Exhibit 10.37
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
dated as of June ____, 2006
among
COPA HOLDINGS, S.A.,
CORPORACION DE INVERSIONES AEREAS, S.A.
and
CONTINENTAL AIRLINES, INC.
TABLE OF CONTENTS
PAGE
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SECTION 1. DEFINITIONS................................................... 1
1.1. Defined Terms................................................... 1
1.2. General Interpretive Principles................................. 4
SECTION 2. REGISTRATION RIGHTS........................................... 4
2.1. Demand Registrations............................................ 4
2.2. Piggyback Registrations......................................... 6
2.3. Sales by CIASA to Independent Panamanians....................... 8
2.4. Registered Offerings of CIASA Shares other than Registrable
Securities...................................................... 9
2.5. Black-out Periods............................................... 9
2.6. No Inconsistent Agreements...................................... 9
2.7. Registration Procedures......................................... 10
2.8. Underwritten Offerings.......................................... 14
2.9. Registration Expenses........................................... 15
2.10. Rules 144 and 144A.............................................. 16
SECTION 3. MISCELLANEOUS................................................. 16
3.1. Indemnification................................................. 16
3.2. Remedies........................................................ 19
3.3. Notices......................................................... 19
3.4. Successors, Assigns and Transferees............................. 20
3.5. Recapitalizations, Exchanges, etc., Affecting Registrable
Securities...................................................... 21
3.6. Governing Law; Arbitration...................................... 21
3.7. Headings........................................................ 22
3.8. Severability.................................................... 22
3.9. Amendment; Waiver............................................... 22
3.10. Counterparts.................................................... 22
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AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT ("Agreement"),
dated as of June ___[insert closing date of offering], 2006, by and among Copa
Holdings, S.A., a corporation (sociedad anonima) organized under the laws of the
Republic of Panama (the "Company"), Corporacion de Inversiones Aereas, S.A., a
corporation (sociedad anonima) organized under the laws of Panama ("CIASA"), and
Continental Airlines, Inc., a corporation organized under the laws of the State
of Delaware ("Continental"). Each of the Company, CIASA and Continental may be
referred to as a "Party" and collectively they may be referred to as the
"Parties".
WITNESSETH:
WHEREAS, the Company, CIASA and Continental have entered into an
Underwriting Agreement, dated June ___, 2006 (the "Underwriting Agreement"),
among the Company, Continental, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., as representatives of the underwriters named therein
(collectively, the "Underwriters"), pursuant to which the Underwriters are
offering up to 7,546,875 Class A shares of the Company owned by Continental to
investors as described in a registration statement on Form F-1 (File No.
333-____) filed by the Company with the SEC (as defined below) (the "Offering");
WHEREAS, in connection with the Offering, the Company, CIASA and
Continental entered into a Second Amended and Restated Shareholders Agreement,
dated the date hereof (the "Shareholders Agreement");
WHEREAS, immediately after the Offering, Continental will continue to
own 5,359,375 Class A shares (or 4,375,000 Class A shares if the over-allotment
option is exercised) of the Company, and CIASA will continue to own 12,778,125
Class B shares of the Company; and
WHEREAS, in connection with the Shareholders Agreement, the Company
has agreed to provide the rights set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
premises, covenants and agreements of the parties hereto, and for other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the Parties hereto agree as follows:
SECTION 1. DEFINITIONS.
1.1. Defined Terms.
As used in this Agreement, the following terms shall have the following
meanings:
"Adverse Disclosure" means public disclosure of material non-public
information, disclosure of which, in the Board's good faith judgment, after
consultation with independent outside counsel to the Company, (i) would be
required to be made in any Registration Statement filed by the Company so that
such Registration Statement would not be
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false or misleading in any material respect; (ii) would not be required to be
made at such time but for the filing or publication of such Registration
Statement and (iii) the Company has a bona fide business purpose for not
disclosing publicly.
"Affiliates" has the meaning set forth in the Shareholders Agreement.
"Agreement" has the meaning set forth in the preamble hereto.
"Board" means the Board of Directors or other supervisory committee or
body of the Company or any other entity, as applicable.
"Class A shares" means the Class A shares, no par value, of the
Company.
"Class B shares" means the Class B shares, no par value, of the
Company.
"Company" has the meaning set forth in the preamble hereto.
"Company Sale" has the meaning set forth in Section 2.2(a).
"Demand Notice" has the meaning set forth in Section 2.1(c).
"Demand Registration" has the meaning set forth in Section 2.1(a).
"Demand Registration Statement" has the meaning set forth in Section
2.1(a).
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and any successor thereto, and any rules and regulations promulgated thereunder,
all as the same shall be in effect from time to time.
"Holder" means any holder of Registrable Securities who is a party
hereto or who succeeds to rights hereunder pursuant to Section 3.4.
"Law" means, as applicable, any and all (i) U.S. and foreign
(including, without limitation, Panama) laws, ordinances, regulations, whether
federal, provincial, state or local, (ii) codes, standards, rules, requirements
and criteria issued under any U.S. or foreign (including, without limitation,
Panama) laws, ordinances or regulations, whether federal, provincial, state or
local and (iii) judgments.
"NASD" means the National Association of Securities Dealers, Inc.
"NYSE" means the New York Stock Exchange.
"Offer" means an offer to persons in the United States to acquire
Registrable Securities.
"Panama" means the Republic of Panama.
"Panamanian" means any person or entity constituting a "Panamanian"
within the meaning of Article III of the Company's Pacto Social.
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"Panamanian Law" means any statute, act, order, rule or regulation
enacted by any Panamanian governmental authority or agency.
"Panamanian Listing Authority" means the Comision Nacional de Valores
of the Republic of Panama.
"Party" and "Parties" have the meaning set forth in the recitals.
"Permitted Transferees" or "Permitted Transfer" has the meaning set
forth in Section 2.1 of the Shareholders Agreement.
"Piggyback Registration" has the meaning set forth in Section 2.2(a).
"Prospectus" means the prospectus included in any Registration
Statement, including any preliminary Prospectus, all amendments and supplements
to such prospectus, including post-effective amendments and all other material
incorporated by reference in such prospectus.
"Registrable Securities" means from time to time (i) with respect to
Continental, the excess, if any, of all Class A shares of the Company held by
Continental and by Holders that are Permitted Transferees of Continental over
the number of Class B shares held by CIASA at such time (it being understood
that on the date hereof Continental has no Registrable Securities), (ii) with
respect to CIASA, the excess, if any, of all Class B shares of the Company held
by CIASA and by Holders that are Permitted Transferees of CIASA over the number
of Class A shares held by Continental at such time (it being understood that on
the date hereof CIASA has 7,418,750 Registrable Securities (or 8,403,125
Registrable Securities if the over-allotment option is exercised)) and (iii)
with respect to each of Continental and CIASA and their respective Permitted
Transferees, any securities that may be issued or distributed or be issuable in
respect of any Registrable Securities by way of conversion, dividend, stock
split or other distribution, merger, consolidation, exchange, recapitalization
or reclassification or similar transaction; provided that (a) the number of
Class A shares constituting Registrable Securities shall be reduced by the
number of Class A shares sold or otherwise transferred to a person that is not a
Permitted Transferee permitted by Section 3.4, and the number of Class B shares
constituting Registrable Securities shall be reduced by the number of Class B
shares sold or otherwise transferred to a person that is not a Permitted
Transferee permitted by Section 3.4; (b) the number of Registrable Securities
shall be increased from time to time in accordance with Section 2.3; and (c)
that any such Registrable Securities shall cease to be Registrable Securities to
the extent (1) a Registration Statement with respect to the sale of such
Registrable Securities has been declared effective under the Securities Act and
such Registrable Securities have been disposed of in accordance with the plan of
distribution set forth in such Registration Statement and/or Prospectus in each
case in accordance with applicable laws or (2) such Registrable Securities have
been distributed pursuant to Rule 144 (or any similar provisions then in force)
under the Securities Act or any other exemption from registration under
applicable Law.
"Registration" means registration with the SEC with respect to the
Company's securities for offer and sale to the public under a Registration
Statement. The term "Register" shall have a correlative meaning.
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"Registration Expenses" has the meaning set forth in Section 2.9.
"Registration Statement" means any registration statement of the
Company filed with, or to be filed with, the SEC under the rules and regulations
promulgated under the Securities Act, including the related Prospectus,
amendments and supplements to such registration statement, including
post-effective amendments, and all exhibits and all material incorporated by
reference in such registration statement.
"Restricted Securities" means any shares of the Company held by CIASA
or Continental that are not Registrable Securities.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and any
successor thereto, and any rules and regulations promulgated thereunder, all as
the same shall be in effect from time to time.
"Shelf Registration Statement" means a "shelf" registration statement
of the Company that covers certain shares of the Company described in Section
2.3 on an appropriate form under Rule 415 under the Securities Act, or any
similar rule that may be adopted by the SEC, and all amendments and supplements
to such registration statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and any
document incorporated by reference therein.
"Underwritten Offering" means a Registration in which Registrable
Securities of the Company are sold to an underwriter or underwriters for
reoffering to the public or in which an underwriter or underwriters commit to
acquire such securities if and to the extent they are not acquired by third
parties.
1.2. General Interpretive Principles. Whenever used in this Agreement,
except as otherwise expressly provided or unless the context otherwise requires,
any noun or pronoun shall be deemed to include the plural as well as the
singular and to cover all genders. The name assigned this Agreement and the
section captions used herein are for convenience of reference only and shall not
be construed to affect the meaning, construction or effect hereof. Unless
otherwise specified, the terms "hereof," "herein" and similar terms refer to
this Agreement as a whole (including the exhibits, schedules and disclosure
statements hereto), and references herein to Sections refer to Sections of this
Agreement.
SECTION 2. REGISTRATION RIGHTS.
2.1. Demand Registrations.
(a) Demand by Holders. Subject to the limitations set forth herein, so
long as either is a Holder, Continental or CIASA may make a written request to
the Company for Registration of all or part of the outstanding shares of
Registrable Securities held by such Holder and any other Holders of Registrable
Securities. Any such requested Registration shall hereinafter be referred to as
a "Demand Registration." A request for a Demand Registration shall specify the
aggregate amount of Registrable Securities to be Registered. The Company
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shall file as expeditiously as reasonably possible a Registration Statement
relating to such Demand Registration (a "Demand Registration Statement") and
shall use its reasonable best efforts to file and effect the Registration under
applicable Law.
(b) Limitation on Demand Registrations. In no event shall the Company
be required to effect and complete (i) more than two (2) Demand Registrations
requested by or CIASA pursuant to Section 2.1(a) (but subject to CIASA's right
to request additional Demand Registrations pursuant to Section 2.1(f)), (ii)
more than one (1) Demand Registration requested by Continental pursuant to
Section 2.1(a) (but subject to Continental's right to request additional Demand
Registrations pursuant to Section 2.1(f), 2.3(a) and 2.3(b)(iii)), (iii) more
than one Demand Registration in any twelve-month period or (iv) any Demand
Registration that would register the lesser of $50 million of the Shares and 5%
of the total Shares of the Company; provided that if, subsequent to the last
sale by a Holder of its Registrable Securities, the Company issues any Shares
and, as a consequence of such issuance, such Holder's remaining Registrable
Securities cease to constitute at least 5% of the total Shares of the Company,
then the limitation set forth in this Section 2.1(b)(iii) shall not apply to one
further Demand Registration by such Holder if such Holder would otherwise
continue to have such right.
(c) Notice of Demand to Other Holders. Promptly upon receipt of any
request for a Demand Registration pursuant to Section 2.1(a) (but in no event
more than 15 business days thereafter), the Company shall deliver a written
notice of any such Registration request specifying the number of Registrable
Securities requested to be registered and the intended method of distribution of
the Registrable Securities (a "Demand Notice") to all other Holders of
Registrable Securities, and the Company shall include in such Demand
Registration all additional Registrable Securities of other Holders with respect
to which the Company has received written requests for inclusion therein within
20 days after the date on which the Demand Notice has been delivered. All
requests made pursuant to this Section 2.1(c) shall specify the class and
aggregate amount of Registrable Securities to be registered.
(d) Delay in Filing; Suspension of Registration. If the filing,
initial effectiveness, publication or continued use of a Demand Registration
Statement at any time would require the Company to make an Adverse Disclosure,
the Company may, upon giving prompt written notice of such action to the
Holders, delay the filing, publication or initial effectiveness of, or suspend
use of, the Demand Registration Statement (a "Demand Suspension"); provided that
such Demand Suspensions shall not extend for more than 90 days in any
twelve-month period. Any Demand Suspension pursuant to this Section 2.1(d) shall
not be effective unless each director and executive officer subject to Section
16(b) of the Exchange Act is prohibited from making purchases and sales during
such Demand Suspension by reason of the existence of material non-public
information that would trigger an Adverse Disclosure. In the case of a Demand
Suspension, the Holders agree to suspend use of the applicable Prospectus in
connection with any sale or purchase, or offer to sell or purchase, Registrable
Securities, upon receipt of the notice referred to above. The Company shall
immediately (i) notify the Holders upon the termination of any Demand
Suspension, (ii) amend or supplement the Prospectus, if necessary, so it does
not contain any untrue statement or omission therein and (iii) furnish to the
Holders such numbers of copies of the Prospectus as so amended or supplemented
as the Holders may reasonably request. The Company represents that, as of the
date hereof, it has no
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knowledge of any circumstance that would reasonably be expected to cause it to
exercise its rights under this Section 2.1(d).
(e) Underwritten Offering. If the Holder requesting the Demand
Registration so elects, the offering of Registrable Securities pursuant to a
Demand Registration shall be in the form of an Underwritten Offering. If any
offering pursuant to a Demand Registration involves an Underwritten Offering,
such initiating Holder shall have the right to select the underwriter or
underwriters to administer the offering; provided that such underwriter or
underwriters shall be reasonably acceptable to the Company.
(f) Priority of Securities Registered Pursuant to Demand
Registrations. If the managing underwriter or underwriters of a proposed
Underwritten Offering of Registrable Securities included in a Demand
Registration informs the Company or the Holders of such Registrable Securities
that, in its or their opinion, the number of securities requested to be included
in such Demand Registration exceeds the number which can be sold in (or during
the time of) such offering without being likely to have a significant adverse
effect on the price, timing or distribution of the securities offered or on the
market for the securities offered, then the number of Registrable Securities to
be included in such Demand Registration shall be reduced and allocated as
follows: (i) first, any securities that the Company proposes to sell and (ii)
second, among the Holders in proportion to their respective equity ownership in
the Company at the time of the offering. If, as a consequence of any such
determination occurring during the final Demand Registration available to such
Holder pursuant to Section 2.1(b)(i), the initiating Holder sells fewer
Registrable Securities in such Demand Registration than such Holder requested to
be included, such Holder shall be entitled to one additional Demand
Registration.
(g) Registration Statement Form. Registrations under this Section 2.1
shall be on such appropriate form of the SEC, (i) as shall be selected by the
Company and as shall be deemed appropriate by counsel for the Company and (ii)
as shall permit the disposition of such Registrable Securities in accordance
with the intended method or methods of disposition specified in such Holders'
requests for such Registration. Notwithstanding the foregoing, if, pursuant to a
Demand Registration, (x) the Company proposes to effect Registration by filing a
Registration Statement on Form F-3 (or any successor or similar short-form
registration statement), (y) such Registration is in connection with an
Underwritten Offering and (z) the managing underwriter or underwriters shall
advise the Company in writing that, in its or their opinion, the use of another
form of registration statement is of material importance to the success of such
proposed offering, then such Registration shall be effected on such other form.
2.2. Piggyback Registrations.
(a) Participation. If the Company at any time proposes to file or
publish a Registration Statement under the Securities Act with respect to any
offering of its securities for its own account or for the account of any other
Persons (other than (i) a Registration under Section 2.1(a) pursuant to which
notice is delivered pursuant to Section 2.1(c), (ii) pursuant to a registration
right granted by the Company as part of a bona fide financing by the Company
structured as a private placement of securities (other than common stock or
warrants to purchase common stock) to be followed, within 270 days of the
consummation thereof, by the filing of a registration statement with respect to
such securities or (iii) a Registration on Form F-4 or S-8 or
7
any similar or successor form to such Forms (such registration pursuant to
clause (iii), a "Company Sale")), then, as soon as practicable (but in no event
less than 30 days prior to the proposed date of filing or publishing, as the
case may be, such Registration Statement), the Company shall give written notice
of such proposed filing to all Holders of Registrable Securities, and such
notice shall offer the Holders of such Registrable Securities the opportunity,
subject to Section 2.2(b), to Register under such Registration Statement such
number of Registrable Securities as each such Holder may request in writing (a
"Piggyback Registration"). Pursuant and subject to Section 2.2(b), the Company
shall include in such Registration Statement all such Registrable Securities
with respect to which the Company has received written requests for inclusion
within 20 days after the date on which the Company has delivered its written
notice, including, if necessary, filing with the SEC a post-effective amendment
or a supplement to such Registration Statement or the related Prospectus or any
document incorporated therein by reference or filing any other required document
or otherwise supplementing or amending such Registration Statement, if required
by the rules, regulations or instructions applicable to the registration form
used by the Company for such Registration Statement or by the Securities Act,
any state securities or blue sky laws, or any rules and regulations thereunder;
provided that if at any time after giving written notice of its intention to
Register any securities and prior to the effective date of the Registration
Statement filed in connection with such Registration, the Company shall
determine for any reason not to Register or to delay Registration of such
securities, the Company may, at its election, give written notice of such
determination to each Holder of Registrable Securities and, thereupon, (i) in
the case of a determination not to Register, shall be relieved of its obligation
to Register any Registrable Securities in connection with such Registration (but
not from its obligation, if any, under Section 2.9 to pay Registration Expenses
in connection therewith) and (ii) in the case of a determination to delay
Registering, shall be permitted to delay Registering any Registrable Securities,
for the same period as the delay in Registering such other securities. If the
offering pursuant to such Registration Statement is to be underwritten, then
each Holder making a request for a Piggyback Registration pursuant to this
Section 2.2(a) must, and the Company shall make such arrangements with the
underwriters so that each such Holder may, participate, subject to Section
2.2(b), in such Underwritten Offering. If the offering pursuant to such
Registration Statement is to be on any other basis, then each Holder making a
request for a Piggyback Registration pursuant to this Section 2.2(a) must, and
the Company will make such arrangements so that each such Holder may,
participate, subject to Section 2.2(b), in such offering on such basis. Each
Holder of Registrable Securities shall be permitted to withdraw all or part of
such Holder's Registrable Securities from a Piggyback Registration at any time
prior to the Company's request for acceleration of the effective date thereof.
(b) Priority of Piggyback Registration. If the managing underwriter or
underwriters of any proposed Underwritten Offering of a class of Registrable
Securities included in a Piggyback Registration informs the Company or the
Holders of such class of Registrable Securities that, in its or their opinion,
the number of securities of such class which such Holders and any other Persons
intend to include in such offering exceeds the number which can be sold in (or
during the time of) such offering without being likely to have a significant
adverse effect on the price, timing or distribution of the securities offered or
on the market for the securities offered, then the number of securities to be
included in such Registration as so determined by the managing underwriter or
underwriters (the "Included Securities") shall be allocated as follows:
8
(i) first, any securities that the Company proposes to sell; (ii) second, among
the Holders in proportion to their respective equity ownership in the Company at
the time of the offering.
2.3. Sales by CIASA to Independent Panamanians. (a) If at any time
CIASA or Permitted Transferees of CIASA shall sell Class B shares to a
Panamanian who is not a Permitted Transferee (an "Independent Panamanian") and
immediately after giving effect thereto CIASA, together with its Permitted
Transferees, collectively beneficially own fewer than the total number of
outstanding shares of the Company beneficially owned at such time by Continental
and its Permitted Transferees (i) the total number of Registrable Securities, if
any, held by Continental shall be increased to include all Class A shares then
owned by Continental, (ii) Continental may sell any Shares that become
Registrable Securities pursuant to this Section 2.3(a) pursuant to the Shelf
Registration Statement described in Section 2.3(b) below and (iii) the number of
Demand Registrations that Continental has a right to request pursuant to Section
2.1 shall increase by one.
(b) CIASA and the Company agree that:
(i) At such time as CIASA or a Permitted Transferee of CIASA
enters into serious negotiations to sell such number of Class B shares
to an Independent Panamanian that would result in CIASA and Permitted
Transferees of CIASA collectively beneficially owning less than the
total number of outstanding shares of the Company beneficially owned
at such time by Continental, CIASA shall use its reasonable best
efforts to cause the Company, and the Company shall use its reasonable
best efforts, to file as soon as possible a Shelf Registration
Statement providing for the registration of a number of Registrable
Securities held by Continental equal to the increased number of
Restricted Securities that shall be become Registrable Securities
pursuant to Sections 2.3(a) and such other securities as the Company
may deem appropriate and to have such Shelf Registration Statement
declared effective by the SEC.
(ii) The Company agrees to use its reasonable best efforts to
keep any Shelf Registration Statement required under Section 2.3(b)
continuously effective until all the Registrable Securities covered by
the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement (the "Shelf Effectiveness Period"). The Company
further agrees to supplement or amend the Shelf Registration Statement
and the related Prospectus if required by the rules, regulations or
instructions applicable to the registration form used by the Company
for such Shelf Registration Statement or by the Securities Act or by
any other rules and regulations thereunder for shelf registration or
if reasonably requested by a Holder of Registrable Securities with
respect to information relating to such Holder, and to use its
reasonable best efforts to cause any such amendment to become
effective and such Shelf Registration Statement and Prospectus to
become usable as soon as thereafter practicable.
(iii) If any Shelf Registration Statement required by this
Section 2.3(b), (i) has not been declared effective within 75 days of
the consummation of the triggering sale to an Independent Panamanian
contemplated by Section 2.3(a) or
9
(ii) becomes effective and thereafter either ceases to be effective or
the Prospectus contained therein ceases to be usable, in each case
during the Shelf Effectiveness Period, and such failure to remain
effective or usable exists for more than 75 days (whether or not
consecutive) in any 12-month period, then the number of Demand
Registrations that Continental has a right to request pursuant to
Section 2.1 shall be increased by one.
(iv) If CIASA sells any of its Class B shares to an Independent
Panamanian under circumstances that require the Company to file the
Shelf Registration Statement pursuant to this Section 2.3, then
Continental may use the Shelf Registration Statement at any time to
sell such increased number of Registrable Securities as were granted
pursuant to this Section 2.3.
2.4. Registered Offerings of CIASA Shares other than Registrable
Securities. In addition to the rights granted to Continental by Section 2.2, if
at any time the Company proposes to file a Registration Statement with respect
to Restricted Securities held by CIASA, then, as soon as practicable (but in no
event less than 20 days prior to the proposed date of filing such Registration
Statement), the Company shall give written notice of such proposed filing to
Continental and shall offer Continental the opportunity to register under such
Registration Statement such number of Restricted Securities held by Continental
equal to the number of CIASA's Restricted Securities that are proposed to be
registered under such Registration Statement.
2.5. Black-out Periods.
(a) The Company shall not be obligated to file any Registration
Statement pursuant to Section 2.1 during the period (A) commencing with the date
on which either (1) the Company previously received a request to file a
Registration Statement pursuant to Section 2.1 or (2) the Company, pursuant to
Section 2.2 or 2.4, previously or simultaneously notified the Holders of
Registrable Securities of its intention to file a Registration Statement (in
either case, such Registration Statement being hereinafter referred to as the
"Preceding Registration Statement") and (B) ending with the earliest of (1) if
such Preceding Registration Statement has not become effective, 180 days
following the filing of such Preceding Registration Statement, (2) if such
Preceding Registration Statement has not been filed, 270 days after notification
of intention to file, (3) if such Preceding Registration Statement has become
effective, 180 days after such Preceding Registration Statement has become
effective (subject to any period (which shall not exceed 120 days) after such
Preceding Registration Statement becomes effective, which the managing
Underwriter has designated as the minimum period during which the Company and
the Holders shall not engage in any new registered offerings) and (4) the date
of abandonment by the Company of its intention to file such Preceding
Registration Statement or the date of withdrawal of the request under Section
2.1 by the Party making the request.
2.6. No Inconsistent Agreements. Except for the Underwriting
Agreement, the Company is not currently a party to any agreement with respect to
its securities which is inconsistent with the rights granted to the Holders of
Registrable Securities by this Agreement. No other registration rights have been
granted or will be granted in connection with the Initial Public Offering.
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2.7. Registration Procedures.
(a) In connection with the Company's Registration obligations under
Sections 2.1, 2.2 and 2.3, the Company will use its reasonable best efforts to
effect such Registration to permit the sale of such Registrable Securities by
the Holders in accordance with the intended method or methods of distribution
thereof under the Securities Act, or other applicable Law, as expeditiously as
reasonably practicable, and in connection therewith the Company will:
(i) (A) prepare the required Registration Statement, Prospectus or
other applicable required registration and/or listing documents including all
exhibits and financial statements required under applicable law to be filed
therewith (such documents, collectively "Registration Documents"), and such
Registration Documents shall comply as to form with the requirements of the
applicable form and include all financial statements required by the SEC to be
filed therewith and all information reasonably requested by the lead managing
Underwriter or sole Underwriter, if applicable, to be included therein, (B) use
its reasonable best efforts to cause such Registration Statement to become
effective and remain effective, (C) use its reasonable best efforts to not take
any action that would cause a Registration Statement to contain a material
misstatement or omission or to be not effective and usable for resale of
Registrable Securities during the period that such Registration Statement is
required to be effective and usable, and (D) cause each Registration Statement
and the related Prospectus and any amendment or supplement thereto, as of the
effective date of such Registration Statement, amendment or supplement (x) to
comply in all material respects with any requirements of the Securities Act and
the rules and regulations of the SEC and (y) not to contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. Before
filing a Registration Statement or publishing a Prospectus or any other
applicable registration documents, or any amendments or supplements thereto,
furnish to the underwriters, if any, and to the Holders of the Registrable
Securities covered by such Registration Statement, copies of all documents filed
with an applicable regulatory authority in conformity with the requirements of
the Securities Act or any other applicable Law;
(ii) prepare and file with the SEC such amendments and post-effective
amendments to such Registration Statement and supplements to the Prospectus as
may be necessary to keep such Registration effective for the period of time
required by this Agreement;
(iii) notify the participating Holders of Registrable Securities and
the managing underwriter or underwriters, if any, and furnish to each Holder of
Registrable Securities and to each underwriter of an Underwritten Offering of
Registrable Securities, if any, without charge, as many copies of the relevant
documents including the Prospectus, any amendment or supplement thereto and such
other documents as such Holder or underwriter may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Securities;
(iv) use its reasonable best efforts to prevent or obtain the
withdrawal of any stop order or other order suspending the use of any
preliminary or final Prospectus;
(v) on or prior to the date on which the applicable Registration
Statement is declared effective or is published, use its reasonable best efforts
to register or qualify, and
11
cooperate with the selling Holders of Registrable Securities, the managing
underwriter or underwriters, if any, and their respective counsel, in connection
with the registration or qualification of such Registrable Securities for offer
and sale under the securities or "Blue Sky" laws of each state of the United
States and other jurisdiction as any such selling Holder or managing underwriter
or underwriters, if any, or their respective counsel reasonably request in
writing and do any and all other acts or things reasonably necessary or
advisable to keep such registration or qualification in effect for so long as
such Registration Statement remains in effect and so as to permit the
continuance of sales and dealings in such jurisdictions for as long as may be
necessary to complete the distribution of the Registrable Securities covered by
the Registration Statement; provided that the Company will not be required to
qualify generally to do business in any jurisdiction where it is not then so
qualified or to take any action which would subject it to taxation or general
service of process in any such jurisdiction where it is not then so subject;
(vi) cooperate with the selling Holders of Registrable Securities and
the managing underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be sold and not bearing any restrictive legends;
(vii) use its reasonable best efforts to cause the Registrable
Securities covered by the applicable Registration Statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof or the underwriter or
underwriters, if any, to consummate the disposition of such Registrable
Securities;
(viii) obtain for delivery to the Holders of Registrable Securities
being registered and to the underwriter or underwriters, if any, an opinion or
opinions from counsel for the Company dated the effective date of the
Registration Statement or, in the event of an Underwritten Offering, the date of
the closing under the underwriting agreement, in customary form, scope and
substance, which counsel and opinions shall be reasonably satisfactory to such
Holders or underwriters, as the case may be, and their respective counsel;
(ix) in the case of an Underwritten Offering, obtain for delivery to
the Company and the managing underwriter or underwriters, with copies to the
Holders of Registrable Securities included in such Registration, a comfort
letter from the Company's independent certified public accountants in customary
form and covering such matters of the type customarily covered by cold comfort
letters as the managing underwriter or underwriters reasonably request, dated
the date of execution of the underwriting agreement and brought down to the
closing under the underwriting agreement;
(x) cooperate with each seller of Registrable Securities and each
underwriter, if any, participating in the disposition of such Registrable
Securities and their respective counsel in connection with any filings required
to be made with the NASD;
(xi) provide and cause to be maintained in the United States or
Panama, as applicable, a transfer agent and registrar for all Registrable
Securities covered by the applicable Registration Statement from and after a
date not later than the effective date of such Registration Statement;
12
(xii) cause all Registrable Securities covered by the applicable
Registration Statement to be listed on each securities exchange on which any of
the Company's securities are then listed or quoted and on each inter-dealer
quotation system on which any of the Company's securities are then quoted;
(xiii) make available upon reasonable notice at reasonable times and
for reasonable periods for inspection by a representative appointed by the
majority of the Holders of each class of Registrable Securities covered by the
applicable Registration Statement, by any underwriter participating in any
disposition to be effected pursuant to such Registration Statement and by any
attorney, accountant or other agent retained by such Holders or any such
underwriter, all pertinent financial and other records, pertinent corporate
documents and properties of the Company, and cause all of the Company's
officers, directors and employees and the independent public accountants who
have certified its financial statements to make themselves available to discuss
the business of the Company and to supply all information reasonably requested
by any such Person in connection with such Registration Statement as shall be
necessary to enable them to exercise their due diligence responsibility pursuant
to the requirements of applicable Law; and
(xiv) (A) within a reasonable time prior to the filing of any
Registration Statement, any Prospectus, any amendment to a Registration
Statement or amendment or supplement to a Prospectus, provide copies of such
document to the Holders of Registrable Securities and to counsel to such Holders
and to the underwriter or underwriters of an Underwritten Offering of
Registrable Securities, if any; and
(B) if reasonably requested by any Holder selling Registrable
Securities pursuant to a Registration Statement, as promptly as reasonably
practicable, incorporate in a Prospectus supplement or post-effective amendment
to such Registration Statement such information as such Holder shall, on the
basis of a written opinion of nationally recognized counsel experienced in such
matters, determine to be required to be included therein by applicable law and
make any required filings of such Prospectus supplement or such post-effective
amendment as required by applicable law; provided that the Company shall not be
required to take any actions under this Section 2.7(xiv)(B) that are not, in the
reasonable opinion of counsel for the Company, required by applicable law; and
fairly consider such other reasonable changes in any such document prior to or
after the filing thereof as the counsel to the Holders or the underwriter or the
underwriters may request and not file any such document in a form to which
Holders of a majority of the Registrable Securities being sold by all Holders in
such offering or any underwriter shall reasonably object; and make such of the
representatives of the Company as shall be reasonably requested by the Holders
of Registrable Securities being registered or any underwriter available for
discussion of such document;
(C) within a reasonable time prior to the filing of any document
which is to be incorporated by reference into a Registration Statement or a
Prospectus, provide copies of such document to counsel for the Holders; fairly
consider such reasonable changes in such document prior to or after the filing
thereof as counsel for such Holders or such underwriter shall request; and make
such of the representatives of the Company as shall be reasonably requested by
such counsel available for discussion of such document; and
13
(xv) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering the
period of at least twelve (12) months, but not more than eighteen (18) months,
beginning with the first month after the effective date of the Registration
Statement, which earnings statement shall meet the requirements of the
Securities Act.
(b) The Company may require each seller of Registrable Securities as
to which any Registration is being effected to furnish to the Company such
information regarding the distribution of such securities and such other
information relating to such Holder and its ownership of Registrable Securities
as the Company may from time to time reasonably request in writing. Each Holder
of Registrable Securities agrees to furnish such information to the Company and
to cooperate with the Company as reasonably necessary to enable the Company to
comply with the provisions of this Agreement.
(c) The Company shall advise each of the Holders and, if requested by
any such person, confirm such advice in writing (which advice pursuant to
clauses (ii) through (v) of this Section 2.7(c) shall be accompanied by an
instruction to suspend the use of the prospectus until the requisite changes
have been made):
(i) when any Registration Statement and any amendment thereto has been
filed with the Commission and when such Registration Statement or any
post-effective amendment thereto has become effective;
(ii) of any request by the Commission for amendments or supplements to
any Registration Statement or the prospectus included therein or for additional
information;
(iii) of the issuance by the Commission of any stop order suspending
the effectiveness of any Registration Statement or the initiation of any
proceedings for that purpose;
(iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose; and
(v) of the happening of any event that requires the making of any
changes in any Registration Statement or the prospectus included therein in
order that the statements therein are not misleading and do not omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading.
(d) Each Holder agrees that, upon receipt of any notice from the
Company pursuant to Section 2.7(c)(ii) through (v), such Holder will discontinue
disposition of any Registrable Securities until such Holder's receipt of copies
of a supplemental or amended prospectus or until advised in writing (the
"Advice") by the Company that the use of the applicable prospectus may be
resumed. In the event the Company shall give any such notice, the period during
which the applicable Registration Statement is required to be maintained
effective shall be extended by the number of days during the period from and
including the date of the giving of such notice to and including the date when
each seller of Registrable Securities covered
14
by such Registration Statement either receives the copies of the supplemented or
amended Prospectus or receives Advice.
2.8. Underwritten Offerings.
(a) Underwriting Agreements. If requested by the underwriters for any
Underwritten Offering, the Company shall enter into an underwriting agreement
with such underwriters for such offering, such agreement to be reasonably
satisfactory in substance and form to the Company, and the underwriters. Such
agreement shall contain such representations and warranties by the Company and
such other terms as are generally prevailing in agreements of that type,
including, without limitation, indemnities generally to the effect and to the
extent of those provided in Section 3.1. The Holders of any Registrable
Securities to be included in any Underwritten Offering by such underwriters
shall enter into such underwriting agreement at the request of the Company. The
Holders of Registrable Securities to be distributed by such Underwriters shall
be parties to such Underwriting Agreement and may, at their option, require that
all of the representations and warranties by, and the other agreements on the
part of, the Company to and for the benefit of such underwriters also be made to
and for the benefit of such Holders and any or all of the conditions precedent
to the obligations of such underwriters under such underwriting agreement be
conditions precedent to the obligations of such Holders. No Holder shall be
required in any such underwriting agreement to make any representations or
warranties to, or agreements with, the Company or the underwriters other than
representations, warranties or agreements regarding such Holder, such Holder's
Registrable Securities, such Holder's intended method of distribution and any
representations required by law.
(b) Participation in Underwritten Registrations. No Person may
participate in any Underwritten Offering hereunder unless such Person (i) agrees
to sell such Person's securities on the basis provided in any underwriting
arrangements approved by the Persons entitled to approve such arrangements and
(ii) completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
(c) Piggyback by Holders in Underwritten Primary Offerings. If the
Company at any time proposes to register any of its securities under the
Securities Act as contemplated by Section 2.2 and such securities are to be
distributed by or through one or more Underwriters, then the Holders of
Registrable Securities to be distributed by such Underwriters pursuant to
Piggyback Rights shall be parties to the Underwriting Agreement between the
Company and such Underwriters and may, at their option, require that any or all
of the representations and warranties by, and the other agreements on the part
of, the Company to and for the benefit of such Underwriters shall also be made
to and for the benefit of such holders of Registrable Securities and that any or
all of the conditions precedent to the obligations of such Underwriters under
such underwriting agreement be conditions precedent to the obligations of such
holders of Registrable Securities. Any such Holder of Registrable Securities
shall not be required to make any representations or warranties to or agreements
with the Company or the Underwriters other than representations, warranties or
agreements regarding such Holder, such Holder's Registrable Securities and such
Holder's intended method of distribution and any other representation required
by law.
15
(d) Holdback Agreements. (i) Each Holder of Registrable Securities
agrees, if so required by the managing Underwriter, that it will agree to
"Holdbacks" to the extent that (A) such Holdbacks apply to the Company and
Holders of all other Registrable Securities on equal or more restrictive terms
and (B) such Holdbacks were limited to one hundred eighty (180) days after any
underwritten registration pursuant to Section 2.1 or 2.2 has become effective or
after any sale under a Registration Statement required by Section 2.3. For the
purpose of this Agreement, to "Holdback" is to refrain from selling, making any
short sale of, loaning, granting any option for the purchase of, effecting any
public sale or distribution of or otherwise disposing of any securities of the
Company, except as part of such underwritten registration, whether or not such
holder participates in such registration. Each Holder of Registrable Securities
agrees that the Company may instruct its transfer agent to place stop transfer
notations in its records to enforce such Holdbacks.
(ii) The Company agrees (A) if so required by the managing
Underwriter, that it would be subject to the same Holdbacks as the holders of
Registrable Securities, except pursuant to registrations on Form ▇-▇, ▇-▇, ▇-▇▇
or S-15 or any successor or similar forms thereto, and (B) to cause each holder
of its securities or any securities convertible into or exchangeable or
exercisable for any of such securities, in each case purchased from the Company
at any time after the date of this Agreement (other than in a public offering)
to agree to such Holdbacks.
2.9. Registration Expenses. In the case of the first Demand
Registration requested under this Agreement after the date hereof, 50% of the
Company's expenses incident to the Company's performance of or compliance with
this Agreement will be paid by the Company and the remaining 50% will be paid
ratably by all Holders in proportion to the number of their respective
Registrable or Restricted Securities, as the case may be, that are included in
such Registration. In the case of all Registrations other than the first such
Demand Registration, all such expenses shall be paid ratably by all Holders
(including the Company) in proportion to the number of their respective
Registrable or Restricted Securities, as the case may be, that are included in
such Registration. The expenses incident to the Company's performance of or
compliance with this Agreement, include, without limitation, (i) all fees and
expenses (other than registration and filing fees) associated with filings
required to be made with the SEC, the NASD, the NYSE or the Panamanian Listing
Authority, (ii) all fees and expenses in connection with compliance with state
securities or "Blue Sky" laws, (iii) all translating, printing, duplicating,
word processing, messenger, telephone, facsimile and delivery expenses
(including expenses of printing certificates for the Registrable Securities in a
form eligible for deposit with The Depository Trust Company or other similar
depository institution and of printing prospectuses), (iv) all fees and
disbursements of counsel for the Company and of all independent certified public
accountants of the Company (including the expenses of any special audit and cold
comfort letters required by or incident to such performance); (v) Securities Act
liability insurance or similar insurance if the Company so desires or the
underwriters so require in accordance with then-customary underwriting practice,
(vi) all fees and expenses (other than listing fees) incurred in connection with
the listing of the Registrable Securities on any securities exchange or
quotation of the Registrable Securities on any inter-dealer quotation system,
(vii) all applicable rating agency fees with respect to the Registrable
Securities and (viii) all fees and expenses of any special experts or other
Persons retained by the Company in connection with any Registration.
Notwithstanding the foregoing, the Company shall not be required to pay, or
16
reimburse any person for, any (i) registration or filing fees associated with
filings required to be made with any governmental or listing authority or (ii)
fees and disbursements of underwriters or the Holders (including the fees of
their respective counsel). Any expenses not payable by the Company shall be paid
by the Holders of Registrable Securities in proportion to their number of
Registrable Securities included in such Registration.
2.10. Rules 144 and 144A.
The Company shall timely file the reports required to be filed by it
under the Securities Act and the Exchange Act (including but not limited to the
reports under Sections 13 and 15(d) of the Exchange Act referred to in
subparagraph (c) of Rule 144 adopted by the Commission under the Securities Act)
and the rules and regulations adopted by the Commission thereunder (or, if the
Company is not required to file such reports, will, upon the request of any
holder of Registrable Securities, make publicly available other information) and
will take such further action as any holder of Registrable Securities may
reasonably request, all to the extent required from time to time to enable such
holder to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by (a) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the Commission. Upon the request
of any holder of Registrable Securities, the Company will deliver to such holder
a written statement as to whether it has complied with the requirements of this
Section 2.10.
SECTION 3. MISCELLANEOUS.
3.1. Indemnification.
(a) Indemnification by Company. The Company agrees to indemnify and
hold harmless, to the full extent permitted by law, each Holder of Registrable
Securities, its Affiliates and their respective partners, officers, directors,
shareholders, employees and advisors and each Person who controls (within the
meaning of the Securities Act or the Exchange Act) such Persons from and against
any and all losses, claims, damages, liabilities, judgments (or actions or
proceedings in respect thereof, whether or not such indemnified party is a party
thereto) and expenses, joint or several (including reasonable costs of
investigation and legal expenses) (each, a "Loss" and collectively "Losses")
arising out of or based upon (A) any untrue or alleged untrue statement of a
material fact contained in any Registration Statement under which such
Registrable Securities were Registered under the Securities Act (including any
final, preliminary or summary Prospectus contained therein or any amendment
thereof or supplement thereto or any documents incorporated by reference
therein), (B) any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein (in
the case of a Prospectus or preliminary Prospectus, in light of the
circumstances under which they were made) not misleading, (C) any other
violation by the Company of the Securities Act, the Exchange Act or any state
securities law or of any rule or regulation promulgated under the Securities
Act, the Exchange Act or any state securities law applicable to the Company and
relating to any action or inaction required of the Company in connection with
any registration of Registrable Shares, or (D) any violation or alleged
violation of the securities Law of Panama; provided that the Company shall not
be liable to any particular indemnified party in any such case to the extent
that any such Loss arises out of or is based upon
17
an untrue statement or alleged untrue statement of a material fact or omission
or alleged omission of a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, in
any such case made in any such Registration Statement in reliance upon and in
conformity with written information furnished to the Company by such indemnified
party expressly for use in the preparation thereof, provided further that the
Company shall not be liable to any Person who participates as an Underwriter in
the offering or sale of Registrable Securities or to any other Person, if any,
who controls such Underwriter within the meaning of the Securities Act, in any
such case to the extent that any such Losses arise out of such Person's failure
to send or give a copy of the final Offering Document, as the same may be then
supplemented or amended, within the time required by the Securities Act or other
applicable foreign securities Laws to the Person asserting the existence of an
untrue statement or alleged untrue statement or omission or alleged omission at
or prior to the written confirmation of the sale of Registrable Securities to
such Person if such statement or omission was corrected in such final Offering
Document. This indemnity shall be in addition to any liability the Company may
otherwise have. Such indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of such Holder or any indemnified
party and shall survive the transfer of such securities by such Holder.
(b) Indemnification by the Selling Holder of Registrable Securities.
Each selling Holder of Registrable Securities agrees (severally and not jointly)
to indemnify and hold harmless, to the full extent permitted by law, the
Company, its directors and officers and each Person who controls the Company
(within the meaning of the Securities Act and the Exchange Act) from and against
any Losses resulting from any untrue statement of a material fact or any
omission of a material fact required to be stated in the Registration Statement
under which such Registrable Securities were Registered under the Securities Act
(including any final, preliminary or summary Prospectus contained therein or any
amendment thereof or supplement thereto or any documents incorporated by
reference therein), or necessary to make the statements therein (in the case of
a Prospectus or preliminary Prospectus, in light of the circumstances under
which they were made) not misleading, to the extent, but only to the extent,
that such untrue statement or omission is made in reliance upon and in
conformity with information furnished in writing by such selling Holder to the
Company specifically for inclusion in such Registration Statement and has not
been corrected in a subsequent writing prior to or concurrently with the sale of
the Registrable Securities to the Person asserting such loss, claim, damage,
liability or expense. In no event shall the liability of any selling Holder of
Registrable Securities hereunder be greater in amount than the dollar amount of
the proceeds received by such Holder under the sale of the Registrable
Securities giving rise to such indemnification obligation. Each Holder also
shall indemnify any underwriters of the Registrable Securities, their officers
and directors and each person who controls such underwriters (within the meaning
of the Securities Act) to the same extent as provided above with respect to the
indemnification of the Company.
(c) Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder will (i) give prompt written notice to the
indemnifying party of any claim with respect to which it seeks indemnification
(provided that any delay or failure to so notify the indemnifying party shall
relieve the indemnifying party of its obligations hereunder only to the extent,
if at all, that it is actually and materially prejudiced by reason of such delay
or failure) and (ii) permit such indemnifying party to assume the defense of
such claim with counsel reasonably satisfactory to the indemnified party;
provided that any Person entitled to
18
indemnification hereunder shall have the right to select and employ separate
counsel and to participate in the defense of such claim, but the fees and
expenses of such counsel shall be at the expense of such Person unless (i) the
indemnifying party has agreed in writing to pay such fees or expenses, (ii) the
indemnifying party shall have failed to assume the defense of such claim within
a reasonable time after receipt of notice of such claim from the Person entitled
to indemnification hereunder and employ counsel reasonably satisfactory to such
Person, (iii) the indemnified party has reasonably concluded (based on advice of
counsel) that there may be legal defenses available to it or other indemnified
parties that are different from or in addition to those available to the
indemnifying party, or (iv) in the reasonable judgment of any such Person, based
upon advice of its counsel, a conflict of interest may exist between such Person
and the indemnifying party with respect to such claims (in which case, if the
Person notifies the indemnifying party in writing that such Person elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such claim
on behalf of such Person). If such defense is not assumed by the indemnifying
party, the indemnifying party will not be subject to any liability for any
settlement made without its consent, but such consent may not be unreasonably
withheld; provided that an indemnifying party shall not be required to consent
to any settlement involving the imposition of equitable remedies or involving
the imposition of any material obligations on such indemnifying party other than
financial obligations for which such indemnified party will be indemnified
hereunder. If the indemnifying party assumes the defense, the indemnifying party
shall not have the right to settle such action without the consent of the
indemnified party. No indemnifying party shall consent to entry of any judgment
or enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of an
unconditional release from all liability in respect to such claim or litigation.
It is understood that the indemnifying party or parties shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for the reasonable fees, disbursements and other charges of more than one
separate firm admitted to practice in such jurisdiction at any one time from all
such indemnified party or parties unless (x) the employment of more than one
counsel has been authorized in writing by the indemnified party or parties, (y)
an indemnified party has reasonably concluded (based on advice of counsel) that
there may be legal defenses available to it that are different from or in
addition to those available to the other indemnified parties or (z) a conflict
or potential conflict exists or may exist (based on advice of counsel to an
indemnified party) between such indemnified party and the other indemnified
parties, in each of which cases the indemnifying party shall be obligated to pay
the reasonable fees and expenses of such additional counsel or counsels.
(d) Contribution. The indemnification provided for under this
Agreement shall remain in full force and effect regardless of any investigation
made by or on behalf of the indemnified party or any officer, director or
controlling Person of such indemnified party and shall survive the transfer of
securities. If for any reason the indemnification provided for in paragraphs (a)
and (b) of this Section 3.1 is unavailable to an indemnified party or
insufficient to hold it harmless as contemplated by paragraphs (a) and (b) of
this Section 3.1, then the indemnifying party shall contribute to the amount
paid or payable by the indemnified party as a result of such Loss in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and the indemnified party on the other. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to
19
information supplied by the indemnifying party or the indemnified party and the
parties' relative intent, knowledge, access to information concerning the matter
with respect to which the claim was asserted and opportunity to correct or
prevent such untrue statement or omission. Notwithstanding anything in this
Section 3.1(d) to the contrary, no indemnifying party (other than the Company)
shall be required pursuant to this Section 3.1(d) to contribute any amount in
excess of the amount by which the net proceeds received by such indemnifying
party from the sale of Registrable Securities in the offering to which the
Losses of the indemnified parties relate exceeds the amount of any damages which
such indemnifying party has otherwise been required to pay by reason of such
untrue statement or omission. The parties hereto agree that it would not be just
and equitable if contribution pursuant to this Section 3.1(d) were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation. If
indemnification is available under this Section 3.1, the indemnifying parties
shall indemnify each indemnified party to the full extent provided in Sections
3.1(a) and 3.1(b) without regard to the relative fault of said indemnifying
parties or indemnified party.
3.2. Remedies. It is hereby agreed and acknowledged that it will be
impossible to measure in money the damage that would be suffered if the parties
fail to comply with any of the obligations herein imposed on them and that in
the event of any such failure, an aggrieved Person will be irreparably damaged
and will not have an adequate remedy at law. Any such Person shall, therefore,
be entitled (in addition to any other remedy to which it may be entitled in law
or in equity) to injunctive relief, including, without limitation, specific
performance, to enforce such obligations, and if any action should be brought in
equity to enforce any of the provisions of this Agreement, none of the parties
hereto shall raise the defense that there is an adequate remedy at law. In
addition, in the case of a material breach of this Agreement, CIASA or
Continental, as applicable, shall have the rights to terminate the Alliance
Agreement or the Services Agreement as described in and in accordance with those
agreements.
3.3. Notices. All notices, other communications or documents provided
for or permitted to be given hereunder, shall be made in writing and shall be
given either personally by hand-delivery, by facsimile transmission, or by air
courier guaranteeing overnight delivery:
(a) if to the Company or to CIASA:
Copa Holdings, S.A.
Avenida ▇▇▇▇▇ Arosmena y ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇ ▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇: ▇▇▇▇ ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
with copies to:
▇▇▇▇▇▇▇, ▇▇▇▇▇ y ▇▇▇▇▇
Edif. Omanco
20
Apartado 8629
Panama 5
Panama
Facsimile: ▇▇▇▇ ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇ C.
and to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
(b) if to Continental:
Continental Airlines, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Senior Vice President - Asia/Pacific and Corporate
Development
with copies to:
Continental Airlines, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Senior Vice President and General Counsel
Each Holder, by written notice given to the Company in accordance with
this Section 3.3 may change the address to which notices, other communications
or documents are to be sent to such Holder. All notices, other communications or
documents shall be deemed to have been duly given: (i) at the time delivered by
hand, if personally delivered; (ii) when receipt is acknowledged in writing by
addressee, if by facsimile transmission and (iii) on the first business day with
respect to which a reputable air courier guarantees delivery; provided that
notices of a change of address shall be effective only upon receipt.
3.4. Successors, Assigns and Transferees.
The provisions of this Agreement shall be binding upon, and shall
inure to the benefit of, the respective successors and assigns of Continental
and CIASA; provided that the benefit of this Agreement may not be assigned or
transferred in whole or in part by Continental
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or CIASA without the prior written consent of the other Party unless such
assignment or transfer is by a Party to a Permitted Transferee and such
Permitted Transfer is made in accordance with the terms of Section 2.1 of the
Shareholders Agreement; and provided, further, that no such assignment shall be
binding upon or obligate the Company to any such Permitted Transferee unless and
until the Company shall have received (i) notice of such assignment as herein
provided, (ii) a written agreement by the assigning or transferring party, in
form and substance reasonably satisfactory to the Company, to remain bound by
the terms of this Agreement and (iii) a written agreement of the Permitted
Transferee, in form and substance reasonably satisfactory to the Company, to be
bound by the terms of this Agreement.
3.5. Recapitalizations, Exchanges, etc., Affecting Registrable
Securities. The provisions of this Agreement shall apply, to the full extent set
forth herein with respect to the Registrable Securities, to any and all
securities or capital stock of the Company or any successor or assign of the
Company (whether by merger, consolidation, sale of assets or otherwise) which
may be issued in respect of, in exchange for, or in substitution of such
Registrable Securities, by reason of any dividend, split, issuance, reverse
split, combination, recapitalization, reclassification, merger, consolidation or
otherwise.
3.6. Governing Law; Arbitration.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED WITHIN THE STATE.
(b) (i) Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall be settled by arbitration administered
in accordance with the International Arbitration Rules of the International
Chamber of Commerce Court of International Arbitration (the "ICC"). Judgment on
the award rendered by the arbitrators may be entered in any court having
jurisdiction thereof.
(ii) The number of arbitrators shall be three, one of whom shall be
appointed by each of the parties and the third of whom shall be selected by
mutual agreement, if possible, within 30 days of the selection of the second
arbitrator and thereafter by the ICC (in which case the third arbitrator shall
not be a citizen of Panama or the United States) and the place of arbitration
shall be Miami, Florida. The language of the arbitration shall be English, but
documents or testimony may be submitted in any other language if a translation
is provided.
(iii) The arbitrators will have no authority to award punitive damages
or any other damages not measured by the prevailing party's actual damages, and
may not, in any event, make any ruling, finding or award that does not conform
to the terms of the Agreement.
(iv) Either party may make an application to the arbitrators seeking
injunctive relief to maintain the status quo until such time as the arbitration
award is rendered or the controversy is otherwise resolved. Either party may
apply to any court having jurisdiction hereof and seek injunctive relief in
order to maintain the status quo until such time as the arbitration award is
rendered or the controversy is otherwise resolved.
22
3.7. Headings. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
3.8. Severability. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law in any jurisdiction, such invalidity,
illegality or unenforceability will not affect any other provision or portion of
any provision in such jurisdiction, and this agreement will be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision or portion of any provision had never been contained
therein.
3.9. Amendment; Waiver.
(a) This Agreement may not be amended or modified and waivers and
consents to departures from the provisions hereof may not be given, except by an
instrument or instruments in writing making specific reference to this Agreement
and signed by the Company, the Holders of a majority of Registrable Securities
then outstanding and, so long as they are Holders, Continental and CIASA. Each
Holder of any Registrable Securities at the time or thereafter outstanding shall
be bound by any amendment, modification, waiver or consent authorized by this
Section 3.9(a), whether or not such Registrable Securities shall have been
marked accordingly.
(b) The waiver by any party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a further or continuing
waiver of such breach or as a waiver of any other or subsequent breach. Except
as otherwise expressly provided herein, no failure on the part of any party to
exercise, and no delay in exercising, any right, power or remedy hereunder, or
otherwise available in respect hereof at law or in equity, shall operate as a
waiver thereof, nor shall any single or partial exercise of such right, power or
remedy by such party preclude any other or further exercise thereof or the
exercise of any other right, power or remedy.
3.10. Counterparts. This Agreement may be executed in any number of
separate counterparts and by the parties hereto in separate counterparts each of
which when so executed shall be deemed to be an original and all of which
together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed as of the date first written above.
COPA HOLDINGS, S.A.
By:
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Name:
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Title:
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CORPORACION DE INVERSIONES AEREAS, S.A.
By:
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Name:
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Title:
---------------------------------
CONTINENTAL AIRLINES, INC.
By:
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Name:
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Title:
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