EXHIBIT 10.37
AMENDMENT NO. 1 ("Amendment"),
dated as of January 17, 2003, to the
INVESTMENT AGREEMENT dated as of
September 26, 2002 by and between The
Retirement Systems of Alabama and
US Airways Group, Inc. (the
"Agreement"), by and among US Airways
Group, Inc., a Delaware corporation (the
"Company"), The Retirement Systems of
Alabama ("RSA"), and Retirement Systems
of Alabama Holdings LLC ("RSA LLC").
The Company and RSA desire to amend the Agreement pursuant to
Section 10.06 thereof as hereinafter set forth. All capitalized terms used but
not otherwise defined herein shall have the meaning ascribed to such terms in
the Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein and for other good and valuable consideration the
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Amendments to Agreement. Effective upon the execution and delivery of
this Amendment No. 1, the Agreement is hereby amended as follows:
(a) Amendment to the Definition of "Investor". For all
purposes under the Agreement and this Amendment No. 1, the definition of
"Investor" in the Agreement shall be deleted in its entirety and "Retirement
Systems of Alabama Holdings LLC" shall be inserted in lieu thereof nunc pro tunc
as if RSA LLC had in all respects been the original signatory and party thereto
as the Investor and, accordingly, RSA LLC shall be treated for all purposes
thereunder as the Investor and all references therein to the Investor shall be
deemed to be references to RSA LLC.
(b) Amendments to Recitals.
(i) The third "Whereas" clause in the recitals of
the Agreement shall be deleted in its entirety and replaced with the following:
"WHEREAS, pursuant to the Plan, the reorganized Company intends to
cancel the existing outstanding Equity Securities of the Company upon the
Effective Date and issue (i) fifty two million four hundred thousand
(52,400,000) Class A common shares of the Company, having the terms set forth in
Exhibit A attached hereto (the "Class A Common Shares"), (ii) five million
(5,000,000) Class B common shares of the Company, having the terms set forth in
Exhibit A attached hereto (the "Class B Common Shares"), (iii) eighteen million
nine hundred fifty thousand (18,950,000) warrants, exercisable into Class A
Common Shares of the Company, having the terms set forth in Exhibit B attached
hereto (the "Class A-1 Warrants"), (iv) eighteen million nine hundred fifty
thousand (18,950,000) non-convertible Class A preferred shares of the Company,
having the terms set forth in Exhibit D attached hereto (the "Class A Preferred
Shares"), (v) seventy five thousand (75,000) non-convertible, redeemable Class B
preferred shares of the Company, having the terms set forth in Exhibit E
attached hereto (the "Class B Preferred Shares") and (vi) up to ten (10)
non-convertible Class C preferred shares of the
Company, which shall be issued in up to four series, having the terms set forth
in Exhibit F attached hereto (the "Class C Preferred Shares");"
(ii) The fourth "Whereas" clause in the recitals of
the Agreement shall be deleted in its entirety and replaced with the following:
"WHEREAS, simultaneously with the consummation of the Plan, the Investor
intends to purchase from the reorganized Company, and the reorganized Company
intends to issue and sell to the Investor, subject to the terms and conditions
contained herein, (i) twenty million six hundred fifty two thousand five hundred
ninety three (20,652,593) Class A Common Shares, (ii) five million (5,000,000)
Class B Common Shares, (iii) one million three hundred eighty thousand five
hundred seventy (1,380,570) Class A-1 Warrants, (iv) one million three hundred
eighty thousand five hundred seventy (1,380,570) Class A Preferred Shares, and
(v) seventy five thousand (75,000) Class B Preferred Shares (such transactions
collectively, the "Investment") in exchange for the Investment Price;"
(c) Amendments to Section 1.01.
(i) The following sentence included in Section 1.01
of the Agreement shall be deleted in its entirety: ""Class A-2 Warrants" has the
meaning set forth in the recitals hereto."
(ii) The following sentence included in Section 1.01
of the Agreement shall be deleted in its entirety: ""Warrants" means the Class
A-1 Warrants together with the Class A-2 Warrants". Thereafter, any and all
references to "Warrants" contained in the Agreement shall be deleted and
replaced with "Class A-1 Warrants."
(iii) The following sentence shall be inserted in
Section 1.01 of the Agreement in alphabetical order therein: ""CWA" has the
meaning set forth in Section 5.01(b) hereof."
(iv) The following sentence shall be inserted in
Section 1.01 of the Agreement in alphabetical order therein: ""CWA Director" has
the meaning set forth in Section 5.01(b) hereof."
(v) The following sentence included in Section 1.01
of the Agreement shall be deleted in its entirety: ""Creditors' Committee
Director" has the meaning set forth in Section 5.01(b) hereof."
(vi) The following sentence included in Section 1.01
of the Agreement shall be deleted in its entirety: ""Labor Director" has the
meaning set forth in Section 5.01(b) hereof."
(vii) The following sentence included in Section 1.01
of the Agreement shall be deleted in its entirety: ""AFA" means the Association
of Flight Attendants.", and shall be replaced with the following: ""AFA" means
the Association of Flight Attendants, International."
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(viii) The following sentence included in Section 1.01
of the Agreement shall be deleted in its entirety: ""TWU" means Transport
Workers Union.", and shall be replaced with the following: ""TWU" means the
Transport Workers Union of America."
(ix) The following sentence shall be inserted in
Section 1.01 of the Agreement in alphabetical order therein: ""AFA/TWU Director"
has the meaning set forth in Section 5.01(b) hereof."
(x) The following sentence included in Section 1.01
of the Agreement shall be deleted in its entirety: ""Series 3 Class C Preferred
Shares" means the Class C Preferred Shares to be issued, as of the Effective
Date, to or for the benefit of employees of the Debtors that are subject to the
new or amended collective bargaining agreements between any Debtor a labor union
(other than ALPA and IAMAW)", and shall be replaced with the following: ""Series
3 Class C Preferred Shares" means the Class C Preferred Shares to be issued, as
of the Effective Date, to or for the benefit of employees of the Debtors that
are subject to collective bargaining agreements between any Debtor, on the one
hand, and AFA and TWU, on the other."
(xi) The following sentence shall be inserted in
Section 1.01 of the Agreement in alphabetical order therein: ""Series 4 Class C
Preferred Shares" means the Class C Preferred Shares to be issued, as of the
Effective Date, to or for the benefit of employees of the Debtors that are
subject to the collective bargaining agreement between any Debtor and CWA."
(d) Amendments to Section 2.01.
(i) The title of Section 2.01 of the Agreement shall
be deleted and replaced with following, "Issuance and Purchase of Common Stock,
Class A-1 Warrants and Preferred Stock."
(ii) Section 2.01(a) of the Agreement shall be
deleted and replaced with the following:
"Upon the terms and subject to the conditions set forth in this
Agreement, and in reliance upon the representations and warranties hereinafter
set forth, at the Closing, the reorganized Company will issue, sell and deliver
to the Investor, and the Investor will purchase from the reorganized Company,
(i) twenty million six hundred fifty two thousand five hundred ninety three
(20,652,593) Class A Common Shares, (ii) five million (5,000,000) Class B Common
Shares, (iii) one million three hundred eighty thousand five hundred seventy
(1,380,570) Class A-1 Warrants, (iv) one million three hundred eighty thousand
five hundred seventy (1,380,570) Class A Preferred Shares, and (v) seventy five
thousand (75,000) Class B Preferred Shares, in each case, free and clear of all
Liens, for an aggregate purchase price of two hundred forty million dollars
($240,000,000)(the "Investment Price")."
(e) Amendments to Section 2.02. Section 2.02(b) of the
Agreement shall be amended by adding the words "and Class B Preferred Shares"
immediately after the words "and Class A Preferred Shares" in both clause (i)
and clause (ii) and changing "and Class A Preferred Shares" to ", Class A
Preferred Shares".
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(f) Amendment to Section 3.05. Section 3.05 of the Agreement
shall be deleted in its entirety and replaced with the following:
"Capitalization; Securities. Upon the Closing and after giving effect to
the Confirmation Order, the Plan and the Investment, the authorized capital of
the reorganized Company shall consist solely of: (i) two hundred and five
million (205,000,000) shares of Common Stock, of which (a) two hundred million
(200,000,000) shares shall be Class A Common Shares, and (b) five million
(5,000,000) shares shall be Class B Common Shares; (ii) fifty million
(50,000,000) shares of preferred stock, of which (x) twenty five million
(25,000,000) shares shall be designated Class A Preferred Shares, (y) seventy
five thousand (75,000) of which shall be designated Class B Preferred Shares,
and (z) up to ten (10) Class C Preferred Shares, issuable in up to four (4)
series, which, in each case, will be authorized and issued or reserved for
issuance; and (iii) twenty five million (25,000,000) Class A-1 Warrants. Upon
the Closing (prior to giving effect to the Investment) there shall not be
outstanding any (A) Class A Common Shares, other than (x) up to twenty-seven
million nine hundred ninety seven thousand four hundred seven (27,997,407) Class
A Common Shares to be issued by the Company to or for the benefit of the
Constituents upon the Effective Date and (y) up to three million seven hundred
fifty thousand (3,750,000) Class A Common Shares to be issued or reserved for
issuance by the Company to members of management of the Company upon the
Effective Date; (B) Class B Common Shares, (C) Class A-1 Warrants, other than
(x) up to fifteen million three hundred forty eight thousand eight hundred sixty
(15,348,860) Class A-1 Warrants to be issued to or for the benefit of the
Constituents upon the Effective Date and (y) up to two million two hundred
twenty thousand five hundred seventy (2,220,570) Class A-1 Warrants to be issued
or reserved for issuance by the Company to members of management of the Company
upon the Effective Date; provided, that the Company may elect to have comparable
options issued in place of Class A-1 Warrants described in this subsection and
this Agreement shall be deemed to be amended to reflect such issuance, and (D)
Class A Preferred Shares other than (x) up to fifteen million three hundred
forty eight thousand eight hundred sixty (15,348,860) Class A Preferred Shares
to be issued to or for the benefit of the Constituents upon the Effective Date
and (y) up to two million two hundred twenty thousand five hundred seventy
(2,220,570) Class A Preferred Shares to be issued to members of management of
the Company upon the Effective Date. Upon the Effective Date, all authorized
Class C Preferred Shares shall have been issued to or for the benefit of the
Constituents. Upon the Closing Date, all of such outstanding securities,
including, without limitation, the Equity Securities 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 Class A Common Shares issuable
upon (i) the exercise of the Class A-1 Warrants, when issued and delivered to
the holders of the Class A-1 Warrants, and (ii) the conversion of the Class B
Common Shares, when issued and delivered to the holders of the Class B Common
Shares, shall have been duly authorized and be validly issued, fully paid,
nonassessable and not subject to preemptive or similar rights of third parties.
Upon the Closing and after giving effect to the Confirmation Order and the Plan,
(i) except for this Agreement, there shall be no voting trusts, voting
agreements, proxies, first refusal rights, first offer rights, co-sale rights,
options, transfer restrictions or other agreements, instruments or
understandings (whether oral, formal or informal) with respect to the voting,
transfer or disposition of capital stock of the Company or any Subsidiary to
which the Company or any Subsidiary is a party or by which it is bound, or, to
the knowledge of the Company, among or
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between any persons other than the Company or any Subsidiary (as the case may
be), and (ii) except as set forth herein, there shall be no options, warrants,
rights, calls, commitments or agreements of any character to which the Company
or any Subsidiary is a party, or by which the Company or any Subsidiary is
bound, calling for the issuance of shares of capital stock or other equity
securities of the Company or any Subsidiary or any securities convertible into
or exercisable or exchangeable for, or representing the right to purchase or
otherwise receive, any such capital stock or other equity securities, or other
arrangement to acquire, at any time or under any circumstance, capital stock of
the Company or any Subsidiary or any such other securities. The rights,
preferences and privileges of the capital stock of the Company shall be as set
forth in the Certificate of Incorporation (including any Certificates of
Designation, as applicable) of the Company, as amended pursuant to the Plan and
in effect upon the Closing."
(g) Amendment to Section 4.01. Section 4.01 of the Agreement
shall be deleted in its entirety and replaced with the following:
"The Investor is a limited liability company formed, validly existing
and in good standing under the Laws of Delaware having all requisite power and
authority and requisite governmental licenses, authorizations, consents and
approvals to execute, deliver and perform its obligations under the Transaction
Documents."
(h) Amendment to Section 4.05. Section 4.05 of the Agreement
shall be amended by adding the words "and Class B Preferred Shares" immediately
after the words "and Class A Preferred Shares" in the first sentence and
changing "and Class A Preferred Shares" to ", Class A Preferred Shares".
(i) Amendments to Section 5.01.
(i) Section 5.01(a) of the Agreement shall be
amended by replacing the number "13" with the number "15".
(ii) Section 5.01(b) of the Agreement shall be
deleted in its entirety and replaced with the following:
"As of the Closing Date and after giving effect to the Confirmation
Order and Plan, the Board shall consist of: (i) eight (8) members designated by
the Investor (each, an "Investor Director"), (ii) two (2) members, neither of
whom is an employee or an affiliate of the Company or the Investor, identified
by the CEO (as defined below) in consultation with the Official Committee of
Unsecured Creditors (the "Creditors' Committee") or the post-confirmation
committee of Unsecured Creditors, as applicable (each, an "Independent
Director"), (iii) one (1) member designated by the Air Line Pilots Association,
International ("ALPA", such member, the "ALPA Director"), in accordance with the
collective bargaining agreement between US Airways and ALPA, (iv) one (1) member
designated by the International Association of Machinists and Aerospace Workers
("IAMAW", such member, the "IAMAW Director"), (v) one (1) member designated
jointly by the AFA and the TWU, in accordance with the Series 3 Class C
Preferred Shares held by AFA and TWU (such member, the "AFA/TWU Director"), (vi)
one (1) member designated by the Communications Workers of America ("CWA", such
member the "CWA Director"), and (vii) the chief executive officer of the Company
(the "CEO")."
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(iii) Section 5.01(c) of the Agreement shall be
deleted in its entirety and replaced with the following:
"In the event of the death, disability, resignation or removal of a
member of the Board, the Person designating such member shall designate a
replacement for such director, and the Company shall cause such replacement to
be elected to the Board."
(iv) Section 5.01(d) of the Agreement shall be
deleted in its entirety and replaced with the following:
"(d) From and after the Closing Date, the reorganized Company shall
cause the following to constitute the slate of nominees recommended by the Board
for election as directors at each annual meeting of the stockholders: (i) eight
(8) Investor Directors; (ii) two (2) Independent Directors; and (iii) the CEO,
and the Company shall use its best efforts to cause the election of such
persons."
(v) The existing Section 5.01(e) of the Agreement
shall be deleted in its entirety, and replaced with the following:
"(e) In accordance with the Certificate of Incorporation, the Board
shall also consist of the following: (i) for so long as the Series 1 Class C
Preferred Share remains outstanding, one (1) ALPA Director designated and
elected by the holder of the Series 1 Class C Preferred Share; (ii) for so long
as the Series 2 Class C Preferred Share remains outstanding, one (1) IAMAW
Director designated and elected by the holder of the Series 2 Class C Preferred
Share; (iii) for so long as the Series 3 Class C Preferred Shares remain
outstanding, one (1) AFA/TWU Director designated and elected by the holders of
the Series 3 Class C Preferred Shares, and (iv) for so long as the Series 4
Class C Preferred Share remains outstanding, one (1) CWA Director designated and
elected by the holder of the Series 4 Class C Preferred Share."
(vi) Section 5.01(f) of the Agreement shall be
deleted in its entirety.
(vii) Section 5.01(g) of the Agreement shall be
deleted in its entirety and replaced with the following:
"(g) Notwithstanding the foregoing provisions of this Section 5.01, upon
(i) the sale of an aggregate of fifty percent (50%) of the number of shares of
Common Stock beneficially owned by the Investor and its Affiliates as of the
Closing (the "Investor Closing Shares") and (ii) the realization of the Investor
and its Affiliates of aggregate net cash proceeds on a cumulative basis of five
hundred fifty million dollars ($550,000,000) (the "Triggering Amount") from
sales of Common Stock, Class A-1 Warrants, Class A Preferred Shares or Class B
Preferred Shares and any repayment of principal under its ATSB "at-risk" loan
participation; provided, that the Triggering Amount shall be increased by any
amounts received by the Company from the Investor in respect of the exercise
price of any Class A-1 Warrants ((i) and (ii) taken together, the "Triggering
Event"), the Investor's right hereunder to designate Investor Directors for
election to the Board shall be reduced to seven (7). Notwithstanding the
foregoing, following the Triggering Event, the total number of Investor
Directors the Investor is entitled to designate for election to the Board shall
be reduced to: (i) six (6), if the Investor and its Affiliates beneficially own
at least 34% but less than 42% of the Investor Closing Shares; (ii) five (5), if
the Investor
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and its Affiliates beneficially own at least 26% but less than 34% of the
Investor Closing Shares; (iii) four (4), if the Investor and its Affiliates
beneficially own at least 18% but less than 26% of the Investor Closing Shares;
(iv) three (3), if the Investor and its Affiliates beneficially own at least 10%
but less than 18% of the Investor Closing Shares; (v) two (2) if the Investor
and its Affiliates beneficially own at least 2.5% but less than 10% of the
Investor Closing Shares; and (v) zero (0), if the Investor and its Affiliates
beneficially own less than 2.5% of the Investor Closing Shares. Following the
Triggering Event, the Investor and its Affiliates shall be required to either
(i) sell shares of Common Stock on a proportionate basis as between shares of
Class A Common Stock and shares of Class B Common Stock, as determined by
reference to the proportion in which the Investor and its Affiliates held shares
of Class A Common Stock and shares of Class B Common Stock immediately following
the Triggering Event (the "Proportionate Amount") (rounded to the nearest whole
number of shares of Class B Common Stock), or (ii) convert the appropriate
number of shares of Class B Common Stock into shares of Class A Common Stock
simultaneously with a sale of shares of Class A Common Stock, based on the
Proportionate Amount. In the event that the number of Investor Directors the
Investor is entitled to designate is reduced pursuant to this Section 5.01(g),
the Investor shall be entitled to designate which Investor Director shall resign
from the Board. Such Investor Director shall resign from the Board no later than
the thirtieth (30th) day following the day on which the Investor's beneficial
ownership of the Investor's Closing Shares drops below the relevant thresholds
set forth above. Sections 5.01 and 5.02 shall cease, terminate and be of no
further force or effect as of September 26, 2007.
(viii) Section 5.01 of the Agreement shall be amended
by adding the following paragraph as Section 5.01(h):
"(h) During the term of this Article V, the Investor agrees to vote all
of the shares of voting capital stock received in connection with the
consummation of the Plan (including transactions that are a condition thereto)
and then owned by it in favor of the directors nominated in accordance with
Section 5.01(d) of this Agreement at each annual meeting of the stockholders of
the Company or at any meeting of the stockholders of the Company at which
members of the Board of Directors of the Company are to be elected or whenever
members of the Board of Directors are to be elected by written consent;
provided, however, that following the initial election of the Board of Directors
of the Company on the Effective Date, the obligations set forth in this Section
5.01(h) shall be contingent and conditioned upon each of General Electric
Capital Corporation (or any affiliate thereof holding shares of capital stock of
the Company), the Air Transportation Stabilization Board (the "ATSB")(or any
entity having the right to vote shares of capital stock of the Company issued in
connection with the guarantee by the ATSB of the ATSB Loan) and the CEO each
agreeing in writing with the Investor and the Company to vote its, his or her
shares of capital stock received in connection with the consummation of the Plan
(including transactions that are a condition thereto) in favor of the directors
so nominated in accordance with Section 5.01(d)."
(ix) Section 5.01 of the Agreement shall be amended
by adding the following paragraph as Section 5.01(i):
"(i) In the event that during the term of this Article V, the Investor
sells or otherwise transfers in a private sale transaction shares of capital
stock of the Company, the transferee
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thereof shall agree to be bound by, and at the option of the Investor shall be
entitled to the rights and benefits of the Investor, under this Article V as if
such transferee were the Investor.
(j) Amendment to Article VI. Article VI of the Agreement
shall be amended by adding the following paragraph as Section 6.04:
"SECTION 6.04 Material Actions. During the period from January 17, 2003
and continuing until the earlier of the termination of this Agreement or the
Closing, except as expressly contemplated by this Agreement, the Company and the
Subsidiaries shall not, without the prior written consent of the Investor, take
any action or fail to take any action (i) that would result in any of the
representations and warranties of the Company herein becoming untrue in any
material respect or in any of the conditions to the consummation of the
transactions contemplated hereby not being satisfied in any material respect, or
(ii) that would reasonably be expected to have a Material Adverse Effect."
(k) Amendment to Section 7.04. Section 7.04 of the Agreement
shall be deleted in its entirety and replaced with the following:
"SECTION 7.04 Registration Rights Agreement. The Common Stock issued to
the Investor pursuant to the Plan and the Class A Common Shares issuable upon
(i) the exercise of the Class A-1 Warrants, and (ii) the conversion of the Class
B Common Shares shall be registered by the Company under the Securities Act. The
Company and the Investor shall use commercially reasonable efforts to promptly
enter into a registration rights agreement (the "Registration Rights Agreement")
on mutually acceptable terms and conditions, pursuant to which the Company shall
file a resale registration statement pursuant to Rule 415 under the Securities
Act permitting free resale of the Common Stock issued to the Investor pursuant
to the Plan and the Class A Common Shares issuable upon the exercise of the
Class A-1 Warrants and upon conversion of the Class B Common Shares promptly
after the Closing Date, and use its commercially reasonable efforts to cause to
be declared effective and, subject to the conditions set forth in the
Registration Rights Agreement, to maintain the effectiveness of such
registration statement."
(l) Amendments to Section 8.01.
(i) Section 8.01(b) of the Agreement shall be
amended by adding the words "and Class B Preferred Shares" immediately after the
words "and Class A Preferred Shares" and changing "and Class A Preferred Shares"
to ", Class A Preferred Shares".
(ii) Section 8.01(n) of the Agreement shall be
amended by replacing the number "5" with the number "8" and replacing the number
"13" with the number "15".
(iii) Section 8.01 of the Agreement shall be amended
by adding the following paragraph as Section 8.01(t):
"(t) Labor Union Waivers and Consents. The Company shall have received
all waivers and consents, if any, that may be required from its labor unions in
connection with collective bargaining agreements covering more than two hundred
(200) employees such that such that the execution, delivery, performance or
implementation of this Agreement or the
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compliance with the provisions hereof, the exercise of any rights or powers by
the Investor or the consummation of the transactions contemplated hereby or by
the Plan would not (i) trigger any "change-of-control" or other similar
provision under any collective bargaining agreement to which the Company or any
Subsidiary is a party, as such collective bargaining agreements may be amended
from time to time, or (ii) trigger any payments to, rights or remedies in favor
of, any labor union (or any member thereof) which is a party to a collective
bargaining agreement with the Company or any of its Subsidiaries, as such
collective bargaining agreement may be amended from time to time, except to the
extent that the failure to receive any such waiver or consent with respect to
clause (ii) above would not reasonably be expected to have a Material Adverse
Effect."
(m) Amendment to Section 8.02. The first paragraph of
Section 8.02 shall be amended by adding the words "and Class B Preferred Shares"
immediately after the words "and Class A Preferred Shares" and changing "and
Class A Preferred Shares" to ", Class A Preferred Shares".
(n) Amendment to Section 10.01. Section 10.01(a) of the
Agreement shall be deleted in its entirety and replaced with the following:
"(a) The Company shall reimburse the Investor for all reasonable fees
and expenses (the "Expenses") incurred by or on behalf of the Investor in
connection with the negotiation, preparation, execution and delivery of the
Transaction Documents and the transactions contemplated thereby, including
Expenses relating to the consummation thereof and customary post-Closing matters
related thereto, including, but not limited to, reasonable fees and expenses of
its legal counsel and third-party consultants engaged by it to assist in such
transactions and reasonable fees and expenses incurred by the Investor in
connection with any due diligence, collateral reviews and field examinations,
provided, that reimbursement of Expenses by the Company to the Investor with
respect to Xxxxxxxx Xxxxx Xxxxxx & Xxxxx shall be limited to (i) monthly fees,
as set forth in the Letter Agreement between the Investor and Xxxxxxxx Xxxxx
Xxxxxx & Xxxxx dated August 26, 2002, through Xxxxx 00, 0000, (xx) reasonable
out of pocket expenses through March 31, 2003, and (iii) a success fee of (a)
three million seven hundred fifty thousand dollars ($3,750,000) less (b) fifty
percent (50%) of any monthly fees reimbursed by the Company. The Investor will
render monthly invoices to the Company for Expenses reimbursable hereunder,
which, with respect to Xxxxxxxx Xxxxx Xxxxxx & Xxxxx'x out of pocket expenses,
shall include appropriate supporting documentation. The Company shall pay to the
Investor or its designated affiliate all amounts due under such invoice within
ten (10) days of receipt thereof."
(o) Amendments to Section 10.05. Section 10.05 of the
Agreement shall be amended by deleting the word "The" immediately before the
words "Retirement Systems of Alabama" and inserting "Holdings LLC" after the
words "Retirement Systems of Alabama" in subsection (ii).
(p) Amendments to Signature Page. The signature page shall
be amended by deleting the word "The" immediately before the words "Retirement
Systems of Alabama" and inserting "Holdings LLC" after the words "Retirement
Systems of Alabama".
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(q) Amendments to Exhibit A.
(i) Subsection (i) of Exhibit A to the Agreement
shall be amended by replacing the following "a majority of the holders of Common
Stock" with "the holders of a majority of the Common Stock".
(ii) Subsection (iv) of Exhibit A to the Agreement
shall be amended by replacing the following "2/3 of the holders of the Class B
Common Shares" with "the holders of 2/3 of the Class B Common Shares".
(iii) Subsection (vii) of Exhibit A to the Agreement
shall be deleted in its entirety and replaced with the following:
"(vii) all Equity Securities of the Company, including, without
limitation, the shares of Class A Common Shares, Class B Common Shares, Class
A-1 Warrants, Class A Preferred Shares, Class B Preferred Shares, Series 1 Class
C Preferred Share, Series 2 Class C Preferred Share, Series 3 Class C Preferred
Shares and Series 4 Class C Preferred Share, shall be subject to the following
limitations:
(a) Non-Citizen Voting Limitation. In no event shall the
total number of shares of Equity Securities held by all Persons who fail to
qualify as a "citizen of the United States," as the term is used in Section
40102(a)(15) of Title 49, in any similar legislation of the United States
enacted in substitution or replacement therefore, or as interpreted by the
Department of Transportation, be entitled to more than 24.9% of the aggregate
votes of all outstanding Equity Securities of the Company (the "Cap Amount").
(b) Allocation of Cap Amounts. The restrictions imposed by
the Cap Amount shall be applied pro rata among the holders of Equity Securities
who fail to qualify as "citizens of the United States" based on the number of
votes the underlying securities are entitled to."
(iv) The following new subsection (viii) shall be
inserted at the end of the existing Exhibit A:
"(viii) shares of Class B Common Shares shall be convertible into shares
of Class A Common Shares on a 1:1 basis at the option of the holder thereof,
subject to equitable adjustments for stock splits, adjustments, combinations and
like transactions."
(r) Amendment to Exhibit B. The reference to "$9.60" in
subsection (iv) of Exhibit B to the Agreement shall be replaced with "$7.42".
(s) Amendment to Exhibit C. Exhibit C to the Agreement, and
all references thereto in the Agreement, shall be deleted in their entirety.
(t) Amendment to Exhibit D. The reference to "Series A-2
Warrants" in subsection (vi) of Exhibit D to the Agreement shall be deleted.
(u) Amendment to Exhibit E. Exhibit E to the Agreement shall
be deleted in its entirety and replaced with the following:
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"EXHIBIT E
CERTIFICATE OF DESIGNATION OF CLASS B PREFERRED SHARES
The Certificate of Designation of Class B Preferred Shares
shall include the following terms:
(i) The nominal value of each Class B Preferred Share will be
$1,000.00.
(ii) The Class B Preferred Shares will have a maturity of eight (8)
years. Upon the maturity of the Class B Preferred Shares, the Company will be
required to redeem each Class B Preferred Share in cash out of funds legally
available therefor for an amount equal to such share's nominal value plus any
accrued and unpaid dividends (the "Redemption Price").
(iii) From and after the Closing Date, the Company will pay cumulative
dividends on the Class B Preferred Shares on a quarterly basis, to the extent
not prohibited under applicable Law; provided, however, that to the extent the
Company is so legally prohibited from paying any such dividends or any portion
thereof, such unpaid dividends shall accrue and be paid immediately upon the
removal of such legal prohibition and, in connection therewith, the Company
shall take all action reasonably necessary to remove or diminish the scope of
such legal prohibition, including, by way of example but not in limitation
thereof, causing a revaluation of its assets. Dividends on the Class B Preferred
Shares will be paid in cash at a rate of 8% per annum (each, a "Cash Dividend").
(iv) At any time following the third anniversary of the Closing Date,
the Company may redeem for cash each Class B Preferred Share at a redemption
price initially equal to 102.5% of the nominal value of such Class B Preferred
Share, declining ratably to par following the ninth (9th) anniversary of the
Closing Date, plus accrued and unpaid dividends."
(v) In the event that the Company has not paid a Cash Dividend for
five (5) consecutive quarters (a "Payment Default"), the holders of the Class B
Preferred Shares shall have the special and exclusive class right to designate
one (1) member of the Board for so long as such Payment Default is continuing.
The Company shall take all necessary actions to effectuate such right, including
by way of example and not limitation thereof, causing the size of the Board to
be increased and/or facilitating the resignation of a director to create a
vacancy for such new director; provided that upon payment of a Cash Dividend by
the Company, such designee will resign from the Board.
(vi) Each Class B Preferred Share will have one (1) vote on all
matters put to the shareholders for a vote."
(v) Amendment to Exhibit F. Exhibit F to the Agreement shall
be deleted in its entirety and replaced with the following:
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"EXHIBIT F
CERTIFICATE OF DESIGNATION OF CLASS C PREFERRED SHARES
The Certificate of Designation of Class C Preferred Shares
shall include the following terms:
(i) The nominal value of each Class C Preferred Share will be $0.0001.
(ii) The Class C Preferred Shares will not pay dividends.
(iii) Each Class C Preferred Share will have a liquidation preference of
$0.0001.
(iv) There will be four series of Class C Preferred Shares.
(a) The Series 1 Class C Preferred Share shall be issued to ALPA as
the collective bargaining representative of the pilots employed by
US Airways, Inc. pursuant to the collective bargaining agreement between ALPA
and US Airways in effect as of the Effective Date (the "ALPA CBA").
(b) The Series 2 Class C Preferred Share shall be issued to employees
(or a representative of such employees) who are subject to the collective
bargaining agreement between the Debtors (as reorganized) and IAMAW in effect as
of the Effective Date (the "IAMAW CBA").
(c) The Series 3 Class C Preferred Shares shall be issued to
employees (or a representative of such employees) who are subject to new or
amended collective bargaining agreements between the Debtors (as reorganized)
and AFA and TWU in effect as of the Effective Date (the "AFA/TWU CBAs").
(d) The Series 4 Class C Preferred Share shall be issued to employees
(or a representative of such employees) who are subject to the collective
bargaining agreement between the Debtors (as reorganized) and CWA in effect as
of the Effective Date (the "CWA CBA")
(v) Maturity.
(a) The Series 1 Class C Preferred Share will have a fixed maturity
of June 30, 2012. Upon the maturity of the Series 1 Class C Preferred Share, the
Company will be required to redeem such Series 1 Class C Preferred Shares in
cash out of funds legally available therefor for an amount equal to such share's
nominal value.
(b) The Series 2 Class C Preferred Share will have a fixed maturity
of June 30, 2012. Upon the maturity of the Series 2 Class C Preferred Share, the
Company will be required to redeem such Series 2 Class C Preferred Share in cash
out of funds legally available therefor for an amount equal to such share's
nominal value.
(c) The Series 3 Class C Preferred Shares will have a fixed maturity
of June 30, 2012. Upon the maturity of the Series 3 Class C Preferred Shares,
the Company will be required to redeem such Series 3 Class C Preferred Shares in
cash out of funds legally available therefor for an amount equal to such share's
nominal value.
(d) The Series 4 Class C Preferred Share will have a fixed maturity
of June 30, 2012. Upon the maturity of the Series 4 Class C Preferred Share, the
Company will be required to redeem such Series 4 Class C Preferred Share in cash
out of funds legally
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available therefor for an amount equal to such share's nominal value.
(vi) Voting Rights.
(a) The holders of the Series 1 Class C Preferred Share (voting as a
separate series) shall be entitled to designate and to vote to elect the ALPA
Director.
(b) The holders of the Series 2 Class C Preferred Share (voting as a
separate series) shall be entitled to designate and to vote to elect the IAMAW
Director.
(c) The holders of the Series 3 Class C Preferred Shares (voting as a
separate series) shall be entitled to designate and to vote to elect the AFA/TWU
Director.
(d) The holders of the Series 4 Class C Preferred Share (voting as a
separate series) shall be entitled to designate and to vote to elect the CWA
Director.
(e) No amendment shall be made to the Certificate of Incorporation or
By-Laws of the Company that would materially and adversely affect the rights of
any Series of Class C Preferred Shares without the consent of the holder of
Class C Preferred Shares so affected.
2. No Other Amendments. Except as expressly amended, modified and
supplemented hereby, the provisions of the Agreement are and will remain in full
force and effect and, except as expressly provided herein, nothing in this
Amendment will be construed as a waiver of any of the rights or obligations of
the parties under the Agreement.
3. Governing Law. To the extent not governed by the Bankruptcy Code, this
Amendment 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.
4. Descriptive Headings. Descriptive headings are for convenience only and
will not control or affect the meaning or construction of any provisions of this
Amendment.
5. Counterparts. This Amendment may be executed in any number of identical
counterparts, each of which will constitute an original but all of which when
taken together will constitute but one instrument.
6. 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, RSA's and RSA LLC's successors and assigns.
7. Severability. In the event one or more of the provisions of this
Amendment should, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provisions of this Amendment, and this Amendment
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
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* * * *
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IN WITNESS WHEREOF, the Parties hereto have caused this Amendment No. 1
to the Investment Agreement to be executed and delivered by their duly
authorized representatives on the date first above written.
THE RETIREMENT SYSTEMS OF ALABAMA
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: General Counsel
US AIRWAYS GROUP, INC.
By: /s/ Xxxx X. Xxxxx
---------------------------------
Name: Xxxx X. Xxxxx
Title: Executive Vice President - Finance & CFO
RETIREMENT SYSTEMS OF ALABAMA HOLDINGS LLC
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Secretary
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