EXHIBIT 1.1
ExpressJet Holdings, Inc.
26,000,000 Shares
Common Stock
($0.01 par value)
Underwriting Agreement
New York, New York
o , 2002
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Inc.
Credit Suisse First Boston Corporation
▇▇▇▇▇▇▇, Sachs & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates,
As Representatives of the several Underwriters,
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
ExpressJet Holdings, Inc., a corporation organized under the
laws of Delaware (the "Company"), and Continental Airlines Inc., a corporation
organized under the laws of Delaware ("Continental") and the Company's sole
shareholder, propose to sell to the several underwriters named in Schedule I
hereto (the "Underwriters"), for whom you (the "Representatives") are acting as
representatives, 26,000,000 shares of the Common Stock, $0.01 par value ("Common
Stock"), of the Company (said shares to be hereinafter called the "Underwritten
Securities"). Continental also proposes to grant to the Underwriters an option
to purchase up to 3,900,000 additional shares of Common Stock to cover
over-allotments (the "Option Securities"; the Option Securities, together with
the Underwritten Securities, being hereinafter called the "Securities"). To the
extent there are no additional Underwriters listed on Schedule I other than you,
the term Representatives as used herein shall mean you, as Underwriters, and the
terms Representatives and Underwriters shall mean either the singular or plural
as the context requires. The use of the neuter in this Agreement shall include
the feminine and masculine wherever appropriate. Certain terms used herein are
defined in Section 17 hereof.
Each share of Common Stock will have attached thereto one
right (collectively, the "Rights") to purchase one one-thousandth of a share of
junior preferred stock, par value $0.01, of the Company (the "Junior Preferred
Shares"). The Rights have been issued pursuant to a Rights Agreement (the
"Rights Agreement") dated as of _________, 2002, between the Company and Mellon
Investor Services Inc., as Rights Agent.
As part of the offering contemplated by this Agreement,
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. has agreed to reserve, out of the Securities set forth
opposite its name on Schedule I to this Agreement, up to ____ shares for sale to
the Company's employees, officers, and directors and to the employees, officers
and directors of Continental (collectively, "Participants"), as set forth in the
Prospectus under the heading "Underwriting" (the "Directed Share Program"). The
Securities to be sold by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. pursuant to the Directed
Share Program (the "Directed Shares") will be sold by ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
pursuant to this Agreement at the public offering price. Any Directed Shares not
orally confirmed for purchase by Participants by the end of the business day on
which this Agreement is executed will be offered to the public by ▇▇▇▇▇▇▇ ▇▇▇▇▇
Barney Inc. as set forth in the Prospectus.
In connection with the offering of the Securities contemplated
hereby, the Company and Continental have entered into a series of agreements and
transactions described in the Prospectus under the captions "Business--Our
Capacity Purchase Agreement with Continental Airlines," "Our Relationship with
Continental Airlines and Other Related Party Transactions" and "Our Agreements
with Continental Airlines."
1. Representations and Warranties of the Company and
Continental.
A. The Company and Continental, jointly and severally,
represent and warrant to, and agree with, each Underwriter as set forth below in
this Section 1.A.
(a) The Company has prepared and filed with the Commission a
registration statement (file number 333-64808) on Form S-1, including a
related preliminary prospectus, for registration under the Act of the
offering and sale of the Securities. The Company may have filed one or
more amendments thereto, including a related preliminary prospectus,
each of which has previously been furnished to you. The Company will
next file with the Commission either (1) prior to the Effective Date of
such registration statement, a further amendment to such registration
statement (including the form of final prospectus) or (2) after the
Effective Date of such registration statement, a final prospectus in
accordance with Rules 430A and 424(b). In the case of clause (2), the
Company has included in such registration statement, as amended at the
Effective Date, all information (other than Rule 430A Information)
required by the Act to be included in such registration statement and
the Prospectus. As filed, such amendment and form of final prospectus,
or such final prospectus, shall contain all Rule 430A Information,
together with all other such required information, and, except to the
extent the Representatives shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to you prior
to the Execution Time or, to the extent not completed at the Execution
Time, shall contain only such specific additional information and other
changes (beyond that contained in the latest Preliminary Prospectus) as
the Company has advised you, prior to the Execution Time, will be
included or made therein.
(b) On the Effective Date, the Registration Statement did or
will, and when the Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date (as defined herein)
and on any date on which Option Securities are purchased, if such date
is not the Closing Date (a "settlement date"), the Prospectus (and any
supplements thereto) will, comply in all material
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respects with the applicable requirements of the Act; on the Effective
Date and at the Execution Time, the Registration Statement did not or
will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; and, on the
Effective Date, the Prospectus, if not filed pursuant to Rule 424(b),
will not, and on the date of any filing pursuant to Rule 424(b) and on
the Closing Date and any settlement date, the Prospectus (together with
any supplement thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
Company and Continental make no representations or warranties as to the
information contained in or omitted from the Registration Statement or
the Prospectus (or any supplement thereto) in reliance upon and in
conformity with information furnished in writing to the Company or
Continental by or on behalf of any Underwriter through the
Representatives specifically for inclusion in the Registration
Statement or the Prospectus (or any supplement thereto).
(c) Each of the Company and each of its subsidiaries, XJT
Holdings, Inc. and ExpressJet Airlines, Inc. (each, a "Subsidiary"),
has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Delaware with full
corporate power and authority to own or lease, as the case may be, and
to operate its properties and conduct its business as described in the
Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each jurisdiction
which requires such qualification, except to the extent such failure to
be so qualified or to be in good standing could not reasonably be
expected to have a material adverse effect on the condition (financial
or otherwise), earnings, business or properties of the Company and its
Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business (a "Material Adverse
Effect").
(d) The Company's authorized equity capitalization is as set
forth in the Prospectus; the capital stock of the Company conforms in
all material respects to the description thereof contained in the
Prospectus; the outstanding shares of Common Stock have been duly and
validly authorized and issued and are fully paid and nonassessable; the
Securities have been duly and validly authorized, and, when issued and
delivered to and paid for by the Underwriters pursuant to this
Agreement, will be fully paid and nonassessable; the Securities are
duly listed, and admitted and authorized for trading, subject to
official notice of issuance and evidence of satisfactory distribution,
on the New York Stock Exchange; the certificates for the Securities are
in valid and sufficient form; the holders of outstanding shares of
capital stock of the Company are not entitled to preemptive or other
rights to subscribe for the Securities; and, except as set forth in the
Prospectus, no options, warrants or other rights to purchase,
agreements or other obligations to issue, or rights to convert any
obligations into or exchange any securities for, shares of capital
stock of or ownership interests in the Company are outstanding; and all
the outstanding shares of capital stock of the Subsidiaries have been
duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Prospectus,
all outstanding shares of capital stock of the Subsidiaries are owned
by the Company either
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directly or through wholly owned subsidiaries free and clear of any
perfected security interest or any other security interests, claims,
liens or encumbrances.
(e) There is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit thereto, which is not
described or filed as required; and the statements in the Prospectus
under the headings "Business--Our Capacity Purchase Agreement with
Continental Airlines," "Our Agreements with Continental Airlines" and
"Material Tax Considerations for Non-United States Holders," insofar as
such statements summarize legal matters, agreements, documents or
proceedings discussed therein, are fair summaries of such legal
matters, agreements, documents or proceedings.
(f) This Agreement has been duly authorized, executed and
delivered by the Company.
(g) The Company is not and, after giving effect to the
offering and sale of the Securities and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as defined in the Investment Company Act of 1940, as amended.
(h) No consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in connection
with the consummation by the Company of the transactions contemplated
herein except such as have been obtained under the Act and such as may
be required under the blue sky laws of any jurisdiction in connection
with the purchase and distribution of the Securities by the
Underwriters in the manner contemplated herein and in the Prospectus.
(i) Neither the issue and sale of the Securities by the
Company or the sale of the Securities by Continental nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with or result in a
breach or violation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or the Subsidiaries pursuant
to (i) the charter or bylaws of the Company or the Subsidiaries, (ii)
the terms of any indenture, contract, lease, mortgage, deed of trust,
note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which the Company or the
Subsidiaries is a party or bound or to which the property of either of
them is subject, or (iii) any statute, law, rule, regulation, judgment,
order or decree applicable to the Company or the Subsidiaries of any
court, regulatory body, administrative agency, governmental body,
arbitrator or other governmental authority having jurisdiction over the
Company, the Subsidiaries or any of its or their property, except, with
respect to clause (ii) or (iii) above, for such conflict, breach,
violation or imposition that could not reasonably be expected to have a
Material Adverse Effect.
(j) Except as provided in the Prospectus, no holders of
securities of the Company have rights to the registration of such
securities under the Registration Statement.
(k) The consolidated historical financial statements and
schedules of the Company and the Subsidiaries included in the
Prospectus and the Registration
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Statement present fairly in all material respects the financial
condition, results of operations and cash flows of the Company and its
Subsidiaries as of the dates and for the periods indicated, comply as
to form with the applicable accounting requirements of the Act and have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved (except as otherwise noted therein). The selected financial
data set forth under the caption "Selected Financial Data" in the
Prospectus and Registration Statement fairly present, on the basis
stated in the Prospectus and the Registration Statement, the
information included therein.
(l) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or its property is pending or, to the best knowledge of the
Company, threatened that could reasonably be expected to have (i) a
material adverse effect on the performance of this Agreement or the
consummation of any of the transactions contemplated hereby or (ii) a
Material Adverse Effect, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto).
(m) Each of the Company and each Subsidiary owns or leases all
such properties as are necessary to the conduct of its operations as
presently conducted, except where the failure to own or lease such
properties could not reasonably be expected to have a Material Adverse
Effect.
(n) Neither the Company nor either Subsidiary is in breach,
violation or default of (i) any provision of its charter or bylaws,
(ii) the terms of any indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which it is a party, by which it
is bound or to which its property is subject, or (iii) any statute,
law, rule, regulation, judgment, order or decree of any court,
regulatory body, administrative agency, governmental body, arbitrator
or other governmental authority having jurisdiction over the Company or
the Subsidiaries or any of its or their property, as applicable,
except, with respect to clauses (ii) or (iii) above, for such breach,
violation or default that could not reasonably be expected to have a
Material Adverse Effect.
(o) Ernst & Young LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries and
delivered their report with respect to the audited consolidated
financial statements and schedules included in the Prospectus, are
independent public accountants with respect to the Company within the
meaning of the Act and the applicable published rules and regulations
thereunder.
(p) To the best of the Company's and Continental's knowledge,
there are no transfer taxes or other similar fees or charges under
Federal law or the laws of any state, or any political subdivision
thereof, required to be paid in connection with the execution and
delivery of this Agreement or the issuance and sale by the Company of
the Securities pursuant to this Agreement.
(q) The Company has filed all foreign, federal, state and
local tax returns that are required to be filed or has requested
extensions thereof (except in any case in which the failure so to file
could not reasonably be expected to have a
5
Material Adverse Effect, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto)) and has paid all
taxes required to be paid by it and any other assessment, fine or
penalty levied against it, to the extent that any of the foregoing is
due and payable, except for any such assessment, fine or penalty that
is currently being contested in good faith or as could not reasonably
be expected to have a Material Adverse Effect, except as set forth in
or contemplated in the Prospectus (exclusive of any supplement
thereto).
(r) No labor problem or dispute with the employees of the
Company or the Subsidiaries exists or, to the Company's knowledge, is
threatened or imminent, and neither the Company nor Continental is
aware of any existing or imminent labor disturbance by the employees of
Continental, that could reasonably be expected to have a Material
Adverse Effect, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto).
(s) Except in each case as set forth in or contemplated by the
Prospectus (exclusive of any supplements thereto), the Company,
directly or through Continental, is insured by insurers of recognized
financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which it is
engaged; all policies of insurance and fidelity or surety bonds
insuring the Company or any of its businesses, assets, employees,
officers and directors are in full force and effect; the Company is in
compliance with the terms of such policies and instruments in all
material respects; and there are no claims by the Company or
Continental under any such policy or instrument as to which any
insurance company is denying liability or defending under a reservation
of rights clause, except for such denials of liability or defenses
under a reservation of rights clause that could not reasonably be
expected to have a Material Adverse Effect; neither the Company nor
Continental has been refused any insurance coverage sought or applied
for with respect to the Company; and the Company has no reason to
believe that it or Continental, as applicable, will not be able to
renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not have a Material
Adverse Effect.
(t) Each of the Company, each Subsidiary and Continental
possesses all material licenses, certificates, permits and other
authorizations issued by the appropriate federal, state or foreign
regulatory authorities necessary for the Company and the Subsidiaries
to conduct their businesses, and neither the Company, either Subsidiary
nor Continental has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse
Effect.
[(u) The Subsidiaries are not currently prohibited, directly
or indirectly, from paying any dividends to the Company, from making
any other distribution on its capital stock, from repaying to the
Company any loans or advances to them from the Company, or from
transferring any of their property or assets to the Company, except as
described in or contemplated by the Prospectus.]
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(v) Each of the Company and each Subsidiary maintains a system
of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(w) The Company has not taken, directly or indirectly, any
action that has constituted or that was designed to or might reasonably
be expected to cause or result in, under the Exchange Act or otherwise,
the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(x) The Company and the Subsidiaries (i) are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received and are in
compliance with all permits, licenses or other approvals required of it
under applicable Environmental Laws to conduct their respective
businesses and (iii) have not received notice of any actual or
potential liability for the investigation or remediation of any
disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants, except where such non-compliance with
Environmental Laws, failure to receive required permits, licenses or
other approvals, or liability could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect,
except as set forth in or contemplated in the Prospectus (exclusive of
any supplement thereto). Except as set forth in the Prospectus, neither
the Company nor either Subsidiary has, to the best knowledge of the
Company, been named as a "potentially responsible party" under the
Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, as amended.
(y) In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company and the Subsidiary, in the
course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws, or any permit, license or approval, any
related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review, the Company
has reasonably concluded that such associated costs and liabilities
could not, singly or in the aggregate, reasonably be expected to have a
Material Adverse Effect, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto).
(z) The Company has fulfilled its obligations, if any, under
the minimum funding standards of ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Employee Retirement Income Security Act of 1974 ("ERISA") and the
regulations and published
7
interpretations thereunder with respect to each "plan" (as defined in
Section 3(3) of ERISA and such regulations and published
interpretations) in which employees of the Company are eligible to
participate, and each such plan is in compliance in all material
respects with the presently applicable provisions of ERISA and such
regulations and published interpretations. The Company has not incurred
any unpaid liability to the Pension Benefit Guaranty Corporation (other
than for the payment of premiums in the ordinary course) or to any such
plan under Title IV of ERISA.
(aa) Each of the Company and each Subsidiary owns, possesses,
licenses or has other rights to use, on reasonable terms, all patents,
patent applications, trade and service marks, trade and service ▇▇▇▇
registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, know-how and other intellectual property
(collectively, the "Intellectual Property") necessary for the conduct
of their respective businesses as now conducted or as proposed in the
Prospectus to be conducted; and neither the Company nor the
Subsidiaries have received any notice of infringement of or conflict
with asserted rights of others with respect to any Intellectual
Property, which infringement or conflict, individually or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(bb) Each of the Initial Public Offering Agreement, the
Amended and Restated Capacity Purchase Agreement, the Registration
Rights Agreement, the Employee Benefits Separation Agreement and the
Tax Agreement, each dated as of April __, 2002, and the Master Facility
and Ground Handling Agreement and the Administrative Support and
Information Services Provisioning Agreement, each dated as of January
1, 2001, all by and between the Company and Continental (collectively,
the "Transaction Documents"), has been duly authorized, executed and
delivered by the Company and Continental and constitutes a legally
valid and binding agreement of the Company and Continental, enforceable
against the Company and Continental in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or
at law); all applicable consents, authorizations, approvals, orders,
certificates and permits of and from, and all applicable declarations
and filings with, all federal, state and foreign governmental
authorities and all courts and other tribunals having jurisdiction over
the Company or Continental required in connection with the Transaction
Documents as of the Execution Date have been obtained or filed, except
for such consents, authorizations, approvals, orders, certificates and
permits of which the failure to obtain or file could not reasonably be
expected to have a Material Adverse Effect; the execution and delivery
of the Transaction Documents did not, and the performance by the
Company or Continental of their respective obligations thereunder will
not, contravene (i) any provision of applicable law or the certificate
of incorporation or bylaws of the Company or Continental, (ii) any
agreement or other instrument binding upon the Company or Continental
or (iii) any judgment, order or decree of any governmental body, agency
or court having jurisdiction over the Company or Continental, except,
with respect to clauses (ii) or (iii) above, for such contraventions
that could not reasonably be
8
expected to have a Material Adverse Effect; and the Transaction
Documents conform in all material respects to the descriptions thereof
contained in the Prospectus.
(cc) Neither the Company nor, to the best knowledge of the
Company or Continental, any director, officer, agent, employee or other
person associated with or acting on behalf of the Company or a
Subsidiary has (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity; (ii) made any direct or indirect unlawful payment
to any foreign or domestic government official or employee from
corporate funds; (iii) violated or is in violation of any provision of
the Foreign Corrupt Practice Act of 1977; or (iv) made any bribe,
rebate, payoff, influence payment, kickback or other unlawful payment.
(dd) The Company is a "citizen of the United States" within
the meaning of Section 40102(a)(15) of Title 49 of the United States
Code, as amended, holding an air carrier operating certificate issued
by the Secretary of Transportation pursuant to Chapter 447 of Title 49
of the United States Code, as amended, for aircraft capable of carrying
10 or more individuals or 6,000 pounds or more of cargo.
(ee) The statistical and market-related data included in the
Prospectus are based on or derived from sources that the Company
believes to be reliable.
B. Continental further represents and warrants to and agrees
with each Underwriter as set forth below in this Section 1.B.
(a) Continental is the record and beneficial owner of the
Securities to be sold by it hereunder free and clear of all liens,
encumbrances, equities and claims and has duly endorsed such Securities
in blank, and, assuming that each Underwriter acquires its interest in
the Securities it has purchased from Continental without notice of any
adverse claim (within the meaning of Section 8-105 of the New York
Uniform Commercial Code ("UCC")), each Underwriter that has purchased
such Securities delivered on the Closing Date to The Depository Trust
Company or other securities intermediary by making payment therefor as
provided herein, and that has had such Securities credited to the
securities account or accounts of such Underwriters maintained with The
Depository Trust Company or such other securities intermediary will
have acquired a security entitlement (within the meaning of Section
8-102(a)(17) of the UCC) to such Securities purchased by such
Underwriter, and no action based on an adverse claim (within the
meaning of Section 8-105 of the UCC) may be asserted against such
Underwriter with respect to such Securities.
(b) This Agreement has been duly authorized, executed and
delivered by Continental.
(c) Continental has not taken, directly or indirectly, any
action designed to or which has constituted or which might reasonably
be expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
9
(d) Continental has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware with full corporate power and authority to own or lease, as
the case may be, and to operate its properties and conduct its
business.
(e) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving
Continental or its property is pending or, to the best knowledge of
Continental, threatened that could reasonably be expected to have a
material adverse effect on the performance of this Agreement or the
consummation of any of the transactions contemplated hereby.
(f) No consent, approval, authorization, filing with or order
of any court or governmental agency or body is required for the
consummation by Continental of the transactions contemplated herein
except such as have been obtained under the Act and such as may be
required under the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the Securities by the Underwriters in
the manner contemplated herein and in the Prospectus.
(g) Neither the sale of the Securities being sold by
Continental nor the consummation of any other of the transactions
herein contemplated by Continental or the fulfillment of the terms
hereof by Continental will conflict with or result in a breach or
violation or imposition of any lien, charge or encumbrance upon any
property or assets of Continental or any of its subsidiaries pursuant
to (i) the charter or bylaws of Continental or any of its subsidiaries,
(ii) the terms of any indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which Continental or any of its
subsidiaries is a party or bound or to which its or their property is
subject, or (iii) any statute, law, rule, regulation, judgment, order
or decree applicable to Continental or any of its subsidiaries of any
court, regulatory body, administrative agency, governmental body,
arbitrator or other governmental authority having jurisdiction over
Continental or any of its subsidiaries or any of its or their
properties, except, with respect to clause (ii) or (iii) above, for
such conflict, breach, violation or imposition that could not
reasonably be expected to have a Material Adverse Effect.
C. Any certificate signed by any officer of the Company or of
Continental and delivered pursuant to this Agreement to the Representatives or
counsel for the Underwriters in connection with the offering of the Securities
shall be deemed a representation and warranty by the Company or Continental, as
applicable, as to matters covered thereby, to each Underwriter.
Furthermore, the Company and Continental represent and warrant
to ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. that (i) the Registration Statement, the Prospectus
and any preliminary prospectus comply, and any further amendments or supplements
thereto will comply, with any applicable laws or regulations of foreign
jurisdictions in which the Prospectus or any preliminary prospectus, as amended
or supplemented, if applicable, are distributed in connection with the Directed
Share Program, and that (ii) no authorization, approval, consent, license,
order, registration or qualification of or with any government, governmental
instrumentality or court, other than such as have been obtained, is
10
necessary under the securities laws and regulations of non-U.S. jurisdictions in
which the Directed Shares are offered.
2. Purchase and Sale. (a) Subject to the terms and conditions
and in reliance upon the representations and warranties herein set forth, the
Company and Continental hereby agree, severally and not jointly, to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to purchase
from the Company and Continental, at a purchase price of $[ ] per share, the
amount of the Underwritten Securities set forth opposite such Underwriter's name
in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, Continental hereby grants
an option to the several Underwriters to purchase, severally and not jointly, up
to 3,900,000 Option Securities at the same purchase price per share as the
Underwriters shall pay for the Underwritten Securities. Said option may be
exercised only to cover over-allotments in the sale of the Underwritten
Securities by the Underwriters. Said option may be exercised in whole or in part
at any time on or before the 30th day after the date of the Prospectus upon
written or telegraphic notice by the Representatives to the Company and
Continental setting forth the number of shares of the Option Securities as to
which the several Underwriters are exercising the option and the settlement
date. In the event that the Underwriters exercise less than their full
over-allotment option, the number of Option Securities to be purchased by each
Underwriter shall be the same percentage of the total number of shares of the
Option Securities to be purchased by the several Underwriters as such
Underwriter is purchasing of the Underwritten Securities, subject to such
adjustments as you in your absolute discretion shall make to eliminate any
fractional shares.
3. Delivery and Payment. Delivery of and payment for the
Underwritten Securities and the Option Securities (if the option provided for in
Section 2(b) hereof shall have been exercised on or before the third Business
Day prior to the Closing Date) shall be made at 10:00 AM, New York City time, on
April __, 2002, or at such time on such later date not more than three Business
Days after the foregoing date as the Representatives shall designate, which date
and time may be postponed by agreement among the Representatives, the Company
and Continental or as provided in Section 9 hereof (such date and time of
delivery and payment for the Securities being herein called the "Closing Date").
Delivery of the Securities shall be made to the Representatives for the
respective accounts of the several Underwriters against payment by the several
Underwriters through the Representatives of the aggregate purchase price of the
Securities being sold by the Company and Continental to or upon the order of the
Company and Continental by wire transfer payable in same-day funds to the
accounts specified by the Company and Continental. Delivery of the Underwritten
Securities and the Option Securities shall be made through the facilities of The
Depository Trust Company unless the Representatives shall otherwise instruct.
The Company and Continental will pay all applicable state
transfer taxes, if any, involved in the transfer to the several Underwriters of
the Securities to be purchased by them from the Company and Continental and the
respective Underwriters will pay any additional stock transfer taxes involved in
further transfers.
11
If the option provided for in Section 2(b) hereof is exercised
after the third Business Day prior to the Closing Date, Continental will deliver
the Option Securities (at the expense of Continental ) to the Representatives
through the facilities of The Depository Trust Company, unless the
Representatives shall otherwise instruct, on the date specified by the
Representatives (which shall be within three Business Days after exercise of
said option) for the respective accounts of the several Underwriters, against
payment by the several Underwriters through the Representatives of the purchase
price thereof to or upon the order of Continental by wire transfer payable in
same-day funds to the account specified by Continental. If settlement for the
Option Securities occurs after the Closing Date, the Company and Continental
will deliver to the Representatives on the settlement date for the Option
Securities, and the obligation of the Underwriters to purchase the Option
Securities shall be conditioned upon receipt of, supplemental opinions,
certificates and letters confirming as of such date the opinions, certificates
and letters delivered on the Closing Date pursuant to Section 6 hereof.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. Agreements of the Company and Continental. The Company and
Continental, jointly and severally, agree with the several Underwriters that:
(a) The Company and Continental will use their best efforts to
cause the Registration Statement, if not effective at the Execution
Time, and any amendment thereof, to become effective. Prior to the
termination of the offering of the Securities, the Company will not
file any amendment of the Registration Statement or supplement to the
Prospectus or any Rule 462(b) Registration Statement unless the Company
has furnished you a copy for your review prior to filing and will not
file any such proposed amendment or supplement to which you reasonably
object. Subject to the foregoing sentence, if the Registration
Statement has become or becomes effective pursuant to Rule 430A, or
filing of the Prospectus is otherwise required under Rule 424(b), the
Company and Continental will cause the Prospectus, properly completed,
and any supplement thereto to be filed with the Commission pursuant to
the applicable paragraph of Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to the
Representatives of such timely filing. The Company and Continental will
promptly advise the Representatives (1) when the Registration
Statement, if not effective at the Execution Time, shall have become
effective, (2) when the Prospectus, and any supplement thereto, shall
have been filed (if required) with the Commission pursuant to Rule
424(b) or when any Rule 462(b) Registration Statement shall have been
filed with the Commission, (3) when, prior to termination of the
offering of the Securities, any amendment to the Registration Statement
shall have been filed or become effective, (4) of any request by the
Commission or its staff for any amendment of the Registration
Statement, or any Rule 462(b) Registration Statement, or for any
supplement to the Prospectus or for any additional information, (5) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (6) of the receipt
by the Company or Continental of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the institution or
12
threatening of any proceeding for such purpose. The Company and
Continental will use their best efforts to prevent the issuance of any
such stop order or the suspension of any such qualification and, if
issued, to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs
as a result of which the Prospectus as then supplemented would include
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall
be necessary to amend the Registration Statement or supplement the
Prospectus to comply with the Act or the rules thereunder, the Company
and Continental promptly will (1) notify the Representatives of any
such event, (2) prepare and file with the Commission, subject to the
second sentence of paragraph (a) of this Section 5, an amendment or
supplement which will correct such statement or omission or effect such
compliance and (3) supply any supplemented Prospectus to you in such
quantities as you may reasonably request.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an
earnings statement or statements of the Company and the Subsidiary
which will satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
(d) The Company will furnish to the Representatives and
counsel for the Underwriters signed copies of the Registration
Statement (including exhibits thereto) and to each other Underwriter a
copy of the Registration Statement (without exhibits thereto) and, so
long as delivery of a prospectus by an Underwriter or dealer may be
required by the Act, as many copies of each Preliminary Prospectus and
the Prospectus and any supplement thereto as the Representatives may
reasonably request.
(e) The Company will arrange, if necessary, for the
qualification of the Securities for sale under the laws of such
jurisdictions as the Representatives may designate and will maintain
such qualifications in effect so long as required for the distribution
of the Securities; provided that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it is not
now so qualified or to take any action that would subject it to service
of process in suits, other than those arising out of the offering or
sale of the Securities, in any jurisdiction where it is not now so
subject.
(f) Neither the Company nor Continental will, without the
prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., offer, sell,
contract to sell, pledge, or otherwise dispose of (or enter into any
transaction which is designed to, or might reasonably be expected to,
result in the disposition of (whether by actual disposition or
effective economic disposition due to cash settlement or otherwise) by
the Company or Continental or any affiliate of the Company or
Continental or any person in privity with the Company or Continental or
any affiliate of the Company or Continental), directly or indirectly,
including the filing (or participation in the filing) of a registration
statement with the Commission in respect of, or establish or increase a
put equivalent position or liquidate or
13
decrease a call equivalent position within the meaning of Section 16 of
the Exchange Act with respect to, any other shares of Common Stock or
any securities convertible into, or exercisable or exchangeable for,
shares of Common Stock, or publicly announce an intention to effect any
such transaction, for a period of 180 days after the date of the
Underwriting Agreement, other than shares of Common Stock disposed of
as bona fide gifts approved by ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., provided,
however, that the Company may issue and sell Common Stock pursuant to
any employee stock option plan, stock ownership plan or dividend
reinvestment plan of the Company in effect at the Execution Time.
(g) Neither the Company nor Continental will take, directly or
indirectly, any action designed to or which has constituted or which
might reasonably be expected to cause or result, under the Exchange Act
or otherwise, in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.
(h) The Company agrees to pay the costs and expenses relating
to the following matters: (i) the preparation, printing or reproduction
and filing with the Commission of the Registration Statement (including
financial statements and exhibits thereto), each Preliminary
Prospectus, the Prospectus, and each amendment or supplement to any of
them; (ii) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and packaging) of
such copies of the Registration Statement, each Preliminary Prospectus,
the Prospectus and all amendments or supplements to any of them, as
may, in each case, be reasonably requested for use in connection with
the offering and sale of the Securities; (iii) the preparation,
printing, authentication, issuance and delivery of certificates for the
Securities, including any stamp or transfer taxes in connection with
the original issuance and sale of the Securities; (iv) the reproduction
and delivery of this Agreement, any blue sky memorandum and all other
agreements or documents delivered in connection with the offering of
the Securities; (v) the registration of the Securities under the
Exchange Act and the listing of the Securities on the New York Stock
Exchange; (vi) any registration or qualification of the Securities for
offer and sale under the securities or blue sky laws of the several
states (including filing fees and the reasonable fees and expenses of
counsel for the Underwriters relating to such registration and
qualification); (vii) any filings required to be made with the National
Association of Securities Dealers, Inc. (the "NASD") (including filing
fees and the reasonable fees and expenses of counsel for the
Underwriters relating to such filings); (viii) the transportation and
other expenses incurred by or on behalf of Company and Continental
representatives in connection with presentations to prospective
purchasers of the Securities; (ix) the fees and expenses of the
Company's accountants and the fees and expenses of counsel (including
local and special counsel) for the Company and Continental; and (x) all
other costs and expenses incident to the performance by the Company and
Continental of their obligations hereunder.
(i) In connection with the Directed Share Program, the Company
will be responsible for and will establish transfer restrictions on the
Directed Shares such that they will be restricted to the extent
required by the NASD or the NASD rules from sale, transfer, assignment,
pledge or hypothecation for a period of three
14
months following the date of the effectiveness of the Registration
Statement. ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. will notify the Company as to
which Participants will need to be so restricted. The Company will
direct the removal of such transfer restrictions upon the expiration of
such period of time.
(j) The Company will pay all reasonable fees and disbursements
of counsel incurred by the Underwriters in connection with the Directed
Share Program (including the printing (or reproduction) and delivery
(including postage, air freight charges and charges for counting and
packaging) of such copies of the Directed Share Program materials) and
stamp duties, similar taxes or duties or other taxes, if any, incurred
by the Underwriters in connection with the Directed Share Program.
Furthermore, the Company covenants with ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Inc. that it will comply with all applicable securities and other applicable
laws, rules and regulations in each foreign jurisdiction in which the Directed
Shares are offered in connection with the Directed Share Program.
6. Conditions to the Obligations of the Underwriters. The
obligation of the Underwriters to purchase the Underwritten Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company and Continental
contained herein as of the Execution Time and the Closing Date and any
settlement date pursuant to Section 3 hereof, to the accuracy of the statements
of the Company and Continental made in any certificates pursuant to the
provisions hereof, to the performance by the Company and Continental of their
respective obligations hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective
prior to the Execution Time, unless the Representatives agree in
writing to a later time, the Registration Statement will become
effective not later than (i) 6:00 PM New York City time on the date of
determination of the public offering price, if such determination
occurred at or prior to 3:00 PM New York City time on such date or (ii)
9:30 AM on the Business Day following the day on which the public
offering price was determined, if such determination occurred after
3:00 PM New York City time on such date; if filing of the Prospectus,
or any supplement thereto, is required pursuant to Rule 424(b), the
Prospectus, and any such supplement, will be filed in the manner and
within the time period required by Rule 424(b); and no stop order
suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been
instituted or threatened.
(b) The Company and Continental shall have requested and
caused ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., counsel for the Company and Continental,
to have furnished to the Representatives their opinion, dated the
Closing Date and addressed to the Representatives, to the effect that:
(i) Each of the Company and each Subsidiary has been
duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Delaware, with
full corporate power and authority to own or lease, as the
case may be, and to operate its properties and conduct its
business as described in the Prospectus;
15
(ii) the Company's authorized capital stock is as set
forth in the Prospectus; the capital stock of the Company
conforms in all material respects to the description thereof
contained in the Prospectus; the Securities have been duly and
validly authorized, and, when issued and delivered to and paid
for by the Underwriters pursuant to the Agreement, will be
fully paid and nonassessable; the holders of outstanding
shares of capital stock of the Company are not entitled to
statutory preemptive rights to subscribe for the Securities;
(iii) the statements included in the Prospectus under
the headings "Business--Our Capacity Purchase Agreement with
Continental Airlines" and "Our Agreements with Continental
Airlines," to the extent that they constitute matters of law
or summaries of legal matters, are correct in all material
respects;
(iv) the statements included in the Prospectus under
the heading "Material Tax Considerations for Non-United States
Holders of Our Common Stock" are correct in all material
respects;
(v) the Registration Statement has been declared
effective under the Act; any required filing of the
Prospectus, and any supplements thereto, pursuant to Rule
424(b) has been made in the manner and within the time period
required by Rule 424(b); to our knowledge, no stop order
suspending the effectiveness of the Registration Statement has
been issued, no proceedings for that purpose have been
instituted or threatened and the Registration Statement, at
the Execution Time (or, if not effective at the Execution
Time, in the form in which it shall become effective), and the
Prospectus, as of the date first filed pursuant to Rule 424(b)
(other than the financial statements and other financial
information included therein, as to which such counsel need
express no opinion) appeared on their face to have been
appropriately responsive in all material respects with the
applicable requirements of the Act and the rules thereunder;
(vi) the Agreement has been duly authorized, executed
and delivered by the Company;
(vii) the Company is not and, after giving effect to
the offering and sale of the Securities and the application of
the proceeds thereof as described in the Prospectus, will not
be an "investment company" as defined in the Investment
Company Act of 1940, as amended;
(viii) no consent, approval, authorization, filing
with or order of any U.S. or Texas court or governmental
agency or body is required in connection with the issue and
sale of the Securities or in connection with the consummation
by the Company or Continental of the transactions contemplated
hereby, except such as have been obtained under the Act and
such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution
of the Securities by the Underwriters in the manner
contemplated in this Agreement and in the Prospectus and such
other approvals (specified herein) as have been obtained,
other than such consents, authorizations, filings or orders
the
16
failure to make or obtain could not reasonably be expected to
have a Material Adverse Effect;
(ix) the issue and sale of the Securities, the
performance by the Company of this Agreement and the
consummation of the transactions contemplated hereby will not
conflict with or result in a breach or violation or imposition
of any lien, charge or encumbrance upon any property or assets
of the Company or the Subsidiaries pursuant to (i) the charter
or bylaws of the Company or the Subsidiaries, (ii) the terms
of any indenture, contract, lease, mortgage, deed of trust,
note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument that in each case has been
filed as an exhibit to the Registration Statement, or (iii)
any statute, law, rule or regulation, or, to the knowledge of
such counsel, any judgment, order or decree applicable to the
Company or the Subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other
governmental authority having jurisdiction over the Company or
the Subsidiaries or its or their respective properties (except
that such counsel will express no opinion with respect to
federal or state securities laws with regard to clause (iii)
of this paragraph), except in the cases of clauses (ii) and
(iii) for such violations that could not reasonably be
expected to have a Material Adverse Effect;
(x) the sale of the Securities, the performance by
Continental of this Agreement and the consummation of the
transactions contemplated hereby will not conflict with or
result in a breach or violation or imposition of any lien,
charge or encumbrance upon any property or assets of
Continental or any of its subsidiaries pursuant to (i) the
charter or bylaws of Continental or any of it subsidiaries, or
(ii) any statute, law, rule or regulation, or, to the
knowledge of such counsel, any judgment, order or decree
applicable to Continental or any of its subsidiaries of any
court, regulatory body, administrative agency, governmental
body, arbitrator or other governmental authority having
jurisdiction over Continental or any of its subsidiaries or
their respective properties (except that such counsel will
express no opinion with respect to federal or state securities
laws with regard to clause (ii) of this paragraph), except in
the cases of clause (ii) for such violations that could not
reasonably be expected to have a Material Adverse Effect;
(xi) each of the Transaction Documents constitutes a
legally valid and binding agreement of the Company and
Continental, enforceable against the Company and Continental
in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable
principles (whether enforcement is sought by proceedings in
equity or at law); and the execution and delivery of the
Transaction Documents did not and the performance by the
Company or Continental of their respective obligations
thereunder will not violate (i) the certificate of
incorporation or bylaws of the Company, (ii) any agreement
that is filed as an exhibit to the Registration Statement,
except in the case of clause (ii) for such violations
17
that could not reasonably be expected to result in a Material
Adverse Effect; and
(xii) Continental is validly existing as a
corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized with full
corporate power and authority to own or lease, as the case may
be, and to operate its properties and conduct its business as
described in the Prospectus.
In addition, such counsel shall include a statement to the
following effect:
Because the primary purpose of such counsel's
engagement was not to establish or confirm factual matters or
financial or accounting matters and because of the wholly or
partially non-legal character of many of the statements
contained in the Prospectus, such counsel is not passing upon
and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Prospectus, and such counsel has not independently verified
the accuracy, completeness or fairness of such statements.
Such counsel has participated in conferences with officers and
other representatives of the Company and Continental and
representatives of the independent public accountants of the
Company, and with the Underwriters' representatives and legal
counsel, at which conferences the contents of the Registration
Statement and the Prospectus and related matters were
discussed. Such counsel has also reviewed certain corporate
documents furnished to such counsel by the Company and
Continental. Based on such participation and review, and
subject to the limitations described above, no facts have come
to such counsel's attention that cause such counsel to believe
that the Prospectus, as of the date of the Prospectus or as of
the date of such opinion letter, or the Registration
Statement, as of the Effective Date or the date the
Registration Statement was last deemed amended, contained or
contains, any untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make
the statements therein, in light of the circumstances under
which they were made, not misleading (excluding the financial
statements, including the notes thereto, and financial
statement schedules and other financial and accounting data
contained or incorporated by reference therein, with respect
to which such counsel has not been asked to comment).
In rendering such opinion, such counsel may rely as to matters
of fact, to the extent they deem proper, on certificates of
responsible officers of the Company and Continental and of
public officials. References to the Prospectus in this
paragraph (b) include any supplements thereto at the Closing
Date.
(c) ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., Vice President, General Counsel
and Assistant Secretary of Continental, with responsibility for the
legal affairs of Continental and its subsidiaries, including the
Company, shall have furnished to the Representatives on behalf of the
Company, her opinion, dated the Closing Date and addressed to the
Representatives, to the effect that:
18
(i) to her knowledge, each of the Company and each
Subsidiary is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification and where the
failure to be so qualified would have a Material Adverse
Effect;
(ii) the outstanding shares of Common Stock have been
duly and validly authorized and issued and are fully paid and
nonassessable; and, except as set forth in the Prospectus, no
options, warrants or other rights to purchase, agreements or
other obligations to issue, or rights to convert any
obligations into or exchange any securities for, shares of
capital stock of or ownership interests in the Company are
outstanding;
(iii) to her knowledge, there is no pending or
threatened action, suit or proceeding by or before any court
or governmental agency, authority or body or any arbitrator
involving the Company or Continental or the property of either
of them of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in
the Prospectus; there is no franchise, contract or other
document of a character required to be described in the
Registration Statement or Prospectus, or to be filed as an
exhibit thereto, which is not described or filed as required;
(iv) to her knowledge, the issue and sale of the
Securities and the performance by the Company of this
Agreement will not conflict with or result in a breach or
violation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or the Subsidiaries
pursuant to the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or
other agreement, obligation, condition, covenant or instrument
to which the Company or any Subsidiary is a party or by which
it or they are bound or to which its or their property is
subject, except where such conflict, breach, violation or
imposition could not reasonably be expected to have a Material
Adverse Effect;
(v) to her knowledge, the sale of the Securities and
the performance by Continental of this Agreement will not
conflict with or result in a breach or violation or imposition
of any lien, charge or encumbrance upon any property or assets
of Continental or any of its subsidiaries pursuant to the
terms of any indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which
Continental or any of its subsidiaries is a party or bound or
to which its or their property is subject, except where such
conflict, breach, violation or imposition could not reasonably
be expected to have a Material Adverse Effect;
(v) except as set forth in the Prospectus, no holders
of securities of the Company have rights to the registration
of such securities under the Registration Statement; and
19
(vi) each of the Transaction Documents has been duly
authorized, executed and delivered by the Company and
Continental; the execution and delivery of the Transaction
Documents did not and the performance by the Company or
Continental of their respective obligations thereunder will
not violate (i) any agreement or other instrument binding upon
Continental or the Company, or (ii) any statute, law, rule or
regulation or, to her knowledge, any judgment, order, or
decree of any governmental body, agency or court having
jurisdiction over the Company, except for such violations that
could not reasonably be expected to have a Material Adverse
Effect; and all applicable consents, authorizations,
approvals, orders, certificates and permits of and from, and
all applicable declarations and filings with, all federal,
state and foreign governmental authorities and all courts and
other tribunals having jurisdiction over the Company or
Continental required in connection with the Transaction
Documents as of the Execution Date have been obtained or
filed, except for such consents, authorizations, approvals,
orders, certificates and permits of which the failure to
obtain or file could not reasonably be expected to have a
Material Adverse Effect;
(vii) Continental is the record and beneficial owner
of the Securities to be sold by it hereunder free and clear of
all liens, encumbrances, equities and claims; and
(viii) this Agreement has been duly authorized,
executed and delivered by Continental.
(d) The Representatives shall have received from Cleary,
Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters, such opinion
or opinions, dated the Closing Date and addressed to the
Representatives, with respect to the issuance and sale of the
Securities, the Registration Statement, the Prospectus (together with
any supplement thereto) and other related matters as the
Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they reasonably request for
the purpose of enabling them to pass upon such matters.
(e) The Representatives shall have received a copy of the tax
opinions from KPMG and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇, respectively tax advisor
and tax counsel to the Company and Continental, dated ____ and
addressed to the Company and Continental.
(f) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the
Prospectus, any supplements to the Prospectus and this Agreement and
that:
(i) the representations and warranties of the Company
in this Agreement are true and correct on and as of the
Closing Date with the same effect as if made on the Closing
Date and the Company has
20
complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or
prior to the Closing Date;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the Company's
knowledge, threatened; and
(iii) since the date of the most recent financial
statements included in the Prospectus (exclusive of any
supplement thereto), there has been no Material Adverse
Effect.
(g) Continental shall have furnished to the Representative a
certificate of Continental, signed by the Chairman of the Board or the
President or any Vice President and the principal financial or
accounting officer of Continental, dated the Closing Date, to the
effect that the signers of such certificate have carefully examined the
Registration Statement, the Prospectus, any supplements to the
Prospectus and this Agreement and that the representations and
warranties of Continental in this Agreement are true and correct on and
as of the Closing Date with the same effect as if made on the Closing
Date and Continental has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied at or prior
to the Closing Date.
(h) The Company shall have requested and caused Ernst & Young
LLP to have furnished to the Representatives, at the Execution Time and
at the Closing Date, letters, dated respectively as of the Execution
Time and as of the Closing Date, in form and substance satisfactory to
the Representatives, confirming that they are independent accountants
within the meaning of the Act and the applicable rules and regulations
adopted by the Commission thereunder and that they have performed a
review of the unaudited interim financial information of the Company as
at and for the six-month period ended June 30, 2001, in accordance with
Statement on Auditing Standards No. 71, and of the audited financial
information of the Company as at and for the year ended December 31,
2002, and stating in effect that:
(i) in their opinion the audited financial statements
and financial statement schedule included in the Registration
Statement and the Prospectus and reported on by them comply as
to form in all material respects with the applicable
accounting requirements of the Act and the related rules and
regulations adopted by the Commission;
(ii) on the basis of a reading of the latest
unaudited financial statements made available by the Company
and the Subsidiary; carrying out certain specified procedures
(but not an examination in accordance with generally accepted
auditing standards) which would not necessarily reveal matters
of significance with respect to the comments set forth in such
letter; a reading of the minutes of the meetings of the
stockholders, the board of directors and the committees
thereof of the Company and the Subsidiary; and inquiries of
certain officials of the Company who have responsibility for
financial and accounting matters of the Company and the
Subsidiary as to transactions and events subsequent to
December 31, 2001, nothing came to their attention which
caused them to believe that:
21
[(1) any unaudited financial statements
included in the Registration Statement and the
Prospectus do not comply as to form in all material
respects with applicable accounting requirements of
the Act and with the related rules and regulations
adopted by the Commission with respect to
registration statements on Form S-1; and said
unaudited financial statements are not in conformity
with generally accepted accounting principles applied
on a basis substantially consistent with that of the
audited financial statements included in the
Registration Statement and the Prospectus;]
(2) with respect to the period subsequent to
December 31, 2001, there were any changes, at a
specified date not more than five days prior to the
date of the letter, in the long-term debt, net
current assets, net amounts due Continental,
liabilities related to capital leases, flight
equipment capital leases or capital stock of the
Company and the Subsidiaries, any increase in the
stockholders' deficit or decreases in net assets or
flight equipment owned of the Company and the
Subsidiaries as compared with the amounts shown on
the December 31, 2001, balance sheet included in the
Registration Statement and the Prospectus;
(3) the information included in the
Registration Statement and Prospectus in response to
Regulation S-K, Item 301 (Selected Financial Data),
Item 302 (Supplementary Financial Information) and
Item 402 (Executive Compensation) is not in
conformity with the applicable disclosure
requirements of Regulation S-K; or
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Registration
Statement and the Prospectus, including the information set
forth under the caption "Business" in the Prospectus, agrees
with the accounting records of the Company and its
subsidiaries, excluding any questions of legal interpretation.
References to the Prospectus in this paragraph (h) include any
supplement thereto at the date of the letter.
(i) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been (i) any change or
decrease specified in the letter or letters referred to in paragraph
(h) of this Section 6 or (ii) any change, or any development involving
a prospective change, in or affecting the condition (financial or
otherwise), earnings, business or properties of the Company, whether or
not arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus (exclusive of
any supplement thereto) the effect of which, in any case referred to in
clause (i) or (ii) above, is, in the judgment of the Representatives,
so material and adverse as to make it impractical or inadvisable to
proceed with the offering or delivery of the Securities as contemplated
by the Registration Statement (exclusive of any amendment thereof) and
the Prospectus (exclusive of any supplement thereto).
22
(i) Prior to the Closing Date, the Company and Continental
shall have furnished to the Representatives such further information,
certificates and documents as the Representatives may reasonably
request.
(j) The Securities shall have been duly listed, and admitted
and authorized for trading on the New York Stock Exchange, and
satisfactory evidence of such actions shall have been provided to the
Representatives.
(k) At the Execution Time, the Company shall have furnished to
the Representatives a letter substantially in the form of Exhibit A
hereto from each officer and director of the Company and addressed to
the Representatives.
(l) On or prior to the Closing Date, all of the Transaction
Documents, in all material respects in the form furnished to you prior
to the Execution Time, shall have been executed.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters, this Agreement and all obligations of the Underwriters hereunder
may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Company and
Continental in writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall
be delivered at the office of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, on the Closing Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to clause (i) of Section 10 hereof or
because of any refusal, inability or failure on the part of the Company or
Continental to perform any agreement herein or comply with any provision hereof
other than by reason of a default by any of the Underwriters, the Company and
Continental, jointly and severally (subject to the limitation set forth in
Section 8(e) hereof), will reimburse the Underwriters severally through ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ Inc. on demand for all reasonable out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
them in connection
23
with the proposed purchase and sale of the Securities. In the event that this
Agreement is terminated pursuant to clauses (ii), (iii) or (iv) of Section 10,
neither Continental nor the Company shall be under any obligation to reimburse
the Underwriters for their out-of-pocket expenses as contemplated by this
Section 7.
8. Indemnification and Contribution. (a) The Company and
Continental jointly and severally agree to indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each Underwriter
and each person who controls any Underwriter within the meaning of either the
Act or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
the registration statement for the registration of the Securities as originally
filed or in any amendment thereof, or in any Preliminary Prospectus or the
Prospectus, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and agree to reimburse each such indemnified party, as incurred,
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company and Continental will not be liable in any
such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company or Continental by or on behalf
of any Underwriter through the Representatives specifically for inclusion
therein; provided further, that with respect to any untrue statement or omission
of material fact made in any Preliminary Prospectus, the indemnity agreement
contained in this Section 8(a) shall not inure to the benefit of any Underwriter
from whom the person asserting any such loss, claim, damage or liability
purchased the securities concerned, to the extent that any such loss, claim,
damage or liability of such Underwriter occurs under the circumstance where it
shall have been determined by a court of competent jurisdiction by final and
nonappealable judgment that (w) the Company had previously furnished copies of
the Prospectus to the Representatives, (x) delivery of the Prospectus was
required by the Act to be made to such person, (y) the untrue statement or
omission of a material fact contained in the Preliminary Prospectus was
corrected in the Prospectus and (z) there was not sent or given to such person,
at or prior to the written confirmation of the sale of such securities to such
person, a copy of the Prospectus. This indemnity agreement will be in addition
to any liability which the Company and Continental may otherwise have.
The Company and Continental, jointly and severally, agree to
indemnify and hold harmless ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., the directors, officers,
employees and agents of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. and each person, who controls
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. within the meaning of either the Act or the Exchange
Act (the "▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. Entities"), from and against any and all
losses, claims, damages and liabilities to which they may become subject under
the Act, the Exchange Act or other Federal or state statutory law or regulation,
at common law or otherwise (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim), insofar as such losses, claims
24
damages or liabilities (or actions in respect thereof) (i) arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
contained in the prospectus wrapper material prepared by or with the consent of
the Company for distribution in foreign jurisdictions in connection with the
Directed Share Program attached to the Prospectus or any preliminary prospectus,
or arise out of or are based upon any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statement therein, when considered in conjunction with the Prospectus or any
applicable preliminary prospectus, not misleading; (ii) are caused by the
failure of any Participant to pay for and accept delivery of the Directed Shares
allocated by the Company to such Participant; or (iii) relate to, arise out of,
or occur in connection with the Directed Share Program, provided that, in the
case of clause (i) neither the Company nor Continental will be liable in any
such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company by or on behalf of ▇▇▇▇▇▇▇
▇▇▇▇▇ Barney Inc. specifically for inclusion therein and that in the case of
clause (iii) neither the Company nor Continental will be liable to the extent
that such loss, claim, damage or liability results from the gross negligence or
willful misconduct of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
(b) Each Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signs the Registration Statement, each person who controls the
Company within the meaning of either the Act or the Exchange Act and
Continental, to the same extent as the foregoing indemnity to each Underwriter,
but only with reference to written information relating to such Underwriter
furnished to the Company or Continental by or on behalf of such Underwriter
through the Representatives specifically for inclusion in the documents referred
to in the foregoing indemnity. This indemnity agreement will be in addition to
any liability which any Underwriter may otherwise have. The Company and
Continental acknowledge that the statements set forth in the last paragraph of
the cover page regarding delivery of the Securities and, under the heading
"Underwriting," (i) the list of Underwriters and their respective participation
in the sale of the Securities, (ii) the sentences related to concessions and
reallowances and (iii) the paragraph related to stabilization, syndicate
covering transactions and penalty bids in any Preliminary Prospectus and the
Prospectus constitute the only information furnished in writing by or on behalf
of the several Underwriters for inclusion in any Preliminary Prospectus or the
Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the
25
indemnifying party shall not thereafter be responsible for the fees and expenses
of any separate counsel retained by the indemnified party or parties except as
set forth below); provided, however, that such counsel shall be reasonably
satisfactory to the indemnified party. Notwithstanding anything contained herein
to the contrary, if indemnity may be sought pursuant to the second paragraph of
Section 8(a) hereof in respect of such action or proceeding, then in addition to
such separate firm for the indemnified parties, the indemnifying party shall be
liable for the reasonable fees and expenses of not more than one separate firm
(in addition to any local counsel) for ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., the directors,
officers, employees and agents of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., and all persons, if
any, who control ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. within the meaning of either the Act
or the Exchange Act for the defense of any losses, claims, damages and
liabilities arising out of the Directed Share Program. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified parties shall have the right to employ one
separate counsel (including local counsel), unless an indemnified party shall
have reasonably concluded that there may be legal defenses available to it which
are different from or in conflict with those available to any other indemnified
parties, in which case such indemnified party shall have the right to employ its
own separate counsel; and the indemnifying party shall bear the reasonable fees,
costs and expenses of such separate counsel, if (i) the use of counsel chosen by
the indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the actual or potential defendants in,
or targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of the institution of such action or
(iv) the indemnifying party shall authorize the indemnified party to employ
separate counsel at the expense of the indemnifying party. An indemnifying party
will not, without the prior written consent of the indemnified parties, settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 8 is unavailable or insufficient to hold harmless an
indemnified party for any reason, the Company and Continental, jointly and
severally, and the Underwriters severally agree to contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which the Company, Continental and one or more of the
Underwriters may be subject in such proportion as is appropriate to reflect the
relative benefits received by the Company and Continental on the one hand and by
the Underwriters on the other from the offering of the Securities; provided,
however, that in no case shall any Underwriter (except as may be provided in any
agreement among underwriters relating to the offering of the Securities) be
responsible for any amount in excess of the underwriting discount or commission
applicable to the Securities purchased by such Underwriter hereunder. If the
allocation provided by the immediately preceding sentence is unavailable for any
reason, the Company and Continental, jointly and
26
severally, and the Underwriters severally shall contribute in such proportion as
is appropriate to reflect not only such relative benefits but also the relative
fault of the Company and Continental on the one hand and of the Underwriters on
the other in connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. Benefits received
by the Company and Continental shall be deemed to be equal to the total net
proceeds from the offering (before deducting expenses) received by the Company
and Continental, and benefits received by the Underwriters shall be deemed to be
equal to the total underwriting discounts and commissions, in each case as set
forth on the cover page of the Prospectus. Relative fault shall be determined by
reference to, among other things, whether any untrue or any alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information provided by the Company or Continental on
the one hand or the Underwriters on the other, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The Company, Continental and the
Underwriters agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 8,
each person who controls an Underwriter within the meaning of either the Act or
the Exchange Act and each director, officer, employee and agent of an
Underwriter shall have the same rights to contribution as such Underwriter, and
each person who controls the Company within the meaning of either the Act or the
Exchange Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to the applicable terms and
conditions of this paragraph (d).
(e) The aggregate liability of Continental under the
representations and warranties contained in Section 1 hereof and under the
indemnity and contribution agreements contained in this Section 8 shall be
limited to an amount equal to the initial public offering price of the
Securities sold by Continental to the Underwriters. The Company and Continental
may agree, as among themselves and without limiting the rights of the
Underwriters under this Agreement, as to the respective amounts of such
liability for which they each shall be responsible.
9. Default by an Underwriter. If any one or more Underwriters
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the
27
remaining Underwriters shall have the right to purchase all, but shall not be
under any obligation to purchase any, of the Securities, and if such
nondefaulting Underwriters do not purchase all the Securities, this Agreement
will terminate without liability to any nondefaulting Underwriter, Continental
or the Company. In the event of a default by any Underwriter as set forth in
this Section 9, the Closing Date shall be postponed for such period, not
exceeding five Business Days, as the Representatives shall determine in order
that the required changes in the Registration Statement and the Prospectus or in
any other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Company, Continental and any nondefaulting Underwriter for damages
occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to
termination by the Representatives, by notice given to the Company and to
Continental prior to delivery of and payment for the Securities, if at any time
prior to such time (i) trading in the Company's Common Stock or Continental's
Class B common stock shall have been suspended by the Commission on the New York
Stock Exchange, (ii) trading in securities generally on the New York Stock
Exchange or the Nasdaq National Market shall have been suspended or limited or
minimum prices shall have been established on either of such Exchange or the
Nasdaq National Market, (iii) a banking moratorium shall have been declared
either by Federal or New York State authorities or (iv) there shall have
occurred any outbreak or escalation of hostilities, declaration by the United
States of a national emergency or war, or other calamity or crisis the effect of
which on financial markets is such as to make it, in the judgment of the
Representatives, impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Prospectus (exclusive of any
supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers, of Continental or its officers and of the Underwriters
set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter,
the Company or Continental or any of the officers, directors, employees, agents
or controlling persons referred to in Section 8 hereof, and will survive
delivery of and payment for the Securities. The provisions of Sections 7 and 8
hereof shall survive the termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or telefaxed to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.'s General Counsel
(fax no.: (▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to the General Counsel, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Inc., at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention:
General Counsel; if sent to the Company, will be mailed, delivered or telefaxed
to ▇▇▇-▇▇▇-▇▇▇▇ and confirmed to it at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, Attention: Chief Financial Officer and General Counsel; or, if sent to
Continental, will be mailed, delivered or telefaxed to ▇▇▇-▇▇▇-▇▇▇▇ and
confirmed to it at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention:
Chief Financial Officer and General Counsel.
13. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers, directors,
28
employees, agents and controlling persons referred to in Section 8 hereof, and
no other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
15. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for
convenience only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New York
City or Houston.
"Commission" shall mean the Securities and Exchange
Commission.
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or become
effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in paragraph 1(A)(a) above and any preliminary prospectus
included in the Registration Statement at the Effective Date that omits
Rule 430A Information.
"Prospectus" shall mean the prospectus relating to the
Securities that is first filed pursuant to Rule 424(b) after the
Execution Time or, if no filing pursuant to Rule 424(b) is required,
shall mean the form of final prospectus relating to the Securities
included in the Registration Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at
the Execution Time, in the form in which it shall become effective)
and, in the event any post-effective amendment
29
thereto or any Rule 462(b) Registration Statement becomes effective
prior to the Closing Date, shall also mean such registration statement
as so amended or such Rule 462(b) Registration Statement, as the case
may be. Such term shall include any Rule 430A Information deemed to be
included therein at the Effective Date as provided by Rule 430A.
"Rule 424," "Rule 430A" and "Rule 462" refer to such rules
under the Act.
"Rule 430A Information" shall mean information with respect to
the Securities and the offering thereof permitted to be omitted from
the Registration Statement when it becomes effective pursuant to Rule
430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the registration statement referred
to in Section 1(a) hereof.
30
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate
hereof, whereupon this letter and your acceptance shall represent a
binding agreement among the Company, Continental and the several
Underwriters.
Very truly yours,
EXPRESSJET HOLDINGS, INC.
By:
--------------------------------------
Name:
Title:
CONTINENTAL AIRLINES, INC.
By:
--------------------------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
▇▇▇▇▇▇▇, SACHS & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ASSOCIATES
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
By:
-------------------------------
Name:
Title:
For themselves and the other
several Underwriters named in
Schedule I to the foregoing Agreement.
31
SCHEDULE I
NUMBER OF UNDERWRITTEN
SECURITIES TO BE
UNDERWRITERS PURCHASED
------------ ----------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.....................................................
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Inc.....................................................
Credit Suisse First Boston Corporation.......................................
▇▇▇▇▇▇▇, Sachs & Co..........................................................
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Inc....................................
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates...................................................
------------
Total ..............................................
============
[LETTERHEAD OF EXPRESSJET HOLDINGS, INC./CONTINENTAL AIRLINES, INC.]
ExpressJet Holdings, Inc.
Public Offering of Common Stock
o, 2002
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Inc.
Credit Suisse First Boston Corp.
▇▇▇▇▇▇▇, Sachs & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates,
As Representatives of the several Underwriters
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This letter is being delivered to you in connection with the
proposed
Underwriting Agreement (the "
Underwriting Agreement") among ExpressJet
Holdings, Inc., a Delaware corporation (the "Company"), Continental Airlines,
Inc., a Delaware corporation and the Company's sole shareholder, and each of you
as representatives of a group of Underwriters named therein, relating to an
underwritten public offering of Common Stock, $0.01 par value (the "Common
Stock"), of the Company.
In order to induce you and the other Underwriters to enter
into the
Underwriting Agreement, the undersigned will not, without the prior
written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., offer, sell, contract to sell,
pledge or otherwise dispose of (or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition of (whether by
actual disposition or effective economic disposition due to cash settlement or
otherwise) by the undersigned or any affiliate of the undersigned or any person
in privity with the undersigned or any affiliate of the undersigned), directly
or indirectly, including the filing (or participation in the filing) of a
registration statement with the Securities and Exchange Commission in respect
of, or establish or increase a put equivalent position or liquidate or decrease
a call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934 with respect to, any shares of capital stock of the Company
or any securities convertible into, or exercisable or
exchangeable for such capital stock, or publicly announce an intention to effect
any such transaction, for a period of 180 days after the date of the
Underwriting Agreement, other than shares of Common Stock disposed of as bona
fide gifts approved by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
If for any reason the
Underwriting Agreement shall be
terminated prior to the Closing Date (as defined in the
Underwriting Agreement),
the agreement set forth above shall likewise be terminated.
Yours very truly,
------------------------------
[NAME AND ADDRESS OF OFFICER,
DIRECTOR OR MAJOR STOCKHOLDER]
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