Merger Agreement









                              INVESTMENT AGREEMENT



                            dated as of May 19, 2005



                                      among



                             US AIRWAYS GROUP, INC.,



                        AMERICA WEST HOLDINGS CORPORATION



                                       and



                           ACE AVIATION HOLDINGS INC.



{PAGE}



                                TABLE OF CONTENTS



{TABLE}

{CAPTION}

                                                                                                                Page

                                                                                                                ----

{S}                                                                                                              {C}

ARTICLE I DEFINITIONS.............................................................................................2

     Section 1.01 Definitions.....................................................................................2



ARTICLE II ISSUANCE AND PURCHASE OF NEW COMMON STOCK..............................................................8

     Section 2.01 Issuance and Purchase of New Common Stock.......................................................8

     Section 2.02 Closing.........................................................................................8



ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY.........................................................8

     Section 3.01 Incorporation by Reference of Representations and Warranties in the Merger Agreement............8

     Section 3.02 Authorization; No Contravention.................................................................9

     Section 3.03 Consents; No Conflicts..........................................................................9

     Section 3.04 Court Orders....................................................................................9

     Section 3.05 Capitalization; Securities.....................................................................10

     Section 3.06 Information Provided...........................................................................10

     Section 3.07 Financial Advisors and Brokers.................................................................10

     Section 3.08 Regulatory Status..............................................................................10

     Section 3.09 Commercial Opportunity.........................................................................10



ARTICLE IV REPRESENTATIONS AND WARRANTIES OF WEST................................................................11

     Section 4.01 Incorporation by Reference of Representations and Warranties in the Merger Agreement...........11

     Section 4.02 Authorization; No Contravention................................................................11

     Section 4.03 Consents; No Conflicts.........................................................................11

     Section 4.04 Court Orders...................................................................................12

     Section 4.05 Information Provided...........................................................................12

     Section 4.06 Financial Advisors and Brokers.................................................................12

     Section 4.07 Commercial Opportunity.........................................................................12



ARTICLE V REPRESENTATIONS AND WARRANTIES OF INVESTOR.............................................................12

     Section 5.01 Organization...................................................................................12

     Section 5.02 Authorization; No Contravention................................................................12

     Section 5.03 Consents; No Conflicts.........................................................................12

     Section 5.04 Financial Advisors and Brokers.................................................................13

     Section 5.05 Ownership of Equity Securities; Purpose of Investment..........................................13

     Section 5.06 Financing......................................................................................13



ARTICLE VI PRE-CLOSING COVENANTS.................................................................................13

     Section 6.01 Taking of Necessary Action.....................................................................13

     Section 6.02 Notifications..................................................................................15

     Section 6.03 Financial and Other Information................................................................15

     Section 6.04 Delivery of Reports............................................................................15

{/TABLE}



                                        i

{PAGE}



{TABLE}

{S}                                                                                                              {C}

     Section 6.05 Amendments to Merger Agreement; Etc............................................................15

     Section 6.06 Publicity......................................................................................16

     Section 6.07 Investor Financing.............................................................................16

     Section 6.08 Issuances of Equity Securities.................................................................16

     Section 6.09 Transfer Taxes.................................................................................17

     Section 6.10 Bankruptcy Covenants...........................................................................17



ARTICLE VII CONDITIONS...........................................................................................18

     Section 7.01 Conditions to Investor's Obligations...........................................................18

     Section 7.02 Conditions to the Company's Obligations........................................................22



ARTICLE VIII TERMINATION.........................................................................................24

     Section 8.01 Termination of Agreement.......................................................................24

     Section 8.02 Effect of Termination..........................................................................25



ARTICLE IX MISCELLANEOUS.........................................................................................25

     Section 9.01 Fees and Expenses..............................................................................25

     Section 9.02 Survival of Representations, Warranties and Covenants..........................................25

     Section 9.03 Specific Performance...........................................................................26

     Section 9.04 General Interpretive Principles................................................................26

     Section 9.05 Notices........................................................................................26

     Section 9.06 Entire Agreement; Amendment....................................................................26

     Section 9.07 No Other Representations or Warranties.........................................................26

     Section 9.08 Counterparts...................................................................................27

     Section 9.09 Governing Law..................................................................................27

     Section 9.10 Successors and Assigns.........................................................................27

     Section 9.11 No Third-Party Beneficiaries...................................................................27

     Section 9.12 Confidentiality................................................................................27



EXHIBIT A             Merger Agreement

EXHIBIT B             Commercial Agreements

EXHIBIT C             Stockholders Agreement



Schedule 1            New Common Stock

Schedule 3.05         Capitalization

Schedule 7.01(q)      Terms of Revised Profit Sharing Plan

Schedule 9.05         Notices Information

{/TABLE}



                                       ii

{PAGE}



                              INVESTMENT AGREEMENT



                  THIS INVESTMENT AGREEMENT (together with all exhibits and

schedules hereto and as the same may be amended, supplemented or otherwise

modified from time to time in accordance with the terms hereof, the

"Agreement"), dated as of May 19, 2005, by and among ACE Aviation Holdings Inc.,

a company organized under the laws of Canada (the "Investor"), US Airways Group,

Inc., a Delaware corporation, and its successors (including, as the context may

require, on or after the Effective Date, as reorganized pursuant to the

Bankruptcy Code) (the "Company"), and America West Holdings Corporation, a

Delaware corporation ("West").



                              W I T N E S S E T H:



                  WHEREAS, on September 12, 2004, the Company and certain of its

Subsidiaries (the "Debtor Subsidiaries" and together with the Company, the

"Debtors") filed voluntary petitions (the "Cases") for protection under chapter

11 of the United States Bankruptcy Code (the "Bankruptcy Code") in the United

States Bankruptcy Court for the Eastern District of Virginia, Alexandria

Division (the "Bankruptcy Court") to enable the Debtors to be restructured

pursuant to one or more plans of reorganization (collectively, the "Plan");



                  WHEREAS, the Debtors have continued in the possession of their

assets and in the management of their businesses pursuant to Sections 1107 and

1108 of the Bankruptcy Code;



                  WHEREAS, pursuant to the Plan, the Company intends to cancel

all of the existing outstanding Equity Securities of the Company upon the

Effective Date and issue the New Common Stock;



                  WHEREAS, pursuant to the Plan, the Company, Barbell

Acquisition Corp., a Delaware corporation ("Merger Sub"), and West have entered

into an Agreement and Plan of Merger (together with all of the schedules,

exhibits and other attachments thereto, the "Merger Agreement"), attached as

Exhibit A hereto;



                  WHEREAS, subject to the other terms and conditions contained

herein, the Investor desires to commit to provide equity financing to the

Company;



                  WHEREAS, the Company intends to issue and sell to Investor,

and Investor intends to purchase from the Company, shares of New Common Stock

(such purchase, issuance and sale, the "Investment") in exchange for the

Investment Price, all on the terms provided in this Agreement;



                  WHEREAS, the Company and the Investor intend to enter into

certain commercial arrangements, on terms substantially as set forth in Exhibits

B-1 through B-4, and in form and substance satisfactory to the Company and

Investor ("Commercial Agreements");



                  WHEREAS, pursuant to the Other Investment Agreements, the

Company intends to issue and sell to Par Investment Partners, L.P., Peninsula

Investment Partners, L.P. and Eastshore Aviation, LLC (the "Other Investors")

shares of New Common Stock pursuant to



                                        1

{PAGE}



investment agreements entered into by the Other Investors in the forms

previously provided to Investor;



                  WHEREAS, the Investor intends to enter into a Stockholders

Agreement (the "Stockholders Agreement"), substantially in the form of Exhibit C

hereto, with the Company and the Other Investors;



                  WHEREAS, the parties intend that the transactions contemplated

hereby will be implemented by and take effect simultaneously with the

implementation of the Plan on the Effective Date (except as to those

transactions that are expressly intended to take effect at another date);



                  WHEREAS, the parties intend that all of the transactions

contemplated hereby are intended to be treated as a single integrated

transaction subject to the approval of the Bankruptcy Court as soon as

reasonably practicable after the date hereof; and



                  WHEREAS, the Company, West and the Investor desire to make

certain representations, warranties, covenants and agreements in connection with

Home        Intelligence        Services        Subscriptions        News        About Us

Contact Us       Terms of Use       Resend Documents       Shopping Cart

Copyright © 2008 The Consus Group LLC