule
or regulation or any order of or restriction imposed by any Governmental
Authority and except, in each case, where such violation of applicable law or
regulation would not reasonably be expected to have a Material Adverse Effect on
West or (B) the Certificate of Incorporation or Bylaws or any other
organizational documents of West or any of its Subsidiaries, (iii) will not
violate, conflict with or result in a breach, or default under any agreement,
contract or obligation or loan agreement or any other indebtedness agreement or
instrument of indebtedness binding upon West or any of its Subsidiaries or its
assets except where such default, breach or violation would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect on
West and (iv) will not result in the creation or acceleration of any obligations
or imposition of any Lien on any assets or properties of West or any of its
Subsidiaries.
Section 4.04 Court Orders. Subject and after giving effect to
any required approvals of the Bankruptcy Court (including, without limitation,
to the extent applicable, the Confirmation Order) and the Plan, the performance
of any action by West required or contemplated by this Agreement or any other
Transaction Document is not restrained or enjoined by any order of the
Bankruptcy Court or by any Governmental Authority (either temporarily,
preliminarily or permanently).
Section 4.05 Information Provided. West has delivered to
Investor a true and correct copy of the Merger Agreement, including any
amendments, supplements and modifications through the date hereof.
Section 4.06 Financial Advisors and Brokers. Except for
Greenhill & Co., LLC and/or its Affiliates ("Greenhill") and TPG Partners, L.P.
and/or its Affiliates ("TPG"), no Person has acted, directly or indirectly, as a
broker, finder or financial advisor of West in connection with the Transaction
Documents or the transactions contemplated thereby, and except for fees payable
to Greenhill and TPG by West, no Person acting for or on behalf of West is
entitled to receive any broker's, finder's or similar fee or commission in
respect thereof based in any way on any agreement, arrangement or understanding
made by or on behalf of West.
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Section 4.07 Financial Plan. The financial plan provided to
Investor on May 12, 2005 (the "Financial Plan") was prepared by West in good
faith using assumptions believed by West to be reasonable, and, as of the date
hereof, the Financial Plan represents West's reasonable, good faith estimate of
the future financial performance of the Company.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF INVESTOR
Investor represents and warrants to the Company as follows:
Section 5.01 Organization. It is an entity duly organized
under the laws of the jurisdiction of its formation having all requisite power
and authority and all requisite governmental licenses, authorizations, consents
and approvals to execute, deliver and perform its obligations under this
Agreement and the Stockholders Agreement.
Section 5.02 Authorization; No Contravention. The execution,
delivery and performance by Investor of this Agreement and the Stockholders
Agreement and the consummation of the transactions contemplated hereby and
thereby, are within Investor's powers and have been duly authorized by all
necessary action and do not and will not contravene the terms of Investor's
Operating Agreement. This Agreement constitutes and, when executed and delivered
by Investor at Closing the Stockholders Agreement will constitute, a legal,
valid and binding obligation of Investor, enforceable against Investor in
accordance with its terms.
Section 5.03 Consents; No Conflicts. Except for (i) the filing
of a notification and report form under the HSR Act and the termination or
expiration of the waiting period under the HSR Act, (ii) the filing of any other
required applications or notices with any Governmental Authority and approval of
such applications and notices, and (iii) approval by the Bankruptcy Court, no
Approval is necessary or required in connection with the execution, delivery or
performance by, or enforcement against, Investor of this Agreement or the
Stockholders Agreement or for the consummation of the transactions contemplated
hereby and thereby, except for such Approvals that would not, individually or in
the aggregate, reasonably be expected to have a material adverse effect on the
ability of Investor to consummate the Investment, and all of which have been
duly obtained, taken, given or made and are in full force and effect, except for
Approvals that would not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the ability of Investor to
consummate the Investment.
Section 5.04 Citizenship. Investor (or its assignee, as
permitted by Section 9.10 who acquires the New Common Stock hereunder at the
Closing) is a Citizen of the Untied States.
ARTICLE VI
PRE-CLOSING COVENANTS
Section 6.01 Taking of Necessary Action. (a) The Company, West
and Investor (solely with respect to the Investment) shall cooperate with each
other and use (and shall cause their respective Subsidiaries to use) their
respective reasonable best efforts to take or cause to be taken all actions, and
do or cause to be done all things, necessary, proper or advisable
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on its part under this Agreement and applicable Law to consummate and make
effective the Transactions as soon as practicable, including preparing and
filing as promptly as practicable all documentation to effect all necessary
notices, reports and other filings (including, without limitation, appropriate
filings pursuant to the HSR Act) and to obtain as promptly as practicable all
consents, registrations, approvals, permits and authorizations necessary or
advisable to be obtained from any third party and/or any Governmental Authority
in order to consummate the Transactions. In exercising the foregoing rights, the
Company, West and Investor shall act reasonably and as promptly as practicable.
The Company's, West's and (solely with respect to the Investment) Investor's
obligations under this Section 6.01 shall include, without limitation, the
obligation to use their respective reasonable best efforts to defend any
lawsuits or legal proceedings, whether judicial or administrative, or any other
actions by a Governmental Authority, challenging the Transactions, including
using reasonable best efforts to seek to have any stay or other injunctive
relief which would prevent or materially delay or impair the consummation of the
Transactions entered by any court or other Governmental Authority reversed on
appeal or vacated. For purposes of this Section 6.01, as it relates to Investor,
"reasonable best efforts" shall include Investor's agreement to (i) hold its
airline assets, if any, in one or more subsidiaries separate from the company
that will hold the Investor's equity interest in the Company, and (ii) nominate
an Investor Director (as defined in the Stockholders Agreement) whose service
would not conflict with applicable law. Except as provided in the immediately
preceding sentence, Investor shall not be required (1) to divest, or agree to
divest, any of its businesses or assets or any interest therein, or (2) to take
or agree to take any other action or agree to any limitation, restriction or
condition that could reasonably be expected to materially impair the benefits to
Investor expected, as of the date of this Agreement, to be realized from the
transactions contemplated hereby.
(b) Each of the Company, West and Investor shall, to the
extent related to the Investment, in connection with obtaining the approvals
referenced in Section 6.01(a), use its reasonable best efforts to (i) subject to
applicable law, permit the other party or the other party's outside counsel to
review in advance any proposed written communication between it and any
Governmental Authority, (ii) promptly inform each other of any communication (or
other correspondence or memoranda) received by such party from, or given by such
party to, any other Governmental Authority and of any material communication
received or given in connection with any proceeding by a private party, in each
case regarding any of the transactions contemplated hereby, (iii) consult with
each other in advance to the extent practicable of any meeting or conference
with any Governmental Authority or, in connection with any proceeding by a
private party, with any other Person, and to the extent permitted by the
applicable Governmental Authority or other Person, give the other party the
opportunity to attend and participate in such meetings and conferences, and (iv)
furnish each other with copies of all correspondence, filings and written
communications between them or their Subsidiaries or Affiliates on one hand, and
any such Governmental Authority or its respective staff on the other hand, with
respect to this Agreement and the transactions contemplated hereby, except that
(A) any materials concerning Investor's valuation of the transaction may be
redacted and (B) any proprietary information of one party not previously
disclosed to the other party may be disclosed only to the other party's outside
counsel, at the option of the disclosing party.
(c) The Company shall, in coordination with Investor (i) file
with the Bankruptcy Court a bidding procedures motion, reasonably satisfactory
to Investor, the expense
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reimbursement provisions set forth in Section 9.01 hereof and the provisions of
Section 4.20 of the Merger Agreement, and (ii) diligently seek approval of the
Transactions (consistent with the Bidding Procedures, as hereinafter defined),
and (iii) if the Company has determined that the Merger represents a highest and
best Qualified Competing Plan Proposal (as defined in the order approving the
bidding procedures), (A) file with the Bankruptcy Court, and diligently seek
approval of, the Disclosure Statement (with the Plan attached as an exhibit
thereto) reasonably satisfactory to Investor and (B) seek to obtain, as
expeditiously as possible, a Confirmation Order with respect to the Plan that is
reasonably satisfactory to the Investor.
Section 6.02 Notifications. At all times prior to the Closing
Date, Investor shall promptly notify the Company and each of the Company and
West shall promptly notify Investor in writing of any fact, change, condition,
circumstance or occurrence or nonoccurrence of any event that will or is
reasonably likely to result in such party's representations and warranties to be
untrue or inaccurate in any material respect or the failure to satisfy the
conditions to be complied with or satisfied by it hereunder; provided, however,
that the delivery of any notice pursuant to this Section 6.02 shall not be
deemed to alter or amend such party's representations or warranties or limit or
otherwise affect the remedies available hereunder to any party giving or
receiving such notice.
Section 6.03 Financial and Other Information. From and after
the date hereof, each of the Company and West shall, and shall cause each of
their respective Subsidiaries and Representatives to, afford to Investor, its
Affiliates and their respective Representatives, including qualified prospective
lenders to Investor that sign appropriate confidentiality agreements, complete
access, upon reasonable notice and in such manner as will not unreasonably
interfere with the conduct of such companies' respective businesses, to their
and their respective Subsidiaries respective facilities, properties, books,
contracts, commitments, records (including information regarding any material
pending or threatened legal proceeding to which any of such companies is, or
reasonably expects to be, a party and negotiations relating to any labor
agreements or labor disputes involving the Company, West or any of their
respective Subsidiaries), key personnel, officers, independent accountants and
legal counsel; provided, however, that neither the Company nor West will be
required to provide access to employee personnel files if providing such files
would be unreasonable or a violation of applicable Law.
Section 6.04 Delivery of Reports. Each of the Company and West
and their respective Subsidiaries shall deliver to Investor, promptly following
delivery to the ATSB, the reports concerning the weekly and monthly operating
and financial data of the Company or West, as applicable, and their respective
Subsidiaries that are delivered to the ATSB.
Section 6.05 Amendments to Merger Agreement; Etc. Other than
pursuant to and in accordance with Section 4.20 of the Merger Agreement, the
Company and West will not amend the Merger Agreement, the Plan, any Other
Investment Agreement or any other Transaction Document, in each case without the
prior written approval of the Investor, such approval not to be unreasonably
withheld (it being understood that in such connection Investor is not required
to consider the interests of any other Person), and, notwithstanding the
foregoing, neither the Company nor West shall waive any condition to the
consummation of the Merger or the Plan without the prior written approval of
Investor.
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Section 6.06 Publicity. Prior to the Closing, except as
required by Law or by obligations pursuant to any listing agreement with or
requirement of any national securities exchange or national quotation system on
which the Common Stock, New Common Stock or the common stock of West is listed,
admitted to trading or quoted, neither the Company (nor any of its
Subsidiaries), West (nor any of its Subsidiaries) nor Investor (nor any of its
Affiliates) shall, without the prior written consent of each other party hereto,
which consent shall not be unreasonably withheld or delayed, make any public
announcement or issue any press release with respect to the transactions
contemplated by this Agreement or the Transaction Documents. Prior to making any
public disclosure required by applicable Law or pursuant to any listing
agreement with or requirement of any relevant national exchange or national
quotation system, the disclosing party shall consult with the other parties
hereto, to the extent feasible, as to the content and timing of such public
announcement or press release. To the extent any party is required to file this
Agreement or any Transaction Document with the SEC or any other Governmental
Authority (including the Bankruptcy Court), the parties shall consult with each
other concerning information for which confidential treatment will be requested.
Section 6.07 Issuances of Equity Securities. The Company shall
not accept subscriptions for, offer, issue, sell, or agree, commit or obligate
itself to offer, issue or sell, any Equity Securities other than New Common
Stock (a) issued to Investor pursuant to this Agreement, (b) issued to other
Persons pursuant to other investment agreements entered into on terms and
conditions, including without limitation purchase price, that are no more
favorable to such Persons than the terms and conditions provided herein and in
the Stockholders Agreement are to the Investor up to an aggregate amount of
$500,000,000 including the investments of the Investor and the Other Investors,
(c) issued to West's equityholders pursuant to the Merger Agreement as set forth
on Schedule 3.05, and (d) issued to existing equityholders and creditors of the
Company pursuant to the Plan as set forth on Schedule 3.05, (e) issued by the
Company on or prior to the Effective Date pursuant to a rights offering by the
Company to existing Company and West stakeholders to purchase shares of New
Common Stock at a price per share no less than the purchase price per share of
New Common Stock paid by Investor under this Agreement and in an aggregate
amount not to exceed the difference between $650,000,000 and the aggregate
amount of the Investment, the Other Investments and the investment of any other
Person under clause (b) above, and (f) issued by the Company on or prior to the
Effective Date at a purchase price per share no less than the purchase price per
share of New Common Stock paid by Investor under this Agreement and otherwise on
terms and conditions that are no more favorable than the terms and conditions
provided herein and in the Stockholders Agreement, for proceeds in excess of
$650,000,000 provided that (i) the sole use of such proceeds is the redemption
or repurchase of Equity Securities from existing Company and West stakeholders
at a repurchase or redemption price that values the Equity Securities redeemed
or repurchased (on an as-converted basis in the case of convertible securities
and, in the case of Equity Securities of West, taking into account the Class B
Merger Exchange Ratio (as defined in the Merger Agreement)) at a price per share
no more than the purchase price per share of New Common Stock paid by Investor
under this Agreement, (ii) the aggregate value of the New Common Stock (valued
on the same basis as the New Common Stock to be issued pursuant to this
Agreement) issued pursuant to this clause (f) shall not exceed $200,000,000 and
(iii) Investor is provided the right to purchase, at its option, up to
$25,000,000 of the New Common Stock to be issued pursuant to this clause (f) at
a price per share equal to the purchase price per share of New Common Stock paid
by Investor under this Agreement. Notwithstanding the foregoing, in
15
connection with the implementation of the Plan, the Company may authorize and
reserve for issuance under the Company's equity incentive plan a number of
shares of New Common Stock not to exceed 12.5% of the outstanding number of
shares of New Common Stock on a Fully Diluted Basis as of the Effective Date,
provided that any awards of such shares of New Common Stock made or committed to
be made at anytime before the second anniversary of the Effective Date, (x) may
only consist of options with an exercise price not less than the lesser of (a)
Fair Market Value as of the date of grant and (b) the Investment Price (as
appropriately adjusted to reflect stock splits, stock dividends, reverse splits
and similar changes with respect to the New Common Stock effected after the
Closing Date); provided that the exercise price for any options granted as of or
immediately following the Effective Date shall be not less than the Investment
Price and (y) shall not be effective unless such awards are approved or ratified
by the Board (as constituted from and after the Effective Date as set forth in
Section 1.8(a) of the Merger Agreement) or by a committee with appropriate
authority granted by such Board.
Section 6.08 Transfer Taxes. All transfer taxes, fees and
duties under applicable law incurred in connection with the Investment under
this Agreement will be borne and paid by the Company and it shall promptly
reimburse Investor for any such tax, fee or duty which Investor is required to
pay under applicable law.
Section 6.09 Bankruptcy Covenants. (a)Notwithstanding anything
herein to the contrary, the Company shall not, and shall cause each of the other
Debtors not to, offer, agree to, or seek approval from the Bankruptcy Court for,
and shall use their best efforts to object to any request by any other party
for, any break-up fee, work fee, expense reimbursement or any other benefit or
protection for any Person in connection with any proposed acquisition of or
investment in any of the Debtors, other than (i) West, (ii) Investor, (iii) any
Other Investor, and (iv) any other Person making an investment pursuant to
Section 6.08(b); provided that (A) such other Person is purchasing at least
$50,000,000 of New Common Stock on terms, and conditions, including without
limitation purchase price, that are no more favorable to such other Person than
the terms and conditions provided herein and in the Stockholders Agreement are
to the Investor and (B) without limitation of the preceding clause (A), any
break-up or similar fee payable to such other Person shall not exceed three
percent (3.0%) of the aggregate amount of financing to be provided by such other
Person.
(b) Each of the Debtors agrees that if the Merger Agreement
becomes the Approved Proposal (as defined in the Merger Agreement), it shall use
its best efforts to cause any order approving the Approved Proposal to prohibit
the Debtors (and any Person purporting to act on behalf of the estate of any
Debtor) from violating the provisions of Section 4.4(a) of the Merger Agreement
or from otherwise pursuing in any way any East Acquisition Proposal (as defined
in the Merger Agreement) other than the Merger Agreement unless the Merger
Agreement shall have previously been terminated in accordance with its terms.
(c) In connection with any proceedings in the Bankruptcy Court
related to the Bidding Procedures (as hereinafter defined), the order approving
the Approved Proposal or the transactions contemplated by the Merger Agreement
or this Agreement (or any Qualified Competing Plan Proposal (as defined in the
Bidding Procedures)) (a) the Company shall provide to Investor copies of all
motions, objections, pleadings, notices, proposed orders and other documents
that are filed by or on behalf of any Debtor as soon as reasonably practicable
prior to
16
filing thereof with the Bankruptcy Court and (b) West shall provide to
Investor copies of all motions, objections, pleadings, notices, proposed orders
and other documents that are filed by or on behalf of West as soon as reasonably
practicable prior to filing thereof with the Bankruptcy Court.
(d) Except in accordance with the Bidding Procedures, the Company
and West shall not, and shall not authorize or permit any of their Subsidiaries
or any of the Company's or West's or such Subsidiaries' Representatives,
directly or indirectly, to, (i) solicit, initiate, or take any action designed
to induce a proposal or offer for an Alternative Proposal, (ii) participate in
any discussions or negotiations regarding any Alternative Proposal, or (iii)
enter into any letter of intent, agreement in principle, acquisition agreement
or other similar agreement related to any Alternative Proposal. "Alternative
Proposal" means (x) any Alternative Transaction, or proposal therefor, or (y)
any proposed investment that would, or is intended to, replace all or a material
portion of the investment contemplated by this Agreement.
ARTICLE VII
CONDITIONS
Section 7.01 Conditions to Investor's Obligations. The
obligation of Investor to make the Investment pursuant to Section 2.01 hereof is
subject to satisfaction or waiver of each of the following conditions precedent:
(a) Definitive Documents. Definitive Transaction
Documents (in form and substance reasonably satisfactory to Investor) shall have
been prepared, negotiated and, to the extent applicable, duly executed by the
parties (or, as applicable, their Affiliates), and approval by the Bankruptcy
Court of such documents pursuant to a Final Order, to the extent necessary,
shall have been obtained. All such Transaction Documents shall have been
executed by the parties thereto (other than Investor and its Affiliates) on or
prior to the Effective Date, shall not have been modified, amended, waived or
supplemented without the consent of Investor, shall be in effect and the
consummation of the transactions contemplated thereby shall not be stayed, and
all conditions to the obligations of the parties under such Transaction
Documents shall have been satisfied or waived. All corporate and other
proceedings to be taken by the Company, West or any of their respective
Subsidiaries in connection with such Transaction Documents and the transactions
contemplated thereby to be completed at the Closing and documents incident
thereto shall have been completed in form and substance reasonably satisfactory
to Investor, and Investor shall have received all such counterpart originals or
certified or other copies of such Transaction Documents and such other documents
as it may reasonably request. Without limiting the generality of the foregoing,
in connection with the consummation of the Plan, the Company and the Other
Investors and shall have entered into the Stockholders Agreement.
(b) Company Representations and Warranties;
Covenants. The representations and warranties of the Company set forth in
Article III hereof (without giving effect to any material adverse effect,
materiality or similar qualifier) shall have been true and correct in all
respects on and as of the date hereof and at the Closing as if made on the
Closing Date (except where such representation and warranty speaks by its terms
of a different date, in
17
which case it shall be true and correct as of such date), except to the extent
that such inaccuracies in any such representation or warranty have not had, and
would not, individually or in the aggregate, have a Material Adverse Effect on
the Company. The Company shall have performed in all material respects all
obligations and complied in all material respects with all agreements,
undertakings, covenants and conditions required to be performed by it hereunder
at or prior to the Closing, and the Company shall have delivered to Investor at
the Closing a certificate dated the Closing Date and signed by the chief
executive officer and the chief financial officer of the Company to the effect
that the conditions set forth in this Section 7.01(b) have been satisfied.
(c) West Representations and Warranties; Covenants.
The representations and warranties of West set forth in Article IV hereof
(without giving effect to any material adverse effect, materiality or similar
qualifier) shall have been true and correct in all respects on and as of the
date hereof and at the Closing as if made on the Closing Date (except where such
representation and warranty speaks by its terms of a different date, in which
case it shall be true and correct as of such date), except to the extent that
such inaccuracies in any such representation or warranty have not had, and would
not, individually or in the aggregate, have a Material Adverse Effect on West.
West shall have performed in all material respects all obligations and complied
in all material respects with all agreements, undertakings, covenants and
conditions required to be performed by it hereunder at or prior to the Closing,
and West shall have delivered to Investor at the Closing a certificate dated the
Closing Date and signed by the chief executive officer and the chief financial
officer of West to the effect that the conditions set forth in this Section
7.01(c) have been satisfied.
(d) Compliance with Laws, No Adverse Action or
Decision. Since the date hereof, (i) no Law shall have been promulgated, enacted
or entered that restrains, enjoins, prevents, materially delays, prohibits or
otherwise makes illegal the performance of any of the Transaction Documents;
(ii) no preliminary or permanent injunction or other order by any Governmental
Authority that restrains, enjoins, prevents, delays, prohibits or otherwise
makes illegal the performance of any of the Transaction Documents shall have
been issued and remain in effect, except for such injunctions that, if obtained,
could not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the ability of Investor, the Company or West or their
respective Affiliates to consummate the Transactions; (iii) no Governmental
Authority shall have instituted any legal proceeding that seeks to restrain,
enjoin, prevent, delay, prohibit or otherwise make illegal the performance of
any of the Transaction Documents, except for any such legal proceedings which
have a significant possibility of being brought to a conclusion which could not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of Investor, the Company or West or their
respective Affiliates to consummate the Transactions, and (iv) there is no
pending or threatened investigation or litigation by any other Person relating
to the Transactions which, if determined adversely to the Company, West or
Investor, would materially impair or limit the rights and benefits of Investor
under the Transaction Documents or the economic benefits to Investor of the
Transactions in the aggregate and which Investor reasonably believes, based on
the advice of counsel, has a reasonable likelihood of success.
(e) Approvals. The Company, Investor and West shall
have received (i) all material Regulatory Approvals, which shall have become
final (provided that, if an appeal of such Regulatory Approval is pending and
such appeal has a significant possibility of being
18
resolved adversely to the Company, Investor or West in a manner that would
reasonably be expected to have a material adverse effect on the ability of
Investor, the Company or West or their respective Affiliates to consummate the
Transactions, this clause (i) shall be deemed not to be satisfied), and (ii) all
other material approvals, permits, authorizations, exemptions, consents,
licenses and agreements from other third parties that are necessary to permit
the Transactions to be completed or performed as contemplated by the Transaction
Documents and to permit the Investor and its Affiliates and Company and its
Affiliates (including West and its Subsidiaries) to carry on its business after
such transactions in a manner not materially inconsistent with the manner in
which it was carried on prior to the Effective Date (together with the
Regulatory Approvals, the "Approvals"), which Approvals shall not contain any
condition or restriction that materially impairs the ability of the Investor and
its Affiliates or the ability of the Company (including West and its
Subsidiaries) to carry on its business. All waiting periods imposed by
applicable Law (including, without limitation, under the HSR Act) in connection
with the Transactions shall have expired or been terminated without any action
having been taken by any court of competent jurisdiction restraining, preventing
or imposing materially adverse conditions upon such transactions or upon the
conduct of the business of Investor, East, West or their respective Affiliates.
(f) Plan of Reorganization. The Plan shall be in a
form reasonably acceptable to the Investor, such Plan shall have been confirmed
by the Bankruptcy Court, and such Plan shall among other things (i) not conflict
with any material term of this Agreement, the Stockholders Agreement or the
other Transaction Documents, (ii) be substantially consistent in all material
respects with the terms of the Financial Plan including, without limitation,
concessions obtained and to be obtained from the Debtors' employees, creditors,
lessors and other claimants, and (iii) reflect a corporate and capital structure
(including liabilities) of the Company consistent with the Financial Plan. All
conditions to the effectiveness of the Plan, other than the consummation of this
Agreement, shall have been satisfied, and a Confirmation Order in a form
reasonably acceptable to the Investor shall have been entered and become a Final
Order no later than December 31, 2005.
(g) Additional East Equity. In connection with the
emergence of the Company and the Operating Companies from chapter 11 and the
consummation of the Plan, the Company will have received on the Effective Date
cash equity investments aggregating not less than $375,000,000 and not more than
$500,000,000 pursuant to the Other Investment Agreements (and this Agreement
through the conversion of Investor's loans under the Credit Facility pursuant
hereto), all on terms, including without limitation purchase price, no more
favorable to the Other Investors than the terms of this Agreement and the
Stockholders Agreement are to the Investor, which with all other equity capital
of the Company, will be invested only in a single class of common stock, the New
Common Stock, with all such New Common Stock having the same voting rights, and
shall have no other class of capital stock authorized in its charter other than
the New Common Stock. The Company alone, and not any Affiliate of the Company,
shall have issued Equity Securities in connection with the consummation of the
Plan.
(h) Contracts. All material executory contracts and
unexpired leases, the assumption, assignment, rejection or renegotiation of
which is necessary for the successful implementation of the Plan and the
operation of the Company's business as such business is
19
contemplated in the Financial Plan to be conducted, shall have been assumed,
assigned, rejected or renegotiated, as applicable.
(i) Effective Date and Merger. The Effective Time (as
defined in the Merger Agreement) shall have occurred, or shall occur
concurrently with the Closing, and the Merger shall have been, or will
concurrently with the Closing be, consummated in accordance with the terms of
the Merger Agreement without amendment or waiver other than as permitted in
accordance with Section 6.05 of this Agreement.
(j) No Conversion to Chapter 7. Neither the Company's
Chapter 11 Case nor US Airways Chapter 11 Case shall have been converted to a
case under Chapter 7 of the Bankruptcy Code and no trustee shall have been
appointed under any chapter of the Bankruptcy Code in respect of either such
case.
(k) Certificate of Incorporation and Bylaws. The
Certificate of Incorporation and Bylaws, substantially in the forms attached as
Exhibits C and D, respectively, to the Merger Agreement, shall have been filed
with and accepted by the Secretary of State of the State of Delaware and shall
have become effective. As of the Closing Date, the Company shall have delivered
to Investor a complete and correct copy of the certificates of incorporation and
the bylaws or comparable governing instruments of each of the Operating
Companies, in full force and effect as of the Closing Date.
(l) Delivery. The Company shall have executed and
delivered to Investor the shares of New Common Stock pursuant to and in
accordance with Section 2.01 hereof.
(m) Board Representation. The composition of the
Board shall be as set forth in Section 1.8(a) of the Merger Agreement, which
shall be included in a staggered board consisting of three classes with the
directors in class three having a term of at least three years from the
Effective Date, and, as contemplated by the Stockholders Agreement, the Investor
Director designated by Investor, if so designated, shall have been elected or
appointed to the Board for an initial term of three years.
(n) Directors' and Officers' Insurance. The Company
shall have procured and maintained in full force and effect directors' and
officers' liability insurance with respect to members of the Board of Directors
of the Company, which insurance shall be at least $100 million, and shall cover
such risks, as is customary for a corporation in the Company's and its
Affiliates respective businesses or other similar businesses.
(o) Absence of Changes. From the date of this
Agreement through the Closing Date, there shall not have occurred any change,
event, occurrence, condition or development that has or could reasonably be
expected to have a material adverse effect on the financial condition, assets,
liabilities, business or results of operations of the Company or West or that
would prevent, materially delay or materially impair the ability of the Company,
West or Investor to consummate the transactions contemplated by this Agreement.
The Company's financial and operational performance from the period from March
31, 2005 to the Closing Date shall not have deviated materially and adversely
from the performance indicated in the Financial Plan.
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(p) Profit Sharing Plan. The Company's employee
profit sharing plan shall have been amended on terms no less favorable to
Investor than those set forth on Schedule 7.01(q).
(q) Listing. The shares of New Common Stock to be
issued to Investor under this Agreement shall have been authorized for listing
or quotation, as applicable, on the New York Stock Exchange or NASDAQ Stock
Market upon official notice of issuance.
(r) Amendment to JSA Agreement. An amendment to the
JSA Agreement, in form and substance reasonably satisfactory to the Investor,
providing for a guarantee of payment by the Company with respect to the
obligations of US Airways under the JSA Agreement (excluding any consequential
damages), if US Airways is in breach thereof, shall be duly executed and
delivered to US Airways and the Company.
Section 7.02 Conditions to the Company's Obligations. The
obligation of the Company to issue and sell the New Common Stock pursuant to
Section 2.01 hereof at the Closing is subject to the satisfaction or waiver of
each of the following conditions precedent:
(a) Definitive Documents. Definitive Transaction
Documents (in form and substance reasonably satisfactory to the Company)
necessary to consummate the transactions contemplated herein shall have been
prepared, negotiated and, to the extent applicable, executed by the parties (or,
as applicable, their Affiliates), and approval by the Bankruptcy Court of such
documents, as necessary, shall have been obtained. All Transaction Documents
shall not have been modified, shall be in effect and the consummation of the
transactions contemplated thereby shall not be stayed, and all conditions to the
obligations of the parties under the Transaction Contracts shall have been
satisfied or effectively waived. All corporate and other proceedings to be taken
by Investor its Affiliates in connection with the Transaction Documents and the
transactions contemplated thereby to be completed at the Closing and documents
incident thereto shall have been completed in form and substance reasonably
satisfactory to the Company, and the Company shall have received all such
counterpart originals or certified or other copies of the Transaction Documents
and such other documents as it may reasonably request.
(b) Investor Representations and Warranties;
Covenants. The representations and warranties of Investor set forth in Article V
hereof (without giving effect to any material adverse effect, materiality or
similar qualifier) shall have been true and correct in all respects, on and as
of the date hereof and at the Closing as if made on the Closing Date (except
where such representation and warranty speaks by its terms as of a different
date, in which case it shall be true and correct as of such date), except to the
extent that such inaccuracies have not had, and would not, individually or in
the aggregate, reasonably be expected to have a material adverse effect on the
ability of Investor or its Affiliates to consummate the Transactions. Investor
shall have performed in all material respects all obligations and complied in
all material respects with all agreements, undertakings, covenants and
conditions required to be performed by it at or prior to the Closing, and
Investor shall have delivered to the Company and West at the Closing a
certificate dated the Closing Date and signed on behalf of a member of Investor
to the effect that the conditions set forth in this Section 7.02(b) have been
satisfied.
21
(c) Compliance with Laws; No Adverse Action or
Decision. Since the date hereof, (i) no Law shall have been promulgated, enacted
or entered that restrains, enjoins, prevents, materially delays, prohibits or
otherwise makes illegal the performance of any of the Transaction Documents with
respect to the transactions contemplated thereby to be completed at the Closing;
(ii) no preliminary or permanent injunction or other order by any Governmental
Authority or other Person that restrains, enjoins, prevents, delays, prohibits
or otherwise makes illegal the performance of any of the Transaction Documents
shall have been issued and remain in effect, except for such injunctions that,
if obtained, could not, individually or in the aggregate, reasonably be expected
to have a material adverse effect on the ability of Investor, the Company or
West or their respective Affiliates to consummate the Transactions; and (iii) no
Governmental Authority shall have instituted any legal proceeding that seeks to
restrain, enjoin, prevent, delay, prohibit or otherwise make illegal the
performance of any of the Transaction Documents, except for any legal
proceedings which have a significant possibility of being brought to a
conclusion which could not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the ability of Investor, the
Company or West or their respective Affiliates to consummate the Transactions.
(d) Approvals. The Company and West shall have
received (i) all material Regulatory Approvals (other than waiting periods
imposed by applicable Law as referred to later in this paragraph), which shall
have become final (provided that, if an appeal of such Regulatory Approval is
pending and such appeal has a significant possibility of being resolved
adversely to the Company or West in a manner that would reasonably be expected
to have a material adverse effect on the ability of Investor, the Company or
West or their respective Affiliates to consummate the Transactions, this clause
(i) shall be deemed not to be satisfied), and (ii) all other Approvals, which
Approvals shall not contain any condition or restriction that, in the Company's
reasonable judgment, materially impairs the Company's ability to carry on its
business. Without limiting the generality of clause (ii), any and all required
approvals under any material financing agreements to which the Company, West or
any of their respective Subsidiaries is a party shall have been obtained. All
waiting periods imposed by applicable Law (including, without limitation, under
the HSR Act) in connection with the transactions contemplated by the Transaction
Documents shall have expired or been terminated without any action having been
taken by any court of competent jurisdiction restraining, preventing or imposing
materially adverse conditions upon such transactions.
(e) Confirmation Order. The Confirmation Order,
satisfactory in form and substance in all respects to the Company, shall have
been entered by the Bankruptcy Court and, once entered, shall not have been
modified without the Company's and West's prior written consent in any manner
materially adverse to the Company, shall be in effect and shall not have been
stayed.
(f) Effective Date and the Merger. The Effective Date
and the satisfaction or waiver of all conditions to the closing of the Merger
shall have occurred not later than the Closing.
(g) Citizenship. The Company and West shall have
received reasonably satisfactory assurances as it may request that Investor is a
Citizen of the United States.
22
ARTICLE VIII
TERMINATION
Section 8.01 Termination of Agreement. Subject to Section 8.02
hereof, this Agreement may be terminated by notice in writing at any time prior
to the Closing by:
(a) Investor or the Company, if (i) closing of the
Transactions (including the Closing) shall not have occurred on or before
December 31, 2005 or (ii) the Merger Agreement shall have been terminated in
accordance with its terms on or before December 31, 2005;
(b) Investor, if (i) a bidding procedures order
(substantially in the form attached as Exhibit E to the Merger Agreement)
approving the expense reimbursement provisions set forth in Section 9.01 and the
provisions of Section 4.20 of the Merger Agreement (in the form attached as
Exhibit A to this Agreement) (the "Bidding Procedures") hereof shall not have
been entered by the Bankruptcy Court within thirty (30) days following the date
hereof, but in no event later than June 30, 2005, (ii) the Merger and the
transactions contemplated by the Merger Agreement and this Agreement shall not
have been determined by the Bankruptcy Court to be the Approved Proposal within
sixty-five (65) days after the entry by the Bankruptcy Court of the order
approving the Bidding Procedures contemplated by the preceding clause (i), (iii)
there shall have been a breach by the Company or West of any material
representation, warranty, covenant or agreement contained in this Agreement,
which breach would result in the failure to satisfy any condition set forth in
Section 7.01 hereof to Investor's obligations and that has not been cured within
thirty (30) days following receipt by the Company or West of written notice from
Investor of such breach, (iv) any condition set forth in Section 7.01 hereof to
Investor's obligations is not capable of being satisfied, (v) the Company shall
enter into a written agreement or letter of intent or agreement in principle
providing for an Alternative Proposal, or (vi) the Bankruptcy Court shall have
ordered the Company to terminate this Agreement in order to accept an
Alternative Proposal;
(c) the Company, if (i) there shall have been a
breach by Investor of any material representation, warranty, covenant or
agreement contained in this Agreement which breach would result in the failure
to satisfy any condition set forth in Section 7.02 hereof to the Company's
obligations and that has not been cured within thirty (30) days following
receipt by Investor of written notice from the Company of such breach, or (ii)
any condition set forth in Section 7.02 hereof to the Company's obligations is
not capable of being satisfied; or
(d) mutual agreement in writing by the Company and
Investor.
Section 8.02 Effect of Termination. If this Agreement is
terminated in accordance with Section 8.01 hereof and the transactions
contemplated hereby are not consummated, this Agreement shall become null and
void and of no further force and effect except that (i) the terms and provisions
of this Section 8.02 and Article IX hereof shall survive the termination of this
Agreement, and (ii) any termination of this Agreement shall not relieve any
party hereto from any liability for any willful breach of its obligations
hereunder. A termination shall not void or affect any of the constituent
transactions consummated prior to
23
such termination or any sections hereof which by their terms survive
termination. If this Agreement is terminated in accordance with Section 8.01
hereof and the transactions contemplated hereby are not consummated, Amendment
No. 1 to the Credit Facility shall automatically terminate and be of no further
effect; however, such termination shall not otherwise void or affect any other
terms of the Credit Facility.
ARTICLE IX
MISCELLANEOUS
Section 9.01 Fees and Expenses. (a) Except as expressly
provided herein or in any Transaction Document, each party shall bear its own
costs and expenses incurred in connection with this Agreement or any of the
Transactions.
(b) All amounts payable under this Agreement shall be
paid in immediately available funds to an account or accounts designated by the
recipient of such amounts, except as otherwise provided herein.
Section 9.02 Survival of Representations, Warranties and
Covenants. None of the representations, warranties or covenants contained in
this Agreement shall survive the Closing Date.
Section 9.03 Specific Performance. The parties hereto
specifically acknowledge that monetary damages are not an adequate remedy for
violations of this Agreement, and that any party hereto may, in its sole
discretion, apply to a court of competent jurisdiction for specific performance
or injunctive or such other relief as such court may deem just and proper in
order to enforce this Agreement or prevent any violation hereof and, to the
extent permitted by applicable Law and to the extent the party seeking such
relief would be entitled to the merits to obtain such relief, each party waives
any objection to the imposition of such relief.
Section 9.04 General Interpretive Principles. Whenever used in
this Agreement, except as otherwise expressly provided or unless the context
otherwise requires, any noun or pronoun shall be deemed to include the plural as
well as the singular and to cover all genders. The name assigned this Agreement
and the Section captions used herein are for convenience of reference only and
shall not be construed to affect the meaning, construction or effect hereof.
Unless otherwise specified, any references to a party's "judgment",
"satisfaction" or words of a similar import shall mean in such party's sole
judgment. Unless otherwise specified, the terms "hereof," "herein" and similar
terms refer to this Agreement as a whole (including the Exhibits and Schedules
hereto), and references herein to Articles or Sections refer to Articles or
Sections of this Agreement.
Section 9.05 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given, if
delivered personally, by telecopier or sent by first class mail, postage
prepaid, to the addresses set forth on Schedule 9.05.
Section 9.06 Entire Agreement; Amendment. This Agreement and
the documents described herein (including the Plan and the Credit Facility) or
attached or delivered pursuant hereto (including, without limitation, the other
Transaction Documents) set forth the
24
entire agreement between the parties hereto with respect to the transactions
contemplated by this Agreement. Any provision of this Agreement may only be
amended, modified or supplemented in whole or in part at any time by an
agreement in writing among the parties hereto executed in the same manner as
this Agreement. No failure on the part of any party to exercise, and no delay in
exercising, any right shall operate as waiver thereof, nor shall any single or
partial exercise by either party of any right preclude any other or future
exercise thereof or the exercise of any other right.
Section 9.07 No Other Representations or Warranties. Except
for the representations and warranties contained in this Agreement, neither East
nor West, nor any agent, Affiliate, officer, director, employee or
representative of either or them, nor any other Person, makes, or shall be
deemed to make, any representation or warranty to Investor, express or implied,
at law or in equity, on behalf of East or West, and East and West hereby exclude
and disclaim any such representation or warranty whether by either East or West
or any or their respective agents, Affiliates, officers, directors, employees or
representatives or any other Person, notwithstanding the delivery or disclosure
to Investor or any of their respective officers, directors, partners, employees
or representatives or any other Person of any documentation or other information
by East or West or any of their respective agents, Affiliates, officers,
directors, employees or representatives or any other Person with respect to any
one or more of the foregoing.
Section 9.08 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to constitute an
original, but all of which together shall constitute one and the same document.
Section 9.09 Governing Law. To the extent not governed by the
Bankruptcy Code, this Agreement shall be governed by, and interpreted in
accordance with, the Laws of the State of New York applicable to contracts made
and to be performed in that State without reference to its conflict of laws
rules. The parties hereto agree that the appropriate and exclusive forum for any
disputes arising out of this Agreement solely between the Company and Investor
shall be the Bankruptcy Court, or if such court will not hear any such suit, the
U.S. District Court for the Southern District of New York, and, the parties
hereto irrevocably consent to the exclusive jurisdiction of such courts, and
agree to comply with all requirements necessary to give such courts
jurisdiction. The parties hereto further agree that the parties will not bring
suit with respect to any disputes arising out of this Agreement except as
expressly set forth below for the execution or enforcement of judgment, in any
jurisdiction other than the above specified courts. Each of the parties hereto
irrevocably consents to the service of process in any action or proceeding
hereunder by the mailing of copies thereof by registered or certified airmail,
postage prepaid, to the address specified in Section 9.05 hereof. The foregoing
shall not limit the rights of any party hereto to serve process in any other
manner permitted by the Law or to obtain execution of judgment in any other
jurisdiction. The parties further agree, to the extent permitted by Law, that
final and non-appealable judgment against any of them in any action or
proceeding contemplated above shall be conclusive and may be enforced in any
other jurisdiction within or outside the United States by suit on the judgment,
a certified or exemplified copy of which shall be conclusive evidence of the
fact and the amount of indebtedness. THE PARTIES AGREE TO WAIVE ANY AND ALL
RIGHTS THAT THEY MAY HAVE TO A JURY TRIAL WITH RESPECT TO DISPUTES ARISING OUT
OF THIS AGREEMENT.
25
Section 9.10 Successors and Assigns. Except as otherwise
expressly provided herein, the provisions hereof shall inure to the benefit of,
and be binding upon, the Company's, West's and Investor's successors and
permitted assigns. Neither this Agreement nor any rights or obligations
hereunder shall be assignable by any party hereto without the prior written
consent of the other parties hereto.
Section 9.11 No Third-Party Beneficiaries. This Agreement is
for the sole benefit of the parties hereto and their respective successors and
permitted assigns and nothing herein, express or implied, is intended or shall
confer upon any other Person any legal or equitable right, benefit or remedy of
any nature whatsoever under or by reason of this Agreement.
Section 9.12 Confidentiality. A version of this Agreement with
certain competitively sensitive information redacted will be filed by the
Company with the Motion. Each party hereto agrees not to disclose the unredacted
version of this Agreement to any third parties (other than disclosure required
by the SEC or any other Governmental Authority (including the Bankruptcy Court)
or pursuant to any listing agreement with or requirement of any relevant
national exchange or national quotation system) without appropriate
confidentiality agreements with such third parties being in place that are
reasonably acceptable to the other parties hereto.
26
IN WITNESS WHEREOF, this Agreement has been executed on behalf of the
parties hereto by their respective duly authorized officers, all as of the date
first above written.
EASTSHORE AVIATION, LLC
By: /s/ Geoffrey T. Crowley
-------------------------------------------
Name: Geoffrey T. Crowley
Title: President
US AIRWAYS GROUP, INC.
By: /s/ Bruce R. Lakefield
-------------------------------------------
Name: Bruce R. Lakefield
Title: Chief Executive Officer
AMERICA WEST HOLDINGS CORPORATION
By: /s/ W. Douglas Parker
-------------------------------------------
Name: W. Douglas Parker
Title: Chairman and Chief Executive Officer
27