STEPHEN MITCHELL, Bankruptcy Judge
Note: The proposed form of order has been modified by the court
This matter comes before the Court upon the Debtors' Motion For An Order (a) Approving Procedures for the Consideration of Plan Funding Proposals, (b) Approving Form and Manner of Notice of Competing Offer Procedures, and (c) Approving Break-Up Fee and Related Provisions (the "Procedures Motion"). Upon consideration of the Procedures Motion and any timely response or opposition thereto, and upon consideration of the arguments of counsel and the evidence presented at a hearing that took place before this Court on the 31st day of May, 2005, and upon further consideration of the entire record in these Chapter 11 cases, the Court hereby finds as follows:
Findings of fact shall be construed as conclusions of law and conclusions of law shall be construed as findings of fact when appropriate. See Fed.R.Bankr.P 7052.
A. Notice of the Procedures Motion was sufficient and complied with all applicable provisions of the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, and the Local Rules of this Court. No additional notice of the Procedures Motion is required.
B. This Court has jurisdiction over the Procedures Motion pursuant to 28 USC § 1334. The Procedures Motion constitutes a core proceeding pursuant to 28 USC § 157(b).
C. The relief sought by the Debtors in the Procedures Motion is (i) reasonably calculated to maximize the value of the Debtors and their businesses and assets, (ii) an appropriate exercise of the Debtors' business judgment, and (iii) in the best interest of the estates and their creditors.
D. The Debtors' selection of the merger proposal made by America West Holdings Corporation ("America West"), and supported by Eastshore Aviation LLC ("Eastshore"), Par Investment Partners, L.P. ("Par"), Peninsula Investment Partners, L.P. ("Peninsula"), ACE Aviation Holding Inc. ("ACE"), and Wellington Management Company, LLP ("Wellington") (hereafter collectively the "Plan Investors") as described in the proposed Agreement and Plan of Merger between US Airways Group, Inc. and America West (the "Merger Agreement"), as agreed in the Investment Agreement by and among Par, America West and US Airways Group, Inc. (including any exhibits, schedules or attachments thereto, the "Par Investment Agreement"), the Investment Agreement by and among Peninsula, America West and US Airways Group, Inc. (including any exhibits, schedules or attachments thereto, the "Peninsula Investment Agreement"), the Investment Agreement by and among ACE, America West and US Airways Group, Inc. (including any exhibits, schedules or attachments thereto, the "ACE Investment Agreement,"), the Investment Agreement by and among Eastshore, America West and US Airways Group, Inc. (including any exhibits, schedules or attachments thereto, the "Eastshore Investment Agreement,"), and the Investment Agreement by and among Wellington, America West and US Airways Group, Inc. (including any exhibits, schedules or attachments thereto, the "Wellington Investment Agreement" and, collectively with the Par Investment Agreement, the Peninsula Investment Agreement, and the ACE Investment Agreement the "Investment Agreements"), and as further described in the Procedures Motion, as the basis for their Plan of Reorganization, subject to consideration of higher or better alternatives in accordance with the procedures set forth in this Order, is a reasonable and appropriate exercise of the Debtors' business judgment.
E. The Debtors are receiving fair and reasonably equivalent value in exchange for the payments and commitments that may be made to America West and/or the Plan Investors under the terms of this Order.
THEREFORE, it is hereby ORDERED as follows:
1. The Procedures Motion shall be, and hereby is, GRANTED, and the procedures described therein are approved.
In the event of any discrepancy between the procedures described in the Procedures Motion and the terms of this Order, the terms of this Order shall govern and control.
2. The Notice of Opportunity to Submit Competing Offers to Fund and Facilitate a Plan of Reorganization for the Debtors (the "Procedures Notice"), a copy of which is attached to this Order as Exhibit A, is hereby approved, and the Debtors are authorized and directed to: (i) mail a copy of the Procedures Notice, along with a copy of this Order, to potential plan sponsors identified by the Debtors and all persons or entities on the Master Service List within five (5) days from the date on which this Order is entered, and (ii) cause the Procedures Notice to be published one time in the Wall Street Journal (National Edition), as soon as reasonably practicable, and in such other publications, if any, as the Debtors may from time-to-time determine. Such service shall constitute good and sufficient notice of this Order and Procedures Notice, and no additional notice shall be required.
3. The Debtors shall comply with the following procedures for the consideration of plan funding proposals, and the implementation of the best proposal as part of a plan of reorganization for the Debtors, and such procedures shall be binding upon all parties in these cases: A. Eligibility To Make Competing Plan Proposal
Any person other than America West who desires to make a competing proposal regarding a plan of reorganization for the Debtors (a "Competing Plan Sponsor") must satisfy all of the requirements set forth below. (A person who satisfies all such requirements is referred to as a "Qualified Competing Plan Sponsor.") Any proposal from a person who is not a Qualified Competing Plan Sponsor shall not be considered by the Debtors or by the Court.
(i)
Confidentiality. Any Competing Plan Sponsor must execute a confidentiality agreement substantially in the form, and no less restrictive on the Competing Plan Sponsor, than the form attached hereto as
Exhibit B (the "Confidentiality Agreement").
(ii)
Disclosure. Any Competing Plan Sponsor must disclose to the Debtors in its proposal (1) the identity of all participants providing funding for the proposal, (2) the specific amount, source, and type of funding to be provided by each such participant, (3) the identity of any person or entity who will participate in any way in the proposal without providing funding, and the nature of such participation, and (4) the principals of each entity that will participate in the Competing Plan Sponsor's proposal.
(iii)
Deposit. Any Competing Plan Sponsor must either (a) make a cash deposit at the time of submission of its proposal in the amount of $25 million (the "Deposit Amount"), which cash deposit shall be held in an escrow account at a financial institution designated by the Debtors and subject to an escrow agreement in form and substance satisfactory to the Debtors, or (b) provide an irrevocable letter of credit for the benefit of the Debtors in the Deposit Amount, in a form and issued by a financial institution acceptable to the Debtors. Any such deposit shall be subject to the jurisdiction of the Court.
(iv)
Capacity to Consummate Transaction. Any Competing Plan Sponsor must demonstrate to the Debtors' satisfaction
its financial, legal, and managerial capacity to consummate and complete the transactions it proposes.
B. Requirements for Any Competing Plan Proposal
The Debtors may consider proposals that satisfy all of the following requirements. (A proposal that satisfies all such requirements is referred to as a "Qualified Competing Plan Proposal"):
(i)
Proponent. The proposal must be submitted by a Qualified Competing Plan Sponsor, as defined above.
(ii)
How and When Submitted. The proposal must (a) be in writing, (b) include a cover letter summarizing all of the material provisions of the proposed transactions (including, without limitation, any closing conditions), (c) include the proposed form of each of the primary documents and agreements necessary to implement the proposed transactions (such as investment agreements, asset purchase agreements, merger agreement and the like), and (d) be submitted to the Debtors and to America West, (with a simultaneous copy to the Official Committee of Unsecured Creditors) so as to be received by no later than 5:00 p.m. prevailing eastern time, on the date that is thirty (30) days after the date of entry of this Order (the "Qualified Competing Plan Proposal Deadline"). The copy submitted to the Debtors shall be sent to Bruce Lakefield, Chief Executive Officer, US Airways Group, Inc., 2345 Crystal Drive, Arlington, Virginia 22227 with a copy to each of: John E. Luth, President and CEO, Seabury Securities LLC, 540 Madison Avenue, 17th Floor, New York, New York 10022; and Brian P. Leitch, Arnold Porter LLP, 370 Seventeenth Street, Suite 4500, Denver, Colorado 80202. The copy submitted to America West shall be sent to Douglas Parker, Chief Executive Officer, America West Holding Corporation, 111 West Rio Salado Parkway, Tempe, AZ 85281 with a copy to Timothy R. Pohl, Skadden, Arps, Slate, Meagher Flom LLP, 333 West Wacker Drive, Chicago, Illinois 60606. The copy submitted to the Official Committee of Unsecured Creditors (the "Committee") shall be sent to Scott L. Hazan, Otterbourg, Steindler, Houston Rosen, P.C., 230 Park Avenue, New York, New York 10169. The Debtors will provide copies of all Qualified Competing Plan Proposals to the Plan Investors, the Committee Professionals and the ATSB.
(iii)
Comprehensive Plan. The proposal should provide for adequate funding and a mechanism that will facilitate confirmation and implementation of a Chapter 11 plan for all of the Debtors in these cases and treatment of each of the major creditor classes, including, without limitation, (a) general unsecured creditors, (b) the Pension Benefit Guaranty Corporation, (c) the Air Transportation Stabilization Board, (d) General Electric Capital Corporation, GE Commercial Aviation Services LLC (f/k/a GE Capital Aviation Services, Inc.), GE Engine Services, Inc., and General Electric Company, GE Transportation Component (collectively, with their respective affiliates, the "GE Entities"), and (e) aircraft lenders and lessors. Asset sale proposals under
11 U.S.C. § 363 are not
preferred but may be entertained, provided however, that the proposal must, in such event, (1) identify the assets to be sold, (2) state who will purchase such assets and the terms of the sale, (3) provide credible evidence demonstrating the capacity of such purchaser to close the transaction, and (4) disclose the impacts that any such asset sales may have on the Debtors' principal stakeholders, including the impacts on employees and creditors, as well as the amount and status of the claims generated or occurring, if any, as a result of each such proposed asset sale.
(iv)
Fees and Expenses. The proposal shall not require the payment of any break-up fee, termination fee, or similar fee or expense reimbursement to the proponent.
(v)
Treatment of Plan Investors. The proposal must identify how the agreements between the Debtors and the Plan Investors will be treated.
(vi)
Cash Investment. The proposal must specify the amount of cash that will be invested in the Debtors under the Competing Plan Proposal and identify all sources of such investment.
(vii)
Feasibility. The proposal must include evidence sufficient in the reasonable judgment of the Debtors to demonstrate the feasibility of the proposal including, without limitation, the capacity of the proponent to consummate the transactions within the time frame specified in the proposal, and a substantial likelihood that the proposal will obtain any antitrust or other required regulatory approvals without material delay.
Notwithstanding the foregoing, at any time prior to the Qualified Competing Plan Proposal Deadline, the Debtors retain the right, in their discretion, after consultation with the Committee and the ATSB Lender Parties and their professionals, to consider prior to such bidding deadline, any non-conforming bids or, any proposals to substitute one or more of the Plan Investors and otherwise implement the terms of the Merger Agreement and any such proposals, if considered by the Debtors, shall be deemed Qualified Competing Plan Proposals for purposes of this Order, provided, however, that any non-conforming bids so considered must, at a minimum, meet the requirements of Sections B(i), (ii) and (iii), above. C. Selection of Highest and Best Qualified Competing Plan Proposal
The proposal that will be selected as the best proposal and serve as the basis for the Debtors' Plan of Reorganization shall be determined in accordance with the following procedures:
(i)
If No Qualified Competing Plan Proposals. If there are no Qualified Competing Plan Proposals, then the Debtors shall proceed to seek confirmation of a Plan implementing the Merger Agreement and Investment Agreements.
(ii)
Best and Final Proposals/Auction. If any Qualified Competing Plan Proposals are received by the Qualified Competing Plan Proposal Deadline, then the Debtors shall allow any party that has submitted a Qualified Competing Plan Proposal to submit to the Debtors their best and final plan funding proposal (the "Best and Final Qualified Bids"), and the Debtors shall forward copies of any such Best and Final Qualified Bid(s) to to the Plan Investors, the Committee Professionals and the ATSB; or in the alternative, the Debtors may hold an auction, on terms and within a time frame deemed appropriate by the Debtors after reasonable notice to America West and the Plan Investors, provided that in no event shall any such Best and Final Qualified Bid be submitted, nor any auction conclude, after the date that is thirty-five (35) days after entry of this Order. Best and Final Qualified Bids may be submitted only by the Plan Investors or a person who submitted a Qualified Competing Plan Proposal. America West, Qualified Competing Plan Sponsors, Plan Investors, the Committee and the Committee Professionals, the ATSB Lender Parties and their professionals, the GE Entities, and such other persons as appropriate, in the Debtors' discretion, may attend such auction.
(iii)
Determination of Winner. If there are any Qualified Competing Plan Proposals, the Board of Directors of Group, after consulting with the Committee, will determine which of the Qualified Competing Plan Proposals (including any Best and Final Qualified Bids) or the Merger Agreement is the best proposal, based on all factors it deems relevant (which factors may include, without limitation, the structure of the proposed transaction, the reputation and credibility of the proponent, the strategic benefits of the transaction, any estimated cost and revenue synergies, the financial capacity of the proponent to consummate the transaction, the nature of any closing conditions and likelihood of timely satisfaction of such conditions, the timing of the closing, the ability to satisfy obligations (if any) to the Plan Investors and their affiliates, the antitrust and other regulatory considerations, and the value of the transaction to each stakeholder group), subject to the Court's approval. In determining the best proposal, the Debtors shall take into account the Break-up Fees that would be payable and the revenue synergies and consequent valuation enhancements resulting from the commercial arrangements with Ace contemplated by the Ace Investment Agreement.
(iv)
Approval Hearing. The Debtors shall seek the Court's approval of its selection of the best proposal at a hearing that will take place before the Court on
July 7, 2005, at 9:30 a.m., a date that is no later than forty (40) days after entry of this Order (the "Approval Deadline"), which proposal shall, upon such approval be deemed the "Approved Proposal". Each of the Investment Agreements, which comprise part of the Approved Proposal, shall be separately approved. If no Qualified Competing Plan Proposal is received by the Qualified Competing Plan Proposal Deadline, or if no proposal is approved by this Court by the Approval Deadline, the Merger Agreement and Investment Agreements shall automatically be deemed to be the Approved Proposal without any further action by the Court or any other party.
D. Access to Information
The Debtors shall provide America West and the Plan Investors, and any potential Competing Plan Sponsor that satisfies the requirements of Sections A(i), (ii), and (iv) above, with immediate reasonable access during normal business hours to the Debtors' books, records, facilities, key personnel, officers, independent accountants and legal counsel for the purpose of completing all due diligence investigations reasonably deemed necessary by such parties, and shall otherwise cooperate with such entities in connection with their due diligence, provided, however, that the Debtors shall not be required to provide confidential or proprietary information to a competitor if the Debtors reasonably believe that disclosure of such information would be detrimental to the Debtors' interests or operations. Any information provided by or on behalf of the Debtors or their estates to potential Competing Plan Sponsors (regardless of whether they have made a Qualified Competing Proposal) shall also be provided at the same time to America West, the Plan Investors, the Committee Professionals, and the ATSB and its professionals, if such information has not previously been provided to such persons. The Debtors may satisfy their requirements set forth in the immediately preceding sentence by maintaining a data room (or virtual data room), access to which is available to America West, the Plan Investors, the Committee Professionals, and the ATSB and its professionals, and by providing to such persons any information that is not in such data room but is provided to other potential Competing Plan Sponsors, at the same time that such information is provided to such other potential Competing Plan Sponsors. Notwithstanding the obligations set forth above, the Debtors shall not provide confidential information obtained by Debtors from America West in connection with this transaction (or information that is based upon or reflects such confidential information) to any party without the consent of America West.
Contracts and related documents between the Debtors and the GE Entities may not be disclosed by the Debtors without the written consent of the GE Entities or their counsel of record.
E. Incorporation of Approved Proposal into Plan of Reorganization
After the Merger Agreement or a Qualified Competing Plan Proposal is designated or becomes the Approved Proposal, the Debtors shall proceed expeditiously to incorporate such Approved Proposal (which term as used herein shall include the related Investment Agreements if the Merger Agreement is the Approved Proposal) into a plan of reorganization, and shall seek confirmation of such plan of reorganization. In addition to the provisions of the Merger Agreement and the Investment Agreements that are approved and made binding pursuant to this Order, after the Approval Hearing, neither the Debtors, nor their respective directors, officers, employees, agents, representatives, or affiliates, will solicit, entertain, discuss, review, negotiate, make, accept, approve, cooperate with, provide information in connection with or support any offer, proposal, bid or indication of interest to or from, or any transaction with, any person or entity other than the Approved Proposal, involving any restructuring, recapitalization of, or sale of assets of, any Debtor, including without limitation, the issuance or distribution of capital stock, options, warrants, or convertible securities exercisable for or convertible into the Debtors' capital stock, debt instrument or any other infusions of equity or debt capital, any commercial contract or arrangement materially inconsistent with the Approved Proposal or any material asset sale outside the ordinary course of business or any other material transaction, provided, however, that foregoing restrictions shall not apply (i) to asset dispositions contemplated or permitted under the Approved Proposal or (ii) from and after the date on which (A) the Court denies confirmation of the plan of reorganization incorporating the Approved Proposal or (B) any event occurs that makes consummation of the Approved Proposal impossible or that gives the Debtors the right to decline to proceed with the transaction under the terms of the Approved Proposal or under any Court order or applicable law.
F. Termination Fees and Related Provisions
Notwithstanding Section 5.1(d) of the Merger Agreement, the Debtors' and America West's rights and obligations under Sections 4.2, 4.3, 4.4, 4.20, 6.1, 6.2, 6.3, 6.4 and 6.5 of the Merger Agreement shall be and hereby are made binding on the Debtors and their estates effective immediately upon entry of this order and shall survive termination of the Merger Agreement. In addition, the Debtors' obligations under Sections 8.01 and 8.02 of each of the Investment Agreements and Section 3 of the Junior DIP Amendment shall be and hereby are made binding on the Debtors and their estates immediately upon entry of this order and shall survive termination of such Investment Agreements. If America West becomes entitled to the West Termination Fee (as defined in the Merger Agreement) under the terms thereof, or if any of the Plan Investors becomes entitled to a breakup fee or expense reimbursement under the terms of the applicable Investment Agreement (or in the case of Eastshore, the Junior DIP Amendment), such fees or expense reimbursement rights will be treated as an allowed administrative priority expense pursuant to sections 503(b) and 507(a)(1) of the Bankruptcy Code without the need for any application, motion or further order of this Court. The Debtors shall pay such fees and expenses by wire transfer to America West, Par, Ace, Peninsula, Eastshore and/or Wellington, if applicable, within two (2) business days after their right to receive such fees arise pursuant to the terms of the Merger Agreement, the applicable Investment Agreement or the terms hereof. If the Debtors become entitled to the East Termination Fee (as defined in the Merger Agreement), America West shall pay such fee by wire transfer to the Debtors within two (2) business days after the Debtors' right to receive the East Termination Fee arises pursuant to the terms of the Merger Agreement. The automatic stay provisions of section 362 of the Bankruptcy Code shall not apply to (1) America West's rights under the Merger Agreement, including, without limitation, the right to terminate the Merger Agreement and the right to receive the West Termination Fee under the terms thereof, or (2) the Plan Investors' rights under the Investment Agreements.
For the avoidance of doubt, any administrative expense priority claim granted or allowed pursuant to this Order is junior and subordinate to the ATSB Lender Parties' Super-Priority Claim (as defined in the Cash Collateral Order.)
If the Merger Agreement becomes the Approved Proposal, from and after such time: (a) America West shall be entitled to seek injunctive relief from this Court to enforce the provisions of Sections 4.4 and 6.5(d) of the Merger Agreement and the provisions of this Order; and (b) the Plan Investors shall be entitled to seek injunctive relief from this Court to enforce the provisions of the Investment Agreements and the provisions of this Order.
Notwithstanding the immediately preceding paragraph, if the Merger Agreement becomes the Approved Proposal, from and after such time:
(i) The Committee, inclusive of its advisors retained by Order of the Bankruptcy Court (collectively, the "Committee"), shall not be permitted to directly or indirectly, initiate, solicit or knowingly encourage or facilitate (subject to the proviso in the next sentence) any inquiries or the making of any proposal or offer with respect to (1) a merger, reorganization, share exchange, consolidation or similar transaction involving the purchase or acquisition of the Debtors, (2) any purchase of an equity interest or interests in the Debtors or (3) any purchase of assets, securities or ownership interests of the Debtors (any such inquiry, proposal or offer being hereinafter referred to as an "Alternative Acquisition Proposal"). Notwithstanding the foregoing sentence, the Committee shall not provide any confidential information or data to, or engage in any negotiations with, any Person relating to an Alternative Acquisition Proposal, or otherwise knowingly encourage or facilitate any effort or attempt by any Person to make or implement an Alternative Acquisition Proposal; provided, however, that nothing contained herein shall prevent the Committee from (A) providing information in response to a request from a Person who has made an unsolicited bona fide written Alternative Acquisition Proposal if the Committee receives from the Person so requesting such information an executed Confidentiality Agreement; provided further, that the Committee shall not provide confidential information obtained by the Committee regarding America West in connection with the Merger Agreement or the transactions contemplated by the Merger Agreement (or information that is based upon or reflects such confidential information) to any party without the prior written consent of America West; (B) engaging in any non-substantive discussions with any Person who has made an unsolicited Alternative Acquisition Proposal; or (C) negotiating or supporting in any way such an Alternative Acquisition Proposal as an alternative to the Merger Agreement to the Debtors and/or this Court, if and only to the extent that (i) the Committee receives from such Person an executed Confidentiality Agreement; (ii) the Committee receives from such Person a bona fide written Alternative Acquisition Proposal, which in each such case referred to in clause (A) or (B) above, the Committee reasonably determines constitutes or is reasonably likely to lead to a Superior Proposal (as defined below) (without having to take the actions referred to in clause (iv) below); (iii) in the case referred to in clause (C) above, the Committee determines in good faith, taking into account all legal, financial and regulatory aspects of the proposal, the likelihood of obtaining financing, and the Person making the proposal, that such Alternative Acquisition Proposal, if consummated, is more favorable, from a financial point of view (taking into account the likelihood of consummation), to the creditors of the Debtors' estates than the transactions contemplated by the Merger Agreement, (in each case
taking into account any revisions to the terms of the transactions contemplated by the Merger Agreement pursuant to the next bullet-point of this paragraph); and (iv) the Debtors and America West shall have had written notice of the intention of the Committee to take the action referred to in clause (C) (a "Notice of Superior Proposal") at least five business days prior to the taking of such action by the Committee and the Committee shall have complied with the provisions of the next bullet-point of this paragraph (any such more favorable Alternative Acquisition Proposal being referred to as a "Superior Proposal").
(ii) The Committee will notify the Debtors and America West as promptly as practicable if any unsolicited bona fide Alternative Acquisition Proposal is received by the Committee, indicating, in connection with such notice, the name of such Person and the material terms and conditions of any proposal or offer and thereafter shall keep the Debtors and America West informed of the status and terms of any such proposal, offer or negotiations. During the five business day period prior to its taking any action referred to in clause (C) of the first bullet point of this paragraph with respect to an Alternative Acquisition Proposal, (i) the Committee shall negotiate in good faith with the Debtors and America West regarding any revisions to the terms of the transaction contemplated by the Merger Agreement and (ii) the Committee may take any such action with respect to an Alternative Acquisition Proposal that was a Superior Proposal only if such Alternative Acquisition Proposal continues to be a Superior Proposal in light of any revisions to the terms of the transaction contemplated by the Merger Agreement to which the Debtors and America West shall have agreed prior to the expiration of such five business day period. The Committee shall deliver to the Debtors and America West a new Notice of Superior Proposal with respect to each Alternative Acquisition Proposal that has been materially revised or modified prior to taking any action to recommend or agreeing to recommend such Alternative Acquisition Proposal to the Debtors or the Bankruptcy Court and that a new two business day period shall commence, for purposes of this paragraph, with respect to each such materially revised or modified Alternative Acquisition Proposal from the time the Debtors and America West receive a Notice of Superior Proposal with respect thereto. The Committee shall also be deemed to have agreed to provide any information to the Debtors and America West that it is providing to another Person pursuant to this paragraph at the same time it provides it to such other Person.
G. Disposition of Deposit
Any deposits made by a Competing Plan Sponsor pursuant to Section A(iii) above, shall be:
(i) promptly returned to such Competing Plan Sponsor if (x) the Debtors select a proposal other than such Competing Plan Proposal as the Approved Proposal, or (y) the Competing Plan Proposal becomes the Approved Proposal but then is not consummated for any reason other
than such Competing Plan Sponsor's material breach of such Competing Plan Sponsor's obligations, agreements or undertakings;
(ii) retained by the Debtors and applied to the funding obligations of such Competing Plan Sponsor's Proposal if such proposal becomes the Approved Proposal and a plan incorporating such transaction with such Competing Plan Sponsor is confirmed; or
(iii) retained by the Debtors in the event that the Debtors select the Competing Plan Proposal as the Approved Proposal but such Competing Plan Sponsor subsequently fails or refuses to close all or any part of the transaction it proposed for any reason other than the failure to occur of one or more specific closing conditions set forth in such Competing Plan Sponsor's proposal which failure was not caused by any breach of such Competing Plan Sponsor's obligations, undertakings or agreements, in which event the Debtors shall remain free, in addition to retaining such Competing Plan Sponsor's deposit, to assert any claims or causes of action the Debtors or their estates may have against such Competing Plan Sponsor.
H. Publicity
Neither the Debtors nor America West shall issue or cooperate in the issuance of any public announcement of any agreement or potential transaction involving the Debtors and America West, except to the extent that any such announcement is required by applicable law, without the consent of the other party and such other party's approval of the form and substance of any such press release or announcement.
The Court shall retain jurisdiction to hear and determine all matters arising from or relating to the implementation of this Order.
__, 2005 _______________________ _______________________ _______________________ ________________________
Subject: Confidentiality Agreement
Ladies and Gentlemen:
In connection with your discussions (the "Discussions") with US Airways Group, Inc. ("us", "we" or the "Company") concerning alternatives currently being considered by the Company and its direct and indirect subsidiaries (the "Alternatives"), you have requested that we or our representatives furnish you or your representatives with certain information relating to the Company, its direct and indirect subsidiaries and its affiliates or the Discussions which is nonpublic, confidential, or proprietary in nature.
All such information, regardless of form, whether furnished before or after the date hereof by us or by directors, officers, employees, affiliates, representatives, including, without limitation, any financial advisors, attorneys and accountants or agents, including for avoidance of doubt Seabury Aviation Advisors, Inc. and its affiliated entities of the Company or its direct and indirect subsidiaries (collectively, "our Representatives") to you or your partners, directors, officers, employees, affiliates, representatives, including, without limitation, financial advisors, attorneys and accountants or agents, and sources of financing or capital (collectively, "your Representatives") as well as the Discussions, the Alternatives, their existence and the existence of disclosures hereunder, and all analyses, compilations, forecasts, studies or other documents prepared by you or your Representatives based on any such information are hereinafter referred to as the "Confidential Information." The term "Confidential Information" will not, however, include information that (i) is already in the possession of you or your Representatives from sources other than the Company or our Representatives, (ii) is or becomes publicly available other than as a result of a disclosure by you or your Representatives in violation of this letter agreement, or (iii) that is or becomes available to you on a non-confidential basis from a source other than us or our Representatives that is not prohibited from disclosing such information to you or your Representatives by a legal, contractual or fiduciary obligation to us.
In consideration of your being furnished with the Confidential Information, you agree that:
1. You and your Representatives (i) will keep the Confidential Information confidential and will not, except as provided above or as required by applicable law, regulation or legal process, and only after compliance with paragraph 2 below, without our prior written consent, disclose any Confidential Information in any manner whatsoever, (ii) will not use any Confidential Information other than in connection with the Discussions and its evaluation of the Alternatives; provided, however, that you may reveal the Confidential Information to your Representatives (a) who need to know the Confidential Information for the purpose of assisting you with respect to the Discussions and evaluating the Alternatives, (b) who are informed by you of the confidential nature of the Confidential information and (c) who agree to act in accordance with the terms of this letter agreement (the "Agreement"). You will cause your Representatives to observe the terms of this Agreement, and you will be responsible for any breach of this Agreement by any of your Representatives.
2. In the event that you or any of your Representatives are requested pursuant to, or required by, applicable law, regulation or legal process to disclose any of the Confidential Information, you agree that you will promptly notify us so that we may seek a protective order, with which you agree to provide reasonable assistance and allow such order to be pursued in your name, or other appropriate remedy, or, in our sole discretion, waive compliance with the terms of this Agreement. In the event that no such protective order or other remedy is obtained, or that we waive compliance with the terms of this Agreement, you will furnish only that portion of the Confidential Information that you are advised by your counsel is legally required and will request that confidential treatment be accorded the Confidential information. Except as contemplated in this paragraph 2, you shall not, nor shall you permit your Representative to, file with any court or governmental agency any motion, pleading or other document that discloses or refers to any Confidential Information without prior written consent of the Company and, if applicable, the counter-party to any agreement which is Confidential Information proposed to be disclosed or referenced, provided, however, if such parties consent to the allowance of Confidential Information to be filed with the Bankruptcy Court, whether in a pleading or otherwise, it shall be filed under seal and the party submitting the filing shall file any necessary papers and take all appropriate steps to ensure that any Confidential Information filed with the Bankruptcy Court remains sealed and is not made public.
3. If either party determines not to proceed with the Discussions, it will promptly inform the other of that decision and, in that case, and at any other time upon the written request of the other (including, but not limited to, if the Company has reasonable grounds to believe you have used the Confidential Information for an unauthorized purpose or disclosed such Confidential Information), you shall promptly deliver to the Company all copies of the written Confidential Information (or send written confirmation that all such copies have been destroyed), except for that portion of the Confidential Information that may be found in analyses, compilations, forecasts, studies or other documents prepared by you or your Representatives, in yours or your Representatives possession, which shall be promptly destroyed (and written confirmation of such destruction shall be provided to the Company).
4. You (i) acknowledge that neither we nor any of our Representatives make any representation or warranty, either express or implied, as to the accuracy or completeness of any Confidential Information and (ii) agree, to the fullest extent permitted by law, that neither the Company nor any of its Representatives will have any liability to you or your Representatives on any basis (including, without limitation, in contract, tort, under federal or state securities laws, or otherwise) as a result of the review or use of the Confidential Information by you or your Representatives, except pursuant to any definitive documentation that may be executed by you in connection with the Alternatives. You further acknowledge and agree that you obtain no license to the Confidential Information other than to use the Confidential Information as provided in this Agreement.
5. You agree that prior to the execution by you of a written agreement expressly stating your intention to be legally bound or to deal with the Company, you (i) will have no duty or obligation to the Company with respect to the subject matter of the Confidential Information, the Discussions, or the Alternatives other than the duties and obligations contained in this Agreement, (ii) will have no duty to enter into such business relationship, and (iii) neither will be restricted from dealing with the Company with respect to the subject matter of the Confidential Information or the Alternatives. This Agreement is not assignable.
6. You agree that, until December 31, 2005, without the prior written consent of the Company, you will not, and will cause each of your affiliates (as such term is defined under the Securities Exchange Act of 1934) not to, singly or as part of a group, in any manner, directly or indirectly, own, acquire, or propose to acquire, by purchase or otherwise, any claims against the Company.
7. The term of this Agreement will commence as of the date hereof and will remain in effect for two (2) years from that date. Notwithstanding such termination, except as otherwise specified, the duties specified under this Agreement will remain in full force and effect for Confidential Information provided during the term hereof until such information is no longer Confidential Information as provided under this Agreement.
8. You acknowledges that you or your Representatives' breach or threatened breach hereof may cause damage to the Company and its subsidiaries for which no remedy may be sufficient. You therefore agrees that, without need for the Company to post any bond or other security, without need for the Company to make any representation on damages, and with you waiving any right you might otherwise have to object, the Company will be entitled to injunctive relief to enforce the terms hereof and otherwise bar a breach hereof It is further agreed that notwithstanding paragraph 8 hereof, such injunctive relief may be obtained in any court of competent jurisdiction. Such injunctive relief shall not be deemed to be the exclusive remedies for a breach of this Agreement, but shall be in addition to all other remedies available at law or equity.
9. This Agreement will be governed by and construed in accordance with the laws of the State of New York without regard to the conflicts of law principles thereof The parties hereto agree that they consent to the jurisdiction of the Courts of New York or the federal courts located within the Southern District of New York, and jurisdiction of the United States Bankruptcy Court for the Eastern District of Virginia (the "Bankruptcy Court") during the pendency of the Company's chapter 11 cases unless the Bankruptcy Court abstains from exercising such jurisdiction, and waive any claim of lack of jurisdiction or forum non conveniens.
10. You agree that during the term hereof and for one (1) year hereafter you will not solicit any current or future officer of the Company or any of its subsidiaries to be an employee of or consultant to you or your affiliates without the Company's prior written consent. The foregoing will not, however, limit your ability to conduct general public solicitations.
11. The counter-parties to any agreements that represent Confidential Information subject to this Agreement are beneficiaries of the obligation of the Company to keep information confidential and are hereby third party beneficiaries of this Agreement and may take any action available to them under the applicable agreements at law or in equity, including, but not limited to, the exercise of any and all rights afforded the Company hereunder, to preserve the confidentiality of the applicable Confidential Information.
12. You acknowledge your duty under all applicable securities laws, including those of the United States Securities and Exchange Commission, with respect to material non-public information and other applicable statues, regulations and rules regarding trading in security while in possession of material non-public information related thereto, and acknowledges that such duties will continue while any portion of the Confidential Information remains material non-public information and will require the same of its Representatives.
13. Any notice hereunder will be made in writing, by first class mail, by overnight courier or by e-mail to:
If to US Airways, to:
US Airways Group, Inc. Attention: Mr. Ronald E. Stanley, Executive Vice President — Finance and Chief Financial Officer 2345 Crystal Drive Arlington, VA 22227 Via e-mail to ron_stanley@usairways.com
and
US Airways Group, Inc. Attention: Elizabeth K. Lanier, Esq. — Executive Vice President — Corporate Affairs, General Counsel, and Secretary 2345 Crystal Drive
Arlington, VA 22227 Fax: 703-872-5208 Via e-mail to liz_lanier@usairways.com
If to XXX, to:
[fill in]
or such other address as a party may specify by notice to the others.
14. If any term or provision of this Agreement, or any application thereof to any circumstances, will, to any extent and for any reason, be held to be invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to circumstances other than those to which it is held invalid or unenforceable, will not be affected thereby and will be construed as if such invalid or unenforceable provision had never been contained herein and each term and provision of this Agreement will be valid and enforceable to the fullest extent permitted by law.
15. This Agreement will constitute the entire agreement between the parties with regard to the subject matter hereof No modification, amendment or waiver will be binding without the written consent of the parties hereto. This Agreement will inure to the benefit of and be binding upon US Airways, and XXX and each of their respective successors and assigns, provided, however, that neither this Agreement nor any of the rights, interests, or obligations hereunder will be assigned by either party hereto without the prior written consent of the other, and no assignment of any right, interest, or obligation will release a party hereto herefrom unless the other party hereto will have consented to such release in writing specifically referring to the right, interest, or obligation from which that party is to be released. It is further understood and agreed that no failure or delay in exercising any right, power, or privilege hereunder will operate as a waiver thereof, nor will any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder. It is acknowledged and agreed that this Agreement may be executed in multiple counterparts that when combined will form a single agreement.
Please confirm your agreement with the foregoing by signing below and returning to the undersigned.
Very truly yours,
US AIRWAYS GROUP, INC.
Elizabeth K. Lanier Executive Vice President — Corporate Affairs, General Counsel, and Secretary
Accepted and agreed as of the date first written above:
XXX
Signature:_____________________ By: ___________________________ Title:_________________________ Date:__________________________
NOTICE OF OPPORTUNITY TO SUBMIT COMPETING OFFERS TO FUND AND FACILITATE A PLAN OR REORGANIZATION FOR THE DEBTORS
Note: The proposed form of exhibit has been modified by the court
PLEASE TAKE NOTICE that on __________, 2005, the United States Bankruptcy Court for the Eastern District of Virginia (Alexandria Division) (the "Bankruptcy Court"), entered an Order (a) Approving Procedures for the Consideration of Plan Funding Proposals, (b) Approving Form and Manner of Notice of Competing Offer Procedures, and (c) Approving Break-Up Fee and Related Provisions (the "Procedures Order"). A copy of the Procedures Order may be obtained in person, during regular business hours, from the Office of the Clerk of the Bankruptcy Court, 200 South Washington Street, Alexandria, Virginia 22314, or by written request to the undersigned counsel.
PLEASE TAKE FURTHER NOTICE that America West Holdings Corporation ("America West") has made a proposal to enter into a merger transaction with the Debtors and thereby to facilitate a plan of reorganization for the Debtors (the "Merger Proposal"), which is incorporated in an Agreement and Plan of Merger ("Merger Agreement") between the Debtors and America West. A copy of the Merger Agreement (without the attached schedules) is available by written request to the undersigned counsel. A copy of the Merger Agreement with attached schedules will be provided, upon written request, to any Competing Plan Sponsor (as defined below) who satisfies the requirements set forth in sections A(i), (ii) and (iv) below.
PLEASE TAKE FURTHER NOTICE that in addition to certain amendments to the Eastshore Loan Agreement previously approved by the Bankruptcy Court, the Debtors propose to enter into five equity investment agreements and certain related synergy agreements with Eastshore Aviation LLC ("Eastshore"), Par Investment Partners, L.P. ("Par"), Peninsula Investment Partners, L.P. ("Peninsula"), ACE Aviation Holdings Inc. ("ACE"), and Wellington Management Company, LLP ("Wellington," collectively with Eastshore, Par, Peninsula, and ACE, the "Plan Investors").
PLEASE TAKE FURTHER NOTICE that the Procedures Order sets forth, among other things, the following Bankruptcy Court-approved procedures for the consideration of competing proposals, the selection of a Highest and Best Qualified Competing Plan Sponsor (as defined below), and the implementation of that proposal as part of a plan of reorganization for the Debtors:fn2
A. Eligibility To Make Competing Plan Proposal
Any person other than America West who desires to make a competing proposal regarding a plan of reorganization for the Debtors (a "Competing Plan Sponsor") must satisfy all of the requirements set forth below. (A person who satisfies all such requirements is referred to as a "Qualified Competing Plan Sponsor.") Any proposal from a person who is not a Qualified Competing Plan Sponsor shall not be considered by the Debtors or by the Bankruptcy Court.
(i)
Confidentiality. Any Competing Plan Sponsor must execute a confidentiality agreement substantially in the form, and no less restrictive on the Competing Plan Sponsor, than the form attached to the Procedures Order as
Exhibit A (the "Confidentiality Agreement").
(ii)
Disclosure. Any Competing Plan Sponsor must disclose to the Debtors in its proposal (1) the identity of all participants providing funding for the proposal, (2) the specific amount, source, and type of funding to be provided by each such participant, (3) the identity of any person or entity who will participate in any way in the proposal without providing funding, and the nature of such participation, and (4) the principals of each entity that will participate in the Competing Plan Sponsor's proposal.
(iii)
Deposit. Any Competing Plan Sponsor must either (a) make a cash deposit at the time of submission of its proposal in the amount of $25 million (the "Deposit Amount"), which cash deposit shall be held in an escrow account at a financial institution designated by the Debtors and subject to an escrow agreement in form and substance satisfactory to the
Debtors, or (b) provide an irrevocable letter of credit for the benefit of the Debtors in the Deposit Amount, in a form and issued by a financial institution acceptable to the Debtors. Any such deposit shall be subject to the jurisdiction of the Bankruptcy Court.
(iv)
Capacity to Consummate Transaction. Any Competing Plan Sponsor must demonstrate to the Debtors' satisfaction
fn4 its financial, legal, and managerial capacity to consummate and complete the transactions it proposes.
B. Requirements for Any Competing Plan Proposal
The Debtors may consider proposals that satisfy all of the following requirements. (A proposal that satisfies all such requirements is referred to as a "Qualified Competing Plan Proposal"):
(i)
Proponent. The proposal must be submitted by a Qualified Competing Plan Sponsor, as defined above.
(ii)
How and When Submitted. The proposal must (a) be in writing, (b) include a cover letter summarizing all of the material provisions of the proposed transactions (including, without limitation, any closing conditions), (c) include the proposed form of each of the primary documents and agreements necessary to implement the proposed transactions (such as investment agreements, asset purchase agreements, merger agreement and the like), and (d) be submitted to the Debtors and to America West, (with a simultaneous copy to the Official Committee of Unsecured Creditors) so as to be received by no later than 5:00 p.m. prevailing eastern time, on the date that is thirty (30) days after the date of entry of the Procedures Order (the "Qualified Competing Plan Proposal Deadline"). The copy submitted to the Debtors shall be sent to Bruce Lakefield, Chief Executive Officer, US Airways Group, Inc., 2345 Crystal Drive, Arlington, Virginia 22227 with a copy to each of: John E. Luth, President and CEO, Seabury Securities LLC, 540 Madison Avenue, 17th Floor, New York, New York 10022; and Brian P. Leitch, Arnold Porter LLP, 370 Seventeenth Street, Suite 4500, Denver, Colorado 80202. The copy submitted to America West shall be sent to Douglas Parker, Chief Executive Officer, America West Holding Corporation, 111 West Rio Salado Parkway, Tempe, AZ 85281 with a copy to Timothy R. Pohl, Skadden, Arps, Slate, Meagher Flom LLP, 333 West Wacker Drive, Chicago, Illinois 60606. The copy submitted to the Official Committee of Unsecured Creditors (the "Committee") shall be sent to Scott L. Hazan, Otterbourg, Steindler, Houston Rosen, P.C.,
230 Park Avenue, New York, New York 10169. The Debtors will provide copies of all Qualified Competing Plan Proposals to the Plan Investors, the Committee Professionals and the ATSB.
(iii)
Comprehensive Plan. The proposal should provide for adequate funding and a mechanism that will facilitate confirmation and implementation of a Chapter 11 plan for all of the Debtors in these cases and treatment of each of the major creditor classes, including, without limitation, (a) general unsecured creditors, (b) the Pension Benefit Guaranty Corporation, (c) the Air Transportation Stabilization Board, (d) General Electric Capital Corporation, GE Commercial Aviation Services LLC (f/k/a GE Capital Aviation Services, Inc.), GE Engine Services, Inc., and General Electric Company, GE Transportation Component (collectively, with their respective affiliates, the "GE Entities"), and (e) aircraft lenders and lessors. Asset sale proposals under
11 U.S.C. § 363 are not preferred but may be entertained, provided however, that the proposal must, in such event, (1) identify the assets to be sold, (2) state who will purchase such assets and the terms of the sale, (3) provide credible evidence demonstrating the capacity of such purchaser to close the transaction, and (4) disclose the impacts that any such asset sales may have on the Debtors' principal stakeholders, including the impacts on employees and creditors, as well as the amount and status of the claims generated or occurring, if any, as a result of each such proposed asset sale.
(iv)
Fees and Expenses. The proposal shall not require the payment of any break-up fee, termination fee, or similar fee or expense reimbursement to the proponent.
(v)
Treatment of Plan Investors. The proposal must identify how the agreements between the Debtors and the Plan Investors will be treated.
(vi)
Cash Investment. The proposal must specify the amount of cash that will be invested in the Debtors under the Competing Plan Proposal and identify all sources of such investment.
(vii)
Feasibility. The proposal must include evidence sufficient in the reasonable judgment of the Debtors to demonstrate the feasibility of the proposal including, without limitation, the capacity of the proponent to consummate the transactions within the time frame specified in the proposal, and a substantial likelihood that the proposal will obtain any antitrust or other required regulatory approvals without material delay.
Notwithstanding the foregoing, at any time prior to the Qualified Competing Plan Proposal Deadline, the Debtors retain the right, in their discretion, after consultation with the Committee and the ATSB Lender Parties and their professionals, to consider prior to such bidding deadline, any non-conforming bids or, any proposals to substitute one or more of the Plan Investors and otherwise implement the terms of the Merger Agreement and any such proposals, if considered by the Debtors, shall be deemed Qualified Competing Plan Proposals for purposes of the Procedures Order, provided, however, that any non-conforming bids so considered must, at a minimum, meet the requirements of Sections B(i), (ii) and (iii), above.
C. Selection of Highest and Best Qualified Competing Plan Proposal
The proposal that will be selected as the best proposal and serve as the basis for the Debtors' Plan of Reorganization shall be determined in accordance with the following procedures:
(i)
If No Qualified Competing Plan Proposals. If there are no Qualified Competing Plan Proposals, then the Debtors shall proceed to seek confirmation of a Plan implementing the Merger Agreement and Investment Agreements.
(ii)
Best and Final Proposals/Auction. If any Qualified Competing Plan Proposals are received by the Qualified Competing Plan Proposal Deadline, then the Debtors shall allow any party that has submitted a Qualified Competing Plan Proposal to submit to the Debtors their best and final plan funding proposal (the "Best and Final Qualified Bids"), and the Debtors shall forward copies of any such Best and Final Qualified Bid(s) to to the Plan Investors, the Committee Professionals and the ATSB; or in the alternative, the Debtors may hold an auction, on terms and within a time frame deemed appropriate by the Debtors after reasonable notice to America West and the Plan Investors, provided that in no event shall any such Best and Final Qualified Bid be submitted, nor any auction conclude, after the date that is thirty-five (35) days after entry of the Procedures Order. Best and Final Qualified Bids may be submitted only by the Plan Investors or a person who submitted a Qualified Competing Plan Proposal. America West, Qualified Competing Plan Sponsors, Plan Investors, the Committee and the Committee Professionals, the ATSB Lender Parties and their professionals, the GE Entities, and such other persons as appropriate, in the Debtors' discretion, may attend such auction.
(iii)
Determination of Winner. If there are any Qualified Competing Plan Proposals, the Board of Directors of Group, after consulting with the Committee, will determine which of the Qualified Competing Plan Proposals (including any Best and Final Qualified Bids) or the Merger Agreement is the best proposal, based on all factors it deems relevant (which factors may include, without limitation, the structure of the proposed transaction, the reputation and credibility of the proponent, the strategic benefits of the transaction, any estimated cost and revenue
synergies, the financial capacity of the proponent to consummate the transaction, the nature of any closing conditions and likelihood of timely satisfaction of such conditions, the timing of the closing, the ability to satisfy obligations (if any) to the Plan Investors and their affiliates, the antitrust and other regulatory considerations, and the value of the transaction to each stakeholder group), subject to the Bankruptcy Court's approval. In determining the best proposal, the Debtors shall take into account the Break-up Fees that would be payable and the revenue synergies and consequent valuation enhancements resulting from the commercial arrangements with ACE contemplated by the ACE Investment Agreement.
(iv)
Approval Hearing. The Debtors shall seek the Bankruptcy Court's approval of its selection of the best proposal at a hearing that will take place before the Bankruptcy Court on
July 7, 2005, at 9:30 a.m., a date that is no later than forty (40) days after entry of the Procedures Order (the "Approval Deadline"), which proposal shall, upon such approval be deemed the "Approved Proposal". Each of the Investment Agreements, which comprise part of the Approved Proposal, shall be separately approved. If no Qualified Competing Plan Proposal is received by the Qualified Competing Plan Proposal Deadline, or if no proposal is approved by the Bankruptcy Court by the Approval Deadline, the Merger Agreement and Investment Agreements shall automatically be deemed to be the Approved Proposal without any further action by the Bankruptcy Court or any other party.
D. Access to Information
The Debtors shall provide America West and the Plan Investors, and any potential Competing Plan Sponsor that satisfies the requirements of Sections A(i), (ii), and (iv) above, with immediate reasonable access during normal business hours to the Debtors' books, records, facilities, key personnel, officers, independent accountants and legal counsel for the purpose of completing all due diligence investigations reasonably deemed necessary by such parties, and shall otherwise cooperate with such entities in connection with their due diligence, provided, however, that the Debtors shall not be required to provide confidential or proprietary information to a competitor if the Debtors reasonably believe that disclosure of such information would be detrimental to the Debtors' interests or operations. Any information provided by or on behalf of the Debtors or their estates to potential Competing Plan Sponsors (regardless of whether they have made a Qualified Competing Proposal) shall also be provided at the same time to America West, the Plan Investors, the Committee Professionals, and the ATSB and its professionals, if such information has not previously been provided to such persons. The Debtors may satisfy their requirements set forth in the immediately preceding sentence by maintaining a data room (or virtual data room), access to which is available to America West, the Plan Investors, the Committee Professionals, and the ATSB and its professionals, and by providing to such persons any information that is not in such data room but is provided to other potential Competing Plan Sponsors, at the same time that such information is provided to such other potential Competing Plan Sponsors. Notwithstanding the obligations set forth above, the Debtors shall not provide confidential information obtained by Debtors from America West in connection with this transaction (or information that is based upon or reflects such confidential information) to any party without the consent of America West.
Contracts and related documents between the Debtors and the GE Entities may not be disclosed by the Debtors without the written consent of the GE Entities or their counsel of record.
E. Incorporation of Approved Proposal into Plan of Reorganization
After the Merger Agreement or a Qualified Competing Plan Proposal is designated or becomes the Approved Proposal, the Debtors shall proceed expeditiously to incorporate such Approved Proposal (which term as used herein shall include the related Investment Agreements if the Merger Agreement is the Approved Proposal) into a plan of reorganization, and shall seek confirmation of such plan of reorganization. In addition to the provisions of the Merger Agreement and the Investment Agreements that are approved and made binding pursuant to the Procedures Order, after the Approval Hearing, neither the Debtors, nor their respective directors, officers, employees, agents, representatives, or affiliates, will solicit, entertain, discuss, review, negotiate, make, accept, approve, cooperate with, provide information in connection with or support any offer, proposal, bid or indication of interest to or from, or any transaction with, any person or entity other than the Approved Proposal, involving any restructuring, recapitalization of, or sale of assets of, any Debtor, including without limitation, the issuance or distribution of capital stock, options, warrants, or convertible securities exercisable for or convertible into the Debtors' capital stock, debt instrument or any other infusions of equity or debt capital, any commercial contract or arrangement materially inconsistent with the Approved Proposal or any material asset sale outside the ordinary course of business or any other material transaction, provided, however, that foregoing restrictions shall not apply (i) to asset dispositions contemplated or permitted under the Approved Proposal or (ii) from and after the date on which (A) the Bankruptcy Court denies confirmation of the plan of reorganization incorporating the Approved Proposal or (B) any event occurs that makes consummation of the Approved Proposal impossible or that gives the Debtors the right to decline to proceed with the transaction under the terms of the Approved Proposal or under any Bankruptcy Court order or applicable law.
F. Termination Fees and Related Provisions
Notwithstanding Section 5.1(d) of the Merger Agreement, the Debtors' and America West's rights and obligations under Sections 4.2, 4.3, 4.4, 4.20, 6.1, 6.2, 6.3, 6.4 and 6.5 of the Merger Agreement shall be and hereby are made binding on the Debtors and their estates effective immediately upon entry of the Procedures Order and shall survive termination of the Merger Agreement. In addition, the Debtors' obligations under Sections 8.01 and 8.02 of each of the Investment Agreements and Section 3 of the Junior DIP Amendment shall be and hereby are made binding on the Debtors and their estates immediately upon entry of the Procedures Order and shall survive termination of such Investment Agreements. If America West becomes entitled to the West Termination Fee (as defined in the Merger Agreement) under the terms thereof, or if any of the Plan Investors becomes entitled to a breakup fee or expense reimbursement under the terms of the applicable Investment Agreement (or in the case of Eastshore, the Junior DIP Amendment), such fees or expense reimbursement rights will be treated as an allowed administrative priority expense pursuant to sections 503(b) and 507(a)(1) of the Bankruptcy Code without the need for any application, motion or further order of the Bankruptcy Court. The Debtors shall pay such fees and expenses by wire transfer to America West, Par, ACE, Peninsula, Eastshore and/or Wellington, if applicable, within two (2) business days after their right to receive such fees arise pursuant to the terms of the Merger Agreement, the applicable Investment Agreement or the terms hereof. If the Debtors become entitled to the East Termination Fee (as defined in the Merger Agreement), America West shall pay such fee by wire transfer to the Debtors within two (2) business days after the Debtors' right to receive the East Termination Fee arises pursuant to the terms of the Merger Agreement. The automatic stay provisions of section 362 of the Bankruptcy Code shall not apply to (1) America West's rights under the Merger Agreement, including, without limitation, the right to terminate the Merger Agreement and the right to receive the West Termination Fee under the terms thereof, or (2) the Plan Investors' rights under the Investment Agreements.
In the event of any discrepancy between the provisions of the Merger Agreement and the terms of this Notice, the terms of the Merger Agreement shall govern and control. In the event of any discrepancy between the provisions of any Investment Agreement and the terms of this Notice, the terms of such Investment Agreement shall govern and control.
If the Merger Agreement becomes the Approved Proposal, from and after such time: (a) America West shall be entitled to seek injunctive relief from this Court to enforce the provisions of Sections 4.4 and 6.5(d) of the Merger Agreement and the provisions of this Order; and (b) the Plan Investors shall be entitled to seek injunctive relief from this Court to enforce the provisions of the Investment Agreement and the provisions of this Order.
Notwithstanding the immediately preceding paragraph, if the Merger Agreement becomes the Approved Proposal, from and after such time:
(i) The Committee, inclusive of its advisors retained by Order of the Bankruptcy Court (collectively, the "Committee"), shall not be permitted to directly or indirectly, initiate, solicit or knowingly encourage or facilitate (subject to the proviso in the next sentence) any inquiries or the making of any proposal or offer with respect to (1) a merger, reorganization, share exchange, consolidation or similar transaction involving the purchase or acquisition of the Debtors, (2) any purchase of an equity interest or interests in the Debtors or (3) any purchase of assets, securities or ownership interests of the Debtors (any such inquiry, proposal or offer being hereinafter referred to as an "Alternative Acquisition Proposal"). Notwithstanding the foregoing sentence, the Committee, it shall not provide any confidential information or data to, or engage in any negotiations with, any Person relating to an Alternative Acquisition Proposal, or otherwise knowingly encourage or facilitate any effort or attempt by any Person to make or implement an Alternative Acquisition Proposal; provided, however, that nothing contained herein shall prevent the Committee from (A) providing information in response to a request from a Person who has made an unsolicited bona fide written Alternative Acquisition Proposal if the Committee receives from the Person so requesting such information an executed Confidentiality Agreement; provided further, that the Committee shall not provide confidential information obtained by the Committee regarding America West in connection with the Merger Agreement or the transactions contemplated by the Merger Agreement (or information that is based upon or reflects such confidential information) to any party without the prior written consent of America West; (B) engaging in any non-substantive discussions with any Person who has made an unsolicited Alternative
Acquisition Proposal; or (C) negotiating or supporting in any way such an Alternative Acquisition Proposal as an alternative to the Merger Agreement to the Debtors and/or the Bankruptcy Court, if and only to the extent that (i) the Committee receives from such Person an executed Confidentiality Agreement; (ii) the Committee receives from such Person a bona fide written Alternative Acquisition Proposal, which in each such case referred to in clause (A) or (B) above, the Committee reasonably determines constitutes or is reasonably likely to lead to a Superior Proposal (as defined below) (without having to take the actions referred to in clause (iv) below); (iii) in the case referred to in clause (C) above, the Committee determines in good faith, taking into account all legal, financial and regulatory aspects of the proposal, the likelihood of obtaining financing, and the Person making the proposal, that such Alternative Acquisition Proposal, if consummated, is more favorable, from a financial point of view (taking into account the likelihood of consummation), to the creditors of the Debtors' estates than the transactions contemplated by the Merger Agreement, (in each case taking into account any revisions to the terms of the transactions contemplated by the Merger Agreement pursuant to the next bullet-point of this paragraph); and (iv) the Debtors and America West shall have had written notice of the intention of the Committee to take the action referred to in clause (C) (a "Notice of Superior Proposal") at least five business days prior to the taking of such action by the Committee and the Committee shall have complied with the provisions of the next bullet-point of this paragraph (any such more favorable Alternative Acquisition Proposal being referred to as a "Superior Proposal").
(ii) The Committee will notify the Debtors and America West as promptly as practicable if any unsolicited bona fide Alternative Acquisition Proposal is received by the Committee, indicating, in connection with such notice, the name of such Person and the material terms and conditions of any proposal or offer and thereafter shall keep the Debtors and America West informed of the status and terms of any such proposal, offer or negotiations. During the five business day period prior to its taking any action referred to in clause (C) of the first bullet point of this paragraph with respect to an Alternative Acquisition Proposal, (i) the Committee shall negotiate in good faith with the Debtors and America West regarding any revisions to the terms of the transaction contemplated by the Merger Agreement and (ii) the Committee may take any such action with respect to an Alternative Acquisition Proposal that was a Superior Proposal only if such Alternative Acquisition Proposal continues to be a Superior Proposal in light of any revisions to the terms of the transaction contemplated by the Merger Agreement to which the Debtors and America West shall have agreed prior to the expiration of such five business day period. The Committee shall deliver to the Debtors and America West a new Notice of Superior Proposal with respect to each Alternative Acquisition Proposal that has been materially revised or modified prior to taking any action to recommend or agreeing to recommend such Alternative Acquisition Proposal to the Debtors or the Bankruptcy Court and that a new two business day period shall commence, for purposes of this paragraph, with respect to each such materially revised or modified Alternative Acquisition
Proposal from the time the Debtors and America West receive a Notice of Superior Proposal with respect thereto. The Committee shall also be deemed to have agreed to provide any information to the Debtors and America West that it is providing to another Person pursuant to this paragraph at the same time it provides it to such other Person.
G. Disposition of Deposit
Any deposits made by a Competing Plan Sponsor pursuant to Section A(iii) above, shall be:
(i) promptly returned to such Competing Plan Sponsor if (x) the Debtors select a proposal other than such Competing Plan Proposal as the Approved Proposal, or (y) the Competing Plan Proposal becomes the Approved Proposal but then is not consummated for any reason other than such Competing Plan Sponsor's material breach of such Competing Plan Sponsor's obligations, agreements or undertakings;
(ii) retained by the Debtors and applied to the funding obligations of such Competing Plan Sponsor's Proposal if such proposal becomes the Approved Proposal and a plan incorporating such transaction with such Competing Plan Sponsor is confirmed; or
(iii) retained by the Debtors in the event that the Debtors select the Competing Plan Proposal as the Approved Proposal but such Competing Plan Sponsor subsequently fails or refuses to close all or any part of the transaction it proposed for any reason other than the failure to occur of one or more specific closing conditions set forth in such Competing Plan Sponsor's proposal which failure was not caused by any breach of such Competing Plan Sponsor's obligations, undertakings or agreements, in which event the Debtors shall remain free, in addition to retaining such Competing Plan Sponsor's deposit, to assert any claims or causes of action the Debtors or their estates may have against such Competing Plan Sponsor.