SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)
America West Airlines, Inc.
-------------------
(Name of Issuer)
Class A Common Stock, $.01 par value
Class B Common Stock, $.01 par value
Warrants to Purchase Class B Common
Stock
----------------------------
(Title of Class of Securities)
023650 302
023650 203
023650 112
--------------
(CUSIP Numbers)
Richard J. Cooper, Esq.
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
(212) 225-2000
----------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
February 14, 1996
--------------
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement
on Schedule 13G to report the acquisition which is the subject of
this Schedule 13D, and is filing this Schedule because of Rule
13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the
statement
[ ].
<PAGE>
SCHEDULE 13D
CUSIP Nos. 023650 302, 023650 203, 023650 112
------------
_________________________________________________________________
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
TPG Partners, L.P.
75-2473270
_________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) | x|
(b) | |
_________________________________________________________________
3 SEC USE ONLY
_________________________________________________________________
4 SOURCE OF FUNDS
WC
_________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
|__|
_________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
_________________________________________________________________
7 SOLE VOTING POWER
CLASS A COMMON STOCK 642,078
CLASS B COMMON STOCK 5,740,865
WARRANTS 1,584,706
NUMBER OF
____________________________________________________________
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY CLASS A COMMON STOCK 1,200,000
EACH CLASS B COMMON STOCK 13,605,766
WARRANTS 4,898,765
____________________________________________________________<PAGE>
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH CLASS A COMMON STOCK 642,078
CLASS B COMMON STOCK 5,740,865
WARRANTS 1,584,706
____________________________________________________________
10 SHARED DISPOSITIVE POWER
CLASS A COMMON STOCK 1,200,000
CLASS B COMMON STOCK 13,605,766
WARRANTS 4,898,765
______________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
CLASS A COMMON STOCK 1,200,000
CLASS B COMMON STOCK 13,605,766
WARRANTS 4,898,765
_______________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
_______________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
CLASS A COMMON STOCK 100.0%
CLASS B COMMON STOCK 27.7%
WARRANTS 47.2%
________________________________________________________________
14 TYPE OF REPORTING PERSON
PN
________________________________________________________________
<PAGE>
SCHEDULE 13D
CUSIP Nos. 023650 302, 023650 203, 023650 112
------------
_________________________________________________________________
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
TPG Parallel I, L.P.
75-2544886
_________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) | x|
(b) | |
_________________________________________________________________
3 SEC USE ONLY
_________________________________________________________________
4 SOURCE OF FUNDS
WC
_________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
|__|
_________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
_________________________________________________________________
7 SOLE VOTING POWER
CLASS A COMMON STOCK 64,699
CLASS B COMMON STOCK 578,477
WARRANTS 159,682
NUMBER OF
____________________________________________________________
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY CLASS A COMMON STOCK 1,200,000
EACH CLASS B COMMON STOCK 13,605,766
WARRANTS 4,898,765
____________________________________________________________<PAGE>
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH CLASS A COMMON STOCK 64,699
CLASS B COMMON STOCK 578,477
WARRANTS 159,682
____________________________________________________________
10 SHARED DISPOSITIVE POWER
CLASS A COMMON STOCK 1,200,000
CLASS B COMMON STOCK 13,605,766
WARRANTS 4,898,765
______________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
CLASS A COMMON STOCK 1,200,000
CLASS B COMMON STOCK 13,605,766
WARRANTS 4,898,765
_______________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
_______________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
CLASS A COMMON STOCK 100.0%
CLASS B COMMON STOCK 27.7%
WARRANTS 47.2%
________________________________________________________________
14 TYPE OF REPORTING PERSON
PN
________________________________________________________________
<PAGE>
SCHEDULE 13D
CUSIP Nos. 023650 302, 023650 203, 023650 112
------------
_________________________________________________________________
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Air Partners II, L.P.
75-2553295
_________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) | x|
(b) | |
_________________________________________________________________
3 SEC USE ONLY
_________________________________________________________________
4 SOURCE OF FUNDS
WC
_________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
|__|
_________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
TEXAS
_________________________________________________________________
7 SOLE VOTING POWER
CLASS A COMMON STOCK 67,718
CLASS B COMMON STOCK 605,476
WARRANTS 167,135
NUMBER OF
____________________________________________________________
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY CLASS A COMMON STOCK 1,200,000
EACH CLASS B COMMON STOCK 13,605,766
WARRANTS 4,898,765
____________________________________________________________<PAGE>
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH CLASS A COMMON STOCK 67,718
CLASS B COMMON STOCK 605,476
WARRANTS 167,135
____________________________________________________________
10 SHARED DISPOSITIVE POWER
CLASS A COMMON STOCK 1,200,000
CLASS B COMMON STOCK 13,605,766
WARRANTS 4,898,765
______________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
CLASS A COMMON STOCK 1,200,000
CLASS B COMMON STOCK 13,605,766
WARRANTS 4,898,765
_______________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
_______________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
CLASS A COMMON STOCK 100.0%
CLASS B COMMON STOCK 27.7%
WARRANTS 47.2%
________________________________________________________________
14 TYPE OF REPORTING PERSON
PN
________________________________________________________________
<PAGE>
This amendment No. 3 (this "Amendment") amends and
supplements the Schedule 13D filed on September 6, 1994, as
amended by Amendment No. 1 filed on November 22, 1995 and
Amendment No. 2 filed on January 30, 1996 (the "Schedule 13D"),
of TPG Partners, L.P. ("TPG"), TPG Parallel I, L.P.
("TPG Parallel") and Air Partners II, L.P. ("Air Partners II",
and collectively with TPG and TPG Parallel, the "Filing
Parties"), with respect to the Class A Common Stock, $ 0.01 par
value per share (the "Class A Common"), the Class B Common Stock,
$0.01 par value per share (the "Class B Common"), and the
Warrants to Purchase Class B Common (the "Warrants") of America
West Airlines, Inc., a Delaware corporation (the "Company"). All
capitalized terms used in this Amendment and not otherwise
defined herein have the meanings ascribed to such terms in the
Schedule 13D.
Item 4. Purpose of Transaction
Item 4 of the Schedule 13D is hereby amended by inserting the
following paragraphs immediately prior to the final paragraph
thereof.
On February 14, 1996, each of the Filing Parties, Continental,
Mesa and Lehman (collectively, the "Selling Securityholders")
entered into and executed a Purchase Agreement (the "Purchase
Agreement") and related Pricing Agreement (the "Pricing Agreement")
each dated February 14, 1996, among the Company and underwriters
represented by Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Donaldson, Lufkin & Jenrette Securities Corporation and Lehman
Brothers Inc. (together, the "Representatives"). The following is
a brief description of the Purchase Agreement and the Pricing
Agreement, and is qualified in its entirety by reference to
such agreements, copies of which are filed as exhibits hereto
and incorporated herein by reference. Pursuant to the Purchase
Agreement and the Pricing Agrement, the Selling Securityholders
have agreed to sell to the underwriters, acting through the
Representatives, 6,633,000 shares of Class B Common for resale
pursuant to the Company's Registration Statement on Form S-1,
File No. 33-54243, and the related prospectus dated January 29,
1996 and prospectus supplement dated February 14, 1996 to
be filed pursuant to Rule 424(b) of the Securities Act of
1933, as amended, at a price of $19.50 per share, less an
underwriting discount of $0.93 per share. Of the total of 6,633,000
shares of Class B Common to be sold, 2,404,178 shares are to be sold
by TPG, 242,258 shares are to be sold by TPG Parallel, 253,564
shares are to be sold by Air Partners II, 1,633,000 shares are to be
sold by Mesa, 1,100,000 shares are to be sold by Continental and
1,000,000 shares are to be sold by Lehman. The closing of the sale
of the 6,633,000 shares of Class B Common pursuant to the Purchase
Agreement and the Pricing Agreement is expected to occur on
February 21, 1996 and is subject to the satisfaction or waiver of
certain conditions set forth in the Purchase Agreement. The
Purchase Agreement provides that, in connection with the offering,
Mesa has granted to the underwriters an option to purchase up to
an additional 351,970 shares of Class B Common and Continental has
granted to the underwriters an option to purchase up to an
additional 258,030 shares of Class B Common, in each case solely
to cover over-allotments in connection with the sale of the shares
of Class B Common.
On February 14, 1996, the Filing Parties entered into and
executed a Share Exchange Agreement (the "Share Exchange
Agreement") dated February 14, 1996 with Continental. The
following is a brief description of the Share Exchange
Agreement, and is qualified in its entirety by reference to
such agreement, a copy of which is filed as an exhibit hereto
and incorporated herein by reference. Pursuant to the Share
Exchange Agreement, each of the Filing Parties has agreed to
exchange shares of Class B Common for an equal number of
shares of Class A Common held by Continental. The aggregate
amount of shares of Class B Common which may be exchanged
with Continental for an equal number of shares of Class A
Common held by Continental is, in the case of TPG, 138,395
shares, in the case of TPG Parallel, 13,945 shares, and in
the case of Air Partners II, 14,596 shares. Closing of the
exchange of 80,926 of such shares by the Filing Parties
(consisting of 67,090 shares to be exchanged by TPG, 6,760 shares
to be exchanged by TPG Parallel and 7,076 shares to be exchanged
by Air Partners II) with Continental is conditioned on closing of
the sale of shares of Class B Common to the underwriters pursuant
to the Purchase Agreement and the Pricing Agreement. Closing of
the exchange of up to 86,010 of such shares (consisting of up to
71,305 shares to be exchanged by TPG, up to 7,185 shares to be
exchanged by TPG Parallel and up to 7,520 shares to be
exchanged by Air Partners II) is conditioned on closing of the
sale of the shares of Class B Common pursuant to the underwriters'
over-allotment option, if and to the extent exercised. In the
Share Exchange Agreement, Continental has also waived its right
of first refusal with regard to the sale by the Filing Parties
to the underwriters of the shares of Class B Common to be sold
by the Filing Parties to the underwriters.
Item 5. Interest in Securities of the Issuer.
Items 5(a), (b) and (c) of the Schedule 13D are hereby
amended to read in their entirety as follows:
(a) - (b) At the date hereof, TPG has the sole power to
vote and dispose of 642,078 shares of Class A Common, 4,156,159
shares of Class B Common, and 1,584,706 Warrants. The Warrants
entitle holders to purchase one share of Class B Common at a
price of $12.74 per share. The Class A Common held by TPG
represents approximately 53.5% of the 1,200,000 shares of Class A
Common outstanding as of December 31, 1995, based on information
provided by the Company. The Class B Common held by TPG
represents approximately 9.4% of the 44,141,330 shares of Class B
Common outstanding as of December 31, 1995, based on information
provided by the Company. The Warrants held by TPG represent
approximately 15.3% of the 10,380,286 Warrants outstanding as of
December 31, 1995, based on information provided by the Company.
Assuming exercise of the Warrants, the Class B Common and
Warrants held by TPG represent approximately 12.6% of the
45,726,036 shares of Class B Common which would be assumed to be
outstanding upon such exercise.
At the date hereof, TPG Parallel has the sole power to vote
and dispose of 64,699 shares of Class A Common, 418,795 shares of
Class B Common, and 159,682 Warrants. The Class A Common held by
TPG Parallel represents approximately 5.4% of the 1,200,000
shares of Class A Common outstanding as of December 31, 1995,
based on information provided by the Company. The Class B Common
held by TPG Parallel represents approximately 0.9% of the
44,141,330 shares of Class B Common outstanding as of December
31, 1995, based on information provided by the Company. The
Warrants held by TPG Parallel represent approximately 1.5% of the
10,380,286 Warrants outstanding as of December 31, 1995, based on
information provided by the Company. Assuming exercise of the
Warrants, the Class B Common and Warrants held by TPG Parallel
represent approximately 1.3% of the 44,301,012 shares of Class B
Common which would be assumed to be outstanding upon such
exercise.
At the date hereof, Air Partners II has the sole power to
vote and dispose of 67,718 shares of Class A Common, 438,341
shares of Class B Common, and 167,135 Warrants. The Class A
Common held by Air Partners II represents approximately 5.6% of
the 1,200,000 shares of Class A Common outstanding as of December
31, 1995, based on information provided by the Company. The
Class B Common held by Air Partners II represents approximately
1.0% of the 44,141,330 shares of Class B Common outstanding as of
December 31, 1995, based on information provided by the Company.
The Warrants held by Air Partners II represent approximately 1.6%
of the 10,380,286 Warrants outstanding as of December 31, 1995,
based on information provided by the Company. Assuming exercise
of the Warrants, the Class B Common and Warrants held by Air
Partners II represent approximately 1.4% of the 44,308,465 shares
of Class B Common which would be assumed to be outstanding upon
such exercise.
As set forth in Items 5(d) and 6 to the Schedule 13D, the
Filing Parties have certain understandings and agreements
regarding the voting and disposition of the securities of the
Company held by them with GPA Group plc, an Irish public limited
company ("GPA"), Continental Airlines, Inc., a Delaware
corporation ("Continental") and Mesa Airlines, Inc., a New Mexico
corporation ("Mesa"). As a result of these agreements and
understandings, the Filing Parties, together with each of GPA,
Continental and Mesa, comprise a group within the meaning of
Section 13(d)(3) of the Exchange Act, and each may be deemed to
beneficially own the securities of the Company owned by the
others. Information concerning the ownership of Class A Common,
Class B Common and Warrants by each of GPA, Continental and Mesa
is contained in separate Schedules 13D (and amendments thereto)
filed by each of GPA, Continental and Mesa.
On the basis of information contained in the Schedules 13D
(as amended as of the date hereof) filed by each of Continental,
Mesa and GPA, the Filing Parties, Continental, Mesa and GPA, as a
group, beneficially own 1,200,000 shares of Class A Common,
8,707,001 shares of Class B Common, and 4,898,765 Warrants. The
aggregate amount of Class A Common beneficially owned by the
group represents 100% of the 1,200,000 shares of Class A Common
outstanding as of December 31, 1995, based on information
provided by the Company. The aggregate amount of Class B Common
beneficially owned by the group represents approximately 19.7% of
the 44,141,330 shares of Class B Common outstanding as of
December 31, 1995, based on information provided by the Company.
The aggregate amount of Warrants beneficially owned by the group
represents approximately 47.2% of the 10,380,286 Warrants
outstanding as of December 31, 1995, based on information
provided by the Company. Assuming exercise of the Warrants, the
aggregate amount of Class B Common and Warrants beneficially
owned by the group represents approximately 27.7% of the
49,040,095 shares of Class B Common which would be assumed to be
outstanding upon such exercise.
Except as described herein, none of the Filing Parties has
the sole or shared voting power to vote or the sole or shared
power to dispose of any shares of Class A Common, Class B Common
or any of the Warrants.
To the knowledge of the Filing Parties, none of the
individuals named in Item 2 has the sole or shared power to vote
or the sole or shared power to dispose of any shares of Class A
Common, Class B Common, or of any Warrants.
(c) Except as stated herein, no transactions in shares of
Class A Common, Class B Common or Warrants were effected during
the past 60 days by any Filing Party or to the best of their
knowledge, any of the individuals identified in Item 2.
Item 6. Contracts, Arrangements, Understandings or
Relationships With Respect to Securities of the Issuer
Item 6 of the Schedule 13D is hereby amended by deleting the
two paragraphs immediately immediately prior to the final paragraph
thereof and replacing them with the following paragraphs.
As set forth in Item 4, on February 14, 1996, the Selling
Securityholders entered into and executed the Purchase Agreement
and related Pricing Agreement, each dated February 14, 1996,
among the Company and underwriters represented by the
Representatives. Each of the Purchase Agreement and the Pricing
Agreement is briefly described in Item 4 and copies of each such
Agreement are attached as an exhibit hereto and incorporated by
reference herein.
As set forth in Item 4, on February 14, 1996, the Filing Parties
entered into and executed the Share Exchange Agreement, dated
February 14, 1996 with Continental. The Share Exchange Agreement
is briefly described in Item 4 and a copy of such Agreement is
attached as an exhibit hereto and incorporated by reference herein.
Item 7. Material to be Filed as Exhibits.
Exhibit 1 -- Joint Filing Agreement
Exhibit 2 -- Purchase Agreement
Exhibit 3 -- Pricing Agreement
Exhibit 4 -- Share Exchange Agreement<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
statement is true, complete and accurate.
Dated: February 16, 1996
TPG PARTNERS, L.P.
By: TPG GenPar, L.P.
General Partner
By: TPG Advisors, Inc.
General Partner
By: /s/ James O'Brien
------------------------
Name: James O'Brien
Title: Vice President
TPG PARALLEL I, L.P.
By: TPG GenPar, L.P.
General Partner
By: TPG Advisors, Inc.
General Partner
By: /s/ James O'Brien
------------------------
Name: James O'Brien
Title: Vice President
<PAGE>
AIR PARTNERS II, L.P.
By: TPG GenPar, L.P.
General Partner
By: TPG Advisors, Inc.
General Partner
By: /s/ James O'Brien
------------------------
Name: James O'Brien
Title: Vice President
JOINT FILING AGREEMENT
JOINT FILING AGREEMENT, (this "Agreement"), dated as of
September 1, 1994 among TPG PARTNERS, L.P., a Delaware limited
partnership ("TPG"), TPG PARALLEL I, L.P., a Delaware limited
partenrship ("TPG Parallel") and AIR PARTNERS II, L.P., a Texas
limited partnership ("Air Partners II").
W I T N E S S T H
WHEREAS, as of the date hereof, each of TPG, TPG Parallel
and Air Partners II is filing a Schedule 13D under the Securities
Exchange Act of 1934 (the "Exchange Act") with respect to the
securities of America West, Inc., a Delaware corporation (the
"Schedule 13D";
WHEREAS, each of TPG, TPG Parallel and Air Partners II is
individually eligible to file the Schedule 13D;
WHEREAS, each of TPG, TPG Parallel and Air Partners II
wishes to file the Schedule 13D and any amendments thereto
jointly and on behalf of each of TPG and AmWest, pursuant to Rule
13d-1(f)(1) under the Exchange Act;
NOW, THEREFORE, in consideration of these premises and other
good and valuable consideration, the parties hereto agree as
follows:
1. TPG, TPG Parallel and Air Partners II hereby agree that
the Schedule 13D is, and any amendments thereto will be, filed on
behalf of each of TPG, TPG Parallel and Air Partners II pursuant
to Rule 13d-1(f)(1)(iii) under the Exchange Act.
2. TPG hereby acknowledges that, pursuant to Rule 13d-
1(f)(1)(i) under the Exchange Act, TPG is responsible for the
timely filing of the Schedule 13D and any amendments thereto, and
for the completeness and accuracy of the information concerning
TPG contained therein, and is not responsible for the
completeness and accuracy of the information concerning TPG
Parallel or Air Partners II contained therein, unless TPG knows
or has reason to know that such information is inaccurate.
3. TPG Parallel hereby acknowledges that, pursuant to Rule
13d-1(f)(1)(i) under the Exchange Act, TPG Parallel is
responsible for the timely filing of the Schedule 13D and any
amendments thereto, and for the completeness and accuracy of the
information concerning TPG Paralllel contained therein, and is
not responsible for the completeness and accuracy of the
information concerning TPG or Air Partners II contained therein,
unless TPG Parallel knows or has reason to know that such
information is inaccurate.
4. Air Partners II hereby acknowledges that, pursuant to
Rule 13d-1(f)(1)(i) under the Exchange Act, Air Partners II is
responsible for the timely filing of the Schedule 13D and any
amendments thereto, and for the completeness and accuracy of the
information concerning Air Partners II contained therein, and is
not responsible for the completeness and accuracy of the
information concerning TPG or TPG Parallel contained therein,
unless Air Partners II knows or has reason to know that such
information is inaccurate.
5. Each of TPG, TPG Parallel and Air Partners II hereby
agree that this Agreement shall be filed as an exhibit to the
Schedule 13D, pursuant to Rule 13D-1(f)(1)(iii) under the
Exchange Act.
IN WITNESS WHEREOF, the parties have caused this Agreement
to executed individually or by their respective directors
hereunto duly authorized as of the day and year first above
written.
TPG PARTNERS, L.P.
By: TPG GenPar, L.P.
General Partner
By: TPG Advisors, Inc.
General Partner
By: /s/ James O'Brien
---------------------------
Name: James O'Brien
Title: Vice President
TPG PARALLEL I, L.P.
By: TPG GenPar, L.P.
General Partner
By: TPG Advisors, Inc.
General Partner
By: /s/ James O'Brien
--------------------------
Name: James O'Brien
Title: Vice President
AIR PARTNERS II, L.P.
By: TPG GenPar, L.P.
General Partner
By: TPG Advisors, Inc.
General Partner
By: /s/ James O'Brien
------------------------------
Name: James O'Brien
Title: Vice President
6,633,000 Shares
AMERICA WEST AIRLINES, INC.
(a Delaware corporation)
Class B Common Stock
(Par Value $.01 Per Share)
PURCHASE AGREEMENT
February 14, 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Donaldson, Lufkin & Jenrette Securities Corporation
Lehman Brothers Inc.
as Representatives of the several Underwriters
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281
Dear Sirs:
America West Airlines, Inc., a Delaware corporation
(the "Company"), and the selling stockholders named in Schedule B
hereto (each a "Selling Stockholder" and collectively, the
"Selling Stockholders") confirm their agreement with Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch"), Donaldson, Lufkin & Jenrette Securities
Corporation ("DLJ"), Lehman Brothers Inc. ("Lehman Brothers") and
each of the other Underwriters named in Schedule A hereto (col-
lectively, the "Underwriters," which term shall also include any
underwriter substituted as hereinafter provided in Section 10
hereof), for whom Merrill Lynch, DLJ and Lehman Brothers are
acting as representatives (in such capacity, Merrill Lynch, DLJ
and Lehman Brothers shall hereinafter be referred to as the
"Representatives"), with respect to the sale by the Selling
Stockholders, acting severally and not jointly, and the purchase
by the Underwriters, acting severally and not jointly, of the
respective numbers of shares of Class B Common Stock, par value
$.01 per share, of the Company ("Common Stock") set forth in said
Schedule A (except as may otherwise be provided in the Pricing
Agreement, as hereinafter defined) and with respect to the grant
by two Selling Stockholders, acting severally and not jointly, as
set forth in Schedule B hereto, to the Underwriters, acting
severally and not jointly, of the option described in Section
2(b) hereof to purchase all or any part of 610,000 additional
shares of Common Stock solely to cover over-allotments, if any,
in each case except as may otherwise be provided in the Pricing
Agreement. The aforesaid 6,633,000 shares of Common Stock (the
"Initial Securities") to be purchased by the Underwriters and all
or any part of the 610,000 shares of Common Stock subject to the
option described in Section 2(b) hereof (the "Option Securities")
are collectively hereinafter called the "Securities."
Prior to the purchase and public offering of the Secu-
rities by the several Underwriters, the Selling Stockholders,
acting severally and not jointly, and the Representatives, acting
on behalf of the several Underwriters, shall enter into an agree-
ment substantially in the form of Exhibit A hereto (the "Pricing
Agreement") which agreement shall be acknowledged by the Company.
The Pricing Agreement may take the form of an exchange of any
standard form of written telecommunication among the Company, the
Selling Stockholders and the Representatives and shall specify
such applicable information as is indicated in Exhibit A hereto.
The offering of the Securities will be governed by this Agree-
ment, as supplemented by the Pricing Agreement. From and after
the date of the execution and delivery of the Pricing Agreement,
this Agreement shall be deemed to incorporate the Pricing Agree-
ment.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-
1 (No. 33-54243), for the registration of certain securities of
the Company including, initially, 26,447,326 shares of Common
Stock, 1,200,000 shares of the Company's Class A Common Stock,
par value $.01 (the "Class A Common Stock") and 5,872,108 war-
rants, each entitling the holder thereof to purchase one share of
Common Stock (the "Warrants"), under the Securities Act of 1933
(the "1933 Act"), on June 23, 1994; and pre-effective amendments
thereto on July 27, 1994, August 2, 1994, August 15, 1994 and
August 23, 1994; and prospectus supplements thereto on August 29,
1994, June 21, 1995, October 5, 1995, November 16, 1995, December
4, 1995 and January 29, 1996; and Post-Effective Amendments
thereto on November 25, 1994, April 19, 1995, June 1, 1995, June
15, 1995, June 21, 1995 and January 30, 1996 and will file such
additional amendments thereto and such amended or supplemental
prospectuses as may hereafter be required. Such registration
statement (as amended, if applicable) and the prospectus consti-
tuting a part thereof (including in each case the information, if
any, deemed to be part thereof pursuant to Rule 434 of the rules
and regulations of the Commission under the 1933 Act (the "1933
Act Regulations")), as from time to time amended or supplemented
pursuant to the 1933 Act, are hereinafter referred to as the
"Registration Statement" and the "Prospectus," respectively,
except that if any revised prospectus shall be provided to the
Underwriters by the Company for use in connection with the
offering of the Securities which differs from the Prospectus on
file at the Commission (whether or not such revised prospectus is
required to be filed by the Company pursuant to Rule 424(b) of
the 1933 Act Regulations), the term "Prospectus" shall refer to
such revised prospectus from and after the time it is first
provided to the Underwriters for such use. Additionally, if the
Company has elected to rely upon Rule 434 of the 1933 Act Regula-
tions, the Company will prepare and file a term sheet (a "term
sheet"), in accordance with the provisions of Rules 434 and
424(b) of such Regulations, promptly after execution of the
Pricing Agreement.
The Company and the Selling Stockholders understand
that the Underwriters propose to make a public offering of the
Securities as soon as the Representatives deem advisable after
the Pricing Agreement has been executed and delivered.
Section 1. Representations and Warranties. (a) The
Company represents and warrants to each Underwriter as of the
date hereof and as of the date of the Pricing Agreement (such
latter date being hereinafter referred to as the "Representation
Date") as follows:
(i) At the time the Registration Statement became
effective and at the Representation Date (unless the
term "Prospectus" refers to prospectuses which have
been provided to the Underwriters by the Company for
use in connection with the offering of Securities which
differs from the Prospectus on file at the Commission,
in which case at the time the Prospectus is first
provided to the Underwriters for their use), the Regis-
tration Statement complied and will comply in all mate-
rial respects with the requirements of the 1933 Act and
the 1933 Act Regulations and did not contain and will
not contain an untrue statement of a material fact or
omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading. The Prospectus, at the Representation
Date, at the time it is first provided to the Under-
writers for their use and at the Closing Time referred
to in Section 2 hereof, will not include an untrue
statement of a material fact or omit to state a materi-
al fact necessary in order to make the statements
therein, in the light of the circumstances under which
they were made, not misleading; and if Rule 434 is
used, the Prospectus shall not be "materially differ-
ent" as such term is used in Rule 434 of the 1933 Act
Regulations, from the prospectus first provided to the
Underwriters for their use; provided, however, that the
representations and warranties in this subsection shall
not apply to statements in or omissions from the Regis-
tration Statement or Prospectus made in reliance upon
and in conformity with information furnished to the
Company in writing by any Underwriter through the
Representatives expressly for use in the Registration
Statement or Prospectus.
(ii) The accountants who certified the financial
statements and supporting schedules included in the
Registration Statement are independent public accoun-
tants as required by the 1933 Act and the 1933 Act
Regulations.
(iii) The financial statements included in the
Registration Statement and the Prospectus present
fairly the financial position of the Company as at the
dates indicated and the results of its operations for
the periods specified; except as otherwise stated in
the Registration Statement, said financial statements
have been prepared in conformity with generally accept-
ed accounting principles applied on a consistent basis;
and the supporting schedules included in the Regis-
tration Statement present fairly the information re-
quired to be stated therein.
(iv) Since the respective dates as of which
information is given in the Registration Statement and
the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condi-
tion, financial or otherwise, or in the earnings, busi-
ness affairs or business prospects of the Company,
whether or not arising in the ordinary course of busi-
ness, (B) there have been no transactions entered into
by the Company, other than those in the ordinary course
of business, which are required to be disclosed therein
under the 1933 Act and the 1933 Act Regulations and are
not so disclosed, and (C) there has been no dividend or
distribution of any kind declared, paid or made by the
Company on any class of its capital stock, except for
any distribution of securities upon the resolution of
bankruptcy-related claims.
(v) The Company has been duly incorporated and is
validly existing as a corporation in good standing
under the laws of the state of Delaware with corporate
power and authority to own, lease and operate its
properties and to conduct its business as described in
the Prospectus and to enter into and perform its obli-
gations under this Agreement and the Pricing Agreement;
and the Company is duly qualified as a foreign corpo-
ration to transact business and is in good standing in
each jurisdiction in which such qualification is re-
quired, whether by reason of the ownership or leasing
of property or the conduct of business, except where
the failure to so qualify would not have a material
adverse effect on the condition, financial or other-
wise, or the earnings, business affairs or business
prospects of the Company.
(vi) The Company has no subsidiaries.
(vii) The authorized, issued and outstanding
capital stock of the Company is as set forth in the
Prospectus under "Capitalization" (except for subse-
quent issuances, if any, pursuant to reservations,
agreements, employee benefit plans or the exercise of
convertible securities and the warrants referred to in
the Prospectus); the shares of issued and outstanding
Common Stock have been duly authorized and validly
issued and are fully paid and nonassessable.
(viii) The Company is not in violation of its
charter or in default in the performance or observance
of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mort-
gage, loan agreement, note, lease or other instrument
to which the Company is a party or by which it may be
bound, or to which any of the property or assets of the
Company is subject, excluding in each case, violations
or defaults which, individually or in the aggregate
would not have a material adverse effect on the condi-
tion, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company;
and the execution, delivery and performance of this
Agreement and the Pricing Agreement and the consumma-
tion of the transactions contemplated herein and there-
in and compliance by the Company with its obligations
hereunder and thereunder have been duly authorized by
all necessary corporate action and will not conflict
with or constitute a breach of, or default under, or
result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of
the Company pursuant to, any contract, indenture,
mortgage, loan agreement, note, lease or other instru-
ment to which the Company is a party or by which it may
be bound, or to which any of the property or assets of
the Company is subject, excluding in each case, con-
flicts, breaches, defaults or liens which, individually
or in the aggregate, would not have a material adverse
effect on the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of
the Company, nor will such action result in any viola-
tion of the provisions of the charter or bylaws of the
Company or any applicable law, rule, regulation, judg-
ment, order, consent or decree of any government in-
strumentality or court, domestic or foreign, having
jurisdiction over the Company or any of its assets or
properties.
(ix) The Company is not in violation of any
Federal, state or local law relating to discrimination
in the hiring, promotion or pay of employees nor any
applicable wage or hour laws that, singly or in the
aggregate, could have a material adverse effect on the
condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company.
Except as disclosed in the Prospectus, there is (A) no
significant unfair labor practice complaint pending
against the Company or, to the best knowledge of the
Company, threatened against the Company, before the
National Labor Relations Board or any state or local
labor relations board, and no significant grievance or
significant arbitration proceeding arising out of or
under any collective bargaining agreement is so pending
against the Company or, to the best knowledge of the
Company, threatened against the Company, and (B) no
labor dispute in which the Company is involved nor, to
the best knowledge of the Company, is any labor dispute
imminent, other than routine disciplinary and grievance
matters. The Company is in compliance with all pres-
ently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and
the regulations and published interpretations thereun-
der, including but not limited to Sections 4975 and
4980B of the Internal Revenue Code of 1986, as amended
(the "Code") except to the extent that such non-compli-
ance would not, singly or in the aggregate, have a
material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or busi-
ness prospects of the Company. There are no "pension
plans" established or maintained by the Company that
are intended to be qualified under Section 401(a) of
the Code. Since September 26, 1980 the Company has not
made or suffered a "complete withdrawal" or a "partial
withdrawal" as such terms are respectively defined in
Sections 4203 and 4205 of ERISA with respect to any
"multi-employer pension plans" to which the Company is
a contributor. On the Representation Date, the Company
would not have an aggregate withdrawal liability (com-
puted as if the Company made a complete withdrawal on
such date) with respect to any "multi-employer pension
plans" to which the Company is a contributor.
(x) There is no action, suit or proceeding before or
by any court or governmental agency or body, domestic
or foreign, now pending, or, to the knowledge of the
Company, threatened, against or affecting the Company,
which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which
is reasonably expected to result in any material ad-
verse change in the condition, financial or otherwise,
or in the earnings, business affairs or business pros-
pects of the Company or is reasonably expected to
materially and adversely affect the properties or
assets thereof or which might materially and adversely
affect the consummation of this Agreement; there are no
contracts or documents of the Company which are re-
quired to be filed as exhibits to the Registration
Statement by the 1933 Act or by the 1933 Act Regula-
tions which have not been so filed.
(xi) The Company (i) has been subject to the
requirements of Section 12 of the 1934 Act for a period
of at least 12 calendar months, (ii) has filed in a
timely manner all reports required to be filed during
the 12 calendar months preceding the Representation
Date, and (iii) the aggregate market value of the
voting stock held by non-affiliates of the Company is
$75 million or more.
(xii) No authorization, approval or consent of
any court or governmental authority or agency is neces-
sary in connection with the offering of and the sale of
the Securities hereunder, except such as may be re-
quired under the 1933 Act or the 1933 Act Regulations
or state securities laws.
(xiii) The Company possesses such certificates,
authorities or permits issued by the appropriate state,
federal or foreign regulatory agencies or bodies neces-
sary to conduct the business now operated by it except
as would not materially and adversely affect the condi-
tion, financial or otherwise, or the earnings, business
affairs or business prospects of the Company, and the
Company has not received any notice of proceedings
relating to the revocation or modification of any such
certificate, authority or permit which, singly or in
the aggregate, if the subject of an unfavorable deci-
sion, ruling or finding, would materially and adversely
affect the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the
Company.
(xiv) The Company has sufficient title for the
use made and proposed to be made of all of its proper-
ties, whether real or personal, free and clear of all
liens, encumbrances and defects, except as stated in
the Prospectus or such as would not have a material
adverse effect on the condition, financial or other-
wise, or in the earnings, business affairs or business
prospects of the Company.
(xv) There are no persons with registration or
other similar rights to have any securities registered
pursuant to the Registration Statement or to partici-
pate in the offering of the Securities contemplated by
this Agreement, except such as have been waived in
writing or complied with by the inclusion of such
securities in the Registration Statement or the inclu-
sion of such persons as Selling Stockholders in Sched-
ule B hereto, as the case may be.
(xvi) This Agreement has been, and, at the Repre-
sentation Date the Pricing Agreement will have been,
duly executed and delivered by the Company.
(xvii) The Company has not and is not presently
doing business with the government of Cuba or with any
person or any affiliate located in Cuba.
(xviii) The Company is an "air carrier" and after
consummation of the transactions contemplated herein
will be a "citizen of the United States," in each case
within the meaning of the Federal Aviation Act of 1958,
as amended.
(xix) There is no pending or threatened action,
suit or proceeding by or before any court or governmen-
tal agency, authority or body or any arbitrator involv-
ing the Company or its property and involving (A)
licenses, certificates, permits or other governmental
authorizations issued by or from the Department of
Transportation, the Federal Aviation Administration,
the Federal Communications Commission or any other
federal or any state transportation or aviation regula-
tory authority or (B) the Federal Aviation Act of 1958,
as amended ((A) and (B) together, "Aviation Laws") that
is of a character required to be disclosed in the
Prospectus.
(xx) The descriptions in the Registration State-
ment of laws, regulations and rules, of legal and
governmental proceedings and of contracts, agreements,
leases and other documents including, without limita-
tion, under the headings "Risk Factors -- Government
Regulation," "Business -- Aircraft and -- Government
Regulation" are accurate in all material respects, and
comply as to form in all material respects with the
applicable requirements of the 1933 Act and the 1933
Act Regulations.
(xxi) The Company is not in violation of any
Federal, state or local laws and regulations or in
noncompliance with any permits or other government
authorizations relating to pollution or protection of
human health or the environment (including, without
limitation, ambient air, surface water, ground water,
land surface or subsurface strata), including, without
limitation, laws, regulations permits or other govern-
ment authorizations relating to emissions, discharges,
releases or threatened releases of toxic or hazardous
substances, materials or wastes, or petroleum and
petroleum products ("Materials of Environmental Con-
cern"), or otherwise relating to the protection of
human health and safety, or the storage, disposal,
transport or handling of Materials of Environmental
Concern (collectively, "Environmental Laws"), that
individually or in the aggregate would not have a
material adverse effect on the condition, financial or
otherwise, or in the earnings, business affairs or
business prospects of the Company. To the Company's
knowledge, there is no pending or threatened claim,
action, investigation or notice (written or oral) by
any governmental authority, person or entity alleging
that the Company is liable for investigatory, cleanup,
or governmental responses costs, or natural resources
or property damages, or personal injuries, attorney's
fees or penalties relating to (x) the presence, or re-
lease into the environment, of any Material of Environ-
mental Concern at any location owned or operated by the
Company, now or in the past, or (y) the violation, or
alleged violation, of any Environmental Law that indi-
vidually or in the aggregate would have material ad-
verse effect on the condition, financial or otherwise,
or in the earnings, business affairs or prospects of
the Company (collectively, "Environmental Claims"); and
there are no past or present actions, activities,
circumstances, conditions, events or incidents, that
could form the basis of any Environmental Claim against
the Company or against any person or entity whose
liability for any Environmental Claim the Company has
retained or assumed either contractually or by opera-
tion of law.
(xxii) The Common Stock is listed on the New York
Stock Exchange and has been registered under Section
12(b) of the Securities Exchange Act of 1934 Act, as
amended (the "1934 Act").
(xxiii) All tax returns required to be filed by
the Company have been timely filed and such returns are
true, complete and correct in all material respects.
All taxes due or claimed to be due from the Company
that are due and payable have been paid, other than
those (i) being contested in good faith and for which
an adequate reserve or accrual has been established in
accordance with GAAP or (ii) those currently payable
without penalty or interest for which an adequate
reserve or accrual has been established in accordance
with GAAP or extensions duly paid. Except as described
in the Prospectus, the Company does not know of (A) any
actual or proposed material additional tax assessments
or (B) any probable basis for the imposition of any
material additional tax assessments for any fiscal
period against the Company.
(b) Each of the Selling Stockholders, solely in such
Selling Stockholder's capacity as a Selling Stockholder,
severally and not jointly represents and warrants to, and
agrees with, each Underwriter as follows:
(i) Such Selling Stockholder has reviewed and is
familiar with the Registration Statement and the Pro-
spectus contained therein or filed as supplements
thereto and, such Selling Stockholder has no reason to
believe that the Prospectus (and any amendment, supple-
ment or term sheet thereto) includes (and, as of the
Closing Time, as defined in Section 2 below, will
include) an untrue statement of a material fact or
omits to state a material fact necessary in order to
make the statements therein, in the light of the cir-
cumstances under which they were made, not misleading;
and such Selling Stockholder is not prompted to sell
the Securities to be sold by such Selling Stockholder
by any information concerning the Company that is not
set forth in the Prospectus or the term sheet.
(ii) On the date the Pricing Agreement is execut-
ed and at the Closing Time, as defined in Section 2
below (and if any Option Securities are purchased, at
the Date of Delivery, as defined in Section 2 below),
and, unless the Company has notified you as provided in
Section 3(e) below, at all times between the first
delivery of the Prospectus and the term sheet, if any,
to the Underwriters for their use and the Closing Time,
as defined in Section 2 below, (and, if any Option
Securities are purchased, the Date of Delivery, as
defined in Section 2 below), such parts of the Regis-
tration Statement and any amendments and supplements
thereto as specifically refer to such Selling Stock-
holder will not contain an untrue statement of a mate-
rial fact or omit to state a material fact required to
be stated therein or necessary to make the statements
therein not misleading and such parts of the Prospectus
or term sheet, if any, as specifically refer to such
Selling Stockholder will not include an untrue state-
ment of a material fact or omit to state a material
fact necessary in order to make the statements therein,
in the light of the circumstances under which they were
made, not misleading.
(iii) Certificates for all of the Securities to
be sold by such Selling Stockholder pursuant to this
Agreement, in suitable form for transfer by delivery or
accompanied by duly executed instruments of transfer or
assignment in blank have been deposited with First
Interstate Bank of California, as custodian (the "Cus-
todian") pursuant to a Custody Agreement dated as of
February 13, 1996 (the "Custody Agreement") for the
purpose of effecting delivery pursuant to this Agree-
ment.
(iv) This Agreement and the Custody Agreement
have been duly authorized, executed and delivered by
such Selling Stockholder. The execution and delivery
of this Agreement and the Custody Agreement by such
Selling Stockholder and the sale and delivery of the
Securities to be sold by such Selling Stockholder to
the Underwriters pursuant to this Agreement do not and
will not conflict with, or result in a breach of any of
the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets
of such Selling Stockholder under any contract, inden-
ture, mortgage, loan agreement, note, lease or other
agreement or instrument to which such Selling Stock-
holder is a party or by which it may be bound or to
which any of its properties may be subject (except for
such conflicts, breaches or defaults or liens, charges
or encumbrances that would not have a material adverse
effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of
such Selling Stockholder and its subsidiaries consid-
ered as one enterprise and would not materially and
adversely affect the consummation of the transactions
contemplated by this Agreement) or any existing appli-
cable law, rule, regulation, judgment, order or decree
of any government, governmental instrumentality or
court, domestic or foreign, having jurisdiction over
such Selling Stockholder or any of its respective
properties.
(v) Such Selling Stockholder will, at the Closing
Time, as defined in Section 2 below, (and, if any
Option Securities are purchased, on the Date of Deliv-
ery, as defined in Section 2 below), have good and
valid title to the Securities to be sold by such Sell-
ing Stockholder pursuant to this Agreement, free and
clear of any pledge, lien, security interest, charge,
claim, equity or encumbrance of any kind, other than
pursuant to this Agreement; such Selling Stockholder
has full right, power and authority to sell, transfer
and deliver such Securities pursuant to this Agreement;
and, upon delivery of such Securities and payment of
the purchase price therefor as contemplated in this
Agreement, assuming each such Underwriter has no notice
of any adverse claim, each of the Underwriters will
receive good and valid title to the offered Securities
purchased by it from such Selling Stockholder, free and
clear of any pledge, lien, security interest, charge,
claim, equity or encumbrance of any kind, other than
any such pledge, lien, security interest, charge,
claim, equity or encumbrance created by such Under-
writer or resulting from any actions taken by such
Underwriter.
(vi) For a period of 90 days from the date here-
of, such Selling Stockholder will not, except as de-
scribed in the Prospectus, without Merrill Lynch's
prior written consent, directly or indirectly, sell,
offer to sell, grant any option for the sale of, or
otherwise dispose of (whether directly or synthetical-
ly) or enter into any agreement to sell or otherwise
dispose of (whether directly or synthetically) any
Common Stock, Class A Common Stock or Warrants or any
security convertible into or exchangeable or exercis-
able for Common Stock, Class A Common Stock or War-
rants,except pursuant to a transaction in which all
holders of Common Stock may participate on a pro rata
basis at the same price per share and on the same
economic terms, including without limitation, a tender
offer or exchange offer, and except for transfers to an
affiliate (as such term is defined in Rule 405 of the
1933 Act Regulations).
(vii) Such Selling Stockholder has not taken and
will not take, directly or indirectly, any action
designed to, or that might reasonably be expected to,
cause or result in stabilization or manipulation of the
price of the Common Stock.
(viii) The offer and the sale of the Securities
being sold by such Selling Stockholder and the consum-
mation of any other of the transactions herein contem-
plated by such Selling Stockholder, will not conflict
with, or result in a breach or violation of, any Avia-
tion Law.
(ix) There are no transfer taxes or other simi-
lar fees or charges required under any Aviation Law to
be paid in connection with the execution, delivery and
performance of this Agreement or the sale by such
Selling Stockholder of the Securities to be sold by
such Selling Stockholder.
(x) Such Selling Stockholder will furnish each
of the Underwriters with any such certification or
completed forms that may be required under applicable
Federal or state tax laws that may be required in
connection with the transactions contemplated by this
Agreement.
(c) Any certificate signed by any officer of the Company
and delivered to the Representatives or to counsel for the Under-
writers shall be deemed a representation and warranty by the
Company to each Underwriter as to the matters covered thereby.
(d) Any certificate signed by any officer or partner, as the
case may be, of a Selling Stockholder and delivered to the
Representatives or to counsel for the Underwriters shall be
deemed a representation and warranty by such Selling Stockholder
to each Underwriter as to the matters covered thereby.
Section 2. Sale and Delivery to Underwriters; Closing.
(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set
forth, the Selling Stockholders severally and not jointly agree
to sell the number of Initial Securities set forth in Schedule B
opposite the name of each such Selling Stockholder to each Under-
writer, severally and not jointly, and each Underwriter, sever-
ally and not jointly, agrees to purchase from the Selling Stock-
holders, at the price per share set forth in the Pricing Agree-
ment, the number of Initial Securities set forth in Schedule A
opposite the name of such Underwriter (except as otherwise
provided in the Pricing Agreement), plus any additional number of
Initial Securities which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof.
(b) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and condi-
tions herein set forth, the two Selling Stockholders identified
on Schedule B hereby severally and not jointly grant an option to
the Underwriters to purchase up to all of the Option Securities
set forth in Schedule B opposite the name of each such Selling
Stockholder at the purchase price per share set forth in the
Pricing Agreement. The option granted will expire 30 days after
the Representation Date and may be exercised in whole or in part
from at any one time only for the purpose of covering over-
allotments which may be made in connection with the offering and
distribution of the Initial Securities upon notice by the Repre-
sentatives to the Company and the Selling Stockholders setting
forth the number of Option Securities as to which the several
Underwriters are then exercising the option and the time and date
of payment and delivery for such Option Securities. Such time
and date of delivery (the "Date of Delivery") shall be determined
by the Representatives, but shall not be later than seven full
business days after the exercise of said option, nor in any event
prior to the Closing Time, as hereinafter defined, unless other-
wise agreed by the Representatives, the Company and the Selling
Stockholders set forth in Schedule B. If the option is exercised
as to all or any portion of the Option Securities, each of the
Underwriters, acting severally and not jointly, will purchase
that proportion of the total number of Option Securities then
being purchased which the number of Initial Securities set forth
in Schedule A opposite the name of such Underwriter bears to the
total number of Initial Securities (except as otherwise provided
in the Pricing Agreement), subject in each case to such adjust-
ments as Merrill Lynch in its discretion shall make to eliminate
any purchases of fractional interests, plus any additional number
of Option Securities which such Underwriter may become obligated
to purchase pursuant to the provisions of Section 10 hereof. If
the option is exercised as to all or any portion of the Option
Securities, each Selling Stockholder, granting such option acting
severally and not jointly, will sell that proportion of the total
number of Option Securities then being purchased which is the
ratio of the number of Option Securities set forth opposite the
name of such Selling Stockholder on Schedule B bears to the total
number of Option Securities.
(c) Payment of the purchase price for the Securities shall
be made at the office of Skadden, Arps, Slate, Meagher & Flom,
300 South Grand Avenue, Los Angeles, California, or at such other
place as shall be agreed upon by the Representatives, the Selling
Stockholders and the Company, at 7:00 A.M. California time on the
third business day (unless postponed in accordance with the
provisions of Section 10) after execution of the Pricing Agree-
ment, or such other time not later than ten business days after
such date as shall be agreed upon by the Representatives, the
Selling Stockholders and the Company (such time and date of
payment and delivery being herein called the "Closing Time").
Payment shall be made to the respective Selling Stockholders by
certified or official bank check or checks drawn in New York
Clearing House funds or similar next day funds payable to the
order of the respective Selling Stockholders, against delivery to
the Representatives at Merrill Lynch's World Headquarters, North
Tower, World Financial Center, New York, New York 10281, for the
respective accounts of the Underwriters of certificates for the
Securities to be purchased by them. Certificates, if any, for
the Securities shall be in such denominations and registered in
such names as the Representatives may request in writing, of the
Custodian on behalf of the Selling Stockholders, at least two
business days before the Closing Time. It is understood that
each Underwriter has authorized the Representatives, for their
account, to accept delivery of, receipt for, and make payment of
the purchase price for, the Securities which it has agreed to
purchase. Merrill Lynch, individually and not as representative
of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Securities to be purchased
by any Underwriter whose check has not been received by the
Closing Time, but such payment shall not relieve such Underwriter
from its obligations hereunder. The certificates, if any, for
the Securities will be made available, by the Custodian on behalf
of the Selling Stockholders, for examination and packaging by the
Representatives not later than 10:00 A.M. on the last business
day prior to the Closing Time at Merrill Lynch's World Headquar-
ters, North Tower, World Financial Center, New York, New York
10281.
(d) In addition, in the event that any or all of the Option
Securities are purchased by the Underwriters, payment of the
purchase price for such Option Securities shall be made at the
above-mentioned offices of Skadden, Arps, Slate, Meagher & Flom,
or at such other place as shall be agreed upon by the Representa-
tives, the Selling Stockholders granting the option for the
Option Securities and the Company, on the Date of Delivery as
specified in the notice from the Representatives to the Company
and the Selling Stockholders granting the option for the Option
Securities. Payment shall be made to the respective Selling
Stockholders named in Schedule B by certified or official bank
check or checks drawn in New York Clearing House funds or similar
next day funds payable to the order of such Selling Stockholders,
against delivery to the Representatives at the above mentioned
offices of Merrill Lynch for accounts of the Underwriters of
certificates for the Option Securities to be purchased by them.
Certificates for the Option Securities, if any, shall be in such
denominations and registered in such names as the Representatives
may request in writing of the Custodian at least two business
days before the Closing Time or the Date of Delivery, as the case
may be. It is understood that each Underwriter has authorized
the Representatives, for their accounts, to accept delivery of,
receipt for, and make payment of the purchase price for the
Option Securities, if any, which it has agreed to purchase.
Merrill Lynch, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of
the purchase price for the Option Securities, if any, to be
purchased by any Underwriter whose check has not been received by
the Date of Delivery, as the case may be, but such payment shall
not relieve such Underwriter from its obligations hereunder. The
certificates for the Option Securities, if any, will be made
available, by the Custodian on behalf of the Selling Stockholders
granting the option for the Option Securities, for examination
and packaging by the Representatives not later than 10:00 A.M. on
the last business day prior to the Date of Delivery. For purpos-
es of this agreement "business day" means a day on which the New
York Stock Exchange is open for business.
Section 3. Covenants of the Company. The Company
covenants with each Underwriter as follows:
(a) The Company will, for so long as the Underwriters
are required to deliver a prospectus in connection with the
offer and sale of the Securities, notify the Representatives
immediately (i) of the effectiveness of any post-effective
amendment to the Registration Statement filed after the date
of this Agreement in connection with the offering of the
Securities, (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information,
and (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement
or the initiation of any proceedings for that purpose. The
Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued,
to obtain the lifting thereof at the earliest possible
moment. The obligations of the Company pursuant to this
Section 3(a) shall be deemed to terminate 90 days after the
date of the Pricing Agreement unless the Representatives
shall notify the Company in writing that the Underwriters
continue to be subject to prospectus delivery requirements
with respect to offers and sales of the Securities, and in
the event of any such notice the obligations of the Company
under this Section 3(a) shall be deemed to terminate 60 days
after the date of such notice unless a further notice to
such effect is so provided.
(b) The Company will, for so long as the Underwriters
are required to deliver a prospectus in connection with the
offer and sale of the Securities, give the Representatives
notice of its intention to file or prepare any post-effec-
tive amendment to the Registration Statement or any amend-
ment or supplement to the Prospectus (including any revised
prospectus which the Company proposes for use by the Under-
writers in connection with the offering of the Securities or
any term sheet (whether or not such revised prospectus or
term sheet is required to be filed pursuant to Rules 424(b)
or 434 of the 1933 Act Regulations), whether pursuant to the
1933 Act, the 1934 Act or otherwise), will furnish the
Representatives with copies of any such amendment or supple-
ment or term sheet a reasonable amount of time prior to such
proposed filing or use, as the case may be, and will not
file any such amendment or supplement or term sheet or use
any such prospectus to which the Representatives or counsel
for the Underwriters shall object. In the event (a) the
Underwriters shall object to any such amendment, supplement,
term sheet or prospectus and (b) the Company shall have
determined (based upon the written opinion of outside coun-
sel) that the failure to file with the Commission or use in
connection with the sale of the securities included in the
Registration Statement any such amendment, supplement, term
sheet or prospectus would make the Prospectus include a
material misstatement or omit to state a material fact in
light of the circumstances existing at the time it is deliv-
ered to a purchaser then, the Company may file with the
Commission any such amendment, supplement, term sheet or
prospectus. The obligations of the Company pursuant to this
Section 3(b) shall be deemed to terminate 90 days after the
date of the Pricing Agreement unless the Representatives
shall notify the Company in writing that the Underwriters
continue to be subject to prospectus delivery requirements
with respect to offers and sales of the Securities, and in
the event of any such notice the obligations of the Company
under this Section 3(b) shall be deemed to terminate 60 days
after the date of such notice unless a further notice to
such effect is so provided.
(c) The Company will deliver to each Representative a
signed copy of any post-effective amendment to the Registra-
tion Statement made in connection with the offering of the
Securities (including exhibits filed therewith or incorpo-
rated by reference therein and documents incorporated or
deemed to be incorporated by reference therein) and will
also deliver to the Representatives a conformed copy of the
Registration Statement as originally filed and of each
amendment, post-effective amendment or supplement or term
sheet thereto (without exhibits) for each of the Underwrit-
ers.
(d) The Company will furnish to each Underwriter, from
time to time during the period when the Prospectus is re-
quired to be delivered under the 1933 Act or the 1934 Act,
such number of copies of the Prospectus (as amended or
supplemented) and the term sheet, if any, as such Underwrit-
er may reasonably request for the purposes contemplated by
the 1933 Act or the 1934 Act or the respective applicable
rules and regulations of the Commission thereunder.
(e) If any event shall occur as a result of which it
is necessary, in the opinion of counsel for the Underwriters
or counsel for the Company, to amend or supplement the Pro-
spectus in order to make the Prospectus not misleading in
the light of the circumstances existing at the time it is
delivered to a purchaser, the Company will forthwith amend
or supplement the Prospectus (in form and substance satis-
factory to counsel for the Underwriters) so that, as so
amended or supplemented, the Prospectus will not include an
untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the
time it is delivered to a purchaser, not misleading, and the
Company will furnish to the Underwriters a reasonable number
of copies of such amendment or supplement.
(f) The Company will endeavor, in cooperation with the
Underwriters, to qualify the Securities for offering and
sale under the applicable securities laws of such states and
other jurisdictions of the United States as the Representa-
tives may designate; provided, however, that the Company
shall not be obligated to qualify as a foreign corporation
in any jurisdiction in which it is not so qualified. In
each jurisdiction in which the Securities have been so
qualified, the Company will file such statements and reports
as may be required by the laws of such jurisdiction to
continue such qualification in effect for a period of not
less than one year from the date of the Pricing Agreement.
The Company will inform the Florida Department of Banking
and Finance if prior to the completion of the distribution
of the Securities by the Underwriters the Company commences
engaging in business with the government of Cuba or with any
person or affiliate located in Cuba. Such information will
be provided within 90 days of the commencement thereof or
after a change to any such previously reported information.
(g) The Company will make generally available to its
security holders as soon as practicable, but not later than
90 days after the close of the period covered thereby, an
earnings statement (in form complying with the provisions of
Rule 158 of the 1933 Act Regulations) covering a twelve-
month period beginning not later than the first day of the
Company's fiscal quarter next following the "effective date"
(as defined in said Rule 158) of the Registration Statement.
(h) Immediately following the execution of the Pricing
Agreement, the Company will prepare, and file or transmit
for filing with the Commission in accordance with Rules 434
and 424(b) of the 1933 Act Regulations, copies of an amended
Prospectus supplement and term sheet, if any, to the Regis-
tration Statement, containing all omitted information.
(i) The Company, during the period when the Prospectus
is required to be delivered under the 1933 Act or the 1934
Act, will file all documents required to be filed with the
Commission pursuant to Section 13, 14 or 15 of the 1934 Act
within the time periods required by the 1934 Act and the
rules and regulations of the Commission under the 1934 Act.
(j) During a period of 90 days from the Representation
Date, the Company will not, without Merrill Lynch's prior
written consent, directly or indirectly, sell, offer to
sell, grant any option for the sale of, or otherwise dispose
of (whether directly or synthetically) or enter into any
agreement to sell or otherwise dispose of (whether directly
or synthetically) any Common Stock, Class A Common Stock or
Warrants or any security convertible into or exchangeable
into or exercisable for Common Stock (except for Common
Stock issued pursuant to reservations, agreements, employee
benefit plans, the exercise of Warrants or the exercise of
convertible securities referred to in Section 1(a)(vii)
hereof), Class A Common Stock or Warrants.
(k) If the Company uses Rule 434 of the 1933 Act
Regulations, it will comply with the requirements of Rule
434 of such regulations and the Prospectus will not be
"materially different," as such term is used in Rule 434 of
the 1933 Act Regulations, from the Prospectus first given to
the Underwriters for their use.
Section 4. Payment of Expenses. The Company will pay
all expenses incident to the performance of its obligations under
this Agreement, including (i) the printing and filing of any
post-effective amendment to the Registration Statement required
in connection with the sale of the Securities, (ii) the prepara-
tion, issuance and delivery of the certificates for the Securi-
ties to the Underwriters, (iii) the fees and disbursements of the
Company's counsel and accountants, (iv) the qualification of the
Securities under securities laws in accordance with the provi-
sions of Section 3(f) hereof, including filing fees and the fees
and disbursements of counsel for the Underwriters in connection
therewith and in connection with the preparation of the Blue Sky
Survey and any Legal Investment Survey, (v) the printing and
delivery to the Underwriters of copies of the Registration
Statement as originally filed and of each amendment thereto, of
each preliminary prospectus supplement, and of the Prospectus and
any amendments or supplements thereto, (vii) the printing and
delivery to the Underwriters of copies of the Blue Sky Survey and
any Legal Investment Survey, (viii) the fees and expenses of
continuing the listing of the Common Stock on the New York Stock
Exchange and (ix) the fee of the National Association of Securi-
ties Dealers, Inc.
If this Agreement is terminated by the Representatives
in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Company shall reimburse the Underwriters for all of
their out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Underwriters unless such termi-
nation occurs by reason of the failure to satisfy the conditions
contained in Section 5(b)(ii), 5(g) insofar it relates to deliv-
eries by the Selling Stockholders and 5(h)(iii) in which case
such fees and expenses shall be paid by the Selling Stockholder
or Stockholders as to which such failure of condition relates.
Section 5. Conditions of Underwriters' Obligations.
The obligations of the Underwriters hereunder are subject to the
accuracy of the representations and warranties of the Company and
the Selling Stockholders herein contained, to the performance by
the Company and the Selling Stockholders of their obligations
hereunder, and to the following further conditions:
(a) The Registration Statement, as amended, shall have
become effective on or prior to the date of this Agreement.
At the Closing Time, no stop order suspending the effec-
tiveness of the Registration Statement shall have been
issued under the 1933 Act or proceedings therefor initiated
or threatened by the Commission. The price of the Securi-
ties and any price-related information previously omitted
from the effective Registration Statement and any term sheet
used pursuant to Rule 434 of the 1933 Act Regulations shall
have been transmitted to the Commission for filing pursuant
to Rule 424(b) of the 1933 Act Regulations within the pre-
scribed time period and prior to the Closing Time the Compa-
ny shall have provided evidence satisfactory to the Repre-
sentatives of such timely filing, or a post-effective amend-
ment providing such information shall have been promptly
filed and declared effective.
(b) At the Closing Time, the Representatives shall
have received:
(i) The favorable opinion, dated as of the Clos-
ing Time, of Andrews & Kurth L.L.P., counsel for the
Company, in form and substance satisfactory to counsel
for the Underwriters, addressed to the Representatives
and each Selling Stockholder to the effect that:
a. The Company has been duly incorporated
and is validly existing as a corporation in good
standing under the laws of the state of Delaware.
b. The Company has corporate power and au-
thority to own, lease and operate its properties
and to conduct its business as described in the
Registration Statement and to enter into and per-
form its obligations under this Agreement.
c. The authorized capital stock of the Com-
pany is as set forth in the Prospectus under "Cap-
italization" and the issued and outstanding shares
of Common Stock listed on the New York Stock Ex-
change have been duly authorized and, assuming
payment therefor in accordance with the terms upon
which the issuance of such shares was authorized,
have been validly issued and are fully paid and
nonassessable.
d. The issuance of the Securities was not
subject, at the date of issue, to statutory pre-
emptive or, other similar rights arising by oper-
ation of law, under the charter or bylaws of the
Company or, to the best of their knowledge and
information, after due inquiry, under any agree-
ment to which the Company is a party.
e. This Agreement has been duly authorized,
executed and delivered by the Company.
f. The Registration Statement and all post
effective amendments thereto were declared effec-
tive under the 1933 Act and, to the best of their
knowledge and information, no stop order suspend-
ing the effectiveness of the Registration State-
ment has been issued under the 1933 Act or pro-
ceedings therefor initiated or threatened by the
Commission.
g. The Registration Statement at its effec-
tive time and at the Representation Date (other
than the financial statements, financial and sta-
tistical information and supporting schedules in-
cluded therein, as to which no opinion need be
rendered) complied as to form in all material
respects with the requirements of the 1933 Act and
the 1933 Act Regulations.
h. The Common Stock and the Class A Common
Stock conform to the description thereof contained
in the Prospectus under the caption "Description
of Capital Stock" and the Warrants conform to the
description thereof contained in the Prospectus
under the caption "Description of Warrants" and
the form of certificate used to evidence the Com-
mon Stock complies with the requirements of the
Delaware General Corporation Law.
i. To the best of their knowledge and infor-
mation, the Company is not in violation of its
charter or bylaws which violation could have a
material adverse effect on the condition, finan-
cial or otherwise, or on the earnings, business
affairs or business prospects of the Company.
j. No authorization, approval, consent or
order of any court or governmental authority or
agency is required, as of the date of such opin-
ion, in connection with the execution and delivery
of this Agreement or the performance of the Com-
pany's obligations hereunder, except such as may
be required under the 1933 Act or the 1933 Act
Regulations or state securities law.
k. To the best of their knowledge and infor-
mation, the execution, delivery and performance of
this Agreement and the Pricing Agreement and the
consummation of the transactions contemplated
herein and therein and compliance by the Company
with its obligations hereunder and thereunder will
not conflict with or constitute a breach of, or
default under, or result in the creation or impo-
sition of any lien, charge or encumbrance upon any
property or assets of the Company pursuant to any
applicable contract (for the purposes of said
opinion an applicable contract is a contract,
indenture, mortgage, loan agreement, note, lease
or other instrument filed as an Exhibit to the
Company's Form 10-K for the year ended December
31, 1994 or filed as an exhibit to any subsequent
report filed by the Company pursuant to 1934 Act),
nor will such action result in any violation of
the provisions of the charter or bylaws of the
Company, nor will such action result in any viola-
tion of the provisions of any applicable law
(applicable law for this purposes shall be limited
to those United States statutes, laws or regula-
tions currently in effect which, in such counsel's
experience, are normally applicable to transac-
tions of the type contemplated by this Agreement)
except for such violations of applicable law which
will not have a material adverse effect on the
condition, financial or otherwise, or the earn-
ings, business affairs or business prospects of
the Company and would not materially and adversely
affect the consummation of the transactions con-
templated by this Agreement.
l. To such counsel's knowledge, there are no
persons with registration or other similar rights
to have any securities registered pursuant to the
Registration Statement or to participate in the
offering of the Securities contemplated by this
Agreement, except such as have been waived in
writing or complied with by the inclusion of such
Stockholders in the Registration Statement or the
inclusion of such persons as Selling Stockholders
in Schedule B hereto, as the case may be.
In addition such counsel shall state that
they have participated in conferences with offi-
cers and other representatives of the Company, the
Representatives, the Company's independent accoun-
tants, counsel for the Selling Stockholders and
counsel for the Underwriters, at which conferences
the contents of the Registration Statement and the
Prospectus and related matters were discussed and,
although they are not passing upon, and do not
assume any responsibility for, the accuracy, com-
pleteness or fairness of the statements contained
in the Registration Statement or Prospectus, and
they have not made any independent check or veri-
fication thereof, on the basis of the foregoing,
nothing has come to their attention that would
lead them to believe that the Registration State-
ment, as amended, (except for financial statements
and other financial and statistical data included
therein), at the time it became effective, con-
tained any untrue statement of a material fact or
omitted to state a material fact required to be
stated therein or necessary to make the statements
therein not misleading or that the Prospectus
(except for the financial statements and other
financial and statistical data contained therein),
at the Representation Date (unless the term "Pro-
spectus" refers to a prospectus which has been
provided to the Underwriters by the Company for
use in connection with the offering of the Securi-
ties which differs from the Prospectus on file at
the Commission at the Representation Date, in
which case at the time it is first provided to the
Underwriters for such use) or at the Closing Time,
included any untrue statement of a material fact
or omitted to state a material fact required to be
stated therein or necessary to make the statements
therein, in light of the circumstances in which
they were made, not misleading.
(ii) The favorable opinion or opinions
of counsel to each of the Selling Stockholders (such
counsel may be counsel employed by such Selling Stock-
holder), dated as of the Closing Time, such counsel and
the form and substance of such opinion being satisfac-
tory to counsel for the Underwriters, to the effect
that:
a. Assuming that (i) the certificates for
the Securities are delivered in the State of New
York as contemplated in Section 2 of this Agree-
ment and (ii) that Merrill Lynch, as a representa-
tive of the Underwriters, acquired its interest in
the Securities to be sold by the Selling Stock-
holders pursuant to this Agreement in good faith
and without any notice of any adverse claim, upon
delivery to the Merrill Lynch as agent for the
Underwriters in the State of New York of such
Securities registered in Merrill Lynch's name,
Merrill Lynch will acquire all of the Selling
Stockholders rights in the Securities free and
clear of any adverse claim (within the meaning of
Section 8-302 of the New York Uniform Commercial
Code). The owner of such Securities, if other
than such Selling Stockholder, is precluded from
asserting against the Underwriters the ineffec-
tiveness of any unauthorized endorsements.
b. This Agreement and the Custody Agreement
have been duly authorized, executed and delivered
by such Selling Stockholder. The execution and
delivery of this Agreement by such Selling Stock-
holder and the sale and delivery of the Securities
to be sold by such Selling Stockholder to the
several Underwriters pursuant to this Agreement do
not result in a breach of any of the terms or
provisions of, or constitute a default under, or
result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets
of such Selling Stockholder under any contract,
indenture, mortgage, loan agreement, note, lease
or other agreement or instrument to which such
Selling Stockholder is a party or by which it may
be bound or to which any of its properties may be
subject or, to the knowledge of such counsel after
due inquiry, any existing applicable law (applica-
ble law for this purpose shall be limited to those
United States statutes, laws or regulations cur-
rently in effect which in such counsel's experi-
ence are normally applicable to transactions of
the type contemplated by this Agreement, but shall
exclude Aviation Laws and Federal and state secu-
rities laws), rule, regulation, judgment, order or
decree of any government, governmental instrumen-
tality or court, domestic or foreign, having ju-
risdiction over such Selling Stockholder or any of
its respective properties (except for such con-
flicts, breaches or defaults or liens, charges or
encumbrances that would not have a material ad-
verse effect on the condition, financial or other-
wise, or the earnings, business affairs or busi-
ness prospects of such Selling Stockholder and its
subsidiaries considered as one enterprise and
would not materially and adversely affect the con-
summation of the transactions contemplated by this
Agreement).
(iii) The favorable opinion, dated as of the
Closing Time, of Winthrop, Stimson, Putnam and Roberts,
special aviation regulatory counsel for the Company, in
form and substance satisfactory to counsel for the
Underwriters, addressed to the Representatives and each
Selling Stockholder to the effect that:
a. The Company is an "air carrier" and after
consummation of the transactions contemplated
herein will be a "citizen of the United States,"
within the meaning of the Federal Aviation Act of
1958, as amended;
b. The Company has such licenses, certifi-
cates, permits and other governmental authoriza-
tions from the Department of Transportation, as
successor to the Civil Aeronautics Board, the
Federal Aviation Administration and any other
federal, state or local transportation or aviation
regulatory authority as are necessary to conduct
its business in the manner described in the Pro-
spectus, and no such license, certificate, permit
or other governmental authorization is the subject
of any "show cause" or other order of, or any
proceeding before, or any investigation by, any
such authority (other than proceedings for the
renewal of temporary rights), which in the opinion
of such counsel might reasonably result in a final
order impairing the validity of such licenses,
certificates, permits and other governmental au-
thorizations;
c. To the best knowledge of such counsel,
there is no pending or threatened action, suit or
proceeding by or before any court or governmental
agency, authority or body or any arbitrator in-
volving the Company or their property and involv-
ing (A) licenses, certificates, permits or other
governmental authorizations issued by or from the
Department of Transportation, the Federal Aviation
Administration or any other federal or any state
transportation or aviation regulatory authority or
(B) the Federal Aviation Act of 1958, as amended
((A) and (B) together, "Aviation Laws") that is of
a character required to be disclosed in the Pro-
spectus; and the statements in the Prospectus
under the heading "Business -- Government Regula-
tion" fairly summarize in all material respects
the matters therein described as they relate to
Aviation Laws;
d. No consent, approval, authorization,
filing with or order of any court or governmental
agency or body involving Aviation Laws is required
for consummation of the transactions contemplated
herein, other than as has been obtained or per-
formed;
e. Neither the offer and sale of the Securi-
ties being sold by the Selling Stockholders nor
the consummation of any other of the transactions
herein contemplated by the Company and the Selling
Stockholders will conflict with, or result in a
breach or violation of, any Aviation Law;
f. There are no transfer taxes or other
similar fees or charges required under any Avia-
tion Law to be paid in connection with the execu-
tion, delivery and performance of this Agreement
or the sale by the Selling Stockholders of the
Securities; and
g. The descriptions in the Registration
Statement of laws, regulations and rules, of legal
and governmental proceedings and of contracts,
agreements, leases and other documents, in so far
as they relate to Aviation Laws, including, with-
out limitation, under the headings "Risk Fac-
tors -- Government Regulation," "Risk Factors --
Limitation on Voting by Foreign Owners," "Business
-- Aircraft and -- Government Regulation" have
been reviewed by such counsel and are accurate in
all material respects.
(iv) The favorable opinion, dated as of the
Closing Time, of Stephen L. Johnson, Senior Vice Presi-
dent - Legal Affairs, in form and substance satisfacto-
ry to counsel for the Underwriters, addressed to the
Representatives and each Selling Stockholder to the
effect that:
a. To the best of his knowledge and information,
the Company is duly qualified as a foreign corporation
to transact business and is in good standing in each
jurisdiction in which such qualification is required,
except in jurisdictions where the failure to be so
qualified would not singly or in the aggregate, have a
material adverse effect on the condition, financial or
otherwise, or in the earnings, business affairs or
business prospects of the Company.
b. To the best of his knowledge and information,
there are no legal or governmental proceedings pending
or threatened which are required to be disclosed in the
Registration Statement, other than those disclosed
therein, and all pending legal or governmental proceed-
ings to which the Company is a party or to which any of
their property is subject which are not described in
the Registration Statement, including ordinary routine
litigation incidental to the business, are, considered
in the aggregate, not material to the financial condi-
tion of the Company.
c. The information in the Prospectus under "Risk
Factors -- Labor Negotiations," "Business -- Labor
Relations, and -- Government Regulation," to the
extent that it constitutes matters of law, summaries of
legal matters, documents or proceedings, or legal con-
clusions, has been reviewed by him and is correct in
all material respects, except as to Aviation Laws as to
which he need not express any opinion.
d. To the best of his knowledge and information,
there are no contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments required
to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than
those described or referred to therein or filed as
exhibits thereto, the descriptions thereof insofar as
they purport to summarize certain provisions thereof
are in all material respects accurate summaries there-
of, and no default (except for defaults which, individ-
ually or in the aggregate would not materially and ad-
versely affect the condition, financial or otherwise,
or the earnings, business affairs or business prospects
of the Company) exists in the due performance or obser-
vance of any obligation, agreement, covenant or condi-
tion contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument so de-
scribed, referred to, or filed.
He and lawyers under his supervision have partici-
pated in conferences with directors, officers and other
representatives of the Company, the Representatives,
the Company's independent accountants, counsel for the
Selling Stockholders and counsel for the Underwriters,
at which conferences the contents of the Registration
Statement and the Prospectus and related matters were
discussed and, although he is not passing upon, and
does not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in
the Registration Statement or Prospectus, and he has
not made any independent check or verification thereof,
on the basis of the foregoing, nothing has come to his
attention that would lead him to believe that the
Registration Statement, as amended (except for finan-
cial statements and other financial and statistical
data included therein), at the time it became effec-
tive, contained any untrue statement of a material fact
or omitted to state a material fact required to be
stated therein or necessary to make the statements
therein not misleading or that the Prospectus (except
for the financial statements and other financial and
statistical data contained therein), at the Representa-
tion Date (unless the term "Prospectus" refers to a
prospectus which has been provided to the Underwriters
by the Company for use in connection with the offering
of the Securities which differs from the Prospectus on
file at the Commission at the Representation Date, in
which case at the time it is first provided to the
Underwriters for such use) or at the Closing Time,
included any untrue statement of a material fact or
omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in
light of the circumstances under which they were made,
not misleading.
(v) The favorable opinion, dated as of the Clos-
ing Time, of Skadden, Arps, Slate, Meagher & Flom,
counsel for the Underwriters, with respect to the mat-
ters set forth in (a), (c), (d) (solely as to preemp-
tive rights arising by operation of law or under the
charter or bylaws of the Company), and (h), of subsec-
tion (b)(i) of this Section, except that, with respect
to the matters referred to in (c), no opinion need be
expressed as to whether any of the Company's outstand-
ing shares of Common Stock, other than the Securities,
have been duly authorized or validly issued or are
fully paid or nonassessable.
In giving their opinions required by subsection
(b)(v) of this Section 5, Skadden, Arps, Slate, Meagher
& Flom shall additionally state that nothing has come
to their attention that would lead them to believe that
the Registration Statement (except for financial state-
ments and schedules and other financial or statistical
data included therein, as to which counsel need make no
statement), at the Representation Date, contained an
untrue statement of a material fact or omitted to state
a material fact required to be stated therein or neces-
sary to make the statements therein not misleading or
that the Prospectus (except for financial statements
and schedules and other financial or statistical data
included therein, as to which counsel need make no
statement), at the time it is first provided to the
Underwriters for such use or at the Closing Time,
included or includes an untrue statement of a material
fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in
the light of the circumstances under which they were
made, not misleading.
(c) At the Closing Time there shall not have been,
since the date hereof or since the respective dates as of
which information is given in the Registration Statement and
the Prospectus, any material adverse change in the condi-
tion, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company, whether or not
arising in the ordinary course of business, and the Repre-
sentatives shall have received a certificate of the chairman
of the board and chief executive officer of the Company and
of the chief financial officer of the Company, dated as of
the Closing Time, addressed to the Representatives and each
Selling Stockholder to the effect that (i) there has been no
such material adverse change, (ii) the representations and
warranties in Section 1 hereof are true and correct with the
same force and effect as though expressly made at and as of
the Closing Time, (iii) the Company has complied with all
agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Closing Time, and
(iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings
for that purpose have been initiated or threatened by the
Commission.
(d) At the time of the execution of this Agreement,
the Representatives shall have received from KPMG Peat
Marwick LLP a letter dated such date, in form and substance
satisfactory to the Representatives, addressed to the Repre-
sentatives and each Selling Stockholder to the effect that
(i) they are independent public accountants with respect to
the Company within the meaning of the 1933 Act and the 1933
Act Regulations; (ii) it is their opinion that the financial
statements and supporting schedule included in the Regis-
tration Statement and covered by their opinions therein
comply as to form in all material respects with the applica-
ble accounting requirements of the 1933 Act and the 1933 Act
Regulations; (iii) based upon limited procedures set forth
in detail in such letter, nothing has come to their atten-
tion which causes them to believe that (A) the unaudited
condensed financial statements of the Company included in
the Registration Statement do not comply as to form in all
material respects with the applicable accounting require-
ments of the 1933 Act and the 1933 Act Regulations or are
not presented in conformity with generally accepted account-
ing principles applied on a basis substantially consistent
with that of the audited financial statements included in
the Registration Statement, except that the financial state-
ments of the Company are presented on a different basis than
those of the Predecessor Company (as defined in such letter)
for the period January 1, 1994 to August 25, 1994, (B) the
unaudited amounts of revenues, net income and net income per
share set forth under "Selected Financial Data" in the
Prospectus were not determined on a basis substantially con-
sistent with that used in determining the corresponding
amounts in the audited financial statements included in the
Registration Statement, except that the financial statements
of the Company are presented on a different basis than those
of the Predecessor Company for the period January 1, 1994
to August 25, 1994, or (C) at a specified date not more than
five days prior to the date of this Agreement, there has
been any change in the capital stock of the Company or any
increase in the long term debt of the Company or any de-
crease in total assets or net assets as compared with the
amounts shown in the balance sheet included in the Registra-
tion Statement or, during the period from September 30, 1995
to a specified date not more than five days prior to the
date of this Agreement, there were any decreases, as com-
pared with the corresponding period in the preceding year,
in revenues, net income or net income per share of the
Company, except in all instances for changes, increases or
decreases which the Registration Statement and the Prospec-
tus disclose have occurred or may occur; and (iv) in addi-
tion to the audit referred to in their opinions and the
limited procedures referred to in clause (iii) above, they
have carried out certain specified procedures, not consti-
tuting an audit, with respect to certain amounts, percentag-
es and financial information which are included in the
Registration Statement and Prospectus and which are speci-
fied by the Representatives, and have found such amounts,
percentages and financial information to be in agreement
with the relevant accounting, financial and other records of
the Company identified in such letter.
(e) At the Closing Time the Representatives shall have
received from KPMG Peat Marwick LLP a letter, dated as of
the Closing Time, addressed to the Representatives and each
Selling Stockholder to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsec-
tion (d) of this Section, except that the specified date
referred to shall be a date not more than five days prior to
the Closing Time and, to the further effect that they have
carried out procedures as specified in clause (iv) of sub-
section (d) of this Section with respect to certain amounts,
percentages and financial information specified by the
Representatives and have found such amounts, percentages and
financial information to be in agreement with the records
specified in such clause (iv).
(f) At the Closing Time and at the Date of Delivery,
the Securities shall continue to be listed on the New York
Stock Exchange.
(g) At the Closing Time and at the Date of Delivery,
if any, counsel for the Underwriters shall have been fur-
nished with such documents and opinions as they may reason-
ably require and have specifically requested prior to such
time for the purpose of enabling them to pass upon the offer
and sale of the Securities as herein contemplated and relat-
ed proceedings, or in order to evidence the accuracy of any
of the representations or warranties, or the fulfillment of
any of the conditions, herein contained; and all proceedings
taken by the Company and the Selling Stockholders in connec-
tion with the offer and sale of the Securities as herein
contemplated shall be satisfactory in form and substance to
the Representatives and counsel for the Underwriters.
(h) In the event that the Underwriters exercise their
option provided in Section 2(b) hereof to purchase all or
any portion of the Option Securities, the representations
and warranties of the Company contained herein and the
statements in any certificates furnished by the Company
hereunder shall be true and correct as of the Date of Deliv-
ery and, at the Date of Delivery, the Representatives shall
have received:
(i) A certificate, dated the Date of Delivery, of the
chairman and chief executive officer of the Company and
of the chief financial officer of the Company, ad-
dressed to the Representatives and each Selling Stock-
holder, confirming that the certificate delivered at
the Closing Time pursuant to Section 5(c) hereof re-
mains true and correct as of such Date of Delivery.
(ii) The favorable opinion of Andrews & Kurth L.L.P.,
counsel for the Company, in form and substance satis-
factory to counsel for the Underwriters, dated the Date
of Delivery, relating to the Option Securities to be
purchased on the Date of Delivery addressed to the
Representatives and each Selling Stockholder and other-
wise to the same effect as the opinion required by
Section 5(b)(i) hereof.
(iii) The favorable opinion or opinions of counsel
for each of the Selling Stockholders (such counsel may
be counsel employed by such Selling Stockholder), in
form and substance satisfactory to counsel for the
Underwriters, dated the Date of Delivery, relating to
the Option Securities to be purchased on the Date of
Delivery and otherwise to the same effect as the opin-
ion required by Section 5(b)(ii) hereof.
(iv) The favorable opinion of Winthrop, Stimson, Putnam
& Roberts, special aviation regulatory counsel to the
Company, in form and substance satisfactory to counsel
to Underwriters, addressed to the Representatives and
each Selling Stockholder, confirming their opinion
delivered at the Closing Time, pursuant to Section
5(b)(iii) hereof, remains their opinion on the Date of
Delivery.
(v) The favorable opinion of Stephen L. Johnson,
Senior Vice President - Legal Affairs, in form and sub-
stance satisfactory to counsel for the Underwriters,
dated the Date of Delivery, addressed to the Represen-
tatives and each Selling Stockholder relating to the
Option Securities to be purchased on the Date of Deliv-
ery and otherwise to the same effect as the statement
required by Section 5(b)(iv) hereof.
(vi) The favorable opinion of Skadden, Arps,
Slate, Meagher & Flom, counsel for the Underwriters,
dated the Date of Delivery, relating to the Option
Securities to be purchased on the Date of Delivery and
otherwise to the same effect as the opinion required by
Section 5(b)(v) hereof.
(vii) A letter from KPMG Peat Marwick LLP, in form
and substance satisfactory to the Representatives and
dated the Date of Delivery addressed to the Represen-
tatives and each Selling Stockholder, substantially the
same in form and substance as the letter furnished to
the Representatives and the Selling Stockholders pursu-
ant to Section 5(e) hereof, except that the "specified
date" in the letter furnished pursuant to this Section
5(h)(vii) shall be a date not more than five days prior
to the Date of Delivery.
If any condition specified in this Section shall not
have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Representatives by notice to
the Company and each Selling Stockholder at any time at or prior
to the Closing Time, and such termination shall be without
liability of any party to any other party except as provided in
Section 4 hereof. The Representatives shall not have the right
to waive each Selling Stockholder's right to be the addressee of
the documents referred to in subsections (b) through (e), inclu-
sive and subsection (h) of this Section 5.
Section 6. Indemnification. (a) The Company agrees
to indemnify and hold harmless each Underwriter and each person,
if any, who controls any Underwriter within the meaning of Sec-
tion 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, arising out
of any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement
(or any amendment thereto), or the omission or alleged
omission therefrom of a material fact required to be
stated therein or necessary to make the statements
therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material
fact contained in any preliminary prospectus, the
Prospectus (or any amendment, supplement or term sheet
thereto) or the omission or alleged omission therefrom
of a material fact necessary in order to make the
statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the
extent of the aggregate amount paid in settlement of
any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threat-
ened, or of any claim whatsoever based upon any such
untrue statement or omission, or any such alleged
untrue statement or omission, if such settlement is ef-
fected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as
incurred (including, subject to Section 6(c) hereof,
the fees and disbursements of counsel chosen by Merrill
Lynch), reasonably incurred in investigating, preparing
or defending against any litigation, or any investiga-
tion or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, to the
extent that any such expense is not paid under (a)(i)
or (a)(ii) above;
provided, however, that this indemnity agreement shall not apply
to any loss, liability, claim, damage or expense to the extent
arising out of any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity
with written information furnished to the Company by any Under-
writer through the Representatives expressly for use in the
Registration Statement (or any amendment thereto) or any prelimi-
nary prospectus or the Prospectus (or any amendment, supplement
or term sheet thereto).
(b) Each Selling Stockholder severally and not
jointly, agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, arising out
of a breach of such Selling Stockholder's representa-
tions and warranties set forth in Section 1(b)(ii).
0219 against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the
extent of the aggregate amount paid in settlement of
any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threat-
ened, or of any claim whatsoever based upon any such
breach of such Selling Stockholder's representations
and warranties set forth in Section 1(b)(ii), if such
settlement is effected with the written consent of such
Selling Stockholder; and
(iii) against any and all expense whatsoever, as
incurred (including, subject to Section 6(c) hereof,
the fees and disbursements of counsel chosen by Merrill
Lynch), reasonably incurred in investigating, preparing
or defending against any litigation, or any investiga-
tion or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based
upon any such breach of such Selling Stockholder's
representations and warranties set forth in Section
1(b)(ii), to the extent that any such expense is not
paid under (b)(i) or (b)(ii) above;
provided, however, that each Selling Stockholder's maximum
aggregate liability to indemnify or otherwise make payments to
the Underwriters and each person, if any, who controls any Under-
writer within the meaning of Section 15 of the 1933 Act pursuant
to the indemnity agreement under this Section 6(b) and for any
breach of the representations and warranties of such Selling
Stockholder set forth in Section 1(b)(ii) of this Agreement shall
be limited to the aggregate amount of the gross proceeds (after
deducting the Underwriters' discount but before deducting expens-
es) received by such Selling Stockholder from the sale of such
Selling Stockholder's Securities pursuant to this Agreement.
(c) The indemnity agreement contained in this Section
6, with respect to any preliminary prospectus supplement, shall
not inure to the benefit of any Underwriter, or any person who
controls an Underwriter within the meaning of Section 15 of the
1933 Act to the extent that any loss, liability, claim, damage or
expense results from the fact that a copy of the Prospectus
(which at such time had been provided to the Underwriters for
their use) was not sent or given, at or prior to the written
confirmation of the sale of Common Stock, by or on behalf of such
Underwriter to the person asserting such loss, claim, damage or
liability to the extent that delivery of the Prospectus would
have cured the defect giving rise to such loss, claim, damages,
liability or expense if such Underwriter shall have been provided
with copies of the Prospectus.
(d) Each Underwriter severally agrees to indemnify
and hold harmless the Company, its directors, each of its offi-
cers who signed the Registration Statement, and each person, if
any, who controls the Company within the meaning of Section 15 of
the 1933 Act, each Selling Stockholder and each person who
controls such Selling Stockholder within the meaning of Section
15 of the 1933 Act against any and all loss, liability, claim,
damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with
respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or
any amendment thereto) or any preliminary prospectus or the
Prospectus (or any amendment, supplement or term sheet thereto)
in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Repre-
sentatives expressly for use in the Registration Statement (or
any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment, supplement or term sheet thereto).
In addition, each Underwriter severally agrees to indemnify and
hold harmless the Company, its directors, each of its officers
who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the
1933 Act and each Selling Stockholder and each person who con-
trols such Selling Stockholder within the meaning of Section 15
of the 1933 Act against any and all loss, liability, claim,
damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with
respect to any loss, liability claim, damage and expense to the
extent that any loss, liability, claim, damage or expense results
from the fact that a copy of the Prospectus was not sent or given
by or on behalf of such Underwriter to the person asserting such
loss, claim, damage or liability to the extent that delivery of
the Prospectus would have cured the defect giving rise to such
loss, claim, damage, liability or judgment if such Underwriter
shall have been provided with copies of the Prospectus.
(e) Each indemnified party shall give notice as
promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may
be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liabili-
ty which it may have otherwise than on account of this indemnity
agreement. An indemnifying party may participate at its own
expense in the defense of any such action. In no event shall the
indemnifying parties be liable for fees and expenses of more than
one counsel (in addition to any local counsel) separate from
their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or
circumstances.
W02 The provisions of this Section 6 and Section 7
hereof shall not affect any separate agreement among the Company
and the Selling Stockholders with respect to indemnification and
contribution.
Section 7. Contribution. In order to provide for just
and equitable contribution in circumstances in which the indemni-
ty agreement provided for in Section 6 hereof is for any reason
held to be unenforceable by the indemnified parties although
applicable in accordance with its terms, the Company, the Selling
Stockholders and the Underwriters shall contribute to the aggre-
gate losses, liabilities, claims, damages and expenses of the
nature contemplated by said indemnity agreement incurred by the
Company and the Selling Stockholders and one or more of the
Underwriters as incurred, in such proportions that the Underwrit-
ers are responsible for that portion represented by the percent-
age that the underwriting discount appearing on the cover page of
the Prospectus or term sheet, if applicable, bears to the initial
public offering price appearing thereon and the Company and the
Selling Stockholders are responsible for the balance, provided
that the aggregate liability of each Selling Stockholder under
this Section 7 and for any breach of any representation and
warranty set forth in Section 1(b) of this Agreement (to the
extent such breach does not also constitute a breach of any other
representation and warranty of such Selling Stockholder) shall be
limited to an amount equal to the net proceeds (after deducting
the aggregate Underwriters' discount or commission, but before
deducting expenses) received by such Selling Stockholder from the
sale of its Securities pursuant to this Agreement; provided,
however, that no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation, and provided that the contri-
bution provisions of this Section 7 shall not inure to the
benefit of any Underwriter to the extent that the aggregate
losses, liabilities, claims, damages and expenses result from the
circumstances described in Section 6(c). Notwithstanding the
foregoing, no indemnifying party shall be responsible for con-
tributing any amount hereunder unless indemnification from such
indemnifying party under subsections (a) (b) or (d) above, as the
case may be, was called for in accordance with its terms. For
purposes of this Section, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act
shall have the same rights to contribution as such Underwriter,
and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933
Act shall have the same rights to contribution as the Company and
each person, if any, who controls a Selling Stockholder within
the meaning of Section 15 of the 1933 Act shall have the same
rights to contribution as such Selling Stockholder.
Section 8. Representations, Warranties and Agreements
to Survive Delivery. All representations, warranties and agree-
ments contained in this Agreement and the Pricing Agreement, or
contained in certificates of officers of the Company or the
Selling Stockholders submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any inves-
tigation made by or on behalf of any Underwriter or controlling
person, or by or on behalf of the Company or the Selling Stock-
holders, and shall survive delivery of the Securities to the
Underwriters.
Section 9. Termination of Agreement. (a) The Repre-
sentatives may terminate this Agreement, by notice to the Company
and each Selling Stockholder, at any time at or prior to the
Closing Time (i) if there has been, since the date of this
Agreement or since the respective dates as of which information
is given in the Registration Statement, any material adverse
change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company,
whether or not arising in the ordinary course of business, or
(ii) if there has occurred any material adverse change in the
financial markets in the United States or elsewhere or any
outbreak of hostilities or escalation thereof or other calamity
or crisis the effect of which is such as to make it, in the
judgment of the Representatives, impracticable to market the
Securities or to enforce contracts for the sale of the Securi-
ties, or (iii) if trading in the Common Stock or the Warrants has
been suspended by the Commission, or if trading generally on
either the American Stock Exchange or the New York Stock Exchange
has been suspended, or minimum or maximum prices for trading have
been fixed, or maximum ranges for prices for securities have been
required, by either of said Exchanges or by order of the Commis-
sion or any other governmental authority, or if a banking morato-
rium has been declared by either Federal, New York or Arizona
authorities.
(b) If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party
to any other party except as provided in Section 4 hereof.
Section 10. Default by One or More of the Underwrit-
ers. If one or more of the Underwriters shall fail at the
Closing Time to purchase the Securities which it or they are
obligated to purchase under this Agreement and the Pricing
Agreement (the "Defaulted Securities"), the Representatives shall
have the right, within 24 hours thereafter, to make arrangements
for one or more of the non-defaulting Underwriters, or any other
underwriters, to purchase all, but not less than all, of the
Defaulted Securities in such amounts as may be agreed upon and
upon the terms herein set forth; if, however, the Representatives
shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not
exceed 10% of the Securities, each of the non-defaulting
Underwriters shall be obligated, severally and not jointly,
to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to
the underwriting obligations of all non-defaulting Under-
writers, or
(b) if the number of Defaulted Securities exceeds 10%
of the Securities, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve
any defaulting Underwriter from liability in respect of its
default.
In the event of any such default which does not result
in a termination of this Agreement, any of the Representatives,
the Selling Stockholders (acting unanimously) or the Company
shall have the right to postpone the Closing Time for a period
not exceeding seven days in order to effect any required changes
in the Registration Statement or Prospectus or in any other
documents or arrangements.
Section 11. Notices. All notices and other communica-
tions hereunder shall be in writing and shall be deemed to have
been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be directed
to the Representatives c/o Merrill Lynch & Co. at 10900 Wilshire
Boulevard, Suite 900, Los Angeles, California 90024, attention of
Robert Woolway, Director; notices to the Company shall be direct-
ed to the Company at 4000 East Sky Harbor Boulevard, Phoenix,
Arizona 85034, attention of Stephen L. Johnson, Esquire, Senior
Vice President; notices to TPG, TPG Parallel and Air Partners II
shall be directed to Texas Pacific Group Partners, L.P., 201 Main
Street, Suite 2420, Fort Worth, Texas 76102 attention of James
O'Brien; notices to Continental Airlines, Inc. shall be directed
to Continental Airlines, Inc.at 2929 Allen Parkway, Houston,
Texas, 77019 attention of Jeffrey Smisek, Esquire, General
Counsel; notices to Lehman Brothers Holdings Inc. shall be
directed to Lehman Brothers Inc. at 3 World Financial Center, New
York, New York 10285, attention of Steven Berkenfeld, Esquire,
Vice President and notices to Mesa Airlines Group, Inc. shall be
directed to Mesa Airlines, at 2323 30th Street, Farmington, New
Mexico, 87401, attention of Larry Risley, Chairman and Chief
Executive Officer.
Section 12. Parties. This Agreement and the Pricing
Agreement shall each inure to the benefit of and be binding upon
the Underwriters, the Selling Stockholders and the Company and
their respective successors. Nothing expressed or mentioned in
this Agreement or the Pricing Agreement is intended or shall be
construed to give any person, firm or corporation, other than the
Underwriters, the Selling Stockholders and the Company and their
respective successors and the controlling persons and officers
and directors referred to in Sections 6 and 7 and their heirs and
legal representatives, any legal or equitable right, remedy or
claim under or in respect of this Agreement or the Pricing
Agreement or any provision herein or therein contained. This
Agreement and the Pricing Agreement and all conditions and
provisions hereof and thereof are intended to be for the sole and
exclusive benefit of the Underwriters, the Selling Stockholders
and the Company and their respective successors, and said con-
trolling persons and officers and directors and their heirs and
legal representatives, and for the benefit of no other person,
firm or corporation. No purchaser of Securities from any Under-
writer shall be deemed to be a successor by reason merely of such
purchase.
Section 13. Governing Law and Time. THIS AGREEMENT
AND THE PRICING AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE. Except as
otherwise set forth herein, specified times of day refer to New
York City time.<PAGE>
If the foregoing is in accordance with your under-
standing of our agreement, please sign and return to the Company
a counterpart hereof, whereupon this instrument, along with all
counterparts, will become a binding agreement among the Under-
writers, the Selling Stockholders and the Company in accordance
with its terms.
Very truly yours,
AMERICA WEST AIRLINES, INC.
By: /s/ William A. Franke
-----------------------------
Name: William A. Franke
Title: Chairman
TPG PARTNERS, L.P.
By: TPG Genpar, L.P.
General Partner
By: TPG Advisors, Inc.
General Partner
By: /s/ Richard P. Schifter
-----------------------------
Name: Richard P. Schifter
Title: Vice President
TPG PARALLEL I, L.P.
By: TPG Genpar, L.P.
General Partner
By: TPG Advisors, Inc.
General Partner
By: /s/ Richard P. Schifter
-----------------------------
Name: Richard P. Schifter
Title: Vice President
<PAGE>
AIR PARTNERS II, L.P.
By: TPG Genpar, L.P.
General Partner
By: TPG Advisors, Inc.
General Partner
By: /s/ Richard P. Schifter
-----------------------------
Name: Richard P. Schifter
Title: Vice President
CONTINENTAL AIRLINES, INC.
By: /s/ Jeffrey A. Smisek
-----------------------------
Name: Jeffrey A. Smisek
Title: Senior Vice President
MESA AIR GROUP, INC.,
for itself and its subsidiaries
By: /s/ W. Stephen Jackson
-----------------------------
Name: W. Stephen Jackson
Title: Chief Financial Officer
LEHMAN BROTHERS INC.
By: /s/ John K. Sweeney
-----------------------------
Name: John K. Sweeney
Title: Managing Director
<PAGE>
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
LEHMAN BROTHERS INC.
By: Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By /s/ Robert Woolway
-----------------------------
Authorized Signatory
For each of themselves and as Representatives of the other
Underwriters named in Schedule A hereto.
<PAGE>
SCHEDULE A
Number
Name of Underwriter of Securities
------------------- -------------
Merrill Lynch, Pierce, Fenner & Smith Incorporated . . . . . .1,436,668
Donaldson, Lufkin & Jenrette Securities Corporation . . . . . .1,435,666
Lehman Brothers Inc. . . . . . . . . . . . . . . . . . . . . . .1,435,666
CS First Boston Corporation . . . . . . . . . . . . . . . . . . .150,000
Dean Witter Reynolds Inc. . . . . . . . . . . . . . . . . . . . .150,000
Dillion, Read & Co. Inc. . . . . . . . . . . . . . . . . . . . . .150,000
Furman Selz LLC . . . . . . . . . . . . . . . . . . . . . . . . .150,000
Goldman, Sachs & Co. . . . . . . . . . . . . . . . . . . . . . . .150,000
Morgan Stanley & Co. Incorporated . . . . . . . . . . . . . . . .150,000
NatWest Securities Limited . . . . . . . . . . . . . . . . . . . .150,000
PaineWebber Incorporated . . . . . . . . . . . . . . . . . . . . .150,000
Smith Barney Inc. . . . . . . . . . . . . . . . . . . . . . . . .150,000
William Blair & Company, L.L.C. . . . . . . . . . . . . . . . . . . 75,000
Dain Bosworth Incorporated . . . . . . . . . . . . . . . . . . . . 75,000
Legg Mason Wood Walker, Incorporated . . . . . . . . . . . . . . . 75,000
McDonald & Company Securities, Inc. . . . . . . . . . . . . . . . 75,000
Monness, Crespi, Hardt & Co., Inc. . . . . . . . . . . . . . . . . 75,000
Morgan Keegan & Company, Inc. . . . . . . . . . . . . . . . . . . 75,000
The Ohio Company . . . . . . . . . . . . . . . . . . . . . . . . . 75,000
Piper Jaffray Inc. . . . . . . . . . . . . . . . . . . . . . . . . 75,000
Principal Financial Securities, Inc. . . . . . . . . . . . . . . . 75,000
Raymond James & Associates, Inc.. . . . . . . . . . . . . . . . . . 75,000
The Robinson-Humphrey Company, Inc. . . . . . . . . . . . . . . . 75,000
Sutro & Co. Incorporated . . . . . . . . . . . . . . . . . . . . . 75,000
Wheat, First Securities, Inc. . . . . . . . . . . . . . . . . . . 75,000
----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6,633,000
==========
<PAGE>
SCHEDULE B
Number of Number of
Initial Option
Name of Selling Stockholder Securities Securities
- --------------------------- ---------- ----------
TPG Partners, L.P.. . . . . . . . . 2,404,178 0
TPG Parallel I, L.P.. . . . . . . . 242,258 0
Air Partners II, L.P. . . . . . . . 253,564 0
Continental Airlines, Inc.. . . . . 1,100,100 258,030
Mesa Air Group, Inc.. . . . . . . . 1,633,000 351,970
Lehman Brothers Inc . . . . . . . . 1,000,000 0
--------- -------
Total . . . . . . . . . . . . . . . 6,633,000 610,000
========= =======
6,633,000 Shares
AMERICA WEST AIRLINES, INC.
(a Delaware corporation)
Class B Common Stock
(Par Value $.01 Per Share)
PRICING AGREEMENT
February 14, 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Donaldson, Lufkin & Jenrette Securities Corporation
Lehman Brothers Inc.
as Representatives of the several
Underwriters named in the within-
mentioned Purchase Agreement
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281
Dear Sirs:
Reference is made to the Purchase Agreement
dated February 14, 1996 (the "Purchase Agreement")
relating to the purchase by the several Underwriters
named in Schedule A thereto, for whom Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Donaldson, Lufkin & Jenrette Securities Corporation and
Lehman Brothers Inc. are acting as representatives (the
"Representatives"), of the above shares of Class B Common
Stock (the "Securities"), of America West Airlines, Inc.,
a Delaware corporation (the "Company"), to be sold by
certain stockholders named in Schedule B thereto (the
"Selling Stockholders").
Pursuant to Section 2 of the Purchase Agree-
ment, the Selling Stockholders severally and not jointly
agree with each Underwriter as follows:
1. The initial public offering price per
share for the Securities, determined as provided in
said Section 2, shall be $19.50.
2. The purchase price per share for the
Securities to be paid by the several Underwriters
shall be $18.57, being an amount equal to the ini-
tial public offering price set forth above less
$0.93 per share; provided that the purchase price
per share for any Option Securities (as defined in
the Purchase Agreement) purchased upon exercise of
the over-allotment option described in Section 2(b)
of the Purchase Agreement shall be reduced by an
amount per share equal to any dividends declared by
the Company and payable on the Initial Securities
(as defined in the Purchase Agreement) but not
payable on the Option Securities.
<PAGE>
If the foregoing is in accordance with your
understanding of our agreement, please sign and return to
the Company a counterpart hereof, whereupon this instru-
ment, along with all counterparts, will become a binding
agreement among the Underwriters and the Selling Stock-
holders in accordance with its terms. By executing this
agreement in the space provided below, the Company ac-
knowledges the execution and delivery of this Pricing
Agreement by the Representatives and the Selling Stock-
holders and the incorporation of this Pricing Agreement
into the Purchase Agreement
Very truly yours,
TPG PARTNERS, L.P.
By: TPG Genpar, L.P.
General Partner
By: TPG Advisors, Inc.
General Partner
By: /s/ Richard P. Schifter
--------------------------
Name: Richard P. Schifter
Title: Vice President
TPG PARALLEL I, L.P.
By: TPG Genpar, L.P.
General Partner
By: TPG Advisors, Inc.
General Partner
By: /s/ Richard P. Schifter
--------------------------
Name: Richard P. Schifter
Title: Viice President
<PAGE>
AIR PARTNERS II, L.P.
By: TPG Genpar, L.P.
General Partner
By: TPG Advisors, Inc.
General Partner
By: /s/ Richard P. Schifter
--------------------------
Name: Richard P. Schifter
Title: Vice President
CONTINENTAL AIRLINES, INC.
By: /s/ Jeffrey A. Smisek
--------------------------
Name: Jeffrey A. Smisek
Title: Senior Vice President
MESA AIR GROUP, INC.,
for itself and its subsidiaries
By: /s/ W. Stephen Jackson
--------------------------
Name: W. Stephen Jackson
Title: Chief Financial Officer
LEHMAN BROTHERS INC.
By: /s/ John K. Sweeney
--------------------------
Name: John K. Sweeney
Title: Managing Director
<PAGE>
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
LEHMAN BROTHERS INC.
By: Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By /s/ Robert Woolway
--------------------------
Authorized Signatory
For each of themselves and as Representatives of the
other
Underwriters named in Schedule A of the Purchase Agree-
ment
ACKNOWLEDGED
as of the date first above written
AMERICA WEST AIRLINES, INC.
By: /s/ William A. Franke
--------------------------
Name: William A. Franke
Title: Chairman
SHARE EXCHANGE AGREEMENT
SHARE EXCHANGE AGREEMENT, dated as of February 14, 1996, by
and among TPG Partners, L.P., a Delaware limited partnership
("TPG Partners"), TPG Parallel I, L.P., a Delaware limited
partnership ("TPG Parallel"), Air Partners II, L.P., a Texas
limited partnership ("Air Partners II" and, together with TPG
Partners and TPG Parallel, "TPG") and Continental Airlines, Inc.,
a Delaware corporation ("Continental" and, together with TPG, the
"Parties").
WHEREAS, the Parties are, concurrently with the execution of
this Agreement, entering into a Purchase Agreement (the "Purchase
Agreement") dated the date hereof among America West Airlines,
Inc. (the "Company"), the Parties, Mesa Air Group, Inc., Lehman
Brothers Holdings Inc. and the several underwriters named in
Schedule A thereto (the "Underwriters");
WHEREAS, pursuant to the Purchase Agreement Continental has
agreed to sell to the Underwriters 1,100,000 shares of Class B
Common Stock, par value $.01 per share ("Class B Common Stock"),
of the Company, and to grant the Underwriters an option to
purchase up to 258,030 additional shares of Class B Common Stock
solely to cover over-allotments, if any;
WHEREAS, under (i) Section 4.1 of the Stockholders'
Agreement for America West Airlines, Inc. entered into as of
August 25, 1994 by and among AmWest Partners, L.P., GPA Group
plc, Robert A. Ewert, David T. Obergfell, William A. Franke and
the Company, (ii) Section 5(d) of the Termination Agreement dated
as of August 25, 1994 by and among AmWest Genpar, Inc., Apcal,
L.P. and Mesa Airlines, Inc. and (iii) certain Assignment and
Assumption Agreements dated August 24, 1994 (collectively, the
"Agreements"), Continental may not sell or otherwise transfer any
Class B Common Stock or Class A Common Stock, $.01 par value per
share ("Class A Common Stock" and, together with Class B Common
Stock, the "Common Stock"), of the Company owned by Continental
(other than to an affiliate of Continental) if, after giving
effect thereto and to any related transaction, the total number
of shares of Class B Common Stock beneficially owned by
Continental would be less than twice the total number of shares
of Class A Common Stock beneficially owned by Continental;
WHEREAS, Continental desires to exchange shares of Class A
Common Stock held by it for shares of Class B Common Stock held
by TPG, and subsequently to sell such shares of Class B Common
Stock, together with other shares of Class B Common Stock
currently held by Continental, to the Underwriters pursuant to
the Purchase Agreement;
WHEREAS, the Parties are parties to that certain Priority
Distribution Agreement (the "Priority Distribution Agreement"),
dated as of August 25, 1994, pursuant to which TPG has granted
Continental the right of first refusal to purchase all (but not
less than all) of certain securities of America West Airlines,
Inc. owned by TPG that TPG has notified Continental it desires to
sell;
WHEREAS, TPG desires to notify Continental of the proposed
sale of shares of Class B Common Stock held by it to the
Underwriters, and Continental desires to waive its right of first
refusal to purchase such shares under the Priority Distribution
Agreement;
NOW, THEREFORE, in consideration of the premises, the
Parties agree as follows:
1. Continental hereby agrees to exchange 80,926 shares of
Class A Common Stock for an equal number of shares of Class B
Common Stock held by TPG. TPG Partners, TPG Parallel and Air
Partners II hereby agree to exchange 67,090, 6,760 and 7,076
shares of Class B Common Stock, respectively, for an equal number
of shares of Class A Common Stock held by Continental. The share
exchange set forth in this section 1 shall be conditioned on the
closing of the purchase of Initial Securities (as defined in the
Purchase Agreement) by the Underwriters at the Closing Time (as
defined in the Purchase Agreement) under the Purchase Agreement,
and shall be effective as of the Closing Time. In the event the
Purchase Agreement is terminated prior to the Closing Time, this
agreement shall terminate and the share exchange set forth in
this section 1 shall not occur.
2. Continental hereby agrees to exchange up to 86,010
shares of Class A Common Stock for an equal number of shares of
Class B Common Stock held by TPG. Each of TPG Partners, TPG
Parallel and Air Partners II hereby agrees to exchange up to
71,305, 7,185 and 7,520 shares of Class B Common Stock,
respectively, for an equal number of shares of Class A Common
Stock held by Continental. The total number of shares of Common
Stock to be exchanged pursuant to this Section 2 shall be equal
to the total number of shares of Class B Common Stock, if any, to
be purchased by the Underwriters from Continental pursuant to the
over-allotment option granted to the Underwriters by Continental
in Section 2(b) of the Purchase Agreement. The share exchange
set forth in this section 2 shall be conditioned on the closing
of the purchase of the Option Securities (as defined in the
Purchase Agreement) by the Underwriters at the Date of Delivery
(as defined in the Purchase Agreement) under the Purchase
Agreement, and shall be effective as of the Date of Delivery. In
the event the Purchase Agreement is terminated prior to the Date
of Delivery, this agreement shall terminate and the share
exchange set forth in this section 2 shall not occur.
3. TPG hereby notifies Continental of its intention to
sell, pursuant to the Purchase Agreement, 2,500,000 shares of
Class B Common Stock (the "TPG Offered Shares") to the
Underwriters at the price per share of Class B Common Stock under
the Purchase Agreement. Such shares of Class B Common Stock
consist of 2,072,567 shares to be sold by TPG Partners, 208,843
shares to be sold by TPG Parallel and 218,590 shares to be sold
by Air Partners II. Continental represents and agrees that the
notice given hereby shall for all purposes be deemed to be
sufficient notice under Section 3 of the Priority Distribution
Agreement. Continental hereby irrevocably waives its right of
first refusal to purchase the TPG Offered Shares; provided,
however, that in the event all or a portion of the TPG Offered
Shares are not sold to the Underwriters pursuant to the Purchase
Agreement, future sales of the TPG Offered Shares by TPG shall be
and remain subject to the provisions of Section 3 of the Priority
Distribution Agreement.
4. This Share Exchange Agreement shall become effective
when executed by each of the parties hereto. This Share Exchange
Agreement may be executed in any number of separate counterparts,
each of which shall, collectively and separately, constitute one
agreement.
5. This Share Exchange Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State
of New York, without regard to the principles thereof regarding
conflicts of law.
* * *<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Share Exchange Agreement to be executed by their respective
officers or partners thereunto duly authorized, as of the date
first above written.
TPG PARTNERS, L.P.
By: TPG Genpar, L.P.
General Partner
By: TPG Advisors, Inc.
General Partner
By: /s/ Richard Schifter
---------------------------
Name: Richard Schifter
Title: Vice President
TPG PARALLEL I, L.P.
By: TPG Genpar, L.P.
General Partner
By: TPG Advisors, Inc.
General Partner
By: /s/ Richard Schifter
---------------------------
Name: Richard Schifter
Title: Vice President
AIR PARTNERS II, L.P.
By: TPG Genpar, L.P.
General Partner
By: TPG Advisors, Inc.
General Partner
By: /s/ Richard Schifter
---------------------------
Name: Richard Schifter
Title: Vice President
CONTINENTAL AIRLINES, INC.
By: /s/ Jeffery A. Smisek
---------------------------
Name: Jeffery A. Smisek
Title: Senior Vice President
