7.25% CONVERTIBLE SENIOR
NOTES
To the Managers
named in
Schedule II hereto
for the several Underwriters
named in Schedule III hereto
US Airways Group,
Inc., a Delaware corporation (the “ Company ”),
proposes to issue and sell to the several underwriters named in
Schedule III hereto (the “ Underwriters ”),
for whom you are acting as managers (the “ Managers
”), the principal amount of its 7.25% Convertible Senior
Notes due 2014 set forth in Schedule I hereto (the “
Firm Securities ”), to be issued under the indenture
(the “ Base Indenture ”) to be entered into on
the Closing Date (as defined below) as supplemented by the
supplemental indenture (the “ Supplemental Indenture
”) to be entered into on the Closing Date (as so
supplemented, the “ Indenture ”), each between
the Company, as issuer, and The Bank of New York Trust Company,
N.A., as trustee (the “ Trustee ”). The Company
also proposes to issue and sell to the several Underwriters an
additional principal amount of its 7.25% Convertible Senior Notes
due 2014 not exceeding the principal amount set forth in
Schedule I hereto (the “ Additional Securities
”), if and to the extent that Citigroup Global Markets Inc.
shall have determined to exercise, on behalf of the Underwriters,
the right to purchase such Additional Securities granted to the
Underwriters in Section 2 hereof. The Firm Securities and the
Additional Securities are hereinafter collectively referred to as
the “ Securities .” The Securities are
convertible into the Company’s common stock, par value $0.01
per share (the “Common Stock” ). The shares of
Common Stock into which the Securities are convertible are
hereinafter collectively referred to as the “ Underlying
Shares .”
Concurrently with
the issuance of the Securities, the Company is offering, in an
offering (the “ Concurrent Offering ”)
registered under the Securities Act of 1933, as amended (the
“ Securities Act ”), by means of a prospectus
supplement and related prospectus, 15,200,000 shares of its Common
Stock. The Company has granted the underwriters of the Concurrent
Offering an option to purchase up to 2,280,000 additional shares of
Common Stock to cover over-allotments, if any.
The Company has
filed with the Securities and Exchange Commission (the “
Commission ”) a registration statement, including a
prospectus, (the file number of which is set forth in Schedule II
hereto) on Form S-3, relating to securities (the “ Shelf
Securities ”), including the Securities and Underlying
Shares, to be issued from time to time by the Company. The
registration statement as amended to the date of this Agreement,
including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to
Rule 430A or Rule 430 B under the Securities Act, is
hereinafter referred to as the “ Registration
Statement ”, and the related prospectus covering the
Shelf Securities dated October 4, 2006 in the form first used
to confirm sales of the Securities (or in the form first made
available to the
2
Underwriters by
the Company to meet requests of purchasers pursuant to
Rule 173 under the Securities Act) is hereinafter referred to
as the “ Base Prospectus. ” The Base Prospectus,
as supplemented by the prospectus supplement specifically relating
to the Securities in the form first used to confirm sales of the
Securities (or in the form first made available to the Underwriters
by the Company to meet requests of purchasers pursuant to
Rule 173 under the Securities Act) is hereinafter referred to
as the “ Prospectus ,” and the term “
preliminary prospectus ” means the preliminary form of
the Prospectus dated May 6, 2009 and distributed to
prospective purchasers of the Securities.
For purposes of
this Agreement, “ free writing prospectus ” has
the meaning set forth in Rule 405 under the Securities Act, “
Time of Sale Prospectus ” means the preliminary
prospectus, together with the free writing prospectuses, if any,
included in Schedule II hereto, and “ broadly
available road show ” means a “bona fide electronic
road show” as defined in Rule 433(h)(5) under the
Securities Act that has been made available without restriction to
any person. As used herein, the terms “Registration
Statement,” “Base Prospectus,” “preliminary
prospectus,” “Time of Sale Prospectus” and
“Prospectus” shall include the documents, if any,
incorporated by reference therein. The terms “
supplement ,” “ amendment ,” and
“ amend ” as used herein with respect to the
Registration Statement, the Base Prospectus, the Time of Sale
Prospectus, and any preliminary prospectus or free writing
prospectus shall include all documents subsequently filed by the
Company with the Commission pursuant to the Securities Exchange Act
of 1934, as amended (the “ Exchange Act ”), that
are deemed to be incorporated by reference therein.
1.
Representations and Warranties. The Company represents and
warrants to, and agrees with, the Underwriters that:
(a) The Company
meets the requirements for the use of Form S-3 under the Securities
Act; the Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or,
to the Company’s knowledge, threatened by the Commission. The
Registration Statement is an automatic shelf registration statement
(as defined in Rule 405 under the Securities Act), the Company is a
well-known seasoned issuer (as defined in Rule 405 under the
Securities Act) eligible to use the Registration Statement as an
automatic shelf registration statement and the Company has not
received notice that the Commission objects to the use of the
Registration Statement as an automatic shelf registration
statement.
(i) Each document,
if any, filed or to be filed pursuant to the Exchange Act and
incorporated by reference in the Time of Sale Prospectus or the
Prospectus complied, or will comply when so filed, in all material
respects with the Exchange Act and the applicable rules and
regulations of the Commission thereunder, (ii) each part of
the Registration Statement, when such part became effective, did
not contain, and each such part, as amended or supplemented, if
applicable, will not contain any 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,
(iii) the Registration Statement as of the date hereof does
not contain any 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
3
misleading,
(iv) the Registration Statement and the Prospectus comply as
to form, and as amended or supplemented, if applicable, will comply
as to form, in all material respects with the Securities Act and
the applicable rules and regulations of the Commission thereunder,
(v) the Time of Sale Prospectus does not, and at the time of
each sale of the Securities in connection with the offering when
the Prospectus is not yet available to prospective purchasers and
at the Closing Date (as defined in Section 4), the Time of
Sale Prospectus, as then amended or supplemented by the Company, if
applicable, will not, contain any untrue statement of a material
fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading, (vi) each broadly available
road show, if any, when considered together with the Time of Sale
Prospectus, does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading and (vii) the Prospectus, as of
the date hereof, does not contain and as amended or supplemented,
if applicable, at the Closing Date (as defined in Section 4)
will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set
forth in this paragraph do not apply to statements or omissions in
the Registration Statement, the Time of Sale Prospectus or the
Prospectus, based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you
expressly for use therein.
(b) The Company is
not an “ineligible issuer” in connection with the
offering pursuant to Rules 164, 405 and 433 under the
Securities Act. Any free writing prospectus that the Company is
required to file pursuant to Rule 433(d) under the Securities Act
has been, or will be, filed with the Commission in accordance with
the requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder. Each free writing
prospectus that the Company has filed, or is required to file,
pursuant to Rule 433(d) under the Securities Act or that was
prepared by or on behalf of or used or referred to by the Company
complies or will comply in all material respects with the
requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder. Except for the free
writing prospectuses, if any, identified in Schedule II hereto
forming part of the Time of Sale Prospectus, and electronic road
shows, if any, each furnished to you before first use, the Company
has not prepared, used or referred to, and will not, without your
prior consent, prepare, use or refer to, any free writing
prospectus.
(c) The Company
has been duly incorporated, is validly existing as a corporation in
good standing under the laws of the State of Delaware, has the
corporate power and authority to own its property and to conduct
its business as described in the Time of Sale Prospectus and the
Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a
whole.
4
(d) Each
subsidiary of the Company has been duly incorporated or organized,
is validly existing as a corporation or limited liability company,
as the case may be, in good standing under the laws of the
jurisdiction of its incorporation or organization, has the
corporate or other power and authority to own its property and to
conduct its business as described in the Time of Sale Prospectus
and the Prospectus and is duly qualified to transact business and
is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so duly
incorporated, organized or qualified or be in good standing would
not have a material adverse effect on the Company and its
subsidiaries, taken as a whole; all of the issued shares of capital
stock or membership interests, as the case may be, of each
subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and are owned directly or
indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims, except liens, encumbrances or
claims which would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(e) This Agreement
has been duly authorized, executed and delivered by the
Company.
(f) The authorized
capital stock of the Company conforms in all material respects as
to legal matters to the description thereof contained in each of
the Time of Sale Prospectus and the Prospectus.
(g) The shares of
Common Stock outstanding prior to the issuance of the Securities
have been duly authorized and are validly issued, fully paid and
non-assessable.
(h) The Underlying
Shares issuable upon conversion of the Securities in accordance
with the terms of the Securities and the Indenture have been duly
authorized and, when issued and delivered in accordance with the
terms of this Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Underlying Securities will
not be subject to any preemptive or similar rights.
(i) The Indenture
has been duly qualified under the Trust Indenture Act, each of the
Base Indenture and the Supplemental Indenture has been duly
authorized, executed and delivered by the Company, and the
Indenture is a valid and binding agreement of the Company, in each
case enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency and similar laws affecting
creditors’ rights generally and equitable principles of
general applicability.
(j) The Securities
have been duly authorized and, when executed and authenticated in
accordance with the provisions of the Indenture and delivered to
and paid for by the Underwriters in accordance with the terms of
this Agreement, will be valid and binding obligations of the
Company, in each case enforceable in accordance with their
respective terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors’ rights generally and
equitable principles of general applicability, and will be entitled
to the benefits of the Indenture.
5
(k) The execution
and delivery by the Company of, and the performance by the Company
of its obligations under, this Agreement, the Indenture and the
Securities will not contravene any provision of applicable law or
the certificate of incorporation or by-laws of the Company or any
agreement or other instrument binding upon the Company or any of
its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or any final judgment, order or
decree of any governmental body, agency or court having
jurisdiction over the Company or any subsidiary, and no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, the Indenture or
the Securities, except such as may be required by the securities or
Blue Sky laws of the various states in connection with the offer
and sale of the Securities.
(l) There has not
occurred any material adverse change, or any development reasonably
likely to involve a material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations
of the Company and its subsidiaries, taken as a whole, from that
set forth in the Time of Sale Prospectus.
(m) There are no
legal or governmental proceedings pending or, to the
Company’s knowledge, threatened to which the Company or any
of its subsidiaries is a party or to which any of the properties of
the Company or any of its subsidiaries is subject (i) other
than proceedings accurately described in all material respects in
each of the Time of Sale Prospectus and the Prospectus and
proceedings that would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole, or on the power or
ability of the Company to perform its obligations under this
Agreement or to consummate the transactions contemplated by the
Time of Sale Prospectus or (ii) that are required to be
described in the Registration Statement or the Prospectus and are
not so described; and there are no statutes, regulations, contracts
or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits
to the Registration Statement that are not described or filed as
required.
(n) Each
preliminary prospectus filed as part of the Registration Statement
as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when
so filed in all material respects with the Securities Act and the
applicable rules and regulations of the Commission
thereunder.
(o) The Company is
not, and after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as described
in the Time of Sale Prospectus and the Prospectus, will not be an
“investment company” as such term is defined in the
Investment Company Act of 1940, as amended.
(p) The Company
and its subsidiaries (i) are in compliance with any and all
applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants
or contaminants (“ Environmental Laws ”),
(ii) have received all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with
all terms and
6
conditions of
any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals would
not, singly or in the aggregate, have a material adverse effect on
the Company and its subsidiaries, taken as a whole.
(q) There are no
costs or liabilities associated with Environmental Laws (including,
without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities
to third parties) which would, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken
as a whole.
(r) There are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to
file a registration statement under the Securities Act with respect
to any securities of the Company or to require the Company to
include such securities with the Securities registered pursuant to
the Registration Statement.
(s) The statements
set forth in each of the Time of Sale Prospectus and the Prospectus
under the captions “Description of the Notes and
“Description of Debt Securities” insofar as they
purport to constitute a summary of the terms of the Indenture and
the Securities, fairly summarize such terms in all material
respects.
(t) The
consolidated financial statements included or incorporated by
reference in the Registration Statement and the Time of Sale
Prospectus present fairly the consolidated financial position of
the Company and its consolidated subsidiaries as of the dates
indicated and the consolidated results of operations and cash flows
or changes in financial position of the Company and its
consolidated subsidiaries for the periods specified. Except as
stated therein, such financial statements have been prepared in
conformity with generally accepted accounting principles applied on
a consistent basis throughout the periods involved. The financial
statement schedules, if any, included or incorporated by reference
in the Registration Statement and the Time of Sale Prospectus
present fairly the information required to be stated
therein.
(u) Subsequent to
the respective dates as of which information is given in the
Registration Statement and the Time of Sale Prospectus,
(i) neither the Company nor any of its subsidiaries has
incurred any material liability or obligation, direct or
contingent, or entered into any material transaction, in each case,
not in the ordinary course of business or as described in,
contemplated by or incorporated by reference into the Time of Sale
Prospectus and the Prospectus (including, without limitation,
aircraft acquisitions or financing and equity incentive plan grants
so described in or contemplated by the Time of Sale Prospectus and
the Prospectus); (ii) the Company has not purchased any of its
outstanding capital stock, nor declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock (other
than repurchases of unvested shares of the Company’s capital
stock pursuant to its equity incentive plans); (iii) there has
not been any material change in the capital stock, short-term debt
or long-term debt of the
7
Company except
in each case as described in, contemplated by or incorporated by
reference into the Time of Sale Prospectus and the Prospectus
(including, without limitation, aircraft financing and equity
incentive plan grants so described in, contemplated by or
incorporated by reference into the Time of Sale Prospectus and the
Prospectus); and (iv) there has been no prohibition or
suspension of the Company’s operating certificate for the
operation of the Company’s aircraft, including as a result of
action taken by the Federal Aviation Administration (“
FAA ”) or the Department of Transportation.
(v) Each of the
Company and its subsidiaries has good and marketable title in fee
simple to all real property and good and marketable title to all
personal property owned by it which is material to the business of
the Company and its subsidiaries, in each case free and clear of
all liens, encumbrances and defects, except liens on real property,
aircraft and engines, parts, rotables, and other equipment of the
Company and such as are described in or incorporated by reference
into the Time of Sale Prospectus or such as do not materially
affect the value of such property or do not interfere with the use
made and proposed to be made of such property by the Company or its
subsidiaries, as the case may be; and any real property and
buildings held under lease by the Company or any of its
subsidiaries are held by it under valid, subsisting and enforceable
leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such
property and buildings by the Company or its subsidiaries, in each
case except as described in or contemplated by the Time of Sale
Prospectus and the Prospectus.
(w) (i) Each
of the Company and its subsidiaries possesses such permits,
licenses, approvals, consents and other authorizations
(collectively, “ Government Licenses ”) issued
by the appropriate federal, state, local or foreign regulatory
agencies or bodies, including the Department of Transportation, the
FAA or the Federal Communications Commission necessary to conduct
the business now operated by it, except where the failure to
possess any such Government License would not, singly or in the
aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole; (ii) each of the Company and
its subsidiaries is in compliance with the terms and conditions of
all such Governmental Licenses, except where the failure so to
comply would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a
whole; (iii) all of the Government Licenses are valid and in
full force, except where the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full
force and effect would not, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken
as a whole; and (iv) the Company has not received any notice
of proceedings relating to the revocation or modification of any
such Governmental Licenses which, singly or in the aggregate, is
reasonably likely to have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
(x) Except as
described in or contemplated by the Time of Sale Prospectus and the
Prospectus, no material labor dispute with the employees of the
Company or its subsidiaries exists or, to the knowledge of the
Company, is imminent; and the Company is not aware, but without any
independent investigation or inquiry, of any existing,
8
threatened or
imminent labor disturbance by the employees of any of its principal
suppliers, manufacturers or contractors that could reasonably
likely result in any material adverse change in the condition,
financial or otherwise, or in the earnings, business or operations
of the Company and its subsidiaries, taken as a whole.
(y) Each of the
Company and its subsidiaries is insured by insurers of recognized
financial responsibility against such losses and risks and in such
amounts as are customary in the businesses in which it is engaged;
provided, that the Company currently maintains war risk insurance
on its aircraft under the FAA’s insurance program authorized
under 49 U.S.C. § 44301 et seq. (“ War Risk
Insurance ”); each of the Company and its subsidiaries
has not been refused any insurance coverage sought or applied for
other than in connection with instances where the Company was
seeking to obtain insurance coverage at more attractive rates; and,
other than with respect to War Risk Insurance coverage, the Company
has no reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not have a material
adverse effect on the Company and its subsidiaries, taken as a
whole, except as described in or contemplated by the Time of Sale
Prospectus and the Prospectus.
(z) The Company
maintains a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are
executed in accordance with management’s general or specific
authorizations in all material respects and (ii) transactions are
recorded as necessary to permit preparation of financial statements
in conformity with generally accepted accounting principles and to
maintain asset accountability.
(aa) US Airways,
Inc. (i) is an “air carrier” within the meaning of
49 U.S.C. Section 40102(a); (ii) holds an air carrier
operating certificate issued by the Secretary of Transportation
pursuant to Chapter 447 of Title 49 of the United States Code
for aircraft capable of carrying 10 or more individuals or 6,000
pounds or more of cargo; and (iii) is a “citizen of the
United States” as defined in 49 U.S.C.
Section 401102.
(bb) KMPG LLP, who
reported on the annual consolidated financial statements of the
Company incorporated by reference in the Registration Statement and
the Prospectus, is an independent registered public accounting firm
as required by the Securities Act.
(cc) Neither the
Company nor any of its subsidiaries or affiliates, nor, to the
Company’s knowledge, any director, officer, or employee, any
agent or representative of the Company or of any of its
subsidiaries or affiliates, has taken any action in furtherance of
an offer, payment, promise to pay, or authorization or approval of
the payment or giving of money, property, gifts or anything else of
value, directly or indirectly, to any “government
official” (including any officer or employee of a government
or government-owned or controlled entity or of a public
international organization, or any person acting in an official
capacity for or on behalf of any of the foregoing, or any political
party or party official or candidate for political office) to
influence official action
9
or secure an
improper advantage; and the Company and its subsidiaries and
affiliates have conducted their businesses in compliance with
applicable anti-corruption laws, including the Foreign Corrupt
Practices Act of 1977, as amended, and the rules and regulations
thereunder, and have instituted and maintain and will continue to
maintain policies and procedures designed to promote and achieve
compliance with such laws and with the representation and warranty
contained herein.
(dd) The
operations of the Company and its subsidiaries are and have been
conducted in material compliance with all applicable financial
recordkeeping and reporting requirements, including those of the
Bank Secrecy Act, as amended by Title III of the Uniting and
Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), and
the applicable anti-money laundering statutes of jurisdictions
where the Company and its subsidiaries conduct business, the rules
and regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any
governmental agency (collectively, the “ Anti-Money
Laundering Laws ”), and no action, suit or proceeding by
or before any court or governmental agency, authority or body or
any arbitrator involving the Company or any of its subsidiaries
with respect to the Anti-Money Laundering Laws is pending or, to
the knowledge of the Company, threatened.
(ee) (i) The
Company represents that neither the Company nor any of its
subsidiaries or, to the knowledge of the Company, any director or
officer of the Company or any of its subsidiaries, is an individual
or entity (“ Person ”) that is, or is owned or
controlled by a Person that is:
(A) the subject of
any sanctions administered or enforced by the U.S. Department of
Treasury’s Office of Foreign Assets Control (“
OFAC ”), the United Nations Security Council (“
UNSC ”), the European Union (“ EU
”), Her Majesty’s Treasury (“ HMT ”)
or other relevant sanctions authorities (collectively, “
Sanctions ”), nor
(B) located,
organized or resident in a country or territory that is the subject
of Sanctions (including, without limitation, Burma/Myanmar, Cuba,
Iran, North Korea, Sudan or Syria).
(ii)
The Company represents and covenants that it will not, directly or
indirectly, use the proceeds of the offering, or lend, contribute
or otherwise make available such proceeds to any subsidiary, joint
venture partner or other Person:
(A) to fund or
facilitate any activities or business of or with any Person or in
any country or territory that, at the time of such funding or
facilitation, is the subject of Sanctions; or
(B) in any other
manner that will result in a violation of Sanctions by any Person
(including any Person participating in the offering, whether as
underwriter, advisor, investor or otherwise).
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