CLASS A-1 WARRANT
THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR APPLICABLE STATE
SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER THE SECURITIES ACT UNLESS
AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE
US AIRWAYS GROUP, INC.
WARRANT TO PURCHASE CLASS A COMMON STOCK
NO. 5 March 31, 2003
VOID AFTER APRIL 1, 2010
THIS CERTIFIES THAT, for value received, ATSB Securities Trust u/a/d
March 31, 2003, with its principal office at c/o the Trustee, Xxxxxx,
Xxxxxx-Xxxxxxx, Colt & Mosle LLP, 0000 Xxx Xxxxxxxxx Xxxxxx, X.X., Xxxxx 000,
Xxxxxxxxxx X.X., 00000, and/or its permitted transferees and assigns
(individually or collectively, the "Holder"), is entitled to purchase at the
Exercise Price (defined below) from US Airways Group, Inc., a Delaware
corporation, with its principal office at 0000 Xxxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxx 00000 (the "Company"), 7,635,000 fully paid and nonassessable shares
of Class A Common Stock, as provided herein, subject to adjustment pursuant to
the terms hereof, including but not limited to, adjustment pursuant to Section
5 hereof, and is entitled to exercise the other appurtenant rights, powers and
privileges hereinafter described.
1. DEFINITIONS. As used herein, the following terms shall have the
following respective meanings:
"Additional Shares of Common Stock" has the meaning set forth in
Section 5.4(c) hereof.
"Affiliate" shall mean, as to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control," when used with respect to any Person, means the power
to direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise
and the terms "affiliated," "controlling" and "controlled" have meanings
correlative to the foregoing.
"Applicable Price" shall mean:
(i) for purposes of any issuance of Additional Shares of Common Stock
under Section 5.4, the greater of (A) the Fair Market Value of a share of the
class of Common Stock being issued (or, if being issued in an underwritten
offering, the Market Price on the day that such offering is being priced), and
(B) the then effective Exercise Price; and
(ii) for purposes of any issuance under Section 5.1(b), the greater
of (A) the Market Price on the date of such issuance, and (B) the then
effective Exercise Price.
"Bankruptcy Court" shall mean the United States Bankruptcy Court for
the Eastern District of Virginia, Alexandria Division.
"Board" shall mean the Board of Directors of the Company.
"Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday
and Friday that is not a day on which banking institutions in New York, New
York are authorized or obligated by law or executive order to close.
"Class A Common Stock" shall mean the Class A common stock, par value
$1.00, of the Company.
"Class A Preferred Stock" shall mean the Class A preferred stock,
nominal value $0.0001 per share, of the Company.
"Class B Preferred Stock" shall mean the Class B preferred stock,
nominal value $1,000, of the Company.
"Common Stock" shall mean the Class A Common Stock and Class B common
stock, par value $1.00 per share (the "Class B Common Stock"), and all other
stock of any class or classes (however designated) of the Company from time to
time outstanding, the holders of which have the right, without limitation as
to amount, either to all or to a share of the balance of current dividends or
liquidating distributions after the payment of dividends and distributions on
any shares entitled to preference.
"Company" has the meaning set forth in the preamble hereto.
"Conversion Right" has the meaning set forth in Section 2.2 hereof.
"Convertible Securities" has the meaning set forth in Section 5.4(b)
hereof.
"Effective Price" has the meaning set forth in Section 5.4(c) hereof.
"Exchange Act" has the meaning set forth in Section 3.1(c) hereof.
"Excluded Issuance" shall mean:
(a) (i) shares of Class A Common Stock issued upon exercise of
this Warrant, (ii) shares of Common Stock, Class A Preferred Stock, Class B
Preferred Stock, Class C Preferred Stock, nominal value $1.00 per share, of
the Company, and Class A-1 warrants issued pursuant to the Plan of
Reorganization as set forth on Schedule A hereto and (iii) shares of Class A
Common Stock issued upon the exercise of such Class A-1 warrants or upon the
conversion of such Class B Common Stock; and
(b) shares of Common Stock and/or options, warrants, stock
appreciation rights, phantom stock rights or any other profit participation
rights or other Common Stock purchase rights issued with respect to any of the
Company's capital stock or other equity ownership interest, or any rights or
options to acquire any such rights and the Common Stock issued pursuant to
such options, warrants or other rights ("Stock Rights") after the date hereof
to employees, officers or directors of, or consultants or advisors to the
Company or any subsidiary pursuant to stock purchase or stock option plans or
other arrangements that are approved by the Board (the "Plans"); provided that
such Stock Rights shall not be Excluded Issuances in any case where the
grantee acquires the shares, or the right to acquire shares pursuant to such
options, warrants or other rights to purchase Common Stock, at a price per
share less than the Market Price on the date of grant.
"Exercise Period" shall mean the time period commencing with the date
hereof and ending at 5:00 p.m. New York time on the seventh anniversary of the
date hereof.
"Exercise Price" shall mean seven dollars and forty-two cents ($7.42)
per share of Class A Common Stock, subject to adjustment pursuant to Section 5
below.
"Exercise Shares" shall mean the shares of the Class A Common Stock
issuable upon exercise of this Warrant, subject to adjustment pursuant to the
terms herein, including, but not limited to, adjustment pursuant to Section 5
below, and shall also mean any other shares, securities, assets or property
otherwise issuable upon exercise of this Warrant.
"Fair Market Value" shall mean,
(i) with respect to a share of Common Stock, or any other security of
the Company or any other issuer:
(a) the average daily Market Price during the period of the most
recent twenty (20) Trading Days, ending on the last Trading Day before the
date of determination of Fair Market Value, if such class of Common Stock or
other security is (i) traded on a national securities exchange or admitted to
unlisted trading privileges on such an exchange, or (ii) is quoted on the
National Market System of the Nasdaq Stock Market (the "National Market
System") or the Nasdaq Small Cap Market (the "Small Cap Market"); or
(b) if such class of Common Stock or other security is not then
so listed, admitted to trading or quoted, the Fair Market Value shall be
determined in accordance with the Valuation Procedure; or
(ii) with respect to any assets or property other than cash or Common
Stock or other securities, the fair market value as determined in accordance
with the Valuation Procedure.
"First Dilutive Issuance" has the meaning set forth in Section 5.4(d)
hereof.
"Holder" has the meaning set forth in the preamble hereto.
"Market Price" shall be, as of any specified date with respect to any
share of any class of Common Stock or any other security of the Company or any
other issuer, if such class of Common Stock or other security is traded on a
national securities exchange or admitted to unlisted trading privileges on
such an exchange, or is quoted on the National Market System or the Small Cap
Market, the weighted average sale price of such class of Common Stock or other
security on such exchange or on the National Market System or the Small Cap
Market on such date or if no such sale is made on such day, the mean of the
closing bid and ask prices for such day on such exchange or on the National
Market System or the Small Cap Market; provided that if such class of Common
Stock or other security is not so listed or admitted to unlisted trading
privileges or quoted, the Market Price as of a specified date shall be the
mean of the last bid and ask prices reported on such date (x) by the Nasdaq or
(y) if reports are unavailable under clause (x) above by the National
Quotation Bureau Incorporated.
"National Market System" has the meaning set forth in the definition
of Fair Market Value.
"Participating Securities" shall mean (i) any equity security (other
than Common Stock) that entitles the holders thereof to participate in
liquidations or other distributions with the holders of Common Stock or
otherwise participate in the capital of the Company other than through a fixed
or floating rate of return on capital loaned or invested, and (ii) any Stock
Rights; provided that any Stock Rights issued pursuant to any of the Plans
shall not be deemed a Participating Security if their grant or issuance would
constitute an Excluded Issuance.
"Person" shall mean any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
estate, unincorporated organization or government or any agency or political
subdivision thereof, or any entity whatsoever.
"Plan of Reorganization" shall mean the plan or plans of
reorganization filed by the Company and certain of its subsidiaries on January
17, 2003 in connection with the voluntary petitions for protection under
Chapter 11 of the United States Bankruptcy Code and confirmed by the
Bankruptcy Court, as such plan or plans may be amended, supplemented or
otherwise modified through the date hereof.
"Plans" has the meaning set forth in the definition of Excluded
Issuance.
"Qualifying Dilutive Issuance" has the meaning set forth in Section
5.4(a) hereof.
"Record Date" shall mean, with respect to any dividend, other
distribution or issuance, the record date for the determination of
stockholders entitled to receive such dividend, distribution or issuance, or
if no such record date exists, the date of such dividend, distribution or
issuance.
"Registration Rights Agreement" has the meaning set forth in Section
6 hereof.
"Rule 144" has the meaning set forth in Section 4.2(a)(iii) hereof.
"Small Cap Market" has the meaning set forth in the definition of
Fair Market Value.
"Stock Rights" has the meaning set forth in the definition of
Excluded Issuance.
"Subsequent Dilutive Issuance" has the meaning set forth in Section
5.4(d) hereof.
"Trading Day" shall mean, with respect to any class of Common Stock
or any other security of the Company or any other issuer, a day (i) on which
the securities exchange or other trading platform applicable for purposes of
determining the Market Price of a share or unit of such class of Common Stock
or other security shall be open for business or (ii) for which quotations from
such securities exchange or other trading platform of the character specified
for purposes of determining such Market Price shall be reported.
"Valuation Procedure" shall mean a determination made in good faith
by the Board that is set forth in resolutions of the Board that are certified
by the Secretary of the Company, which certified resolutions (i) set forth the
basis of the Board's determination, which, in the case of a valuation in
excess of $25 million, shall include the Board's reliance on the valuation of
a nationally recognized investment banking or appraisal firm, and (ii) are
delivered to the Holder within ten (10) Business Days following such
determination. A Valuation Procedure with respect to the value of any capital
stock shall be based on the price that would be paid for all of the capital
stock of the issuer in an arm's-length transaction between a willing buyer and
a willing seller (neither acting under compulsion) without any discount or
provision for a minority interest, lack of liquidity or similar discount.
"Warrant" shall mean this Class A-1 warrant to purchase Class A
Common Stock.
2. EXERCISE OF WARRANT.
2.1 EXERCISE. Subject to Section 2.3 hereof, this Warrant may be
exercised by the Holder in whole or in part at any time during the Exercise
Period, by delivery of the following to the Company at its address set forth
above (or at such other address as it may designate by notice in writing to
the Holder):
(a) an executed Notice of Exercise in the form attached hereto
as Annex A;
(b) the Exercise Price (i) in cash or by check, or (ii) pursuant
to Section 2.2 hereof, or (iii) any combination of (i) or (ii) above;
(c) this Warrant; and
(d) the requisite number of shares of Class A Preferred Stock,
as set forth in Section 2.3 hereof.
Upon the exercise of this Warrant, a certificate or certificates for
the Exercise Shares so purchased, registered in the name of the Holder or such
other Person as may be designated by the Holder (to the extent such transfer
is not restricted and upon payment of any transfer taxes that are required to
be paid by the Holder in connection with any such transfer), shall be issued
and delivered to the Holder or such other Person as promptly as practicable
(and in any event within five (5) Business Days) after receipt of the Notice
of Exercise. If this Warrant shall not have been exercised in full, a new
Warrant exercisable for the number of Exercise Shares remaining shall be
executed by the Company and delivered at the same time as the certificate (or
certificates) for the Exercise Shares that are being issued.
The Person in whose name any certificate or certificates for the
Exercise Shares are to be issued upon exercise of this Warrant shall be deemed
to have become the holder of record of such shares on the date on which this
Warrant was surrendered and payment of the Exercise Price was made,
irrespective of the date of delivery of such certificate or certificates,
except that, if the date of such surrender and payment is a date when the
stock transfer books of the Company are closed, such Person shall be deemed to
have become the holder of such shares at the close of business on the next
succeeding date on which the stock transfer books are open (whether before or
after the end of the Exercise Period).
2.2 NET EXERCISE.
(a) Notwithstanding any provision herein to the contrary, if the
Fair Market Value of one Exercise Share is greater than the Exercise Price (at
the date of calculation as set forth below), in lieu of exercising this
Warrant by payment of cash or check, the Holder may elect (the "Conversion
Right") to receive Exercise Shares equal to the value (as determined below) of
this Warrant (or the portion thereof being exercised) by surrender of this
Warrant at the principal office of the Company together with the properly
endorsed Notice of Exercise in which event the Company shall issue to the
Holder a number of Exercise Shares computed using the following formula:
X = Y (A-B)
---------
A
Where X = the number of Exercise Shares to be issued.
Y = the number of Exercise Shares purchasable under this Warrant or,
if only a portion of this Warrant is being exercised, the portion of this
Warrant being exercised (at the date of such calculation).
A = the Fair Market Value of one Exercise Share (at the date of such
calculation).
B = the Exercise Price (as adjusted pursuant to Section 5 hereof to
the date of such calculation).
The Company shall pay all reasonable administrative costs incurred by
the Holder in connection with the exercise of the Conversion Right by the
Holder pursuant to this Section 2.2.
(b) Unless indicated otherwise in writing by the Holder, this
Warrant shall automatically be exercised on March 31, 2010 by the Holder
hereof pursuant to Section 2.2(a) hereof if the Fair Market Value of one
Exercise Share is greater than the Exercise Price per share on such date. The
Company shall take all actions and execute and deliver all documents necessary
to effect the foregoing, and the Holder shall be entitled to receive Exercise
Shares as if such Holder had exercised this Warrant pursuant to Section 2.2(a)
hereof for the full number of Exercise Shares purchasable under this Warrant
on such date.
2.3 CLASS A PREFERRED STOCK. Notwithstanding anything to the
contrary contained herein, this Warrant may not be exercised or transferred
without also tendering to the Company, with executed stock powers in blank, or
transferring, as the case may be, the corresponding amount of Class A
Preferred Stock (after taking into account any adjustments pursuant to Section
5.2 hereof). Any exercise or transfer of this Warrant shall be deemed to
include the corresponding tender or transfer of the applicable amount of Class
A Preferred Stock.
3. COVENANTS AND REPRESENTATIONS OF THE COMPANY; SECURITIES MATTERS.
3.1 COVENANTS AS TO EXERCISE SHARES.
(a) The Company covenants and agrees that all Exercise Shares
that may be issued upon the exercise of this Warrant will, upon issuance, be
duly authorized, validly issued and outstanding, fully paid and nonassessable,
free of preemptive rights and free from all taxes, liens, charges and security
interests with respect to the issuance thereof. If the Class A Common Stock or
the class of securities of any other Exercise Shares is then listed or quoted
on a national securities exchange, the National Market System or the Small Cap
Market, all such Exercise Shares upon issuance shall also be so listed or
quoted. The Company further covenants and agrees that the Company will, at all
times during the Exercise Period, have authorized and reserved solely for
purposes of the exercise of this Warrant, free from preemptive rights, a
sufficient number of shares of its Class A Common Stock or the class of
securities of any other Exercise Shares to provide for the exercise in full of
this Warrant (without taking into account any possible exercise pursuant to
Section 2.2 hereof). If at any time during the Exercise Period, the number of
authorized but unissued shares of Class A Common Stock or the class of
securities of any other Exercise Shares shall not be sufficient to permit
exercise in full of this Warrant (without taking into account any possible
exercise pursuant to Section 2.2 hereof), the Company will promptly take such
corporate action as shall be necessary to increase its authorized but unissued
shares of Class A Common Stock or the class of securities of any other
Exercise Shares to such number of shares as shall be sufficient for such
purposes. The Company covenants and agrees that if any shares of capital stock
to be reserved for the purpose of the issuance of such shares upon the
exercise of this Warrant require registration with or approval of any
governmental authority under any Federal or state law before such shares may
be validly issued or delivered upon exercise, then the Company will in good
faith and as expeditiously as possible endeavor to secure such registration or
approval, as the case may be.
(b) In the event that at any time, including as a result of any
provision of Section 5, the Exercise Shares shall include any shares or other
securities other than shares of Class A Common Stock, or any other property or
assets, the terms of this Warrant shall be modified or supplemented (in the
absence of express written documentation thereof, shall be deemed to be so
modified or supplemented), and the Company shall take all actions as may be
necessary to preserve, in a manner and on terms as nearly equivalent as
practicable to the provisions of this Warrant as they apply to the Class A
Common Stock, the rights of the Holder hereunder (including, without
limitation, the provisions of Section 5 hereof), including any equitable
replacements of the term "Class A Common Stock" with the term "Exercise
Shares" and adjustments of any formula included herein.
(c) The Company's filings under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), will comply, during the Exercise
Period, in all material respects as to form with the Exchange Act and the
rules and regulations thereunder. If required pursuant to Regulation D under
the Securities Act of 1933, as amended (the "Securities Act") or any successor
regulation thereto, the Company shall timely file a Form D in respect of the
issuance of this Warrant and the issuance of the Exercise Shares.
(d) Until the later of (i) the date as of which a Holder may
sell all of the Exercise Shares without restriction pursuant to Rule 144(k)
under the Securities Act, or any successor rule, and (ii) the last date on
which any of the Warrants remain outstanding, the Company shall timely file
all reports required to be filed with the Securities and Exchange Commission
(the "SEC") pursuant to the Exchange Act, and the Company shall not terminate
its status as an issuer required to file reports under the Exchange Act other
than as a result of a merger or consolidation of the Company where the Company
is not the surviving entity.
3.2 NO IMPAIRMENT. Except and to the extent as waived or
consented to in writing by the Holder, the Company will not, by amendment of
its Amended and Restated Certificate of Incorporation or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms to be observed or performed
hereunder by the Company, but will at all times in good faith assist in the
carrying out of all the provisions of this Warrant and in the taking of all
such action as may be necessary or appropriate in order to protect the
exercise rights of the Holder against impairment consistent with the intent
and principles expressed in Section 5.9 below.
3.3 NOTICES OF RECORD DATE. In the event (i) the Company takes a
record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend or
other distribution, (ii) the Company authorizes the granting to the holders of
Common Stock (or holders of the class of securities of any other Exercise
Shares) of rights to subscribe to or purchase any shares of capital stock of
any class or securities convertible into any shares of capital stock or of any
other right, (iii) the Company authorizes any reclassification of, or any
recapitalization involving, any class of Common Stock or any consolidation or
merger to which the Company is a party and for which approval of the
stockholders of the Company is required, or of the sale or transfer of all or
substantially all of the assets of the Company, (iv) the Company authorizes or
consents to or otherwise commences the voluntary or involuntary dissolution,
liquidation or winding up of the Company, or (v) the Company authorizes or
takes any other action that would trigger an adjustment in the Exercise Price
or the number or amount of shares of Class A Common Stock or other Exercise
Shares subject to this Warrant (other than a stock split or combination), the
Company shall mail to the Holder, at least twenty (20) days prior to the
earlier of the record date for any such action or stockholder vote and the
date of such action, a notice specifying (a) which action is to be taken and
the date on which any such record is to be taken for the purpose of any such
action, (b) the date that any such action is to take place, and (c) the amount
and character of any stock, other securities or property and amounts, or
rights or options with respect thereto, proposed to be issued, granted or
delivered to each holder of Common Stock (or holders of the class of
securities of any other Exercise Shares).
4. REPRESENTATIONS AND AGREEMENTS OF HOLDER.
4.1 REPRESENTATIONS OF HOLDER. The Holder hereby represents and
warrants to the Company, as of the date hereof, that:
(a) ACQUISITION PURSUANT TO EXEMPTION; ACCREDITED INVESTOR;
ACQUISITION OF WARRANT FOR PERSONAL ACCOUNT. The Holder is an "accredited
investor" within the meaning of Rule 501 under Regulation D promulgated under
the Securities Act. The Holder represents and warrants that it is acquiring
this Warrant and, to the extent this Warrant is exercised, the Exercise Shares
solely for its account for investment purposes only and not with a view to or
for sale or distribution of said Warrant or Exercise Shares or any part
thereof, other than potential transfers between Affiliates or transfers
pursuant to an effective registration statement under, or an exemption from
the registration requirements of, the Securities Act.
(b) SECURITIES ARE NOT REGISTERED.
(i) The Holder understands that this Warrant and the
Exercise Shares have not been registered under the Securities Act, on the
basis that no distribution or public offering is being effected. The Holder
realizes that the basis for the exemption set forth above may not be present
if, notwithstanding its representations, the Holder has a present intention of
acquiring the securities for a fixed or determinable period in the future,
selling (in connection with a distribution or otherwise), granting any
participation in, or otherwise distributing the securities. The Holder has no
such present intention, except that, subject to Section 4.2, the Holder may,
in the future, transfer between Affiliates or transfer pursuant to an
effective registration statement under, or an exemption from the registration
requirements of the Securities Act.
(ii) To the extent the Holder is not a government
instrumentality, the Holder has had full access to all information it
considers necessary or appropriate to make an informed investment decision
with respect to this Warrant and has been given the opportunity to ask
questions of the Company and its representatives concerning this transaction
and has such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of an investment in the Company
and can bear the economic risk of its investment in this Warrant.
4.2 DISPOSITION OF WARRANT AND EXERCISE SHARES.
(a) The Holder agrees not to make any disposition of all or any
part of the Exercise Shares in any event unless:
(i) the Company shall have received a letter secured by the
Holder from the staff of the Securities and Exchange Commission stating that
no action will be recommended to the Commission with respect to the proposed
disposition;
(ii) there is then in effect a registration statement under
the Securities Act covering such proposed disposition and such disposition is
made in accordance with said registration statement;
(iii) the Holder shall have furnished the Company with an
opinion of counsel for the Holder, reasonably satisfactory to the Company, to
the effect that such disposition shall be made in compliance with Rule 144
under the Securities Act ("Rule 144"); or
(iv) the Holder shall have notified the Company of the
proposed disposition and shall have furnished the Company with a statement of
the circumstances surrounding the proposed disposition and, if reasonably
requested by the Company, the Holder shall have furnished the Company with an
opinion of counsel for the Holder, reasonably satisfactory to the Company, to
the effect that such disposition will not require registration of such
Exercise Shares under the Securities Act or any applicable state securities
laws.
(b) The Holder further agrees not to make any disposition of all
or any part of this Warrant in any event unless (i) (A) the Holder shall have
notified the Company of the proposed disposition and shall have furnished the
Company with a statement of the circumstances surrounding the proposed
disposition and, if reasonably requested by the Company, the Holder shall have
furnished the Company with an opinion of counsel for the Holder, reasonably
satisfactory to the Company, to the effect that such disposition will not
require registration of such Warrant under the Securities Act or any
applicable state securities laws, and (B) such transferee has executed and
delivered to the Company an agreement whereby such transferee agrees to become
a party hereto and to that certain Registration Rights Agreement between the
Holder and the Company, dated as of March 31, 2003 (the "Registration Rights
Agreement"), and to be bound by all the provisions hereof and thereof, or (ii)
such disposition is in accordance with the terms and provisions of the
Registration Rights Agreement.
(c) The Holder is aware that the Exercise Shares may not be sold
pursuant to Rule 144 unless the applicable conditions thereof are met,
including, among other things, the required holding period under Rule 144 and
the number of shares being sold during any three-month period not exceeding
specified limitations.
(d) The Holder understands and agrees that all certificates
evidencing the Exercise Shares may bear the following legend (unless such
shares have been disposed of in accordance with Section 4.2(a)(ii) or (iii) or
such legend is no longer required to comply with applicable securities laws):
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT").
THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO SUCH SECURITIES UNDER THE SECURITIES ACT
UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE."
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon
completion of a public distribution pursuant to an effective registration
statement under the Securities Act) shall also bear such legend unless such
legend is no longer required to comply with applicable securities laws.
5. ADJUSTMENT OF EXERCISE PRICE, SHARES OF CLASS A COMMON STOCK
PURCHASABLE AND NUMBER OF WARRANTS.
5.1 ADJUSTMENT OF EXERCISE PRICE. The Exercise Price, as defined
in Section 1, shall be subject to adjustment from time to time as follows:
(a) If the Company after the date hereof shall (i) pay a
dividend or make a distribution to all holders of any class of Common Stock
with respect to such holders' Common Stock and in shares of Common Stock, (ii)
split or otherwise subdivide the outstanding shares of Common Stock, or (iii)
combine the outstanding shares of Class A Common Stock into a smaller number
of shares, then in any such case the Exercise Price in effect immediately
prior thereto shall be adjusted to a price obtained by multiplying such
Exercise Price by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding prior to such action and the denominator
shall be the number of shares of Common Stock outstanding after giving effect
to such action. An adjustment made pursuant to clause (i) of this subsection
(a) shall become effective retroactive to the date immediately after the
Record Date for such dividend or distribution, and an adjustment made pursuant
to clause (ii) or (iii) of this subsection (a) shall become effective
immediately after the effective date of such subdivision or combination.
(b) If the Company after the date hereof shall issue rights,
options or warrants to all holders of any class of Common Stock with respect
to such holders' Common Stock to subscribe for or purchase shares of Common
Stock or securities convertible into Common Stock at a price per share less
than the Applicable Price per share on the issuance date thereof, the Exercise
Price in effect immediately prior thereto shall be adjusted to a price
obtained by multiplying such Exercise Price by a fraction of which (i) the
numerator shall be the number of shares of Common Stock outstanding on the
date of issuance of such rights, options or warrants plus the number of shares
of the class of Common Stock subject to such rights, options or warrants which
the aggregate consideration for the total number of shares so to be offered
would purchase at the Applicable Price of a share of the class of Common Stock
subject to such rights, options or warrants, and (ii) the denominator shall be
the number of shares of Common Stock outstanding on the date of issuance of
such rights, options or warrants plus the number of additional shares of
Common Stock to be offered for subscription or purchase; provided, however,
that no adjustment shall be made if the Company issues or distributes to the
Holder the rights, options or warrants which the Holder would have been
entitled to receive had this Warrant been exercised prior to the Record Date
(and, if applicable, had this Warrant been exercisable for the class of Common
Stock receiving such issuance or distribution). Any such adjustments shall be
made whenever such rights, options or warrants are issued to all holders of
any class of Common Stock with respect to such holders' Common Stock and shall
become effective retroactive to the date immediately after the Record Date for
the determination of stockholders entitled to receive such rights, options or
warrants unless such rights, options or warrants are not immediately
exercisable, in which case, any such adjustments shall be made at such time
such rights, options or warrants become exercisable. Upon expiration of the
period during which any such rights, options or warrants may be exercised, any
adjustment previously made pursuant to the foregoing provisions shall be
recalculated to take into consideration only those rights, options or warrants
actually exercised during the applicable period for exercise and notice of any
such further adjustment to the Exercise Price shall be given to Holder as
herein provided.
(c) If the Company after the date hereof shall issue or
distribute to all holders of any class of Common Stock (or any class of
capital stock that is convertible into Common Stock) with respect to such
holders' Common Stock (or such other capital stock) evidences of its
indebtedness, cash, or other assets, shares of capital stock of any class or
any other securities (other than the Common Stock) or rights to subscribe
therefor (excluding those referred to in subsection (b) above), in each such
case the Exercise Price in effect immediately prior thereto shall be adjusted
to a price obtained by multiplying such Exercise Price by a fraction of which
(i) the numerator shall be the difference between (x) the amount, for each
class of Common Stock then outstanding, of the Fair Market Value per share of
such class of Common Stock, multiplied by the number of outstanding shares of
such class of Common Stock, in each case on the Record Date, and (y) the Fair
Market Value of the assets, cash or evidences of indebtedness so distributed,
or shares of capital stock or other securities or rights to subscribe therefor
so issued, and (ii) the denominator shall be product of the amount, for each
class of Common Stock then outstanding, of the Fair Market Value per share of
such class of Common Stock, multiplied by the number of outstanding shares of
such class of Common Stock, in each case on the Record Date; provided,
however, that no adjustment shall be made if the Company issues or distributes
to the Holder the evidence of indebtedness, cash, other assets, capital stock
or other securities or subscription rights referred to above in this
subsection (c) that the Holder would have been entitled to receive had this
Warrant been exercised in full prior to the Record Date (and, if applicable,
had this Warrant been exercisable for the class of Common Stock or such other
class of capital stock that is convertible into Common Stock receiving such
issuance or distribution). The Company shall provide the Holder, upon receipt
of a written request therefor, with any indenture or other instrument defining
the rights of the holders of any indebtedness, assets, capital stock or other
securities or subscription rights referred to in this subsection 5.1(c). Any
such adjustment shall be made whenever any such distribution is made, and
shall become effective retroactive to the date immediately after the Record
Date. Upon expiration of the period during which any subscription rights
granted pursuant to this subsection (c) may be exercised, any adjustment
previously made pursuant to the foregoing provisions shall be recalculated to
take into consideration only those subscription rights actually exercised
during the applicable period for exercise and notice of any such further
adjustment to the Exercise Price shall be given to the Holder as herein
provided.
(d) For purposes of Sections 5.1(a), 5.1(b) and 5.1(c), any
dividend or distribution to which Section 5.1(c) is applicable that also
includes shares of Common Stock, a subdivision of Common Stock or a
combination of Common Stock to which Section 5.1(a) applies, or rights or
warrants to subscribe for or purchase shares of Common Stock to which Section
5.1(b) applies (or any combination thereof), shall be deemed instead to be:
(i) a dividend or distribution of the evidences of
indebtedness, cash, other assets, shares of capital stock, other securities or
subscription rights, other than such shares of Common Stock, such subdivision
or combination or such rights, options or warrants to which Sections 5.1(a)
and 5.1(b) apply, respectively (and any Exercise Price reduction required by
Section 5.1(c) with respect to such dividend or distribution shall then be
made), immediately followed by
(ii) a dividend or distribution of such shares of Common
Stock, such subdivision or combination or such rights, options or warrants to
which Sections 5.1(a) and 5.1(b) apply (and any further Exercise Price
reduction required by Sections 5.1(a) and 5.1(b) with respect to such actions
shall then be made).
(e) In case a tender or exchange offer (other than an odd lot
offer) by the Company for any Common Stock is consummated at a price in excess
of the Market Price of the Common Stock subject to such tender or exchange
offer, at the expiration of such tender or exchange offer, the Exercise Price
in effect immediately prior thereto shall be adjusted to a price obtained by
multiplying such Exercise Price by a fraction of which (i) the numerator shall
be such Market Price, less the amount of the excess of the value of the tender
or exchange offer price over the Market Price, and (ii) the denominator shall
be the Market Price, such adjustment to become effective immediately prior to
the opening of business on the day following such date of expiration.
5.2 ADJUSTMENT OF NUMBER OF EXERCISE SHARES PURCHASABLE UPON
EXERCISE OF WARRANTS; ADJUSTMENT OF CLASS A PREFERRED STOCK. Upon each
adjustment of the Exercise Price pursuant to Section 5.1 or 5.4 hereof, the
number of Exercise Shares purchasable upon exercise of this Warrant shall be
adjusted to the number of Exercise Shares, rounded up or down, as the case may
be, to the nearest full share, obtained by (i) multiplying the number of
Exercise Shares purchasable immediately prior to such adjustment by the
Exercise Price in effect prior to such adjustment, and (ii) dividing the
product so obtained by the Exercise Price in effect after such adjustment of
the Exercise Price. The number of votes per share of Class A Preferred Stock
held by the Holder shall be adjusted accordingly with any adjustment to the
number of Exercise Shares such that the aggregate number of votes entitled to
be cast by the Class A Preferred Stock, as a class, is equal to the votes
associated with the aggregate number of shares of Class A Common Stock into
which the Warrants can be exercised following such Anti-dilution Adjustment.
5.3 RIGHTS UPON CONSOLIDATION, MERGER, SALE, TRANSFER,
RECLASSIFICATION OR RECAPITALIZATION.
(a) In case the Company after the date hereof (a) shall
consolidate with or merge into any other Person and shall not be the
continuing or surviving corporation of such consolidation or merger, or (b)
shall permit any other Person to consolidate with or merge into the Company
and the Company shall be the continuing or surviving Person but, in connection
with such consolidation or merger, the Class A Common Stock or other
securities or property otherwise issuable upon exercise of this Warrant shall
be changed into or exchanged for stock or other securities of any other Person
or cash or any other property, or (c) shall transfer (by sale, lease or
otherwise) all or substantially all of its properties or assets to any other
Person, or (d) shall effect a capital reorganization or reclassification of
the Class A Common Stock or other securities or property otherwise issuable
upon exercise of this Warrant (other than a capital reorganization or
reclassification resulting in the issuance of additional shares of Common
Stock for which adjustment in the Exercise Price is provided in Section 5.1 or
5.4 unless such adjustment pursuant to Section 5.1 or 5.4 fails to take into
account all steps in a multi-step transaction), then, and in the case of each
such transaction, proper provision shall be made so that, upon the basis and
the terms and in the manner provided in this Warrant, the holder of this
Warrant, upon the exercise hereof at any time after the consummation of such
transaction (until the end of the Exercise Period), shall be entitled to
receive (at the aggregate Exercise Price in effect at the time of such
consummation for all Class A Common Stock or other securities or property
otherwise issuable upon such exercise immediately prior to such consummation),
in lieu of the Class A Common Stock or other securities or property otherwise
issuable upon such exercise prior to such consummation, the kind and amount of
shares, other securities, property, assets or cash that the Holder would have
been entitled to receive upon the consummation of such transaction had the
Holder exercised this Warrant immediately prior to the consummation of such
transaction, subject to adjustments (subsequent to such consummation) as
nearly equivalent as possible to the adjustments provided for in this Section
5.
(b) The Company shall not consummate any transaction that
effects or permits any such event or occurrence unless each Person whose
shares of stock, securities or assets will be issued, delivered or paid to the
holders of the Class A Common Stock (including the Company with respect to
clause (ii) below), prior to or simultaneously with the consummation of the
transaction, (i) is a corporation organized and existing under the laws of the
United States of America or any State or the District of Columbia, and (ii)
expressly assumes, or in the case of the Company, acknowledges, by a Warrant
supplement or other document in a form substantially similar hereto, executed
and delivered to the Holder hereof, the obligation to deliver to such Holder
such shares of stock, securities or assets as, in accordance with the
foregoing provisions of this Section 5.3, such Holder is entitled to purchase,
and all other obligations and liabilities under this Warrant, including
obligations and liabilities in respect of subsequent adjustments that are
required under this Warrant.
(c) The above provisions of this Section 5.3 shall similarly
apply to successive reclassifications and changes of Exercise Shares and to
successive consolidations, mergers, leases, sales or conveyances.
5.4 SALE OF SHARES BELOW APPLICABLE PRICE.
(a) If at any time or from time to time after the date hereof,
the Company issues or sells, or is deemed by the express provisions of this
Section 5.4 to have issued or sold, Additional Shares of Common Stock (as
defined below), other than as provided in Section 5.1, 5.2 or 5.3 above, for
an Effective Price (as defined below) less than the Applicable Price (such
issue, a "Qualifying Dilutive Issuance"), then and in each such case, the then
effective Exercise Price shall be reduced, effective as of the opening of
business on the date of such issue or sale (or if earlier, the date on which a
binding agreement providing for such issue or sale was entered into), to a
price determined by multiplying the Exercise Price in effect immediately prior
to such issuance or sale by a fraction:
(i) the numerator of which shall be (A) the number of
shares of Common Stock outstanding immediately prior to such issue or sale,
plus (B) the number of shares of the class of Common Stock being issued or
sold or deemed to be issued or sold which the aggregate consideration received
by the Company for the total number of Additional Shares of Common Stock so
issued or deemed to be so issued would purchase at the Applicable Price, and
(ii) the denominator of which shall be the number of shares
of Common Stock outstanding immediately prior to such issue or sale plus the
total number of Additional Shares of Common Stock so issued or deemed to be so
issued.
(b) For the purpose of the adjustment required under this
Section 5.4, if the Company issues or sells (x) stock or other securities
convertible into shares of Common Stock (such convertible stock or securities
being herein referred to as "Convertible Securities") or (y) rights, options
or warrants for the purchase of shares of Common Stock or Convertible
Securities and if the Effective Price of such shares of Common Stock is less
than the Applicable Price, in each case the Company shall be deemed to have
issued at the time of the issuance of such rights, options or warrants or
Convertible Securities the maximum number of Additional Shares of Common Stock
issuable upon exercise or conversion thereof and to have received as aggregate
consideration for the issuance of such shares an amount equal to the total
amount of the consideration, if any, received by the Company for the issuance
or sale of such rights, options or warrants or Convertible Securities plus the
minimum amounts of consideration, if any, payable to the Company upon the
exercise or conversion of such rights, options or warrants or Convertible
Securities (other than by cancellation of liabilities or obligations evidenced
by such Convertible Securities); provided that:
(i) subject to paragraph (d) below, if the minimum amounts
of such consideration cannot be ascertained, but are a function of
antidilution or similar protective clauses, the Company shall be deemed to
have received the minimum amounts of consideration without reference to such
clauses; and
(ii) if the minimum amount of consideration payable to the
Company upon the exercise or conversion of such rights, options, warrants or
Convertible Securities is reduced over time or on the occurrence or
non-occurrence of specified events other than by reason of antidilution
adjustments, the Effective Price shall be recalculated using the figure to
which such minimum amount of consideration is reduced; provided further, that
if the minimum amount of consideration payable to the Company upon the
exercise or conversion of such rights, options, warrants or Convertible
Securities is subsequently increased, the Effective Price shall be again
recalculated using the increased minimum amount of consideration payable to
the Company but only upon the exercise or conversion of such rights, options,
warrants or Convertible Securities.
No further adjustment of the Exercise Price, as adjusted upon the
issuance of such rights, options, warrants or Convertible Securities, shall be
made as a result of the actual issuance of Additional Shares of Common Stock
upon the exercise of any such rights, options or warrants or the conversion of
any such Convertible Securities. If any such rights, options or warrants or
the conversion privilege represented by any such Convertible Securities shall
expire without having been exercised, the Exercise Price as adjusted upon the
issuance of such rights, options, or warrants or Convertible Securities shall
be readjusted to the Exercise Price which would have been in effect had an
adjustment been made on the basis of only the Additional Shares of Common
Stock, if any, actually issued or sold on the exercise or conversion of such
rights, options, warrants or Convertible Securities, and on the basis that
such Additional Shares of Common Stock, if any, were issued or sold for the
consideration actually received by the Company upon such exercise or
conversion (other than by cancellation of liabilities or obligations evidenced
by such Convertible Securities), plus the consideration, if any, actually
received by the Company for the issue or sale of all such rights, options,
warrants and Convertible Securities, whether or not exercised, provided that
such readjustment shall not apply to prior exercises of this Warrant.
(c) For the purpose of making any adjustment to the Exercise
Price of the Exercise Shares required under this Section 5.4, "Additional
Shares of Common Stock" shall mean all shares of Common Stock issued by the
Company or deemed to be issued pursuant to this Section 5.4 (including shares
of Common Stock subsequently reacquired or retired by the Company), other than
any Excluded Issuance.
The "Effective Price" of Additional Shares of Common Stock shall mean
the quotient determined by dividing the total number of Additional Shares of
Common Stock issued or sold, or deemed to have been issued or sold by the
Company under this Section 5.4, into the aggregate consideration received, or
deemed to have been received by the Company for such issue under this Section
5.4, for such Additional Shares of Common Stock.
(d) In the event that the Company issues or sells, or is deemed
to have issued or sold, Additional Shares of Common Stock in a Qualifying
Dilutive Issuance (the "First Dilutive Issuance"), then in the event that the
Company issues or sells, or is deemed to have issued or sold, Additional
Shares of Common Stock in a Qualifying Dilutive Issuance other than the First
Dilutive Issuance (a "Subsequent Dilutive Issuance") pursuant to the same
instruments as the First Dilutive Issuance, then, and in each such case upon a
Subsequent Dilutive Issuance, the Exercise Price shall be reduced to the
Exercise Price that would have been in effect had the First Dilutive Issuance
and each Subsequent Dilutive Issuance all occurred on the closing date of the
First Dilutive Issuance.
5.5 ADDITIONAL ADJUSTMENTS TO EXERCISE PRICE. Notwithstanding
anything to the contrary contained in this Section 5, but subject to Section
5.7, the Company shall be entitled, but not required, to make such reductions
in the Exercise Price, in addition to those required by Section 5.1, 5.3 or
5.4, as it, in its sole discretion, shall determine to be advisable,
including, without limitation, in order that any dividend in or distribution
of shares of Common Stock or shares of capital stock of any class other than
Common Stock, subdivision, reclassification or combination of shares of Common
Stock, issuance of rights, options, or warrants, or any other transaction
having a similar effect, shall not be treated as a distribution of property by
the Company to its stockholders under Section 305 of the Internal Revenue Code
of 1986, as amended, or any successor provision and shall not be taxable to
them.
5.6 DE MINIMUS ADJUSTMENTS. The adjustments required by this
Section 5 shall be made whenever and as often as any specified event requiring
an adjustment shall occur, except that no adjustment pursuant to Section 5.1,
5.3 or 5.4 hereof shall be required unless such adjustment would require an
increase or decrease of at least $.10 in the Exercise Price then subject to
adjustment; provided, however, that any adjustments that are not made by
reason of this Section 5.6 shall be carried forward and (i) made as soon as
such adjustment, together with other adjustments required by this Section 5
and not previously made, would result in an increase or decrease of at least
$.10 in the Exercise Price as of the date of exercise, or (ii) made upon the
date of exercise, in whole or in part, of the Warrant. In case the Company
shall at any time issue Common Stock by way of dividend on any stock of the
Company or split or otherwise subdivide or combine the outstanding shares of
Common Stock, said amount of $.10 specified in the preceding sentence (as
theretofore increased or decreased, if said amount shall have been adjusted in
accordance with the provisions of this Section 5.6) shall forthwith be
proportionately increased in the case of such a combination or decreased in
the case of such a subdivision or stock dividend so as appropriately to
reflect the same. All calculations under this Section 5 shall be made to the
nearest hundredth of a cent.
5.7 CONDITION PRECEDENT TO REDUCTION OF EXERCISE PRICE BELOW PAR
VALUE OF SHARES OF CLASS A COMMON STOCK OR INCREASE IN PAR VALUE TO ABOVE
EXERCISE PRICE.
(a) Before taking any action that would require an adjustment
reducing the Exercise Price to below the then par value of any of the shares
of Class A Common Stock issuable upon exercise of this Warrant, the Company
will take any corporate action that may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid
and non-assessable shares of such Class A Common Stock at such adjusted
Exercise Price.
(b) Before taking any action that would, or would result in an,
increase the par value of the Class A Common Stock issuable upon exercise of
this Warrant to an amount that is greater than the then effective Exercise
Price, the Company will take such corporate action that is necessary in order
that the Company may validly and legally issue fully paid and non-assessable
shares of such Class A Common Stock at such then effective Exercise Price.
5.8 CERTIFICATE OF ADJUSTMENT. In each case of an adjustment or
readjustment of the Exercise Price, the Company, at its sole expense, shall
compute such adjustment or readjustment in accordance with the provisions
hereof and prepare a certificate showing such adjustment or readjustment, and
shall mail such certificate, by first class mail, postage prepaid, to the
Holder at the Holder's address, as provided in Section 13 hereof, no later
than five (5) Business Days following the effective date of such adjustment or
readjustment. The certificate shall set forth such adjustment or readjustment,
showing in detail the facts upon which such adjustment or readjustment is
based, including a statement of (i) the number of Additional Shares of Common
Stock issued or sold or deemed to have been issued or sold; (ii) the
consideration received or deemed to be received by the Company for any
Additional Shares of Common Stock issued or sold or deemed to have been issued
or sold; (iii) the Exercise Price at the time in effect; and (iv) the type and
amount, if any, of other property which would be received upon exercise of
this Warrant.
5.9 OTHER DILUTIVE EVENTS. If any event or occurrence shall
occur as to which the provisions of this Section 5 are not strictly applicable
but as to which the failure to make any adjustment to the Exercise Price
and/or the number of shares or other assets or property subject to this
Warrant would adversely affect the purchase rights or value represented by
this Warrant in accordance with the essential intent and principles of this
Section 5, including any issuance of Participating Securities, then, in each
such case, the Company shall determine the adjustment, if any, on a basis
consistent with the essential intent and principles established in this
Section 5, necessary to preserve, without dilution, the purchase rights
represented by this Warrant. If such determination involves or is based on a
determination of the Fair Market Value of any securities or other assets or
property, such determination shall be made in accordance with the Valuation
Procedure.
5.10 GENERAL ADJUSTMENT PROVISIONS.
(a) Notwithstanding anything to the contrary contained in this
Warrant, no adjustments to the Exercise Price or the number of shares of Class
A Common Stock (or other securities into which the Warrants may become
exercisable) purchasable upon exercise of this Warrant shall be made solely as
a result of any Excluded Issuance.
(b) In any case in which this Section 5 shall require that an
adjustment be made retroactive to the date immediately following a Record
Date, the Company may elect to defer (but only until five (5) Business Days
following the mailing by the Company to the Holder of the certificate as
required by Section 5.8) issuing to the Holder, in the event of any exercise
of this Warrant after such Record Date, the shares of the Class A Common Stock
issuable upon such exercise in excess of the shares of Class A Common Stock
issuable upon such exercise prior to such adjustment, if any.
(c) The provisions and adjustments provided for in this Section
5 shall apply to successive events or occurrences of the types described in
this Section 5.
(d) For the purpose of making any adjustment required under this
Section 5 that requires a determination of the aggregate consideration
received by the Company for any sale, issue or distribution of securities, the
aggregate consideration received by the Company shall equal the sum of: (i) to
the extent it consists of cash, the net amount of cash received by the Company
after deduction of any underwriting or similar commissions, compensation or
concessions paid or allowed by the Company in connection with such issue or
sale but without deduction of any expenses payable by the Company, and (ii) to
the extent it consists of property or assets other than cash, the Fair Market
Value of the property or assets.
5.11 SIGNIFICANT SUBSIDIARIES. If any "significant subsidiary"
(as defined by Rule 1-02(w) of Regulation S-X under the Securities Act or any
successor rule) of the Company issues or grants (i) any capital stock or
equity ownership interest, including any Participating Security; (ii) any
rights, options, warrants or convertible securities that are exercisable for
or convertible into any capital stock or other equity ownership interest,
including any Participating Security; or (iii) any stock appreciation rights,
phantom stock rights, or any other profit participation rights, or any rights
or options to acquire any such rights, in each case of clauses (i), (ii) and
(iii) above, to any Person other than the Company or its wholly-owned
subsidiaries, the Company shall determine an anti-dilution adjustment, if any,
on a basis consistent with the essential intent and principles established in
this Section 5, necessary to preserve, without dilution, the purchase rights
represented by this Warrant. If such determination involves or is based on a
determination of the Fair Market Value of any securities or other assets or
property, such determination shall be made in accordance with the Valuation
Procedure.
6. FRACTIONAL SHARES. The Company may, but shall not be required to,
issue fractions of Exercise Shares upon exercise of the Warrant or distribute
certificates which evidence fractional Exercise Shares. As to any fractional
Exercise Share which the Holder would otherwise be entitled to purchase from
the Company upon such exercise, the Company may purchase from the Holder such
unissued fractional share at a price equal to an amount calculated by
multiplying such fractional share (calculated to the nearest 1/100th of a
share) by the then Fair Market Value of one Exercise Share determined in
accordance with the terms hereof. Payment of such amount shall be made in cash
or by check payable to the order of the Holder at the time of delivery of any
certificate or certificates arising upon such exercise.
7. REGISTRATION RIGHTS. The Holder shall have the registration rights
with respect to the Class A Common Stock, the Warrant and the Class A
Preferred Stock as set forth in that certain Registration Rights Agreement,
dated as of March 31, 2003 (the "Registration Rights Agreement") between the
Company and ATSB Securities Trust u/a/d March 31, 2003. To the extent that
this Warrant becomes exercisable for Exercise Shares other than the Class A
Common Stock, the Company agrees to grant the Holder hereof the same
registration rights with respect to such Exercise Shares as are currently
granted to Holder in respect of the Class A Common Stock pursuant to the
Registration Rights Agreement.
8. NO STOCKHOLDER RIGHTS OR LIABILITIES. This Warrant in and of
itself shall not entitle the Holder to any voting rights or other rights as a
stockholder of the Company (subject to the provisions of Section 5 above). No
provision of this Warrant, in the absence of affirmative action by the Holder
to exercise this Warrant in exchange for shares of Class A Common Stock or any
other equity securities issuable upon exercise of this Warrant, and no mere
enumeration herein of the rights or privileges of the Holder, shall give rise
to any liability of the Holder for the Exercise Price or as a stockholder of
the Company, whether such liability is asserted by the Company or by creditors
of the Company.
9. TRANSFER OF WARRANT. Subject to the restriction on transfers set
forth in the legend on the first page of this Warrant and in Sections 2.3 and
4.3 and applicable laws, this Warrant and all rights hereunder, in whole or in
part, are transferable, by the Holder in person or by duly authorized
attorney, upon delivery of this Warrant and the form of assignment attached
hereto as Annex B to any transferee designated by Holder.
10. PAYMENT OF TAXES ON STOCK CERTIFICATE ISSUES UPON EXERCISE. The
initial issuance of certificates of Exercise Shares upon any exercise of this
Warrant shall be made without charge to the exercising Holder for any
transfer, stamp or similar tax or for any other governmental charges that may
be imposed in respect of the issuance of such stock certificates, and such
stock certificates shall be issued in the respective names of, or in such
names as may be directed by, the Holder; provided, however, that the Company
shall not be required to pay any tax or such other charges that may be payable
in respect of any transfer involved in the issuance and delivery of any such
stock certificate, any new Warrants or other securities in a name other than
that of the Holder upon exercise of this Warrant (other than to an Affiliate),
and the Company shall not be required to issue or deliver such certificates or
other securities unless and until the Person or Persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or
shall have established to the satisfaction of the Company that such tax has
been paid.
11. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. Upon receipt of
evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and, in the case of any such loss,
theft or destruction, upon receipt of indemnity or security reasonably
satisfactory to the Company or, in the case of any such mutilation, upon
surrender and cancellation of this Warrant, the Company shall issue a new
Warrant, in lieu of the Warrant so lost, stolen, destroyed or mutilated, of
like denomination and tenor as this Warrant so lost, stolen, mutilated or
destroyed. Any such new Warrant shall constitute an original contractual
obligation of the Company, whether or not the allegedly lost, stolen,
mutilated or destroyed Warrant shall be at any time enforceable by anyone.
12. EXCHANGE OF WARRANT; DIVISIBILITY OF WARRANT. Subject to
compliance with Section 4.2 hereof, this Warrant is exchangeable, without
charge to any Holder, upon the surrender hereof by the Holder at the office or
agency of the Company, for one or more new Warrants of the tenor representing
in the aggregate the right to subscribe for and purchase the number of
Exercise Shares which may be subscribed for and purchased hereunder, each of
such new Warrants to represent the right to subscribe for and purchase such
number of shares as shall be designated by said Holder at the time of such
surrender.
13. CLOSING OF BOOKS. The Company will at no time close its transfer
books against the transfer of any Warrant or of any Exercise Shares issued or
issuable upon the exercise or conversion of any Warrant in any manner which
interferes with the timely exercise or conversion of this Warrant.
14. NOTICES, ETC. All notices required or permitted hereunder shall
be in writing and shall be deemed effectively given: (a) upon personal
delivery to the party to be notified, (b) when sent by confirmed telex or
facsimile if sent during normal business hours of the recipient or, if not,
then on the next Business Day, (c) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage prepaid, or
(d) one (1) Business Day after deposit with a nationally recognized overnight
courier, specifying next Business Day delivery, with written verification of
receipt. All notices and other communications shall be sent to the Company at
the address listed on the signature page and to the Holder at the address set
forth below or at such other address as the Company or the Holder may
designate by ten (10) days advance written notice to the other parties hereto:
ATSB Securities Trust u/a/d March 31, 2003 c/o the Trustee
Xxxxxx, Xxxxxx-Xxxxxxx, Colt & Mosle LLP 0000 Xxx Xxxxxxxxx
Xxxxxx, X.X.
Suite 430
Washington D.C., 20036
Attention: Xxxxxxx X. Xxxxxxxxx
Fax: (000) 000-0000
With a copy to:
Xxxxxx, Xxxxxx-Xxxxxxx, Colt & Mosle LLP
000 Xxxx Xxxxxx
Xxx Xxxx, X.X. 10178
Attention: Xxxxxx X. Xxxxxxx
Fax: (000) 000-0000
With a copy to:
Air Transportation Stabilization Board
0000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: Executive Director
Phone: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
United States Department of the Treasury
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Washington, D.C. 20220
Attention: Deputy Assistant Secretary for Government
Financial Policy
Phone: (000) 000-0000
Fax: (000) 000-0000
15. ACCEPTANCE. Receipt of this Warrant by the Holder shall
constitute acceptance of and agreement to all of the terms and conditions
contained herein.
16. BINDING EFFECT ON SUCCESSORS. This Warrant shall be binding upon
any Person succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets (to the extent provided in
Section 5), and all of the obligations of the Company relating to the Exercise
Shares issuable upon the exercise or conversion of this Warrant shall survive
the exercise, conversion and termination of this Warrant and all of the
covenants and agreements of the Company shall inure to the benefit of the
successors and assigns of the Holder.
17. SEVERABILITY. In case any one or more of the provisions contained
in this Warrant shall be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and therein shall not in any way be affected or impaired thereby. The
parties shall endeavor in good faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect
of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
18. SECTION HEADINGS. The section headings used herein are for
convenience of reference only, are not part of this Warrant and are not to
affect the construction of or be taken into consideration in interpreting this
Warrant.
19. NONWAIVER. No course of dealing or any delay or failure to
exercise any right hereunder on the part of the Holder shall operate as a
waiver of such right or otherwise prejudice the Holder's rights, powers or
remedies.
20. GOVERNING LAW. This Warrant and all rights, obligations and
liabilities hereunder shall be governed and construed in accordance with
Federal law, if and to the extent such Federal law is applicable and otherwise
in accordance with the law of the State of New York applicable to contracts
made and to be performed in the State of New York without regard to principles
of conflicts of law.
21. AMENDMENTS. This Warrant and any term hereof may be amended,
waived, discharged or terminated only by an instrument in writing signed by
the party against which enforcement of such change, waiver, discharge or
termination is sought; provided, that Section 5 hereof may not be amended
unless all outstanding Class A-1 Warrants of the Company are concurrently
amended to the same extent. From and after the date hereof, unless consented
to by the Required Holders, no amendment shall be made to the terms of any of
the Class A-1 Warrants of the Company issued concurrently with this Warrant
providing for any more favorable terms or benefits unless the Company agrees
to provide the Holders of this Warrant with the same more favorable terms or
benefits. Any such amendment or waiver shall be binding upon each future
Holder and upon the Company. In the event of a waiver or amendment and upon
the request of the Company, the Holder hereof shall submit this Warrant to the
Company so that this Warrant be marked to indicate such amendment or waiver
and any Warrant issued thereafter shall bear a similar notation referring to
any such amendment or continuing waiver.
22. SPECIFIC PERFORMANCE. Each Holder of this Warrant and Exercise
Shares, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Warrant. The Company agrees that monetary damages would not
be adequate compensation for any loss incurred by reason of a breach by it of
the provisions of this Warrant and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.
IN WITNESS WHEREOF, the parties hereto have caused this
Warrant to be executed by their respective duly authorized officers as of
March 31, 2003.
US AIRWAYS GROUP, INC.
By: /s/ Xxxx X. Xxxxx
----------------------------------------
Name: Xxxx X. Xxxxx
Title: Executive Vice President - Finance
and Chief Financial Officer
Address: 0000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
WARRANT HOLDER:
ATSB SECURITIES TRUST U/A/D MARCH 31, 2003
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Partner
Address: c/o the Trustee
Xxxxxx, Xxxxxx-Xxxxxxx, Colt & Mosle LLP,
0000 Xxx Xxxxxxxxx Xxxxxx, X.X.
Suite 430
Washington D.C., 20036
Annex A
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NOTICE OF EXERCISE
TO: US AIRWAYS GROUP, INC.
(1) [ ] The undersigned hereby elects to purchase ________
shares of the Class A Common Stock of US Airways Group, Inc.
(the "Company") pursuant to the terms of the attached
Warrant, and (i) tenders herewith or is delivering by wire
transfer to account number __________ at
_____________________ (bank) payment of the exercise price
in full, and (ii) tenders herewith the Warrant and
certificates representing the requisite number of shares of
Class A Preferred Stock, as set forth in Section 2.3 of the
Warrant; and/or
[ ] The undersigned hereby elects to purchase ________
shares of the Class A Common Stock of the Company pursuant
to the terms of the net exercise provisions set forth in
Section 2.2 of the attached Warrant.
(2) Please issue a certificate or certificates representing said
shares of Class A Common Stock in the name of the undersigned or in such other
name as is specified below:
---------------------------------
(Name)
---------------------------------
---------------------------------
(Address)
------------------------ ------------------------------ (Date)
(Signature)
-----------------------------------
(Print name)
Annex B
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form
and supply required information. Do not use this
form to purchase shares.)
FOR VALUE RECEIVED, the right to purchase _______ shares of Class A
Common Stock pursuant to the foregoing Warrant and all other rights evidenced
thereby and the corresponding shares of Class A Preferred Stock, as set forth
in Section 2.3 of the Warrant, are hereby assigned to
Name:
--------------------------------------------------------------
(Please Print)
Address:
--------------------------------------------------------------
(Please Print)
Dated:
-----------------
Holder's
Signature:
-------------------------------------
Holder's
Address:
---------------------------------------
NOTE: The signature to this Assignment Form must correspond with the name as
it appears on the face of this Warrant, without alteration or enlargement or
any change whatever. Officers of corporations and those acting in a fiduciary
or other representative capacity should file proper evidence of authority to
assign the foregoing Warrant.
