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EXHIBIT 4.1
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CONTINENTAL AIRLINES, INC.,
AS ISSUER
8% Notes due December 15, 2005
UNDERWRITING AGREEMENT
Dated: December 8, 1998
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CONTINENTAL AIRLINES, INC.,
as ISSUER
8% Notes due December 15, 2005
UNDERWRITING AGREEMENT
December 8, 1998
Xxxxxx Xxxxxxx & Co. Incorporated
Credit Suisse First Boston Corporation
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Continental Airlines, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell, subject the terms and conditions stated
herein, to Xxxxxx Xxxxxxx & Co. Incorporated ("Xxxxxx Xxxxxxx") and Credit
Suisse First Boston Corporation (the "Underwriters") $200,000,000 aggregate
principal amount of its 8% Senior Notes due 2005 (the "Notes") to be issued
pursuant to the provisions of an Indenture dated July 15, 1997 between the
Company and Bank One, N.A., as trustee (the "Trustee").
Capitalized terms used but not defined herein have the meanings
to be assigned to them in the Prospectus (as defined below) or the Indenture.
The Company understands that the Underwriters propose to make an
offering of the Notes on the terms, subject to the conditions and in the manner
to be set forth in the Prospectus and this Agreement, as soon as the
Underwriters deem advisable after this Agreement has been executed and
delivered.
The Company has filed with the Securities and Exchange Commission
(the "Commission") a shelf registration statement on Form S-3 (File No. 333-
29255) relating to Debt Securities (as defined therein), including the Notes
(such registration statement (including the respective exhibits thereto and the
respective documents filed by the Company with the Commission pursuant to the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder (collectively, the "Exchange Act"), that are
incorporated by reference therein), as amended at the date hereof, being herein
referred to as
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the "Registration Statement"), and the offering thereof from time to time in
accordance with Rule 415 of the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder (collectively, the
"Securities Act"). The Registration Statement has been declared effective by
the Commission. A final prospectus supplement reflecting the terms of the
Notes, the terms of the offering thereof and other matters relating to the
Notes, as further specified in Section 4(d) hereof, will be prepared and filed
together with the base prospectus referred to below pursuant to Rule 424 under
the Securities Act (such prospectus supplement, in the form filed on or after
the date hereof pursuant to Rule 424, being herein referred to as the
"Prospectus Supplement"). The base prospectus included in the Registration
Statement at the effective date of the Registration Statement and relating to
all offerings of Debt Securities under the Registration Statement, as
supplemented by the Prospectus Supplement, and including the documents
incorporated by reference therein, is herein called the "Prospectus", except
that, if such base prospectus is amended or supplemented on or prior to the
date on which the Prospectus Supplement is first filed pursuant to Rule 424,
the term "Prospectus" shall refer to such base prospectus as so amended or
supplemented and as supplemented by the Prospectus Supplement. Any reference
herein to the terms "amendment" or "supplement" with respect to the Prospectus
shall be deemed to refer to and include any documents filed with the Commission
under the Exchange Act after the date the Prospectus is filed with the
Commission, or the date of such Prospectus Supplement, as the case may be, and
incorporated therein by reference pursuant to Item 12 of Form S-3 under the
Securities Act.
1. Representations and Warranties. (a) The Company
represents and warrants to, and agrees with each Underwriter that:
(i) The Company meets the requirements for use of Form S-3
under the Securities Act; the Registration Statement has become
effective; and on the original effective date of the Registration
Statement, the Registration Statement complied as to form in all
material respects with the requirements of the Securities Act. On the
effective date of the Registration Statement, the Registration Statement
did not include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading, and on the date hereof and on the
Closing Date (as defined below), the Prospectus, as amended and
supplemented if the Company shall have furnished any amendment or
supplement thereto, does not and will not include an untrue statement of
a material fact and does not and will not omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The preceding
sentence does not apply to statements in or omissions from the
Registration Statement or the Prospectus based upon written information
furnished to the Company by any Underwriter through Xxxxxx Xxxxxxx and
relating to such Underwriter expressly for use therein ("Underwriter
Information") or to statements or omissions in that part of each
Registration Statement which shall constitute the Statement of
Eligibility of the Trustee under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), on Form T-1.
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(ii) The documents incorporated by reference in the Prospectus
pursuant to Item 12 of Form S-3 under the Securities Act, at the time
they were or hereafter, during the period mentioned in paragraph 4(a)
below, are filed with the Commission, complied and will comply as to
form in all material respects with the requirements of the Exchange Act.
(iii) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware,
with corporate power and authority to own, lease and operate its
property and to conduct its business as described in the Prospectus; and
the Company is duly qualified to do business as a foreign corporation in
good standing in all other jurisdictions in which its ownership or lease
of property or the conduct of its business requires such qualification,
except where the failure to be so qualified would not have a material
adverse effect on the condition (financial or otherwise), business,
properties or results of operations of the Company and its consolidated
subsidiaries taken as a whole (a "Material Adverse Effect").
(iv) Each of Continental Micronesia, Inc., Air Micronesia Inc.
and Continental Express, Inc. (together, the "Subsidiaries") has been
duly incorporated and is an existing corporation in good standing under
the laws of the jurisdiction of its incorporation, with corporate power
and authority to own its properties and conduct its business as
described in the Prospectus; and each Subsidiary is duly qualified to do
business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the conduct
of its business requires such qualification, except where the failure to
be so qualified would not have a Material Adverse Effect; all of the
issued and outstanding capital stock of each Subsidiary has been duly
authorized and validly issued and is fully paid and nonassessable; and,
except as described in the Prospectus and except for the capital stock
of Continental Micronesia, Inc. which is pledged to secure obligations
of the Company, each Subsidiary's capital stock owned by the Company,
directly or through subsidiaries, is owned free from liens, encumbrances
and defects.
(v) Except as described in the Prospectus, the Company is not
in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which it is
a party or by which it may be bound or to which any of its properties
may be subject, except for such defaults that would not have a Material
Adverse Effect. The consummation of the transactions contemplated
herein has been duly authorized by all necessary corporate action of the
Company and will not result in any breach of any of the terms,
conditions or provisions of, or constitute a default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company pursuant to any indenture, loan
agreement, contract or other instrument to which the Company is a party
or by which the Company
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may be bound or to which any of the property or assets of the Company is
subject, which breach, default, lien, charge or encumbrance,
individually or in the aggregate, would have a Material Adverse Effect,
nor will any such execution, delivery or performance result in any
violation of the provisions of the charter or by-laws of the Company or
any material violation of any statute, any rule, regulation or order of
any governmental agency or body or any court having jurisdiction over
the Company.
(vi) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is required
for the valid authorization, execution and delivery by the Company of
this Agreement and for the consummation of the transactions contemplated
herein, except such as may be required under the Securities Act, the
Trust Indenture Act, the securities or "blue sky" or similar laws of the
various states and of foreign jurisdictions or rules and regulations of
the National Association of Securities Dealers, Inc.
(vii) This Agreement has been duly authorized, executed and
delivered by the Company.
(viii) The consolidated financial statements included or
incorporated by reference in the Registration Statement, 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 the unaudited financial statements do not
include all required footnotes. The financial statement schedules, if
any, included or incorporated by reference in the Registration Statement
present the information required to be stated therein.
(ix) 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.
(x) The Notes have been duly authorized by the Company; when
executed, authenticated, issued and delivered in the manner provided for
in the Indenture and sold and paid for as provided in this Agreement,
the Notes will constitute valid and binding obligations of the Company
entitled to the benefits of the Indenture, enforceable against the
Company in accordance with their terms, except as enforcement thereof
may be limited by bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers), reorganization, moratorium
or other similar laws now or hereafter
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in effect relating to creditors' rights generally and except as
enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law); and the Notes will conform in all material respects
to the description thereof to be contained in the Prospectus.
(xii) Except as disclosed in the Prospectus, the Company and the
Subsidiaries have good and marketable title to all real properties and
all other properties and assets owned by them, in each case free from
liens, encumbrances and defects except where the failure to have such
title would not have a Material Adverse Effect; and except as disclosed
in the Prospectus, the Company and the Subsidiaries hold any leased real
or personal property under valid and enforceable leases with no
exceptions that would have a Material Adverse Effect.
(xiii) Except as disclosed in the Prospectus, there is no action,
suit or proceeding before or by any governmental agency or body or
court, domestic or foreign, now pending or, to the knowledge of the
Company, threatened against the Company or any of its subsidiaries or
any of their respective properties that individually (or in the
aggregate in the case of any class of related lawsuits), could
reasonably be expected to have a Material Adverse Effect or that could
reasonably be expected to materially and adversely affect the
consummation of the transactions contemplated by this Agreement.
(xiv) Except as disclosed in the Prospectus, no labor dispute
with the employees of the Company or any subsidiary exists or to the
knowledge of the Company is imminent that could reasonably be expected
to have a Material Adverse Effect.
(xv) Each of the Company and the Subsidiaries has all necessary
consents, authorizations, approvals, orders, certificates and permits of
and from, and has made all declarations and filings with, all federal,
state, local and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, to own, lease, license
and use its properties and assets and to conduct its business in the
manner described in the Prospectus, except to the extent that the
failure to so obtain, declare or file would not have a Material Adverse
Effect.
(xvi) Except as disclosed in the Prospectus, neither the Company
nor any of the Subsidiaries is in violation of any statute, rule,
regulation, decision or order of any governmental agency or body or any
court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances (collectively, "environmental laws"), owns
or operates any real property contaminated with any substance that is
subject to any environmental laws, or is subject to any claim relating
to any environmental laws, which violation, contamination, liability or
claim individually or in the aggregate is reasonably expected to have a
Material Adverse Effect; and the
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Company is not aware of any pending investigation which might lead to
such a claim that is reasonably expected to have a Material Adverse
Effect.
(xvii) The accountants that examined and issued an auditors'
report with respect to the consolidated financial statements of the
Company and the financial statement schedules, if any, included or
incorporated by reference in the Registration Statement are independent
public accountants within the meaning of the Securities Act.
(b) The parties agree that any representation or warranty
contained in a certificate signed by a duly authorized officer of the Company
and delivered to an Underwriter, or to counsel for the Underwriters, in each
case on the Closing Date and in connection with this Agreement or the offering
of the Notes, shall be deemed a representation and warranty by (and only by)
the Company to the Underwriters as to the matters covered thereby.
2. Purchase, Sale and Delivery of Notes. (a) On the basis
of the representations, warranties and agreements herein contained, but subject
to the terms and the conditions herein set forth, the Company agrees to sell to
each Underwriter, and each Underwriter agrees, severally and not jointly, to
purchase from the Company the respective principal amount of Notes set forth in
Schedule I hereto opposite their names at a purchase price of 98.0% of the
principal amount thereof, plus accrued interest, if any, from December 14, 1998
to the date of payment and delivery.
(b) The Company is advised by you that the Underwriters
propose to make a public offering of the Notes as soon after this Agreement has
been entered into as in your judgment is advisable. The Company is further
advised by you that the Notes are to be offered to the public initially at 100%
of their principal amount -- the public offering price -- plus accrued
interest, if any, and to certain dealers selected by the Underwriters at
concessions not in excess of the concessions set forth in the Prospectus, and
that the Underwriters may allow, and such dealers may re-allow, concessions not
in excess of the concessions set forth in the Prospectus to certain other
dealers.
(c) Delivery of and payment for the Notes shall be made at the
offices of Shearman & Sterling at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 at 10:00 A.M. on December 14, 1998 or 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 Notes being herein called the "Closing Date"). Delivery of the
Notes shall be made to your account at The Depository Trust Company for the
respective accounts of the several Underwriters against payment by the
Underwriters of the purchase price thereof to or upon the order of the Company
by wire transfer. The Notes shall be registered in the name of Cede & Co. or
in such other names, and in such denominations, as you may request in writing
at least two full business days in advance of the Closing Date.
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(d) The Company agrees to have the Notes available for
inspection, checking and packaging by you in New York, New York not later than
1:00 P.M. on the business day prior to the Closing Date.
3. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase and pay for the Notes pursuant to
this Agreement are subject to the following conditions:
(a) On the Closing 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.
(b) On the Closing Date, you shall have received an opinion of
Xxxxxx & Xxxxxx L.L.P., as counsel for the Company, dated the Closing
Date, in form and substance reasonably satisfactory to you and
substantially to the effect set forth in Exhibit A hereto.
(c) On the Closing Date, you shall have received an opinion of
the General Counsel of the Company, dated the Closing Date, in form and
substance reasonably satisfactory to you and substantially to the effect
set forth in Exhibit B hereto.
(d) On the Closing Date, you shall have received an opinion of
Shearman & Sterling, as counsel for the Underwriters, dated as of the
Closing Date, with respect to the issuance and sale of the Notes, the
Registration Statement, the Prospectus and other related matters as the
Underwriters may reasonably require.
(e) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred any change, or any development
or event involving a prospective change, in the condition (financial or
other), business, properties or results of operations of the Company and
its subsidiaries considered as one enterprise that, in your judgment, is
material and adverse and that makes it, in your judgment, impracticable
to proceed with the completion of the public offering of the Notes on
the terms and in the manner contemplated by the Prospectus.
(f) You shall have received on the Closing Date a certificate,
dated the Closing Date and signed by the President or any Vice President
of the Company, to the effect that the representations and warranties of
the Company contained in this Agreement are true and correct as of the
Closing Date (except to the extent that they relate solely to an earlier
date in which case they shall be accurate as of such earlier date), that
the Company has performed all its obligations to be performed hereunder
on or prior to the Closing Date and that, subsequent to the execution
and delivery of this Agreement, there shall not have occurred any
material adverse change, or any development or event involving a
prospective material adverse change, in the condition
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(financial or other), business, properties or results of operations of
the Company and its subsidiaries considered as one enterprise, except as
set forth in or contemplated by the Prospectus.
(g) On the Closing Date, you shall have received a letter,
dated the Closing Date, of Ernst & Young LLP in a form and substance
satisfactory to you, containing statements and information of the type
ordinarily included in accountants' "comfort letters".
(h) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date, there shall not have been any downgrading
in the rating accorded any of the Company's securities, except for any
downgrading of pass through certificates, by any "nationally recognized
statistical rating organization", as such term is defined for purposes
of Rule 436(g)(2) under the Securities Act, or any public announcement
that any such organization has under surveillance or review its ratings
of any such securities (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating).
(i) On or prior to the Closing Date, counsel for the
Underwriters shall have been furnished with such documents and opinions
as such counsel may reasonably require for the purpose of enabling such
counsel to pass upon the issuance and sale of Notes as herein
contemplated and related proceedings, or in order to evidence the
accuracy of any of the representations and warranties, or the
fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the issuance and
sale of Notes as herein contemplated shall be reasonably satisfactory in
form and substance to you.
4. Certain Covenants of the Company. The Company covenants
with each Underwriter as follows:
(a) During the period described in the following sentence of
this Section 4(a), the Company shall advise you promptly of any proposal
to amend or supplement the Registration Statement or the Prospectus
(except by documents filed under the Exchange Act) and will not effect
such amendment or supplement (except by documents filed under the
Securities Act or the Exchange Act) without your consent, which consent
shall not be unreasonably withheld. If, at any time after the public
offering of the Notes, the Prospectus is required by law to be delivered
in connection with sales by an Underwriter or dealer, any event shall
occur as a result of which it is necessary to amend the Registration
Statement or amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading in any material
respect, or if it is necessary to amend the Registration Statement or
amend or supplement the Prospectus to comply with law, the Company shall
prepare and furnish, at its own expense, to the
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Underwriters and to the dealers (whose names and addresses you will
furnish to the Company) to which Notes may have been sold by you on
behalf of 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 is delivered to a purchaser, be
misleading in any material respect or amendments or supplements to the
Registration Statement or the Prospectus so that the Registration
Statement or the Prospectus, as so amended or supplemented, will comply
with law and cause such amendments or supplements to be filed promptly
with the Commission.
(b) During the period mentioned in paragraph (a) above, the
Company shall notify each Underwriter immediately of (i) the
effectiveness of any amendment to the Registration Statement, (ii) the
transmittal to the Commission for filing of any supplement to the
Prospectus or any document that would as a result thereof be
incorporated by reference in the Prospectus, (iii) the receipt of any
comments from the Commission with respect to the Registration Statement,
the Prospectus or the Prospectus Supplement, (iv) any request by the
Commission for any amendment to the Registration Statement or any
supplement to the Prospectus or for additional information relating
thereto or to any document incorporated by reference in the Prospectus
and (v) receipt by the Company of any notice of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement, the suspension of the qualification of the Notes
for offering or sale in any jurisdiction, or the institution or
threatening of any proceeding for any of such purposes; and the Company
agrees to use every reasonable effort to prevent the issuance of any
such stop order and, if any such order is issued, to obtain the lifting
thereof at the earliest possible moment and the Company shall (subject
to the proviso in Section 4(e)) endeavor, in cooperation with the
Underwriters, to prevent the issuance of any such stop order suspending
such qualification and, if any such order is issued, to obtain the
lifting thereof at the earliest possible moment, all of the foregoing at
the expense of the Company.
(c) During the period mentioned in paragraph (a) above, the
Company will furnish to each of the Underwriters as many conformed
copies of the Registration Statement (as originally filed) and all
amendments and supplements to such documents (excluding all exhibits and
documents filed therewith or incorporated by reference therein) and as
many conformed copies of all consents and certificates of experts, in
each case as soon as available and in such quantities as each of the
Underwriters reasonably requests.
(d) Promptly following the execution of this Agreement, the
Company will prepare a Prospectus Supplement that complies with the
Securities Act and that sets forth the principal amount of the Notes and
their terms not otherwise specified in the base prospectus included in
the Registration Statement, the name of each Underwriter
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participating in the offering and the principal amount of the Notes that
each severally has agreed to purchase, the name of each Underwriter, if
any, acting as representative of the Underwriters in connection with the
offering, the price at which the Notes are to be purchased by the
Underwriters from the Company, any initial public offering price, any
selling concession and reallowance and any delayed delivery
arrangements, and such other information as you and the Company deem
appropriate in connection with the offering of the Notes. The Company
will timely transmit copies of the Prospectus Supplement to the
Commission for filing pursuant to Rule 424 under the Securities Act.
(e) The Company shall, in cooperation with the Underwriters,
endeavor to arrange for the qualification of the Notes for offer and
sale under the applicable securities or "blue sky" laws of such
jurisdictions in the United States as Xxxxxx Xxxxxxx reasonably
designates and will endeavor to maintain such qualifications in effect
so long as required for the distribution of such Notes, all at the
expense of the Company; provided that the Company shall not be required
to (i) qualify as a foreign corporation or as a dealer in securities,
(ii) file a general consent to service of process or (iii) subject
itself to taxation in any such state.
(f) During the period the Notes remain outstanding, the
Company will promptly furnish to each of the Underwriters, upon request,
copies of all Annual Reports on Form 10-K and any definitive proxy
statement of the Company filed with the Commission.
(g) Between the date of this Agreement and the Closing Date,
the Company shall not, without your prior written consent, offer, sell,
or enter into any agreement to sell (as public debt securities
registered under the Securities Act (other than the Notes) or as debt
securities that may be resold in a transaction exempt from the
registration requirements of the Securities Act in reliance on Rule 144A
thereunder and that are marketed through the use of a disclosure
document containing substantially the same information as a prospectus
for similar debt securities registered under the Securities Act), any
unsecured notes, debentures or other evidences of unsecured
indebtedness.
5. Indemnification and Contribution. (a) The Company agrees
that it will indemnify and hold harmless each Underwriter, and 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 from and against any and
all losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred by any Underwriter or any such
controlling person 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, or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements 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, in light of the
circumstances under which
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they were made, 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 based upon (i) Underwriter Information (as defined
in Section 1(a)(i) of this Agreement) or (ii) statements or omissions in that
part of such Registration Statement which shall constitute the Statement of
Eligibility of the Trustee under the Trust Indenture Act.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, each of the officers
who signed the Registration Statement and each person, if any, who controls the
Company, as the case may be, 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 the Underwriter Information applicable to such Underwriter.
(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 paragraph (a) or (b) above, such
person (the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party"), in writing. 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 the indemnifying party 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 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 and that all such fees and expenses
shall be reimbursed as they are incurred. Any such firm retained pursuant to
the third sentence of this paragraph (c) shall be designated in writing by
Xxxxxx Xxxxxxx in the case of parties indemnified pursuant to paragraph (a)
above and by the Company in the case of parties indemnified pursuant to
paragraph (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 in writing 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 90 days
after receipt by such indemnifying party of the aforesaid
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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, unless such fees and expenses are being disputed in good faith. 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
paragraph (a) or (b) of this Section 5 is required to be made but is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages or liabilities, 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 such
Notes or (ii) if the allocation provided by clause (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 (i) above but also the relative fault
of the Company, on the one hand, and 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 such Notes shall be deemed to be in the same respective proportions as the
proceeds from the offering of such Notes received by the Company (before
deducting expenses), and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in (or in the notes to)
the table on the cover of the Prospectus, bear to the aggregate public offering
price of such Notes. The relative fault of the Company, on the one hand, and
of 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 Underwriter Information, 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 5 are several in
proportion to the respective principal amount of Notes they have purchased
hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not
be just or equitable if contribution pursuant to this Section 5 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 paragraph (d) above. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in paragraph (d) above shall be deemed to
include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such
12
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indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 5, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Notes 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 indemnity and contribution
provisions contained in this Section 5 and the representations and warranties
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 or any person controlling
any Underwriter or by or on behalf of the Company, each of their respective
officers or directors or any person controlling the Company and (iii)
acceptance of and payment for any of the Notes. The remedies provided for in
this Section 5 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in equity.
6. Default of Underwriters. If either Underwriter defaults
in its obligations to purchase Notes hereunder and the aggregate principal
amount of the Notes with respect to which such default or defaults occur
exceeds 10% of the total principal amount of the Notes and arrangements
satisfactory to Xxxxxx Xxxxxxx and the Company for the purchase of such Notes
by other persons are not made within 36 hours after such default, this
Agreement will terminate without liability on the part of any non-defaulting
Underwriter or the Company, except as provided in Section 5. As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
7. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, or its officers and of the Underwriters set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any termination of this agreement, any investigation, or
statement as to the results thereof, made by or on behalf of any Underwriter,
the Company, or any of its representatives, officers or directors or any
controlling person and will survive delivery of and payment for the Notes. If
for any reason the purchase of the Notes by the Underwriters is not
consummated, the Company shall remain responsible for the expenses to be paid
or reimbursed by it pursuant to Section 9 and the respective obligations of the
Company and the Underwriters pursuant to Section 5 shall remain in effect. If
the purchase of the Notes by the Underwriters is not consummated for any reason
other than solely because of the occurrence of the termination of the Agreement
pursuant to Section 6 or 8, the Company will reimburse the Underwriters for all
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
reasonably incurred by them in connection with the offering of such Notes and
comply with its obligations under Section 9.
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8. Termination. This Agreement shall be subject to
termination by notice given by Xxxxxx Xxxxxxx to the Company, if (a) after the
execution and delivery of this Agreement and prior to the Closing 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 National Association of Securities Dealers, Inc., (ii) trading
of any securities of the Company shall have been suspended on any exchange or
in any over-the-counter market, (iii) a general moratorium on commercial
banking activities in New York shall have been declared by either Federal or
New York State authorities or (iv) there shall have occurred any outbreak or
escalation of hostilities or any change in financial markets or any calamity or
crisis that, in Xxxxxx Xxxxxxx'x judgment, is material and adverse and (b) in
the case of any of the events specified in clauses (a)(i) through (iv), such
event singly or together with any other such event makes it, in Xxxxxx
Xxxxxxx'x judgment, impracticable to market the Notes on the terms and in the
manner contemplated in the Prospectus.
9. Payment of Expenses. The Company shall pay all of the
following costs and expenses:
(i) expenses (including filing fees and reasonable fees and
disbursements of counsel for the Underwriters in connection therewith)
incurred in connection with (A) qualifying the Notes for offer and sale
under the applicable securities or "blue sky" laws of such jurisdictions
in the United States as Xxxxxx Xxxxxxx reasonably designates, (B)
endeavoring to maintain such qualifications in effect so long as
required for the distribution of such Notes, (C) the review (if any) of
the offering of the Notes by the National Association of Securities
Dealers, Inc., (D) the determination of the eligibility of the Notes for
investment under the laws of such jurisdictions as the Underwriters may
designate and (E) the preparation, printing and distribution of any blue
sky or legal investment memorandum by Underwriters' Counsel;
(ii) expenses incurred in connection with the preparation and
distribution to the Underwriters and the dealers (whose names and
addresses the Underwriters will furnish to the Company) to which Notes
may have been sold by the Underwriters on their behalf and to any other
dealers upon request, either of (A) amendments to the Registration
Statement or amendments or supplements to the Prospectus in order to
make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not materially misleading or (B)
amendments or supplements to the Registration Statement or the
Prospectus so that the Registration Statement or the Prospectus, as so
amended or supplemented, will comply with law and the expenses incurred
in connection with causing such amendments or supplements to be filed
promptly with the Commission;
(iii) all expenses incident to the performance of the Company's
obligations under this Agreement;
14
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(iv) expenses incurred in connection with the preparation,
printing and filing of the Registration Statement (including financial
statements and exhibits), as originally filed and as amended, the
Prospectus and any amendments thereof and supplements thereto, and the
cost of furnishing copies thereof to the Underwriters;
(v) expenses incurred in connection with the preparation,
printing and distribution of this Agreement and the Notes;
(vi) expenses incurred in connection with the delivery of the
Notes;
(vii) reasonable fees and disbursements of the counsel and
accountants for the Company;
(viii) fees and expenses of the Trustee and the reasonable fees
and disbursements of counsel for the Trustees;
(ix) fees charged by rating agencies for rating the Notes
(including annual surveillance fees related to the Notes as long as they
are outstanding); and
(xi) all other expenses reasonably incurred by the Underwriters
(other than fees and disbursements of their counsel) in connection with
the transactions contemplated by this Agreement.
10. Notices. All communications hereunder will be in writing
and, if sent to the Underwriters, will be mailed, delivered or sent by
facsimile transmission and confirmed to the Underwriters, c/o Morgan Xxxxxxx &
Co. Incorporated, 0000 Xxxxxxxx, Xxx Xxxx, X.X. 00000, Attention: High Yield
Syndication Desk, if sent to the Company, will be mailed, delivered or sent by
facsimile transmission and confirmed to it at 0000 Xxxxx Xxxxxx, Xxxxxxx, XX
00000, Attention: Chief Financial Officer and General Counsel, facsimile
number (000) 000-0000; provided, however, that any notice to an Underwriter
pursuant to Section 5 will be sent by facsimile transmission or delivered and
confirmed to such Underwriter.
11. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
controlling persons referred to in Section 5, and no other person will have any
right or obligation hereunder.
12. Representation of Underwriters. Xxxxxx Xxxxxxx will act
for the several Underwriters in connection with this purchase, and any action
under this Agreement taken jointly or by Xxxxxx Xxxxxxx will be binding upon
all the Underwriters.
15
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13. Counterparts. This Agreement may be executed in any
number of counterparts, each of which will be deemed to be an original, but all
such counterparts shall together constitute one and the same Agreement.
14. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW.
15. Jurisdiction. Each of the parties hereto agrees that any
legal suit, action or proceeding arising out of or relating to this Agreement
or the transactions contemplated hereby may be instituted in any U.S. federal
or New York State court in the Borough of Manhattan in the City of New York
(each a "New York court") and each of the parties hereto hereby irrevocably
waives any objection that it may now or hereafter have to the laying of venue
of any such proceeding, and irrevocably submits to the jurisdiction of such
courts, with respect to actions brought against it as defendant, in any suit,
action or proceeding. Each of the parties to this Agreement agrees that a
final judgment in any such suit, action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law in accordance with applicable law.
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If the foregoing is in accordance with the Underwriters'
understanding of our agreement, kindly sign and return to the Company one of
the counterparts hereof, whereupon it will become a binding agreement among the
Underwriters and the Company in accordance with its terms.
Very truly yours,
CONTINENTAL AIRLINES, INC.
By: /s/ XXXXXXXX X. XXXXX
------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above written
XXXXXX XXXXXXX & CO. INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
By: XXXXXX XXXXXXX & CO. INCORPORATED
By: /s/ XXXXXX XXXXXXX & CO. INCORPORATED
--------------------------------------
Name:
Title:
17
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SCHEDULE I
Underwriters Principal Amount
Of Notes to
Be Purchased
----------------
Xxxxxx Xxxxxxx & Co. Incorporated . . . . . . . . . . . . . . $ 160,000,000
Credit Suisse First Boston Corporation . . . . . . . . . . . 40,000,000
---------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 200,000,000
===============
20
EXHIBIT A
Form of legal opinion to be rendered by Xxxxxx and Xxxxxx,
Counsel for the Company
1. Continental is validly existing as a corporation in good
standing under the laws of the State of Delaware.
2. Continental has the corporate power (i) to own, lease and
operate its properties and conduct its business as described in the Prospectus
and (ii) to enter into each of the Indenture and the Underwriting Agreement and
to perform its obligations thereunder.
3. The execution and delivery by Continental of the
Underwriting Agreement have been duly authorized by all necessary corporation
action of Continental, and the Underwriting Agreement has been duly executed
and delivered by Continental.
4. The statements set forth under the heading "Description of
Notes", in the Prospectus Supplement, insofar as such statements purport to
summarize certain provisions of the Notes, provide a fair summary of such
provisions.
5. The statements set forth under the heading "Tax
Considerations" in the Prospectus Supplement, insofar as such statements
purport to address the federal income tax laws of the United States, are
accurate in all material respects with respect to the matters discussed
therein.
6. Continental is not an "investment company", and
Continental is not a company "controlled" by an "investment company", in each
case within the meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act").
7. The issuance and sale of the Notes to the Underwriters
pursuant to the Underwriting Agreement does not require Continental to obtain
or effect any consent, approval, authorization, registration or qualification
of or with any governmental agency or body of the United States or of the State
of New York, except such as are required under the Securities Act, the Trust
Indenture Act of 1939, as amended, and the rules and regulation thereunder
(collectively, the "Trust Indenture Act"), and the securities or blue sky laws
of the various states. Neither the execution and delivery by Continental of
the Underwriting Agreement nor the consummation by Continental of the
transactions contemplated thereby to be consummated on the date hereof violates
(i) Continental's Certificate of Incorporation or By-Laws or (ii) any law or
governmental rule or regulation known to us to be applicable to, or binding on,
Continental.
8. The Registration Statement has become effective under the
Securities Act and, to our knowledge, (i) no stop order suspending the
effectiveness of the Registration
21
Statement has been issued and (ii) no proceedings for that purpose have been
instituted or threatened by the Commission.
9. Without independent check or verification of the
statements contained therein, the Registration Statement and the Prospectus
(other than the financial statements, financial statement schedules and other
financial or statistical data included therein, or omitted therefrom, other
matters referred to in the Prospectus under the captions "Experts", Exhibit
12.1 to the Registration Statement and the Statement of Eligibility on Form
T-1, as to which we are not expressing an opinion), in each case, excluding the
documents incorporated or deemed incorporated by reference therein, as of their
respective effective or issue dates, appear on their face to have been
appropriately responsive in all material respects to the requirements of the
Securities Act.
In addition, such counsel shall state that:
We have examined the registration statement on Form S-3
(Registration No. 33-29255) filed by Continental under the Securities Act of
1933, as amended, with the Commission on July 18, 1997 (the registration
statement at the time it became effective, including the exhibits thereto and
the documents incorporated by reference therein, is referred to herein as the
"Registration Statement"), the prospectus included in the Registration
Statement at the effective date of the Registration Statement (the "Base
Prospectus"), and the prospectus supplement dated December 8, 1998 with respect
to the Notes (the "Prospectus Supplement", and the Base Prospectus as
supplemented and modified by the Prospectus Supplement, the "Prospectus"). The
limitations inherent in the independent verification of factual matters and in
the role of outside counsel are such that we cannot and do not assume any
responsibility for the accuracy, completeness or fairness of the statements
made therein and (except to the extent expressly set forth in paragraph 4 of
our opinion letter of even date herewith addressed to each of you), have made
no independent check or verification thereof. In the course of the preparation
of the Registration Statement and the Prospectus, we have, however,
participated in conferences with certain officers and employees of Continental
and with representatives of the Underwriters. Our examination of the
Registration Statement and the Prospectus and our participation in the
above-mentioned conferences did not disclose to us any information that led us
to believe that the Registration Statement (other than the exhibits thereto,
the financial statements, financial statement schedules and other financial or
statistical data included therein, or incorporated or deemed incorporated by
reference therein, or omitted therefrom, and other matters referred to in the
Prospectus under the caption "Experts"), as of its effective date, contained
any untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading, or that the Prospectus (other than the financial
statements, financial statement schedules and other financial or statistical
data included therein, or incorporated or deemed incorporated by reference
therein, or omitted therefrom, and other matters referred to in the Prospectus
under the captions "Experts", as to which we express no belief), as of December
8, 1998 contained, or as of the date hereof contains, any untrue statement of a
material fact or, as of December 8, 1998 omitted, or as of the date hereof
omits, to state a material fact necessary in order to make the statements
therein, in the light of the circumstances in which they were made, not
misleading.
A-2
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EXHIBIT B
Form of Company General Counsel's Opinion
1. Each of Continental Express, Inc., Air Micronesia, Inc.,
and Continental Micronesia, Inc. (together, the "Subsidiaries") and Continental
is validly existing as a corporation in good standing under the laws of the
State of Delaware, with corporate power to own, lease and operate its
properties and conduct its business as described in the Prospectus; each of
Continental and its Subsidiaries is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in the United States in
which its ownership or lease of property or the conduct of its business
requires such qualification, except where the failure to be so qualified would
not have a material adverse effect on the business or consolidated financial
condition of Continental and the Subsidiaries taken as a whole.
2. To my knowledge, except as disclosed in the Prospectus,
there is no action, suit or proceeding before or by any governmental agency or
body or court, domestic or foreign, now pending against Continental or any of
the Subsidiaries or any of their respective properties that could reasonably be
expected to have a material adverse effect on the business or consolidated
financial condition of Continental and the Subsidiaries taken as a whole (a
"Material Adverse Effect").
3. Continental 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.
4. The execution, delivery and performance by Continental of
the Underwriting Agreement and the consummation by Continental of the
transactions contemplated therein will not result in any violation of the
provisions of the Certificate of Incorporation or By-Laws of Continental or, to
my knowledge, any applicable law, administrative regulation or any
administrative or court decree, nor does any such action, to my knowledge,
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any assets of Continental or
any of the Subsidiaries pursuant to, any material contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which Continental
or any of the Subsidiaries is a party or by which any of them are bound or to
which any of the assets of Continental or any of the Subsidiaries is subject.
5. The issuance and sale of the Notes to the Underwriters
pursuant to the Underwriting Agreement and the performance by Continental of
its obligations thereunder do not require Continental to obtain or effect any
consent, approval, authorization, registration or
23
qualification of or with any governmental agency or body of the United States
or the State of Texas, except such as are required under federal or state
securities or blue sky laws.
6. To my knowledge, except as disclosed in the Prospectus,
there is no event of default under any material agreement or instrument under
which indebtedness of Continental is outstanding or by which it is bound or any
of its properties is subject.
7. To my knowledge, there are no legal or governmental
proceedings pending or threatened against the Company or any Subsidiary that
are required to be disclosed in the Registration Statement, other than those
disclosed therein or those which individually (or in the aggregate in the case
of any class of related lawsuits) could not reasonably be expected to have a
Material Adverse Effect.
8. Each document filed pursuant to the Securities Exchange
Act of 1934, as amended, and the rules and regulation thereunder (the "Exchange
Act"), and incorporated or deemed incorporated by reference in the Registration
Statement or the Prospectus (other than the exhibits thereto, the financial
statements, financial statement schedules and other financial or statistical
data included therein, or incorporated or deemed incorporated therein by
reference, or omitted therefrom, and other matters referred to in the
Prospectus under the captions "Experts", as to which I am not expressing an
opinion), when so filed with the Commission, appeared on its face to have been
appropriately responsive in all material respects to the requirements of the
Exchange Act.
B-2
