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exv10w110

 

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CONFIDENTIAL

EXHIBIT 10.110

ASSIGNMENT AND FIRST AMENDMENT

TO

AMERICA WEST CO-BRANDED CARD AGREEMENT

     THIS ASSIGNMENT AND FIRST AMENDMENT TO CO-BRANDED CARD AGREEMENT (the “Amendment”) is dated
August 8, 2005, by and between AMERICA WEST AIRLINES, INC., a Delaware corporation (“America
West”), US AIRWAYS GROUP, INC., a Delaware corporation (“US Airways Group”), and JUNIPER BANK
(“Juniper Bank”).

RECITALS

     WHEREAS, America West and Juniper Bank previously entered into that certain America West
Co-Branded Card Agreement, dated January 25, 2005 (the “Original Agreement”) establishing and
maintaining a co-branded credit card program for the benefit of members of America West’s
FlightFund loyalty program (“Flight Fund Program”) and America West’s customers; and

     WHEREAS, US Airways, Inc., a Delaware corporation and wholly-owned subsidiary of US Airways
Group (“US Airways”) provides scheduled airline services and operates as part of its service a
loyalty program featuring airline mileage or other travel credit or awards including its Dividend
Miles loyalty program (“Dividend Miles Program”) and accepts MasterCard and Visa credit cards as a
method of payment for air transportation and related travel services; and

     WHEREAS, America West’s parent company, America West Holdings Corporation, a Delaware
corporation (“Holdings”), US Airways Group and Barbell Acquisition Corp., a Delaware corporation
and wholly-owned subsidiary of US Airways Group (“Merger Sub”) entered into that certain Agreement
and Plan of Merger dated May 19, 2005 (the “Merger Agreement”) pursuant to which the parties shall
merge their respective operations (the “Merger”); and

     WHEREAS, upon consummation of the Merger, America West’s air transportation services shall be
operated as “US Airways” using the US Airways Marks, and the FlightFund Program shall be combined
with the Dividend Miles Program, with the Dividend Miles Program as the surviving program; and

     WHEREAS, US Airways is party to that certain Co-Branded Card and Merchant Services Agreement,
dated as of May 20, 2003, with Bank of America, N.A. (USA), pursuant to which a co-branded credit
card program was established and has been maintained for the benefit of US Airways’ customers and
Dividend Miles Program members (“US Airways/Bank of America Co-Branded Program”); and

     WHEREAS, US Airways has the right to terminate the US Airways/Bank of America
Co-Branded Program following the Merger by giving 24 months prior written notice of
termination to Bank of America on or after the 90th day following the Merger

 

 

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Effective Date (the “US Airways/Bank of America Co-Branded Termination Notice”); and

     WHEREAS, Juniper Bank desires to participate in the Dividend Miles Program and to establish
and maintain a US Airways’ co-branded credit card program upon consummation of the Merger; and

     WHEREAS, Juniper Bank and America West desire to amend the Original Agreement and assign the
Original Agreement as amended hereby (the “Amended Agreement”) to US Airways Group upon
consummation of the Merger, and US Airways Group desires to become bound by the Amended Agreement
upon consummation of the Merger; and

     WHEREAS, America West, US Airways Group and Juniper Bank understand and agree that the
effectiveness of this Amendment and the fulfillment of the respective rights and obligations
contained herein shall be contingent upon consummation of the Merger.

     NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties agree
as follows:

1. Definitions. All capitalized terms used herein, but not otherwise defined herein, shall have
the meanings given to such terms in the Original Agreement.

2. Amendments.

	 	(a)	 	Section 1 of the Agreement is amended to add the following definitions in the
appropriate alphabetical order:
	 
	 	 	 	“Active Frequent Flyer Baseline Year” as defined in Section 4.11.
	 
	 	 	 	“Adjustable Rate” as defined in Section 14.2.2.
	 
	 	 	 	“Affinity Cardholder Baseline” as defined in Section 4.11.
	 
	 	 	 	“Affinity Spend Baseline” as defined in Section 4.11.
	 
	 	 	 	“Amended Agreement” as defined in the Recitals of this Amendment.
	 
	 	 	 	“Annual Bonus Payment” as defined in Section 4.12.
	 
	 	 	 	“Certificate of Merger” means the Certificate of Merger between Holdings, US Airways
Group and Merger Sub.
	 
	 	 	 	“Dividend Miles Program” as defined in the Recitals of this Amendment.
	 
	 	 	 	“Dual Branding Period” means the period of up to two years and 120 days after the
Merger Effective Date during which Juniper Bank and Bank of America shall each have
the right to market co-branded credit cards bearing the Marks of US
Airways Group; provided that at no time on or after January 1, 2006 shall Bank of
America have the right to use the America West Marks.

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	 	 	 	“Early Payment Events” as defined in Section 4.6(b).
	 
	 	 	 	“Early Payments” as defined in Section 4.6.
	 
	 	 	 	“Effective Date” with respect to the Amended Agreement, means the date the Amended
Agreement is assigned to US Airways Group, which shall in no event be earlier than
the Merger Effective Date.
	 
	 	 	 	“Holdings” as defined in the Recitals of this Amendment.
	 
	 	 	 	“Interest Period” as defined in Section 14.2.2.
	 
	 	 	 	“Lender Agreement” as defined in Section 4.6.
	 
	 	 	 	“Marks” means any logos, trademarks, service marks, trade names or other brand
identifiers.
	 
	 	 	 	“Material Adverse Effect” as defined in Section 4.11.
	 
	 	 	 	“Merger” as defined in the Recitals of this Amendment.
	 
	 	 	 	“Merger Agreement” as defined in the Recitals of this Amendment.
	 
	 	 	 	“Merger Bonus Payment” as defined in Section 4.11.
	 
	 	 	 	“Merger Effective Date” means, with respect to the Merger, the date on which the
Certificate of Merger is filed with the Delaware Secretary of State or such later
time as specified in the Certificate of Merger.
	 
	 	 	 	“Merged Entities” means the proposed combined companies and operations of America
West and US Airways Group.
	 
	 	 	 	“Merger Sub” as defined in the Recitals of this Amendment.
	 
	 	 	 	“Original Agreement” as defined in the Recitals of this Amendment.
	 
	 	 	 	“Passenger Enplanements Baseline Year” as defined in Section 4.11.
	 
	 	 	 	“Pre-Purchase Date” as defined in Section 14.1.
	 
	 	 	 	“Pre-Purchased Miles” as defined in Section 14.1.
	 
	 	 	 	“Suspension Events” as defined in Section 4.6(a).
	 
	 	 	 	“US Airways” as defined in the Recitals of this Amendment.
	 
	 	 	 	“US Airways/Bank of America Co-Branded Program” as defined in the Recitals of this
Amendment.

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	 	 	 	“US Airways/Bank of America Co-Branded Termination Notice” as defined in the
Recitals of this Amendment.
	 
	 	 	 	“US Airways Group” as defined in the Recitals of this Amendment; provided that after
the Merger Effective Date all references to US Airways Group shall be to the
combined companies and operations of US Airways Group and America West.
	 
	 	(b)	 	The definition of “Active Frequent Flier” is deleted in its entirety and replaced
with the following definition:
	 
	 	 	 	“Active Frequent Flyer” as defined in Section 4.11.
	 
	 	(c)	 	The definition of “Affinity Card” is deleted in its entirety and replaced with the
following definition:
	 
	 	 	 	“Affinity Card” shall mean, as the context may require, [REDACTED] or other mutually
agreed credit card(s) co-branded with Juniper Bank’s Marks, America West’s Marks, US
Airways Group’s Marks and/or the Merged Entities’ Marks issued to Affinity
Cardholders;.
	 
	 	(d)	 	The definition of “FF Program” is deleted in its entirety and replaced with the
following definition:
	 
	 	 	 	“FF Program” means the Dividend Miles Program, as established and maintained by US
Airways and America West as of the Effective Date of this Amended Agreement and from
time to time thereafter, whereby US Airways Customers who become FF Participants
receive travel benefits based upon air travel mileage accumulated on US Airways or
other designated air carriers, including without limitation members of the Star
Alliance, or through the use or purchase of the goods or services of any vendor
designated by US Airways.
	 
	 	(e)	 	The definition of “Passenger Enplanements” is deleted in its entirety and replaced
with the following definition:
	 
	 	 	 	“Passenger Enplanements” as defined in Section 4.11.
	 
	 	(f)	 	The definition of “Program” is deleted in its entirety and replaced with the
following definition:
	 
	 	 	 	“Program” means the co-branded Card program between Juniper Bank and US Airways
Group conducted pursuant to this Amended Agreement.
	 
	 	(g)	 	The definition of “Total Managed Expense” is deleted in its entirety and replaced
with the following definition:
	 
	 	 	 	“Total Managed Expense” means actual cost of
funds, net credit and fraud losses, [REDACTED]
acquisition costs including, Purchased Credit Card Relationships
amortization expense, [REDACTED] New Account Fee and
Base Miles, Adjustment Miles, Bonus Miles, Renewed Account Fee
expense, the Merger Bonus Payment, Annual Bonus Payment, [REDACTED]

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	 	(h)	 	The definition of “Total Managed Revenue” is deleted in its entirety and replaced
with the following definition:
	 
	 	 	 	“Total Managed Revenue” means [REDACTED].”
	 
	 	(i)	 	The following defined terms shall be deleted from the Amended Agreement:
	 
	 	 	 	“Cumulative Un-recouped Guarantee”
	 
	 	 	 	“Earned Fees”
	 
	 	 	 	“Guarantee Payment”
	 
	 	 	 	“Incentive Agreement”
	 
	 	 	 	“Renewal Premiums”
	 
	 	 	 	“Volume Incentive”
	 
	 	(j)	 	Section 4.2.2 of the Original Agreement is deleted in its entirety and replaced
with the following:
	 
	 	 	 	“Section 4.2.2. Bonus Mile Fees and Base Mile Fees. During the Term of this
Agreement, Juniper Bank shall pay a Base Mile Fee to US Airways Group equal
[REDACTED] for each Base Mile awarded to an Account. In addition, from the
Commencement Date until termination or expiration of the US Airways/Bank of America
Co-Branded Program, Juniper Bank shall pay a Bonus Mile Fee to US Airways Group
equal [REDACTED] for each Bonus Mile awarded to an Account. Upon expiration of the
US Airways/Bank of America Co-Branded Program (unless terminated earlier), Juniper
Bank shall pay a Bonus Mile Fee to US Airways Group equal to [REDACTED] for each
Bonus Mile awarded to an Account during the first [REDACTED] months following such
expiration, and [REDACTED] for each Bonus Mile awarded to an Account thereafter for
the remainder of the Term. Should the US Airways/Bank of America Co-Branded Program
terminate prior to its expiration and Juniper Bank purchases the Existing Portfolio
and the US Airways/Bank of America Co-Branded Program portfolio, Juniper Bank shall
pay a Bonus Mile Fee to US Airways Group equal [REDACTED] for each Bonus Mile
awarded to an Account for the remainder of the Term. Base Mile Fees and Bonus Mile
Fees shall be awarded as follows:

(a) US Airways Group shall award Base Miles as set forth in Exhibit
A and Exhibit B attached hereto.

(b) US Airways Group will from time to time award Bonus Miles to Accounts.
Bonus Miles will be awarded as agreed from time to time by the parties for,
by way of example only and not limitation, rewards to
Customers when they open Accounts, rewards to Affinity Cardholders for
engaging in certain categories of transactions as the

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parties may agree,
including, but not limited to, the use of an Account to purchase US Airways
Group tickets. The Bonus Mile Fee shall be in addition to, and not in lieu
of, the Base Mile Fee that is due for a transaction. For example:

For US Airways Group ticket purchases on the
[REDACTED] for which double miles are awarded for
using the credit card, the first mile awarded by US
Airways will be compensated by the Base Mile Fee, and
the second (bonus) mile will be compensated by the
Bonus Mile Fee.”

	 	(k)	 	Sections 4.2.1(b) and 4.3 are each deleted in their entirety.
	 
	 	(l)	 	Section 4.6 of the Agreement is deleted in its entirety and replaced with the
following:
	 
	 	 	 	“4.6 Suspension Events and Early Payment Dates.

	 	(a)	 	If one or more of the following (each a “Suspension Event”) occurs:

“(i) The sum of cash, cash equivalents and short term investments (in each case
unrestricted) maintained by US Airways Group is less than [REDACTED] on average
of the unrestricted cash on hand on the last day of each month during a quarter
as calculated at the end of each quarter during the Term of this Agreement; or

(ii) US Airways Group fails to maintain a frequent flyer program that is as
competitive in the marketplace as the FF Program was as of [REDACTED]; provided
that Juniper Bank provides written notice of such failure to maintain the
competitiveness of the FF Program which will commence a forty-five (45) day
period during which US Airways Group may cure such deficiency;

then Juniper Bank may, in its sole discretion, elect to either (1) compensate US
Airways Group with Pre-Purchased Miles as set forth in Sections 14.4 and
14.5 below, or (2) terminate this Agreement, or (3) commence the repurchase
of Pre-Purchased Miles as set forth in the next paragraph. Neither clause (1),
clause (2) nor clause (3) is exclusive and an election by Juniper Bank to compensate
US Airways Group with Pre-Purchased Miles or commence the repurchase of
Pre-Purchased Miles shall not prevent a later election to terminate this Agreement
so long as a breach is continuing or to exercise and other right or remedy
hereunder. For purposes of clarity, if Juniper Bank compensates US Airways Group
with Pre-Purchased Miles due to a breach of (i) or (ii) above and the breach is
subsequently cured, such compensation with Pre-Purchased Miles shall cease and
Juniper Bank shall resume paying US Airways Group in cash as set forth in
Section 4.2. If Juniper Bank commences the repurchase of Pre-Purchased
Miles as set forth

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in the next paragraph due to a breach of (i) or (ii) above and
the breach is subsequently cured, then such repurchase shall cease and the number of
quarterly payments in Section 14.2.1 shall be reduced by the number of
quarterly payments made as a result of the breach. In the event Juniper Bank
terminates this Agreement pursuant to this Section 4.6, US Airways Group
will promptly (i) repurchase any unused Pre-Purchased Miles as of the date of
termination; and (ii) repay an amount equal to (x) the sum of the Merger Bonus
Payment and Bonus Payment divided by the (y) number of months of the Term times (z)
the number of whole calendar months remaining from the effective date of termination
until the Expiration Date, together with interest at the Adjustable Rate (including
interest on the Pre-Purchase Miles to the extent not previously paid under
Section 14.2.2 and interest on the Merger Bonus Payment and the Bonus
Payment from the date each was paid by Juniper Bank; provided that until such time
as Juniper Bank is the sole issuer y and z shall each equal 60.

	 	(b)	 	If one or more of the following (each an “Early Payment Event”) occurs:

(i) The Fixed Charge Coverage Ratio (“FCCR”), of US Airways Group is less than
the amount set forth below for quarters ending as of the corresponding date set
forth below:

For the four quarters ending:

	 	 	 
	December 31, 2006

	 	REDACTED
	March 31, 2007

	 	REDACTED
	June 30, 2007

	 	REDACTED
	September 30, 2007

	 	REDACTED
	December 31, 2007

	 	REDACTED
	March 31, 2008

	 	REDACTED
	June 30, 2008

	 	REDACTED
	September 30, 2008

	 	REDACTED
	December 31, 2008

	 	REDACTED
	March 31, 2009

	 	REDACTED
	June 30, 2009

	 	REDACTED
	September 30, 2009

	 	REDACTED
	December 31, 2009

	 	REDACTED
	March 31, 2010

	 	REDACTED
	June 30, 2010

	 	REDACTED
	September 30, 2010

	 	REDACTED
	December 31, 2010

	 	REDACTED
	March 31, 2011

	 	REDACTED
	June 30, 2011

	 	REDACTED
	September 30, 2011

	 	REDACTED
	December 31, 2011

	 	REDACTED
	March 31, 2012

	 	REDACTED
	June 30, 2012

	 	REDACTED

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	September 30, 2012

	 	REDACTED
	December 31, 2012

	 	REDACTED

The FCCR means, with respect to each quarter during the Term of this
Agreement, the ratio (calculated on a four quarter rolling basis) of (1)
EBITDAR for the prior four quarters ending on such date to (2) the sum of
all interest expense (including capitalized interest) plus
aircraft rental expense in respect of operating leases (to the extent
deducted in determining net operating income) for the same prior
four quarter period, provided, all aircraft rentals and financings over the
first 2 years of the term will be treated as rentals for the
purposes of calculating this covenant; or

(ii) US Airways Group is in default, with all applicable cure and grace
periods elapsed, of any of their financing agreements in excess of
[REDACTED] (each a “Lender Agreement”) and as a result of such default
either (1) the obligations under such Lender Agreement have been accelerated
or (2) such Lender Agreement has been renegotiated to the detriment of
Juniper Bank to the extent such renegotiation results in materially higher
payment obligations on the part of US Airways Group or additional material
claims, liens, or other encumbrances against the assets of US Airways Group
until five (5) years prior to the Expiration Date; or

(iii) US Airways Group fails to provide timely reporting as required by
Section 17 hereof provided that US Airways Group shall have thirty
(30) days from receipt of written notice of a breach of such Section to cure
said failure except that as to the covenant certification required pursuant
to Section 17(iv) the cure period shall be seven (7) business days;

	 	 	 	then the repurchase of Pre-Purchased Miles as set forth in Section 14.2.1
shall commence in the quarter in which the Early Payment Event shall have occurred
and shall continue for the next twelve (12) quarters (the “Early Payments”).
Provided that in the event that the Early Payment Event is cured, the Early Payments
shall cease and the number of quarterly payments in Section 14.2.1 shall be
reduced by the number of quarterly payments made as a result of the breach. In the
event that US Airways Group fails to make a payment hereunder within thirty (30)
days of when due, Juniper Bank may, in its discretion, elect to offset the amount of
the missed payment by paying US Airways Group in Pre-Purchased Miles as set forth in
Sections 14.4 and 14.5.”
	 
	 	(m)	 	Section 4.9 is deleted in its entirety and replaced with the following:
	 
	 	 	 	“4.9 Merger of US Airways Group. In the event of a merger in which US
Airways Group either acquires or is acquired by another air carrier that has an
existing credit card program associated with its frequent flyer program, not issued
by Juniper Bank, [REDACTED].”

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	 	(n)	 	Section 4 is amended by adding the following new Sections 4.11, 4.12 and 4.13:
	 
	 	 	 	“4.11 Merger Bonus Payment. Juniper Bank shall pay, by wire transfer, US
Airways Group a one-time payment of one hundred thirty million dollars
($130,000,000.00) (“Merger Bonus Payment”) within five (5) business days after the
Merger Effective Date, provided that as of the Merger Effective Date each of the
following conditions shall be satisfied: (i) completion of the funding of additional
equity of five hundred million dollars ($500,000,000); (ii) completion of the two
hundred fifty million dollars ($250,000,000) exit financing from Airbus, of which
approximately one hundred forty million dollars ($140,000,000) will be complete on
the Merger Effective Date; (iii) commencement of the unwinding of the US Airways tax
trust in the amount of approximately one hundred seventy million dollars
($170,000,000) which will be fully realized as cash after a 90-day wind down period;
(iv) successful approval and completion of the Merger; (v) Juniper Bank has the sole
right to issue credit cards branded with US Airways Marks for the Term of this
Agreement, provided that such right shall be non-exclusive during the Dual Branding
Period; (vi) the Merged Entities have $1.1 billion in unrestricted cash, cash
equivalents and short term investments inclusive of the funds to be realized
pursuant to (ii) and (iii) but exclusive of any payments due from Juniper Bank
pursuant to this Amendment; and (vii) no material adverse change, individually or in
the aggregate, in the business, financial or other condition of America West, US
Airways Group, the Merged Entities or their respective consolidated subsidiaries,
taken as a whole, other than any thereof which would not result in a Material
Adverse Effect. For purposes of this Agreement, “Material Adverse Effect” with
respect to the Merged Entities means (A) a material adverse effect on the financial
condition, assets, liabilities, business or results of operations of the Merged
Entities and their subsidiaries, taken as a whole, excluding any such effect
resulting from (1) changes or conditions generally affecting the U.S. economy or
financial markets, (2) changes or conditions generally affecting any of the segments
of the airline industry in which the Merged Entities or any of their subsidiaries
operates, to the extent such conditions or changes do not disproportionately impact
the Merged Entities or their subsidiaries, and (3) the announcement or consummation
of the Merger Agreement; or (B) an effect that would prevent, materially delay or
materially impair the ability of the Merged Entities to consummate the Merger or the
ability of the Merged Entities to consummate the transactions contemplated by this
Amendment. For purposes of this definition, any suspension of commercial air travel
in the United States for a period of 72 hours or more shall be deemed to have a
Material Adverse Effect on the Merged Entities. Further provided, in the event
that, as measured each month the Merged Entities Passenger Enplanements or Active
Frequent Flyers in the previous [REDACTED] below the comparable months in the
Passenger Enplanements Baseline Year or Active Frequent Flyer Baseline Year, as
applicable, and the number of active Affinity Cardholders or the Affinity Card Spend
[REDACTED] from the comparable months in the Affinity Cardholder or Affinity Spend

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	 	 	 	Baseline Years, Juniper Bank may, in its sole discretion, elect to either (1)
compensate America West with Pre-Purchased Miles as set forth in Sections
14.4 and 14.5 below, or (2) terminate this Agreement and
America West will promptly (i) repurchase any unused Pre-Purchased Miles as of the
date of termination; and (ii) repay an amount equal to [REDACTED]. For purposes of
this Agreement, (i) “Passenger Enplanements” means the aggregate of ticketed
passengers flown on America West and US Airways branded aircraft as reported by the
Merged Entities for the twelve month period ending September 30 (for avoidance of
doubt, as of the date of this Agreement, Passenger Enplanements includes passengers
flown on Mesa Airlines or any other carrier operated as America West Express or US
Airways Express but does not include passengers flown on Hawaiian Airlines, except,
for example, a passenger flown on an Albuquerque-Phoenix-Honolulu flight, the
Albuquerque-Phoenix segment of such flight would be included as a Passenger
Enplanement), and (ii) “Active Frequent Flyer” means an America West or US Airways
Group FF Participant who has accrued miles from flights on America West or US
Airways in the twelve month period ending September 30. The “Passenger Enplanements
Baseline Year” shall be the combined US Airways Group and America West Passenger
Enplanements for the twelve month period ending September 30, 2005. The “Active
Frequent Flyer Baseline Year” shall be the combined US Airways Group and America
West Active Frequent Flyers for the twelve month period ending September 30, 2005,
less the number of FF Participant accounts eliminated as a result of the pre-merger
membership in both the US Airways and America West frequent flyer programs. The
“Affinity Cardholder Baseline Year” shall be the combined US Airways Group and
America West Active Cardholders for the twelve month period ending September 30,
2005 and the “Affinity Spend Baseline Year” shall be the combined US Airways Group
and America West spend on Affinity Cards for the twelve month period ending
September 30, 2005.
	 
	 	 	 	4.12 Annual Bonus Payment. Juniper Bank shall each year after it becomes the
exclusive issuer of the co-branded credit card pay US Airways Group an annual bonus
of five million dollars ($5,000,000.00) for the Term of this Agreement and any
extension thereof (the “Annual Bonus Payment”). The Annual Bonus Payment shall be
paid on February 1, 2007 and on each anniversary of that date thereafter during the
term of the Agreement (each an “Annual Bonus Payment Date”). In the event that US
Airways Group Passenger Enplanements or Active Frequent Flyers in the twelve month
period ending September 30 of the prior year has declined more than [REDACTED] below
the Passenger Enplanements Baseline Year or Active Frequent Flyer Baseline Year, as
applicable, and the number of active Affinity Cardholders and amount of spending of
the Affinity Card has decreased by more than [REDACTED] from the Affinity Cardholder
or Affinity Spend Baseline Years, Juniper Bank is relieved of its obligation pay the
Annual Bonus payment for that contract year. Further provided, to the extent that on
an Annual Bonus Payment Date Juniper Bank is not the exclusive issuer, the payment
under this Section, if any, shall be the lesser of [REDACTED].

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	 	 	 	4.13 Material Change. In the event of a material adverse change to the
credit card operating environment caused by a change in government legislation or
regulation, or change to the association (through actions of the association and
where said actions are applicable to similarly situated issuers) that impacts all
issuers of co-branded general purpose credit cards which materially adversely
affects the Program’s overall return to Juniper Bank including but not limited to
lowering or limiting the amount of interchange income received by Juniper Bank, the
parties shall negotiate in good faith to restructure the economics of the Program to
substantially maintain the relative economic positions of US Airways Group, Juniper
Bank and the Affinity Cardholders in light of such changes. In the absence of
agreement to restructure the Program, Juniper Bank may terminate this Agreement upon
ninety (90) days’ prior written notice and in such event US Airways Group shall
repurchase Pre-Purchased Miles pursuant to Section 14.2.1 below.”
	 
	 	(o)	 	Section 5.1 of the Agreement is deleted in its entirety and replaced with the
following:
	 
	 	 	 	“5.1 Term. This Agreement shall be effective as of the Effective Date and
shall continue for a term (the “Term”) commencing on January 1, 2006 or, if later,
the date upon which Juniper Bank commences marketing to the general public (the
“Commencement Date”) and ending December 31, 2012 or seven years (7) from the date
on which marketing of the Program to the general public first commences, whichever
is later (the “Expiration Date”), unless earlier terminated by either party pursuant
to Section 12 of this Agreement. As of the date of expiration or
termination of the Agreement, FF Program mileage will no longer be granted for a FF
Participant’s use of an Affinity Card. The termination of this Agreement shall not
affect any rights or obligations which shall have accrued prior to the date of
termination, including, but not limited to, payments due US Airways Group hereunder
for FF Program mileage earned by FF Participants prior to said date, including
adjustments posted following termination of this Agreement.”
	 
	 	(p)	 	Section 8.2 of the Agreement is deleted in its entirety and replaced with the
following:
	 
	 	 	 	“8.2 US Airways. Juniper Bank acknowledges US Airways Group’s ownership and
proprietary right to all US Airways Marks. US Airways Group hereby grants Juniper
Bank a limited license to use said Marks to promote the FF Program and Mileage
Accumulation Program including all Marks to promote the FF Program and Mileage
Accumulation Program for the Merged Entities, provided that Juniper Bank obtains US
Airways Group’s written approval prior to any such use. Juniper Bank recognizes and
acknowledges that it acquires no right in these Marks by such use. Any other
advertising or marketing medium with respect to the Program shall contain the
disclaimer set forth in Exhibit D attached hereto.”

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	 	(q)	 	Section 9.1 of the Agreement is amended by adding the following sentences to the
end of such Section:
	 
	 	 	 	“US Airways currently has an agreement with American Express for participation in
its Membership Rewards Program. [REDACTED].”
	 
	 	(r)	 	The Agreement is amended by adding the following new Section 12.3:
	 
	 	 	 	“12.3 In the event Juniper Bank terminates this Agreement pursuant to this
Section 12, upon such termination US Airways Group shall promptly: (i)
repurchase from Juniper Bank any unused Pre-Purchased Miles that remains outstanding
as of the date of termination; and (ii) repay an amount equal to [REDACTED].”
	 
	 	 	 	The Agreement is amended by adding the following new Section 14 to the end of the
Agreement:
	 
	 	 	 	“14. PRE-PURCHASE OF MILES
	 
	 	 	 	14.1 Pre-Purchase of Miles. Juniper Bank will purchase [REDACTED] Base
Miles, for the sum of three hundred twenty-five million dollars ($325,000,000.00)
(the “Pre-Purchased Miles”) within five (5) business days after the Merger Effective
Date (the “Pre-Purchase Date”), provided that as of the Merger Effective Date: (i)
completion of the funding of additional equity of $500 million; (ii) completion of
the two hundred fifty million dollars ($250,000,000) exit financing from Airbus, of
which approximately one hundred forty million dollars ($140,000,000) will be
complete on the Merger Effective Date; (iii) commencement of the unwinding of the US
Airways tax trust in the amount of approximately one hundred seventy million dollars
($170,000,000) which will be fully realized as cash after a 90-day wind down period;
(iv) successful approval and completion of the Merger; (v) Juniper Bank has the sole
right to issue credit cards branded with US Airways Group’s Marks for the Term of
this Agreement, provided that such right shall be non-exclusive during the Dual
Branding Period; (vi) the Merged Entities have $1.1 billion in cash, cash
equivalents and short term investments (in each case unrestricted) inclusive of the
funds to be realized pursuant to (ii) and (iii) but exclusive of any payments due
from Juniper Bank pursuant to this Amendment; and (vii) no material adverse change,
individually or in the aggregate, in the business, financial or other condition of
America West, US Airways Group, the Merged Entities or their respective consolidated
subsidiaries, taken as a whole, other than any thereof which would not result in a
Material Adverse Effect. Juniper Bank may use the Pre-Purchased Miles for any
purpose, provided said purpose is not in competition with the Program. It is
specifically agreed that the use of Pre-Purchased Miles for fulfillment of rewards
offered in connection with a Juniper Bank or Barclays branded credit card shall not
be deemed competitive with the Program.

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14.2 Repurchase of Pre-Purchased Miles. US Airways Group will repurchase
the Pre-purchased Miles together with interest on the amount of the purchase price
to be paid therefor on or before the Expiration Date in the manner and in accordance
with the following terms and conditions.

14.2.1 Principal Payments. Except as set forth in Section
4.6 above, US Airways Group will repurchase the Pre-Purchased Miles in
twelve (12) equal consecutive quarterly installments of [REDACTED]
commencing on the date five (5) years prior to the Expiration Date until
paid in full. Provided that to the extent Juniper Bank uses Base Miles as
permitted hereunder, including but not limited to payment pursuant to
Section 14.4, said Base Miles shall be deducted from the last then
due quarterly installment, and the obligation to repurchase Pre-Purchased
Miles shall cease at such time as Juniper Bank no longer owns Pre-Purchased
Miles. Further provided, in the event that US Airways Group fails to make a
payment due under this Section 14.2.1 within thirty (30) days of
when due, Juniper Bank may, in its discretion, elect to offset the amount of
the missed payment by paying US Airways Group in Pre-Purchased Miles as set
forth in Sections 14.4 and 14.5.

14.2.2 Interest Payments. Commencing on the first day of the
calendar month following the Pre-Purchase Date, and continuing on the first
day of each calendar month so long as Juniper Bank owns Pre-Purchased Miles,
US Airways Group will pay Juniper Bank interest accruing under the
Pre-Purchased Miles at the Adjustable Rate during the preceding Interest
Period. For purposes of this Agreement, “Adjustable Rate” shall mean the
One Month LIBOR on the last business day of each calendar month prior to the
next Interest Period as published on Bloomberg page USSW, plus 4.75%.
“Interest Period” shall mean (i) initially, the period beginning on the
Pre-Purchase Date and ending on the last day of the calendar month in which
such date occurs, and (ii) thereafter, the period beginning on the first day
of the calendar month and ending on the last day of such calendar month or
the date on which Juniper Bank no longer owns Pre-Purchased Miles, as
applicable. The monthly calculation will be as follows: Number of
Pre-Purchased Miles held by Juniper Bank times [REDACTED] times (Adjustable
Rate/360 times the number of calendar days in the Interest Period).

14.2.3 Miles Repurchase, Processor Collateral. [REDACTED].

14.3 Prepayment. US Airways Group may repurchase all or any of the
Pre-Purchased Miles at any time, or from time to time, without penalty or premium.
Any prepayment shall include accrued interest, if any, in accordance with Section
14.2.2.

14.4 Suspension Events. Juniper Bank shall, absent a Suspension Event or
material breach by US Airways Group and except as provided in Section

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14.5, pay US Airways Group monthly as set forth in Section 4.2. In the event of
the occurrence of a Suspension Event or material breach by US Airways Group,
payments under this Agreement shall be made using Pre-Purchased Miles as set forth
in Section 14.5 below until such time that either (i) the Suspension Event
has been remedied; or (ii) the breach has been cured; or (iii) there are no Pre-
Purchased Miles remaining. All payments to US Airways Group under Sections
14.4 and 14.5 for purchase of Bonus or Base Miles awarded to Affinity
Cardholders shall include the Transportation Tax as set forth in Section
4.8.

14.5 Payment with Pre-Purchased Miles. For each month for which US Airways
Group receives payment in Pre-Purchased Miles in lieu of cash payment pursuant to
this Section 14, Juniper Bank shall return to US Airways Group Pre-Purchased
Miles on the following schedule:

(i) For each New Account Fee earned by US Airways Group pursuant to
Sections 4.2.1(c) and 4.4.1 in the preceding month:
[REDACTED];

(ii) For each New Account Premium earned by America West as set forth in
Section 4.2.1(a) in the preceding month: [REDACTED];

(iii) For each Base Mile posted to a Cardholder’s Account as set forth in
Section 4.2.2 in the preceding month: [REDACTED];

(iv) For each Bonus Mile otherwise purchased for [REDACTED], posted to a
Cardholder’s Account as set forth in Section 4.2.2 in the preceding
month: [REDACTED];

(v) For each Bonus Mile otherwise purchased for [REDACTED], posted to a
Cardholder’s Account as set forth in Section 4.2.2 in the preceding
month: [REDACTED];

(v) For the Transportation Tax due on the purchase and award of Bonus Miles
or Base Miles as set forth in Section 4.8, Juniper Bank shall pay
for each dollar due: [REDACTED]; and

(vi) For each Annual Bonus Payment: [REDACTED] Miles.

14.6 Acceptance of Payment with Pre-Purchased Miles. US Airways Group
agrees to accept payment in Pre-Purchased Miles as provided in this Section
14 in lieu of cash and irrevocably waives any rights to receive cash or other
consideration for such payments regardless of the then value of a Pre-Purchased
Miles.

14.7 Use of Pre-Purchased Miles. To the extent Juniper Bank uses
Pre-Purchased Miles for purposes other than as set forth in Sections 14.2
through 14.6, US Airways Group shall provide commercially reasonable methods
to redeem said miles (e.g., mileage certificates or assignment to FF Accounts) to

14

 

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facilitate the use of the Miles by Juniper Bank and/or the recipient of the
Pre-Purchased Miles. This obligation shall survive termination of this Agreement.”

	(s)	 	The Agreement is amended by adding the following new Section 15 to the end of the
Agreement:
	 
	 	 	“15. FAILURE TO PROVIDE EXCLUSIVITY
	 
	 	 	In the event that the Merger is completed and Juniper Bank does not become the
exclusive issuer of co-branded credit cards to the Merged Entities within 2 years
and 120 days of the Merger Effective Date (the “Exclusivity Failure”), US Airways
Group shall promptly: (i) repurchase any unused Pre-Purchased Miles remaining at
the end of such period; and (ii) repay the Merger Bonus Payment and Bonus Payment in
their entirety together with interest at the Adjustable Rate accruing from the date
each such amount was received from Juniper Bank in accordance with Section
14.2.2. US Airways Group agrees that the damages resulting from the occurrence
of an Exclusivity Failure would be extremely difficult to determine; therefore, the
parties agree that in the event Juniper Bank does not become the exclusive issuer of
co-branded credit cards to US Airways Group upon the expiration of such period,
Juniper Bank shall receive, in addition to the amounts described in clause (i) and
(ii) above, as liquidated damages, and not as a penalty, [REDACTED] .”
	 
	(t)	 	The Agreement is amended by adding the following new Section 16 to the end of the
Agreement:
	 
	 	 	“16. THE DUAL BRANDING PERIOD
	 
	 	 	[REDACTED] America West shall use commercially reasonable efforts to assist
Juniper Bank in its efforts to purchase the Existing Portfolio and the US
Airways/Bank of America Co-Branded Program portfolio.”
	 
	(u)	 	The Agreement is amended by adding the following new Section 17 to the end of the
Agreement:
	 
	 	 	“17. REPORTING
	 
	 	 	US Airways Group shall make available to Juniper Bank the following reports: (i)
annual audited financials statements within 105 days after the end of each
fiscal year and unaudited quarterly financial statements within 60 days after
the end of each fiscal quarter; provided that the filing of such reports on
EDGAR shall satisfy the delivery obligations hereunder; (ii) quarterly
forecasts/budgets of profit/loss, balance sheet and cash flow for the following
year by no later than 45 days following the beginning of each quarter; (iii)
monthly income statements and balance sheet results in a format consistent with
Securities Exchange Commission standards within 25 days following the close of
each month

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	 	 	 	(with the exception that during the first six (6) months following
the Effective Date, US Airways Group shall deliver to Juniper Bank preliminary
monthly income statements and balance sheets within twenty-five (25) days
following the close of the month, and final monthly income statements and
balance sheet results within thirty (30) days following the close of the month);
(iv) quarterly certificate of compliance with the covenants contained in
Section 4.6 within thirty (30) days following the end
of each quarter (sixty (60) days during the first six (6) months following the
Effective Date); and (v) a monthly report showing the amount of Gross Air
Traffic Liability and the amount of funds maintained in the Reserve Account
maintained by Chase as of the month end [REDACTED].”
	 
	 	(v)	 	The Agreement is amended by adding the following new Section 18 to the end of the
Agreement:
	 
	 	 	 	“18. WARRANTIES AND REPRESENTATIONS 
	 
	 	 	 	US Airways Group warrants and represents that:

	 	(i)	 	upon termination and after the Dual Branding Period of the US
Airways/Bank of America Co-Branded Program, Juniper Bank will be the exclusive
issuer of co-branded credit cards to US Airways Group;
	 
	 	(ii)	 	upon 90 days following consummation of the Merger, it has the
contractual right to terminate the US Airways/Bank of America Co-Branded
Program thus commencing the Dual Branding Period;
	 
	 	(iii)	 	to the knowledge of US Airway Group and America West, there
are no contractual restrictions on the terms that Juniper Bank may set for the
credit card and the award of Base and Bonus Miles other than those contained
herein; and
	 
	 	(iv)	 	the execution and delivery of this Amendment by US Airways
Group and America West and the performance by US Airways Group and America West
of their respective obligations hereunder or under the Agreement, do not
violate or conflict with any other agreement, contract, instrument, law, rule
or regulation that is legally binding upon either US Airways or America West.”

	 	(w)	 	The Agreement is amended by adding the following new Sections 19, 20, 21, 22, 23
and 24 to the end of the Agreement:

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	 	 	 	“19. SELECTION OF CREDIT CARD ASSOCIATION
	 
	 	 	 	Juniper Bank may, without limitation or restrictions, select
[REDACTED] as the Program association and, without
limitation or restrictions, at its option, convert the Existing
Portfolio and the US Airways/Bank of America Co-Branded Program
portfolio association to that association.
	 
	 	 	 	20. LEGACY AMERICA WEST MARKETING CHANNELS
	 
	 	 	 	[REDACTED].
	 
	 	 	 	21. TERMINATION OF THE US AIRWAYS/BANK OF AMERICA CO-BRANDED
PROGRAM
	 
	 	 	 	US Airways Group shall deliver the US Airways/Bank of America Co-Branded
Termination Notice thus commencing the Dual Branding Period at the
earliest date permitted under the US Airways/Bank of America Co-Branded
agreement, but in any event such Termination Notice shall be delivered no later than
ninety-seven (97) days after the Merger Effective Date. Failure to provide the US
Airways/Bank of America Co-Branded Termination Notice shall be a material default
hereunder. US Airways Group shall provide Juniper Bank contemporaneous notice of
the termination and, upon receipt by US Airways Group proof of delivery.
	 
	 	 	 	22. NOTICES AND REQUIRED DISCLOSURES
	 
	 	 	 	With the exception of disclosures required by law, regulation or any government
authority (including without limitation the Securities Exchange Commission), for
which the parties agree to provide the other party forty-eight (48) hours prior
notice when practical, neither America West, US Airways Group nor Juniper Bank, nor
any of their affiliates, shall issue a press release or make a public announcement
or any disclosure related to the transactions contemplated by this Amendment or the
Original Agreement without the prior consent of the other party, which consent shall
not be unreasonably withheld or delayed.
	 
	 	 	 	23. COMPETITIVENESS
	 
	 	 	 	The redemption value of Base and Bonus Miles and redemption availability shall
be competitive with [REDACTED].
	 
	 	 	 	24. LEGACY US AIRWAYS MARKETING CHANNELS
	 
	 	 	 	[REDACTED].
	 
	 	  (x)	 	Exhibit B of the Agreement is amended in its entirety and replaced with a new
Exhibit B attached to this Amendment.

3. Consent to Assignment. Pursuant to Section 13.1 of the Original Agreement and
consistent with the terms of this Amendment, Juniper Bank hereby consents, on a one-time
basis to the assignment of the Original Agreement as amended hereby to US Airways Group.
Further, upon consummation of the Merger, the Amended

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CONFIDENTIAL

Agreement will be automatically
assigned to US Airways Group without further act, and unless otherwise specifically
provided to the contrary herein or the context otherwise requires, all references to
America West in the Original Agreement and/or this Amendment shall be deemed references to
US Airways Group.

4. Effectiveness of Amended Agreement. The Amended Agreement shall be effective on the
Effective Date. In the event the Merger is not consummated, this Amendment shall have no
force and effect, the Original Agreement shall be reinstated without giving effect to any
of the amendments contained herein, and the parties hereto shall be relieved from any
obligations and liabilities that may have arisen hereunder.

5. Exclusivity. Upon execution of this Amendment and for six months thereafter and except
as set forth herein, Juniper Bank shall not, and Juniper Bank shall not permit
any of its Affiliates (as defined below) to make, directly or indirectly, any investment
(debt or equity) in US Airways Group or any resulting entity of US Airways Group subsequent
to the effective date of the Plan (as defined below) as part of, or provide, directly or
indirectly, any financing (debt or equity) to any third party for purposes of funding, any
Transaction (as defined below) with respect to which neither Holdings nor any of its
Affiliates is a party or otherwise involved. For avoidance of doubt, such prohibition
shall include Juniper Bank’s or any of its Affiliates’ direct or indirect support, whether
financial or otherwise, to any airline or such airline’s Affiliates in aid of a
Transaction.

6. Certain Definitions. For purposes of this Amendment, the following terms shall have the
meanings set forth below.

“Affiliate” means, with respect to any specified person, a person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or is under
common control with, the specified person, where “control” (including the terms
“controlling,” “controlled by” and “under common control with”) means the possession,
directly or indirectly, of the power to direct or cause the direction of the management and
policies of such person, whether through the ownership of voting securities, by contract,
or otherwise.

“Plan” means the Plan of Reorganization of US Airways Group and its subsidiaries under
Chapter 11, Title 11 of the U.S. Bankruptcy Code to be filed with the U.S. Bankruptcy Court
for the Eastern District of Virginia.

“Transaction” means a reorganization, sale, merger, consolidation, joint venture, recapitalization,
stand-alone plan, sale of assets or equity interests, or other combination or disposition or
similar transaction involving US Airways Group as part of the Plan.

7. Rights and Obligations. The rights and obligations of the parties under this Amendment
are expressly contingent upon the consummation of the Merger. In the event that the Merger
is not consummated, then at Juniper Bank’s election, this Amendment shall terminate and
America West shall remit to Juniper Bank within ten (10) business days of Juniper Bank’s
notice to terminate (“Termination Notice”)

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all amounts paid to America West by Juniper Bank
pursuant to this Amendment, together with interest at LIBOR published on Bloomberg page
USSW on the date of the Termination Notice, or if not printed on that date, then
on the most recent date published prior to the Termination Notice. For purposes of this
Amendment and the Agreement, “consummation of Merger” shall mean the filing of the
Certificate of Merger with the Delaware Secretary of State. Upon termination of this
Amendment pursuant to this Section 7, the terms and conditions of the Original Agreement
shall be reinstated and will govern the rights and obligations of the parties for the Term
of the Agreement.

8. Effect. Except as set forth in this Amendment, the Original Agreement shall remain in
full force and effect and each of America West and Juniper Bank hereby restates and affirms
all of the terms and provisions of the Original Agreement. If any
conflict exists between the terms and provisions of the Original Agreement and this
Amendment, the terms and provisions of this Amendment will govern and control.

9. Entire Agreement. The Amended Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior understandings
with respect thereto.

10. Counterparts. This Amendment may be executed in any number of counterparts, each of which
shall be deemed an original and all of which when taken together shall constitute one and the same
instrument. Delivery of an executed counterpart signature page by telecopier shall be effective as
a manually executed signature page.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, Juniper Bank, America West and US Airways Group have executed and
delivered this Amendment as of the date first written above.

	 	 	 
	AMERICA WEST AIRLINES, INC.

	 	JUNIPER BANK
	 
	 	 
	/s/ J. Scott Kirby

	 	/s/ Kevin Kleinschmidt
	 

	 	 
	By: J. Scott Kirby

	 	By: Kevin Kleinschmidt
	Title: Executive Vice President, Sales and Marketing

	 	Title: Managing Director
	 
	 	 
	US AIRWAYS GROUP, INC.
	 	 
	 
	 	 
	/s/ Ronald E. Stanley
	 	 
	 
	 	 
	By: Ronald E. Stanley
	Title: Executive Vice President, Chief Financial Officer

 

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CONFIDENTIAL

EXHIBIT B

CARD BENEFITS

	 	 	 	 	 	 	 	 	 	 	 
	 
	 	[REDACTED]
	 	[REDACTED]
	 	[REDACTED]
	 	[REDACTED]
	 	[REDACTED]
	 
	Activation
Bonus Miles
	 	[REDACTED]
	 	[REDACTED]
	 	[REDACTED]
	 	[REDACTED]
	 	[REDACTED]
	 
	Miles
Earned Per Dollar
	 	[REDACTED]
	 	[REDACTED]
	 	[REDACTED]
	 	[REDACTED]
	 	[REDACTED]
	 
	Miles
Earned Per Dollar on US AIRWAYS ticket purchases,
USA Vacations (excluding cruises), and USA Club Passes or
Memberships**
	 	[REDACTED]
	 	[REDACTED]
	 	[REDACTED]
	 	[REDACTED]
	 	[REDACTED]
	 
	Miles
Earned Per Dollar of Qualifying Balance Transfer
	 	[REDACTED]
	 	[REDACTED]
	 	[REDACTED]
	 	[REDACTED]
	 	[REDACTED]
	 
	US Airways
Club Passes*
	 	[REDACTED]
	 	[REDACTED]
	 	[REDACTED]
	 	[REDACTED]
	 	[REDACTED]
	 
	Companion
Pass*
	 	[REDACTED]
	 	[REDACTED]
	 	[REDACTED]
	 	[REDACTED]
	 	[REDACTED]

 

			
	*	 	US Airways Group will provide, at US Airways Group’s sole discretion.

	 
	**	 	Juniper Bank will provide and purchase the incremental US Airways Group ticket purchase miles at
the Bonus Mileage Rate.exv10w111

 

EXHIBIT 10.111

FIRST AMENDMENT TO MERCHANT SERVICES BANKCARD AGREEMENT

This First Amendment (“Amendment”) is to the Merchant Services Bankcard Agreement (the “Agreement”)
dated April l6, 2003 among America West Airlines, Inc. (“CUSTOMER”), JPMorgan Chase Bank, N.A.,
successor-in-interest to JPMorgan Chase Bank (“BANK”) and Chase Merchant Services, L.L.C. (“CMS”).
CMS and BANK are collectively referred to as the “SERVICERS”.

     WHEREAS, US Airways Group, Inc. and its domestic subsidiaries (collectively, “Debtor”) filed
for bankruptcy protection under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy
Court for the Eastern District of Virginia (the “Bankruptcy Court”) on September 12, 2004 (the
“Bankruptcy Proceeding”). Debtor remains in the Bankruptcy Proceeding as of the date the parties
are signing this Amendment;

     WHEREAS, CUSTOMER has advised SERVICERS of the prospective merger of its parent, America West
Holdings Corporation into a newly created wholly-owned subsidiary of US Airways Group, Inc. named
Barbell Acquisition Corp. (which subsidiary will be formed subsequent to entry of the Order, as
defined herein below), with the result that America West Holdings Corporation will be the surviving
entity (the “Merger”). After the completion of the Merger, America West Holdings Corporation
(CUSTOMER’s parent) and US Airways, Inc. will be domestic subsidiaries of US Airways Group, Inc.;

     WHEREAS, the merger or consolidation of CUSTOMER or its parent with or into another Person,
including, without limitation, a subsidiary of US Airways Group, Inc., is considered an assignment
or transfer of the Agreement, pursuant to Section 18.1, and requires the prior written consent of
SERVICERS;

     WHEREAS, Bank of America currently performs Visa and Mastercard card processing for US
Airways, Inc., which is a domestic subsidiary of US Airways Group, Inc. The parties intend to
transfer such processing to SERVICERS as soon as possible after the completion of the Merger; and

     WHEREAS, SERVICERS are providing their consent to such assignments and transfers by CUSTOMER
subject to satisfaction of the conditions precedent set forth below and in accordance with the
additional and modified terms and conditions outlined below.

     NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:

1. Defined Terms; Annex 1.

(a) All capitalized terms not otherwise defined in this Amendment shall have the meaning ascribed
to such term in the Agreement.

(b) As of the Effective Date, the term “CUSTOMER”, as used in the Agreement, as amended,
shall mean America West Airlines, Inc. which is a wholly-owned subsidiary of America West Holdings
Corporation, which is a wholly-owned subsidiary of US Airways Group, Inc. On the Effective Date,
CUSTOMER, as defined in the immediately preceding sentence shall provide to SERVICERS an
acknowledgement of its assumption of the Agreement, as successor-in-interest following a merger,
and the representations and warranties in substantially similar form to those attached as Exhibit A
to this Amendment. On the Effective Date, US Airways Group, Inc. will provide a guaranty to
SERVICERS (in addition to the Guaranty), which is in substantially similar form as the Guaranty.
Upon provision of such guaranty, “GUARANTOR” shall mean America West Holdings Corporation
and US Airways Group, Inc.

(c) As of the Conversion Date, the term “CUSTOMER”, as used in the Agreement, as amended,
shall collectively mean America West Airlines, Inc. (as defined in Subsection 1(b) of this
Amendment) and US Airways, Inc., which is a wholly owned subsidiary of US Airways Group,
Inc., jointly and severally. On the Conversion Date, the parties shall enter into an amendment to
the Agreement which adds US Airways, Inc. as a party to the Agreement in the capacity of being
jointly and severally obligated, liable and responsible for any and all obligations of CUSTOMER
arising out of or related to the Agreement.

Page 1 of 12

 

(d) The following changes are hereby made to Annex 1:

     (i) In Section 1.24 “Corporate Debt Rating of America West Airlines” is hereby changed
to “Corporate Debt Rating of CUSTOMER”. Section 1.19 and 1.20, which define Net Air
Traffic Liability and Net Reserve Percentage, respectively, are hereby deleted.

     (ii) Section 1.13, which defines “Gross Air Traffic Liability” is hereby superseded by and
replaced with the following: “1.13 “Gross Air Traffic Liability” means, at any given time,
the greater of (a) the sales price of all tickets or services sold by CUSTOMER which, pursuant to
CUSTOMER’s policies, represents a valid obligation of CUSTOMER (and shall include, for sake of
clarification, Breakage, i.e., Breakage is not to be subtracted) for which the holder or purchaser
of the ticket or service has paid via a Card transaction and has not yet traveled or used the
ticket or service” (whether such travel or service is to be provided by CUSTOMER or another
carrier), and (b) the dollar amount of any and all unfulfilled tickets or services which may be or
become subject to Chargeback pursuant to Association Rules.”

     (iii) Section 1.14, which defines “Gross Reserve Percentage” is hereby superseded by
and replaced with the following: “1.14 “Gross Reserve Percentage” is a factor multiplied by
the Gross Air Traffic Liability for the most recent week as reported by CUSTOMER each weekly period
as of midnight (Arizona time) each Friday in determining the amount to be maintained in the Reserve
Account.”

2. Section 3.3. (a) Section 3.3(ii) of the Agreement is hereby deleted and is hereby
replaced with the following:

“(ii) a brief description of the goods or services sold, returned or cancelled, which shall
include, but not be limited to, flight itinerary information for all travel segments (as further
described below);”. The following language is hereby added to the end of Section 3.3: “The flight
itinerary information shall include, but not be limited to, original departure date, origination
city, destination city, airport codes, carrier ID, and any additional services provided.”

(b) CUSTOMER (America West Airlines, Inc. and US Airways, Inc., as defined in Paragraph 1(c)
of this Amendment) covenants and agrees that it shall use all commercially reasonable diligent
efforts to take, or cause to be taken, as promptly as practicable all actions which are necessary
or appropriate to ensure that, for systems under its control, flight itinerary information with
respect to ticket sales is provided in accordance with a standard of [Redacted]completeness and
accuracy as expeditiously as reasonably possible following the Conversion Date. For avoidance of
doubt, this Paragraph 2(b) shall be deemed to be a material term of the Agreement, as amended.

3. Section 4. The caption of Section 4 is hereby changed to “Operation Guide;
Association Rules; Data Security”. The following language is hereby added to Section 4:

“CUSTOMER agrees that CUSTOMER and its Service Providers shall follow and comply with the
VISA Cardholders Information Security Guidelines (presently available online at VISA’s
website www.visa.com), the MasterCard Site Data Protection Program (presently available
online at MasterCard’s website www.mastercardmerchant.com), as well as any other
security guidelines or requirements established by any applicable Association or by
SERVICERS in response to Association Rules or applicable state or federal law, rules or
regulations (collectively, “Data Security Requirements”). CUSTOMER shall be liable
for any fees or fines imposed by an Association as a result of CUSTOMER’s or its Service
Providers’ failure to comply with any such security guidelines.

CUSTOMER shall be responsible for (a) verifying its (and ensuring its Service Providers’)
compliance with Data Security Requirements, from time to time, which includes, but is not
limited to, having security audits performed and (b) all costs related to verification, and
for any fines or penalties arising out of or related to CUSTOMER’s or its Service Providers’
non-compliance with Data Security Requirements. In addition, in the event of a security
incident or issue, or reasonable suspicion of such, related to CUSTOMER and/or its Service
Providers, CUSTOMER shall cooperate in, and shall be responsible for the costs of, an audit
or investigation pertaining to such incident or issue. If there is any conflict between the
terms of this Agreement and the Operating Guide, the terms of this Agreement, as amended,
will govern.

Page 2 of 12

 

CUSTOMER shall notify SERVICERS of all Service Providers CUSTOMER utilizes. Service
Providers shall be responsible for their registration, and associated costs with the
applicable Associations. CUSTOMER shall only utilize Service Providers that are registered
with the applicable Associations and that are certified by the applicable Associations as
compliant with such Association’s security guidelines. As used in this Section,
“Service Provider” shall mean any individual or entity secured by or performing
services on behalf of CUSTOMER that stores, processes, or transmits Cardholder data.”

4. Section 18; Consent to Assignments or Transfers of the Agreement; Conditions Precedent.

(a) CUSTOMER acknowledges that its parent is in the process of completing the Merger described in
the recitals. Upon the Effective Date, CUSTOMER hereby assigns to America West Airlines, Inc.
(which will have new ownership as a result of the Merger, as outlined in Paragraph 1(b) of this
Amendment), and America West Airlines, Inc. shall accept and assume, the Agreement and all of
CUSTOMER’s rights and obligations arising out of or related to the Agreement. CUSTOMER and America
West Airlines, Inc. shall provide SERVICERS with any such supporting documents and resolutions as
SERVICERS may reasonably request related to completion of the Merger and America West Airlines,
Inc.’s assumption of the Agreement pursuant to the foregoing, which will include, but not be
limited to, providing the acknowledgments, representations and warranties on Exhibit A to this
Amendment.

(b) Conditions Precedent to effectiveness of Amendment. Each of the following shall be
conditions precedent to the effectiveness of this Amendment:

     (i) Entry by [Redacted]of a final and non-appealable order (the “Order”) by the
Bankruptcy Court confirming Debtor’s plan of reorganization (the “Plan”) under which Debtor
shall emerge from the Bankruptcy Proceeding as a going concern, which Plan shall include, but not
be limited to, the merger or consolidation of Barbell Acquisition Corp., a wholly-owned subsidiary
of US Airways Group, Inc. which will be created subsequent to entry of the Order into America West
Holdings Corp. SERVICERS shall be provided with a copy of the Plan upon filing, and further shall
be provided with other financial information from CUSTOMER, as may be reasonably requested by
SERVICERS; and

     (ii) Board of Director approval of this Amendment by America West Holdings Corporation and US
Airways Group, Inc.

(c) Conversion Requirement. CUSTOMER shall complete the conversion, which shall mean, for
sake of clarification, conversion of [Redacted]of the US Airways, Inc.’s Card transaction volume
from US Airway, Inc.’s existing processor to SERVICERS for processing as soon as practicable, but
no later than [Redacted]days from the Effective Date (the “Conversion Date”). SERVICERS
agree to work with CUSTOMER in good faith and to use commercially reasonable efforts to assist
CUSTOMER in completing the conversion as soon as reasonably practicable, including, without
limitation, providing CUSTOMER with the applicable processing system specifications.

5. Section 19.2; Term of Agreement. The initial term of this Agreement is set to expire on
April 15, 2008. The foregoing notwithstanding, the parties agree that the initial term shall
expire three (3) years from the Effective Date of this Amendment. Upon expiration of the initial
term, the Agreement shall automatically renew for successive one-year periods pursuant to the terms
of Section 19.2 of the Agreement.

6. Section 19.3 and Section 19.4; Events of Default.

(a) The following is hereby added to the beginning of Subsection 19.3(vii): “not including the
Bankruptcy Proceeding,”

	(b)	 	The following additional subsections are hereby added to Section 19.3:
	 
	 	 	“(x) any general suspension of commercial air transportation on the United States for a
consecutive period [Redacted](xi) failure to provide information as required by this Agreement
and/or as may be reasonably requested from time to time by SERVICERS, before converting the US
Airway’s Card transaction volume to SERVICERS for processing; or

Page 3 of 12

 

(xii) CUSTOMER has failed to provide to SERVICERS any Gross Air Traffic Liability information
outlined in Section 21 of this Agreement, as amended, within the timeframes indicated therein.”

(c) The following sentence is hereby added after the second sentence in Section 19.4: “For any
event specified in subparagraphs (xi) and (xii) above, the cure period shall be [Redacted]Business
Days.”

7. Section 20; Reserve Account.

(a) CUSTOMER acknowledges that in addition to the weekly adjustments contemplated by Section 20.1
of the Agreement, as amended herein below, there shall be two adjustments to the amount maintained
in the Reserve Account in connection with the Merger, as follows:

     (i) On the Effective Date, the amount required to be maintained in the Reserve Account shall
be increased to reflect an amount based upon a Gross Reserve Percentage of [Redacted]which is
calculated based upon the Gross Air Traffic Liability for America West Airlines, Inc. (as defined
in Paragraph 1(b) of this Amendment). America West Airlines, Inc. shall fund the additional amount
required to be maintained in the Reserve Account within [Redacted]Days of SERVICERS’ calculation
and notification of the amount. In connection with such review, [Redacted]days prior to the
Effective Date, CUSTOMER shall provide SERVICERS with reports outlining America West Airlines,
Inc.’s Gross Air Traffic Liability for the prior [Redacted]weeks.

     (ii) On the Conversion Date, the amount required to be maintained in the Reserve Account shall
be increased to reflect an amount based upon a Gross Reserve Percentage of [Redacted]which shall be
calculated based upon the combined Gross Air Traffic Liability of CUSTOMER (America West Airlines,
Inc. and US Airways, Inc., as defined in Paragraph 1(c) of this Amendment). SERVICERS will
calculate and notify CUSTOMER of the additional amount required to be maintained in the Reserve
Account (the “Reserve Account Shortfall”). The Reserve Account Shortfall shall be funded (x) by
wire transfer of funds to SERVICERS by or before the Conversion Date should an indemnification
agreement be completed and executed by the applicable parties by or before [Redacted]days prior to
the Conversion Date, as outlined in and pursuant to Paragraph 12 of this Amendment, or
alternatively, (y) if each of the requirements of (x) are not fully satisfied, pursuant to the
foregoing, SERVICERS may deduct and hold-back settlement monies due to CUSTOMER related to US
Airway, Inc.’s Card transactions on a ratable basis over a period of [Redacted]weeks to fund the
Reserve Account Shortfall. In connection with SERVICERS review and calculation of Gross Air
Traffic Liability under this Paragraph 7(a)(ii), CUSTOMER shall provide SERVICERS with reports
outlining America West Airlines, Inc.’s and US Airways, Inc.’s combined Gross Air Traffic Liability
for the prior [Redacted]weeks [Redacted]days prior to the Conversion Date.

(b) Section 20.1. The following changes are hereby made to Section 20.1:

     (i) The fourth and fifth sentences of Section 20.1 are hereby deleted and shall be replaced
with the following:

     “Subject to Section 20.2, upon the Effective Date the amount required to be maintained in the
Reserve Account will be reviewed and adjusted by SERVICERS on a [Redacted]basis. In conducting
such [Redacted]reviews, SERVICERS will review the most recently available reports of Gross Air
Traffic Liability and financial reports provided by CUSTOMER pursuant to Section 21.1, as amended;
provided, however, that if (x) SERVICERS reasonably believe that CUSTOMER’s reports of Gross Air
Traffic Liability contain materially inaccurate information and/or material information is omitted,
or (y) CUSTOMER fails to provide a [Redacted]report of Gross Air Traffic Liability within the
timeframe specified in Section 21.1, as amended, then SERVICERS may, at their sole discretion,
elect to reasonably estimate Gross Air Traffic Liability based upon information available to
SERVICERS. The adjusted amount to be maintained in the Reserve Account (the “Adjusted Reserve
Result”) pursuant to this Section 20.1 shall be based upon a Gross Reserve Percentage of
[Redacted](the “Baseline Reserve Amount”) based upon the prior week’s reports of Gross Air
Traffic Liability (in accordance with the definition of Gross Reserve Percentage in Section 1.14 of
Annex 1).”

     (ii) Additionally, the sixth sentence of Section 20.1 is hereby deleted. The following
language is hereby added to Section 20.1 in place of such deleted sentence: “If SERVICERS’ weekly
review under this Section 21.1 indicates (x) an increase in the amount required to be maintained in
the Reserve Account, funding of the deficiency by CUSTOMER by wire transfer to an account
designated by SERVICERS shall be completed within [Redacted], as

Page 4 of 12

 

provided herein, or (y) a decrease in the amount required to be maintained in the Reserve Account,
SERVICERS will within [Redacted]return the overage to CUSTOMER; provided, however, that an increase
or decrease pursuant to the foregoing shall only be made if the amount of the deficiency or overage
is equal to or greater than [Redacted]as measured against the amount currently maintained in the
Reserve Account. If CUSTOMER has not funded the amount of any deficiency within[Redacted],
pursuant to the above, SERVICERS may fund the deficiency in the amount maintained in the Reserve
Account, pursuant to Subsection 20.1(x), by making one or more deductions from the settlement
monies due to CUSTOMER, or alternatively, at their sole discretion, SERVICERS may require CUSTOMER
to immediately fund the amount of the deficiency into the Reserve Account.”

(c) Section 20.2 of the Agreement is hereby modified as follows:

     (i) The third “bullet” paragraph of Section 20.2 is hereby deleted. The paragraph in Section
20.2 in between the bullet points (outlining certain events) and the guidelines table (outlining
Net and Gross Reserve Percentage, such table hereinafter referred to as “Reserve Percentage
Table”) is hereby deleted. In place of such deleted paragraph, the parties acknowledge and
agree that the Baseline Reserve Amount shall be applicable with respect to determining the amount
required to be maintained in the Reserve Account under Section 20.1, as amended, from the Effective
Date forward, unless a higher amount applies pursuant to the terms of the Agreement as amended
(i.e., Full Coverage); provided, however, that upon the conclusion of [Redacted]following the
Effective Date, and the receipt and review by SERVICERS of at least [Redacted]of financial reports,
SERVICERS will consider an adjustment to the Baseline Reserve Amount, as follows: In the event
CUSTOMER’s and GUARANTOR’s Corporate Debt Rating are equal to the Corporate Debt Ratings identified
for particular row within the Reserve Guidelines Table (each of the two rows hereinafter referred
to as “tiers”), then SERVICERS will base the amount required to be maintained in the Reserve
Account upon the Gross Reserve Percentage for such tier. 

     (ii) In the Reserve Percentage Table, (a) column four, which outlines Net Reserve Percentage,
is hereby deleted, and (b) the percentages in column five, which outlines Gross Reserve Percentage,
is hereby changed from [Redacted]and [Redacted](c) the caption of column two is hereby changed from
“Corporate Debt Rating of America West Airlines, Inc. (S&P)” to “Corporate Debt Rating of CUSTOMER
(S&P)”, and (d) the caption of column three is hereby changed from “Corporate Debt Rating of
America West Airlines, Inc. (Moody’s)” to “Corporate Debt Rating of CUSTOMER (Moody’s)”.

     (iii) The two paragraphs in Section 20.2 which immediately follow the Reserve Percentage Table
are hereby deleted. The following language is hereby added to Section 20.2 following the Reserve
Percentage Table in place of such deleted paragraphs:

“In the event a Gross Reserve Percentage from the Reserve Percentage Table is applied in accordance
with the forgoing, the Reserve Account will be reviewed and adjusted on a weekly basis, as outlined
in Section 20.1 of the Agreement, as amended, and in accordance with the method for adjustments
outlined therein. Notwithstanding the foregoing, (x) if CUSTOMER no longer qualifies for a
particular tier within the Reserve Percentage Table, the Reserve Account will be adjusted, at
SERVICERS’ sole discretion, based upon the applicable tier within the Reserve Percentage Table, or
alternatively, (y) if CUSTOMER no longer qualifies for either tier within the Reserve Percentage
Table (i.e., CUSTOMER and GUARANTOR’s Corporate Debt Ratings are below the Corporate Debt Ratings
identified for the tiers in the Reserve Percentage Table), the Reserve Account will be adjusted, at
SERVICERS’ sole discretion, to an amount calculated based upon a Gross Reserve Percentage of
[Redacted], if such is otherwise permitted under the Agreement, as amended.

The applicable Gross Reserve Percentage within the Reserve Percentage Table will be determined
based upon the lowest of the Corporate Debt Rating of CUSTOMER as reported by S&P, the Corporate
Debt Rating of CUSTOMER as reported by Moody’s, or the Corporate Debt Rating of GUARANTOR.
Notwithstanding anything herein to the contrary, in the event CUSTOMER and GUARANTOR do not have a
Moody’s and/or S&P Corporate Debt Rating, then the Reserve Account will be adjusted, at SERVICERS’
sole discretion, to an amount calculated based upon a Gross Reserve Percentage of [Redacted]is
otherwise permitted under the Agreement. ”

Page 5 of 12

 

(d) Section 20.6. In Section 20.6 of the Agreement, references to “Net Reserve
Percentage” and “Net Air Traffic Liability” are hereby deleted. Section 20.6 shall only refer to
Gross Reserve Percentage. In the second sentence of Section 20.6, the “and” which precedes
subsection (y) is deleted and the following new subsection is hereby added following subsection
(y): “or (z)[Redacted]”. In the fifth sentence of Section 20.6, the language: “shall not exceed
the greater of (i) the Net Reserve Percentage, (ii) the Gross Reserve Percentage or (iii) the total
amount of CUSTOMER’s Chargebacks during the prior [Redacted]month period” is hereby changed
to: “shall not exceed the greater of (i) the Gross Reserve Percentage, (ii) the total amount
of CUSTOMER’s Chargebacks during the prior [Redacted]month period, or (iii)[Redacted].”

8. Acknowledgment by CUSTOMER concerning Section 20.2 and Section 20.6. CUSTOMER
acknowledges that notwithstanding anything to the contrary in the Section 20 of the Agreement, as
amended hereby, upon the occurrence of one of the events outlined in Section 20.2 and/or with
respect to a Termination Reserve Account under Section 20.6, SERVICERS shall have the right to
elect to base the amount required to be maintained in the Reserve Account upon the greater of: (i)
the amount calculated utilizing the applicable Gross Reserve Percentage and the prior week’s
reports of Gross Air Traffic Liability (in accordance with the definition of Gross Reserve
Percentage in Section 1.14 of Annex 1); or (ii) the amount of[Redacted], based upon the highest
amount Gross Air Traffic Liability will reach over a [Redacted]period (in accordance with the
definition of [Redacted]in Section 1.12 of Annex 1).

9. Section 21.1. (a) The term “Net Air Traffic Liability” shall be deleted from the
fourth and seventh sentences of Section 21.1 as well as every other place used in the Agreement.
In addition to the [Redacted]reports of Gross Air Traffic Liability outlined in Section 21.1 of the
Agreement, CUSTOMER shall additionally provide [Redacted]reports of summary Gross Air Traffic
Liability for the prior [Redacted]The [Redacted]Gross Air Traffic Liability reports to be provided
by CUSTOMER shall include an electronic file (in a mutually agreed upon format) of the data upon
which CUSTOMER has based such reports of Gross Air Traffic Liability (i.e., including, without
limitation, itinerary and flight data). It is acknowledged that such [Redacted]electronic data
file will be very large and SERVICERS shall be responsible for their costs of receiving and
processing such electronic data file. Each [Redacted]summary report of and Gross Air Traffic
Liability pursuant to the foregoing, shall be as of midnight (Arizona time) on Friday of the
previous [Redacted]and shall be based on the latest available actual data and an estimate of
transportation that has already been provided by other carriers as of the report date in cases
where CUSTOMER has sold a ticket where all or part of the transportation has been provided by
another carrier.

(b) The sentence which precedes the last sentence of Section 21.1, is hereby deleted and shall be
replaced with the following: “Upon request and reasonable notice, CUSTOMER shall provide to
SERVICERS or their representatives reasonable access to CUSTOMER’s facilities and records for the
purpose of (x) performing any inspection and/or copying of CUSTOMER’s books and/or records related
to Card transactions processed pursuant to this Agreement, (y) to verify transaction data and
information, and/or (z) to perform an audit of the Gross Air Traffic Liability data provided by
CUSTOMER.” Such inspections or audits will not take place more than [Redacted]per calendar year,
except as may otherwise be required by an Association.

10. Section 19.6. Subsections 19.6(a) and (b) shall be applicable, notwithstanding
anything to the contrary in such subsections in the Agreement, only upon expiration of
[Redacted]from the Effective Date. In addition, Section 19.6 is hereby modified as follows: (i)
“Third Party Processor”, as used in Section 19.6, shall mean one of the top [Redacted]U.S. bank
card acquirers, as rated by The Nilson Report (or such successor or comparable rating publication
concerning the payment systems industry), or a bank card acquirer which is publicly traded (i.e.,
it has shares of common stock actively traded on an organized national domestic exchange), and (ii)
“better terms and conditions”, as used in subsection (a) shall be qualified by a materiality
threshold of [Redacted]and “pricing which is better” or “better pricing”, as used in subsection
(b), shall be qualified by a materiality threshold of [Redacted]I.e., with respect to subsection
(a), the Third Party Processor Offer Reserve Notice must be based upon a reserve which is less than
the reserve being held by SERVICERS by [Redacted]or more, and with respect to subsection (b), the
Third Party Processor’s pricing must be less than the pricing provided by SERVICERS pursuant to
this Agreement by [Redacted]or more.

11. Schedule A. Effective as of the Conversion Date, on Schedule A, Section 1(a), the
settlement fee of [Redacted]per settled transaction is hereby changed to [Redacted]per settled
transaction. On Schedule A, Section 2(b) is hereby changed to: “b) Chargeback Processing
/ Excessive Fee: In addition, in the event CUSTOMER’s Chargeback Percentage is greater than
[Redacted]of CUSTOMER’s Card transaction volume in any given calendar

Page 6 of 12

 

month, then CUSTOMER will be charged [Redacted]per Chargeback during such calendar month (which fee
is, in accordance with Section 12.5 of the Agreement, in addition to any applicable Association
fines or fees.”

12. Transition of Bank of America Processing; Substitute Collateral. After the Conversion
Date, SERVICERS will process Card Transactions of US Airways, Inc. pursuant to the terms of the
Agreement, as amended. Subject to CUSTOMER funding the Reserve Account as required pursuant to
Paragraph 7(a)(ii) of this Amendment on the Conversion Date, CMS will use good faith efforts to
work with CUSTOMER in negotiating an agreement with Bank of America pursuant to which CMS would
indemnify Bank of America against any Chargebacks relating to VISA and MasterCard card transactions
which were processed by Bank of America prior to the Conversion Date and Bank of America would
release and fund its reserve account (which has the meaning provided to such term in the services
agreement between Bank of America and US Airways, Inc.) to CUSTOMER; provided, however, that any
such agreement shall be upon terms satisfactory to CMS in its sole discretion and reached within a
reasonable period of time (i.e., completed at least [Redacted]prior to the Conversion Date). If
for any reason CUSTOMER and CMS are unable to negotiate and execute such an indemnity agreement
with Bank of America by the Conversion Date and cause such release and funding to CUSTOMER, then
the Reserve Account Shortfall shall be funded by deduction and hold-back from settlement monies
pursuant to Paragraph 7(a)(ii)(y) of this Amendment. CUSTOMER (as defined in Paragraph 1(c) of
this Amendment) may at any time elect to substitute a letter of credit in accordance with Section
20.3 of the Agreement for all or any portion of the amount of the Reserve Account. For sake of
clarification and notwithstanding anything in this Amendment to the contrary, in the event the
amount released and funded to CUSTOMER by Bank of America is less than the Reserve Account
Shortfall (as defined in Paragraph 7(a)(ii) of this Amendment), then CUSTOMER shall wire transfer
funds to SERVICES in the amount of such deficiency to ensure that the Reserve Account is funded as
required pursuant to Paragraph 7(a)(ii) of this Amendment by the Conversion Date.

13. Section 20.3 and Section 20.5; Control Agreement. (a) The last sentence of Section
20.3 is hereby deleted. The second and third sentences of Section 20.5 are hereby deleted. In
place of such deleted sentences, the following language is hereby added as new paragraphs to
Section 20.3:

“Except as expressly provided otherwise in this Section 20.3, CUSTOMER’s funds held in a Reserve
Account will be maintained in a separate investment account established by CUSTOMER and identified
as “Chase Merchant Services, L.L.C., reserve account owned by America West Airlines, Inc. and US
Airways, Inc.”, which account shall be subject to (x) SERVICER’s security interest pursuant to
Section 20.5 of the Agreement, and (y) an account control agreement (as defined by the applicable
sections of the Uniform Commercial Code, hereinafter referred to as “Control Agreement”) among
CUSTOMER, the institution at which such account is held (such institution hereinafter referred to
as “Depository”) and SERVICERS (such investment account hereinafter referred to as the “Control
Account”), pursuant to the following. The Control Agreement shall be in form and substance
satisfactory to SERVICERS. The Depository shall be a National Association bank or a nationally
recognized brokerage firm which is mutually acceptable to CUSTOMER and CMS. Funds held in the
Control Account may be invested (and reinvested, as applicable) by CUSTOMER only in Qualified
Assets (as defined below); provided, however, that CUSTOMER must diversify its investment
activities such that no more than [Redacted]of the total reserve amount can be placed with any one
issuer at any given time, except for the following exception. Such diversification requirement
will not apply with respect to Direct Obligations of the US Treasury (item 1. on Schedule C to the
Agreement, as amended). CUSTOMER shall ensure that SERVICERS receive access to whatever account
statements, on-line (i.e., Web) access and phone/voice access are available for the Control
Account. For sake of clarification and without limiting the foregoing, SERVICERS shall directly
receive from Depository and/or CUSTOMER unaltered and complete account statements which Depository
provides (on a monthly or more frequent basis), a user ID/password for on-line access to view
account activity (to the extent such on-line access is available), and a phone number(s) for
phone/voice access to account information. The account statements, pursuant to the foregoing,
shall outline at a minimum: (a) the investment activities in detail for the period being reported,
(b) the current real-time Reserve Account balance, and (c) any other information typically conveyed
in such statements. CUSTOMER acknowledges and agrees that should it violate any of the foregoing
requirements, including, without limitation, the requirement to invest in Qualified Assets,
diversify CUSTOMER’s investment activities, and provision of account statements to SERVICERS,
SERVICERS shall then be entitled to immediately assume managerial control over the Reserve Account,
which includes, but is not limited to, transferring such funds, money or amounts to, and holding
them in, a commingled reserve account(s) of SERVICERS (i.e., may be commingled with other funds of
SERVICERS, or with other funds of customers of SERVICERS) and CUSTOMER agrees to execute

Page 7 of 12

 

any all documents necessary to effectuate such. “Qualified Assets” shall mean the
investments listed on Schedule C to the Agreement, as amended herein.

CUSTOMER shall be entitled to the income and gain arising from the investment activities for the
Control Account (the “Interest Payments”). Except with respect to Interest Payments, no
distributions or withdrawals from the Control Account shall be allowed without the prior written
consent of CMS. Nothing herein (including CUSTOMER’s entitlement to Interest Payments) shall limit
or modify CUSTOMER’s requirement to at all times maintain the Control Account in the amount
required to be maintained in the Reserve Account pursuant to the terms of the Agreement, as amended
hereby. All items of income, gain, expense and loss recognized in the Control Account shall be
reported to the Internal Revenue Service and all state and local taxing authorities under the name
and taxpayer identification numbers of America West Airlines, Inc. and US Airways, Inc.

(b) In the event (i) CUSTOMER and Depository fail to deliver to SERVICERS an executed Control
Agreement in form and substance agreeable to SERVICERS no less than [Redacted]Days prior to the
Conversion Date, in accordance with Paragraph 13(a) above, or (ii) an executed Control Agreement is
subsequently terminated, CUSTOMER acknowledges and agrees that the Reserve Account will be held in
the name of SERVICERS and under SERVICERS’ control in a commingled reserve account(s) of SERVICERS
(as described in Section 20.3, as amended in Paragraph 13(a) of this Amendment), until such time as
a Control Agreement in form and substance agreeable to SERVICERS is executed by CUSTOMER and
Depository and delivered to SERVICERS.

(c) For sake of clarification and notwithstanding anything in the Agreement, as amended hereby, to
the contrary, in the event SERVICERS deduct, holdback, suspend, off set or set off (collectively
“Set Off Funds”) any settlement monies or amounts otherwise due CUSTOMER pursuant to terms of the
Agreement, as amended hereby, CUSTOMER acknowledges that such Set Off Funds will be held in a
commingled reserve account(s) of SERVICERS (as described in Section 20.3, as amended in Paragraph
13(a) of this Amendment) until such time as such Set Off Funds are wired or deposited by SERVICERS
into any Reserve Account which is in the name of CUSTOMER pursuant to Section 20.3, as amended.
SERVICERS will transfer Set Off Funds from their commingled reserve account(s) as soon as
practicable using commercially reasonable efforts.

14. Schedule C; Qualified Assets. Schedule C of the Agreement is hereby deleted and shall
be replaced with the new Schedule C which is attached hereto and executed herewith.

15. Continued Effectiveness of Agreement. Except as expressly set forth above, the
Agreement, as amended, shall continue in full force and effect in accordance with its terms.

16. Effective Date of Amendment. This Amendment shall become effective upon entry of the
Order and completion of the Merger(the “Effective Date”).

17. Counterparts. The parties may execute this Amendment in multiple counterparts, each of
which constitutes an original, and all of which, collectively, constitute only one agreement.

[REMAINDER OF PAGE INTENTIONALY LEFT BLANK;

SIGNATURE PAGE FOLLOWS]

Page 8 of 12

 

IN WITNESS WHEREOF, the parties have executed this Amendment by their duly authorized officers.

	 	 	 	 	 	 	 
	America West Airlines, Inc.	 	JPMorgan Chase Bank, N.A
	 	 	 
	(“CUSTOMER”)	 	(“Bank”)
	 
	 	 	 	 	 	 
	By:
	 	/s/ Derek J. Kerr	 	By:	 	/s/ Philip Levine
	 

	 	 
	 	 	 	 
	Name:
	 	Derek J. Kerr	 	Name:	 	Philip Levine
	 

	 	 
	 	 	 	 
	Title:
	 	Chief Financial Officer	 	Title:	 	Credit Director, FDMS
	 

	 	 
	 	 	 	 
	Date:
	 	August 4, 2005	 	Date:	 	August 4, 2005
	 

	 	 
	 	 	 	 
	 
	Chase Merchant
Services, L.L.C.	 	
	 	 	 
	(“CMS”)	 	
	 
	 	 	 	 	 	 
	By:
	 	/s/ Norman Haug	 	 	 	 
	 

	 	 	 	 	 	 
	Name:
	 	Norman Haug	 	 	 	 
	 

	 	 	 	 	 	 
	Title:
	 	Chief Operations Officer	 	 	 	 
	 

	 	 	 	 	 	 
	Date:
	 	August 4, 2005	 	 	 	 
	 

	 	 	 	 	 	 

Page 9 of 12

 

EXHIBIT A

Acknowledgements, Representations and Warranties

Reference is made to that certain Merchant Services Bankcard Agreement (the “Agreement”) dated
April l6, 2003, as amended, among America West Airlines, Inc. (“CUSTOMER”), JPMorgan Chase Bank,
N.A., successor-in-interest to JPMorgan Chase Bank (“BANK”) and Chase Merchant Services, L.L.C.
(“CMS”). CMS and BANK are collectively referred to as the “SERVICERS”.

1. [___] hereby accepts and assumes, the Agreement and all of CUSTOMER’s rights and
obligations arising out of or related to such Agreement. [___] is hereby substituted
as CUSTOMER under the Agreement and agrees to be bound by to the terms and condition of the
Agreement.

2. Representations and Warranties. [___] hereby represents and warrants to
SERVICERS that (i) it is a [___] duly organized, validly existing and in good standing
under the laws of the State of [___] with a principal place of business at
[___]; (ii) it has the full authority to accept the assignment of the
Agreement from America West Airlines, Inc. and to enter into the Amendment as amended to; (iii)
upon execution of this letter, the Agreement as amended will constitute a legal, valid and binding
obligation of Assignee, enforceable against Assignee in accordance with their terms.

3. Recipient for Notices. The notices information for CUSTOMER shall be as follows:

	 	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	Attn:
	 	 	 	 
	 

	 	 	 	 

Page 10 of 12

 

AMENDED SCHEDULE C

	1.	 	Direct obligations of the US Treasury Such as Treasury Bills,
Treasury Notes and Treasury Bonds.
	 
	2.	 	Debentures and Notes issued or guaranteed by the US
Government, its agencies or instrumentalities Debt issued by US
Government agencies and instrumentalities include such obligations as
securities of Federal Home Loan Banks (supported by the right of the issuer to
borrow from the Treasury); and Federal National Mortgage Association
obligations (sponsored by the US Government and supported by the credit of the
instrumentality).
	 
	3.	 	Certificates of Deposit (“CD’s”), Time Deposits (“TD’s”)
and Bankers’ Acceptances (“BA’s”) CD’s are short-term negotiable
obligations of commercial banks. TD’s are non-negotiable deposits maintained
in banking institutions for specified periods of time at stated interest rates.
BA’s are time drafts drawn on commercial banks, usually in connection with
international transactions. CD, TD and BA investments are limited to those
instruments issued by institutions with total assets in excess of [Redacted],
and where the long term obligations are rated “[Redacted]” or better by Moody’s
and “[Redacted]” or better by S&P and the short-term deposits are
rated[Redacted], respectively.
	 
	4.	 	Commercial Paper Short-term, unsecured, negotiable
promissory note of a domestic company. Commercial paper must have a rating of
[Redacted]or better by at least two of the Nationally Recognized Statistical
Rating Organizations (as defined in Item 10 of this Schedule C).
	 
	5.	 	Repurchase Agreements Transactions in which the
purchaser acquires a security and simultaneously agrees to sell it back at a
higher price, normally within seven days. Such agreements may be entered into
with domestic organizations, including banks and broker-dealers, which have a
long term debt rating of “[Redacted]or better by at least two NRSRO’s. The
underlying securities must be the types of investments identified on this
Schedule C.
	 
	6.	 	Money Market Mutual Funds (“Money Funds”) No-load
mutual funds which seek to maximize current income for shareholders consistent
with the preservation of capital by investing in a diverse portfolio of high
quality, short-term instruments that maintain compliance with Rule 2a-7 of the
Investment Company Act of 1940. The funds strive to maintain a constant share
price and offer daily purchase and redemption privileges. CUSTOMER’s
investment in any Money Fund shall not be greater than[Redacted] the overall
fund size.

Page 11 of 12

 

	7.	 	Fixed and Floating Rate Corporate Debentures and
Medium-Term Notes Short to medium-term debt issuances of major corporations
and financial institutions. The ratings of the issue/issuer must have a long
term debt rating of “[Redacted]” or better by at least two of the following
NRSRO’s: Moody’s, S&P or Fitch.
	 
	8.	 	Tax-Exempt and Tax-Advantages Securities Limited to
issues rated MIG1, A1, P1, or AA, or higher by at least two NRSRO’s.

	 	a.	 	Tax-exempt commercial paper Short
term commercial paper issued by tax-exempt entities.
	 
	 	b.	 	Variable rate demand obligations
Long-term obligations of tax-exempt entities which have variable
interest rates, and which reset periodically based on a specified index
and formula. Because these obligations always have current market
interest rates, they trade near their par value, and thus, are
considered short-term instruments.
	 
	 	c.	 	Fixed rate, fixed maturity municipal
notes, including long-term notes with a “put” at the sole option of
the investor.

	9.	 	Any and all investments are specifically limited to those types
of investments noted above and any particular investment shall have a maximum
final stated maturity of [Redacted]or less (in any event, the maturity date of
any particular investment shall not exceed the term of the Agreement).
	 
	10.	 	All investments must be denominated in US dollars. For
purposes of this Schedule C, “Nationally Recognized Statistical Rating
Organizations or NRSRO” shall mean Moody’s (as defined in Annex 1 of the
Agreement), S&P (as defined in Annex 1 of the Agreement) or Fitch. “Fitch”
shall refer to Fitch, Inc. or any successor thereto.

Initials for acknowledgement and agreement by:

     America West Airlines, Inc. 

     JPMorgan Chase Bank, N.A

     Chase Merchant Services, L.L.C.

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