EXHIBIT 1.1
4,700,000 Shares
FRONTIER AIRLINES, INC.
Common Stock (no par value)
UNDERWRITING AGREEMENT
September 18, 2003
September 18, 2003
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Xxxxx & Associates, Inc.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
FRONTIER AIRLINES, INC., a Colorado corporation (the
"COMPANY"), proposes to issue and sell to the several Underwriters named in
Schedule I hereto (the "UNDERWRITERS") 4,700,000 shares (the "FIRM SHARES") of
its common stock, no par value (the "COMMON STOCK"). The Company also proposes
to issue and sell to the several Underwriters not more than an additional
700,000 shares of its Common Stock (the "ADDITIONAL SHARES") if and to the
extent that you, as Managers of the offering, shall have determined to exercise,
on behalf of the Underwriters, the right to purchase such shares of Common Stock
granted to the Underwriters in Section 2 hereof. The Firm Shares and the
Additional Shares are hereinafter collectively referred to as the "SHARES."
The Company has filed with the Securities and Exchange
Commission (the "COMMISSION") a registration statement, including a prospectus,
relating to certain of its debt and equity securities (including the Shares) and
has filed with, or transmitted for filing to, or shall promptly hereafter file
with or transmit for filing to, the Commission a prospectus supplement (the
"PROSPECTUS SUPPLEMENT") specifically relating to the Shares pursuant to Rule
424 under the Securities Act of 1933, as amended (the "SECURITIES ACT"). The
term "REGISTRATION STATEMENT" means the registration statement, including the
exhibits thereto, as amended to the date of this Agreement. The term "BASE
PROSPECTUS" means the prospectus included in the Registration Statement. The
term "PROSPECTUS" means the Base Prospectus together with the Prospectus
Supplement. The term "PRELIMINARY PROSPECTUS" means a preliminary prospectus
supplement specifically relating to the Shares, together with the Base
Prospectus. As used herein the terms "Base Prospectus," "Prospectus" and
"preliminary prospectus" shall include, in each case, the documents, if any,
incorporated by reference therein. The terms "SUPPLEMENT," "AMENDMENT" and
"AMEND" as used herein shall include all the documents deemed to be incorporated
by reference in the Prospectus that are filed subsequent to the date of the Base
Prospectus by the Company with the Commission pursuant to the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT").
Representations and Warranties. The Company represents and warrants to
and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or, to
the knowledge of the Company, threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant
to the Exchange Act and incorporated by reference in the Prospectus
complied or will comply when so filed in all material respects with the
Exchange Act and the applicable rules and regulations of the Commission
thereunder; (ii) each part of the Registration Statement, when it
became effective, did not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; (iii) the
Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with
the Securities Act and the applicable rules and regulations of the
Commission thereunder; and (iv) the Prospectus does not contain and, as
amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that the representations
and warranties set forth in this paragraph do not apply to statements
or omissions in the Registration Statement or the Prospectus, as
amended or supplemented (if applicable), based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company. The
Company has no existing subsidiaries.
(d) This Agreement has been duly authorized, executed and
delivered by the Company.
(e) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
(f) The shares of capital stock of the Company outstanding
prior to the issuance of the Shares have been duly authorized and are
validly issued, fully paid and non-assessable.
(g) The Shares to be sold by the Company have been duly
authorized and, when issued and delivered in accordance with the terms
of this Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be subject to
any preemptive or similar rights.
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(h) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene any provision of applicable law or the articles of
incorporation or by-laws of the Company or any agreement or other
instrument binding upon the Company that is material to the Company, or
any judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company, and no consent, approval,
authorization or order of, or qualification with, any governmental body
or agency is required for the performance by the Company of its
obligations under this Agreement, except such as have been obtained
under the Securities Act and the Exchange Act and from The Nasdaq
National Market and the National Association of Securities Dealers,
Inc. ("NASD"), and except such as may be required by the securities or
Blue Sky laws of the various states in connection with the offer and
sale of the Shares.
(i) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company, from that set forth in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement).
(j) There are no legal or governmental proceedings pending or
threatened to which the Company is a party or to which any of the
properties of the Company is subject that are required to be described
in the Registration Statement or the Prospectus and are not so
described or any statutes, regulations, contracts or other documents
that are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
(k) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities Act
and the applicable rules and regulations of the Commission thereunder.
(l) The Company is not, and after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus will not be, required to
register as an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
(m) The Company (i) is in compliance with any and all
applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
("ENVIRONMENTAL LAWS"), (ii) has received all permits, licenses or
other approvals required of them under applicable Environmental Laws to
conduct their businesses, (iii) is in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a material adverse effect on the
Company.
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(n) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate,
have a material adverse effect on the Company.
(o) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company (except as
otherwise disclosed in the Registration Statement) or to require the
Company to include such securities with the Shares registered pursuant
to the Registration Statement.
(p) Subsequent to the date as of which information is given in
the Prospectus, (i) the Company has not incurred any material liability
or obligation, direct or contingent, or entered into any material
transaction, in each case, not in the ordinary course of business or as
described in or contemplated by the Prospectus (including, without
limitation, aircraft acquisitions or financing so described in or
contemplated by the Prospectus); (ii) the Company has not purchased any
of its outstanding capital stock, nor declared, paid or otherwise made
any dividend or distribution of any kind on its capital stock; (iii)
there has not been any material change in the capital stock, short-term
debt or long-term debt of the Company except in each case as described
in or contemplated by the Prospectus (including, without limitation,
aircraft financing so described in or contemplated by the Prospectus);
and (iv) there has been no prohibition or suspension of the operation
of the Company's aircraft, including as a result of action taken by the
Federal Aviation Administration or the Department of Transportation.
(q) The Company has good and marketable title in fee simple to
all real property and good and marketable title to all personal
property owned by it which is material to the business of the Company,
free and clear of all liens, encumbrances and defects except such as
are described in the Prospectus or the Registration Statement or such
as do not materially affect the value of such property or do not
interfere with the use made and proposed to be made of such property by
the Company; and any real property and buildings held under lease by
the Company are held by it under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and
buildings by the Company, in each case except as described in or
contemplated by the Prospectus.
(r) (i) The Company possesses such permits, licenses,
approvals, consents and other authorizations (collectively "GOVERNMENT
LICENSES") issued by the appropriate federal, state, local or foreign
regulatory agencies or bodies, including the Department of
Transportation, the Federal Aviation Administration or the Federal
Communications Commission necessary to conduct the business now
operated by it; (ii) the Company is in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, have a material
adverse effect on the Company; (iii) all of the Government Licenses are
valid and in full
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force, except where the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and effect
would not have a material adverse effect on the Company; and (iv) the
Company has not received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a material adverse effect on the Company.
(s) Except as described in the Prospectus, no material labor
dispute with the employees of the Company exists or, to the knowledge
of the Company, is imminent; and the Company is not aware, but without
any independent investigation or inquiry, of any existing, threatened
or imminent labor disturbance by the employees of any of its principal
suppliers, manufacturers or contractors that could have a material
adverse effect on the Company.
(t) The Company is insured by insurers that the Company
reasonably believes to be of recognized financial responsibility
against such losses and risks and in such amounts as are customary in
the businesses in which it is engaged; the Company has not been refused
any insurance coverage sought or applied other than in connection with
instances where the Company was seeking to obtain insurance coverage at
more attractive rates; and the Company has no reason to believe that it
will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a cost that
would not have a material adverse effect on the Company, except as
described in or contemplated by the Prospectus.
(u) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or
specific authorizations in all material respects and (ii) transactions
are recorded as necessary to permit preparation of financial statements
in conformity with generally accepted accounting principles and to
maintain asset accountability.
(v) The Company (i) is an "air carrier" within the meaning of
49 U.S.C. Section 40102(a); (ii) holds an air carrier operating
certificate issued by the Secretary of Transportation pursuant to
Chapter 447 of Title 49 of the United States Code for aircraft capable
of carrying 10 or more individuals or 6,000 pounds or more of cargo;
and (iii) is a "citizen of the United States" as defined in 49 U.S.C.
Section 401102.
Agreements to Sell and Purchase. The Company hereby agrees to
sell to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective numbers of Firm Shares set forth in Schedule I hereto
opposite its name at $16.1075 a share (the "PURCHASE PRICE").
On the basis of the representations and warranties contained
in this Agreement, and subject to its terms and conditions, the Company agrees
to sell to the Underwriters the Additional Shares, and the Underwriters shall
have the right to purchase, severally and not
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jointly, up to 700,000 Additional Shares at the Purchase Price. You may exercise
this right on behalf of the Underwriters in whole or from time to time in part
by giving written notice of each election to exercise the option not later than
30 days after the date of this Agreement. Any exercise notice shall specify the
number of Additional Shares to be purchased by the Underwriters and the date on
which such shares are to be purchased. Each purchase date must be at least one
business day after the written notice is given and may not be earlier than the
closing date for the Firm Shares nor later than ten business days after the date
of such notice. Additional Shares may be purchased as provided in Section 4
hereof solely for the purpose of covering over-allotments made in connection
with the offering of the Firm Shares. On each day, if any, that Additional
Shares are to be purchased (an "OPTION CLOSING DATE"), each Underwriter agrees,
severally and not jointly, to purchase the number of Additional Shares (subject
to such adjustments to eliminate fractional shares as you may determine) that
bears the same proportion to the total number of Additional Shares to be
purchased on such Option Closing Date as the number of Firm Shares set forth in
Schedule I hereto opposite the name of such Underwriter bears to the total
number of Firm Shares.
The Company hereby agrees that, without the prior written consent of
Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the Underwriters, it will not,
during the period ending 90 days after the date of the Prospectus, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (ii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall not apply
to (A) the Shares to be sold hereunder, (B) the issuance by the Company of
shares of Common Stock upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof and as described in the
Prospectus or (C) the issuance by the Company of any shares of Common Stock or
options to employees of the Company on or after the date hereof pursuant to the
Company's equity incentive plans as described in the Prospectus and the issuance
by the Company of shares of Common Stock upon the exercise of any such options.
Terms of Public Offering. The Company is advised by you that
the Shares are to be offered to the public initially at $17.00 a share (the
"PUBLIC OFFERING PRICE") and to certain dealers selected by you at a price that
represents a concession not in excess of $0.58 a share under the Public Offering
Price.
Payment and Delivery. Payment for the Firm Shares shall be
made to the Company in Federal or other funds immediately available in New York
City against delivery of such Firm Shares for the respective accounts of the
several Underwriters at 10:00 a.m., New York City time, on September 24, 2003,
or at such other time on the same or such other date, not later than October 1,
2003, as shall be designated in writing by you. The time and date of such
payment are hereinafter referred to as the "CLOSING DATE."
Payment for any Additional Shares shall be made to the Company
in Federal or other funds immediately available in New York City against
delivery of such Additional Shares
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for the respective accounts of the several Underwriters at 10:00 a.m., New York
City time, on the date specified in the corresponding notice described in
Section 2 or at such other time on the same or on such other date, in any event
not later than October 18, 2003, as shall be designated in writing by you.
The Firm Shares and Additional Shares shall be registered in
such names and in such denominations as you shall request in writing not later
than one full business day prior to the Closing Date or the applicable Option
Closing Date, as the case may be. The Firm Shares and Additional Shares shall be
delivered to you on the Closing Date or an Option Closing Date, as the case may
be, for the respective accounts of the several Underwriters, with any transfer
taxes payable in connection with the transfer of the Shares to the Underwriters
duly paid, against payment of the Purchase Price therefor.
Conditions to the Underwriters' Obligations. The obligations
of the Company to sell the Shares to the Underwriters and the several
obligations of the Underwriters to purchase and pay for the Shares on the
Closing Date are subject to the following conditions:
(w) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
in the rating accorded any of the Company's securities by any
"nationally recognized statistical rating organization," as
such term is defined for purposes of Rule 436(g)(2) under the
Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations of the Company, from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement) that, in your
judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Shares on the terms and
in the manner contemplated in the Prospectus.
(x) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of the Company, to the effect set forth in Section 5(a)(i) above and to
the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing Date
and that the Company has complied in all material respects with all of
the agreements and satisfied in all material respects all of the
conditions on its part to be performed or satisfied hereunder on or
before the Closing Date. The officer signing and delivering such
certificate may rely upon the best of his or her knowledge as to
proceedings threatened.
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(y) The Underwriters shall have received on the Closing Date
an opinion of Faegre & Xxxxxx LLP, outside counsel for the Company,
dated the Closing Date, to the effect that:
(i) the Company has been duly incorporated, is
validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in
each jurisdiction set forth in a schedule to such opinion,
except where the failure to be so qualified or be in good
standing would not have a material adverse effect on the
Company;
(ii) the authorized capital stock of the Company
conforms as to legal matters in all material respects to the
description thereof contained in the Prospectus;
(iii) the shares of capital stock outstanding prior
to the issuance of the Shares have been duly authorized and
are validly issued and, to the knowledge of such counsel,
fully paid and non-assessable;
(iv) the Shares have been duly authorized and, when
issued and delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be
subject to any preemptive or similar rights;
(v) this Agreement has been duly authorized, executed
and delivered by the Company;
(vi) except for such conflicts or violations, when
considered alone or taken together with all other conflicts or
violations, would not have a material adverse effect on the
Company, the execution and delivery by the Company of this
Agreement does not, and the performance by the Company of its
obligations under this Agreement will not, contravene any
provision of applicable law or the articles of incorporation
or by-laws of the Company, or, to such counsel's knowledge,
any agreement or other instrument binding upon the Company
that is material to the Company, or, to such counsel's
knowledge, any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company,
and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is
required for the performance by the Company of its obligations
under this Agreement, except for those which have been
obtained under the Securities Act and the Exchange Act, and
except such as may be required by the securities or Blue Sky
laws of the various states in connection with the offer and
sale of the Shares;
(vii) the statements relating to legal matters,
documents or proceedings included in (A) the Prospectus under
the captions "Description of Capital Stock" and "Underwriters"
(except relating to price, stabilization, short positions and
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passive market-making activities, as to which such counsel
need not express an opinion) and (B) the Registration
Statement in Item 15, in each case insofar as such statements
constitute summaries of the legal matters, documents or
proceedings referred to therein fairly summarize in all
material respects such matters, documents or proceedings;
(viii) after due inquiry, such counsel does not know
of any legal or governmental proceedings pending or threatened
to which the Company is a party or to which any of the
properties of the Company is subject that are required to be
described in the Registration Statement or the Prospectus and
are not so described or of any statutes, regulations,
contracts or other documents that are required to be described
in the Registration Statement or the Prospectus or to be filed
as exhibits to the Registration Statement that are not
described or filed as required;
(ix) the Company is not, and after giving effect to
the offering and sale of the Shares and the application of the
proceeds thereof as described in the Prospectus will not be,
required to register as an "investment company" as such term
is defined in the Investment Company Act of 1940, as amended;
and
(x) nothing has come to the attention of such counsel
that causes such counsel to believe that (A) the Registration
Statement or the Prospectus (except for the financial
statements and the notes and financial schedules thereto and
other financial, statistical and accounting information and
data included or incorporated by reference therein
(collectively, the "Excluded Information"), as to which such
counsel need not express any belief) do not comply as to form
in all material respects with the requirements of the
Securities Act and the applicable rules and regulations of the
Commission thereunder, or (B) each document filed pursuant to
the Exchange Act and incorporated by reference in the
Registration Statement and the Prospectus (except for the
Excluded Information, as to which such counsel need not
express any belief), on the date such document was filed with
the Commission, did not comply as to form in all material
respects with the requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder.
In addition, such counsel shall state that, although
such counsel has not undertaken to determine independently
and, therefore, except for the opinions set forth in clauses
(c)(iii), (vii) and (ix) above, does not assume any
responsibility, explicitly or implicitly, for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement and the Prospectus, such counsel has
participated in the preparation of the Registration Statement
and the Prospectus, including review and discussion of the
contents thereof, and that, based upon and subject to the
foregoing and the other qualifications and limitations set
forth in such counsel's opinion, nothing has come to the
attention of such counsel that causes such counsel to believe
that (i) the Registration Statement or the prospectus included
therein (except for the Excluded Information, as to which such
counsel need not express any belief) at the time the
Registration Statement became effective contained an untrue
statement of a
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material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein
not misleading or (ii) the Prospectus (except for the Excluded
Information, as to which such counsel need not express any
belief) as of its date or as of the Closing Date contained or
contains 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 giving such opinion and belief, counsel for the
Company may (i) as to matters of fact, rely on certificates of
the Company or officers of the Company and other information
from governmental officials, (ii) state that it is opining
only as to matters of federal and Colorado law, and (iii)
state that its opinion and belief are based upon its
participation in the preparation of the Registration Statement
and Prospectus and any amendments or supplements thereto and
review and discussion of the contents thereof, but are without
independent check or verification, except as specified.
The opinion described in Section 5(c) above shall be
rendered to the Underwriters at the request of the Company and
shall so state therein.
(z) The Underwriters shall have received on the Closing Date
an opinion of Xxxxx Xxxxxxxxx, general counsel for the Company, dated
the Closing Date, to the effect that:
(i) to such counsel's knowledge, the Company
possesses the Government Licenses necessary to conduct its
commercial airline operations as described in the Prospectus
and the Company is in compliance with the terms and conditions
of all such Government Licenses, except where the failure to
so comply would not, singly or in the aggregate, have a
material adverse effect on the Company, and all of the
Government Licenses are valid and in full force and effect,
except where the invalidity of such Government Licenses or the
failure of such Governmental Licenses to be in full force and
effect would not have a material adverse effect on the
Company; and
(ii) the Company is an "air carrier" and a "citizen
of the United States" within the meaning of that portion of
the United States Code comprising those provisions formerly
referred to as the Federal Aviation Act of 1958, and now
primarily codified in Title 49 of the United States Code, as
amended, and holds an "air carrier operating certificate
issued by the Secretary of Transportation" within the meaning
of 11 U.S.C. Section 1110. The routes presently operated by
the Company as described in the Prospectus are being operated
pursuant to valid certificates or authorizations issued by the
Federal Aviation Administration.
In addition, such counsel shall state that, although
such counsel has not undertaken to determine independently,
and therefore, does not assume any responsibility, explicitly
or implicitly, for, the accuracy, completeness or fairness of
the statements contained in the Registration Statement and
Prospectus, such
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counsel has participated in the preparation of the
Registration Statement and Prospectus, including review and
discussion of the contents thereof, and that, based upon and
subject to the foregoing and the other qualifications and
limitations set forth in such counsel's opinion, nothing has
come to the attention of such counsel that causes such counsel
to believe that (i) the Registration Statement or the
prospectus included therein (except for the Excluded
Information, as to which such counsel need not express any
belief) at the time the Registration Statement became
effective contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or
(ii) the Prospectus (except for the Excluded Information, as
to which such counsel need not express any belief) as of its
date or as of the Closing Date contained or contains 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 giving such opinion and belief, such counsel may
(i) as to matters of fact, rely on certificates of the Company
or officers of the Company and other information from
governmental officials, (ii) state that it is opining only as
to matters of federal and Colorado law, and (iii) state that
its opinion and belief are based upon its participation in the
preparation of the Registration Statement and Prospectus and
any amendments or supplements thereto and review and
discussion of the contents thereof, but are without
independent check or verification, except as specified.
(aa) The Underwriters shall have received on the Closing Date
an opinion of Shearman & Sterling LLP, counsel for the Underwriters,
dated the Closing Date (or a letter in the case of Section 5(c)(x)),
covering the matters referred to in Sections 5(c)(iv), 5(c)(v),
5(c)(vii) (but only as to the statements in the Prospectus under
"Underwriters") and 5(c)(x).
(bb) The Underwriters shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the
Closing Date, as the case may be, in form and substance reasonably
satisfactory to the Underwriters, from KPMG LLP, independent public
accountants, 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 the Registration Statement and the Prospectus;
provided that the letter delivered on the Closing Date shall use a
"cut-off date" not earlier than the date hereof.
(cc) The "lock-up" agreements, each substantially in the form
of Exhibit A hereto, between you and the officers and directors, and
holders of warrants, of the Company listed in Schedule II hereto
relating to sales and certain other dispositions of shares of Common
Stock or certain other securities, delivered to you on or before the
date hereof, shall be in full force and effect on the Closing Date.
11
(dd) The Underwriters shall have received on the Closing Date
such documents as you may reasonably request with respect to the good
standing of the Company, the due authorization and issuance of the
Shares and other matters related to the issuance of the Shares.
The several obligations of the Underwriters to purchase
Additional Shares hereunder are subject to the delivery to you on the applicable
Option Closing Date of each of the documents referred to above dated as of the
Option Closing Date (except that insofar as any documents relate to Shares, they
may be limited to covering only Additional Shares).
Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(ee) To furnish to you, without charge, five signed copies of
the Registration Statement (including exhibits thereto) and for
delivery to each other Underwriter a conformed copy of the Registration
Statement (without exhibits thereto) and to furnish to you in New York
City, without charge, prior to 10:00 a.m. New York City time on the
business day next succeeding the date of this Agreement and during the
period mentioned in Section 6(c) below, as many copies of the
Prospectus and any supplements and amendments thereto or to the
Registration Statement as you may reasonably request.
(ff) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably object, and to file
with the Commission within the applicable period specified in Rule
424(b) under the Securities Act any prospectus required to be filed
pursuant to such Rule.
(gg) If, during such period after the first date of the public
offering of the Shares as in the reasonable opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if, in the reasonable opinion of counsel
for the Underwriters, it is necessary to amend or supplement the
Prospectus to comply with applicable law, forthwith to prepare, file
with the Commission and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses you will
furnish to the Company) to which Shares 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 or so that the Prospectus, as amended or
supplemented, will comply with law.
(hh) To endeavor to qualify the Shares for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you
shall reasonably request.
12
(ii) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement covering
the twelve-month period ending September 30, 2004 that satisfies the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
(jj) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the registration and delivery of the
Shares under the Securities Act and all other fees or expenses in
connection with the preparation and filing of the Registration
Statement, any preliminary prospectus, the Prospectus and amendments
and supplements to any of the foregoing, including all printing costs
associated therewith, and the mailing and delivering of copies thereof
to the Underwriters and dealers, in the quantities hereinabove
specified, (ii) all costs and expenses related to the transfer and
delivery of the Shares to the Underwriters, including any transfer or
other taxes payable thereon, (iii) any expenses incurred in connection
with the qualification of the Shares for offer and sale under state
securities laws as provided in Section 6(d) hereof or in connection
with the review and qualification of the offering of the Shares by the
NASD, including any filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
qualification, (iv) all costs and expenses incident to listing the
Shares on The Nasdaq National Market, (v) the cost of printing
certificates representing the Shares, (vi) the costs and charges of any
transfer agent, registrar or depositary, (vii) the costs and expenses
of the Company relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the
Shares, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with
the prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants,
and the cost of any aircraft chartered in connection with the road show
and (viii) all other costs and expenses incident to the performance of
the obligations of the Company hereunder for which provision is not
otherwise made in this Section. It is understood, however, that except
as provided in this Section, Section 7 entitled "Indemnity and
Contribution" and the last paragraph of Section 9 below, the
Underwriters will pay all of their costs and expenses, including fees
and disbursements of their counsel, stock transfer taxes payable on
resale of any of the Shares by them and any advertising expenses
connected with any offers they may make.
Indemnity and Contribution. (kk) The Company agrees to
indemnify and hold harmless each Underwriter, each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, and each affiliate of
any Underwriter within the meaning of Rule 405 under the Securities
Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or
any amendment thereof, any preliminary prospectus or the Prospectus (as
amended or
13
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 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 information relating to any Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use
therein; provided, however, that the foregoing indemnity agreement with
respect to any preliminary prospectus shall not inure to the benefit of
any Underwriter from whom the person asserting any such losses, claims,
damages or liabilities purchased Shares, or any person controlling such
Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the
Shares to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses,
claims, damages or liabilities, unless such failure is the result of
noncompliance by the Company with Section 6(a) hereof.
(ll) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers
who sign the Registration Statement and each person, if any, who
controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Company to such Underwriter, but only
with reference to information relating to such Underwriter furnished to
the Company in writing by such Underwriter through you expressly for
use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
(mm) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to Section 7(a) or 7(b), such
person (the "INDEMNIFIED PARTY") shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
writing and the indemnifying party, upon request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified
party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the
fees and disbursements of such counsel related to such proceeding. In
any such proceeding, any indemnified party shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local
counsel) for all such indemnified parties and that all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by Xxxxxx Xxxxxxx & Co.
14
Incorporated, in the case of parties indemnified pursuant to Section
7(a), and by the Company, in the case of parties indemnified pursuant
to Section 7(b). The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified
party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying
party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second and third sentences of this
paragraph, the indemnifying party agrees that it shall be liable for
any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt
by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are
the subject matter of such proceeding.
(nn) To the extent the indemnification provided for in Section
7(a) or 7(b) is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to
therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriters on the other hand from the offering
of the Shares or (ii) if the allocation provided by clause 7(d)(i)
above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause 7(d)(i) above but also the relative fault of the Company on the
one hand and of the Underwriters on the other hand in connection with
the statements or omissions that resulted in such losses, claims,
damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other hand in connection with the
offering of the Shares shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Shares (before
deducting expenses) received by the Company and the total underwriting
discounts and commissions received by the Underwriters, in each case as
set forth in the table on the cover of the Prospectus, bear to the
aggregate Public Offering Price of the Shares. The relative fault of
the Company on the one hand and the Underwriters on the other hand
shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission
or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are
several in proportion to the respective number of Shares they have
purchased hereunder, and not joint.
15
(oo) The Company and the Underwriters agree that it would not
be just or equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations
referred to in Section 7(d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which
the total price at which the Shares underwritten by it and distributed
to the public were offered to the public exceeds the amount of any
damages that such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section
7 are not exclusive and shall not limit any rights or remedies which
may otherwise be available to any indemnified party at law or in
equity.
(pp) The indemnity and contribution provisions contained in
this Section 7 and the representations, warranties and other statements
of the Company contained in this Agreement shall remain operative and
in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of any
Underwriter, any person controlling any Underwriter or any affiliate of
any Underwriter or by or on behalf of the Company, its officers or
directors or any person controlling the Company and (iii) acceptance of
and payment for any of the Shares.
Termination. The Underwriters may terminate this Agreement by
notice given by you to the Company, if after the execution and delivery of this
Agreement and prior to the 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 Nasdaq National Market,
(ii) trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a material disruption in
securities settlement, payment or clearance services in the United States shall
have occurred, (iv) any moratorium on commercial banking activities shall have
been declared by either Federal or New York State authorities or (v) there shall
have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in your judgment, is material
and adverse and which singly or together with any other event specified in this
clause (v), makes it, in your judgment, impracticable or inadvisable to proceed
with the offer, sale or delivery of the Shares on the terms and in the manner
contemplated in the Prospectus.
Effectiveness; Defaulting Underwriters. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or an Option Closing Date, as the case
may be, any one or more of the Underwriters shall fail or refuse to purchase
Shares that it has or they have agreed to
16
purchase hereunder on such date, and the aggregate number of Shares
which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase is not more than one-tenth of the aggregate number
of the Shares to be purchased on such date, the other Underwriters
shall be obligated severally in the proportions that the number of Firm
Shares set forth opposite their respective names in Schedule I bears to
the aggregate number of Firm Shares set forth opposite the names of all
such non-defaulting Underwriters, or in such other proportions as you
may specify, to purchase the Shares which such defaulting Underwriter
or Underwriters agreed but failed or refused to purchase on such date;
provided that in no event shall the number of Shares that any
Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 9 by an amount in excess of
one-ninth of such number of Shares without the written consent of such
Underwriter. If, on the Closing Date, any Underwriter or Underwriters
shall fail or refuse to purchase Firm Shares and the aggregate number
of Firm Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Firm Shares to be purchased, and
arrangements satisfactory to you and the Company for the purchase of
such Firm Shares are not made within 36 hours after such default, this
Agreement shall terminate without liability on the part of any
non-defaulting Underwriter or the Company. In any such case either you
or the Company shall have the right to postpone the Closing Date, but
in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and in the Prospectus or
in any other documents or arrangements may be effected. If, on an
Option Closing Date, any Underwriter or Underwriters shall fail or
refuse to purchase Additional Shares and the aggregate number of
Additional Shares with respect to which such default occurs is more
than one-tenth of the aggregate number of Additional Shares to be
purchased on such Option Closing Date, the non-defaulting Underwriters
shall have the option to (i) terminate their obligation hereunder to
purchase the Additional Shares to be sold on such Option Closing Date
or (ii) purchase not less than the number of Additional Shares that
such non-defaulting Underwriters would have been obligated to purchase
in the absence of such default. Any action taken under this paragraph
shall not relieve any defaulting Underwriter from liability in respect
of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or
any of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Company shall be unable to perform its obligations under
this Agreement, the Company will reimburse the Underwriters or such Underwriters
as have so terminated this Agreement with respect to themselves, severally, for
all out-of-pocket expenses (including the reasonable fees and disbursements of
their counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering contemplated hereunder.
Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
Headings. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
17
Very truly yours,
FRONTIER AIRLINES, INC.
By:
----------------------------------------------
Name: Xxxx X. Xxxxxx
Title: President and Chief Executive
Officer
By:
----------------------------------------------
Name: Xxxx X. Xxxx
Title: Chief Financial Officer
Accepted as of the date hereof
XXXXXX XXXXXXX & CO. INCORPORATED
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
XXXXXXX XXXXX & ASSOCIATES, INC.
Acting severally on behalf of themselves
and the several Underwriters named in
Schedule I hereto.
By: XXXXXX XXXXXXX & CO. INCORPORATED
By:
-----------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Managing Director
18
