Exhibit 1
7,500,000 Shares
JETBLUE AIRWAYS CORPORATION
Common Stock (par value $0.01 per share)
UNDERWRITING AGREEMENT
NOVEMBER 7, 2005
November 7, 2005
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Xxxxx & Associates, Inc.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
JETBLUE AIRWAYS CORPORATION, a Delaware corporation (the "COMPANY"),
proposes to issue and sell to the several underwriters named in Schedule I
hereto (the "UNDERWRITERS"), subject to the terms and conditions set forth
herein, an aggregate of 7,500,000 shares (the "Firm Shares") of its common
stock, par value $.01 per share (the "COMMON STOCK"). The Company also proposes
to issue and sell to the several Underwriters not more than an additional
1,125,000 shares of its Common Stock (the "ADDITIONAL SHARES") if and to the
extent that Xxxxxx Xxxxxxx & Co. Incorporated ("XXXXXX XXXXXXX"), as
representative of the several Underwriters, 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."
Subject to the terms and conditions set forth herein, the Underwriters agree to
purchase from the Company, severally and not jointly, the respective number of
shares of Common Stock set forth in Schedule I opposite their names at the
purchase price set forth herein.
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") two shelf registration statements on Form S-3: (i) Registration
Statement No. 333-109546 (the "FIRST REGISTRATION STATEMENT") and (ii)
Registration Statement No. 333-119549 (the "SECOND REGISTRATION STATEMENT")
constituting a post-effective amendment no. 1 to the First Registration
Statement, each relating to certain classes of securities (such registration
statements, including the exhibits thereto and the 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 the "REGISTRATION
STATEMENTS") 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 term "BASIC
PROSPECTUS" means the prospectus relating to common stock included in the
Registration Statements. As provided in Section 3, a prospectus supplement
reflecting the terms of the public offering of the Shares
contemplated hereby and the other matters set forth therein has been prepared
and will be filed together with the Basic Prospectus referred to below pursuant
to Rule 424(b) ("RULE 424(B)") under the rules and regulations of the Commission
under the Securities Act (such prospectus supplement, in the form first filed on
or after the date hereof pursuant to Rule 424(b), is herein referred to as the
"PROSPECTUS SUPPLEMENT"). The term "PROSPECTUS" means the Basic Prospectus
together with the Prospectus Supplement. The term "PRELIMINARY PROSPECTUS" means
a preliminary prospectus supplement specifically relating to the Shares,
together with the Basic Prospectus. As used herein, the terms "BASIC
PROSPECTUS", "PROSPECTUS" and "PRELIMINARY PROSPECTUS" shall include in each
case the documents incorporated by reference therein. The terms "SUPPLEMENT,"
"AMENDMENT" and "AMEND" as used herein shall include all documents deemed to be
incorporated by reference in the Prospectus that are filed subsequent to the
date of the Basic Prospectus by the Company with the Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT").
1. Representations and Warranties.
The Company represents and warrants to and agrees with each of the
Underwriters that:
(a) The Registration Statements have become effective; no stop order
suspending the effectiveness one or both of the Registration Statements 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 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 Statements 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 (A) to statements or
omissions in the Registration Statements or the Prospectus based upon
information relating to any Underwriter furnished to the Company in writing
by such Underwriter through Xxxxxx Xxxxxxx expressly for use therein or (B)
to that part of the Registration Statements that constitutes the Statement
of Eligibility of any trustee under the Trust Indenture Act of 1939, as
amended (the "TRUST INDENTURE ACT"), on Form T-1.
(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
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standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries, taken
as a whole.
(d) Each of the Company's subsidiaries has been duly organized, is
validly existing as a corporation or limited liability company, as the case
may be, in good standing under the laws of the jurisdiction of its
incorporation or organization, has the power and authority to own its
property and to conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole; all of the issued shares of capital stock or membership interests,
as the case may be, of the Company's subsidiaries have been duly and
validly authorized and issued, are fully paid and non-assessable and are
owned directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims.
(e) This Agreement has been duly authorized, executed and delivered by
the Company.
(f) The Company has an authorized capitalization as set forth in the
Prospectus and all of the issued and outstanding shares of capital stock of
the Company have been duly and validly authorized and issued, are fully
paid and non-assessable and conform in all material respects to the
description thereof contained under the captions "Summary" in the
Prospectus Supplement and "Description of Common and Preferred Stock" in
the Basic Prospectus.
(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.
(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 certificate of incorporation or
by-laws of the Company or any agreement or other instrument binding upon
the Company or any of its subsidiaries that is material to the Company and
its subsidiaries, taken as a whole, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company or
any of its subsidiaries, 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 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 reasonably likely to involve a material adverse change, in the
condition, financial or
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otherwise, or in the earnings, business or operations of the Company and
its subsidiaries, taken as a whole, 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, to the
knowledge of the Company, threatened to which the Company or any of its
subsidiaries is a party or to which any of the properties of the Company or
any of its subsidiaries is subject that are required to be described in the
Registration Statements 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 Statements or the Prospectus or to be filed
as exhibits to the Registration Statements that are not described or filed
as required.
(k) Each preliminary prospectus filed as part of the registration
statements 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 and its subsidiaries (i) are 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) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct
their businesses, and (iii) are in compliance with all terms and conditions
of any such permit, license or approval, except where any 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 and its
subsidiaries, taken as a whole.
(n) To the knowledge of the Company, there are no costs or liabilities
associated with Environmental Laws (including, without limitation, any
capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate, have
a material adverse effect on the Company and its subsidiaries, taken as a
whole.
(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 Statements) or to require the
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Company to include such securities with the Shares registered pursuant to
the Registration Statements (except those rights that have been waived).
(p) Subsequent to the date of the Prospectus, (i) neither the Company
nor any of its subsidiaries has incurred any material liability or
obligation, direct or contingent, or entered into any material transaction,
in each case, not in the ordinary course of business or as described in or
as contemplated by the 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 (other than repurchases of
unvested shares of the Company's capital stock pursuant to its equity
incentive plans); (iii) there has not been any material change in 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 and equity incentive plan grants 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) Each of the Company and its subsidiaries 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 and its subsidiaries, in each case free and clear of all liens,
encumbrances and defects except liens and encumbrances on aircraft,
aircraft engines and other aircraft-related equipment of the Company and
such other liens, encumbrances and defects as are described in or
contemplated by the Prospectus or such as do not materially affect the
value of such property or do not interfere with the use made and proposed
to be made of such property by the Company or its subsidiaries; and any
real property and buildings held under lease by the Company or any of its
subsidiaries 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
or its subsidiaries, in each case except as described in or contemplated by
the Prospectus.
(r) (i) Each of the Company and its subsidiaries possesses such
permits, licenses, approvals, consents and other authorizations
(collectively "GOVERNMENT LICENSES") issued by the appropriate federal,
state, local or foreign regulatory agencies or bodies, including the
Department of Transportation, the Federal Aviation Administration or the
Federal Communications Commission necessary to conduct the business now
operated by it; (ii) each of the Company and its subsidiaries is in
compliance with the terms and conditions of all such Governmental Licenses,
except where the failure so to comply would not, singly or in the
aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole; (iii) all of the Government Licenses are
valid and in full force, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full force
and effect would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole; and (iv) the Company has not received any
notice of proceedings relating to the revocation or modification of any
such Governmental Licenses which, singly or in the aggregate, is
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reasonably likely to have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(s) Except as described in or contemplated by the Prospectus, no
material labor dispute with the employees of the Company or its
subsidiaries exists or, to the knowledge of the Company, is imminent; and
the Company is not aware, but without any independent investigation or
inquiry, of any existing, threatened or imminent labor disturbance by the
employees of any of its principal suppliers, manufacturers or contractors
that could result in any material adverse change in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole.
(t) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
customary in the businesses in which it is engaged; the Company has not
been refused any insurance coverage sought or applied other than in
connection with instances where the Company was seeking to obtain insurance
coverage at more attractive rates; and the Company has no reason to believe
that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a cost that would
not have a material adverse effect on the Company and its subsidiaries,
taken as a whole, except as described in or contemplated by the Prospectus.
(u) Except as described in or contemplated by the Prospectus, the
Company maintains a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations in all
material respects and (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability.
(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.
2. 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 Shares set forth in Schedule I hereto opposite its name at $
17.75 a share (the "PURCHASE PRICE") plus accrued dividends, if any, to the
Closing Date.
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 a
one-time right to purchase, severally and not jointly, up to 1,125,000
Additional Shares at the Purchase Price. If Xxxxxx Xxxxxxx, on
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behalf of the Underwriters, elects to exercise such option, Xxxxxx Xxxxxxx shall
so notify the Company in writing not later than 30 days after the date of this
Agreement, which 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. Such purchase date may be the same as the Closing Date (as defined
below) but not earlier than the Closing Date 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. If any Additional Shares are to
be purchased, each Underwriter agrees, severally and not jointly, to purchase
the number of Additional Shares (subject to such adjustments to eliminate
fractional shares as may be determined by Xxxxxx Xxxxxxx) that bears the same
proportion to the total number of Additional Shares to be purchased 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.
To induce the Underwriters to continue their efforts in connection
with the Public Offering (as defined below), the Company hereby agrees that,
without the prior written consent of Xxxxxx Xxxxxxx, it will not, during the
period ending 90 days after November 7, 2005, which is the date of the
Prospectus relating to the Public Offering, (1) 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;
(2) file any registration statement with the Commission relating to the offering
of any shares of Common Stock or any securities convertible into or exercisable
or exchangeable for Common Stock or (3) 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 (1), (2) or (3) 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 sale of any Shares to the Underwriters pursuant to this
Agreement, (b) transactions relating to shares of Common Stock or other
securities acquired in open market transactions after the completion of the
Public Offering, (c) 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, including, without limitation, upon conversion of the
Company's 3 1/2% Convertible Notes due 2033 (the "Convertible Notes") or the
Company's 3 3/4% Convertible Debentures due 2035, and as described in or
contemplated by the Prospectus, (d) the filing by the Company of any
post-effective amendments to its registration statement on Form S-3 or any
supplements to the prospectus included therein relating to the Convertible Notes
and the shares of Common Stock issuable upon conversion thereof (Registration
Statement No. 333-108616); (e) the issuance by the Company of any shares of
Common Stock or options or other rights to employees of the Company on or after
the date hereof pursuant to the Company's equity incentive plans as described in
or contemplated by the Prospectus and the issuance by the Company of shares of
Common Stock upon the exercise of any such options or the vesting of any such
other rights, (f) the filing by the Company of a shelf registration statement
with the Commission for the sale of securities only by the Company, provided
that securities are not offered or sold pursuant thereto during such 90-day
period, or (g) any securities issued or issuable in connection with the
Company's stockholders rights plan.
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3. Terms of Public Offering.
The Company is advised by the Underwriters that the Underwriters propose to
make a public offering of their respective portions of the Shares, as soon after
the Registration Statements and this Agreement become effective as in the
Underwriters' judgment is advisable (the "PUBLIC OFFERING"). The Company is
further advised by the Underwriters that the Shares are to be offered to the
public initially at $ 18.00 a share (the "PUBLIC OFFERING PRICE") plus accrued
dividends, if any, to the Closing Date.
The Company acknowledges and agrees that the Underwriters are acting
solely in the capacity of an arm's length contractual counterparty to the
Company with respect to the offering of Shares contemplated hereby (including in
connection with determining the terms of the Public Offering) and not as a
financial advisor or a fiduciary to, or an agent of, the Company or any other
person. Additionally, the Underwriters are not advising the Company or any other
person as to any legal, tax, investment, accounting or regulatory matters in any
jurisdiction with respect to the Public Offering or the process leading thereto
(irrespective of whether the Underwriters have advised or are advising the
Company on other matters). The Underwriters advise that they and their
affiliates are engaged in a broad range of securities and financial services and
that they and their affiliates may enter into contractual relationships with
purchasers or potential purchasers of the Company's securities, and that some of
these services or relationships may involve interests that differ from those of
the Company and need not be disclosed to the Company, unless otherwise required
by law. The Company has consulted with its own advisors concerning such matters
and shall be responsible for making its own independent investigation and
appraisal of the transactions contemplated hereby, and the Underwriters shall
have no responsibility or liability to the Company or any other person with
respect thereto. Any review by the Underwriters of the Company, the transactions
contemplated hereby or other matters relating to such transactions will be
performed solely for the benefit of the Underwriters and shall not be on behalf
of the Company. The Company waives, to the fullest extent permitted by law, any
claims it may have against the Underwriters for breach of fiduciary duty or
alleged breach of fiduciary duty and agrees that the Underwriters shall have no
liability (whether direct or indirect) to the Company in respect of such a
fiduciary duty claim or to any person asserting a fiduciary duty claim on behalf
of or in right of the Company, including stockholders, employees or creditors of
the Company.
4. 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
Shares for the respective accounts of the several Underwriters at 10:00 a.m.,
New York City time, on November 10, 2005, or at such other time on the same or
such other date, not later than November 17, 2005, as shall be designated in
writing by the Underwriters. 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 for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on the date specified in the
notice described in Section 2 or at such other time on the same or on such other
date, in any event not later than December 7, 2005, as shall be designated in
writing by the Underwriters. The time and date of such payment are hereinafter
referred to as the "OPTION CLOSING DATE."
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The Firm Shares and Additional Shares shall be in book-entry form and
registered in such names and in such denominations as the Underwriters shall
request in writing not later than one full business day prior to the Closing
Date or the Option Closing Date, as the case may be. The Firm Shares and
Additional Shares shall be delivered to the Underwriters on the Closing Date or
the 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.
5. 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 condition that the Registration
Statements shall have become effective prior to the date hereof, is effective on
the date hereof and shall be effective on the Closing Date and on the Option
Closing Date.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date, there shall not have occurred any change, or any
development reasonably likely to involve a change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole, from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto subsequent
to the date of this Agreement) that, in the Underwriters' judgment, is
material and adverse and that makes it, in the Underwriters' judgment,
impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed, on behalf of the Company,
by an executive officer 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 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.
(c) The Underwriters shall have received on the Closing Date an
opinion of Xxxxx Xxxxxxx 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 (based solely on an examination of certificates of government
officials and agencies) is duly qualified to transact business and is
in good standing in each jurisdiction set forth in Schedule I to such
opinion, except where the failure to be so qualified or be in
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good standing would not have a material adverse effect on the Company
and its subsidiaries, taken as whole;
(ii) each U.S. subsidiary of the Company has been duly
incorporated or organized, as the case may be, is validly existing as
a corporation or limited liability company in good standing under the
laws of the jurisdiction of its incorporation or organization, has the
power and authority to own its property and to conduct its business as
described in the Prospectus, and (based solely on an examination of
certificates of government officials and agencies) is duly qualified
to transact business and is in good standing in each jurisdiction set
forth in Schedule I 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 and its subsidiaries, taken as whole;
(iii) the authorized capital stock of the Company conforms as to
legal matters in all material respects to the description thereof
contained under the captions "Summary--Recent Developments--Stock
Split" in the Prospectus Supplement and "Description of Common and
Preferred Stock" in the Basic Prospectus;
(iv) the shares of capital stock of the Company 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;
(v) all of the issued shares of capital stock or membership
interests, as the case may be, of each U.S. subsidiary of the Company
have been duly and validly authorized and issued, and to the knowledge
of such counsel, are fully paid and non-assessable and are owned
directly or indirectly by the Company, free and clear of any security
interest or adverse claim (as defined in Article 8 of the Uniform
Commercial Code) other than transfer restrictions in organizational
documents of such subsidiary and foreign ownership restrictions under
applicable law, rules and regulations;
(vi) 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
arising by virtue of the certificate of incorporation or bylaws of the
Company or the General Corporation Law of the State of Delaware (the
"DGCL") and, to the knowledge of such counsel, any agreement to which
the Company is bound, that have not been waived;
(vii) this Agreement has been duly authorized, executed and
delivered by the Company;
(viii) 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 and its
subsidiaries, taken as a whole, the
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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, conflict with or violate any provision of the certificate of
incorporation or by-laws of the Company, any agreement or other
instrument set forth in Schedule II to such opinion, or, to the
knowledge of such counsel, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the
Company or any of its subsidiaries and applicable to the Company, its
subsidiaries or their properties, or any law which in such counsel's
experience is normally applicable to transactions of the type
contemplated by this Agreement; and, except for those which have been
obtained under the Securities Act and the Exchange Act and such as may
be required by applicable state and local securities laws, 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;
(ix) the statements (A) in the Prospectus under the captions
"Description of Common and Preferred Stock" and "Underwriting" (except
for matters relating to price stabilization, short positions and
passive market making activities, as to which such counsel need not
express any opinion) and (B) in the Registration Statements in Item
15, in each case insofar as such statements constitute summaries of
the legal matters, documents or proceedings referred to therein,
fairly present, in all material respects, the information called for,
with respect to such legal matters, documents and proceedings and
fairly summarize the matters referred to therein;
(x) 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;
(xi) each of the Registration Statements, as of its respective
effective date, and the Prospectus, as of the date thereof, except for
financial statements, notes thereto and schedules and other financial,
numerical, statistical and accounting information and data included or
incorporated by reference therein or omitted therefrom, and that part
of the Registration Statements that constitutes the Form T-1
heretofore referred to (collectively, "EXCLUDED INFORMATION"), as to
which such counsel need not express any opinion, appears, on its face,
to be appropriately responsive, in all material respects, with the
requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder; and
(xii) each document filed pursuant to the Exchange Act and
incorporated by reference in the Registration Statements and the
Prospectus (except for Excluded Information, as to which such counsel
need not express any opinion), on the date such document was filed
with the Commission, complied as to form in all material respects with
the requirements of the Exchange Act and the applicable rules and
regulations of the Commission thereunder.
-11-
In addition, such counsel shall deliver a negative assurance
letter stating that, although such counsel has not undertaken to
determine independently, and therefore, except for the opinions set
forth in Section 5(c)(iii), (ix), (xi) and (xii) in such counsel's
opinion letter, does not assume any responsibility, explicitly or
implicitly, for, the accuracy, completeness or fairness of the
statements contained or incorporated by reference in the Registration
Statements and Prospectus, such counsel has participated in the
preparation of the Registration Statements 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 Statements and the Prospectus included therein at
the time the Underwriters became underwriters in respect of the Public
Offering (except for Excluded Information, as to which such counsel
need not express any belief) contained any 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 and (ii) the Prospectus (except for 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 any untrue statement
of a material fact 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 negative assurance letter, 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 or stating a
belief only as to matters of federal and New York law and, with
respect to the Company and its U.S. corporate subsidiary, the DGCL,
and, with respect to the Company's U.S. limited liability company
subsidiary, the Limited Liability Company Law of the State of
Delaware, and (iii) state that its opinion and belief are based upon
its participation in the preparation of the Registration Statements
and Prospectus and review and discussion of the contents thereof, but
are without independent check or verification, except as specified.
(d) The Underwriters shall have received on the Closing Date an
opinion of Xxxxx X. Xxxx, general counsel for the Company, dated the
Closing Date, to the effect that:
(i) 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 Statements 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 Statements or the Prospectus or to be filed as exhibits
to the Registration Statements that are not described or filed as
required;
-12-
(ii) 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;
(iii) the statements incorporated by reference into the
Prospectus from the Company's Annual Report on Form 10-K/A for the
year ended December 31, 2004, as amended, under the caption "Business
-- Government Regulation," insofar as such statements constitute
summaries of legal or regulatory matters, documents or proceedings
referred to therein are accurate in all material respects and fairly
summarize the matters referred to therein; and
(iv) 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 statements in the Prospectus
as to the routes relating to its services which the Company presently
operates or is authorized to operate are correct in all material
respects and such routes presently operated are being operated
pursuant to valid certificates or authorizations issued by the Federal
Aviation Authority.
In giving such opinion, 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, and (ii) state that
it is opining only as to matters of federal and New York law and, with
respect to the Company and its U.S. corporate subsidiary, the DGCL,
and, with respect to the Company's U.S. limited liability company
subsidiary, the Limited Liability Company Law of the State of
Delaware.
(e) 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 the penultimate paragraph of
Section 5(c)) covering the matters referred to in Sections 5(c)(i) (but
only as to the Company's jurisdiction of incorporation) 5(c)(vi),
5(c)(vii), 5(c)(ix) (but only as to the statements in the Prospectus under
"Description of Common and Preferred Stock" and "Underwriting") and the
penultimate paragraph of Section 5(c).
(f) 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 Ernst & Young
-13-
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 for the years ended
December 31, 2004, 2003 and 2002 and the three-month and nine-month periods
ended September 30, 2005 and 2004 and certain financial information
contained in the Registration Statements and the Prospectus; provided that
the letter delivered on the Closing Date shall use a "cut-off date" not
earlier than the date hereof.
(g) The "lock-up" agreements, each substantially in the form of
Exhibit A hereto, signed by the directors and officers of the Company
listed in Schedule II hereto relating to sales and certain other
dispositions of shares of Common Stock or certain other securities of the
Company, delivered to the Underwriters on or before the date hereof, shall
be in full force and effect on the Closing Date.
(h) The Underwriters shall have received on the Closing Date such
documents as may be reasonably requested 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 the Underwriters on the 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 the Shares, they
may be limited to covering only Additional Shares).
6. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to Xxxxxx Xxxxxxx without charge, five signed copies of
the Registration Statements (including exhibits thereto) and for delivery
to the other Underwriter a conformed copy of the Registration Statements
(without exhibits thereto) and to furnish to each Underwriter in New York
City, without charge, prior to 10:00 a.m. New York City time on the second
business day following the date of this Agreement and during the period
mentioned in Section 6(c) below, as many copies of the Prospectus and any
supplements and amendments thereto or to the Registration Statements as may
reasonably be requested by the Underwriters.
(b) Before amending or supplementing the Registration Statements or
the Prospectus with respect to the Shares, to furnish to Xxxxxx Xxxxxxx a
copy of each such proposed amendment or supplement and not to file any such
proposed amendment or supplement to which Xxxxxx Xxxxxxx reasonably
objects, and to file with the Commission within the applicable period
specified in Rule 424(b) under the Securities Act any prospectus required
to be filed pursuant to such Rule.
(c) If, during such period after the first date of the Public Offering
of the Shares, in the reasonable opinion of counsel for the Underwriters,
the Prospectus is required by law to be delivered in connection with sales
by the Underwriters or any dealer, any event shall occur or condition exist
as a result of which it is necessary to
-14-
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 any dealer
(whose names and addresses the Underwriters will furnish to the Company) to
which Shares may have been sold by the Underwriters and to any other
dealers upon request, either amendments or supplements to the Prospectus so
that the statements in the Prospectus as so amended or supplemented will
not, in the light of the circumstances when the Prospectus is delivered to
a purchaser, be misleading or so that the Prospectus, as amended or
supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Underwriters shall
reasonably request; provided, however, the Company shall not be obligated
to qualify as a foreign corporation or file any general consent to service
of process under the laws of any such jurisdiction or subject itself to
taxation as doing business in any such jurisdiction.
(e) To make generally available to the Company's security holders and
the Underwriters as soon as practicable an earning statement covering a
twelve month period beginning on the first day of the first full fiscal
quarter after the date of this Agreement that shall satisfy the provisions
of Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder. If such fiscal quarter is the last fiscal quarter of
the Company's fiscal year, such earning statement shall be made available
not later than 90 days after the close of the period covered thereby and in
all other cases shall be made available not later than 45 days after the
close of the period covered thereby.
(f) 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 Statements, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all printing
costs associated therewith, and the mailing and delivering of copies
thereof to the Underwriters and dealers, in the quantities herein above
specified, (ii) all costs and expenses related to the transfer and delivery
of the Shares to the Underwriters, including any transfer or other taxes
payable thereon, (iii) the cost of printing or producing any Blue Sky or
legal investment memorandum in connection with the offer and sale of the
Shares under state law and all expenses in connection with the
qualification of the Shares for offer and sale under state law as provided
in Section 6(d) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky or legal investment
memorandum, (iv) all filing fees and the reasonable fees and disbursements
of counsel to the Underwriters incurred in connection with the review and
qualification of the offering of the Shares by the National Association of
Securities Dealers, Inc., (v) the cost of printing
-15-
certificates representing the Shares, (vi) the costs or charges of any
transfer agent, registrar or depositary, and (vii) 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 and any advertising expenses connected with any
offers they may make.
7. Indemnity and Contribution.
(a) The Company agrees to indemnify and hold harmless each Underwriter,
each person, if any, who controls any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, and each
affiliate of any Underwriter within the meaning of Rule 405 under the Securities
Act, from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statements or any amendment thereof, any preliminary
prospectus 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 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 Xxxxxx Xxxxxxx 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.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statements 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 expressly for use in the Registration Statements, any
preliminary prospectus, the Prospectus or any amendments or supplements
thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may
be sought pursuant
-16-
to either Section 7(a) or 7(b), such person (the "INDEMNIFIED PARTY") shall
promptly notify the person against whom such indemnity may be sought (the
"INDEMNIFYING PARTY") in writing and the indemnifying party, upon request
of the indemnified party, shall retain counsel reasonably satisfactory to
the indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees
and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them.
It is understood that the indemnifying party shall not, in respect of the
legal expenses of any indemnified party in connection with any proceeding
or related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel)
for all such indemnified parties and that all such fees and expenses shall
be reimbursed as they are incurred. Such firm shall be designated in
writing by the Underwriters, in the case of parties indemnified pursuant to
Section 7(a) above, and by the Company, in the case of parties indemnified
pursuant to Section 7(b) above. The indemnifying party shall not be liable
for any settlement of any proceeding effected without its written consent,
but if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse
the indemnified party for fees and expenses of counsel as contemplated by
the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered into
more than 30 days after receipt by such indemnifying party of the aforesaid
request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such proceeding.
(d) To the extent the indemnification provided for in Section 7(a) or
7(b) is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the
Underwriters on the other hand from the offering of the 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
-17-
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.
(e) The Company and the Underwriters agree that it would not be just
or equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in Section 7(d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 7, no Underwriter
shall be required to contribute any amount in excess of the amount by which
the total price at which the 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 that may otherwise be available to any
indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 7 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of any Underwriter, any person
controlling any Underwriter or any affiliate of any Underwriter or by or on
behalf of the Company, its officers or directors or any person controlling
the Company and (iii) acceptance of and payment for any of the Shares.
-18-
8. Termination.
Xxxxxx Xxxxxxx, acting on behalf of the Underwriters, may terminate this
Agreement by notice given by Xxxxxx Xxxxxxx 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 Xxxxxx Xxxxxxx'x judgment, is material and adverse and which
singly or together with any other such event specified in this clause (v), makes
it, in Xxxxxx Xxxxxxx'x judgment, impracticable to proceed with the offer, sale
or delivery of the Shares on the terms and in the manner contemplated in the
Prospectus.
9. Effectiveness; Defaulting Underwriter.
This Agreement shall become effective upon the execution and delivery
hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may
be, any Underwriter shall fail or refuse to purchase Shares that it has agreed
to purchase hereunder on such date, and the aggregate number of Shares that such
defaulting Underwriter 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 Underwriter shall be obligated to purchase the Shares which such
defaulting Underwriter 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 Xxxxxx Xxxxxxx 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 the Underwriters 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
Statements and in the Prospectus or in any other documents or arrangements may
be effected. If, on the 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, the
non-defaulting Underwriter shall have the option to (i) terminate its obligation
hereunder to purchase Additional Shares or (ii) purchase not less than the
number of Additional Shares that such non-defaulting Underwriter 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
-19-
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 Underwriter as have so terminated this
Agreement with respect to themselves, severally, for all out-of-pocket expenses
(including the reasonable fees and disbursements of their counsel) reasonably
incurred by such Underwriters in connection with this Agreement or the offering
contemplated hereunder.
10. Counterparts.
This Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
11. Applicable Law.
This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York.
12. 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.
-20-
Very truly yours,
JETBLUE AIRWAYS CORPORATION
By: /s/ Xxxx X. Xxxx
------------------------------------
Name: Xxxx X. Xxxx
Title: Chief Financial Officer
Accepted as of the date hereof
XXXXXX XXXXXXX & CO. INCORPORATED
XXXXXXX XXXXX & ASSOCIATES, INC.
By: XXXXXX XXXXXXX & CO. INCORPORATED
By: /s/ Xxxxxxx X. Xxxx
----------------------------------
Name: Xxxxxxx X. Xxxx
Title: Managing Director
SCHEDULE I
NUMBER OF
UNDERWRITER NAME FIRM SHARES TO BE PURCHASED
---------------- ---------------------------
Xxxxxx Xxxxxxx & Co. Incorporated... 6,750,000
Xxxxxxx Xxxxx & Associates, Inc. ... 750,000
---------
Total............................ 7,500,000
SCHEDULE II
LIST OF PERSONS SUBJECT TO THE LOCK-UP AGREEMENTS
Xxxxx Xxxxxxxx
Xxxxx Xxxxxx
Xxxxx Xxxxxxxxx
Xxx Xxxxx
Xxx Xxxxx
Xxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx
Xxxx Xxxxxxxxxx
Xxxx Xxxxxxxx
Xxx Xxxxxxx
Xxxxx Xxxx
Xxxxxx Xxxxx
Xxxx Xxxx
Xxxxxx Spain
Xxxxx Xxxxxx
Xxxxx Xxxx
Xxx Xxxxxxx
Xxx Xxxxxxxx
EXHIBIT A
FORM OF LOCK-UP AGREEMENT
[ ], 2005
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Xxxxx & Associates, Inc.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co. Incorporated (the
"UNDERWRITER") and Xxxxxxx Xxxxx & Associates, Inc. ("XXXXXXX XXXXX") propose to
enter into an Underwriting Agreement (the "UNDERWRITING AGREEMENT") with JetBlue
Airways Corporation, a Delaware corporation (the "COMPANY"), providing for the
public offering (the "PUBLIC OFFERING") by the Underwriter and Xxxxxxx Xxxxx, of
7,500,000 shares of the common stock of the Company (the "COMMON STOCK").
To induce the Underwriter and Xxxxxxx Xxxxx to continue their efforts in
connection with the Public Offering, the undersigned hereby agrees that, without
the prior written consent of the Underwriter, it will not, during the period
commencing on the date hereof and ending 90 days after November 7, 2005, which
is the date of the final prospectus relating to the Public Offering (the
"PROSPECTUS"), subject to the following paragraph, (1) 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 beneficially owned by the undersigned or (2) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of Common Stock beneficially owned by the
undersigned, whether any such transaction described in clause (1) or (2) above
is to be settled by delivery of Common Stock or such other securities, in cash
or otherwise. In addition, the undersigned agrees that, without the prior
written consent of the Underwriter, it will not, during the period commencing on
the date hereof and ending 90 days after the date of the Prospectus, make any
demand for or exercise any right with respect to, the registration of any shares
of Common Stock or any security convertible into or exercisable or exchangeable
for Common Stock. The undersigned also agrees and consents to the entry of stop
transfer instructions with the Company's transfer agent and registrar against
the transfer of the undersigned's shares of Common Stock except in compliance
with the foregoing restrictions or pursuant to a transaction described in the
following paragraph.
The foregoing paragraph shall not apply to (a) transactions relating
to shares of Common Stock or other securities acquired in open market
transactions after the completion of the Public Offering, (b) transfers of
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock to a member of the undersigned's immediate family
or to a trust of which the undersigned or such a family member is the
beneficiary, (c) distributions or transfers of shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock to
partners, members or controlled affiliates of the undersigned, (d) transfers as
a bona fide gift or gifts, (e) the sale of any shares of Common Stock pursuant
to any securities trading program designed to comply with Rule 10b5-1 under the
Securities Exchange Act of 1934, as such program is in effect on the date
hereof, or (f) transfers
effected by the undersigned or the undersigned's personal representatives in the
event the undersigned dies or becomes permanently disabled; provided that in the
case of any transfer or distribution pursuant to clause (b), (c) or (d), (1)
each transferee, distributee or donee shall execute and deliver to the
Underwriter a lock-up letter substantially in the form of this letter and (2) no
filing by any party (whether transferor, transferee, distributor, distributee,
donor or donee) under Section 16(a) of the Securities Exchange Act of 1934 shall
be required or made voluntarily, reporting a reduction in beneficial ownership
of shares of Common Stock during the restricted period referred to in the
foregoing paragraph (other than such filings made after the expiration of the
90-day period referred to above). For purposes of this Lock-Up Agreement,
"immediate family" shall mean any relationship by blood, marriage or adoption,
not more remote than first cousin.
The undersigned understands that the Company and the Underwriter are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
Public Offering. The undersigned further understands that this Lock-Up Agreement
is irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns.
Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriter.
Very truly yours,
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(Name)
Address:
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