Exhibit 1.1
SHARES
COPA HOLDINGS, S.A.
CLASS A COMMON STOCK, NO PAR VALUE
UNDERWRITING AGREEMENT
____________, 2006
____________, 2006
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
4 World Financial Center, Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Ladies and Gentlemen:
Continental Airlines, Inc. (the "SELLING SHAREHOLDER") proposes to sell to
the several Underwriters named in Schedule I hereto (the "UNDERWRITERS"), an
aggregate of shares of Class A Common Stock, without par value (the "FIRM
SHARES") of Copa Holdings, S.A., a Panamanian corporation (the "COMPANY").
Xxxxxx Xxxxxxx & Co. Incorporated ("XXXXXX XXXXXXX") and Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated ("XXXXXXX XXXXX"), shall act as representatives (the
"REPRESENTATIVES") of the several Underwriters.
The Selling Shareholder also proposes to sell to the several Underwriters
not more than an additional shares of Class A Common Stock, without par value,
of the Company (the "ADDITIONAL SHARES") if and to the extent that you, as
Representatives, shall have determined to exercise, on behalf of the
Underwriters, the right to purchase such Additional Shares granted to the
Underwriters in Section 3 hereof. The Firm Shares and the Additional Shares are
hereinafter collectively referred to as the "SHARES." The outstanding shares of
Class A Common Stock, without par value, of the Company, are hereinafter
referred to as the "COMMON STOCK."
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement on Form F-1 (File No. 333- ), including a
prospectus, relating to the Shares. The registration statement as amended at the
time it becomes effective, including the information (if any) deemed to be part
of the registration statement at the time of effectiveness pursuant to Rule 430A
under the Securities Act of 1933, as amended (the "SECURITIES ACT"), is
hereinafter referred to as the "REGISTRATION STATEMENT"; the prospectus in the
form first used to confirm sales of Shares (or if no prospectus is delivered to
confirm sales, the corresponding form of prospectus referred to in Rule 173
under the Securities Act) is hereinafter referred to as the "PROSPECTUS." If the
Company has filed an abbreviated registration statement to register additional
shares of Common Stock pursuant to Rule 462(b) under the Securities Act (the
"RULE 462 REGISTRATION STATEMENT"), then any reference herein to the term
"REGISTRATION STATEMENT" shall be deemed to include such Rule 462 Registration
Statement.
For purposes of this Agreement, "FREE WRITING PROSPECTUS" has the meaning
set forth in Rule 405 under the Securities Act and "TIME OF SALE PROSPECTUS"
means the preliminary
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prospectus, together with the free writing prospectuses, if any, as each are
identified in Schedule II hereto and the price to the public and the number of
shares on the cover page of the Prospectus, considered together. As used herein,
the terms "Registration Statement," "preliminary prospectus," "Time of Sale
Prospectus" and Prospectus shall include the documents, if any, incorporated by
reference therein. The terms "SUPPLEMENT," "AMENDMENT," and "AMEND" as used
herein with respect to the Time of Sale Prospectus or any free writing
prospectus shall include all documents subsequently filed by the Company with
the Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), that are incorporated by reference therein.
1. Representations and Warranties of the Company and Compania Panamena de
Aviacion, S.A. Each of the Company and Compania Panamena de Aviacion, S.A.
("COPA AIRLINES") 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 Company's knowledge,
threatened by the Commission.
(b) (i) 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,
(ii) 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, (iii) the Time of Sale Prospectus does not, and at the time of each
sale of the Shares in connection with the offering and at the Closing Date (as
defined in Section 5), the Time of Sale Prospectus, as then amended or
supplemented by the Company, if applicable, will not, contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading and (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, the Time of
Sale Prospectus or the Prospectus based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use therein or by a Selling Shareholder expressly for use in the
preparation of the answers therein to Item 7 of Form 20-F pursuant to Item 4(a)
of Form F-1.
(c) The Company is not an "ineligible issuer," as defined in Rule 405 of
the Securities Act, in connection with the offering pursuant to Rules 164, 405
and 433 under the Securities Act. Any free writing prospectus that the Company
is required to file pursuant to Rule 433(d) under the Securities Act has been,
or will be, filed with the Commission in accordance with the requirements of the
Securities Act and the applicable rules and regulations of the Commission
thereunder. Each free writing prospectus that the Company has filed, or is
required
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to file, pursuant to Rule 433(d) under the Securities Act or used or referred to
by the Company complies or will comply in all material respects with the
requirements of the Securities Act and the applicable rules and regulations of
the Commission thereunder. Except for the free writing prospectuses, if any,
identified in Schedule II hereto, and electronic road shows, if any, furnished
to you before first use, the Company has not prepared, used or referred to, and
will not, without your prior consent, prepare, use or refer to, any free writing
prospectus.
(d) The Company has been duly incorporated, is validly existing as a
corporation (sociedad anonima) in good standing under the laws of the Republic
of Panama ("Panama"), has the corporate power and authority to own its property
and to conduct its business as described in the Time of Sale Prospectus and is
duly qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing or to have such power an authority would not
have a material adverse effect on the Company and its subsidiaries, taken as a
whole.
(e) Each subsidiary of the Company (including Copa Airlines) 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
Time of Sale Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing or to have
such power and authority 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 of each subsidiary of the Company have been duly and validly authorized
and issued, are fully paid and non-assessable and are owned directly by the
Company (with the exception of the minority interests therein, as described in
the Time of Sale Prospectus), free and clear of all liens and similar
encumbrances, except as described in the Time of Sale Prospectus.
(f) This Agreement has been duly authorized, executed and delivered by the
Company and Copa Airlines.
(g) The authorized capital stock of the Company conforms in all material
respects as to legal matters to the description thereof contained in each of the
Time of Sale Prospectus and the Prospectus.
(h) The shares of Common Stock (including the Shares to be sold by the
Selling Shareholders) have been duly authorized and are validly issued, fully
paid and non-assessable.
(i) 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 (i) the certificate of incorporation or by-laws of the Company,
(ii) any agreement or other instrument binding upon the Company or any of its
subsidiaries or (iii) applicable law or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company or any
subsidiary, except in the case of (ii) and (iii), as would not have a material
adverse effect
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on the Company and its subsidiaries, taken as a whole. 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 (i) 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
or (ii) such as would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole, or on the Company's ability to perform its
obligations under the Agreement.
(j) The execution and delivery by Copa Airlines of, and the performance by
Copa Airlines of its obligations under, this Agreement will not contravene any
provision of (i) the certificate of incorporation or by-laws of Copa Airlines,
(ii) any agreement or other instrument binding upon Copa Airlines or (iii)
applicable law or any judgment, order or decree of any governmental body, agency
or court having jurisdiction over Copa Airlines, except in the case of (ii) and
(iii), as would not have a material adverse effect on Copa Airlines. No consent,
approval, authorization or order of, or qualification with, any governmental
body or agency is required for the performance by Copa Airlines of its
obligations under this Agreement, except (i) 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 or (ii) such as would not have a material adverse effect
on Copa Airlines or on Copa Airlines' ability to perform its obligations under
the Agreement.
(k) There has not occurred any material adverse change in the condition,
financial or otherwise, or in the earnings, business, operations or prospects of
the Company and its subsidiaries, taken as a whole, from that set forth in the
Time of Sale Prospectus.
(l) There are no legal or governmental proceedings pending or, to the
Company's knowledge, 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
Statement or the Prospectus and are not so described and there are no 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. The Time of
Sale Prospectus does not contain any description of the foregoing matters that
is materially different from those contained in the Prospectus.
(m) 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.
(n) Neither the Company nor Copa Airlines is, and immediately after giving
effect to the offering and sale of the Shares neither of them will be, required
to register as an "investment company" as such term is defined in the Investment
Company Act of 1940, as amended.
(o) 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
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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 respective businesses and (iii) are in
compliance with all terms and conditions of any such permit, license or
approval, except in each case 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 and its subsidiaries, taken as a whole.
(p) 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) that would, singly or in the
aggregate, have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(q) There are no contracts, agreements or understandings either between the
Company or Copa Airlines and any person granting such person the right to
require the Company or Copa Airlines to file a registration statement under the
Securities Act with respect to any securities of the Company or Copa Airlines or
to require the Company to include such securities with the Shares registered
pursuant to the Registration Statement, except as contemplated in the
registration rights agreement by and among the Company, Corporacion de
Inversiones Aereas, S.A. ("CIASA") and the Selling Shareholder dated December
14, 2005.
(r) Subsequent to the respective dates as of which information is given in
each of the Registration Statement, the Time of Sale Prospectus and the
Prospectus, (i) the Company and its subsidiaries have not incurred any material
liability or obligation, direct or contingent, nor entered into any material
transaction; (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 ordinary and customary dividends; and (iii)
there has not been any material change in the capital stock, short-term debt or
long-term debt of the Company and its subsidiaries, except in each case as
described in each of the Registration Statement, the Time of Sale Prospectus and
the Prospectus, respectively; and (iv) there has been no prohibition or
suspension of the operation of either the Company's or Copa Airlines' aircraft,
including, but not limited to, as a result of action taken by the Panamanian
Department of Civil Aviation (the Autoridad de Aeronautica Civil) (the "AAC") or
other applicable bodies in the other jurisdictions in which Copa Airlines or
AeroRepublica S.A. ("AEROREPUBLICA") operates, except as would not have a
material adverse effect on the Company and its subsidiaries, taken as a whole.
(s) The Company and its subsidiaries have good and marketable title to all
real property and good and marketable title to all personal property owned by
them that is material to the business of the Company and its subsidiaries, taken
as a whole, in each case free and clear of all liens, encumbrances and defects
except such as are described in the Time of Sale Prospectus or such as do not
materially affect the value of such property or do not materially interfere with
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the use made and proposed to be made of such property by the Company and its
subsidiaries; and any real property and buildings held under lease by the
Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases except as are not material or do not materially interfere
with the use made and proposed to be made of such property and buildings by the
Company and its subsidiaries, in each case except as described in the Time of
Sale Prospectus.
(t) The Company and its subsidiaries own or have the valid right to use, or
can acquire on reasonable terms, all material patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names currently employed by
them in connection with the business now operated by them, except where the
failure to so own or have the right to use would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole, and neither the
Company nor any of its subsidiaries has received any notice of infringement of
or conflict with asserted rights of others with respect to any of the foregoing
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 and its
subsidiaries, taken as a whole.
(u) No material labor dispute with the employees of the Company or any of
its subsidiaries exists, except as described in the Time of Sale Prospectus, or,
to the knowledge of the Company, is imminent; and the Company is not aware 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 and its subsidiaries, taken as a whole.
(v) The Company and each of its subsidiaries and its owned and leased
properties, including its airplanes, are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
are prudent and customary in the businesses in which they are engaged; neither
the Company nor any of its subsidiaries has been refused any insurance coverage
sought or applied for; and neither the Company nor any of its subsidiaries has
any 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 the Time of Sale Prospectus.
(w) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their respective businesses except
where the failure to so possess would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole, and neither the Company nor any
of its subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or permit
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 and its
subsidiaries, taken as a whole, except as described in the Time of Sale
Prospectus.
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(x) Except as described in the Time of Sale Prospectus, the Company and
each of its subsidiaries maintain 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; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. Except as described in the Time of Sale Prospectus, since the end
of the Company's most recent audited fiscal year, there has been (i) no material
weakness in the Company's internal control over financial reporting (whether or
not remediated) and (ii) no change in the Company's internal control over
financial reporting that has materially and adversely affected, or is reasonably
likely to materially and adversely affect, the Company's internal control over
financial reporting.
(y) Except as described in the Time of Sale Prospectus, the Company has not
sold, issued or distributed any shares of Common Stock during the six-month
period preceding the date hereof, including any sales pursuant to Rule 144A
under, or Regulation D or S of, the Securities Act, other than shares issued
pursuant to employee benefit plans, qualified stock option plans or other
employee compensation plans or pursuant to outstanding options, rights or
warrants.
(z) There are no contracts, agreements or understandings between either the
Company or any of its subsidiaries and any person that would give rise to a
valid claim against either the Company or any of its subsidiaries or any
Underwriter for a brokerage commission, finder's fee or other like payment in
connection with this offering.
(aa) The Company's auditor and the Audit Committee of its Boards of
Directors have not been advised of (i) any significant deficiencies in the
design or operation of internal controls that could adversely affect the
Company's ability to record, process, summarize, and report financial data, (ii)
any fraud, whether or not material, that involves management or other employees
who have a role in the Company's internal controls and (iii) any material
weaknesses in internal controls identified by the Company's auditors other than
as described in the Time of Sale Prospectus; and since the date of the most
recent evaluation of the Company's disclosure controls and procedures, there
have been no significant changes in internal controls or in other factors that
could significantly and adversely affect internal controls, including any
corrective actions with regard to significant deficiencies and material
weaknesses, other than as described in the Time of Sale Prospectus.
(bb) The Company is a "foreign private issuer," as defined in Rule 3b-4
under the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT").
(cc) As of the date hereof, the Company and each of its subsidiaries, as
well as the directors and officers of the Company, are each in compliance in all
material respects with all applicable to the Company effective provisions of the
Xxxxxxxx-Xxxxx Act of 2002 in effect and
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applicable as of the date hereof and the rules and regulations of the Commission
and the New York Stock Exchange (the "NYSE") promulgated thereunder as of the
date hereof.
(dd) Ernst & Young, who have certified certain financial statements of the
Company and its subsidiaries, are independent public accountants as required by
the Exchange Act and the rules and regulations of the Commission thereunder.
(ee) The Company maintains a system of internal control over financial
reporting (as such term is defined in Rule 13a-15(f) of the Exchange Act) that
complies with the requirements of the Exchange Act and has been designed by the
Company's principal executive officer and principal financial officer, or under
their supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. Except as
disclosed in the Prospectus, the Company's internal control over financial
reporting is effective and the Company is not aware of any material weaknesses
in its internal control over financial reporting.
(ff) The Company maintains disclosure controls and procedures (as such term
is defined in Rule 13a-15(e) of the Exchange Act) that comply with the
requirements of the Exchange Act; such disclosure controls and procedures have
been designed to provide reasonable assurance that material information relating
to the Company and its subsidiaries is made known to the Company's principal
executive officer and principal financial officer by others within those
entities; and such disclosure controls and procedures are effective, except as
described in the Prospectus.
(gg) Each of the Company and Copa Airlines has the power to submit, and
pursuant to Section 16 of this Agreement has legally, validly, effectively and
irrevocably submitted, to the jurisdiction of the courts of the State of New
York and of the United States sitting in the Borough of Manhattan and has the
power to designate, appoint and empower, and pursuant to Section 16 of this
Agreement, has legally, validly and effectively designated, appointed and
empowered an agent for service of process in any suit or proceeding arising out
of or relating to this Agreement.
(hh) The Shares have been (i) admitted for listing and trading on the NYSE
and (ii) registered with the National Securities Commission of Panama (the
Comision Nacional de Valores).
(ii) The audited consolidated financial statements as of and for the period
ending December 31, 2005 and the unaudited consolidated financial statements as
of and for the period ending March 31, 2006, included in each of the Time of
Sale Prospectus and the Prospectus, together with the related notes and
schedules, present fairly in all material respects the financial position of
each of the Company and its subsidiaries as at the dates indicated and the
results of operations and statement of changes in financial position of each of
the Company and its subsidiaries for the periods specified; such financial
statements have been prepared in conformity with U.S. GAAP applied on a
consistent basis during the periods involved (except as otherwise disclosed
therein); the other financial and statistical data set forth in the Prospectus
are accurately presented in all material respects and prepared, where
applicable, on a basis consistent with the
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financial statements and books and records of each of the Company and its
subsidiaries; and neither the Company nor its subsidiaries has any material
liabilities or obligations, direct or contingent (including any off-balance
sheet obligations), not disclosed in the Time of Sale Prospectus or the
Prospectus.
(jj) Neither the Company nor any of its subsidiaries has sustained, since
the date of the last audited financial statements, any material loss or
interference with its business from fire, explosion, flood or other calamity,
regardless of whether covered by insurance.
(kk) Any statistical and market-related data included in each of the Time
of Sale Prospectus and Prospectus are based on or derived from sources that each
of the Company and Copa Airlines believes to be reasonably reliable and
accurate, and the Company or Copa Airlines has obtained the written consent to
the use of such data from such sources to the extent required.
(ll) All tax returns required to be filed by each of the Company and its
subsidiaries in all applicable jurisdictions have been filed, and all taxes and
other assessments of a similar nature (whether imposed directly or through
withholding) including any interest, additions to tax or penalties applicable
thereto due or claimed to be due from either the Company or any of its
subsidiaries have been paid, other than those being contested in good faith and
for which adequate reserves have been provided, except as otherwise described in
the Time of Sale Prospectus or where the failures to so file or so pay would not
reasonably be expected to have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(mm) Except as described in the Time of Sale Prospectus, there is no tax,
duty, levy, impost, deduction, charge or withholding imposed by Panama or any
political subdivision thereof or taxing authority therein either (i) on or by
virtue of the execution, delivery, performance or enforcement of this Agreement
or of any other document to be furnished hereunder or thereunder by the Company
or Copa Airlines, or (ii) on any payment to be made pursuant to this Agreement.
(nn) Neither the Company nor any of its subsidiaries has sent or received
any communication regarding termination of, or intent not to renew, any of the
contracts or agreements referred to or described in the Time of Sale Prospectus,
except where such termination or non-renewal would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole, and no such
termination or non-renewal has been threatened by either the Company or any of
its subsidiaries, or, to the best of each of the Company's and Copa Airlines'
knowledge, by any other party to any such contract or agreement.
(oo) This Agreement is in proper legal form under the laws of Panama for
the enforcement thereof in Panama against the Company and Copa Airlines, and it
is not necessary in order to ensure the legality, validity, enforcement or
admissibility into evidence of this Agreement in Panama that this Agreement be
filed or recorded with any court or other authority in Panama or that any tax or
fee be paid in Panama on or in respect of this Agreement or any other document,
other than court costs, including (without limitation) filing fees and deposits
to secure judgments, except that, with respect to enforcement or admissibility
into evidence (i) the
9
signatures of the parties thereto signing outside Panama shall have been
notarized by a notary public licensed as such under the law of the place of
signing and the signature of such notary public shall have been legalized by the
relevant Panamanian Consulate or by an apostille, and (ii) this Agreement shall
have been translated into Spanish by a licensed translator in Panama.
(pp) The audiovisual presentation made available to the public by the
Company at [xxxx://xxx.xxxxxxxxxxxxxx.xxx/xxx/xxxxxx.xxx?xx00000000000 through a
link on the Company's website at
xxxx://xxx.xxxxxxx.xxx/xxxxxxxxxxxxxx/xxxxxxxx/xxxxxxx.xxxx?xxx00] is a "bona
fide electronic roadshow" for purposes of Rule 433(d)(8)(ii) of the Securities
Act, and such presentation, when taken together with the Time of Sale
Prospectus, does not contain any untrue statement of material fact or omit to
state a material fact necessary to make the statements therein, in 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 such presentation or Time of Sale Prospectus based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter expressly for use therein.
2. Representations and Warranties of the Selling Shareholder. The Selling
Shareholder represents and warrants to and agrees with each of the Underwriters
that:
(a) Except for the free writing prospectuses, if any, identified in
Schedule II hereto, and electronic road shows, if any, furnished to you before
first use, the Selling Shareholder has not prepared, used or referred to, and
will not, without your prior consent, prepare, use or refer to, any free writing
prospectus.
(b) This Agreement has been duly authorized, executed and delivered by or
on behalf of the Selling Shareholder.
(c) The execution and delivery by the Selling Shareholder of, and the
performance by the Selling Shareholder of its obligations under, this Agreement
will not contravene (i) any provision of applicable law, (ii) the certificate of
incorporation or by-laws of the Selling Shareholder, or (iii) any agreement or
other instrument binding upon the Selling Shareholder or any judgment, order or
decree of any governmental body, agency or court having jurisdiction over the
Selling Shareholder, except for such contraventions in the case of (i) and (iii)
as would not have a material adverse effect on the Company or its subsidiaries,
taken as a whole, or on the Selling Shareholder's ability to consummate the
transactions contemplated hereby. No consent, approval, authorization or order
of, or qualification with, any governmental body or agency is required for the
performance by the Selling Shareholder of its obligations under this Agreement,
except (i) 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 and (ii) as
would not have a material adverse effect on the Company or its subsidiaries,
taken as a whole, or on the Selling Shareholder's ability to consummate the
transactions contemplated hereby.
(d) The Selling Shareholder owns, and on the Closing Date will own, the
Shares to be sold by the Selling Shareholder free and clear of all security
interests, claims, liens, equities or
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other encumbrances and has, and on the Closing Date will have, the legal right
and power, and all authorizations and approvals required by law, to enter into
this Agreement and to sell, transfer and deliver the Shares to be sold by the
Selling Shareholder.
(e) Upon payment for the Shares to be sold by the Selling Shareholder
pursuant to this Agreement, delivery of such Shares, as directed by the
Underwriters, to Cede & Co. ("CEDE") or such other nominee as may be designated
by the Depository Trust Company ("DTC"), registration of such Shares in the name
of Cede or such other nominee and the crediting of such Shares on the books of
DTC to securities accounts of the Underwriters (assuming that neither DTC nor
any such Underwriter has notice of any adverse claim (within the meaning of
Section 8-105 of the New York Uniform Commercial Code (the "UCC")) to such
Shares), (A) DTC shall be a "protected purchaser" of such Shares within the
meaning of Section 8-303 of the UCC, (B) under Section 8-501 of the UCC, the
Underwriters will acquire a valid security entitlement in respect of such Shares
and (C) no action based on any "adverse claim", within the meaning of Section
8-102 of the UCC, to such Shares may be asserted against the Underwriters with
respect to such security entitlement; for purposes of this representation, the
Selling Shareholder may assume that when such payment, delivery and crediting
occur, (x) such Shares will have been registered in the name of Cede or another
nominee designated by DTC, in each case on the Company's share registry in
accordance with its certificate of incorporation, bylaws and applicable law, (y)
DTC will be registered as a "clearing corporation" within the meaning of Section
8-102 of the UCC and (z) appropriate entries to the accounts of the several
Underwriters on the records of DTC will have been made pursuant to the UCC.
(f) Upon payment for the Shares to be sold to the Underwriters by the
Selling Shareholder pursuant to this Agreement, all right, title and interest in
the Shares will be transferred to the Underwriters free and clear of all
security interests, claims, liens, equities or other encumbrances.
(g) The Selling Shareholder has no knowledge that the representations and
warranties of the Company and Copa Airlines contained in Section 1 are not true
and correct, is familiar with the Registration Statement and Prospectus and has
no knowledge of any untrue statement of material fact or omission to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The Selling
Shareholder is not prompted by any information concerning the Company or its
subsidiaries that is not set forth in the Time of Sale Prospectus to sell its
Shares pursuant to this Agreement. The liability of the Selling Shareholder for
a breach of the representations and warranties contained in this paragraph shall
be limited to an amount equal to the aggregate Public Offering Price of the
Shares sold by the Selling Shareholder under this Agreement.
(h) (i) 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,
(ii) the Time of Sale Prospectus does not, and at the time of each sale of the
Shares in connection with the offering and at the Closing Date (as defined in
Section 5), the Time of Sale Prospectus, as then amended or supplemented by the
Company, if applicable, will
11
not, contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading and (iii) 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 2(h) apply only to statements or omissions in the
Registration Statement, the Time of Sale Prospectus or the Prospectus based upon
information relating to the Selling Shareholder that is furnished to the Company
in writing by the Selling Shareholder expressly for use therein. The liability
of the Selling Shareholder for a breach of representations and warranties
contained in this paragraph shall be limited to an amount equal to the aggregate
Public Offering Price of the Shares sold by the Selling Shareholder under this
Agreement.
(i) In order to document the Underwriters' compliance with the reporting
and withholding provisions of the Tax Equity and Fiscal Responsibility Act of
1982 with respect to the transactions herein contemplated, the Selling
Shareholder will deliver to the Representatives prior to or at the Closing Date
a properly completed and executed U.S. Treasury Department Form W-9 (or other
applicable form or statement specified by the U.S. Treasury Department
regulations in lieu thereof).
(j) Except as disclosed by the Selling Shareholder in writing to the
Representatives, neither the Selling Shareholder nor any of his, her or its
affiliates directly, or indirectly through one or more intermediaries, controls,
or is controlled by, or is under common control with, or has any other
association with (within the meaning of Article 1(q) of the By-laws of the
National Association of Securities Dealers, Inc. (the "NASD")), any member firm
of the NASD.
3. Agreements to Sell and Purchase. The Selling Shareholder 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
Selling Shareholder at $________ a share (the "PURCHASE PRICE") the number of
Firm Shares set forth in Schedule I hereto opposite the name of such
Underwriter.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Selling Shareholder
agrees to sell to the Underwriters the Additional Shares, and the Underwriters
shall have the right to purchase, severally and not jointly, up to ________
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 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 two business days 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
12
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.
Each of the Company and the Selling Shareholder hereby agrees that, without
the prior written consent of the Representatives on behalf of the Underwriters,
it will not, during the period ending 90 days (or one year in the case of the
Selling Shareholder) after the date of the Prospectus, (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 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
the Common Stock, 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 or (3) 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.
The restrictions contained in the preceding paragraph shall not apply to
(a) the Shares to be sold hereunder, or (b) after 90 days, the sale of any
Additional Shares by the Selling Shareholder to the extent such shares were not
sold in full or at all pursuant to Section 3 hereof, or (c) the sale of shares
of Common Stock held by the Selling Shareholder pursuant to its tag-along rights
in its Shareholders' Agreement with CIASA, or (d) transactions by the Selling
Shareholder relating to shares of Common Stock or other securities acquired in
open market transactions after the completion of the offering of the Shares,
provided that no filing under Section 16(a) of the Exchange Act shall be
required or shall be voluntarily made in connection with subsequent sales of
Common Stock or other securities acquired in such open market transactions or
(e) any existing employee benefits plan. In addition, the Selling Shareholder,
agrees that, without the prior written consent of the Representatives on behalf
of the Underwriters, it will not, during the period ending one year 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 Selling Shareholder
consents to the entry of stop transfer instructions with the Company's transfer
agent and registrar against the transfer of any Shares held by the Selling
Shareholder except in compliance with the foregoing restrictions.
Notwithstanding the foregoing, if (1) during the last 17 days of the 90-day (or
one year, as applicable) restricted period the Company issues an earnings
release or material news or a material event relating to the Company occurs; or
(2) prior to the expiration of the 90-day (or one year, as applicable)
restricted period, the Company announces that it will release earnings results
during the 16-day period beginning on the last day of the 90-day (or one year,
as applicable) period, the restrictions imposed by this agreement shall continue
to apply until the expiration of the 18-day period beginning on the issuance of
the earnings release or the occurrence of the material news or material event.
The Company shall promptly notify the Representatives of any earnings release,
news or event that may give rise to an extension of the initial 90-day (or one
year, as applicable) restricted period.
4. Terms of Public Offering. The Selling Shareholder is advised by you that
the Underwriters propose to make a public offering of their respective portions
of the Shares as soon
13
after the Registration Statement and this Agreement have become effective as in
your judgment is advisable. The Selling Shareholder is further advised by you
that the Shares are to be offered to the public initially at $________ a share
(the "PUBLIC OFFERING PRICE") and to certain dealers selected by you at a price
that represents a concession not in excess of $________ a share under the Public
Offering Price.
5. Payment and Delivery. Payment for the Firm Shares to be sold by the
Selling Shareholder shall be made to the Selling Shareholder 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 ______, 2006 or at such other time on the same or such
other date, not later than ________, 2006 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 Selling Shareholder
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
corresponding notice described in Section 3 or at such other time on the same or
on such other date, in any event not later than _____________, 2006, as shall be
designated in writing by you.
The Firm Shares and Additional Shares shall be registered in the name of
Cede. 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.
6. Conditions to the Underwriters' Obligations. The obligations of the
Selling Shareholder 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 Statement shall
have become effective not later than 5:00 p.m. (New York City time) on the date
hereof.
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:
(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 securities of the
Company or any of its subsidiaries by any "nationally recognized
statistical rating organization," as such term is defined for purposes of
Rule 436(g)(2) under the Securities Act; and
14
(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 and its
subsidiaries, taken as a whole, from that set forth in the Time of Sale
Prospectus 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 Time of Sale Prospectus.
(b) The Underwriters shall have received on the Closing Date a certificate,
dated the Closing Date and signed by an executive officer of the Company and
Copa Airlines, to the effect set forth in Section 6(a) above and to the effect
that the representations and warranties of each of the Company and Copa Airlines
contained in this Agreement are true and correct as of the Closing Date and that
each of the Company and Copa Airlines has complied in all material respects with
all of the agreements and satisfied 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
Xxxxxxx, Xxxxx & Xxxxx, special outside counsel for each of the Company, Copa
Airlines and the Selling Shareholder, dated the Closing Date, to the effect
that:
(i) the Company and each of its Panamanian subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under
the laws of Panama, has all requisite power and authority to own its
property and to conduct its business as described in the Time of Sale
Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in Panama 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;
(ii) the authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in each of the Time of Sale
Prospectus and the Prospectus;
(iii) the issued shares of Common Stock (including the Shares to be
sold by the Selling Shareholder) have been duly and validly authorized and
issued and are fully paid and non-assessable;
(iv) all of the issued shares of capital stock of each Panamanian
subsidiary of the Company have been duly and validly authorized and issued,
are fully paid and non-assessable and are owned directly by the Company
(with the exception of the minority interests therein, as described in the
Prospectus), free and clear of all liens, encumbrances, equities or claims;
15
(v) the Selling Shareholder owns, and on the Closing Date will own,
the Shares to be sold by it free and clear of all security interests,
claims, liens, equities or other encumbrances and has, and on the Closing
Date will have, the legal right and power, and all authorizations and
approvals required by law, to enter into this Agreement and to sell,
transfer and deliver the Shares to be sold by it;
(vi) this Agreement has been duly authorized, executed and delivered
by each of the Company and Copa Airlines;
(vii) assuming this Agreement has been duly authorized, executed and
delivered by each of the other parties thereto, this Agreement is a valid
and binding obligation of each of the Company and Copa Airlines,
enforceable against the Company and Copa Airlines in accordance with its
terms;
(viii) the execution and delivery by each of the Company and Copa
Airlines of, and the performance by each of the Company and Copa Airlines
of its respective obligations under, this Agreement will not contravene any
provision of applicable law or the Pacto Social (Articles of Incorporation)
of the Company or Copa Airlines or, to the best of such counsel's
knowledge, any agreement or other instrument binding upon any of the
Company or any subsidiaries that is material to any of the Company and its
subsidiaries, taken as a whole, or, to the best of such counsel's
knowledge, any judgment, order or decree of any governmental body, agency
or court having jurisdiction over the Company or any subsidiary;
(ix) no consent, approval, authorization or order of, or qualification
with, any governmental body or agency in Panama is required for the
performance by any of the Company, Copa Airlines or the Selling Shareholder
of its respective 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;
(x) the statements relating to Panamanian legal matters, documents or
proceedings included in (A) the Time of Sale Prospectus and the Prospectus
under the captions "Business--Litigation," "Regulation--Panama,"
"Description of Capital Stock," "Certain Income Tax Consequences--Other
Panamanian Taxes" and "Underwriting" and (B) the Registration Statement in
Items 6 and 7, in each case fairly summarize in all material respects such
matters, documents or proceedings;
(xi) to the best of such counsel's knowledge and after due inquiry in
Panama, there are no actions, suits or proceedings by or before any
arbitrator or governmental body pending or threatened against or affecting
the Company or any of its subsidiaries which, if adversely determined,
could reasonably be expected to, individually or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken as a
whole, except as described in the Time of Sale Prospectus;
16
(xi) upon payment to the Selling Shareholder for the Shares to be sold
to the Underwriters by the Selling Shareholder, pursuant to this Agreement,
all right, title and interest in such Shares will be transferred to the
Underwriters free and clear of all security interests, claims, liens,
equities or other encumbrances;
(xii) Copa Airlines possesses the governmental licenses in Panama
necessary to conduct its commercial airline operations as described in the
Prospectus under the caption "Regulations," and Copa Airlines is in
compliance with the terms and conditions of all such governmental licenses,
except where the failure to so comply would not, singly or in the
aggregate, have a material adverse effect on either the Company or Copa
Airlines; and all of the governmental licenses are valid and in full force
and effect, except where the invalidity of such governmental licenses or
the failure of such governmental licenses to be in full force and effect
would not, singly or in the aggregate, have a material adverse effect on
either the Company or Copa Airlines, in all cases except as disclosed in
the Time of Sale Prospectus; and
(xiii) nothing has come to the attention of such counsel that causes
such counsel to believe that (A) the Registration Statement or the
Prospectus included therein (except for the financial statements and
financial schedules and other financial data included therein, as to which
such counsel need not express any belief) at the time the Registration
Statement became effective 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, (B) the Time of
Sale Prospectus (except for the financial statements and financial
schedules and other financial data included therein, as to which such
counsel need not express any belief) as of the date of this Agreement or as
amended or supplemented, if applicable, as of the Closing Date contained or
contains any untrue statement of a material fact or omitted 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 or
(C) the Prospectus (except for the financial statements and financial
schedules and other financial data included therein, as to which such
counsel need not express any belief) as of its date or as amended or
supplemented, if applicable, as of the Closing Date contained or contains
any 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.
(d) The Underwriters shall have received on the Closing Date an opinion of
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, outside United States counsel for the Company
and Copa Airlines, dated the Closing Date, to the effect that:
(i) this Agreement has been duly executed and delivered by each of the
Company and Copa Airlines under the law of the State of New York;
(ii) assuming this Agreement has been duly authorized by the each of
the Company and Copa Airlines and duly authorized, executed and delivered
by each of the other parties thereto, this Agreement is a valid and binding
obligation of the Company
17
and Copa Airlines, enforceable against each of the Company and Copa
Airlines in accordance with its terms, subject to (i) the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights
generally, (ii) general equitable principles (whether considered in a
proceeding in equity or at law), (iii) an implied covenant of good faith
and fair dealing and (iv) the effects of the possible judicial application
of foreign laws or foreign governmental or judicial action affecting
creditors' rights;
(iii) the execution and delivery by each of the Company and Copa
Airlines and the performance by each of the Company and Copa Airlines of
its obligations under this Agreement will not violate any U.S. federal or
New York statute or any rule or regulation that has been issued pursuant to
any U.S. federal or New York statute and will not breach the terms of any
agreement identified on a schedule to such opinion;
(iv) no consent, approval, registration or qualification of or with
any U.S. federal or New York governmental agency is required for the
performance by either the Company or Copa Airlines of its obligations under
this Agreement, except for the registration under the Securities Act and
the Exchange Act of the Shares, and such consents, approvals, registrations
or qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Shares by the
Underwriters;
(v) the statements made in the Time of Sale Prospectus and the
Prospectus under the caption "Income Tax Consequences--United States,"
insofar as they purport to constitute summaries of matters of U.S. federal
tax law and regulations or legal conclusions with respect thereto,
constitute accurate summaries of the matters described therein in all
material respects;
(vi) neither the Company nor Copa Airlines is an investment company
within the meaning of or subject to regulations under the Investment
Company Act of 1940, as amended;
(vii) assuming such submission to jurisdiction is valid under the laws
of Panama, under the laws of the State of New York relating to submission
to personal jurisdiction, each of the Company and Copa Airlines has,
pursuant to Section 16 of this Agreement, submitted to the personal
jurisdiction of the courts of the State of New York and of the United
States sitting in the Borough of Manhattan in any action arising out of or
relating to this Agreement, has to the fullest extent permitted by law
waived any objection to the venue of a proceeding in any such court, and
has appointed CT Corporation as its authorized agent for the purpose
described in Section 16 hereof, and service of process effected on such
agent in the manner set forth in Section 16 hereof will be effective to
confer valid personal jurisdiction over the Company in any such action; and
18
(viii) (A) such counsel advises that the Registration Statement, as of
its effective date, and the Prospectus, as of its date (except for the
financial statements and financial schedules and other financial data
contained therein or omitted therefrom, as to which such counsel need not
express any opinion) appear on their face to be appropriately responsive in
all material respects to the requirements of the Securities Act and the
applicable rules and regulations of the Commission thereunder, and (B)
nothing has come to the attention of such counsel that causes such counsel
to believe that (1) the Registration Statement (except for the financial
statements and financial schedules and other financial data contained
therein or omitted therefrom, as to which such counsel need not express any
belief) at the time the Registration Statement became effective 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, (2) the Time of Sale Prospectus considered together with
the number of shares and price to public on the cover page of the
Prospectus (except for the financial statements and financial schedules and
other financial data contained therein or omitted therefrom, as to which
such counsel need not express any belief) as of the date of this Agreement
contained any 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
or (3) the Prospectus (except for the financial statements and financial
schedules and other financial data contained therein or omitted therefrom,
as to which such counsel need not express any belief) as of its date or as
amended or supplemented, if applicable, of the Closing Date contained or
contains any 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.
(e) The Underwriters shall have received on the Closing Date an opinion of
Xxxxxx & Xxxxxx LLP, counsel for the Selling Shareholder, dated the Closing
Date, to the effect that:
(i) assuming this Agreement has been duly authorized, executed and
delivered by each of the parties thereto, this Agreement is a valid and
binding obligation of the Selling Shareholder, enforceable against the
Selling Shareholder in accordance with its terms subject to (i) the effects
of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally, (ii) general equitable principles (whether considered in
a proceeding in equity or at law) and (iii) an implied covenant of good
faith and fair dealing;
(ii) the execution and delivery by the Selling Shareholder of, and the
performance by the Selling Shareholder of its obligations under, this
Agreement will not violate any U.S. federal or New York statute or any rule
or regulation that has been issued pursuant to any U.S. federal or New York
statute except for any violation that would not have a material adverse
effect on the Selling Shareholder's performance of its obligations under
this Agreement;
19
(iii) no consent, approval, registration or qualification of or with
any U.S. federal or New York governmental agency is required for the
performance by the Selling Shareholder with its obligations under this
Agreement, except for the registration under the Securities Act and the
Exchange Act of the Shares, and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of the
Shares by the Underwriters except for any violation that would not have a
material adverse effect on the Selling Shareholder's performance of its
obligations under this Agreement; and
(iv) assuming the Selling Shareholder has full power, right and
authority to sell the Shares to be sold by the Selling Shareholder upon the
payment and transfer contemplated by the Underwriting Agreement, the
Underwriters will acquire a security entitlement with respect to the Shares
sold by the Selling Shareholder and no action based on an adverse claim may
be asserted against the Underwriters.
(f) The Underwriters shall have received on the Closing Date an opinion of
[Xxxxxx Xxxxxx] in-house counsel for the Company and Copa Airlines, dated the
Closing Date, to the effect that:
(i) the Company and each of its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under
the laws of Panama, has all requisite power and authority to own its
property and to conduct its business as described in the Time of Sale
Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries, taken
as a whole
(ii) there are no actions, suits or proceedings by or before any
arbitrator or governmental body pending or threatened against or affecting
the Company or any of its subsidiaries which, if adversely determined,
could reasonably be expected to, individually or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken as a
whole, except as described in the Time of Sale Prospectus; and
(iii) Copa Airlines possesses the governmental licenses necessary to
conduct its commercial airline operations as described in the Prospectus
under the caption "Regulations," and Copa Airlines is in compliance with
the terms and conditions of all such governmental licenses, except where
the failure to so comply would not, singly or in the aggregate, have a
material adverse effect on either the Company or Copa Airlines; and all of
the governmental licenses are valid and in full force and effect, except
where the invalidity of such governmental licenses or the failure of such
governmental licenses to be in full force and effect would not, singly or
in the aggregate, have a material adverse effect on either the Company or
Copa Airlines, in all cases except as disclosed in the Time of Sale
Prospectus.
20
(g) The Underwriters shall have received on the Closing Date an opinion of
[Xxxxxxxx Xxxxx], Senior Vice-President and General Counsel for the Selling
Shareholder, dated the Closing Date, to the effect that:
(i) this Agreement has been duly authorized by the Selling Shareholder
and has been duly executed and delivered by the Selling Shareholder
(ii) the execution and delivery by the Selling Shareholder of, and the
performance by the Selling Shareholder of its obligations under, this
Agreement will not contravene any provision of the organizational documents
of the Selling Shareholder or any agreement or other instrument binding
upon the Selling Shareholder or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Selling
Shareholder except for any violation that would not be reasonably expected
to have a material adverse effect on the Selling Shareholder's performance
of its obligations under this Agreement;
(iii) no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Selling Shareholder of its obligations under this
Agreement, except such as may be required by the securities or Blue Sky
laws of the States of the United States or securities laws of other
jurisdictions in connection with the offer and sale of the Shares (as to
which such counsel expresses no comment or opinion) or have been obtained
or effected under the Securities Act or Exchange Act or in connection with
the listing of the Shares on the NYSE or the failure of which to be
obtained would not reasonably be expected to have a material adverse effect
on the Selling Shareholder's performance of its obligations under this
Agreement; and
(iv) the Selling Shareholder owns, and on the Closing Date will own,
the Shares to be sold by it free and clear of all liens and similar
encumbrances and has, and on the Closing Date will have, the legal right
and corporate power, and all authorizations and approvals required by law,
to enter into this Agreement and to sell, transfer and deliver the Shares
to be sold by it.
(h) The Underwriters shall have received on the Closing Date an opinion of
Xxxxx, Fabrega & Fabrega, Panamanian counsel for the Underwriters, dated the
Closing Date, covering the matters referred to in Sections 6(c)(iv), 6(c)(vi),
6(c)(x) (but only as to the statements in each of the Time of Sale Prospectus
and the Prospectus under "Description of Capital Stock" and "Underwriting") and
6(c)(xiv) above.
(i) The Underwriters shall have received on the Closing Date an opinion of
Xxxxxx Xxxxxxxx Xxxxx & Xxxxxxxx LLP, counsel for the Underwriters, dated the
Closing Date, covering the matters referred to in Sections 6(c)(x) (but only as
to the statements in the Prospectus under "Underwriting") and letter covering
the matters referred to in 6(d)(viii) above.
21
(j) With respect to Section 6(c)(xiv) above, Xxxxxxx, Xxxxx & Xxxxx and
Xxxxx, Xxxxxxx & Xxxxxxx, with respect to Section 6(d)(viii) above, Xxxxxxx
Xxxxxxx & Xxxxxxxx LLP, Xxxxxx & Xxxxxx LLP and Xxxxxx Xxxxxxxx Xxxxx & Xxxxxxxx
LLP may state that their opinions and beliefs are based upon their participation
in the preparation of the Registration Statement, Time of Sale Prospectus 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. With respect to Section 6(d) above, Xxxxxxx Xxxxxxx &
Xxxxxxxx LLP may rely upon with respect to factual matters and to the extent
such counsel deems appropriate, upon the representations of the parties hereto
contained herein and in other documents and instruments. With respect to Section
6(e) above, Xxxxxx & Xxxxxx LLP may rely upon opinion or opinions of in-house
counsel for the Selling Shareholder and, with respect to factual matters and to
the extent such counsel deems appropriate, upon the representations of the
parties hereto contained herein and in other documents and instruments.
(k) The opinions of Xxxxxxx, Xxxxx & Xxxxx, Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
and Xxxxxx & Xxxxxx LLP described in Sections 6(c), 6(d) and 6(e) above shall be
rendered to the Underwriters at the request of the Company or the Selling
Shareholder and shall so state therein.
(l) 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 satisfactory to the Underwriters, from Ernst
& Young 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, the Time of Sale Prospectus and the
Prospectus; provided that the letter delivered on the Closing Date shall use a
"cut-off date" not earlier than the date hereof.
(m) The "lock-up" agreements, each substantially in the form of Exhibit A
hereto, between you and CIASA, certain other shareholders, officers and
directors of the Company 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.
(n) The Selling Shareholder shall have entered into a lock-up agreement
substantially consistent with Section 3 hereof with CIASA for the period ending
two years after the date of the Prospectus.
(o) The listing of the Shares on the NYSE shall be in full force and
effect.
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 such documents as you may reasonably request with respect to the good
standing of the Company, the due authorization and issuance of the Additional
Shares to be sold on such Option Closing Date and other matters related to the
issuance of such Additional Shares.
22
7. Covenants of the Company. The Company covenants with each Underwriter as
follows:
(a) To furnish to you, without charge, six 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 4:00 p.m. New York City time on the business day next succeeding the date of
this Agreement and during the period mentioned in Section 7(e) or 7(f) below, as
many copies of the Time of Sale Prospectus, the Prospectus and any supplements
and amendments thereto or to the Registration Statement as you may reasonably
request.
(b) Before amending or supplementing the Registration Statement, the Time
of Sale Prospectus or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and to make such modifications as you may
reasonably suggest, and file with the Commission within the applicable period
specified in Rule 424(b) under the Securities Act any prospectus required to be
filed pursuant to such Rule.
(c) To furnish to you a copy of each proposed free writing prospectus to be
prepared by or on behalf of, used by, or referred to by the Company and not to
use or refer to any proposed free writing prospectus to which you reasonably
object.
(d) Not to take any action that would result in an Underwriter or the
Company being required to file with the Commission pursuant to Rule 433(d) under
the Securities Act a free writing prospectus prepared by or on behalf of the
Underwriter that the Underwriter otherwise would not have been required to file
thereunder without the consent of such Underwriter and the Representatives.
(e) If the Time of Sale Prospectus is being used to solicit offers to buy
the Shares at a time when the Prospectus is not yet available to prospective
purchasers and any event shall occur or condition exist as a result of which it
is necessary to amend or supplement the Time of Sale Prospectus in order to make
the statements therein, in the light of the circumstances, not misleading, or if
any event shall occur or condition exist as a result of which the Time of Sale
Prospectus conflicts with the information contained in the Registration
Statement then on file, or if, in the opinion of counsel for the Underwriters,
it is necessary to amend or supplement the Time of Sale Prospectus to comply
with applicable law, forthwith to prepare, file with the Commission and furnish,
at its own expense, to the Underwriters and to any dealer upon request, either
amendments or supplements to the Time of Sale Prospectus so that the statements
in the Time of Sale Prospectus as so amended or supplemented will not, in the
light of the circumstances when delivered to a prospective purchaser, be
misleading or so that the Time of Sale Prospectus, as amended or supplemented,
will no longer conflict with the Registration Statement, or so that the Time of
Sale Prospectus, as amended or supplemented, will comply with applicable law.
(f) If, during such period after the first date of the public offering of
the Shares as in the opinion of counsel for the Underwriters the Prospectus (or
in lieu thereof the notice referred
23
to in Rule 173(a) under the Securities Act) 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 (or in lieu thereof the notice referred to in
Rule 173(a) under the Securities Act) is delivered to a purchaser, not
misleading, or if, in the 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 (or in lieu thereof the notice referred to in Rule 173(a) under the
Securities Act) is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(g) 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, provided that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation or as a
dealer in securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any jurisdiction in
which it is not otherwise so subject.
(h) 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 December 31, 2007 that satisfies the provisions of Section 11(a) of the
Securities Act and the rules and regulations of the Commission thereunder.
(i) To use its best efforts to maintain in full force and effect the
listing of the Shares on the NYSE, including the filing with the NYSE of all
required documents and notices for non-U.S. companies that have securities that
are traded on the NYSE.
(j) To file any documents or reports with respect to the Shares required to
be filed with the National Securities Commission of Panama (the Comision
Nacional de Valores) in the time period required for such filing.
(k) To make available to the holders of the Shares and the Representatives,
(A) after the end of each fiscal year, an annual report (in English) that will
include a review of operations and annual audited consolidated financial
statements (including consolidated balance sheets, statements of income,
statements of change in shareholders' equity and statements of cash flow) with
an opinion by an independent accountant and prepared in conformity with U.S.
GAAP; and (B) after the end of each of the first three quarterly periods of each
fiscal year, unaudited consolidated financial information prepared in accordance
with U.S. GAAP, equivalent in substance to the information that would be
required to be filed on Form 10-Q, if the Company were required to file
quarterly reports on Form 10-Q.
24
8. Expenses. Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, the Company agrees to pay or
cause to be paid all expenses incident to the performance of their obligations
under this Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel, the Company's accountants and counsel for the Selling
Shareholder 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 Time of Sale Prospectus, the Prospectus, any free writing
prospectus prepared by or on behalf of, used by, or referred to by the Company
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) 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 securities laws and
all expenses in connection with the qualification of the Shares for offer and
sale under state securities laws as provided in Section 7(g) 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 NASD, (v)
all costs and expenses incident to listing the Shares on the NYSE, (vi) the cost
of printing certificates representing the Shares, (vii) the costs and charges of
any transfer agent, registrar or depositary, (viii) the costs and expenses of
the Company relating to investor presentations on any "road show" undertaken in
connection with the marketing of the offering of the Shares, including, without
limitation, expenses associated with the preparation or dissemination of any
electronic road show, 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, lodging
expenses of the representatives and officers of the Company and any such
consultants, the Company's pro rata share of travel expenses, and the Company's
pro rata cost of any aircraft chartered in connection with the road show, (ix)
the document production charges and expenses associated with printing this
Agreement and (x) 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
Section 10 entitled "Indemnity and Contribution" and the last paragraph of
Section 12 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.
The provisions of this Section shall not supersede or otherwise affect any
agreement that the Company and the Selling Shareholder may otherwise have for
the allocation of such expenses among themselves.
9. Covenant of the Underwriters. Each Underwriter severally covenants with
the Company not to take any action that would result in the Company being
required to file with the Commission under Rule 433(d) a free writing prospectus
prepared by or on behalf of such
25
Underwriter that otherwise would not be required to be filed by the Company
thereunder, but for the action of the Underwriter and not to use or refer to any
free writing prospectus without the prior written consent of the Company.
10. Indemnity and Contribution. (a) The Company and Copa Airlines, jointly
and severally, agree 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, the Time of Sale Prospectus, any "issuer free writing prospectus" as
defined in Rule 433(d) of the Securities Act relating to the Shares or any
"issuer information" filed or required to be filed pursuant to Rule 433(d) of
the Securities Act or the Prospectus or any amendment or supplement thereto, or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Underwriter furnished to the
Company in writing by such Underwriter, expressly for use therein.
(b) The Selling Shareholder agrees to indemnify and hold harmless each
Underwriter and the Company, each person, if any, who controls the Company, Copa
Airlines or 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, the
Time of Sale Prospectus, any "issuer free writing prospectus" as defined in Rule
433(d) of the Securities Act relating to the Shares or any "issuer information"
filed or required to be filed pursuant to Rule 433(d) of the Securities Act or
the Prospectus or any amendment or supplement thereto, or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, but only
with reference to information relating to the Selling Shareholder furnished in
writing to the Company by or on behalf of the Selling Shareholder expressly for
use in the Registration Statement, any preliminary prospectus, the Time of Sale
Prospectus, any "issuer free writing prospectus" as defined in Rule 433(d) of
the Securities Act relating to the Shares or any "issuer information" filed or
required to be filed pursuant to Rule 433(d) of the Securities Act or the
Prospectus or any amendment or supplement thereto. The liability of the Selling
Shareholder under the indemnity agreement contained in this paragraph shall be
limited to an amount equal to the aggregate Public Offering Price of the Shares
sold by the Selling Shareholder under this Agreement.
26
(c) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, the Selling Shareholder, the directors of the
Company, the officers of the Company who sign the Registration Statement and
each person, if any, who controls the Company or the Selling Shareholder 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 Statement, any preliminary prospectus, the Time of
Sale Prospectus, any "issuer free writing prospectus" as defined in Rule 433(d)
of the Securities Act relating to the Shares or any "issuer information" filed
or required to be filed pursuant to Rule 433(d) of the Securities Act, the
Prospectus or any amendments or supplements thereto.
(d) 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 10(a), 10(b), or 10(c) such person (the "INDEMNIFIED PARTY")
shall promptly notify the person against whom such indemnity may be sought (the
"INDEMNIFYING PARTY") in writing, but the omission to so notify the indemnifying
party shall not relieve it from any liability which it may have to any
indemnified party, 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
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a actual or potential differing interest;
(ii) the actual or potential defendants in, or targets of, any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties that are different
from or additional to those available to the indemnifying party; (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action; or (iv) the indemnifying party
shall authorize in writing the indemnified party to employ separate counsel at
the expense of the indemnifying party. 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 (i) the fees and expenses of more than one separate firm (in
addition to any local counsel) for all Underwriters and all persons, if any, who
control any Underwriter within the meaning of either Section 16 of the
Securities Act or Section 20 of the Exchange Act or who are affiliates of any
Underwriter within the meaning of Rule 405 under the Securities Act, (ii) the
fees and expenses of more than one separate firm (in addition to any local
counsel) for 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 such Section, (iii) the fees and expenses of more than one separate
firm (in addition to any local counsel) for the Selling Shareholder and all
persons, if any, who control the Selling Shareholder within the meaning of
either such Section, and that all such fees and expenses shall be reimbursed as
they are incurred.
27
In the case of any such separate firm for the Underwriters and such control
persons and affiliates of any Underwriters, such firm shall be designated in
writing by the Representatives. In the case of any such separate firm for the
Company, and such directors, officers and control persons of the Company, such
firm shall be designated in writing by the Company. In the case of any such
separate firm for the Selling Shareholder and such control persons of the
Selling Shareholder, such firm shall be designated in writing by the Selling
Shareholder. The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent, such consent not to be
unreasonably withheld, 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. 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 (i) includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding and (ii) does not include a statement as to or an admission of
fault, culpability or a failure to act, by or on behalf of any indemnified
party.
(e) To the extent the indemnification provided for in Section 10(a), 10(b)
or 10(c) 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 indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand from the offering of the Shares
or (ii) if the allocation provided by clause 10(e)(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 10(e)(i) above but also the relative
fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties 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 and the Selling Shareholder 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 each of
the Company and the Selling Shareholder 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 or the Selling Shareholder, as the
case may be, 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 the Selling
Shareholder 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 10 are several in proportion to the respective number of
28
Shares they have purchased hereunder, and not joint. The liability of the
Selling Shareholder under the contribution agreement contained in this paragraph
shall be limited to an amount equal to the aggregate Public Offering Price of
the Shares sold by the Selling Shareholder under this Agreement.
(f) The Company, Copa Airlines, the Selling Shareholder and the
Underwriters agree that it would not be just or equitable if contribution
pursuant to this Section 10 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 10(e). The amount paid or payable by an indemnified party
as a result of the losses, claims, damages and liabilities referred to in
Section 10(e) 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 10, 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 10 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.
(g) The indemnity and contribution provisions contained in this Section 10
and the representations, warranties and other statements of the Company, Copa
Airlines and the Selling Shareholder 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, any
Selling Shareholder or any person controlling any Selling Shareholder, or the
Company, its officers or directors or any person controlling the Company and
(iii) acceptance of and payment for any of the Shares.
11. 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 NYSE,
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) material disruption in securities settlement,
payment or clearance services in the United States or Panama shall have
occurred, (iv) a change or development involving a prospective change in
Panamanian taxation affecting the Company, the Shares or the transfer thereof
shall have occurred, which 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 Time of Sale Prospectus or the
Prospectus (v) any moratorium on commercial banking activities shall have been
declared by Federal, New York State or Panamanian authorities or (vi) there
shall have occurred any outbreak or escalation of
29
hostilities, or any change in financial, political or economic conditions 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 (vi), 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
Time of Sale Prospectus or the Prospectus.
12. 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 purchase hereunder on such date, and the aggregate
number of Shares that 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 that 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 12 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 on such date, and arrangements satisfactory to you, the
Company and the Selling Shareholders 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, the Company or
the Selling Shareholder. In any such case either you, the Company or the Selling
Shareholder 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, in the Time of Sale Prospectus, 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 or the Selling
Shareholder to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Company or the Selling Shareholder shall be
unable to perform its obligations under this Agreement, the
30
Company or the Selling Shareholder 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 fees and disbursements
of their counsel) reasonably incurred by such Underwriters in connection with
this Agreement or the offering contemplated hereunder.
13. Entire Agreement. (a) This Agreement, together with any contemporaneous
written agreements and any prior written agreements (to the extent not
superseded by this Agreement) that relate to the offering of the Shares,
represents the entire agreement between the Company and the Underwriters with
respect to the preparation of any preliminary prospectus, the Time of Sale
Prospectus, the Prospectus, the conduct of the offering, and the purchase and
sale of the Shares.
(b) The Company acknowledges that in connection with the offering of the
Shares: (i) the Underwriters have acted at arms length, are not agents of, and
owe no fiduciary duties to, the Company or any other person, (ii) the
Underwriters owe the Company only those duties and obligations set forth in this
Agreement and prior written agreements (to the extent not superseded by this
Agreement), if any, and (iii) the Underwriters may have interests that differ
from those of the Company. The Company waives to the full extent permitted by
applicable law any claims it may have against the Underwriters arising from an
alleged breach of fiduciary duty in connection with the offering of the Shares.
14. 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.
15. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
16. Submission to Jurisdiction; Appointment of Agent for Service. (a) The
Company irrevocably submits to the non-exclusive jurisdiction of the courts of
the State of the New York and of the United States sitting in the Borough of
Manhattan over any suit, action or proceeding arising out of or relating to this
Agreement, the Prospectus, the Registration Statement or the offering of the
Shares. The Company irrevocably waives, to the fullest extent permitted by law,
any objection that it may now or hereafter have to the laying of venue of any
such suit, action or proceeding brought in such a court and any claim that any
such suit, action or proceeding brought in such a court has been brought in an
inconvenient forum. To the extent that the Company has or hereafter may acquire
any immunity (on the grounds of sovereignty or otherwise) from the jurisdiction
of any court or from any legal process with respect to itself or its property,
the Company irrevocably waives, to the fullest extent permitted by law, such
immunity in respect of any such suit, action or proceeding.
(b) Copa Airlines irrevocably submits to the non-exclusive jurisdiction of
the courts of the State of the New York and of the United States sitting in the
Borough of Manhattan over any suit, action or proceeding arising out of or
relating to this Agreement and irrevocably waives, to the fullest extent
permitted by law, any objection that it may now or hereafter have to
31
the laying of venue of any such suit, action or proceeding brought in such a
court and any claim that any such suit, action or proceeding brought in such a
court has been brought in an inconvenient forum. To the extent that Copa
Airlines has or hereafter may acquire any immunity (on the grounds of
sovereignty or otherwise) from the jurisdiction of any court or from any legal
process with respect to itself or its property, Copa Airlines irrevocably
waives, to the fullest extent permitted by law, such immunity in respect of any
such suit, action or proceeding.
(c) Each of the Company and Copa Airlines hereby irrevocably appoints CT
Corporation, with offices at 000 Xxxxxx Xxx., Xxx Xxxx, Xxx Xxxx 00000 as its
agent for service of process in any suit, action or proceeding described in the
preceding paragraph and agrees that service of process in any such suit, action
or proceeding may be made upon it at the office of such agent. Each of the
Company and Copa Airlines waives, to the fullest extent permitted by law, any
other requirements of or objections to personal jurisdiction with respect
thereto. Each of the Company and Copa Airlines represents and warrants that such
agent has agreed to act as the Company's and Copa Airlines' agent for service of
process, and each of the Company and Copa Airlines agrees to take any and all
action, including the filing of any and all documents and instruments, that may
be necessary to continue such appointment in full force and effect.
17. Taxes. All payments to be made by the Company, Copa Airlines and the
Selling Shareholder under this Agreement shall be paid free and clear of and
without deduction or withholding for or on account of, any present or future
taxes, levies or imposts by Panama or by any department, agency or other
political subdivision or taxing authority thereof or therein, and all interest,
penalties or similar liabilities with respect thereto (collectively, "TAXES").
If any Taxes are required by law to be deducted or withheld in connection with
such payments, the Company, Copa Airlines and the Selling Shareholder will
increase the amount paid so that the net amount received by the Underwriters
equals the amount that would have been received in the absence of such deduction
or withholding.
18. No Fiduciary Duty. Each of the Company and the Selling Shareholders
acknowledges that in connection with the offering of the Shares: (a) the
Underwriters have acted at arms length, are not agents of, and owe no fiduciary
duties to, the Company, the Selling Shareholder or any other person, (b) the
Underwriters owe the Company and the Selling Shareholder only those duties and
obligations set forth in this Agreement and (c) the Underwriters may have
interests that differ from those of the Company and the Selling Shareholder.
Each of the Company and the Selling Shareholder waives to the full extent
permitted by applicable law any claims it may have against the Underwriters
arising from an alleged breach of fiduciary duty in connection with the offering
of the Shares.
19. 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. Notices. All communications hereunder shall be in writing and effective
only upon receipt and if to the Underwriters shall be delivered, mailed or sent
to you in care of the Representatives: Xxxxxx Xxxxxxx & Co. Incorporated, 0000
Xxxxxxxx, Xxx Xxxx, Xxx
00
Xxxx 00000, Attention: Equity Syndicate Desk, with a copy to the Legal
Department and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, 4 World
Financial Center, Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Global
Origination Counsel, Fax: 000-000-0000; if to the Company shall be delivered,
mailed or sent to Xxxxxxx Xxxxxxxxx x Xxxxxxx xx xx Xxxxxxx, Xxxxx xxx Xxxx,
Complejo Business Park, Torre Norte, Parque Xxxxxxx, Panama City, Panama,
Attention: Xxxxx Xxxxxxxx, Fax: 000-000-0000; and if to the Selling Shareholder
shall be delivered, mailed or sent to 0000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000,
Attention: Xxxx Xxxxx, with a copy to the office of General Counsel.
33
Very truly yours,
Copa Holdings, S.A.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Compania Panamena de Aviacion, S.A
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
34
The Selling Shareholder:
By: Continental Airlines, Inc.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Accepted as of the date hereof.
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx, Sachs & Co.
Acting severally on behalf of
themselves and the several
Underwriters named in Schedule I
hereto
By: Xxxxxx Xxxxxxx & Co. Incorporated
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
By: Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
35
SCHEDULE I
NUMBER OF FIRM SHARES TO BE
UNDERWRITER PURCHASED
-------------------------------------------------- ---------------------------
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxxx, Sachs & Co.
---------------------------
Total:
===========================
I-1
SCHEDULE II
TIME OF SALE PROSPECTUS
1. Preliminary Prospectus issued _______________, 2006
2. Free Writing Prospectuses: None
II-1
EXHIBIT A
[FORM OF LOCK-UP LETTER](1)
____________, 2006
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
4 World Financial Center, Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Ladies and Gentlemen:
The undersigned understands that Xxxxxx Xxxxxxx & Co. Incorporated ("XXXXXX
XXXXXXX") and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("XXXXXXX
XXXXX" and, together with Xxxxxx Xxxxxxx, the "REPRESENTATIVES") propose to
enter into an Underwriting Agreement (the "UNDERWRITING AGREEMENT") with Copa
Holdings, S.A. a Panamanian corporation (the "COMPANY"), providing for the
public offering (the "PUBLIC OFFERING") by the several Underwriters, including
Xxxxxx Xxxxxxx and Xxxxxxx Xxxxx (the "UNDERWRITERS") as the representatives
(the "REPRESENTATIVES") of the several Underwriters, of __________ shares (the
"SHARES") of Class A Common Stock, without par value, of the Company (the
"COMMON STOCK").
To induce the Underwriters that may participate in the Public Offering to
continue their efforts in connection with the Public Offering, the undersigned
hereby agrees that, without the prior written consent of the Representatives on
behalf of the Underwriters, it will not, during the period commencing on the
date hereof and ending 90 days after the date of the final prospectus relating
to the Public Offering (the "PROSPECTUS"), (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,
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 the Common
Stock, 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. The foregoing sentence shall not apply to (a) transactions relating
to shares of Common Stock or other securities acquired in open market
----------
(1) Period will be 90 days for other shareholders and directors and
officers of the Company, 180 days for CIASA and one year for Continental.
A-1
transactions after the completion of the Public Offering, provided that no
filing under Section 16(a) of the Exchange Act shall be required or shall be
voluntarily made in connection with subsequent sales of Common Stock or other
securities acquired in such open market transactions and (ii) no filing under
Section 16(a) of the Exchange Act, reporting a reduction in beneficial ownership
of shares of Common Stock, shall be required or shall be voluntarily made during
the restricted period referred to in the foregoing sentence. In addition, the
undersigned agrees that, without the prior written consent of the
Representatives on behalf of the Underwriters, 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.
If:
(1) during the last 17 days of the 90-day restricted period the Company
issues an earnings release or material news or a material event relating to the
Company occurs; or
(2) prior to the expiration of the 90-day restricted period, the Company
announces that it will release earnings results during the 16-day period
beginning on the last day of the 90-day period;
the restrictions imposed by this agreement shall continue to apply until the
expiration of the 18-day period beginning on the issuance of the earnings
release or the occurrence of the material news or material event.
The undersigned shall not engage in any transaction that may be restricted
by this agreement during the 34-day period beginning on the last day of the
initial 90-day restricted period unless the undersigned requests and receives
prior written confirmation from the Company or the Representatives on behalf of
the Underwriters that the restrictions imposed by this agreement have expired.
The undersigned understands that the Company and the Underwriters are
relying upon this agreement in proceeding toward consummation of the Public
Offering. The undersigned further understands that this agreement is irrevocable
and shall be binding upon the undersigned's heirs, legal representatives,
successors and assigns.
A-2
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 Underwriters.
Very truly yours,
---------------------------------------
(Name)
---------------------------------------
(Address)
A-3
