Exhibit 1.1
EXECUTION COPY
JETBLUE AIRWAYS CORPORATION
(a Delaware corporation)
PASS THROUGH CERTIFICATES
UNDERWRITING AGREEMENT
November 7, 2006
November 7, 2006
Xxxxxx Xxxxxxx & Co. Incorporated
As representative of the several
Underwriters named in
Schedule I hereto
(the "REPRESENTATIVE")
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
JetBlue Airways Corporation, a Delaware corporation (the "COMPANY"),
proposes that Wilmington Trust Company, a Delaware banking corporation, as pass
through trustee (a "TRUSTEE") under the Class G-1 Trust and the Class B-1 Trust
(each as defined below), issue and sell to the several underwriters named in
Schedule I hereto the JetBlue Airways (Spare Parts) Pass Through Certificates,
Class G-1 (the "CLASS G-1 CERTIFICATES") and the JetBlue Airways (Spare Parts)
Pass Through Certificates, Class B-1 (the "CLASS B-1 CERTIFICATES" and, together
with the Class G-1 Certificates, the "OFFERED CERTIFICATES") in the aggregate
face amounts and with the interest rates and final expected distribution dates
set forth on Schedule II hereto on the terms and conditions stated herein.
The Offered Certificates will be issued pursuant to two separate
pass through trust agreements, each to be dated as of November 14, 2006, between
the Company and the Trustee (the "PASS THROUGH TRUST AGREEMENTS"). The Pass
Through Trust Agreements relate to the JetBlue Airways (Spare Parts) Pass
Through Trust, Class G-1 (the "CLASS G-1 TRUST"), and the JetBlue Airways (Spare
Parts) Pass Through Trust, Class B-1 (the "CLASS B-1 TRUST" and together with
the Class G-1 Trust, the "TRUSTS").
The Offered Certificates will represent interests in Class G-1 Trust
and Class B-1 Trust established to fund the purchase of Series G-1 equipment
notes (the "SERIES G EQUIPMENT NOTES") and the Series B-1 equipment notes (the
"SERIES B EQUIPMENT NOTES" and, together with the Series G Equipment Notes, the
"EQUIPMENT NOTES"), respectively, to be issued by the Company. The Equipment
Notes will be issued under an Trust Indenture and Mortgage, dated as of the
Issuance Date, between Wilmington Trust Company, as trustee and mortgagee (the
"MORTGAGEE"), and the Company (including any Supplements thereto, the
"INDENTURE"). On the Issuance Date, the Trustees will use the proceeds from the
sale of the Offered Certificates to purchase the Equipment Notes pursuant to the
Series G-1 and B-1 Note Purchase Agreement, dated as of the Issuance Date, among
the Company, the Mortgagee and the Trustees and the Subordination Agent (the
"NOTE PURCHASE AGREEMENT"). The Equipment Notes will be secured by a lien on
Collateral (as defined in the Indenture), which includes certain aircraft spare
parts and related assets owned by the Company. The Company will grant a security
interest in the
Collateral to the Mortgagee pursuant to the Indenture. In addition, on the
Issuance Date, the Company will enter into a Collateral Maintenance Agreement
with the Policy Provider and the Mortgagee with respect to the Collateral (the
"COLLATERAL MAINTENANCE AGREEMENT").
Certain amounts of interest payable on the Offered Certificates
issued by the Class G-1 Trust will be entitled to the benefits of a primary
liquidity facility and an above-cap liquidity facility. Landesbank
Hessen-Thuringen Girozentrale, New York Branch (the "PRIMARY LIQUIDITY
PROVIDER") will enter into a revolving credit agreement with respect to the
Class G-1 Trust (the "PRIMARY LIQUIDITY FACILITY"), to be dated as of the
Issuance Date for the benefit of the holders of the Offered Certificates issued
by the Class G-1 Trust. Xxxxxx Xxxxxxx Capital Services Inc. (the "ABOVE-CAP
LIQUIDITY PROVIDER") will enter into an interest rate cap agreement (the
"ABOVE-CAP LIQUIDITY FACILITY"), to be dated as of the Issuance Date for the
benefit of the holders of the Offered Certificates issued by such Trust, and the
Liquidity Guarantor will issue a guarantee, to be dated as of the Issuance Date,
in connection with the Above-Cap Liquidity Facility (the "ABOVE-CAP GUARANTEE").
The Primary Liquidity Provider, the Above-Cap Liquidity Provider,
MBIA Insurance Corporation, as provider of the Policies referred to below (in
such capacity, the "POLICY PROVIDER"), and the holders of the Offered
Certificates will be entitled to the benefits, and subject to the terms, of an
Intercreditor Agreement to be dated as of the Issuance Date (the "INTERCREDITOR
AGREEMENT") among the Trustee, Wilmington Trust Company, as subordination agent
and trustee thereunder (the "SUBORDINATION AGENT"), the Primary Liquidity
Provider, the Above-Cap Liquidity Provider, the Policy Provider and the
Additional Primary Liquidity Provider(s), Additional Above-Cap Liquidity
Provider(s) and Additional Policy Provider(s), if any, which may from time to
time, become parties thereto.
Payments of interest on the Offered Certificates issued by the Class
G-1 Trust will be supported by a financial guaranty insurance policy (the
"POLICY") issued by the Policy Provider to the extent the Primary Liquidity
Facility and the Above-Cap Liquidity Facility for such Offered Certificates and
any funds contained in the related cash collateral accounts are not available
for that purpose. The Policy will also support the payment of the outstanding
balance of the Offered Certificates issued by the Class G-1 Trust on the final
legal distribution date for such Offered Certificates and under certain other
circumstances described in the Intercreditor Agreement and the Policies. The
Policy will be issued pursuant to an insurance and indemnity agreement dated as
of the Issuance Date (the "POLICY PROVIDER AGREEMENT") among the Policy
Provider, the Company, the Trustee for the Class G-1 Trust and the Subordination
Agent.
The Class B-1 Certificates may only be sold by the Underwriters to
persons reasonably believed by the Underwriters to be "qualified institutional
buyers" ("QIBs"), as defined in Rule 144A under the Securities Act of 1933, as
amended (the "Securities Act").
As used herein, unless the context otherwise requires, the term
"UNDERWRITERS" shall mean the firms named as Underwriters in Schedule I, and the
term "YOU" shall mean Xxxxxx Xxxxxxx & Co. Incorporated ("XXXXXX XXXXXXX").
Capitalized terms not otherwise defined in this Agreement shall have
the meanings specified therefor in the Pass Through Trust Agreements or the
Intercreditor
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Agreement, as applicable; provided that, as used in this Agreement, the term
"OPERATIVE DOCUMENTS" shall mean the Intercreditor Agreement, the Primary
Liquidity Facility, the Above-Cap Liquidity Facility, the Above-Cap Guarantee,
the Policy, the Policy Provider Agreement, the Indemnification Agreement dated
the date hereof (the "INDEMNIFICATION AGREEMENT") among the Company, the Policy
Provider and the Underwriters, the Pass Through Trust Agreements, the Offered
Certificates, the Note Purchase Agreement, the Policy Fee Letter, the Indenture,
the Collateral Maintenance Agreement and the Equipment Notes.
The Company has filed with the Securities and Exchange Commission
(the "COMMISSION") an automatic registration statement on Form S-3 ASR
(Registration Statement No. 333-135545) relating to certain classes of
securities, including pass through certificates (the "SHELF SECURITIES"), to be
issued from time to time by the Company and the offering thereof from time to
time in accordance with Rule 415 under the Securities Act of 1933, as amended,
and the rules and regulations of the Commission thereunder (collectively, the
"SECURITIES ACT"). The registration statement as amended to the date of this
Agreement, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A or
Rule 430B under the Securities Act is hereinafter referred to as the
"REGISTRATION STATEMENT," and the related prospectus dated June 30, 2006
covering the Shelf Securities, in the form in which it was most recently filed
with the Commission on or prior to the date of this Agreement, is hereinafter
referred to as the "BASIC PROSPECTUS." The Basic Prospectus, as supplemented by
the prospectus supplement specifically relating to the Offered Certificates in
the form first used to confirm sales of the Offered Certificates (or in the form
first made available to the Underwriters by the Company to meet requests of
purchasers pursuant to Rule 173 under the Securities Act), is hereinafter
referred to as the "PROSPECTUS," and the term "PRELIMINARY PROSPECTUS" means the
Basic Prospectus as supplemented by the preliminary prospectus supplement dated
November 7, 2006. For purposes of this Agreement, "FREE WRITING PROSPECTUS" has
the meaning set forth in Rule 405 under the Securities Act, "TIME OF SALE
PROSPECTUS" means the Preliminary Prospectus together with the free writing
prospectuses, if any, each identified in Schedule II hereto. As used herein, the
terms "REGISTRATION STATEMENT," "BASIC PROSPECTUS," "PRELIMINARY PROSPECTUS,"
"TIME OF SALE PROSPECTUS" and "PROSPECTUS" shall include in each case the
documents incorporated by reference therein. The terms "SUPPLEMENT,"
"AMENDMENT," and "AMEND" as used herein with respect to the Registration
Statement, the Basic Prospectus, the Time of Sale Prospectus, the Prospectus,
the Preliminary Prospectus or any free writing prospectus shall include all
documents subsequently filed by the Company with the Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), that are
deemed to be incorporated by reference therein.
1. Representations and Warranties. The Company represents and
warrants to and agrees with each of the Underwriters that:
(a) The Company meets the requirements for use of Form S-3
under the Securities Act; the Registration Statement has become effective;
no stop order suspending the effectiveness of the Registration Statement
is in effect, and no proceedings for such purpose are pending before or,
to the knowledge of the Company, threatened by the Commission. The
Registration Statement is an automatic shelf registration statement as
defined in Rule 405 under the Securities Act, the Company is a well-known
seasoned issuer (as defined in Rule 405 under the Securities Act) eligible
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to use the Registration Statement as an automatic shelf registration
statement, and the Company has not received notice that the Commission
objects to the use of the Registration Statement as an automatic shelf
registration statement.
(b) (i) Each document, if any, filed or to be filed pursuant
to the Exchange Act and incorporated by reference in the Time of Sale
Prospectus or the Prospectus complied or will comply when so filed in all
material respects with the Exchange Act and the applicable rules and
regulations of the Commission thereunder; (ii) each part of the
Registration Statement, when such part became effective, did not contain,
and each such part, as amended or supplemented, if applicable, will not
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; (iii) the Registration Statement as of
the date hereof does not 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; (iv) the
Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder; (v) the Time of Sale Prospectus does not, and at the time of
each sale of the Offered Certificates in connection with the offering when
the Prospectus is not yet available to prospective purchasers and at the
Issuance Date (as defined in Section 2), the Time of Sale Prospectus, as
then amended or supplemented by the Company, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; and (vi) the
Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph
do not apply (A) to statements or omissions in the Registration Statement,
the Time of Sale Prospectus or the Prospectus based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein, (B) to that part of the
Registration Statement that constitutes the Statement of Eligibility of
any trustee under the Trust Indenture Act of 1939, as amended (the "TRUST
INDENTURE ACT"), on Form T-1, or (C) to that part of the Registration
Statement that constitutes the Policy Provider Information (as defined in
the Indemnification Agreement).
(c) The Company is not an "ineligible issuer" in connection
with the offering pursuant to Rules 164, 405 and 433 under the Securities
Act. Any free writing prospectus that the Company is required to file
pursuant to Rule 433(d) under the Securities Act has been, or will be,
filed with the Commission in accordance with the requirements of the
Securities Act and the applicable rules and regulations of the Commission
thereunder. Each free writing prospectus that the Company has filed, or is
required to file, pursuant to Rule 433(d) under the Securities Act or that
was prepared by or on behalf of or used or referred to by the Company
complies or will comply in all material respects with the requirements of
the Securities Act and the applicable rules and regulations of the
Commission thereunder. Except for the free
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writing prospectuses, if any, identified in Schedule IV hereto, and
electronic road shows, if any, furnished to you before first use, the
Company has not prepared, used or referred to, and will not, without your
prior consent, prepare, use or refer to, any free writing prospectus.
(d) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State of
Delaware, has the corporate power and authority to own its property and to
conduct its business as described in the Time of Sale Prospectus and is
duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole.
(e) Each of the Company's subsidiaries has been duly
incorporated or organized, is validly existing as a corporation or limited
liability company, as the case may be, in good standing under the laws of
the jurisdiction of its incorporation or organization, has the power and
authority to own its property and to conduct its business as described in
the Time of Sale Prospectus and is duly qualified to transact business and
is in good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole; all of the issued shares
of capital stock or membership interests, as the case may be, of the
Company's subsidiaries have been duly and validly authorized and issued,
are fully paid and non-assessable and are owned directly or indirectly by
the Company, free and clear of all liens, encumbrances, equities or
claims.
(f) The Company has an authorized capitalization as set forth
in the Time of Sale Prospectus and the Prospectus and all of the issued
and outstanding shares of capital stock of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable and
conform in all material respects to the description thereof contained in
each of the Time of Sale Prospectus and the Prospectus.
(g) The consolidated financial statements of the Company
incorporated by reference in the Time of Sale Prospectus, together with
the related notes thereto, present fairly in all material respects the
financial position of the Company and its consolidated subsidiaries at the
dates indicated and the consolidated results of operations and cash flows
of the Company and its consolidated subsidiaries for the periods
specified. Such financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved, except as otherwise stated therein and
except that unaudited financial statements do not have all required
footnotes. The financial statement schedules, if any, incorporated by
reference in the Time of Sale Prospectus present the information required
be stated therein.
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(h) The Operative Documents to which the Company is, or is to
be, a party are or will be substantially in the form heretofore supplied
to you, and, when duly executed and delivered by the Company will
constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as may be
subject to (A) bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally and (B) general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity
or at law). Each Pass Through Trust Agreement as executed is substantially
in the form filed as an exhibit to the Registration Statements and has
been duly qualified under the Trust Indenture Act. The Offered
Certificates, the Equipment Notes and the Operative Documents will conform
in all material respects to the descriptions thereof in the Time of Sale
Prospectus and the Prospectus.
(i) When executed, authenticated, issued and delivered in the
manner provided for in the related Pass Through Trust Agreement and sold
and paid for as provided in this Agreement, the Offered Certificates will
be validly issued and will be entitled to the benefits of the related Pass
Through Trust Agreement.
(j) At the Closing Time, the Indenture will create in favor of
the Mortgagee, for the benefit of the Holders and the Indemnitees, a valid
and perfected Lien on the Collateral purported to be covered thereby,
subject to no equal or prior Lien.
(k) The Equipment Notes to be issued under each Indenture,
when duly executed and delivered by the Company, and duly authenticated by
the Indenture Trustee in accordance with the terms of such Indenture, will
be duly issued under such Indenture and will constitute the valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as may be subject to (A) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally and (B)
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law). The holders of the
Equipment Notes issued under each Indenture will be entitled to the
benefits of such Indenture.
(l) The execution and delivery by the Company of this
Agreement and of the Operative Documents to which the Company is, or is to
be, a party, the consummation by the Company of the transactions
contemplated by this Agreement, by such Operative Documents, and
compliance by the Company with the terms of this Agreement and such
Operative Documents have been duly authorized by all necessary corporate
action on the part of the Company and do not and will not result in any
violation of the certificate of incorporation or by-laws of the Company
and do not and will not conflict with, or result in a breach of any of the
terms or provisions of, or constitute a default under, or result in the
creation or imposition of any Lien (other than as specified in, or
permitted by, the applicable Operative Document) upon any property or
assets of the Company under, (A) any contract, indenture, mortgage, loan
agreement, note, lease or other material agreement or other instrument to
which the Company is a party or by which it may be bound or to which any
of its properties may
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be subject or (B) any existing applicable law, rule, regulation, judgment,
order or decree of any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over the Company, any of its
subsidiaries, or any of its properties (other than the securities or Blue
Sky laws of the various states, as to which the Company makes no
representation or warranty), except, in the case of either clause (A) or
(B) above, for such conflicts, breaches, defaults or Liens that would not,
singly or in the aggregate, have a material adverse effect on the Company
and its subsidiaries, taken as a whole. No consent, approval,
authorization, order or license of, or filing with or notice to, any
government, governmental instrumentality, regulatory body or authority or
court, domestic or foreign, is required for the valid authorization,
issuance and delivery of the Offered Certificates and the Equipment Notes,
the valid authorization, execution, delivery and performance by the
Company of its obligations under this Agreement, the Equipment Notes and
the Operative Documents to which the Company is, or is to be, a party, or
the consummation by the Company of the transactions contemplated by this
Agreement, the Equipment Notes and such Operative Documents, except (i)
such as are required under the Securities Act, the Exchange Act, the Trust
Indenture Act and the securities or Blue Sky laws of the various states,
(ii) filings, recordings, notices or other ministerial actions pursuant to
any routine recordings, contractual or regulatory requirements applicable
to the Company, (iii) filings or recordings with the Federal Aviation
Administration (the "FAA") and under the Uniform Commercial Code as in
effect in Delaware or other laws in effect in any applicable jurisdiction
governing the perfection of security interests in the Collateral, which
filings or recordings referred to in this clause (iii) shall have been
made or duly presented for filing or recordation on or prior to the
Closing Time, and (iv) any other filings, recordings, notices or other
actions contemplated by the Operative Documents.
(m) This Agreement has been executed and delivered by the
Company; and the Operative Documents to which the Company will be a party
will be duly executed and delivered by the Company on or prior to the
Issuance Date.
(n) There has not occurred any material adverse change, or any
development reasonably likely to involve a material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Time of Sale Prospectus (exclusive of any amendments
or supplements thereto subsequent to the date of this Agreement).
(o) There are no legal or governmental proceedings pending or,
to the knowledge of the Company, threatened to which the Company or any of
its subsidiaries is a party or to which any of the properties of the
Company or any of its subsidiaries is subject (i) other than proceedings
accurately described in all material respects in the Time of Sale
Prospectus and proceedings that would not have a material adverse effect
on the Company and its subsidiaries, taken as a whole, or on the power or
ability of the Company to perform its obligations under this Agreement,
the Indenture or the Offered Certificates or to consummate the
transactions contemplated by the Prospectus or (ii) that are required to
be described in the Registration Statement or the Prospectus and are not
so described; there are no statutes, regulations, contracts
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or other documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement that are not described or filed as required.
(p) Any preliminary prospectus, including the Preliminary
Prospectus, filed as part of the registration statement as originally
filed or as part of any amendment thereto, or filed pursuant to Rule 424
under the Securities Act, complied when so filed in all material respects
with the Securities Act and the applicable rules and regulations of the
Commission thereunder.
(q) Neither the Company nor any Trust is an "investment
company", within the meaning of the Investment Company Act of 1940, as
amended (the "INVESTMENT COMPANY ACT"); and after giving effect to the
offering and sale of the Offered Certificates and the application of the
proceeds thereof as described in the Prospectus, neither of the Trusts
will be an "investment company" or an entity "controlled" by an
"investment company", as defined in the Investment Company Act.
(r) The Company (i) is 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) has received all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their
businesses, and (iii) is in compliance with all terms and conditions of
any such permit, license or approval, except, in each case, where any such
non-compliance with Environmental Laws, failure to receive required
permits, licenses or other approvals, or failure to comply with the terms
and conditions of such permits, licenses or approvals would not, singly or
in the aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(s) To the knowledge of the Company, there are no costs or
liabilities associated with Environmental Laws (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) which would, singly or in the
aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(t) Subsequent to the date as of which information is given in
the Time of Sale Prospectus, (i) neither the Company nor any of its
subsidiaries has incurred any material liability or obligation, direct or
contingent, or entered into any material transaction, in each case, not in
the ordinary course of business or as described in or as contemplated by
the Time of Sale Prospectus (including, without limitation, aircraft
acquisitions or financing so described in or contemplated by the Time of
Sale Prospectus); (ii) the Company has not purchased any of its
outstanding capital stock, nor declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock (other than
repurchases of unvested shares of the Company's capital stock pursuant to
its equity incentive plans); (iii) there has not been any material change
in
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the capital stock, short-term debt or long-term debt of the Company except
in each case as described in or contemplated by the Time of Sale
Prospectus (including, without limitation, aircraft financing and equity
incentive plan grants so described in or contemplated by the Time of Sale
Prospectus); and (iv) there has been no prohibition or suspension of the
operation of the Company's aircraft, including as a result of action taken
by the FAA or the Department of Transportation.
(u) The Company has good and marketable title in fee simple to
all real property and good and marketable title to all personal property
owned by it which is material to the business of the Company in each case
free and clear of all liens, encumbrances and defects except liens and
encumbrances on aircraft, aircraft engines and other aircraft related
equipment of the Company and such other liens, encumbrances and defects as
are described in or contemplated by the Time of Sale Prospectus or such as
do not materially affect the value of such property or do not interfere
with the use made and proposed to be made of such property by the Company;
and any real property and buildings held under lease by the Company are
held by it under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company, in each
case except as described in or contemplated by the Time of Sale
Prospectus.
(v) Each of the Company and its subsidiaries possesses such
permits, licenses, approvals, consents and other authorizations
(collectively "GOVERNMENT LICENSES") issued by the appropriate federal,
state, local or foreign regulatory agencies or bodies, including the
Department of Transportation, the FAA or the Federal Communications
Commission necessary to conduct the business now operated by it; (ii) each
of the Company and its subsidiaries is in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure so
to comply would not, singly or in the aggregate, have a material adverse
effect on the Company and its subsidiaries, taken as a whole; (iii) all of
the Government Licenses are valid and in full force, except when the
invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole; and (iv) the Company has not received any notice of proceedings
relating to the revocation or modification of any such Governmental
Licenses which, singly or in the aggregate, is reasonably likely to have a
material adverse effect on the Company and its subsidiaries, taken as a
whole.
(w) Except as described in or contemplated by the Time of Sale
Prospectus, no material labor dispute with the employees of the Company
exists or, to the knowledge of the Company, is imminent; and the Company
is not aware, but without any independent investigation or inquiry, of any
existing, threatened or imminent labor disturbance by the employees of any
of its principal suppliers, manufacturers or contractors that could result
in any material adverse change in the condition, financial or otherwise,
or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole.
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(x) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
customary in the businesses in which it is engaged; the Company has not
been refused any insurance coverage sought or applied other than in
connection with instances where the Company was seeking to obtain
insurance coverage at more attractive rates; and the Company has no reason
to believe that it 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 on the Company and its
subsidiaries, taken as a whole, except as described in or contemplated by
the Time of Sale Prospectus.
(y) Except as described in or contemplated by the Time of Sale
Prospectus, the Company 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 in all material respects and (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain asset
accountability.
(z) The Company (i) is an "air carrier" within the meaning of
49 U.S.C. Section 40102(a); (ii) holds an air carrier operating
certificate issued by the Secretary of Transportation pursuant to Chapter
447 of Title 49 of the United States Code for aircraft capable of carrying
10 or more individuals or 6,000 pounds or more of cargo; and (iii) is a
"citizen of the United States" as defined in 49 U.S.C. Section 401102.
(aa) Ernst & Young LLP, who reported on the annual
consolidated financial statements of the Company incorporated by reference
in the Registration Statement and the Prospectus, is an independent
registered public accounting firm as required by the Securities Act.
(bb) Simat, Helliesen & Xxxxxxx, Inc. ("SH&E") is not an
affiliate of the Company and, to the knowledge of the Company, does not
have a substantial interest, direct or indirect, in the Company. To the
knowledge of the Company, none of the officers and directors of SH&E is
connected with the Company or any of its affiliates as an officer,
employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
(cc) The information provided by the Company to SH&E for use
by SH&E in preparation of its report relating to the Collateral dated as
of October 24, 2006, taken as a whole with respect to such report, did not
contain an untrue statement of material fact or omit to state a material
fact necessary to make such information not misleading.
2. Agreements to Sell and Purchase. Subject to the terms and
conditions set forth herein and in Schedule III, and in reliance upon the
representations and warranties herein contained, the Company agrees to cause the
Trustee to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Trustees, at a purchase price
10
of 100% of the face amount thereof, the aggregate face amount of Offered
Certificates set forth opposite the name of such Underwriter in Schedule I.
The Company will pay to Xxxxxx Xxxxxxx at the Issuance Date (i) for
the accounts of the Underwriters any fee, commission or other compensation that
is specified in Schedule III hereto, and (ii) the structuring fee that is
specified in Schedule III. Such payment will be made by federal funds wire
transfer or other immediately available funds.
The Company shall cause the Class B Trust to issue and deliver
against payment of the purchase price the Class B-1 Certificates to be purchased
by the Underwriter hereunder and to be offered and sold by the Underwriter to
QIBs in the form of one or more certificated securities in definitive, fully
registered form without interest coupons (the "RESTRICTED DEFINITIVE
SECURITIES") which shall be registered in the name or names designated by the
Underwriter. The Restricted Definitive Security shall include the legend
regarding restrictions on transfer set forth under "Description of the
Certificates--Transfer Restrictions for Class B1 Certificates" in the Time of
Sale Prospectus and the Prospectus.
Delivery of and payment for the Offered Certificates shall be made
at the offices of Holland & Knight LLP at 000 Xxxxxxxx, Xxx Xxxx, XX 00000 at
9:00 A.M. on November 14, 2006 or on such other date, time and place as may be
agreed upon by the Company and you (such date and time of delivery and payment
for the Offered Certificates being herein called the "ISSUANCE DATE"). Delivery
of the Offered Certificates issued by each Trust shall be made to your account
(or accounts) at The Depository Trust Company for the respective accounts of the
several Underwriters against payment by the Underwriters by wire transfer of
immediately available funds to the account and in the manner designated, prior
to the Issuance Date, to the Underwriters by the Company. Upon delivery, the
Offered Certificates shall be registered in the name of Cede & Co. or in such
other names and in such denominations as you may request in writing.
The Company agrees to have one or more global certificates
representing the Offered Certificates of each Trust available for inspection and
checking by you in New York, New York not later than one full business day prior
to the Issuance Date.
3. Terms of Public Offering. The Company is advised by you that the
Underwriters propose to make a public offering of their respective face amount
of the Offered Certificates on the terms to be set forth in the Prospectus, as
soon after the Registration Statement and this Agreement become effective as in
your judgment is advisable.
The Company acknowledges and agrees that the Underwriters are acting
solely in the capacity of an arm's length contractual counterparty to the
Company with respect to the offering of the Offered Certificates contemplated
hereby (including in connection with determining the terms of the Public
Offering) and not as a financial advisor or a fiduciary to, or an agent of, the
Company or any other person. Additionally, the Underwriters are not advising the
Company or any other person as to any legal, tax, investment, accounting or
regulatory matters in any jurisdiction with respect to the Public Offering or
the process leading thereto (irrespective of whether the Underwriters have
advised or are advising the Company on other matters). The Underwriters advise
that they and their affiliates are engaged in a broad range of
11
securities and financial services and that they and their affiliates may enter
into contractual relationships with purchasers or potential purchasers of the
Company's securities, and that some of these services or relationships may
involve interests that differ from those of the Company and need not be
disclosed to the Company, unless otherwise required by law. The Company has
consulted with its own advisors concerning such matters and shall be responsible
for making its own independent investigation and appraisal of the transactions
contemplated hereby, and the Underwriters shall have no responsibility or
liability to the Company or any other person with respect thereto. Any review by
the Underwriters of the Company, the transactions contemplated hereby or other
matters relating to such transactions will be performed solely for the benefit
of the Underwriters and shall not be on behalf of the Company. The Company
waives, to the fullest extent permitted by law, any claims it may have against
the Underwriters for breach of fiduciary duty or alleged breach of fiduciary
duty and agrees that the Underwriters shall have no liability (whether direct or
indirect) to the Company in respect of such a fiduciary duty claim or to any
person asserting a fiduciary duty claim on behalf of or in right of the Company,
including stockholders, employees or creditors of the Company.
4. Conditions to the Underwriters' Obligations. The obligations of
the Company to cause the Trustee to sell the Offered Certificates to the
Underwriters and the several obligations of the Underwriters to purchase and pay
for the Offered Certificates on the Issuance Date are subject to the following
conditions:
(a) Subsequent to the execution and delivery of this
Agreement and prior to the Issuance Date:
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating
accorded any of the Company's or MBIA Insurance Corporation's
securities, including the Offered Certificates, by any "nationally
recognized statistical rating organization," as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act;
(ii) each of the Operative Documents shall have been
duly executed and delivered by each of the parties thereto; and
(iii) there shall not have occurred any change, or any
development reasonably likely to involve a change, in the condition,
financial or otherwise, or in the earnings, business or operations
of the Company and its subsidiaries, taken as a whole, or MBIA
Insurance Corporation from that set forth in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to
the date of this Agreement) that, in the judgment of Xxxxxx Xxxxxxx,
on behalf of the Underwriters, is material and adverse and that
makes it, in the judgment of Xxxxxx Xxxxxxx, on behalf of the
Underwriters, impracticable to market the Offered Certificates on
the terms and in the manner contemplated in the Prospectus.
12
(b) The Underwriters shall have received on the Issuance Date
a certificate, dated the Issuance Date and signed by an executive officer
of the Company, to the effect set forth in Subsections 4(a)(i) above and
to the effect that: (i) the representations and warranties of the Company
contained in this Agreement are true and correct as of the Issuance Date
(except to the extent that they relate solely to an earlier or later date,
in which case they shall be true and correct as of such earlier or later
date), (ii) the Company has complied in all material respects with all of
the agreements and satisfied in all material respects all of the
conditions on its part to be performed or satisfied hereunder on or before
the Issuance Date, and (iii) the representations and warranties of the
Company contained in each of the Operative Documents to which it is a
party and executed by the Company on or before the Issuance Date shall be
true and correct as of the Issuance Date (except to the extent that they
relate solely to an earlier or later date, in which case they shall be
true and correct as of such earlier or later date). The officer signing
and delivering such certificate may rely upon the best of his or her
knowledge as to proceedings threatened.
(c) On the Issuance Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued under
the Securities Act and no proceedings therefor shall have been instituted
or threatened by the Commission.
(d) On the Issuance Date, you shall have received an opinion
of Holland & Knight LLP, special counsel for the Company, dated the
Issuance Date and in form and substance reasonably satisfactory to you and
counsel for the Underwriters, substantially to the effect set forth in
Exhibit A hereto.
(e) On the Issuance Date, you shall have received an opinion
of Xxxxx X. Xxxx, Senior Vice President & General Counsel of the Company,
dated the Issuance Date, and in form and substance reasonably satisfactory
to you and counsel for the Underwriters substantially to the effect set
forth in Exhibit B hereto.
(f) On the Issuance Date, you shall have received an opinion
of Morris, James, Hitchens & Xxxxxxxx LLP, counsel for Wilmington Trust
Company, individually and as Trustee, Subordination Agent, Paying Agent,
and Reference Agent, dated the Issuance Date and in form and substance
reasonably satisfactory to you and counsel for the Underwriters,
substantially to the effect as set forth in Exhibit C hereto.
(g) On the Issuance Date, you shall have received an opinion
of Pillsbury Xxxxxxxx Xxxx Xxxxxxx LLP, special counsel for the Primary
Liquidity Provider, and an opinion of in-house counsel for the Primary
Liquidity Provider, each dated the Issuance Date and in form and substance
reasonably satisfactory to you and counsel for the Underwriters,
substantially to the effect as set forth in Exhibits D-1 and D-2 hereto,
respectively.
(h) On the Issuance Date, you shall have received an opinion
of Shearman & Sterling LLP, special counsel for the Above-Cap Liquidity
Provider, an opinion of in-house counsel for the Above-Cap Liquidity
Provider and an opinion of in-house counsel for the Liquidity Guarantor,
respectively, each dated the Issuance Date, in
13
form and substance reasonably satisfactory to you and counsel to the
Underwriters, substantially to the effect set forth in Exhibits E-1, E-2
and E-3 hereto, respectively.
(i) On the Issuance Date, you shall have received an opinion
of Shearman & Sterling LLP, special counsel for the Above-Cap Liquidity
Provider, dated the Issuance Date, with respect to certain bankruptcy
matters.
(j) On the Issuance Date, you shall have received an opinion
of Xxxxxx & Xxxxxxx LLP, special counsel for the Policy Provider, and an
opinion of the General Counsel of the Policy Provider, each dated the
Issuance Date and in form and substance reasonably satisfactory to you and
counsel for the Underwriters, substantially to the effect set forth in
Exhibits F-1 and F-2, respectively.
(k) On the Issuance Date, you shall have received the opinions
of counsel, dated the Issuance Date, required to be delivered in
accordance with the provisions of Section 4.1.2(vii)(A) - (E) of the Note
Purchase Agreement.
(l) On the Issuance Date, you shall have received an opinion
of Shearman & Sterling LLP, special counsel for the Underwriters, dated
the Issuance Date, with respect to the issuance and sale of the Offered
Certificates, the Registration Statement, the Prospectus and other related
matters as the Underwriters may reasonably require.
(m) The Underwriters shall have received a letter dated the
date of this Agreement, in form and substance reasonably satisfactory to
the Underwriters, from Ernst & Young LLP, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained or incorporated by reference in
the Registration Statement, the Time of Sale Prospectus and the
Prospectus.
(n) On the Issuance Date, the Underwriters shall have received
from Ernst & Young LLP a letter, dated as of the Issuance Date, to the
effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (l) of this Section 4, except that the specified
date referred to shall be a date not more than three business days prior
to the Issuance Date, and such letter shall contain statements and
information with respect to certain financial information contained in the
Prospectus.
(o) As of the Issuance Date, the representations and
warranties of the Policy Provider contained in the Indemnification
Agreement shall be true and correct in all material respects as of the
Issuance Date (except to the extent that they relate solely to an earlier
or later date, in which case they shall be true and correct as of such
earlier or later date) and you shall have received a certificate of the
President or a Vice President of the Policy Provider, dated the Issuance
Date, to such effect.
(p) SH&E shall have furnished to you a letter, addressed to
the Company and dated the Issuance Date, confirming that SH&E and each of
its directors and officers (i) is not an affiliate of the Company or any
of its affiliates, (ii) does not have any substantial interest, direct or
indirect, in the Company or any of its affiliates and (iii) is
14
not connected with the Company or any of its affiliates as an officer,
employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
(q) At the Issuance Date, each of the Operative Documents
shall have been duly executed and delivered by each of the parties
thereto; and the representations and warranties of the Company contained
in each of such executed Operative Documents shall be true and correct as
of the Issuance Date (except to the extent that they relate solely to an
earlier date, in which case they shall be true and correct as of such
earlier date) and the Underwriter shall have received a certificate of the
President or a Vice President of the Company, dated as of the Issuance
Date to such effect.
(r) The Underwriters shall have received on the Issuance Date
such documents as you may reasonably request with respect to the good
standing of the Company and its U.S. subsidiaries, the due authorization
and issuance of the Offered Certificates and other matters related to the
issuance of the Offered Certificates.
(s) On the Issuance Date, (i) the Class G-1 Certificates shall
be rated "AAA" by Standard & Poor's Ratings Service ("S&P") and "Aaa" by
Xxxxx'x Investors Service, Inc. ("MOODY'S") and (ii) the Class B-1
Certificates shall be rated not lower than "B+" by S&P and not lower than
"Ba3" by Moody's.
5. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, two signed copies of
the Registration Statement (including exhibits thereto) and for delivery
to each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and to furnish to you in New York City, without
charge, prior to 10:00 a.m. New York City time on the second business day
following the date of this Agreement and during the period mentioned in
Section 5(f) below, as many copies of the Time of Sale Prospectus, the
Prospectus and any supplements and amendments thereto or to the
Registration Statement as you may reasonably request.
(b) Before amending or supplementing the Registration
Statement, the Time of Sale Prospectus or the Prospectus with respect to
the Offered Certificates, to furnish to you a copy of each such proposed
amendment or supplement and not to file any such proposed amendment or
supplement to which you reasonably object, and to file with the Commission
within the applicable period specified in Rule 424(b) under the Securities
Act any prospectus required to be filed pursuant to such Rule.
(c) To furnish to you a copy of each proposed free writing
prospectus to be prepared by or on behalf of, used by, or referred to by
the Company and not to use or refer to any proposed free writing
prospectus to which you reasonably object.
(d) Not to take any action that would result in an Underwriter
or the Company being required to file with the Commission pursuant to Rule
433(d) under the Securities Act a free writing prospectus prepared by or
on behalf of the Underwriter that the Underwriter otherwise would not have
been required to file thereunder.
15
(e) If the Time of Sale Prospectus is being used to solicit
offers to buy the Offered Certificates at a time when the Prospectus is
not yet available to prospective purchasers and any event shall occur or
condition exist as a result of which it is necessary to amend or
supplement the Time of Sale Prospectus in order to make the statements
therein, in the light of the circumstances, not misleading, or if any
event shall occur or condition exist as a result of which the Time of Sale
Prospectus conflicts with the information contained in the Registration
Statement then on file, or if, in the opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Time of Sale
Prospectus to comply with applicable law, forthwith to prepare, file with
the Commission and furnish, at its own expense, to the Underwriters and to
any dealer upon request, either amendments or supplements to the Time of
Sale Prospectus so that the statements in the Time of Sale Prospectus as
so amended or supplemented will not, in the light of the circumstances
when delivered to a prospective purchaser, be misleading or so that the
Time of Sale Prospectus, as amended or supplemented, will no longer
conflict with the Registration Statement, or so that the Time of Sale
Prospectus, as amended or supplemented, will comply with applicable law.
(f) If, during such period after the first date of the Public
Offering of the Offered Certificates, in the reasonable opinion of counsel
for the Underwriters, the Prospectus (or in lieu thereof the notice
referred to in Rule 173(a) under the Securities Act) is required by law to
be delivered in connection with sales by the Underwriters or any dealer,
any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the Prospectus
(or in lieu thereof the notice referred to in Rule 173(a) under the
Securities Act) is delivered to a purchaser, not misleading, or if, in the
reasonable opinion of counsel for the Underwriters, it is necessary to
amend or supplement the Prospectus to comply with applicable law,
forthwith to prepare, file with the Commission and furnish, at its own
expense, to the Underwriters and to any dealers (whose names and addresses
the Underwriters will furnish to the Company) to which Offered
Certificates may have been sold by the Underwriters and to any other
dealers upon request, either amendments or supplements to the Prospectus
so that the statements in the Prospectus as so amended or supplemented
will not, in the light of the circumstances when the Prospectus (or in
lieu thereof the notice referred to in Rule 173(a) under the Securities
Act) is delivered to a purchaser, be misleading or so that the Prospectus,
as amended or supplemented, will comply with applicable law.
(g) To endeavor to qualify the Offered Certificates for offer
and sale under the securities or Blue Sky laws of such jurisdictions as
the Underwriters shall reasonably request; provided, however, the Company
shall not be obligated to qualify as a foreign corporation or file any
general consent to service of process under the laws of any such
jurisdiction or subject itself to taxation as doing business in any such
jurisdiction.
(h) To make generally available to the Company's security
holders and to the Underwriters as soon as practicable an earning
statement covering a twelve month period beginning on the first day of the
first full fiscal quarter after the date of this Agreement that shall
satisfy the provisions of Section 11(a) of the Securities Act and the
rules and regulations of the Commission thereunder. If such fiscal quarter
is the last
16
fiscal quarter of the Company's fiscal year, such earning statement shall
be made available not later than 90 days after the close of the period
covered thereby and in all other cases shall be made available not later
than 45 days after the close of the period covered thereby.
(i) During the period beginning on the date of this Agreement
and continuing to and including the Issuance Date, other than in
connection with the resale of its 3 1/2% Convertible Notes due 2033, and
the resale of its 3 3/4% Convertible Debentures due 2035, not to offer,
sell, contract to sell or otherwise dispose of any debt securities of the
Company or warrants to purchase debt securities of the Company
substantially similar to the Offered Certificates (other than (i) the
Offered Certificates and (ii) commercial paper issued in the ordinary
course of business), without your prior written consent.
(j) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Company
will pay or cause to be paid all expenses incident to the performance of
its obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the registration and delivery of the
Offered Certificates under the Securities Act and all other fees or
expenses in connection with the preparation and filing of the Registration
Statement, any preliminary prospectus, the Prospectus and amendments and
supplements to any of the foregoing, including all printing costs
associated therewith, and the mailing and delivering of copies thereof to
the Underwriters and dealers, in the quantities herein above specified,
(ii) all costs and expenses related to the transfer and delivery of the
Offered Certificates to the Underwriters, including any transfer or other
taxes payable thereon, (iii) the printing or processing and distribution
of this Agreement, the Offered Certificates, the Operative Documents, the
Underwriters' Questionnaire, any Blue Sky or legal investment memorandum
in connection with the offer and sale of the Offered Certificates under
state law and all expenses in connection with the qualification of the
Offered Certificates for offer and sale under state law as provided in
Section 5(g), including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky or legal investment
memorandum, (iv) the fees and expenses of the Trustees, the Loan Trustees,
the Subordination Agent, the Mortgagee, the Primary Liquidity Provider,
the Above-Cap Liquidity Provider, the Reference Agent, the Paying Agent,
and the Policy Provider, including the reasonable fees and disbursements
of their respective counsel, in connection with the Offered Certificates
and the Operative Documents, (v) all filing fees and the reasonable fees
and disbursements of counsel to the Underwriters incurred in connection
with the review and qualification of the offering of the Offered
Certificates by the National Association of Securities Dealers, Inc., (vi)
any fees charged by rating agencies for rating the Offered Certificates
(including annual surveillance fees related to the Offered Certificates as
long as they are outstanding), (vii) all fees and expenses relating to
appraisals of the Collateral, (viii) the costs and expenses of the Company
relating to investor presentations on any "road show" undertaken in
connection with the marketing of the offering of the Offered Certificates,
including, without limitation, expenses associated with the production of
road show
17
slides and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations with the prior approval of the
Company, travel and lodging expenses of the representatives and officers
of the Company and any such consultants, and such proportion of the cost
of any aircraft chartered in connection with the road show as shall be
agreed upon separately by the Company and the Representative (it being
understood that the Underwriters shall be responsible for paying travel
and lodging expenses of the Representative and such proportion of the cost
of any aircraft chartered in connection with the road show and any ground
transportation used by the Representative in connection with the road show
as shall be so separately agreed upon), and (ix) all other costs and
expenses incident to the performance of the obligations of the Company
hereunder for which provision is not otherwise made in this Section. The
reasonable fees and disbursements of counsel to the Underwriters will be
paid as shall be agreed upon separately by the Company and the
Representative. It is understood, however, that except as provided in this
Section, Section 7 and the last paragraph of Section 9 below, the
Underwriters will pay all of their costs and expenses and any advertising
expenses connected with any offers they may make.
(k) If the third anniversary of the initial effective date of
the Registration Statement occurs before all the Offered Certificates have
been sold by the Underwriters, prior to the third anniversary to file a
new shelf registration statement and to take any other action necessary to
permit the public offering of the Offered Certificates to continue without
interruption; reference herein to the Registration Statement shall include
the new registration statement declared effective by the Commission.
(l) To prepare a final term sheet substantially in the for set
forth on Schedule IV relating to the offering of the Offered Certificates,
containing only information that describes the final terms of the Offered
Certificates or the offering in a form consented to by you, and to file
such final term sheet within the period required by Rule 433(d)(5)(ii)
under the Securities Act following the date the final terms have been
established for the offering of the Offered Certificates.
6. Covenants of the Underwriters. (a) Each Underwriter severally
represents and warrants that it is a QIB within the meaning of Rule 144A under
the Securities Act. Each Underwriter severally represents, warrants and agrees
with the Company that it has solicited, and will solicit, offers for the Class
B-1 Certificates only from, and has offered and will offer and sell the Class
B-1 Certificates only to persons that it reasonably believes to be QIBs;
provided that, in purchasing the Class B-1 Certificates, such persons are deemed
to have represented and agreed as provided in the Time of Sale Prospectus under
the caption "Description of the Certificates - Transfer Restrictions for Class
B1 Certificates."
(b) Each Underwriter severally covenants with the Company not to
take any action that would result in the Company being required to file with the
Commission under Rule 433(d) a free writing prospectus prepared by or on behalf
of such Underwriter that otherwise would not be required to be filed by the
Company thereunder, but for the action of the Underwriter.
18
7. Indemnity and Contribution. (a) The Company agrees to indemnify
and hold harmless each Underwriter, each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, and each affiliate of any Underwriter within the
meaning of Rule 405 under the Securities Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, the Preliminary Prospectus, the Time of Sale
Prospectus, any issuer free writing prospectus as defined in Rule 433(h) under
the Securities Act, any Company information that the Company has filed, or is
required to file, pursuant to Rule 433(d) under the Securities Act, or the
Prospectus or any amendment or supplement thereto, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission (x) based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein, (y) in the Policy
Provider Information or (z) in that part of the Registration Statements which
shall constitute the Statement of Eligibility of the Trustee under the Trust
Indenture Act on Form T-1.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use in the Registration Statement or any amendment thereof, the
Preliminary Prospectus, the Time of Sale Prospectus, any issuer free writing
prospectus as defined in Rule 433(h) under the Securities Act, or the Prospectus
or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either Section 7(a) or 7(b), such person
(the "INDEMNIFIED PARTY") shall promptly notify the person against whom such
indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties
19
and that all such fees and expenses shall be reimbursed as they are incurred.
Such firm shall be designated in writing by you, in the case of parties
indemnified pursuant to Section 7(a) above, and by the Company, in the case of
parties indemnified pursuant to Section 7(b) above. The indemnifying party shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(d) To the extent the indemnification provided for in Section 7(a)
or 7(b) is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Offered Certificates or (ii) if the
allocation provided by clause 7(d)(i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause 7(d)(i) above but also the relative fault of the Company
on the one hand and of the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other hand in connection with the offering of the Offered Certificates
shall be deemed to be in the same respective proportions as the net proceeds
from the offering of such Offered Certificates (before deducting expenses)
received by the Company and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus Supplement, bear to the aggregate offering price of the
Offered Certificates. The relative fault of the Company on the one hand and the
Underwriters on the other hand 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 information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Underwriters' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the respective face
amounts of Offered Certificates they have purchased hereunder, and not joint.
20
(e) The Company and the Underwriters agree that it would not be just
or equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 7(d). The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Offered
Certificates underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages that such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. 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. The remedies provided for in this Section 7 are not exclusive
and shall not limit any rights or remedies that may otherwise be available to
any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 7 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter, any person controlling
any Underwriter or any affiliate of any Underwriter or by or on behalf of the
Company, its officers or directors or any person controlling the Company and
(iii) acceptance of and payment for any of the Offered Certificates.
8. Termination. The Underwriters may terminate this Agreement by
notice given by you to the Company, if after the execution and delivery of this
Agreement and prior to the Issuance Date (i) trading generally shall have been
suspended or materially limited on, or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange or The Nasdaq Global Select
Market, (ii) trading of any securities of the Company shall have been suspended
on any exchange or in any over-the-counter market, (iii) a material disruption
in securities settlement, payment or clearance services in the United States
shall have occurred, (iv) any moratorium on commercial banking activities shall
have been declared by either Federal or New York State authorities or (v) there
shall have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in the reasonable judgment of
Xxxxxx Xxxxxxx, on behalf of the Underwriters, is material and adverse and which
singly or together with any other such event specified in this clause (v), makes
it, in the reasonable judgment of Xxxxxx Xxxxxxx, on behalf of the Underwriters,
impracticable to proceed with the offer, sale or delivery of the Offered
Certificates on the terms and in the manner contemplated in the Time of Sale
Prospectus or the Prospectus.
9. Effectiveness; Defaulting Underwriters. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
If, on the Issuance Date, any one or more of the Underwriters shall
fail or refuse to purchase the face amount of Offered Certificates that it has
or they have agreed to purchase
21
hereunder on such date, and the aggregate face amount of Offered Certificates
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase is not more than one-tenth of the aggregate face amount of all the
Offered Certificates to be purchased on such date, the other Underwriters shall
be obligated severally in the proportions that the face amount of Offered
Certificates set forth opposite their respective names in Schedule I hereto
bears to the aggregate face amount of Offered Certificates set forth opposite
the names of all such non-defaulting Underwriters, or in such other proportions
as you may specify, to purchase the face amount of Offered Certificates which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase on such date; provided that in no event shall the face amount of
Offered Certificates that any Underwriter has agreed to purchase pursuant to
this Agreement be increased pursuant to this Section 9 by an amount in excess of
one-ninth of such face amount of Offered Certificates without the written
consent of such Underwriter. If, on the Issuance Date, any Underwriter or
Underwriters shall fail or refuse to purchase the face amount of Offered
Certificates that it has or they have agreed to purchase hereunder on such date,
and the aggregate face amount of Offered Certificates with respect to which such
default occurs is more than one-tenth of the aggregate face amount of all the
Offered Certificates to be purchased, and arrangements satisfactory to you and
the Company for the purchase of such face amount of Offered Certificates are not
made within 36 hours after such default, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter or the Company. In any
such case either you or the Company shall have the right to postpone the
Issuance Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement, in the Time of Sale
Prospectus, in the Prospectus or in any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the reasonable fees and disbursements of their
counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering contemplated hereunder.
10. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
11. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
12. Entire Agreement. This Agreement, together with any
contemporaneous written agreements and any prior written agreements (to the
extent not superseded by this Agreement) that relate to the offering of the
Offered Certificates, represents the entire agreement between the Company and
the Underwriters with respect to the preparation of the Preliminary
22
Prospectus, the Time of Sale Prospectus, the Prospectus, the conduct of the
offering, and the purchase and sale of the Offered Certificates.
13. Headings. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
14. Notices. All communications hereunder shall be in writing and
effective only upon receipt and if to the Underwriters shall be delivered,
mailed or sent to you at Xxxxxx Xxxxxxx & Co. Incorporated, 0000 Xxxxxxxx, Xxx
Xxxx, XX 00000, Attention: Equipment Finance Group; facsimile number (212)
761-1781; and if to the Company shall be delivered, mailed or sent to it at
000-00 Xxxxxx Xxxxxxxxx, Xxxxxx Xxxxx, Xxx Xxxx, XX 00000-0000; Attention: Vice
President - Corporate Finance and Treasurer; facsimile number (000) 000-0000,
with a copy (at the same Company address) to the Office of the General Counsel;
facsimile number (000) 000-0000.
23
Very truly yours,
JETBLUE AIRWAYS CORPORATION
By: /s/ Xxxx Xxxxxx
------------------------------
Name: Xxxx Xxxxxx
Title: Vice President Corporate Finance
and Treasurer
Accepted as of the date hereof
XXXXXX XXXXXXX & CO. INCORPORATED
Acting on its own behalf
and on behalf of the
several Underwriters named
in Schedule I hereto.
By: XXXXXX XXXXXXX & CO. INCORPORATED
By: /s/ Xxxxxxx Xxxxxx
Name: Xxxxxxx Xxxxxx
Title: Managing Director
24
SCHEDULE I
--------------------------------------------------------------------------------
FACE AMOUNT FACE AMOUNT
OF CLASS G-1 OF CLASS B-1
UNDERWRITER CERTIFICATES CERTIFICATES
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxx & Co. Incorporated $ 66,716,000 $ 44,477,000
Greenwich Capital Markets, Inc. 7,412,000 4,941,000
Total $ 74,128,000 $ 49,418,000
------------ ------------
--------------------------------------------------------------------------------
25
SCHEDULE II
Pass Through Certificates
Pass Through Final Expected
Certificate Face Interest Distribution
Designation Amount Rate Date
------------- ------------ -------- ---------------
Class G-1 $ 74,128,000 USD Three-Month LIBOR plus 0.230% January 2, 2014
Class B-1 $ 49,418,000 USD Three-Month LIBOR plus 2.875% January 2, 2014
SCHEDULE III
Underwriting fees, discounts, commissions or other compensation to Xxxxxx
Xxxxxxx:
(i) for the account of the Underwriters $ 2,285,601.00
(ii) for the structuring fee $ 247,092.00
SCHEDULE IV
ISSUER FREE WRITING PROSPECTUS
FILED PURSUANT TO RULE 433(D)
REGISTRATION NO. 333-135545
NOVEMBER 7, 2006
JETBLUE AIRWAYS CORPORATION ("JETBLUE")
(NASDAQ SYMBOL: JBLU)
--------------------------------------------------------------------------------------------------------------
SECURITIES: JetBlue Airways (Spare Parts) G-1 Pass JetBlue Airways (Spare Parts) B-1 Pass
Through Certificates (the "Class G-1 Through Certificates ("Class B-1
Certificates") Certificates" and, together with the Class
G-1 Certificates, the "Certificates")
--------------------------------------------------------------------------------------------------------------
PUBLIC OFFERING
PRICE: 100% 100%
--------------------------------------------------------------------------------------------------------------
AMOUNT: $74,128,000 $49,418,000
--------------------------------------------------------------------------------------------------------------
CUSIP: 47714T AA 2 47714U AA 9
--------------------------------------------------------------------------------------------------------------
ISIN: US47714TAA25 US47714UAA97
--------------------------------------------------------------------------------------------------------------
COUPON: USD 3-month LIBOR + 0.23% USD 3-month LIBOR + 2.875%
--------------------------------------------------------------------------------------------------------------
MAXIMUM INTEREST RATE
FOR CLASS G-1
CERTIFICATES: Interest rate for the Class G-1 Certificates is subject
to a maximum rate equal to the Capped Interest Rate for
any interest period commencing on any regular
distribution date if a payment default by JetBlue exists
on such regular distribution date and continues
throughout such interest period
CAPPED INTEREST RATE
FOR CLASS G-1
CERTIFICATES: Capped LIBOR (10% per annum) plus 0.23% per annum
CALCULATION OF
AMOUNTS AVAILABLE
UNDER PRIMARY
LIQUIDITY FACILITY: The amount available under the Primary Liquidity
Facility for the payment of accrued interest on the
Class G-1 Certificates has been calculated utilizing the
Capped Interest Rate
AMOUNT AVAILABLE
UNDER PRIMARY
LIQUIDITY FACILITY AT
JANUARY 2, 2007: $ 15,398,301
OPTIONAL
REDEMPTION: JetBlue may elect to redeem all or (so long as no
Payment Default has occurred and is continuing) a
portion of the Equipment Notes of any Series at any time
prior to maturity, except that no Equipment Notes may be
redeemed by JetBlue prior to the third anniversary of
the original issuance date of the Certificates (other
than in connection with a redemption to satisfy the
maximum Collateral Ratio requirements or the minimum
Rotable Ratio requirement, or to the extent required as
a result of certain reductions in JetBlue's aircraft
fleet). The redemption price in such case will be the
principal amount of the Equipment Notes to be redeemed,
together with accrued and unpaid interest and LIBOR
break amount, if any.
In addition, in the case of an optional redemption of
the Series B-1 Equipment Notes that relate to the Class
B-1 Certificates on or after the third anniversary and
prior to the fifth anniversary of the original issuance
date of the Class B-1 Certificates (except in connection
with a redemption to satisfy the maximum Collateral
Ratio requirements, or to the extent
required as a result of certain reductions in JetBlue's
aircraft fleet), the redemption price will include a
Premium equal to the following percentage of the
principal amount redeemed:
IF REDEEMED DURING THE
YEAR PRIOR TO THE ANNIVERSARY OF
THE ORIGINAL ISSUANCE SERIES B-1
DATE INDICATED BELOW PREMIUM
-------------------------------- -----------
4th 4.0%
5th 2.0%
In the case of an optional redemption of Equipment Notes
that relate to the Certificates prior to the fifth
anniversary of the original issuance date of the
Certificates required as a result of certain reductions
in JetBlue's aircraft fleet, the redemption price will
include a Premium equal to the following percentage of
the principal amount redeemed:
IF REDEEMED DURING THE YEAR
PRIOR TO THE ANNIVERSARY OF
THE ORIGINAL ISSUANCE DATE SERIES G-1 SERIES B-1
INDICATED BELOW PREMIUM PREMIUM
--------------------------- ---------- ----------
1st 1.0% 4.0%
2nd 1.0% 4.0%
3rd 1.0% 4.0%
4th None 4.0%
5th None 2.0%
UNDERWRITING
COMMISSION AND
OTHER
COMPENSATION: Underwriters Compensation: $2,285,601 Structuring Fee
Payable to Xxxxxx Xxxxxxx & Co. Incorporated: $247,092
DATE OF
UNDERWRITING
AGREEMENT: Dated November 7, 2006
USE OF PROCEEDS: The proceeds will be used to fund working capital and
capital expenditures
SETTLEMENT: November 14, 2006 (T + 5) closing date, the 5th business
day following the date hereof
PRELIMINARY
PROSPECTUS
SUPPLEMENT: JetBlue has prepared and filed with the SEC a
Preliminary Prospectus Supplement, dated November 7,
2006, which includes additional information regarding
the Certificates
THE ISSUER HAS FILED A REGISTRATION STATEMENT (INCLUDING A PROSPECTUS) WITH THE
SEC FOR THE OFFERING TO WHICH THIS COMMUNICATION RELATES. BEFORE YOU INVEST, YOU
SHOULD READ THE PROSPECTUS IN THAT REGISTRATION STATEMENT AND OTHER DOCUMENTS
THE ISSUER HAS FILED WITH THE SEC FOR MORE COMPLETE INFORMATION ABOUT THE ISSUER
AND THIS OFFERING. YOU MAY GET THESE DOCUMENTS FOR FREE BY VISITING XXXXX ON THE
SEC WEB SITE AT XXX.XXX.XXX. ALTERNATIVELY, THE ISSUER, ANY UNDERWRITER OR ANY
DEALER PARTICIPATING IN THE OFFERING WILL ARRANGE TO SEND YOU THE PROSPECTUS IF
YOU REQUEST IT BY CALLING XXXXXX XXXXXXX TOLL-FREE 0-000-000-0000.
