EXHIBIT 1.1
CONTINENTAL AIRLINES, INC.
5.0 % Convertible Notes Due 2023
Purchase Agreement
June 4, 2003
Citigroup Global Markets Inc.
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Credit Suisse First Boston LLC
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
4 World Financial Center
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Each as Representatives of the Initial Purchasers
Ladies and Gentlemen:
Continental Airlines, Inc. a Delaware corporation (the
"Company"), proposes to issue and sell to the several parties named in Schedule
I hereto (the "Initial Purchasers"), for whom you (the "Representatives") are
acting as representatives, $150,000,000 principal amount of its 5.0% Convertible
Notes Due 2023 (the "Firm Securities"). The Company also proposes to grant to
the Initial Purchasers an option to purchase up to $25,000,000 additional
principal amount of such Notes (the "Option Securities" and, together with the
Firm Securities, the "Securities"). The Securities are convertible into shares
of Common Stock, par value $.01 per share (the "Common Stock"), of the Company
at the conversion price set forth herein. The Securities are to be issued under
an indenture, dated as of June 10, 2003, (the "Indenture") between the Company
and Bank One, N.A. as trustee (the "Trustee). The Securities will have the
benefit of a registration rights agreement (the "Registration Rights
Agreement"), to be dated as of the Closing Date, among the Company and the
Initial Purchasers, pursuant to which the Company will agree to file and to use
its reasonable best efforts to have declared effective a registration statement
under the Securities Act to register the resale of the Securities under the Act
subject to the terms and conditions therein specified. To the extent there are
no additional parties listed on Schedule I other than you, the term
Representatives as used herein shall mean
you as the Initial Purchasers, and the terms Representatives and Initial
Purchasers shall mean either the singular or plural as the context requires. The
use of the neuter in this Agreement shall include the feminine and masculine
wherever appropriate. Certain terms used herein are defined in Section 19
hereof.
The sale of the Securities to the Initial Purchasers will be
made without registration of the Securities or the Common Stock issuable upon
conversion thereof under the Act in reliance upon exemptions from the
registration requirements of the Act.
In connection with the sale of the Securities, the Company is
preparing and will deliver to the Initial Purchasers, no later than 12:00 noon
on June 9, 2003, copies of an offering memorandum, dated as of the date hereof
(as amended or supplemented as of the Execution Time, including any and all
exhibits thereto and any information incorporated by reference therein, the
"Offering Memorandum"). The Offering Memorandum sets forth certain information
concerning the Company, the Securities and the Common Stock issuable upon
conversion thereof. The Company hereby confirms that it has authorized the use
of the Offering Memorandum, and any amendment or supplement thereto, in
connection with the offer and sale of the Securities by the Initial Purchasers.
Unless stated to the contrary, any references herein to the terms "amend",
"amendment" or "supplement" with respect to the Offering Memorandum shall be
deemed to refer to and include any information filed under the Exchange Act
subsequent to the Execution Time that is incorporated by reference therein.
1. Representations and Warranties. The Company, as of the date
hereof, as of the Closing Date referred to in Section 3(a) hereof, and as of
each settlement date (if any) referred to in Section 2(b) hereof, represents and
warrants to, and agrees with, the Representatives as set forth below in this
Section 1.
(a) At the Execution Time and on the Closing Date, the
Offering Memorandum did not and will not (and any amendment or supplement
thereto, at the date thereof and at the Closing Date, will not) contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representations or warranties as to
the information contained in or omitted from the Offering Memorandum (or any
amendment or supplement thereto) in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any Initial
Purchaser through the Representatives specifically for inclusion in the Offering
Memorandum (or any amendment or supplement thereto).
(b) None of the Company, its Affiliates, or any person acting
on its or their behalf has, directly or indirectly, made offers or sales of any
security, or solicited offers to buy, any security under circumstances that
would require the registration of the Securities or the Common Stock issuable
upon conversion thereof under the Act.
(c) None of the Company, its Affiliates, or any person acting
on its or their behalf has: (i) engaged in any form of general solicitation or
general advertising (within the meaning of Regulation D) in connection with any
offer or sale of the Securities or (ii) engaged in any directed selling efforts
(within the meaning of Regulation S) with respect to the Securities or the
Common Stock issuable upon conversion thereof; and each of the Company, its
Affiliates and each person acting on its or their behalf has complied with the
offering restrictions requirement of Regulation S.
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(d) The Securities satisfy the eligibility requirements of
Rule 144A(d)(3) under the Act.
(e) Assuming the accuracy of the representations and
warranties set forth in Section 4(b), no registration under the Act of the
Securities is required for the offer and sale of the Securities to or by the
Initial Purchasers in the manner contemplated herein and in the Offering
Memorandum
(f) The Company is not and, after giving effect to the
offering and sale of the Securities and the application of the proceeds thereof
as described in the Offering Memorandum, will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended.
(g) Since the respective dates as of which information is
given in the Offering Memorandum, except as otherwise stated therein, (A) there
has been no material adverse change in the condition, financial or otherwise, or
in the earnings, business, properties or results of operations of the Company
and its subsidiaries taken as a whole, whether or not arising in the ordinary
course of business (a "Material Adverse Effect"), (B) there have been no
transactions entered into by the Company or any of its subsidiaries, other than
those in the ordinary course of business, which are material with respect to the
Company and its subsidiaries taken as a whole, and (C) except for regular
dividends on the Common Stock in amounts per share that are consistent with past
practice, there has been no dividend or distribution of any kind declared, paid
or made by the Company on any class of its capital stock.
(h) The documents incorporated or deemed to be incorporated by
reference in the Offering Memorandum, at the time they were or hereafter are
filed with the Commission, complied and will comply in all material respects
with the requirements of the Exchange Act, and, when read together with the
other information in the Offering Memorandum, at the date of the Offering
Memorandum and at the Closing Date (and if any Option Securities are purchased,
on any settlement date), did not and will not contain an 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.
(i) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Delaware and has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Offering Memorandum
and to enter into and perform its obligations under this Agreement; and the
Company is duly qualified as a foreign corporation to transact business and is
in good standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect. Each "significant
subsidiary" of the Company (as such term is defined in Rule 1-02 of Regulation
S-X) (each a "Subsidiary" and, collectively, the "Subsidiaries") has been duly
organized and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has corporate power and authority
to own, lease and operate its properties and to conduct its business as
described in the Offering Memorandum and is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the
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conduct of business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect.
(j) Except as otherwise disclosed in the Offering Memorandum,
all of the issued and outstanding capital stock of each such Subsidiary has been
duly authorized and validly issued, is fully paid and non-assessable and is
owned by the Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity; none of
the outstanding shares of capital stock of any Subsidiary was issued in
violation of the preemptive or similar rights of any security holder of such
Subsidiary.
(k) The shares of issued and outstanding capital stock of the
Company have been duly authorized and validly issued and are fully paid and
non-assessable; none of the outstanding shares of capital stock of the Company
was issued in violation of the preemptive or other similar rights of any
security holder of the Company. The shares of Common Stock initially issuable
upon conversion of the Securities have been duly authorized and reserved for
issuance by the Company upon conversion of the Securities, and such Common
Stock, when issued upon such conversion, shall be validly issued, fully paid and
non-assessable and will not be subject to preemptive or other similar rights of
any security holder of the Company.
(l) This Agreement has been duly authorized, executed and
delivered by the Company. The Indenture has been duly authorized and, assuming
due authorization, execution and delivery thereof by the Trustee, when executed
and delivered by the Company, will constitute a legal, valid and binding
instrument enforceable against the Company in accordance with its terms
(subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting creditors' rights
generally from time to time in effect and to general principles of equity,
including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing, regardless of whether considered in a proceeding in
equity or at law); and the Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Initial Purchasers pursuant to this
Agreement, will constitute legal, valid and binding obligations of the Company
entitled to the benefits of the Indenture (subject, as to enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors' rights generally from time to time in effect and
to general principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing, regardless of whether
considered in a proceeding in equity or at law) and will be convertible into
Common Stock in accordance with their terms; and the Registration Rights
Agreement has been duly authorized by the Company and, when executed and
delivered by the Company, will constitute the legal, valid, binding and
enforceable instrument of the Company (subject, as to enforcement of remedies,
to applicable bankruptcy, reorganization, insolvency, moratorium or other laws
affecting creditors' rights generally from time to time in effect and to general
principles of equity, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing, regardless of whether considered in
a proceeding in equity or at law), provided that no representation is made with
respect to Section 6 thereof (relating to indemnification and contribution).
(m) No consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in connection with the
transactions contemplated herein, the Indenture or the Registration Rights
Agreement except such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the
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Securities by the Initial Purchasers in the manner contemplated herein and in
the Offering Memorandum and, in the case of the Registration Rights Agreement
and the Indenture, such as will be obtained under the Act and the Trust
Indenture Act.
(n) Neither the issue and sale of the Securities nor the
consummation of any other of the transactions herein contemplated nor the
fulfillment of the terms hereof will conflict with or result in a breach or
violation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to (i) the charter or
bylaws of the Company or any of its subsidiaries, (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to
which the Company or any of its subsidiaries is a party or bound or to which its
or their property is subject, or (iii) any statute, law, rule, regulation,
judgment, order or decree applicable to the Company or any of its subsidiaries
of any court, regulatory body, administrative agency, governmental body,
arbitrator or other governmental authority having jurisdiction over the Company,
any of its subsidiaries or any of either of their properties, except, with
respect to clause (ii) or (iii) above, for such conflict, breach, violation or
imposition that could not reasonably be expected to have a Material Adverse
Effect.
(o) The financial statements included or incorporated by
reference in the Offering Memorandum, together with the related schedules and
notes, present fairly in all material respects the financial position of the
Company and its consolidated subsidiaries at the dates indicated and the
statement of operations, stockholders' equity and cash flows of the Company and
its consolidated subsidiaries for the periods specified; said financial
statements comply as to form with the applicable accounting requirements of the
Act and have been prepared in conformity with generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the periods
involved. The supporting schedules, if any, included or incorporated by
reference in the Offering Memorandum present fairly in accordance with GAAP the
information required to be stated therein. The selected financial data and the
summary financial information included in the Offering Memorandum present fairly
the information shown therein and have been compiled on a basis consistent with
that of the audited financial statements included or incorporated by reference
in the Offering Memorandum.
(p) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
or any of its Subsidiaries or its or their property is pending or, to the best
knowledge of the Company, threatened that could reasonably be expected to have
(i) a material adverse effect on the performance of this Agreement or the
consummation of any of the transactions contemplated hereby or (ii) a Material
Adverse Effect, except as set forth in or contemplated in the Offering
Memorandum (exclusive of any supplement thereto).
(q) The Company and its subsidiaries have good and marketable
title to all material real property owned by the Company and its subsidiaries
and good title to all other material properties owned by them, in each case,
free and clear of all mortgages, pledges, liens, security interests, claims,
restrictions or encumbrances of any kind except such as (a) are described in the
Offering Memorandum or (b) do not, singly or in the aggregate, materially affect
the value of such property and do not interfere with the use made and proposed
to be made of such property by the Company or any of its subsidiaries; and all
of the leases and subleases of the Company and its subsidiaries and under which
the Company or any of its subsidiaries holds properties described in the
Offering Memorandum, are in full force and effect, except where such
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failure to be in full force and effect would not result in a Material Adverse
Effect, and neither the Company nor any subsidiary has any notice of any claim
or claims of any sort that singly or in the aggregate would have a Material
Adverse Effect that has been asserted by anyone adverse to the rights of the
Company or any subsidiary under any of the leases or subleases mentioned above,
or affecting or questioning the rights of the Company or such subsidiary to the
continued possession of the leased or subleased premises under any such lease or
sublease.
(r) Except as set forth in the Offering Memorandum, neither
the Company nor any Subsidiary is in breach, violation or default of (i) any
provision of its charter or bylaws, (ii) the terms of any indenture, contract,
lease, mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which it is a party
or bound or to which its property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree of any court, regulatory body,
administrative agency, governmental body, arbitrator or other governmental
authority having jurisdiction over the Company or any Subsidiary or any of
either of their properties, as applicable, except, with respect to clause (ii)
or (iii) above, for such breach, violation or default that could not reasonably
be expected to have a Material Adverse Effect.
(s) Ernst & Young LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries and delivered their
report with respect to the audited consolidated financial statements and
schedules included or incorporated by reference in the Offering Memorandum, are
independent public accountants with respect to the Company within the meaning of
the Act and the applicable published rules and regulations thereunder.
(t) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent, and the
Company is not aware of any existing or imminent labor disturbance by the
employees of the Company or any Subsidiary that, in either case, may reasonably
be expected to result in a Material Adverse Effect.
(u) The Company and its subsidiaries possess such permits,
licenses, approvals, consents and other authorizations (collectively,
"Governmental Licenses") issued by the appropriate federal, state, local or
foreign regulatory agencies or bodies necessary to conduct the business now
operated by them; the Company and its subsidiaries are 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; all of the Governmental Licenses are valid and in full force and effect,
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; and neither the Company nor any of its subsidiaries has received
any notice of proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material Adverse
Effect.
(v) Except as described in the Offering Memorandum and except
as would not, singly or in the aggregate, result in a Material Adverse Effect,
(A) neither the Company nor any of its subsidiaries is in violation of any
federal, state, local or foreign statute, law, rule, regulation, ordinance,
code, policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order, consent,
decree or judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or
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wildlife, including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"), (B) the Company and
its subsidiaries have all permits, authorizations and approvals required under
any applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or threatened administrative, regulatory
or judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings relating to any
Environmental Law against the Company or any of its subsidiaries and (D) there
are no events or circumstances that might reasonably be expected to form the
basis of an order for clean-up or remediation, or an action, suit or proceeding
by any private party or governmental body or agency, against or affecting the
Company or any of its subsidiaries relating to Hazardous Materials or any
Environmental Laws.
(w) The only subsidiaries of the Company are (a) the
subsidiaries listed on Annex A hereto and (b) certain other subsidiaries which,
considered in the aggregate as a single Subsidiary, do not constitute a
"significant subsidiary" as defined in Rule 1-02 of Regulation S-X.
(x) The Company is a "citizen of the United States" within the
meaning of Section 40102(a)(15) of Title 49 of the United States Code, as
amended, holding an air carrier operating certificate issued by the Secretary of
Transportation pursuant to Chapter 447 of Title 49 of the United States Code, as
amended, for aircraft capable of carrying 10 or more individuals or 6,000 pounds
or more of cargo.
Any certificate signed by any officer of the Company or any of its subsidiaries
and delivered to the Representatives or counsel for the Initial Purchasers in
connection with the offering of the Securities shall be deemed a representation
and warranty by the Company, as to matters covered thereby, to each Initial
Purchaser.
2. Purchase and Sale. (a) Subject to the terms and conditions
and in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Initial Purchaser, and each Initial Purchaser
agrees, severally and not jointly, to purchase from the Company, at a purchase
price of 100% of the principal amount thereof, the principal amount of Firm
Securities set forth opposite such Initial Purchaser's name in Schedule I
hereto.
(b) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Company hereby grants
an option to the several Initial Purchasers to purchase, severally and not
jointly, the Option Securities at the same purchase price as the Initial
Purchasers shall pay for the Firm Securities on the settlement date for the
Option Securities. The option may be exercised in whole or in part at any time
and from time to time on or before the 30th day after the date of the Offering
Memorandum upon written or telegraphic notice by the Representatives to the
Company setting forth the principal amount of Option Securities as to which the
several Initial Purchasers are exercising the option and the settlement date.
Delivery of the Option Securities, and payment therefor, shall be made as
provided in Section 3 hereof. The principal amount of Option Securities to be
purchased by each Initial Purchaser shall be the same percentage of the total
principal amount of Option Securities to be purchased by the several Initial
Purchasers as such Initial Purchaser is purchasing of the
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Firm Securities, subject to such adjustments as you in your absolute discretion
shall make to eliminate any fractional Securities.
3. Delivery and Payment. (a) Delivery of and payment for the
Firm Securities and the Option Securities (if the option provided for in Section
2(b) hereof shall have been exercised on or before the third Business Day prior
to the Closing Date) shall be made at 10:00 A.M., New York City time, on June
10, 2003, which date and time may be postponed by agreement among the
Representatives and the Company or as provided in Section 9 hereof (such date
and time of delivery and payment for the Securities being herein called the
"Closing Date"). Delivery of the Securities shall be made to the Representatives
for the respective accounts of the several Initial Purchasers against payment by
the several Initial Purchasers through the Representatives of the purchase price
thereof to or upon the order of the Company by wire transfer payable in same-day
funds to the account specified by the Company. Delivery of the Securities shall
be made through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct.
(b) If the option provided for in Section 2(b) hereof is
exercised after the third Business Day prior to the Closing Date, the Company
will deliver the Option Securities (at the expense of the Company) to the
Representatives on the date specified by the Representatives (which shall be
within three Business Days after exercise of said option) for the respective
accounts of the several Initial Purchasers, against payment by the several
Initial Purchasers through the Representatives of the purchase price thereof to
or upon the order of the Company by wire transfer payable in same-day funds to
the account specified by the Company. If settlement for the Option Securities
occurs after the Closing Date, the Company will deliver to the Representatives
on the settlement date for the Option Securities, and the obligation of the
Initial Purchasers to purchase the Option Securities shall be conditioned upon
receipt of, supplemental opinions, certificates and letters confirming as of
such date the opinions, certificates and letters delivered on the Closing Date
pursuant to Section 6 hereof.
4. Offering by Initial Purchasers. (a) Each Initial Purchaser
acknowledges that the Securities and the Common Stock issuable upon conversion
thereof have not been and will not be registered under the Act and may not be
offered or sold within the United States or to, or for the account or benefit
of, U.S. persons, except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Act.
(b) Each Initial Purchaser, severally and not jointly,
represents and warrants to and agrees with the Company that:
(i) it has not offered or sold, and will not
offer or sell, any Securities within the United States or to,
or for the account or benefit of, U.S. persons (x) as part of
their distribution at any time or (y) otherwise until one year
after the later of the commencement of the offering and the
date of closing of the offering except:
(A) to those it reasonably believes to
be "qualified institutional buyers"
(as defined in Rule 144A under the
Act) or
(B) in accordance with Rule 903 of
Regulation S;
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(ii) neither it nor any person acting on its
behalf has made or will make offers or sales of the Securities
in the United States by means of any form of general
solicitation or general advertising (within the meaning of
Regulation D) in the United States;
(iii) in connection with each sale pursuant to
Section 4(b)(i)(A), it has taken or will take reasonable steps
to ensure that the purchaser of such Securities is aware that
such sale is being made in reliance on Rule 144A;
(iv) any information provided by the Initial
Purchasers to publishers of publicly available databases about
the terms of the Securities shall include a statement that the
Securities have not been registered under the Act and are
subject to restrictions under Rule 144A under the Act and
Regulation S;
(v) it will not engage in hedging transactions
with regard to the Securities prior to the expiration of the
distribution compliance period as (defined in Regulation S),
unless in compliance with the Act;
(vi) neither it, nor any of its Affiliates nor
any person acting on its or their behalf has engaged or will
engage in any directed selling efforts (within the meaning of
Regulation S) with respect to the Securities;
(vii) it has not entered and will not enter into
any contractual arrangement with any distributor (within the
meaning of Regulation S) with respect to the distribution of
the Securities, except with its affiliates or with the prior
written consent of the Company;
(viii) it and they have complied and will comply
with the offering restrictions requirement of Regulation S;
(ix) at or prior to the confirmation of sale of
Securities (other than a sale of Securities pursuant to
Section 4(b)(i)(A) of this Agreement), it shall have sent to
each distributor, dealer or person receiving a selling
concession, fee or other remuneration that purchases
Securities from it during the distribution compliance period
(within the meaning of Regulation S) a confirmation or notice
to substantially the following effect:
"The Securities covered hereby have not been
registered under the U.S. Securities Act of 1933 (the
"Act") and may not be offered or sold within the
United States or to, or for the account or benefit
of, U.S. persons (i) as part of their distribution at
any time or (ii) otherwise until one year after the
later of the commencement of the offering and the
date of closing of the offering, except in either
case in accordance with Regulation S or Rule 144A
under the Act. Additional restrictions on the offer
and sale of the Securities and the Common Stock
issuable upon conversion thereof are described in the
offering memorandum for the Securities. Terms used in
this paragraph have the meanings given to them by
Regulation S."
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(x) it acknowledges that additional restrictions
on the offer and sale of the Securities and the Common Stock
issuable upon conversion thereof are described in the Offering
Memorandum;
(xi) it has not offered or sold and, prior to the
date six months after the date of issuance of the Securities,
will not offer or sell any Securities to persons in the United
Kingdom except to persons whose ordinary activities involve
them in acquiring, holding, managing or disposing of
investments (as principal or as agent) for the purposes of
their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the
United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995;
(xii) it has complied and will comply with all
applicable provisions of the FSMA with respect to anything
done by it in relation to the Securities in, from or otherwise
involving the United Kingdom;
(xiii) it has only communicated or caused to be
communicated and will only communicate or cause to be
communicated any invitation or inducement to engage in
investment activity (within the meaning of section 21 of the
FSMA) received by it in connection with the issue or sale of
any Securities, in circumstances in which section 21(1) of the
FSMA does not apply to the Company; and
(xiv) it is an "accredited investor" (as defined
in Rule 501(a) of Regulation D).
5. Agreements. The Company agrees with each Initial Purchaser
that:
(a) The Company will furnish to each Initial Purchaser and to
counsel for the Initial Purchasers, without charge, from the date and time the
Offering Memorandum is first delivered to the Initial Purchasers and thereafter
during the period referred to in paragraph (c) below, as many copies of the
Offering Memorandum and any amendments and supplements thereto as they may
reasonably request.
(b) The Company will not amend or supplement the Offering
Memorandum, other than by filing documents under the Exchange Act that are
incorporated by reference therein, without the prior written consent of the
Representatives; provided, however, that, prior to the completion of the
distribution of the Securities by the Initial Purchasers (as determined by the
Initial Purchasers), the Company will not file any document under the Exchange
Act that is incorporated by reference in the Offering Memorandum unless, prior
to such proposed filing, the Company has furnished the Representatives with a
copy of such document for their review and the Representatives have not
reasonably objected to the filing of such document. The Company will promptly
advise the Representatives when any document filed under the Exchange Act that
is incorporated by reference in the Offering Memorandum shall have been filed
with the Commission.
(c) If at any time prior to the completion of the sale of the
Securities by the Initial Purchasers (as determined by the Representatives), any
event occurs as a result of which the Offering Memorandum, as then amended or
supplemented, would include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in
10
the light of the circumstances under which they were made, not misleading, or if
it should be necessary to amend or supplement the Offering Memorandum to comply
with applicable law, the Company will promptly (i) notify the Representatives of
any such event; (ii) subject to the requirements of paragraph (b) of this
Section 5, prepare an amendment or supplement that will correct such statement
or omission or effect such compliance; and (iii) supply any supplemented or
amended Offering Memorandum to the several Initial Purchasers and counsel for
the Initial Purchasers without charge in such quantities as they may reasonably
request.
(d) The Company will arrange, if necessary, for the
qualification of the Securities for sale by the Initial Purchasers under the
laws of such jurisdictions as the Representatives may designate and will
maintain such qualifications in effect so long as required for the distribution
of the Securities; provided that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so qualified or
to take any action that would subject it to service of process in suits, other
than those arising out of the offering or sale of the Securities, or subject
itself to taxation in any jurisdiction where it is not now so subject.
(e) Until the Shelf Registration Statement (as defined in the
Registration Rights Agreement) is declared effective by the SEC, the Company
will not, and will not permit any of its subsidiaries to, resell any Securities
that have been acquired by any of them.
(f) None of the Company, its Affiliates, or any person acting
on its or their behalf will, directly or indirectly, make offers or sales of any
security, or solicit offers to buy any security, under circumstances that would
require the registration of the Securities or Common Stock issuable upon
conversion thereof under the Act.
(g) None of the Company, its Affiliates, or any person acting
on its or their behalf will engage in any form of general solicitation or
general advertising (within the meaning of Regulation D) in connection with any
offer or sale of the Securities in the United States.
(h) So long as any of the Securities or the Common Stock
issuable upon the conversion thereof are "restricted securities" within the
meaning of Rule 144(a)(3) under the Act, the Company will, during any period in
which it is not subject to Section 13 or 15(d) of the Exchange Act, provide to
each holder of such restricted securities and to each prospective purchaser (as
designated by such holder) of such restricted securities, upon the request of
such holder or prospective purchaser, any information required to be provided by
Rule 144A(d)(4) under the Act.
(i) None of the Company, its Affiliates, or any person acting
on its or their behalf will engage in any directed selling efforts with respect
to the Securities, and each of them will comply with the offering restrictions
requirement of Regulation S. Terms used in this paragraph have the meanings
given to them by Regulation S.
(j) The Company will cooperate with the Representatives and
use its best efforts to permit the Securities to be eligible for clearance and
settlement through The Depository Trust Company.
(k) The Company will use the net proceeds received by it from
the sale of the Securities in the manner specified in the Offering Memorandum
under "Use of Proceeds."
11
(l) The Company will reserve and keep available at all times,
free of preemptive or other similar rights, a sufficient number of shares of
Common Stock for the purpose of enabling the Company to satisfy any obligations
to issue Common Stock upon the conversion of Securities.
(m) The Company will not for a period of 60 days following the
Execution Time, without the prior written consent of Citigroup Global Markets
Inc., Credit Suisse First Boston LLC and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
offer, sell or contract to sell, or otherwise dispose of (or enter into any
transaction which is designed to, or might reasonably be expected to, result in
the disposition (whether by actual disposition or effective economic disposition
due to cash settlement or otherwise) by the Company or any Affiliate of the
Company or any person in privity with the Company or any Affiliate of the
Company), directly or indirectly, or announce the offering of, any shares of
Common Stock or any securities convertible into, or exchangeable for, shares of
Common Stock (other than the Securities); provided, however, that the foregoing
sentence shall not apply to (A) the Securities to be sold hereunder, (B) any
shares of Common Stock issued by the Company upon the exercise an option or
warrant or the conversion of the Securities or a security outstanding on the
date hereof and referred to in the Offering Memorandum, (C) any shares of Common
Stock issued or options to purchase Common Stock granted pursuant to employee
benefit plans of the Company or (D) any shares of Common Stock issued pursuant
to any non-employee director stock plan or dividend reinvestment plan.
(n) Until the completion of the sale of the Securities by the
Initial Purchasers (as determined by the Representatives), the Company will not
take, directly or indirectly, any action designed to or which has constituted or
which might reasonably be expected to cause or result, under the Exchange Act or
otherwise, in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(o) Until the completion of the sale of the Securities by the
Initial Purchasers (as determined by the Representatives), the Company will file
all documents required to be filed with the Commission pursuant to the Exchange
Act within the time periods required by the Exchange Act and the Exchange Act
Regulations.
(p) The Company agrees to pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation and printing of the Indenture and the Registration Rights Agreement,
the issuance of the Securities, the fees of the Trustee and the issuance of the
Common Stock upon conversion of the Securities; (ii) the preparation, printing
or reproduction of the Offering Memorandum and each amendment or supplement to
either of them; (iii) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and packaging) of such
copies of the Offering Memorandum, and all amendments or supplements to either
of them, as may, in each case, be reasonably requested for use in connection
with the offering and sale of the Securities; (iv) the preparation, printing,
authentication, issuance and delivery of certificates for the Securities; (v)
any stamp or transfer taxes in connection with the original issuance and sale of
the Securities; (vi) the printing (or reproduction) and delivery of this
Agreement, any blue sky memorandum and all other agreements or documents printed
(or reproduced) and delivered in connection with the offering of the Securities;
(vii) any registration or qualification of the Securities for offer and sale
under the securities or blue sky laws of the several states and any other
jurisdictions specified pursuant to Section 5(d) (including filing fees and the
reasonable fees and expenses of counsel for the Initial Purchasers relating to
such registration and qualification); (viii) admitting the Securities
12
for trading in the PORTAL Market; (ix) the fees and expenses of the Company's
accountants and the fees and expenses of counsel (including local and special
counsel) for the Company; and (xi) all other costs and expenses incident to the
performance by the Company of its obligations hereunder.
6. Conditions to the Obligations of the Initial Purchasers.
The obligations of the Initial Purchasers to purchase the Firm Securities and
the Option Securities, as the case may be, shall be subject to the accuracy of
the representations and warranties on the part of the Company contained herein
as of the Execution Time and the Closing Date, to the accuracy of the statements
of the Company made in any certificates pursuant to the provisions hereof, to
the performance by the Company of its obligations hereunder and to the following
additional conditions:
(a) At the Closing Date, the Representatives shall have
received (i) the favorable opinion, dated as of the Closing Date, of ▇▇▇▇▇▇ &
▇▇▇▇▇▇ L.L.P., counsel for the Company, in form and substance satisfactory to
counsel for the Initial Purchasers, to the effect set forth in Annex B hereto
and to such further effect as counsel to the Initial Purchasers may reasonably
request, and (ii) the favorable opinion, dated as of the Closing Date, of
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., Vice President, General Counsel and Secretary of the
Company, with responsibility for the legal affairs of the Company and its
subsidiaries, to the effect set forth in Annex C hereto and to such further
effect as counsel to the Representatives may reasonably request.
(b) The Representatives shall have received from Cleary,
Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Initial Purchasers, such opinion or
opinions, dated the Closing Date and addressed to the Representatives, with
respect to the issuance and sale of the Securities, the Indenture, the
Registration Rights Agreement, the Offering Memorandum (as amended or
supplemented at the Closing Date) and other related matters as the
Representatives may reasonably require, and the Company shall have furnished to
such counsel such documents as they request for the purpose of enabling them to
pass upon such matters.
(c) The Representatives shall have received a certificate of
the President or a Vice President of the Company and of the chief financial or
chief accounting officer of the Company, dated as of the Closing Date, to the
effect that (i) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business, properties or results of
operations of the Company and its subsidiaries taken as a whole, whether or not
arising in the ordinary course of business, (ii) the representations and
warranties in Section 1 hereof are true and correct with the same force and
effect as though expressly made at and as of the Closing Date, and (iii) the
Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to the Closing Date.
(d) At the Closing Date, the Representatives shall have
received from Ernst & Young LLP a letter, dated as of the Closing Date, in form
and substance satisfactory to the Representatives, 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 in a registration statement and prospectus for a
registered public offering.
All references in this Section 6(d) to the Offering Memorandum
include any amendment or supplement thereto at the date of the applicable
letter.
13
(e) At the Closing Date, there shall not have been, since the
date hereof or since the respective dates as of which information is given in
the Offering Memorandum (exclusive of any amendment or supplement thereto), any
material adverse change in the condition, financial or otherwise, or in the
earnings, business, properties or results of operations of the Company and its
subsidiaries taken as a whole, whether or not arising in the ordinary course of
business.
(f) The Securities shall have been designated as
PORTAL-eligible securities in accordance with the rules and regulations of the
NASD and the Securities shall be eligible for clearance and settlement through
The Depository Trust Company.
(g) Subsequent to the Execution Time, there shall not have
been any decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Act) or any notice given of any intended or potential
decrease in any such rating or of a possible change in any such rating that does
not indicate the direction of the possible change.
(h) The Company shall have used it best efforts to cause the
shares of Common Stock initially issuable upon conversion of the Securities to
be approved for listing, subject to issuance, on the New York Stock Exchange;
(i) In the event that the Initial Purchasers exercise their
option provided in Section 2(b) hereof to purchase all or any portion of the
Option Securities, the representations and warranties of the Company contained
herein and the statements in any certificates furnished by the Company or any
subsidiary of the Company hereunder shall be true and correct as of each
settlement date and, at the relevant settlement date, the Representatives shall
have received:
(i) Officers' Certificate. A certificate, dated
such settlement date, of the President or a Vice President of
the Company and of the chief financial or chief accounting
officer of the Company confirming that the certificate
delivered at the Closing Date pursuant to Section 6(c) hereof
remains true and correct as of such settlement date.
(ii) Opinions of Counsel for Company. The
favorable opinions of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., counsel for the
Company, and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., Vice President, General
Counsel and Assistant Secretary of the Company, in form and
substance satisfactory to counsel for the Initial Purchasers,
dated such settlement date, relating to the Option Securities
to be purchased on such settlement date and otherwise to the
same effect as the opinions required by Section 6(a) hereof.
(iii) Opinion of Counsel for Initial Purchasers.
The favorable opinion of Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
counsel for the Initial Purchasers, dated such settlement
date, relating to the Option Securities to be purchased on
such settlement date to the effect that they reaffirm the
statements made in the letter furnished pursuant to Section
6(b) hereof.
(j) At the Closing Date and at each settlement date, counsel
for the Initial Purchasers shall have been furnished with such documents and
opinions as they may require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or
14
the fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be satisfactory in form and substance to the
Representatives and counsel for the Initial Purchasers.
(k) If any condition specified in this Section 6 shall not
have been fulfilled when and as required to be fulfilled, this Agreement, or, in
the case of any condition to the purchase of Option Securities, on a settlement
date which is after the Closing Date, the obligation of the Initial Purchasers
to purchase the Option Securities, may be terminated by the Representatives by
notice to the Company at any time at or prior to the Closing Date or such
settlement date, as the case may be, and such termination shall be without
liability of any party to any other party except as provided in Section 5(q) and
except that Sections 1, 8, 9 and 12 shall survive any such termination and
remain in full force and effect.
The documents required to be delivered by this Section 6 will
be delivered at the office of counsel for the Initial Purchasers, at Cleary,
Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, on the
Closing Date.
7. Reimbursement of Expenses. If the sale of the Securities
provided for herein is not consummated because any condition to the obligations
of the Initial Purchasers set forth in Section 6 hereof is not satisfied because
of any refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Initial Purchasers, the Company will reimburse the Initial
Purchasers severally through Citigroup on demand for all expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
them in connection with the proposed purchase and sale of the Securities.
8. Indemnification. (a) The Company agrees to indemnify and
hold harmless each Initial Purchaser, and each person, if any, who controls any
Initial Purchaser within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act as follows:
(i) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, arising out of any
untrue statement or alleged untrue statement of a material
fact contained in the Offering Memorandum (or any amendment or
supplement thereto), or the omission or alleged omission
therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading;
(ii) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of
the aggregate amount paid in settlement of any litigation, or
any investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such
alleged untrue statement or omission provided that any such
settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as
incurred (including the fees and disbursements of counsel
chosen in accordance with Section 8(c) below), reasonably
incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any
governmental agency or body,
15
commenced or threatened, or any claim whatsoever based upon
any such untrue statement or omission, or any such alleged
untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Representatives expressly for use in the Offering Memorandum (or any amendment
thereto).
(b) The Initial Purchasers severally and not jointly agree to
indemnify and hold harmless the Company, its directors, each of its officers and
each person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20 of the Exchange Act against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Offering Memorandum (or any amendment or supplement thereto) in reliance upon
and in conformity with written information relating to an Initial Purchaser
furnished to the Company by or on behalf of such Initial Purchaser through the
Representatives expressly for use in the Offering Memorandum (or any amendment
or supplement thereto).
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability which it
may have otherwise than on account of this indemnity agreement. In the case of
parties indemnified pursuant to Section 8(b) above, counsel to the indemnified
parties shall be selected by the Initial Purchasers (provided, however, that
such counsel shall be reasonably satisfactory to such indemnified parties), and,
in the case of parties indemnified pursuant to Section 8(a) above, counsel to
the indemnified parties shall be selected by the Company (provided, however,
that such counsel shall be reasonably satisfactory to such indemnified parties).
An indemnifying party may participate at its own expense in the defense of any
such action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 8 or Section 9 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
16
9. Contribution. If the indemnification provided for in
Section 8 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Initial Purchasers on the other hand from the
offering of the Securities pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company on the one hand and of the
Initial Purchasers on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand
and the Initial Purchasers on the other hand in connection with the offering of
the Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the Initial
Purchasers, as set forth on the cover of the Offering Memorandum.
The relative fault of the Company on the one hand and the
Initial Purchasers on the other hand shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Initial Purchasers and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company and each Initial Purchasers agrees that it would
not be just and equitable if contribution pursuant to this Section 9 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
Section 9. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
9 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 9, no Initial
Purchasers shall be required to contribute any amount in excess of the
underwriting discount or commission applicable to the Securities purchased by
such Initial Purchasers.
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 9, each person, if any, who
controls an Initial Purchasers within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act shall have the same rights to contribution as
such Initial Purchasers, and each director of the Company, and each person, if
any, who controls the Company within the meaning of Section 15
17
of the Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Company.
10. Default by an Initial Purchaser. If any one or more
Initial Purchasers shall fail to purchase and pay for any of the Securities
agreed to be purchased by such Initial Purchaser hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Initial Purchasers shall be
obligated severally to take up and pay for (in the respective proportions which
the principal amount of Securities set forth opposite their names in Schedule I
hereto bears to the aggregate principal amount of Securities set forth opposite
the names of all the remaining Initial Purchasers) the Securities which the
defaulting Initial Purchaser or Initial Purchasers agreed but failed to
purchase; provided, however, that in the event that the aggregate principal
amount of Securities which the defaulting Initial Purchaser or Initial
Purchasers agreed but failed to purchase shall exceed 10% of the aggregate
principal amount of Securities set forth in Schedule I hereto, the remaining
Initial Purchasers shall have the right to purchase all, but shall not be under
any obligation to purchase any, of the Securities, and if such nondefaulting
Initial Purchasers do not purchase all the Securities, this Agreement will
terminate without liability to any nondefaulting Initial Purchaser or the
Company. In the event of a default by any Initial Purchaser as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding
five Business Days, as the Representatives shall determine in order that the
required changes in the Offering Memorandum or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Initial Purchaser of its liability, if any, to the Company or any
nondefaulting Initial Purchaser for damages occasioned by its default hereunder.
11. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice given
to the Company prior to delivery of and payment for the Securities, if at any
time prior to such time (i) trading in the Company's Common Stock shall have
been suspended by the Commission or the New York Stock Exchange or trading in
securities generally on the New York Stock Exchange or the American Stock
Exchange or the Nasdaq National Market shall have been suspended or limited or
minimum prices shall have been established on either of such exchanges or the
Nasdaq National Market; (ii) a banking moratorium shall have been declared
either by U.S. federal or New York State authorities; or (iii) there shall have
occurred any outbreak or escalation of hostilities, declaration by the United
States of a national emergency or war or other calamity or crisis the effect of
which on financial markets is such as to make it, in the sole judgment of the
Representatives, impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated in the Offering Memorandum (exclusive
of any amendment or supplement thereto).
12. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Initial Purchasers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of the Initial Purchasers or the Company
or any of the indemnified persons referred to in Section 8 hereof, and will
survive delivery of and payment for the Securities. The provisions of Sections
7, 8 and 9 hereof shall survive the termination or cancellation of this
Agreement.
18
13. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or telefaxed to the Citigroup General Counsel (fax no.: (212)
▇▇▇-▇▇▇▇) and confirmed to Citigroup at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: General Counsel; the Credit Suisse First Boston, General
Counsel (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to Credit Suisse First Boston at
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel;
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Global Capital Markets Syndicate Desk (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇)
and confirmed to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Global Capital Markets Syndicate Desk; or, if sent, mailed, delivered
or telefaxed to the Company Chief Financial Officer (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇)
and confirmed to ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇, attention of
the Chief Financial Officer and to the General Counsel (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇)
and confirmed at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇, attention of
the General Counsel.
14. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
indemnified persons referred to in Section 8 hereof and their respective
successors, no other person will have any right or obligation hereunder.
15. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York. The parties
hereto each hereby waive any right to trial by jury in any action, proceeding or
counterclaim arising out of or relating to this Agreement.
16. Waiver of Tax Confidentiality. Notwithstanding anything
herein to the contrary, purchasers of the Securities (and each employee,
representative or other agent of the Company) may disclose to any and all
persons, without limitation of any kind, the U.S. tax treatment and U.S. tax
structure of any transaction contemplated herein and all materials of any kind
(including opinions or other tax analyses) that are provided to the purchasers
of the Securities relating to such U.S. tax treatment and U.S tax structure,
other than any information for which nondisclosure is reasonably necessary in
order to comply with applicable securities laws.
17. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
18. Headings. The section headings used herein are for
convenience only and shall not affect the construction hereof.
19. Definitions. The terms that follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Affiliate" shall have the meaning specified in Rule 501(b) of
Regulation D.
19
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or trust
companies are authorized or obligated by law to close in The City of New York.
"Citigroup" shall mean Citigroup Global Markets Inc.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Commission" shall mean the Securities and Exchange
Commission.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Investment Company Act" shall mean the Investment Company Act
of 1940, as amended, and the rules and regulations of the Commission promulgated
thereunder.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"PORTAL" shall mean the Private Offerings, Resales and Trading
through Automated Linkages system of the NASD.
"Regulation D" shall mean Regulation D under the Act.
"Regulation S" shall mean Regulation S under the Act.
"Trust Indenture Act" shall mean the Trust Indenture Act of
1939, as amended, and the rules and regulations of the Commission promulgated
thereunder.
20
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
between the Company and the several Initial Purchasers.
Very truly yours,
Continental Airlines, Inc.
By: /S/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President and General Counsel
The foregoing Agreement is hereby
confirmed and accepted as of the date first
above written.
Citigroup Global Markets Inc.
By: /S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Director
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Managing Director
Credit Suisse First Boston LLC
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
By: /S/ ▇▇▇▇▇ ▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Vice President
Each on behalf of the
Initial Purchasers.
21
SCHEDULE I
Principal Amount
of Firm
Securities to be
Initial Purchasers Purchased
------------------ ----------------
Citigroup Global Markets Inc........................................ $ 46,250,000
Credit Suisse First Boston LLC...................................... 46,250,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated................................... 46,250,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.................................................. 11,250,000
Total............................................. $ 150,000,000.00
----------------
ANNEX A
Significant Subsidiaries
SUBSIDIARY STATE OF INCORPORATION
---------- ----------------------
Air Micronesia, Inc. Delaware
Continental Micronesia, Inc. Delaware
ExpressJet Airlines, Inc. Delaware
ExpressJet Holdings, Inc. Delaware
XJT Holdings, Inc. Delaware
A-1
ANNEX B
Form of Opinion of Company's Counsel
to be delivered pursuant to Section 6(b)
(i) The Company is validly existing as a corporation in
good standing under the laws of the State of Delaware, with full
corporate power and authority to own, lease and operate its properties,
to conduct its business as described in the Offering Memorandum, to
issue the Securities and to enter into and perform its obligations
under the Purchase Agreement, the Registration Rights Agreement and the
Indenture.
(ii) The execution and delivery of the Indenture have been
duly authorized by all necessary corporate action of the Company, and
the Indenture has been duly executed and delivered by the Company and
is a valid, binding and enforceable agreement of the Company.
(iii) The execution and delivery of the Registration Rights
Agreement have been duly authorized by all necessary corporate action
of the Company, and the Registration Rights Agreement has been duly
executed and delivered by the Company and is a valid, binding and
enforceable agreement of the Company.
(iv) The execution and delivery of the Securities have
been duly authorized by all necessary corporate action of the Company,
and the Securities have been duly executed and delivered by the Company
and are the valid, binding and enforceable obligations of the Company,
entitled to the benefits of the Indenture.
(v) The holders of outstanding shares of capital stock of
the Company are not entitled to any statutory preemptive rights to
subscribe for the Securities or the shares of Common Stock issuable
upon conversion thereof; and the shares of Common Stock issuable upon
conversion of the Securities into which the Securities are convertible
at the initial conversion price have been duly authorized by all
necessary corporate action of the Company and reserved for issuance
upon conversion and, upon issuance of such shares of Common Stock on
conversion of the Securities in accordance with the Indenture and the
terms of the Securities at conversion prices at or in excess of the par
value of such shares of Common Stock, will be validly issued, fully
paid and nonassessable.
(vi) The information in the Offering Memorandum under
"Description of Notes" and "Description of Common Stock," insofar as
such statements purport to summarize certain provisions of the
Securities, the Indenture, the Company's charter and bylaws and matters
of Delaware General Corporation Law, is correct in all material
respects.
(vii) The Purchase Agreement has been duly authorized,
executed and delivered by the Company.
(viii) The Company is not, and after giving effect to the
offering and sale of the Securities and the application of the proceeds
thereof as described in the Offering Memorandum, will not be, an
"investment company," as such term is defined in the 1940 Act.
(ix) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any United
States or Texas court or governmental authority or agency (other than
under the 1933 Act and the 1933 Act Regulations or as may be required
under the securities or blue sky laws of the various states, as to
which such counsel need express no opinion) is necessary or required in
connection with the due authorization, execution and delivery of the
Purchase Agreement, the Indenture, the Registration Rights Agreement,
the Securities or the shares of Common Stock issuable upon conversion
of the Securities.
(x) Assuming the accuracy of the representations and
warranties and compliance with the agreements contained herein (without
regard to the representation found in Section 1(f)), no registration
under the Act of the Securities or the Common Stock issuable upon
conversion thereof, and no qualification of an indenture under the
Trust Indenture Act, are required for the sale and delivery of the
Securities by the Company to the Initial Purchasers or the offer and
sale by the Initial Purchasers of the Securities in the manner
contemplated herein and in the Offering Memorandum.
In addition, such counsel shall include a statement to the
following effect:
Because the primary purpose of such counsel's engagement was not to
establish or confirm factual matters or financial or accounting matters
and because of the wholly or partially non-legal character of many of
the statements contained in the Offering Memorandum, such counsel is
not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Offering Memorandum, and such counsel has not independently verified
the accuracy, completeness or fairness of such statements. Such counsel
has participated in conferences with officers and other representatives
of the Company and Continental and representatives of the independent
public accountants of the Company, and with the Initial Purchasers'
representatives and legal counsel, at which conferences the contents of
the Offering Memorandum and related matters were discussed. Such
counsel has also reviewed certain corporate documents furnished to such
counsel by the Company. Based on such participation and review (relying
as to matters of fact upon statements made to us by representatives of
the Company), and subject to the limitations described above, nothing
has come to such counsel's attention that would lead such counsel to
believe that the Offering Memorandum, or any amendment or supplement
thereto (except for (i) financial statements and schedules contained
therein, including the notes thereto and the auditors' reports thereon
and (ii) the other financial information contained therein or omitted
therefrom), at the Execution Time or on the Closing Date, included or
includes an untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
In rendering such opinion, such counsel may rely, as to
matters of fact (but not as to legal conclusions), to the extent they
deem proper, on certificates of responsible officers of the Company and
public officials. Such opinion shall not state that it is to be
governed or qualified by, or that it is otherwise subject to, any
treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA
Section of Business Law (1991).
ANNEX C
Form of Opinion of Company's In-House Counsel
to be delivered pursuant to Section 6(b)
(i) The Company is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would
not result in a Material Adverse Effect.
(ii) To her knowledge and except as set forth in the
Offering Memorandum, no options, warrants or other rights to purchase,
agreements or other obligations to issue, or rights to convert any
obligations into or exchange any securities for, shares of capital
stock of or ownership interests in the Company are outstanding, except
as may have been issued or may exist under the Company's employee
benefit or similar plans.
(iii) To her knowledge, there is not pending or threatened
any action, suit, proceeding, inquiry or investigation, to which the
Company or any subsidiary is a party, or to which the property of the
Company or any subsidiary is subject, before or brought by any court or
governmental agency or body, domestic or foreign, of a character
required to be disclosed under the Exchange Act which is not adequately
disclosed in the Offering Memorandum.
(iv) Each Subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Offering Memorandum and is duly qualified
as a foreign corporation to transact business and is in good standing
in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Offering Memorandum, all of the issued and
outstanding capital stock of each Subsidiary has been duly authorized
and validly issued, is fully paid and non-assessable and, to the best
of my knowledge, is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity.
(v) The documents incorporated by reference in the
Offering Memorandum (other than the financial statements and supporting
schedules included therein or omitted therefrom, as to which such
counsel need express no opinion), when they were filed with the
Commission complied as to form in all material respects with the
requirements of the 1934 Act and the rules and regulations of the
Commission thereunder.
(vi) To her knowledge, neither the Company nor any
subsidiary is in violation of its charter or by-laws and no default by
the Company or any subsidiary exists in the due performance or
observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument that is described or referred to
in the Offering Memorandum, (except for such defaults that are not
reasonably expected to have a Material Adverse Effect).
(vii) To her knowledge, the execution, delivery and
performance of the Purchase Agreement, the Registration Rights
Agreement, the Securities and the Indenture and the consummation of the
transactions contemplated in the Purchase Agreement, in the Indenture
and in the Offering Memorandum (including the issuance and sale of the
Securities and the use of the proceeds from the sale of the Securities
as described in the Offering Memorandum under the caption "Use Of
Proceeds") and compliance by the Company with its obligations under the
Purchase Agreement, the Registration Rights Agreement or the Indenture
do not and will not, whether with or without the giving of notice or
lapse of time or both, conflict with or constitute a breach of, or
default under or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
subsidiary pursuant to any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or any other agreement or
instrument, known to her, to which the Company or any subsidiary is a
party or by which it or any of them may be bound, or to which any of
the property or assets of the Company or any subsidiary is subject
(except for such conflicts, breaches or defaults or liens, charges or
encumbrances that are not reasonably expected to have a Material
Adverse Effect), nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or any subsidiary,
or any applicable law, statute, rule, regulation, judgment, order, writ
or decree, known to her, of any government, government instrumentality
or court, domestic or foreign, having jurisdiction over the Company or
any subsidiary or any of their respective properties, assets or
operations, which violation would result in a Material Adverse Effect.
