Document:

EXHIBIT 10.9

 Exhibit 10.9 
  
 Confidential 
  
 November 24, 2004 
  
 US Airways Group, Inc. 
 2345 Crystal Drive 
 Arlington, VA 22227 
  
 US Airways, Inc.

 2345 Crystal Drive 
 Arlington, VA 22227 
  
 General Electric Capital Corporation 
 c/o GE Capital Aviation Services, Inc. 
 201 High Ridge Road 
 Stamford, CT 06927-4900 
  

	Re:	Master Memorandum of Understanding (“Master MOU”) among US Airways, Inc. (including, as the context may require, as reorganized pursuant to the Bankruptcy Code,
“US Airways”), US Airways Group, Inc. (including, as the context may require, as reorganized pursuant to the Bankruptcy Code, “Group”), and General Electric Capital Corporation, acting through its agent GE Capital
Aviation Services, Inc. (“GECC”; and together with GE Capital Aviation Services, Inc. “GECAS”, GE Engine Services, Inc. “GE Engine Services” and General Electric Company, GE Transportation Component
“GEAE” and their respective affiliates, the “GE Entities”) 

  
 Gentlemen/Ladies: 
  
 This Master MOU, when
countersigned by the respective parties, shall set forth our understanding with respect to a restructuring of the indebtedness and obligations of US Airways and Group to the GE Entities, which understanding was reached in separate negotiations with
each of such respective parties in connection with the related matters contained herein. 
  
 In conjunction with the bankruptcy proceedings of Group and certain of its subsidiaries (including US Airways) under Chapter 11, Title 11 of the United States Code (the “Chapter 11 Case”) commenced on
September 12, 2004 (the “Petition Date”) in the United States Bankruptcy Court for the Eastern District of Virginia, Alexandria Division (the “Bankruptcy Court”), US Airways wishes to obtain and GECAS is willing to
provide (both during the Chapter 11 Case and upon emergence pursuant to a plan of reorganization (“Plan of Reorganization”) confirmed by the Bankruptcy Court) the following: (i) certain lease modifications with respect to certain
GECC aircraft leased to US Airways as described in Exhibit A; (ii) certain lease and other arrangements in respect 

  

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 Confidential 
  

 
of future regional jet acquisitions by US Airways (the “Regional Jet Lease Transactions”) as described in Exhibit B; (iii) certain
sale-leaseback transactions as described in Exhibit C; (iv) certain modifications to the financing evidenced by the Credit Agreement dated as of November 16, 2001 among US Airways, as Borrower, GECC, as Lender and Group, as Guarantor (as
amended, supplemented and modified, the “2001 Facility”) and the Exit Liquidity Facility Agreement dated as of March 31, 2003 among US Airways, as Borrower, GECC, as Lender and Group, as Guarantor (as supplemented and modified, the
“2003 Liquidity Facility”) as described in Exhibit D; (v) a new bridge financing facility as further described in Exhibit E (the “Bridge Facility”); and (vi) waiver of registration penalties for the
[REDACTED] EETC as described in Exhibit F. In consideration of the foregoing, US Airways has agreed to issue certain Convertible Notes to a GE Entity upon emergence from the Chapter 11 Case, the terms of which are described in
Exhibit G. 
  
 In addition, US Airways wishes to obtain certain
modifications with respect to certain of its contracts with GE Engine Services and GEAE, and GE Engine Services and GEAE are willing to modify such provisions of such contracts with US Airways, as further described in Exhibit H. 

 
 Each of these transactions and modifications is to occur pursuant to the terms and
conditions set forth in the following applicable term sheets attached as Exhibits A through H (each, a “Term Sheet” and, collectively, the “Term Sheets”). Certain of the transactions and modifications
described in the Term Sheets are scheduled to take effect upon judicial approval of the Master MOU no later than December 17, 2004 or described in the attached term sheets as a Phase I Transaction (the “Phase I Transactions”);
others are scheduled to take effect on January 18, 2004 or described in the attached term sheets as a Phase II Transaction (the “Phase II Transactions”); and others are scheduled to take effect upon US Airways’ exit from
bankruptcy or described in the attached term sheets as an Exit Transaction (the “Exit Transactions” and, together with the Phase I Transactions and the Phase II Transactions, the “Restructuring Transactions”). 

 

			
	 Exhibit A:
	  	 Aircraft Lease Term Sheet

		
	 Exhibit B:
	  	 Regional Jet Lease Transactions Term Sheet

		
	 Exhibit C:
	  	 Sale-Leaseback Term Sheet

		
	 Exhibit D:
	  	 Existing Facilities Term Sheet

		
	 Exhibit E:
	  	 Bridge Facility Term Sheet

		
	 Exhibit F:
	  	 [REDACTED] EETC Term Sheet

		
	 Exhibit G:
	  	 Convertible Note Term Sheet

		
	 Exhibit H:
	  	 GEAE Restructuring Term Sheet

  

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 Confidential 
  

 The parties further acknowledge and agree that (i) the Restructuring Transactions contemplated in this Master MOU are
comprised of several separate interrelated transactions (each of which is individually described in its respective Term Sheet), and (ii) each Phase I Transaction and Phase II Transaction is expressly conditioned upon the consummation of every other
Phase I Transaction and Phase II Transaction. In no event shall any Term Sheet be viewed as a stand-alone transaction. Accordingly, each of the transactions and modifications contemplated by the Term Sheets must be evidenced by executed definitive
agreements in order to effectuate the Restructuring Transactions. 
  
 Each of the
Phase I Transactions, the Phase II Transactions and the Exit Restructuring Transactions shall only take effect on the effective dates and, in each case subject to the satisfaction of applicable conditions, for such transactions (whether such
conditions are provided for in the schedules to this Master MOU or in the applicable Term Sheet). 
  
 Each and every obligation of US Airways and Group to a GE Entity, or to another party where nonperformance of such obligation could impose an obligation on a GE Entity, which may be created under this Master MOU and
the Term Sheets (such obligations of US Airways and Group, the “US Airways Restructuring Obligations”) will be (i) cross-defaulted to each and every US Airways Restructuring Obligation unless such cross-default has specifically been
waived by the affected GE Entity or in the Term Sheets and (ii) cross-defaulted with the cash collateral order in respect of the existing loan guaranteed by the Air Transportation Stabilization Board (the “ATSB”) in accordance with
the Air Carrier Guarantee Loan Program (the “ATSB Loan”). 
  
 Each of the parties hereto acknowledges that this Master MOU and the related Term Sheets contain commercially sensitive and proprietary information. Each of the parties agrees to keep this information strictly confidential and agrees to
disclose it to no person other than: (A) their respective board(s) of directors; (B) employees working on the subject matter of this Master MOU; (C) professional advisors advising them concerning the subject matter of this Master MOU provided that
US Airways and such outside professional advisors execute a confidentiality agreement in form and substance acceptable to GECC and GE Engine Services; (D) the ATSB, provided that US Airways shall use commercially reasonable efforts to prevent
disclosure of such information under the Freedom of Information Act; (E) the Bankruptcy Court during the course of the Chapter 11 Case, provided, however, that no document shall be filed with the Bankruptcy Court unless either there
has been obtained prior to the filing thereof an order of the Bankruptcy Court enabling US Airways to file those portions of the documents under seal or portions of such filed documents designated by GECC are redacted, in each case, as GECC shall
request in its sole discretion; (F) the professional advisors of the Official Committee of Unsecured Creditors (the “Creditors’ Committee”), but only to the extent that designated portions of such material to be disclosed are
redacted, in each case, as GECC shall request in its sole discretion, members of the Creditors’ Committee, and (G) any potential debtor-in-possession (“DIP”) lender and equity investors provided that such entities shall, in
each case prior to disclosure, execute a confidentiality agreement in form and substance acceptable to GECC and GEAE. A written summary of the Restructuring 

  

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 Confidential 
  

 
Transaction, approved by GECC in advance of disclosing such summary, may be provided to (i) US Airways’ and Group’s labor unions, (ii) any lender,
potential lender, or participant, (iii) any material stakeholder in US Airways’ and Group’s proposed restructuring, (iv) the Creditors’ Committee (but only if such summary has been redacted in a manner satisfactory to GECC as provided
above) or (v) such other third parties as the parties hereto may mutually agree; provided that such parties described in (i) – (v) above have executed a confidentiality agreement in form and substance acceptable to GECC and GE Engine Services.
The parties agree that the terms of this Paragraph will survive any termination, through expiration or otherwise, of the Term Sheets that are the subject hereof. 
  
 Subject to the conditions set forth in Schedule A, Schedule B and Schedule C hereto with respect to the Phase I
Transactions, the Phase II Transactions and the Exit Restructuring Transactions, this Master MOU and the Term Sheets are intended to create binding legal obligations among the parties. Reference is made to the milestones and events described in
Schedule D hereto (as the same may be amended, each a “Global Event of Default”). 
  
 This Master MOU may not be modified or amended in any manner other than in writing duly executed by or on behalf of all of the parties hereto. 
  
 Once this Master MOU has been countersigned, the parties will proceed to finalize appropriate definitive agreements and to commence the
other steps that will be necessary or appropriate to complete the transactions contemplated by the Term Sheets. 
  
 This Master MOU may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original, and such counterparts together shall
constitute and be one and the same instrument. 
  
 [Signature pages
follow.] 
  

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 Confidential 
  

 IN WITNESS WHEREOF, this Master MOU was entered into the day and year first above written. 
  

			
	 For and on behalf of

	
	 US AIRWAYS GROUP, INC.

		
	Name:	 	 /s/ Eilif Serck-Hanssen

	 Title:
	 	 Senior Vice-President Finance & Treasurer

  

			
	
	US AIRWAYS, INC.
		
	Name:	 	 /s/ Eilif Serck-Hanssen

	 Title:
	 	 Senior Vice President Finance & Treasurer

  

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 Confidential 
  

			
	
	GENERAL ELECTRIC CAPITAL CORPORATION
		
	Name:	 	 /s/ Michael Kreidberg

	 Title:
	 	 Vice President

  

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 Confidential 
  

			
	 GENERAL ELECTRIC COMPANY, GE TRANSPORTATION COMPONENT

		
	 Name:
	 	 /s/ John Falconi

	 Title:
	 	 Vice President

  

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 Confidential 
  

  
 Schedule A

  
 Phase I Transaction Conditions 
  

	1.	Consummation of each Phase I Transaction. 

  

	2.	Satisfactory negotiation, review and agreement of definitive documentation, including legal review, for the Phase I Transactions in form and substance acceptable to US Airways and
Group on the one hand and to GECAS, GECC, GE Engine Services, or GEAE, as applicable on the other hand. 

  

	3.	Bring-down due diligence (including, but not limited to, credit analysis, business review, legal review and review of capital, operating structure (including mainline and regional
operations)) respecting US Airways and Group satisfactory to GECAS, GECC, GE Engine Services, or GEAE, as applicable, in their sole discretion. 

  

	4.	Approval by the Bankruptcy Court of all transactions on or before December 17, 2004, which order (a) shall be in form and substance acceptable to GECC in its sole discretion and (b)
shall not be subject to an appeal, motion for rehearing or reconsideration or petition for writ of certiorari and the time to file such appeal, motion or petition shall have expired. 

  

	5.	Payment or reimbursement of all reasonable costs and expenses, including without limitation, reasonable legal fees (including legal fees accruing prior to the Petition Date) of the
GE Entities to date. 

  

	6.	No occurrence of a Global Event of Default. 

  

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 Confidential 
  

  
 Schedule B

  
 Phase II Transaction Conditions 
  

	1.	Consummation of the Phase I Transactions and each Phase II Transaction. 

  

	2.	Satisfactory negotiation, review and agreement of definitive documentation, including legal review, for the Phase II Transactions in form and substance acceptable to US Airways and
Group on the one hand and to GECAS, GECC, GE Engine Services, or GEAE, as applicable on the other hand. 

  

	3.	Bring-down due diligence (including, but not limited to, credit analysis, business review, legal review and review of capital, operating structure (including mainline and regional
operations) and governance structure) respecting US Airways and Group satisfactory to GECAS, GECC, GE Engine Services, or GEAE, as applicable, in their sole discretion. 

  

	4.	Payment or reimbursement of all reasonable costs and expenses, including without limitation, reasonable legal fees (including legal fees accruing prior to the Petition Date) of the
GE Entities to date. 

  

	5.	No occurrence of a Global Event of Default. 

  

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 Confidential 
  

  
 Schedule C

  
 Exit Restructuring Transaction Conditions

  

	1.	Consummation of the Phase I and Phase II Transactions and each other Exit Transaction. 

  

	2.	Satisfactory negotiation, review and agreement of definitive documentation, including legal review, for the Exit Transactions in form and substance acceptable to US Airways and
Group on the one hand and to GECAS, GECC, GE Engine Services, or GEAE, as applicable on the other hand. 

  

	3.	Bring-down due diligence (including, but not limited to, plan of reorganization, credit analysis, business review, legal review and review of capital structure, business plan,
regional carrier arrangements, ownership structure, equity ownership, listing and public securities arrangements, exit financing arrangements) respecting US Airways and Group satisfactory to GECAS, GECC, GE Engine Services, or GEAE, as applicable,
in their sole discretion. 

  

	4.	Assumption of all leases and executory contracts as modified in accordance with the Restructuring Transaction with GE Entities on or prior to emergence from the Chapter 11 Case.

  

	5.	The applicable provisions of the Plan of Reorganization and the order confirming the Plan of Reorganization shall be consistent with the terms of the Restructuring Transactions
described in this Master MOU. 

  

	6.	Payment or reimbursement of all reasonable costs and expenses, including without limitation, reasonable legal fees (including legal fees accruing prior to the Petition Date) of the
GE Entities to date. 

  

	7.	No occurrence of a Global Event of Default. 

  

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 Confidential 
  

  
 Schedule D

  
 Global Events of Defaults 
  

	1.	Continued compliance with the following milestones during the Chapter 11 Case: 

  

			
	 Date

	  	 Milestone

	 November 26, 2004
	  	Filing of motion to approve the global GE transaction
		
	 December 17, 2004
	  	Final judicial approval of the global GE transaction
		
	 December 20, 2004
	  	Closing of the Bridge Facility
		
	 January 14, 2005
	  	Final judicial order granting permanent labor contract, retiree health and pension relief in amounts at least equal to the amount of relief requested in the US Airways’ request for
relief
		
	 January 14, 2005
	  	Implementation of definitive agreements with a third party or third parties to provide the US Airways with at least $100 million of incremental liquidity, cost reductions or concessions during
the Chapter 11 Case
		
	 January 14, 2005
	  	Implementation of a program reasonably forecasted to produce a mutually acceptable level of annual savings in non-labor costs from the US Airways’ business plan
		
	 January 18, 2005
	  	Final judicial order approving extension of ATSB cash collateral order through June 30, 2005 under current terms revised only for restated and reasonable financial covenants
		
	 January 18, 2005
	  	Filing of a substantive plan of reorganization reasonably acceptable to GE
		
	 January 18, 2005
	  	Closing of the Phase II Transactions
		
	 February 18, 2005
	  	Filing of a substantive disclosure statement reasonably acceptable to GE
		
	 March 30, 2005
	  	Commencement of the disclosure statement hearing
		
	 May 16, 2005
	  	Commencement of the confirmation hearing
		
	 May 23, 2005
	  	Final judicial approval of a plan of reorganization reasonably acceptable to GE
		
	 June 30, 2005
	  	Plan of Reorganization implementation and emergence from the Chapter 11 Case

  

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 Confidential 
  

	2.	Continued compliance with the following financial covenants (expressed in millions of US dollars): 

  

																									
	 Month End

	  	Nov

	 	 	Dec

	 	 	Jan

	 	 	Feb

	 	 	Mar

	 	 	Apr

	 	 	May

	 	 	Jun

	 
	 Cumulative EBITDAR*
	  	[Redacted	]	 	[Redacted	]	 	[Redacted	]	 	[Redacted	]	 	[Redacted	]	 	[Redacted	]	 	[Redacted	]	 	[Redacted	]
									
	 Unrestricted Liquidity**
	  	[Redacted	]	 	[Redacted	]	 	[Redacted	]	 	[Redacted	]	 	[Redacted	]	 	[Redacted	]	 	[Redacted	]	 	[Redacted	]

  

	3.	No event of default or material breach beyond any applicable notice and cure period under any agreement between US Airways, Group and any GE Entity (including without limitation,
any default arising on account of any cross-default or upon the rejection of any lease) other than those expressly waived in the Term Sheets and Excepted Obligations as currently defined in the 2001 Facility (the “Excepted
Obligations”). 

  

	4.	No continuing default or material breach or the occurrence of any termination event beyond any applicable notice and cure period under the Cash Collateral Order relating to the ATSB
Loan and no material breach or event of default beyond any applicable notice and cure period under any Debtor-in-Possession Facility (in each case, irrespective of whether the ATSB has agreed to waive or forebear exercising rights with respect to
such default, breach or termination event). 

	*	To be reset, as mutually agreed on or before December 15, 2004 at no more than a [REDACTED]% deviation from plan levels. 

  

	**	To be reset, if necessary, at [REDACTED]% of plan levels on or before December 15, 2004. 

  

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 Confidential 
  

  
 EXHIBIT A

 Aircraft Lease Term Sheet 
  

			
	Lessee:	  	US Airways, Inc. (“US Airways” or “Lessee”).
		
	Owner Participant:	  	GECC and/or its subsidiary, affiliate, associated company or assignees.
		
	Lessor:	  	Any entity in which Owner Participant is the beneficial owner or a subsidiary or affiliate of GECC, as in the relevant lease.

  
 Except as indicated below, US
Airways shall perform all of its obligations under any existing aircraft lease contract with any Lessor both during the Chapter 11 Case and upon emergence from Chapter 11 pursuant to consensual 1110(a) agreements effective during the pendency of
Debtors’ Chapter 11 Cases, or amendments to pre-petition agreements, it being agreed that, except as set forth in the Master MOU or the Term Sheets, the same shall not constitute an assumption of any such agreement or a post-petition contract
for purposes of, among other things, Sections 365, 503 and 507 of the Bankruptcy Code, but shall be subject to Lessee’s obligations under Section 1110 of the Bankruptcy Code. 
  
 PART 1 – PHASE I TRANSACTIONS 
  

	A.	Existing Operating Leases for the Airbus Aircraft 

  

			
	 [REDACTED] EETC
 Leases:
	  	The A321 leases between US Airways and the Lessor subject to the [REDACTED] EETC (the “[REDACTED] A321 Leases”) with respect to the aircraft
identified on Schedule A hereto will remain unchanged. US Airways acknowledges that Owner Participant has cured the Basic Rent payment payable on September 20, 2004 in the amount of $[REDACTED] (the “Cure Amount”), and GE
shall waive cross-default provisions in its other financing agreements with US Airways in respect of the failure of Lessee to make such Basic Rent payment. US Airways shall make: (i) full cure payments on or before December 20, 2004 of all amounts
payable under the [REDACTED] A321 Leases other than the Cure Amount and (ii) full contract rental payments (including supplemental rent and other amounts due) and performance under the [REDACTED] A321 Leases during the Chapter 11
Case.
		
	Return of Airbus Aircraft:	  	The nine (9) A319 aircraft and one (1) A320 aircraft on operating leases will be amended to provide expiry dates according to the return schedule listed as Schedule B to this Exhibit A. Lessee
and Lessor will swap the last three aircraft on the list (tail numbers [REDACTED], [REDACTED] and [REDACTED]) with three (3) A319 aircraft currently securing the 2001 Facility bearing tail

  

 1 

 Confidential 
  

			
	 	  	numbers [REDACTED], [REDACTED] and [REDACTED] upon consummation of the Phase II Transactions.
		
	 	  	Amended Redelivery conditions are to be agreed upon no later than December 17, 2004.

  

	B.	Existing Leases For The Boeing Fleet 

  

			
	Rent Payments:	  	On December 20, 2004, US Airways will pay all amounts then due and payable for the B737-300 Aircraft identified on Schedule C (such transactions, the “Boeing 733 SIL
Transactions”) and for the Boeing 757 Aircraft identified on Schedule D (the “Boeing 757 SIL Transactions”, and together with the Boeing 733 SIL Transactions, the “Boeing SIL Transactions”), which payment
obligations are deferred to such date, and thereafter through the remainder of the Chapter 11 Case, US Airways shall pay and perform in full, all obligations with respect to the Boeing SIL Transactions and the Boeing 737-400 single investor leases
described below.
		
	 Leveraged Lease B737-400
 Aircraft:
	  	Upon Bankruptcy Court approval of the Restructuring Transaction (assumed to be no later than December 17, 2004), GECC will, with respect to the five (5) B737-400 aircraft with
manufacturer’s serial number [REDACTED], [REDACTED], [REDACTED], [REDACTED] and [REDACTED], waive cross-default provisions in its other financing agreements with US Airways, and Lessor will relinquish its
interest in such aircraft with no resulting claims asserted by the Owner Participant against the bankruptcy estate.
		
	Boeing 737 SIL Aircraft:	  	In lieu of any extension or purchase options in the Boeing 733 SIL Transactions, Lessee shall have the right to extend the expiry dates on the single investor lease documentation relating to the
Boeing 733 SIL Transactions to the dates specified on Schedule C hereto at the rental rate of $[REDACTED] per month. Redelivery conditions to be negotiated prior to December 17, 2004. GE will consider engine swapping
arrangements.

  
 PART 2 – EXIT TRANSACTIONS

  

			
	 [REDACTED] EETC
 Cure
Payment:
	  	The Cure Amount will be repaid immediately as “Supplemental Rent” under the [REDACTED] A321 Leases, together with interest payable at the default rate (as such default rate is
specified in the A321 Leases).

  

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 Confidential 
  

			
	 Modification of Rental
 Amounts:
	  	Upon US Airways’ emergence from the Chapter 11 Case, a pre-emergence “true-up” payment for rent accrued and unpaid from the last payment date on the Boeing SIL Transactions to the
date immediately prior to the emergence date shall be made at a monthly lease rental rate of $[REDACTED] per month per aircraft, pro rated for partial months. From and after the date of US Airways’ emergence from the Chapter 11 Case, the
monthly lease rental rates for the Boeing SIL Transactions shall be paid in advance, pro rated for partial months, and in the amount of $[REDACTED] per month per aircraft. Upon the next payment date after emergence, in respect of the B737-400
single investor lease aircraft, rents shall be paid in advance, pro rated for partial months in the amount of $[REDACTED] per month per aircraft. All amounts noted above reflect the average monthly lease rate across the relevant fleet with
variations for individual aircraft within each fleet.
		
	 B737-400 SIL Restructure
 Option:
	  	GECC will provide US Airways with the option to restructure any number of the B737-400 single investor leases to monthly rentals (payable in advance) of $[REDACTED] at sixty (60), ninety
(90) or one hundred-eighty (180) days following the issuance of Convertible Notes, for cash or Convertible Notes of equal market value under the indicative pricing schedule contained on Schedule E to the Exhibit A.

  
 All capitalized terms used herein, but
not otherwise defined herein shall have the respective meanings ascribed to such terms in the Master MOU. 
  

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 Confidential 
  

  
 SCHEDULE A TO
EXHIBIT A 
  
 (Description of the [REDACTED] A321
Leases) 
  
 [SCHEDULE REDACTED] 
  

 4 

  
 SCHEDULE B TO EXHIBIT A

  
 (Description of the Airbus Aircraft)

  

	
	 Return Date*

	 February 2005

	 March 2005

	 April 2005

	 May 2005

	 June 2005

	 July 2005

	 August 2005

	 September 2005

	 September 2005

	 September 2005

  

	*	Aircraft to be returned pursuant to this schedule are all A319/A320 aircraft with the following tail numbers: [REDACTED], [REDACTED], [REDACTED],
[REDACTED], [REDACTED], [REDACTED], [REDACTED], [REDACTED], [REDACTED] and [REDACTED], subject to the swap described in the “Return of Airbus Aircraft” section in Part I of this Exhibit A.
US Airways will indicate which specific aircraft apply to the schedule dates above by December 3, 2004. 

  

 5 

  
 SCHEDULE C TO EXHIBIT A

  
 (Description of the 733 SIL Transactions)

  

			
	 Aircraft Type

	  	 Extension Option Date*

	 B737-300
	  	February 2006
	 B737-300
	  	March 2006
	 B737-300
	  	April 2006
	 B737-300
	  	April 2006
	 B737-300
	  	May 2006
	 B737-300
	  	May 2006
	 B737-300
	  	June 2006
	 B737-300
	  	July 2006
	 B737-300
	  	November 2006
	 B737-300
	  	January 2007
	 B737-300
	  	March 2007
	 B737-300
	  	April 2007
	 B737-300
	  	May 2007
	 B737-300
	  	July 2007
	 B737-300
	  	August 2007

  

	*	Specific aircraft return schedule to be agreed. 

  

 6 

  
 SCHEDULE D TO EXHIBIT A

  
 (Description of the 757 SIL Transactions)

  
 [SCHEDULE REDACTED] 
  

 7 

  
 SCHEDULE E TO EXHIBIT A

  

							
	 	 	 Illustrative Buy Out Date

	 MSN

	 	 30-Aug-05

	 	 30-Sep-05

	 	 31-Dec-05

	 [REDACTED]
	 	 [REDACTED]
	 	 [REDACTED]
	 	 [REDACTED]

	 [REDACTED]
	 	 [REDACTED]
	 	 [REDACTED]
	 	 [REDACTED]

	 [REDACTED]
	 	 [REDACTED]
	 	 [REDACTED]
	 	 [REDACTED]

	 [REDACTED]
	 	 [REDACTED]
	 	 [REDACTED]
	 	 [REDACTED]

	 [REDACTED]
	 	 [REDACTED]
	 	 [REDACTED]
	 	 [REDACTED]

	 [REDACTED]
	 	 [REDACTED]
	 	 [REDACTED]
	 	 [REDACTED]

	 [REDACTED]
	 	 [REDACTED]
	 	 [REDACTED]
	 	 [REDACTED]

	 [REDACTED]
	 	 [REDACTED]
	 	 [REDACTED]
	 	 [REDACTED]

	 [REDACTED]
	 	 [REDACTED]
	 	 [REDACTED]
	 	 [REDACTED]

	 [REDACTED]
	 	 [REDACTED]
	 	 [REDACTED]
	 	 [REDACTED]

	 [REDACTED]
	 	 [REDACTED]
	 	 [REDACTED]
	 	 [REDACTED]

	
	 	
	 	
	 	

	 Total
	 	$91.0	 	$90.1	 	$86.8
	
	 	
	 	
	 	

  
 This indicative pricing schedule
assumes average monthly rentals of $[REDACTED] through the buy out date. The pricing schedule will be revised and mutually agreed to prior to emergence from the Chapter 11 Case to reflect the final actual buy out dates. 
  

 8 

  
 EXHIBIT B 

Regional Jet Lease Transactions Term Sheet 
  
 PHASE II & EXIT TRANSACTION 
  

			
	Lessee:	  	US Airways, Inc. (“US Airways”)
		
	Lessor:	  	GECC, acting through its agent GECAS and/or its subsidiary, affiliate, associated company or assignees (“Lessor”).
		
	Regional Jet Aircraft:	  	Up to thirty-one (31) regional jet aircraft to be acquired by US Airways or via the GECAS order stream. The aircraft to be leased will consist of 70- to 100-seat regional jet aircraft
manufactured by Bombardier and/or Embraer in a mix and other terms to be agreed mutually by GECC and US Airways.
		
	Lease Transaction Terms:	  	In addition to those described in the RJ Leasing Agreement (described below), the Lease Transactions will have the following terms and conditions:
		
	 	  	(i) [REDACTED];
		
	 	  	(ii) [REDACTED];
		
	 	  	(iii) Lessor’s cost to be determined and subject to GE’s satisfaction;
		
	 	  	(iv) updated credit rating and MAC benchmark and financial covenants to be agreed;
		
	 	  	(v) the Lease Transactions shall not be leveraged leases; and
		
	 	  	(vi) GECC reaching agreement with each aircraft manufacturer, including order stream relief for aircraft leased from US Airways’ order book.
		
	Interim Leases (Phase II):	  	Of the aircraft noted above, GECC will lease to US Airways six (6) CRJ-700s beginning between January 18, 2005 and February 28, 2005 and ending the earlier of (i) the date of emergence from the
Chapter 11 Case or (ii) June 30, 2005 and cross-defaults shall include the occurrence of a Global Event of Default. Each lease will be a post-petition agreement, but only rent payable through June 30, 2005 (as the parties may agree to extend) and
return condition obligations shall be afforded administrative expense status, and all other claims under such lease, including rejection damage claims, would be unsecured pre-petition claims. The leases will be extended upon emergence from
the

  

 9 

			
	 	  	Chapter 11 Case based on the terms noted above.
		
	Timing of SIL Transactions:	  	GECC will provide US Airways with the remaining regional jet aircraft between 2005 and 2007 roughly on a one for one basis with the removal of GECC’s Airbus and Boeing aircraft from US
Airways’ mainline fleet.
		
	PDP Financing:	  	GECC will have no obligation to provide pre-delivery financing.
		
	Documentation:	  	On or before January 18, 2005, US Airways and GECC shall execute an agreement reinstating that portion of the RJ Lease Transaction and Debt Financing Agreement dated as of December 18, 2003 (as
amended “RJ Leasing Agreement”) pursuant to which GECC will provide the Lease Transactions on terms consistent with the single-investor lease transactions described therein with changes to reflect the terms of this Exhibit B and
other modifications as required by GECC and acceptable to US Airways; the obligations under the reinstated RJ Leasing Agreement shall not be afforded administrative expense status.

  
 All capitalized terms used herein, but
not otherwise defined herein shall have the respective meanings ascribed to such terms in the Master MOU. 
  

 10 

  
 EXHIBIT C 

Sale-Leaseback Term Sheet 
  
 PHASE II TRANSACTIONS 
  

			
	Seller/Lessee:	  	US Airways, Inc. (“US Airways”)
		
	Purchaser/Lessor:	  	A subsidiary, affiliate, associated company or assignee of GECC (“Purchaser”).
		
	Purchase:	  	Purchaser will purchase (i) the collateral securing the 2001 Facility: three (3) A319 aircraft, three (3) A320 aircraft, five (5) A321 aircraft, fourteen (14) CFM56- 5B spare engines and
fourteen (14) CFM56-3B spare engines and (ii) nine (9) CRJ-200 aircraft and one (1) CRJ-700 aircraft, that are currently mortgage debt financed by GECC, for $640.42 million, pricing assumes the inclusion of engine stands (to the extent included in
the 2001 Facility collateral) and eight (8) full QEC kits for the CFM56-5B6 with a purchase price adjustment to be mutually agreed to half-life/half-time conditions of the spare engines at the closing (the “Purchase
Price”).
		
	Use of Proceeds:	  	Seller shall use the sale proceeds to repay in its entirety:
		
	 	  	 (i) first, the 2003 Liquidity Facility;
  
 (ii) second, the GE mortgage debt financing for the CRJs (the “RJ Loans”); and
  
 (iii) third, the 2001 Facility (assuming no purchase price adjustments, leaving a stipulated and agreed loan balance of $14.99
million).

		
	Closing Date:	  	Assumed to be January 18, 2005.
		
	Lease Terms:	  	Initial lease terms shall end on the earlier of (i) emergence from the Chapter 11 Case or (ii) June 30, 2005.
		
	 	  	Upon emergence from the Chapter 11 Case, leases will be extended as follows:
		
	 	  	(i) A319 and A320: an average [REDACTED] year term from inception;
		
	 	  	(ii) A321: an average [REDACTED] year term from inception;

  

 11 

			
		
	 	  	(iii) CFM56-5B6: an average [REDACTED] year term from inception, with the exception of two (2) spare engines (bare), one of which shall be returned in June 2005 and the other in September
2005;
		
	 	  	(iv) CFM56-3B2: an average [REDACTED] year term from inception, with the exception of three (3) engines which are to be returned as every [REDACTED] Boeing 733 SIL Transaction
aircraft is returned;
		
	 	  	(v) CRJ-200 and CRJ-700: per the terms noted in Exhibit B hereto and assuming a purchase of $[REDACTED] million for each CRJ-200 and $[REDACTED] million for each CRJ-700, as
adjusted for delivery condition.
		
	Lease Rentals:	  	 A319: $[REDACTED]
 A320:
$[REDACTED]
 A321: $[REDACTED]
 CFM56-5B6 (bare):
$[REDACTED]
 CFM56-5B6 (full QEC): $[REDACTED]
 CFM56-3B2 (bare): $[REDACTED]
 CRJ-200/CRJ-700: per the terms noted in Exhibit B hereto.

		
	 	  	Rents will be payable monthly in advance.
		
	Miscellaneous:	  	Seller shall pay all accrued and unpaid interest and other amounts due under the 2001 Facility and the RJ Loans on the Closing Date. Return conditions for the aircraft and the engines, to be
agreed, but in general will allow for half life/half time return conditions for aircraft and same-in/same-out for engines with financial adjustments for differences in actual return conditions but subject to minimum redelivery conditions
[REDACTED]. Leases will be cross-defaulted to any obligation to any GE Entity (other than Excepted Obligations), including any Global Event of Default. Documentation for aircraft to be modeled after the existing leases relating to the
aircraft listed in Schedule B to Exhibit A. Documentation for engine leases to be modeled after the existing leases relating to the aircraft listed in Schedule B to Exhibit A, with appropriate changes for a spare engine operating lease. Each lease
will be a post-petition agreement, but only rent payable through June 30, 2005 (as the parties may agree to extend) and return condition obligations shall be afforded administrative expense status, and all other

  

 12 

			
	 	  	claims under such lease, including rejection damage claims, would be unsecured pre-petition claims.

  
 All capitalized terms used herein, but
not otherwise defined herein shall have the respective meanings ascribed to such terms in the Master MOU. 
  

 13 

  
 EXHIBIT D 

Existing Facilities Term Sheet 
  
 PART 1 –PHASE II TRANSACTIONS 
  

			
	Borrower:	  	US Airways, Inc. (“Borrower”)
		
	Lender:	  	General Electric Capital Corporation (“Lender”).
		
	Amendments:	  	Upon consummation of the sale-leaseback transaction set forth in Exhibit C, the 2001 Facility shall be amended as follows:
		
	 	  	(i) US Airways may make an additional $10 million draw on January 18, 2005 leaving a loan balance of $24.99 million (assuming $14.99 million balance after the sale/leaseback as may be
adjusted to reflect the actual Purchase Price);
		
	 	  	(ii) Interest rate will be the sum of (i) three-month US Dollar LIBOR as quoted on Bloomberg Page BBAM 1 (British Bankers Association page) and (ii) 4.25%;
		
	 	  	(iii) interest only during the Chapter 11 Case, payable quarterly in arrears;
		
	 	  	(iv) principal to be repaid ratably over the twenty-four (24) months following the emergence from the Chapter 11 Case;
		
	 	  	(v) Collateral securing the loan will be a third (3rd)
lien position subject to first (1st) and second (2nd) lien positions on four (4) CRJ-700 aircraft and a first (1st) lien position on one (1) CF34 spare engine (collectively, the “Collateral”); and
		
	 	  	(vi) additional events of defaults as may be appropriate during the Chapter 11 Case, including a Global Event of Default.
		
	Special Conditions:	  	On December 20, 2004, all accrued and unpaid interest relating to the 2001 Facility shall be paid (such payment to be a Phase I Transaction). The principal payment that had been due on
November 16, 2004 shall be deferred and paid on the earlier of the consummation of the sale and leaseback transaction or January 18, 2005.

  

 14 

			
	 	  	Satisfaction in GECC’s sole discretion of not more than an aggregate of $62 million of liens prior to GE on the Collateral.
		
	 	  	Subject to consent of the lienholders senior to GE on the Collateral described above and entering into inter-creditor arrangements with such parties acceptable to GE.

  
 PART 2 – EXIT TRANSACTIONS

  

			
	Plan of Reorganization:	  	The Plan of Reorganization shall provide that the 2001 Facility, as amended in accordance herewith, shall be unimpaired.

  
 All capitalized terms used herein, but
not otherwise defined herein shall have the respective meanings ascribed to such terms in the Master MOU. 
  

 15 

  
 EXHIBIT E 

Bridge Facility Term Sheet 
  
 PART 1 –PHASE I TRANSACTIONS 
  

			
		
	Borrower:	  	US Airways, Inc. (“Borrower”)
		
	Lender:	  	General Electric Capital Corporation (“Lender”).
		
	 Bridge Facility
 Closing
Date:
	  	December 20, 2004.
		
	Facility Loans:	  	The Lender will make liquidity loans available to Borrower (the “Bridge Facility Loans”) as described on Schedule A hereto. The facility will be cross-collateralized and
cross-defaulted with all other GE Entity obligations and will be stipulated and approved as an administrative claim with priority over all other administrative claims other than for aircraft financing deferrals, which shall be pari passu, and only
subordinate to “superpriority” administrative claims of the ATSB Loan (including the carve-outs contained therein), post-petition wages and benefits, and new money DIP financing.
		
	Drawing Notices	  	Each disbursement will be made on the drawdown date specified therefore in Schedule A and Borrower will be deemed to have executed and delivered the Borrowing Notice, unless Borrower notifies
Lender to the contrary in writing prior to the LIBOR Setting Date (defined below).
		
	Accreting Grid Note:	  	Each disbursement of a Bridge Facility Loan made with respect to the Bridge Facility will be evidenced on an accreting grid note (the “Bridge Facility Note”) as described
below.
		
	Interest:	  	The Bridge Facility Note shall bear floating rate interest quarterly in arrears based on the average outstanding daily balance of the Bridge Facility during the preceding quarter. The annual
interest rate shall be computed as the sum of (i) three-month US Dollar LIBOR, as quoted on Bloomberg Page BBAM 1 (British Bankers Association page) on the applicable LIBOR Setting Date” and (ii) 4.25%, and such interest rate shall accrue on an
actual/360 basis. Interest may be paid in US dollars or in kind at the option of Borrower during the Chapter 11 Case. The “LIBOR Setting Date” shall be the date which is two (2) Business Days in advance of the applicable three-month
LIBOR period.
		
	Loan Repayment:	  	Principal amounts and interest paid in kind due under the Bridge

  

 16 

			
		
	 	  	Notes will be payable in full on the Maturity Date.
		
	Maturity Date:	  	Upon emergence from the Chapter 11 Case, which Bridge Facility shall be satisfied by the issuance of the Convertible Note described in Exhibit G.
		
	Prepayment:	  	The Borrower will have the following prepayment rights and obligations:
		
	 	  	Optional: The Borrower may prepay the Bridge Facility at par plus accrued interest on any date prior to the applicable Maturity Date.
		
	 	  	Mandatory: Upon the acceleration of the Bridge Facility following an Event of Default (as defined below), Borrower will prepay all amounts outstanding under the Bridge
Facility.
		
	Event of Default:	  	An event of default will occur if, among other customary events, any of the following occurs, and is continuing (“Event of Default”):
		
	 	  	 (a)    Failure to make any payment of principal when due under any Bridge Facility Note or failure to make any payment
of interest, fees or other amounts and such failure shall continue unremedied for a period of five (5) business days or more;

		
	 	  	 (b)    Breach of any covenant in any material respect under the Bridge Facility, and such breach remains unremedied
after a cure period which shall be determined;

		
	 	  	 (c)    Breach or Event of Default of any cash collateral order in respect of the ATSB Loan or any default under the
ATSB Loan (irrespective of whether the ATSB has waived or acted upon such breach or default);

		
	 	  	 (d)    Events of Default that occur and continue with respect to the US Airways Restructuring Obligations or material
Events of Default that occur and continue with respect to any other agreement between US Airways or Group and any GE Entity;

		
	 	  	 (e)    The occurrence of an Event of Default under the 2001 Facility, the 2003 Liquidity Facility (if not repaid) or a
Global Event of Default;

		
	 	  	 (f)     Other appropriate and customary events of default;

		
	 	  	 (g)    Entry of an order authorizing the conversion of the Chapter 11 Case into a Chapter 7 liquidation or the
implementation of a

  

 17 

			
		
	 	  	 liquidation in the Chapter 11 Case;

		
	 	  	 (h)    Entry of an order authorizing the appointment of a Trustee or an examiner with expanded powers in connection
with the Chapter 11 Case;

		
	 	  	 (i)     Entry of an order authorizing the sale of all or substantially all of Borrower’s assets unless
consummated as part of a plan of reorganization and contemplated by the Restructuring Documentation;

		
	 	  	 (j)     Suspension of all or substantially all of Borrower’s flight and other operations or entry of an order
authorizing the same; or

		
	 	  	 (k)    Filing of a motion by the debtor in the Chapter 11 Case to effectuate (g), (h), (i) or (j).

		
	 	  	The Bridge Facility may be accelerated in full within five (5) business days of an Event of Default and Borrower will be required to pay Lender all principal and interest payments then due
and owing plus other enforcement costs, if any.
		
	 Representations,
 Warranties and

Covenants:
	  	The documentation with respect to the Bridge Facility will contain representations, warranties and covenants (which will be applicable to US Airways, Group and any of their respective
subsidiaries) customarily found in the loan agreements of GECAS or GECC, as applicable, for similar financings.
		
	Conditions Precedent to Closing:	  	The conditions to the closing of the Bridge Facility transaction will include those on Schedules A and B to the Master MOU.
		
	Conditions Precedent to Drawdown:	  	Draw-downs under the Bridge Facility shall be, in each case, subject to certain customary conditions and no occurrence of an Event of Default (other than any Excepted Obligations), including
a Global Event of Default.

  
 All capitalized terms used herein, but
not otherwise defined herein shall have the respective meanings ascribed to such terms in the Master MOU. 
  

 18 

  
 SCHEDULE A TO EXHIBIT E

  

										
	 Week

	  	[REDACTED]

	 	 	Bridge
Facility
Funding
Amount (2)

	  	[REDACTED]

	 
	 Dec 17 - Dec 19
	  	 	 	 	$	19,918,881	  	 	 
	 Dec 20 - Dec 26
	  	 	 	 	 	 	  	 	 
	 Dec 27 - Jan 2
	  	 	 	 	 	 	  	 	 
	 Jan 3 - Jan 9
	  	 	 	 	 	4,365,758	  	 	 
	 Jan 10 - Jan 16
	  	 	 	 	 	2,143,523	  	 	 
	 Jan 17 - Jan 23
	  	 	 	 	 	1,427,161	  	 	 
	 Jan 24 - Jan 30
	  	 	 	 	 	1,428,901	  	 	 
	 Jan 31 - Feb 6
	  	 	 	 	 	5,887,479	  	 	 
	 Feb 7 - Feb 13
	  	 	 	 	 	415,960	  	 	 
	 Feb 14 - Feb 20
	  	 	 	 	 	 	  	 	 
	 Feb 21 - Feb 27
	  	 	 	 	 	 	  	 	 
	 Feb 28 - Mar 6
	  	 	 	 	 	 	  	 	 
	 Mar 7 - Mar 13
	  	 	 	 	 	 	  	 	 
	 Mar 14 - Mar 20
	  	[REDACTED	]	 	 	 	  	[REDACTED	]
	 Mar 21 - Mar 27
	  	 	 	 	 	 	  	 	 
	 Mar 28 - Apr 3
	  	 	 	 	 	 	  	 	 
	 Apr 4 - Apr 10
	  	 	 	 	 	 	  	 	 
	 Apr 11 - Apr 17
	  	 	 	 	 	 	  	 	 
	 Apr 18 - Apr 24
	  	 	 	 	 	 	  	 	 
	 Apr 25 - May 1
	  	 	 	 	 	 	  	 	 
	 May 2 - May 8
	  	 	 	 	 	 	  	 	 
	 May 9 - May 15
	  	 	 	 	 	 	  	 	 
	 May 16 - May 22
	  	 	 	 	 	 	  	 	 
	 May 23 - May 29
	  	 	 	 	 	 	  	 	 
	 May 30 - Jun 5
	  	 	 	 	 	6,194,343	  	 	 
	 Jun 6 – Jun 12
	  	 	 	 	 	7,364,516	  	 	 
	 Jun 13 - Jun 19
	  	 	 	 	 	 	  	 	 
	 Jun 20 - Jun 26
	  	 	 	 	 	 	  	 	 
	 Jun 27 - Jun 30
	  	 	 	 	 	 	  	 	 
	 	  	 	 	 	
	
	  	 	 
	 Total
	  	 	 	 	$	55,506,545	  	 	 

  

	1	[REDACTED]. 

  

	2	[REDACTED]. 

  

 19 

  
 EXHIBIT F 

[REDACTED] EETC Term Sheet 
  
 PART 1 – PHASE I TRANSACTIONS 
  
 Reference is made to that certain Registration Agreement dated as of [REDACTED], by and between US Airways and [REDACTED], and agreed to by
[REDACTED], solely in its capacity as trustee of the US Airways Pass Through Trust [REDACTED] (the “Registration Agreement”), which requires US Airways to prepare and file a Registration Statement (as defined in the
Registration Agreement) in order to effect an offer to exchange GECC’s holdings of US Airways [REDACTED] Pass Through Certificates, Series [REDACTED] (the “Certificates”) for substantially similar certificates.
During the Chapter 11 Case, step-up interest rate is to be waived on the Certificates (in accordance with the terms of the Registration Agreement) (such interest rate, the “Step-up Interest Rate”) until six (6) months after US
Airways’ emergence from the Chapter 11 Case. US Airways’ obligations under the Registration Agreement, as modified, shall be assumed pursuant to Section 365 of the Bankruptcy Code or reinstated pursuant to the Plan of Reorganization no
later than the date of the consummation of the Plan of Reorganization. 
  
 PART
2 – EXIT TRANSACTIONS 
  
 Upon US Airways’
emergence from the Chapter 11 Case, GECC will agree to extend, until six (6) months after the date of such emergence from the Chapter 11 Case (the “Extension Period”), the deadline with respect to the exercise of the right to
require registration, pursuant to the terms and conditions of the Registration Agreement. 
  
 All capitalized terms used herein, but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Master MOU. 
  

 20 

  
 EXHIBIT G 

Convertible Note Term Sheet 
  
 EXIT TRANSACTION 
  

			
		
	Issuer:	  	US Airways, Inc., as reorganized pursuant to the Bankruptcy Code.
		
	Guarantor	  	Parent holding company of the Issuer.
		
	Issue:	  	[___]%* Senior Convertible Notes Due 2020 (the “Notes”) issued on the Issuer’s emergence from the Chapter 11 Case.
		
	Initial Holder:	  	A GE affiliate.
		
	Principal Amount:	  	$125,000,000 in denominations of $1,000.
		
	Term:	  	Fifteen (15) years from issuance.
		
	Amortization:	  	None prior to maturity; full principal to be repaid at the maturity date except to the extent converted or prepaid.
		
	Interest Rate:	  	Semi-annually in arrears, in cash, at an annual rate of [___]%*.
		
	Security:	  	None.
		
	Ranking:	  	The Notes are senior unsecured obligations and rank equally in right of payment with all existing and future senior unsecured obligations of Issuer. The Notes are senior unsecured and thus
are junior to Issuer’s secured obligations to the extent of the value of the collateral securing such secured obligation.
		
	Conversion Rights:	  	The Holder may convert any number of the Notes into the Issuer’s common stock (the “Common Stock”), at any time, at the Conversion Price.
		
	Conversion Price:	  	The product of (x) 140-150% (at Issuer’s option) and (y) the average closing price of the Common Stock for the sixty (60)

	*	The parties will work together to set a coupon rate for the Notes no later than thirty (30) days prior to the scheduled date of emergence from the Chapter 11 Case which would be
reasonably expected to result in the Notes trading at par upon emergence from the Chapter 11 Case (the “Par Value Interest Rate”). Failing agreement on the Par Value Interest Rate, the parties will solicit rate recommendation from
three national trading firms and will adopt the average of the three suggested rates. 

  

 21 

			
	 	  	consecutive trading days following Issuer’s emergence from the Chapter 11 Case and listing on NASDAQ or a national stock exchange from the Chapter 11 Case.
		
	Transferability:	  	The Notes will be issued under 11 U.S.C. §1145 upon the Issuer’s emergence from the Chapter 11 Case; the Notes and the underlying Common Stock will be freely transferable by the
Holders without registration under the Securities Act of 1933.
		
	Common Stock:	  	When delivered, the underlying Common Stock will be fully paid and non-assessable and listed on a national stock exchange by one hundred-eighty (180) days following emergence from the Chapter
11 Case. Failure to achieve such listing within one hundred-eighty (180) days of the date of emergence from the Chapter 11 Case will result in customary liquidated damages (i.e., increase in interest rate).
		
	Call Rights:	  	No call for five (5) years; thereafter, callable, at the option of the Issuer, in (a) cash or (b) Common Stock if the Common Stock has traded at no less than 115% of the Conversion Price for
twenty (20) of the thirty (30) trading days prior to the call date.
		
	Put Rights:	  	“Soft” put right for principal and accrued interest, payable in cash or Common Stock at the option of the Issuer, on the fifth (5th) and tenth (10th)
anniversary of issuance.
		
	Mandatory
Prepayments:	  	Mandatory repayment at upon a “fundamental corporate change” with a customary coupon make-whole for public market convertible debt securities of this type.
		
	Anti-Dilution
Protections:	  	The Conversion Price will be subject to customary anti-dilution adjustments, including, without limitation, upon (i) stock or cash dividends, (ii) reclassifications, subdivisions or
combinations of the Common Stock, (iii) the issuance of convertible securities, rights or warrants to all holders of Common Stock convertible into or exercisable for Common Stock at less than the then-current market price, (iv) purchases of Common
Stock in a tender offer at more than the then-current market price, (v) distribution of the capital stock of an Issuer subsidiary to holders of the Common Stock and (vi) any other distributions of assets or securities by the Issuer to holders of the
Common Stock.
		
	Business
Combinations:	  	The Notes will enjoy customary adjustments and protections if the Common Stock is converted into, reclassified into or

  

 22 

			
	 	  	exchanged for cash, assets or securities.
		
	Other Terms and
Conditions:	  	The Notes are intended to be public market securities and to trade at par value when issued. Documentation of the Notes will include the terms and conditions customarily found in public
market convertible securities of this type.

  

 23 

  
 EXHIBIT H 

GEAE Restructuring Term Sheet 
  
 November 25, 2004 
  
 US Airways Group, Inc. 
  
 2345 Crystal Drive 
 Arlington, VA 22227 
  
 US Airways, Inc. 
 2345 Crystal Drive 
 Arlington, VA 22227 
  

	Re:    (i)    	CFM56-3 Engine Maintenance Agreement (ESI-96-222G) between US Airways, Inc. (“US Airways”) and GE Engine Services, Inc. (“GEES”) (as amended, the “CFM56-3
Agreement”); 

  

	 	(ii)	CFM56-5 Engine Maintenance Agreement (ESI-97-0084W) between US Airways and GEES (as amended, the “CFM56-5 Agreement”); 

  

	 	(iii)	CF6-80C2 Engine Maintenance Agreement ( ESI-96-610I) between US Airways and GEES (as amended, the “CF6-80C2 Agreement”); 

  

	 	(iv)	CF34-8E5 Maintenance Cost Per Hour (“MCPH”) Engine Service Agreement (ESI-01-0700M-8E5) between US Airways Group, Inc. (“Group”) and GEES (the “CF34-8E5
Agreement”); 

  

	 	(v)	CF34-3B1 Time & Material Services Agreement (Proposal No. 1-103898006 Rev 5) between Group and GEES (the “CF34-3B1 Agreement”) (as amended, individually, an
“Agreement” and collectively, the “Agreements”) 

  
 Gentlemen/Ladies: 
  
 This term sheet is being entered into with
reference to the Master MOU, dated November 24, 2004, among US Airways Group, Inc., US Airways, Inc. and General Electric Capital Corporation (the “Master MOU”), and will be attached thereto as Exhibit “H.” 
  
 The following sets forth the understandings which have been reached by US Airways, Group,
GEES and General Electric Company (“GEC”) in relation to the Agreements and certain other matters. Except as otherwise indicated, capitalized terms not defined herein have the meanings given those terms in each Agreement or in the Master
MOU. 
  
 US Airways, Group and their affiliates filed voluntary petitions for
reorganization under Chapter 11 of the Bankruptcy Code on September 12, 2004 (the “Petition Date”). 
  

 24 

 US Airways and Group seek forgiveness of certain obligations arising under the Agreements, and wish to defer other
obligations arising thereunder and to make certain amendments thereto. GEES and GEC are willing to grant such forgiveness, to accept such deferrals and to make such amendments, subject to the terms and conditions contained in this term sheet.

  
 The parties agree as follows: 
  
 1. The provisions of this term sheet shall be subject to the conditions that (i) US Airways,
Group and their affiliates shall be in compliance with all of their obligations under the Master MOU and the other term sheets attached thereto, and (ii) no default shall have occurred with respect to the US Airways Restructuring Obligations, or
with respect to any other obligations between US Airways, Group and/or any affiliate and the GE Entities, except (a) any payments that relate solely to a good faith dispute regarding the performance of GEES or any of its affiliates under any engine
maintenance agreement (including, without limitation, the Agreements) between US Airways or any of its affiliates and GEES or any of its affiliates, (b) any lease payments that relate solely to a good faith dispute regarding the return of an
aircraft past the scheduled or mutually agreed termination of the lease of such aircraft provided that neither US Airways nor any of its affiliates is operating such aircraft, and (c) any obligations that have been forgiven or deferred pursuant to
this term sheet so long as, with respect to any deferral, such payments are made at the time specified in this term sheet (a “Cross-Default”). 
  
 2. Notwithstanding any other provision of this term sheet, in the event that, in the currently pending case under the US Bankruptcy Code, (a) US Airways consummates a
chapter 11 plan of reorganization, including a liquidating chapter 11 plan, and neither it nor its successor under the plan continues to operate as an airline, and US Airways’ flight operations are, therefore, discontinued, or (b) the case is
dismissed or converted to a case under chapter 7 of the Bankruptcy Code or US Airways is otherwise liquidated and, as a result of such dismissal, conversion or liquidation, US Airways discontinues flight operations, then US Airways, Group or GEES
may (subject to any applicable notice periods) terminate the Agreements; provided, however, that this sentence shall not apply if US Airways sells a material portion of its assets to any purchaser that is not, prior to entering into the transaction
with US Airways, a certificated air carrier (or a member of the same consolidated group). In the event the previous sentence is applicable, the claims of GEES in respect of the Agreements in the pending bankruptcy case shall be limited as follows:
(x) GEES shall have an allowed administrative expense priority claim under Bankruptcy Code Section 503(b)(1)(A) in the amount of $1 million, plus a sum equal to any unpaid invoices for services rendered after September 12, 2004, but prior to the
date of termination; and (y) GEES shall have an unsecured (except as provided in the next sentence) prepetition claim for all other claims and damages related to the termination or breach of, or any other claims arising under the Agreements. Nothing
in this paragraph shall limit the rights of GEES to enforcement of any and all mechanics or similar liens which secure any sums owed to GEES under the Agreements or which arise in connection with services performed thereunder. 
  
 3. The parties intend that the Master MOU and the term sheets attached thereto, including
this term sheet, will be submitted for approval of the bankruptcy court on December 16, 2004. This term sheet shall become effective upon approval by the court. If the Master MOU and attached term sheets are not submitted and approved by the court
on such date, then GEES and GEC may at their option elect not to consummate the transactions described in this term sheet. 
  

 25 

 The parties will undertake to agree upon definitive documents prior to the hearing date, so that documents can be
submitted to the court and executed promptly, and in no event later than five days following approval (the “Assumption Date”). The parties agree that this term sheet and any final agreement resulting from this term sheet will be filed with
the court under rules which will cause only a redacted counterpart to become publicly available. 
  
 4. [REDACTED]  
  
 5.
[REDACTED] 
  
 6. [REDACTED] 
  
 7. It is a condition subsequent to the agreements of GEES and GEC under this term sheet that
US Airways consummates a chapter 11 plan of reorganization under which it (or its successor under the plan) continues to operate as an airline by the Termination Date. Subject to paragraph 2 of this term sheet, failure of this condition will cause
all sums, payment of which has been deferred pursuant to the Agreements, as amended by this term sheet, to become immediately due and payable, and GEES shall not be precluded from the enforcement of any and all mechanics or similar liens which may
secure payment of such sums. 
  
 8. The full balance of all payments deferred
under the Agreements, as amended pursuant to this term sheet (i.e., the Deferred Obligations and the Deferred Charges under the CFM56-5 Agreement), (i) shall be paid unconditionally, without set-off or demand at the time such payments are due and
payable in accordance with the Agreements as modified by this term sheet, and (ii) shall accelerate and become immediately due and payable, and shall be paid without notice or demand, upon the occurrence of any Cross-Default. Payments deferred under
each Agreement shall accelerate and become immediately due and payable upon termination of such Agreement for any reason other than GEES’ default. 
  
 9. Engine overhaul charges for MCPH engines which will remain in US Airways’ fleet will continue to be paid monthly under the terms of the Agreements. Conversely, GE
will seek to recover engine overhaul charges for MCPH engines which will be rejected or abandoned by US Airways or affiliates, as debtor-in-possession, from the engine owners. Recovery from engine owners will not affect the obligation of US Airways,
Group or their affiliates to pay charges due upon removal of the engines pursuant to the Agreements (but GE will credit any sums received from engine owners against the Deferred Obligations). Removal charges which become due postpetition will be an
administrative expense under Section 503(b) of the Bankruptcy Code, and will be due and payable upon removal of such engine pursuant to the Agreements. If any engine in GE’s possession is scheduled to be rejected or abandoned by US Airways or
an affiliate, but such rejection or abandonment has not become effective, GE will release the engine to US Airways or such affiliate upon payment of the applicable removal charges. So that GE can take appropriate action, US Airways or Group shall
identify each MCPH engine prior to return following overhaul as one of the following: 
  

	 	•	 	To be returned to fleet. 

  

	 	•	 	Rejected/abandoned. 

  

 26 

	 	•	 	To be rejected/abandoned—removal charge will be paid upon return to US Airways or an affiliate. 

  
 This paragraph 9 shall not apply with respect to GECAS-owned engines, removed from US Airways’ fleet pursuant to the Master MOU and the
term sheets thereunder (the “GECAS Engines”). Reconciliation, including any return-to-service charges and any removal charges and credits with respect to the GECAS Engines, shall be waived. 
  
 10. With respect to the GE-Snecma Aircraft listed in Exhibit A, US Airways will cooperate
with documentation of permanent leases substantially equivalent to the existing interim leases, and execution of permanent leases no later than December 17, 2004 (which may be held in escrow pending foreclosure). In the event that US Airways does
not emerge from bankruptcy, the administrative claim related to such permanent leases shall be limited to three months rent under such leases and performance of return conditions. If required by existing agreements, US Airways will reimburse legal
fees owing upon execution of permanent leases. 
  
 11. If GEES, GEC or their
respective affiliates shall become entitled to file any claim in the chapter 11 case pending with respect to US Airways as the result of a Cross Default, or the failure of a condition precedent or subsequent to any such obligation, or otherwise
arising out of this term sheet and the transactions contemplated hereby, such claim shall be deemed timely if filed within 30 days following the date of the breach, failure of condition, or other event giving rise to such claim, notwithstanding any
deadline fixed by law or the prior entry of any order setting a bar date for such claim or any equitable argument that might preclude the filing of such a claim. 
  
 12. Without limiting any provisions of the Master MOU or other term sheets thereunder, US Airways and Group will be responsible for
reimbursement of reasonable legal fees paid by GEC and GEES to their outside counsel in connection with the negotiation, documentation and implementation of this term sheet, including, but not limited to, drafting of definitive documents.

  
 13. Subject to the consent of the ATSB loan parties, if required, (a) on
behalf of themselves and their affiliates, US Airways and Group waive their rights under Bankruptcy Code Section 362 solely to the extent necessary in order that GEES may take such actions as necessary, including filing with the appropriate county
register of deeds, to retain liens against aircraft engines arising in the ordinary course under Kansas Statute 58-201, following performance of overhaul services, and (b) US Airways agrees that the Agreements shall be amended as necessary to
authorize such filings. 
  

			
	Very truly yours,
	
	GENERAL ELECTRIC COMPANY
		
	By:	 	 /s/ John Falconi

	 Title:
	 	 Vice President

  

 27 

			
	GE ENGINE SERVICES, INC.
		
	By:	 	 /s/ John Falconi

	 Title:
	 	 Vice President

  

			
	Agreed to and Accepted:
	
	US AIRWAYS, INC.
		
	By:	 	 /s/ Eilif Serck-Hanssen

	 Title:
	 	 Senior Vice President Finance & Treasurer

  

			
	Agreed to and Accepted:
	
	US AIRWAYS GROUP, INC.
		
	By:	 	 /s/ Eilif Serck-Hanssen

	 Title:
	 	 Senior Vice President Finance & Treasurer

  

 28 

  
 EXHIBIT A 
  
 GE-Snecma Aircraft 
  
 N563US 
 N352US 
 N353US 
 N354US 
 N355US 
 N356US 
 N575US 
  

 29 

  
 EXHIBIT B 
  
 Deferred Obligations 
  
 EES - USAirways Term Sheet Agreement, Exhibit B 
  

								
	 Invoice#

	  	 Description

	  	 	  	Prepetition
Balance Due

	 Redacted
	  	 Redacted
	  	 	  	 	Redacted
	 Redacted
	  	 Redacted
	  	 	  	 	Redacted
	 Redacted
	  	 Redacted
	  	 	  	 	Redacted
	 Redacted
	  	 Redacted
	  	 	  	 	Redacted
	 Redacted
	  	 Redacted
	  	 	  	 	Redacted
	 Redacted
	  	 Redacted
	  	 	  	 	Redacted
	 Redacted
	  	 Redacted
	  	 	  	 	Redacted
	 Redacted
	  	 Redacted
	  	 	  	 	Redacted
	 Redacted
	  	 Redacted
	  	 	  	 	Redacted
	 Redacted
	  	 Redacted
	  	 	  	 	Redacted
	 Redacted
	  	 Redacted
	  	 	  	 	Redacted
	 Redacted
	  	 Redacted
	  	 	  	 	Redacted
	 Redacted
	  	 Redacted
	  	 	  	 	Redacted
	 Redacted
	  	 Redacted
	  	 	  	 	Redacted
	 Redacted
	  	 Redacted
	  	 	  	 	Redacted
	 Redacted
	  	 Redacted
	  	 	  	 	Redacted
	 Redacted
	  	 Redacted
	  	 	  	 	Redacted
	 	  	 	  	TOTAL:	  	$	16,335,171.23

  

 30EXHIBIT 10.54

 Exhibit 10.54 
  
 FIRST AMENDMENT 
 TO THE US AIRWAYS GROUP, INC. 
 2003 NONEMPLOYEE DIRECTOR STOCK INCENTIVE PLAN 
  
 This First Amendment to the US Airways Group, Inc. 2003 Nonemployee Director
Stock Incentive Plan (the “Plan”) is made and entered into this              day of
                    , 2004, by US Airways Group, Inc. (the “Corporation”). 
  
 W I T N E S S E T H: 
  
 WHEREAS, the Corporation maintains the Plan, which is administered by
the Human Resources Committee (the “Committee”) appointed by the Board of Directors of the Corporation (the “Board”), to provide for formula grants of nonqualified stock options to nonemployee members of the Board; and

  
 WHEREAS, the formula for grants under the Plan does not
make any provision for grants to directors who begin service on the Board during a given year; and 
  
 WHEREAS, the Corporation wishes to amend the Plan to provide for a prorated grant of options under the Plan upon an individual’s initially
becoming a member of the Board during a year; and 
  
 WHEREAS, Section 7.1 of the Plan permits the Board to amend the Plan at any time, subject to consent of the participants for any amendment that would adversely affect, in any way, the rights of such participants; 
  
 NOW, THEREFORE, the Corporation hereby amends the Plan as follows:

  
 1. 
  
 Section 5.1 of the Plan shall be amended to read as follows: 
  
 “5.1 Grants to Eligible Directors. 

 
 (a) Annual Grant. Subject to Section 6
hereof, on the first business day following the Corporation’s annual meeting of stockholders held subsequent to 2003 and prior to the termination of the Plan, each Eligible Director shall automatically be issued an Option pursuant to the Plan
to purchase 5,000 shares of Stock. Options shall be granted at an option price equal to the Fair Market Value of the Stock on the Date of Grant. 
  
 (b) Grant for Mid-Year Elections. With regard to any Eligible Director who is elected or appointed as a member of the Board of the
Corporation on any date other than the date of the annual meeting of shareholders, on the first business day following the date of election or appointment of such individual as an Eligible Director, the Eligible Director shall automatically be
issued an Option pursuant to the Plan to purchase a 

 
number of shares of Stock (rounding to the nearest whole number of shares) equal to 5,000, multiplied by a fraction equal to the number of days between the
Date of Grant and the first anniversary of the date of the most recent annual meeting of the stockholders of the Corporation occurring before the Date of Grant, divided by 365. Options shall be granted at an option price equal to the Fair Market
Value of the Stock on the Date of Grant “ 
  
 2. 

 
 This Amendment shall be effective as of August 1, 2004. 
  
 3. 
  
 Except as specifically amended hereby, the Plan shall remain in full force and effect. 
  
 IN WITNESS WHEREOF, the Corporation has caused its duly authorized officer to
execute this First Amendment. 
  

			
	 US AIRWAYS GROUP, INC.

		
	 By:
	 	  

  

	 Name:
	 	  

  

	 Title:
	 	  

  

 Page 2

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