CONTINENTAL AIRLINES, INC. Continental Airlines Pass Through Certificates, Series 2006-1G Continental Airlines Pass Through Certificates, Series 2006-1B UNDERWRITING AGREEMENT
CONTINENTAL
AIRLINES, INC.
$190,000,000
Continental
Airlines Pass Through Certificates, Series 2006-1G
$130,000,000
Continental
Airlines Pass Through Certificates, Series 2006-1B
May
24,
2006
XXXXXX
XXXXXXX & CO. INCORPORATED
0000
Xxxxxxxx
Ladies
and Gentlemen:
Continental
Airlines, Inc., a Delaware corporation (the "Company"),
proposes that Wilmington Trust Company, as trustee under each of the Trusts
(as
defined below) (each, a "Trustee"),
issue
and sell to Xxxxxx Xxxxxxx & Co. Incorporated (the "Underwriter"),
Continental Airlines Pass Through Certificates, Series 2006-1G (the
"Class G
Certificates"),
and
Continental Airlines Pass Through Certificates, Series 2006-1B (the
"Class B
Certificates"
and,
together with the Class G Certificates, the "Certificates"),
in
the aggregate principal amounts and with the interest rates and final expected
distribution dates set forth on Schedule I hereto on the terms and conditions
stated herein. Each Trustee will use the proceeds from the sale of the
Certificates to acquire from the Company the Equipment Notes. The Company
intends to use most of the proceeds from the sale of said Equipment Notes
to
redeem its outstanding Floating Rate Secured Notes due 2007 and Floating
Rate
Secured Subordinated Notes due 2007 (collectively, the "Existing
Notes"),
outstanding under the Amended and Restated Indenture (the "Existing
Indenture")
dated
as of May 9, 2003, among the Company, Wilmington Trust Company, as trustee,
Xxxxxx Xxxxxxx Capital Services Inc., as liquidity provider, and MBIA Insurance
Corporation, as policy provider (or, if the Company has funded such redemption
prior to receipt of such proceeds, to reimburse the Company for such funding).
The
Class
B Certificates may only be sold by the Underwriter to persons reasonably
believed by the Underwriter to be "qualified institutional buyers"
("QIBs"),
as
defined in Rule 144A under the Securities Act of 1933, as amended (the
"Securities
Act").
The
Company has filed with the Securities and Exchange Commission (the "Commission")
an
automatic shelf registration statement on Form S-3 (File
No.333-133187)
1
relating
to securities, including pass through certificates (the "Shelf
Securities"),
to be
issued from time to time by the Company. The registration statement (including
the respective exhibits thereto and the respective documents filed by the
Company with the Commission pursuant to the Securities Exchange Act of 1934,
as
amended, and the rules and regulations of the Commission thereunder
(collectively, the "Exchange
Act"),
that
are incorporated by reference therein), as amended to and including the date
of
this Agreement, including the information (if any) deemed to be part of the
registration statement pursuant to Rule 430B under the Securities Act (and
the
Underwriter confirms that the first contract of sale of the Certificates
by the
Underwriter was made on the date of this Agreement), is hereinafter referred
to
as the "Registration
Statement",
and
the related prospectus covering the Shelf Securities dated April 10, 2006
filed
as part of the Registration Statement, in the form in which it has most recently
been filed with the Commission on or prior to the date of this Agreement,
is
hereinafter referred to as the "Basic
Prospectus".
The
Basic Prospectus, as supplemented by the final prospectus supplement
specifically relating to the Certificates in the form as first filed with
the
Commission pursuant to Rule 424(b) under the Securities Act in accordance
with
Section 4(d) hereof is hereinafter referred to as the "Prospectus",
and
the term "preliminary
prospectus"
means
any preliminary form of the Prospectus filed with the Commission pursuant
to
Rule 424 under the Securities Act. For purposes of this Agreement, (i)
"free
writing prospectus"
has the
meaning set forth in Rule 405 under the Securities Act and (ii) "Time
of Sale Prospectus"
means
the preliminary prospectus together with the free writing prospectuses, if
any,
each identified in Schedule III hereto. As used herein, the terms "Registration
Statement", "Basic Prospectus", "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 Registration Statement, the Basic Prospectus,
the
Time of Sale Prospectus, any preliminary prospectus or free writing prospectus
shall include all documents subsequently filed by the Company with the
Commission pursuant to the Exchange Act), and incorporated by reference
therein.
The
Certificates will be issued pursuant to a Pass Through Trust Agreement, dated
as
of September 25, 1997 (the "Basic
Agreement"),
between the Company and the Trustee, as supplemented with respect to the
issuance of each class of Certificates by a separate Pass Through Trust
Supplement to be dated as of the Closing Date (as defined below) (individually,
a "Trust
Supplement"),
between the Company and the Trustee (the Basic Agreement as supplemented
by each
such Trust Supplement being referred to herein individually as a "Pass
Through Trust Agreement").
The
Trust Supplements are related to the creation and administration of Continental
Airlines Pass Through Trust 2006-1G (the "Class G
Trust")
and
Continental Airlines Pass Through Trust 2006-1B (the "Class B
Trust"
and,
together with the Class G Trust, the "Trusts").
Certain
amounts of interest payable on the Class G Certificates will be entitled
to the
benefits of a primary liquidity facility and an above-cap liquidity facility.
Xxxxxx Xxxxxxx Bank (the "Primary
Liquidity Provider")
will
enter into a revolving credit agreement with respect to the Class G Trust
(the "Primary
Liquidity Facility"),
to be
dated as of the Closing Date, for the benefit of the holders of the Class
G
Certificates issued by the Class G Trust. Xxxxxx Xxxxxxx Capital Services
Inc.
(the "Above-Cap
Liquidity Provider")
will
enter into an interest rate cap agreement with respect to the Class G Trust
(the "Above-Cap
Liquidity Facility"
and,
together
2
with
the
Primary Liquidity Facility, the "Liquidity
Facilities"),
to be
dated as of the Closing Date, for the benefit of the holders of the Class
G
Certificates issued by the Class G Trust. The Liquidity Facilities will not
cover any amounts payable in respect of the Class B Certificates.
Payments
of interest on the Class G Certificates will be supported by a financial
guaranty insurance policy for the Class G Trust (the "Policy")
issued
by Financial Guaranty Insurance Company, as policy provider (the "Policy
Provider"),
to
the extent the Liquidity Facilities and any funds contained in the cash
collateral account funded from the Primary Liquidity Facility or the Above-Cap
Account funded from the Above-Cap Liquidity Facility, are insufficient or
unavailable for that purpose. The Policy will also support the payment of
the
final distributions on the Class G Certificates and will take effect in certain
other circumstances described in the Intercreditor Agreement and the Policy.
The
Policy will be issued pursuant to an Insurance and Indemnity Agreement to
be
dated as of the Closing Date (the "Policy
Provider Agreement")
among
the Policy Provider, the Company and the Subordination Agent. Under the
Intercreditor Agreement and the Policy Provider Agreement, the Policy Provider
will be entitled to reimbursement for amounts paid pursuant to claims made
under
the Policy, subject to certain limitations. The Class B Certificates will
not be
entitled to the benefits of the Policy or any other financial guaranty insurance
policy.
The
Primary Liquidity Provider, the Above-Cap Liquidity Provider, the Trustees
on
behalf of the holders of the Certificates and the Policy Provider will be
entitled to the benefits of an Intercreditor Agreement to be dated as of
the
Closing Date (the "Intercreditor
Agreement")
among
the Trustees, Wilmington Trust Company, as subordination agent and trustee
thereunder (the "Subordination
Agent"),
the
Primary Liquidity Provider, the Above-Cap Liquidity Provider and the Policy
Provider.
Capitalized
terms used but not defined in this Underwriting Agreement (the "Agreement")
shall
have the meanings specified therefor in the Pass Through Trust Agreement,
the
Note Purchase Agreement (as defined in the Intercreditor Agreement) or the
Intercreditor Agreement; provided
that, as
used in this Agreement, the term "Operative
Agreements"
shall
mean the Intercreditor Agreement, the Liquidity Facilities, the Policy, the
Pass
Through Trust Agreements, the Policy Provider Agreement, the Reference Agency
Agreement, the Collateral Maintenance Agreement, the Indenture, the Note
Purchase Agreement, the Equipment Notes, the Certificates and the
Indemnification Agreement, dated as of the Closing Date (the "Indemnification
Agreement"),
among
the Policy Provider, the Company and the Underwriter.
1. Representations
and Warranties.
(a) The
Company represents and warrants to, and agrees with the Underwriter that:
(i) The
Company meets the requirements for use of Form S-3 under the Securities
Act; the Registration Statement has become effective; and, on the original
effective date of the Registration Statement, the Registration Statement
complied in all material respects with the requirements of the Securities
Act;
no stop order suspending the effectiveness of the Registration Statement
is in
effect, and no proceedings for such purpose are pending before or, to the
knowledge of the Company, threatened by the Commission. The Registration
Statement is an "automatic
shelf registration statement"
3
(as
defined in Rule 405 under the Securities Act) and the Company is a "well-known
seasoned issuer"
(as
defined in Rule 405 under the Securities Act) eligible to use the Registration
Statement as an automatic shelf registration statement, and the Company has
not
received notice that the Commission objects to the use of the Registration
Statement as an automatic shelf registration statement. The Registration
Statement does not, as of the date hereof, include any untrue statement of
a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading. As of its date
and
on the Closing Date, the Prospectus, as amended and supplemented, if the
Company
shall have made any amendment or supplement thereto, does not and will not
include an untrue statement of a material fact and does not and will not
omit to
state a material fact necessary in order to make the statements therein,
in the
light of the circumstances under which they were made, not misleading.
The
Registration Statement, as of the date hereof, complies and the Prospectus
complies, 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. The Time of Sale Prospectus did
not,
as of 5 p.m., Eastern Time, on the date of this Agreement (the "Applicable
Time"),
and
the Time of Sale Prospectus, as then amended or supplemented by the Company,
if
applicable, will not as of the Closing Date, 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. The
preceding sentences do not apply to (x) statements in or omissions from the
Registration Statement, the
Time
of Sale Prospectus or the Prospectus based
upon (A) written
information furnished to the Company by
the
Underwriter expressly for use therein,
(B) information under the caption "Description of the Policy Provider", the
third paragraph under the caption "Experts" or Appendix III in the Prospectus
or
documents incorporated by reference thereunder (collectively, the "Policy
Provider Information")
or (C)
statements
or omissions in that part of each Registration Statement which shall constitute
the Statement of Eligibility of the Trustee under the Trust Indenture Act
of
1939, as amended (the "Trust
Indenture Act"),
on
Form T-1.
(ii) The
documents incorporated by reference in the Time of Sale Prospectus or the
Prospectus (excluding any Policy Provider Information comprising documents
incorporated by reference) pursuant to Item 12 of Form S-3 under the Securities
Act, at the time they were filed with the Commission or hereafter, during
the
period mentioned in Section 4(a) hereof, are filed with the Commission, complied
or will comply, as the case may be, in all material respects with the
requirements of the Exchange Act.
(iii) The
Company is not an
"ineligible issuer" in connection with the offering of the Certificates 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 to file, pursuant to Rule 433(d) under
the
Securities Act 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
4
prospectuses,
if any, identified in Schedule III hereto, the Company has not prepared,
used or
referred to, any free writing prospectus in connection with the offering
of the
Certificates.
(iv) The
Company has been duly incorporated and is an existing corporation in good
standing under the laws of the State of Delaware, with corporate power and
authority to own, lease and operate its property and to conduct its business
as
described in the Time of Sale Prospectus; and the Company is duly qualified
to
do business as a foreign corporation in good standing in all other jurisdictions
in which its ownership or lease of property or the conduct of its business
requires such qualification, except where the failure to be so qualified
would
not have a material adverse effect on the condition (financial or otherwise),
business, properties or results of operations of the Company and its
consolidated subsidiaries taken as a whole (a "Continental
Material Adverse Effect").
(v) Each
of
Continental Micronesia, Inc. and Air Micronesia Inc. (together, the
"Subsidiaries")
has
been duly incorporated and is an existing corporation in good standing under
the
laws of the jurisdiction of its incorporation, with corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Time of Sale Prospectus; and each Subsidiary is duly
qualified to do business as a foreign corporation in good standing in all
other
jurisdictions in which its ownership or lease of property or the conduct
of its
business requires such qualification, except where the failure to be so
qualified would not have a Continental Material Adverse Effect; all of the
issued and outstanding capital stock of each Subsidiary has been duly authorized
and validly issued and is fully paid and nonassessable; and, except as described
in the Time of Sale Prospectus, each Subsidiary's capital stock owned by
the
Company, directly or through subsidiaries, is owned free from liens,
encumbrances and defects.
(vi) Except
as
described in the Time of Sale Prospectus, the Company is not in default in
the
performance or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease
or
other instrument to which it is a party or by which it may be bound or to
which
any of its properties may be subject, except for such defaults that would
not
have a Continental Material Adverse Effect. The execution, delivery and
performance of this Agreement and the Operative Agreements to which the Company
is or will be a party and the consummation by the Company of the transactions
contemplated herein and therein have been duly authorized by all necessary
corporate action of the Company and will not result in any breach of any
of the
terms, conditions or provisions of, or constitute a default under, or result
in
the creation or imposition of any lien, charge or encumbrance (other than
any
lien, charge or encumbrance created under any Operative Agreement) upon any
property or assets of the Company pursuant to any indenture, loan agreement,
contract, mortgage, note, lease or other instrument to which the Company
is a
party or by which the Company may be bound or to which any of the property
or
assets of the Company is subject, which breach, default, lien, charge or
encumbrance, individually or in the aggregate, would have a Continental Material
Adverse Effect, nor will any such execution, delivery or performance result
in
any violation of the provisions of the charter or by-laws of the Company
or any
statute, any rule, regulation or order of any governmental agency or body
or any
court having jurisdiction over the Company.
5
(vii) No
consent, approval, authorization, or order of, or filing with, any governmental
agency or body or any court is required for the valid authorization, execution
and delivery by the Company of this Agreement and the Operative Agreements
to
which it is or will be a party and for the consummation of the transactions
contemplated herein and therein, except (x) such as may be required under
the
Securities Act, the Trust Indenture Act, the securities or "blue sky" or
similar
laws of the various states and of foreign jurisdictions or rules and regulations
of the NASD, Inc. ("NASD"),
and
(y) filings or recordings with the Federal Aviation Administration (the
"FAA")
and
under the Uniform Commercial Code (the "UCC")
or
other laws in effect in any applicable jurisdiction governing the perfection
of
security interests, which filings or recordings referred to in this clause
(y)
shall have been made, or duly presented for filing or recordation, or shall
be
in the process of being duly filed or filed for recordation, on or prior
to the
Closing Date.
(viii) This
Agreement has been duly executed and delivered by the Company and the Operative
Agreements to which the Company will be a party will be duly executed and
delivered by the Company on or prior to the Closing Date.
(ix) The
Operative Agreements to which the Company is or will be a party, when duly
executed and delivered by the Company, assuming that such Operative Agreements
have been duly authorized, executed and delivered by, and constitute the
legal,
valid and binding obligations of, each other party thereto, will constitute
valid and binding obligations of the Company enforceable in accordance with
their terms, except (w) as enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws now or hereafter
in
effect relating to creditors' rights generally, (x) as enforcement thereof
is
subject to general principles of equity (regardless of whether enforcement
is
considered in a proceeding in equity or at law), (y) that the enforceability
of
the Indenture may also be limited by applicable laws which may affect the
remedies provided therein but which do not affect the validity of the Indenture
or make such remedies inadequate for the practical realization of the benefits
intended to be provided thereby and (z) with respect to indemnification and
contribution provisions, as enforcement thereof may be limited by applicable
law. The Basic Agreement as executed is substantially in the form filed as
an
exhibit to the Company's current report on Form 8-K dated September 25, 1997
and
has been duly qualified under the Trust Indenture Act. The Certificates and
the
Pass Through Trust Agreements will, upon execution and delivery thereof,
conform
in all material respects to the descriptions thereof in the Time of Sale
Prospectus.
(x) The
consolidated financial statements of the Company incorporated by reference
in
the Time of Sale Prospectus, together with the related notes thereto, present
fairly in all material respects the financial position of the Company and
its
consolidated subsidiaries at the dates indicated and the consolidated results
of
operations and cash flows of the Company and its consolidated subsidiaries
for
the periods specified. Such financial statements have been prepared in
conformity with generally accepted
6
accounting
principles applied on a consistent basis throughout the periods involved,
except
as otherwise stated therein and except that unaudited financial statements
do
not have all required footnotes. The financial statement schedules, if any,
incorporated by reference in the Time of Sale Prospectus present the information
required to be stated therein.
(xi) The
Company is a "citizen of the United States" within the meaning of Section
40102(a)(15) of Title 49 of the United States Code, as amended, and holds
an air
carrier operating certificate issued pursuant to Chapter 447 of Title 49
of the
United States Code, as amended, for aircraft capable of carrying 10 or more
individuals or 6,000 pounds or more of cargo. All of the outstanding shares
of
capital stock of the Company have been duly authorized and validly issued
and
are fully paid and non-assessable.
(xii) On
or
prior to the Closing Date, the issuance of the Certificates will be duly
authorized by the Trustee. When duly executed, authenticated, issued and
delivered in the manner provided for in the Pass Through Trust Agreements
and
sold and paid for as provided in this Agreement, the Certificates will be
legally and validly issued and will be entitled to the benefits of the relevant
Pass Through Trust Agreement.
(xiii)
Except
as
disclosed in the Time of Sale Prospectus, the Company and the Subsidiaries
have
good and marketable title to all real properties and all other properties
and
assets owned by them, in each case free from liens, encumbrances and defects
except where the failure to have such title would not have a Continental
Material Adverse Effect; and except as disclosed in the Time of Sale Prospectus,
the Company and the Subsidiaries hold any leased real or personal property
under
valid and enforceable leases with no exceptions that would have a Continental
Material Adverse Effect.
(xiv) Except
as
disclosed in the Time of Sale Prospectus, there is no action, suit or proceeding
before or by any governmental agency or body or court, domestic or foreign,
now
pending or, to the knowledge of the Company, threatened against the Company
or
any of its subsidiaries or any of their respective properties that individually
(or in the aggregate in the case of any class of related lawsuits), could
reasonably be expected to result in a Continental Material Adverse Effect
or
that could reasonably be expected to materially and adversely affect the
consummation of the transactions contemplated by this Agreement or the Operative
Agreements.
(xv) Except
as
disclosed in the Time of Sale Prospectus, no labor dispute with the employees
of
the Company or any subsidiary exists or, to the knowledge of the Company,
is
imminent that could reasonably be expected to have a Continental Material
Adverse Effect.
(xvi) Each
of
the Company and the Subsidiaries has all necessary consents, authorizations,
approvals, orders, certificates and permits of and from, and has made all
declarations and filings with, all federal, state, local and other governmental
authorities, all self-regulatory organizations and all courts and other
tribunals, to own, lease, license and use its properties and assets and to
conduct its business in the manner described in
7
the
Prospectus, except to the extent that the failure to so obtain, declare or
file
would not have a Continental Material Adverse Effect.
(xvii) Except
as
disclosed in the Time of Sale Prospectus, (x) neither the Company nor any
of the Subsidiaries is in violation of any statute, rule, regulation, decision
or order of any governmental agency or body or any court, domestic or foreign,
relating to the use, disposal or release of hazardous or toxic substances
(collectively, "environmental
laws"),
owns
or operates any real property contaminated with any substance that is subject
to
any environmental laws, or is subject to any claim relating to any environmental
laws, which violation, contamination, liability or claim individually or
in the
aggregate is reasonably expected to have a Continental Material Adverse Effect,
and (y) the Company is not aware of any pending investigation which might
lead to such a claim that is reasonably expected to have a Continental Material
Adverse Effect.
(xviii) The
accountants that examined and issued an auditors' report with respect to
the
consolidated financial statements of the Company and the financial statement
schedules of the Company, if any, included or incorporated by reference in
the
Registration Statement are independent public accountants within the meaning
of
the Securities Act.
(xix) Each
preliminary prospectus filed
pursuant to Rule 424 under the Securities Act and included in the Time of
Sale Prospectus, complied when so filed in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder.
(xx) Neither
the Company nor either of the Trusts is an "investment company", or an entity
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended (the "Investment
Company Act"),
in
each case required to register under the Investment Company Act; and after
giving effect to the offering and sale of the Certificates and the application
of the proceeds thereof as described in the Prospectus, neither of the Trusts
will be an "investment company", or an entity "controlled" by an "investment
company", as defined in the Investment Company Act, in each case required
to
register under the Investment Company Act.
(xxi) This
Agreement and the Operative Agreements to which the Company is a party will,
upon execution and delivery thereof, conform in all material respects to
the
descriptions thereof contained in the Time of Sale Prospectus.
(xxii) Xxxxx,
Xxxxxxxxx & Xxxxxxx, Inc. ("SH&E")
is not
an affiliate of the Company and, to the knowledge of the Company, does not
have
a substantial interest, direct or indirect, in the Company. To the knowledge
of
the Company, none of the officers and directors of SH&E is connected with
the Company or any of its affiliates as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar
functions.
(xxiii) The
Company (A) makes and keeps books, records and accounts, which, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of
the
8
material
assets of the Company and its consolidated subsidiaries and (B) maintains
a
system of internal accounting controls sufficient to provide reasonable
assurances that (1) transactions are executed in accordance with
management’s general or specific authorization; (2) transactions are recorded as
necessary: (x) to permit preparation of financial statements in conformity
with
generally accepted accounting principles or any other criteria applicable
to
such statements and (y) to maintain accountability for assets; (3) access
to material assets is permitted only in accordance with management’s general or
specific authorization; and (4) the recorded accountability for material
assets
is compared with the existing material assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(xxiv) The
information provided by the Company to SH&E for use by SH&E in
preparation of its report relating to the Pledged Spare Parts dated as of
February 16, 2006, taken as a whole with respect to such report, did not
contain
an untrue statement of material fact or omit to state a material fact necessary
to make such information not misleading.
(b) The
parties agree that any certificate signed by a duly authorized officer of
the
Company and delivered to the Underwriter, or to counsel for the Underwriter,
on
the Closing Date and in connection with this Agreement or the offering of
the
Certificates, shall be deemed a representation and warranty by (and only
by) the
Company to the Underwriter as to the matters covered thereby.
2. Purchase,
Sale and Delivery of Certificates.
(a) On
the basis of the representations, warranties and agreements herein contained,
but subject to the terms and the conditions herein set forth, the Company
agrees
to cause the Trustees to sell to the Underwriter, and the Underwriter agrees
to
purchase from the Trustees, at a purchase price of 100% of the principal
amount
thereof, the aggregate principal amount of each class of Certificates.
(b) The
Company is advised by the Underwriter that the Underwriter proposes to make
a
public offering of the Certificates as set forth in the Prospectus as soon
after
this Agreement has been entered into as in the Underwriter’s judgment is
advisable. The Company is further advised by the Underwriter that the
Certificates are to be offered to the public initially at 100% of their
principal amount -- the public offering price -- plus accrued interest, if
any,
and to certain dealers selected by the Underwriter at concessions not in
excess
of the concessions set forth in the Prospectus, and that the Underwriter
may
allow, and such dealers may reallow, concessions not in excess of the
concessions set forth in the Prospectus to certain other dealers.
(c) As
underwriting commission and other compensation to the Underwriter for its
commitments and obligations hereunder in respect of the Certificates, including
the undertakings to distribute the Certificates, the Company will pay to
the
Underwriter the amount set forth in Schedule II hereto. Such payment will
be
made on the Closing Date simultaneously with the issuance and sale of the
Certificates to the Underwriter. Payment of such compensation shall be made
by
Federal funds check or by wire transfer of immediately available funds.
9
(d) The
Company shall cause the Class B Trust to issue and deliver against payment
of
the purchase price the Class B Certificates to be purchased by the Underwriter
hereunder and to be offered and sold by the Underwriter to QIBs in the form
of
one or more certificated securities in definitive, fully registered form
without
interest coupons (the "Restricted
Definitive Securities")
which
shall be registered in the name or names designated by the Underwriter. The
Restricted Definitive Security shall include the legend regarding restrictions
on transfer set forth under "Description of the Certificates—Transfer
Restrictions for Class B Certificates" in the Time of Sale Prospectus.
(e) Delivery
of and payment for the Certificates shall be made at the offices of Xxxxxx
Xxxxxxx & Xxxx LLP at Xxx Xxxxxxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 at
10:00 A.M. on June 9, 2006 or such other date, time and place as may be agreed
upon by the Company and the Underwriter (such date and time of delivery and
payment for the Certificates being herein called the "Closing
Date").
Delivery of the Class G Certificates issued by the Class G Trust shall be
made
to the Underwriter's account at The Depository Trust Company ("DTC")
for
the account of the Underwriter against payment by the Underwriter of the
purchase price thereof. Delivery of the Restricted Definitive Securities
evidencing the Class B Certificates shall be made to the Underwriter by physical
delivery to, or at the direction of, the Underwriter. Payment for the
Certificates issued by the Trusts shall be made by the Underwriter by wire
transfer of immediately available funds to the accounts and in the manner
designated prior to the Closing Date to the Underwriter by the Company or
at
such other date, time and place as may be agreed upon by the Company and
the
Underwriter. The Certificates shall be in the form of one or more fully
registered global Class G Certificates, and shall be deposited with the Class
G
Trustee as custodian for DTC and registered in the name of Cede &
Co.
(f) The
Company agrees to have the Certificates available for inspection and checking
by
the Underwriter in New York, New York not later than 1:00 P.M. on the business
day prior to the Closing Date.
3. Conditions
of Underwriter's Obligations.
The
obligations of the Underwriter to purchase and pay for the Certificates pursuant
to this Agreement are subject to the following conditions:
(a) On
the
Closing Date, no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the Securities Act and no proceedings
therefor shall have been instituted or threatened by the
Commission.
(b) On
the
Closing Date, the Underwriter shall have received an opinion of Xxxxxx Xxxxxxx
& Xxxx LLP, as counsel for the Company, dated the Closing Date, in form and
substance reasonably satisfactory to the Underwriter.
(c) On
the
Closing Date, the Underwriter shall have received the opinion of Xxxxxx Xxxxxxx
& Xxxx LLP, counsel for the Company, dated the Closing Date, delivered in
accordance with the provisions of Section 4.1.2(vii)(A) of the Note Purchase
Agreement.
10
(d) On
the
Closing Date, the Underwriter shall have received an opinion of the General
Counsel, Secretary and Corporate Compliance Officer of the Company, dated
the
Closing Date, in form and substance reasonably satisfactory to the
Underwriter.
(e) On
the
Closing Date, the Underwriter shall have received an opinion of the Legal
Department of the Company, dated the Closing Date, delivered in accordance
with
the provisions of Section 4.1.2(vii)(B) of the Note Purchase
Agreement.
(f) On
the
Closing Date, the Underwriter shall have received an opinion of Xxxxxxxx,
Xxxxxx
& Finger, P.A., special counsel to Wilmington Trust Company, individually
and as Trustee, Mortgagee and Subordination Agent, dated the Closing Date,
in
form and substance reasonably satisfactory to the Underwriter, delivered
in
accordance with the provisions of Section 4.1.2(vii)(C) of the Note Purchase
Agreement.
(g) On
the
Closing Date, the Underwriter shall have received an opinion as to the
perfection of the security interest in the Pledged Spare Parts of Xxxxxxxx,
Xxxxxx & Finger, P.A., counsel for Wilmington Trust Company, individually
and as Trustee, Mortgagee and Subordination Agent.
(h) On
the
Closing Date, the Underwriter shall have received an opinion of Xxxxx
Xxxxx & Xxxxxx,
special
counsel in Oklahoma City, Oklahoma counsel, dated the Closing Date, in form
and
substance reasonably satisfactory to the Underwriter, delivered in accordance
with the provisions of Section 4.1.2(vii)(D) of the Note Purchase
Agreement.
(i) On
the
Closing Date, the Underwriter shall have received an opinion of Xxxxxxxx
&
Sterling LLP, special New York counsel for the Primary Liquidity Provider,
dated
the Closing Date, in form and substance reasonably satisfactory to the
Underwriter.
(j) On
the
Closing Date, the Underwriter shall have received an opinion of Xxxxxxx Xxxxx
Xxxxxxx & Xxxxxxxxx, LLP, special Utah counsel for the Primary Liquidity
Provider, dated the Closing Date, in form and substance reasonably satisfactory
to the Underwriter.
(k) On
the
Closing Date, the Underwriter shall have received an opinion regarding the
2006-1G Pass Through Trust of Shearman & Sterling LLP, special New York
counsel for the Above-Cap Liquidity Provider, dated the Closing Date, in
form
and substance reasonably satisfactory to the Underwriter, delivered in
accordance with the provisions of Section 4(a)(ii) of the ISDA Master
Agreement.
(l) On
the
Closing Date, the Underwriter shall have received an opinion of Xxxxxxxx
&
Sterling LLP, special New York counsel for the Above-Cap Liquidity Provider,
dated the Closing Date, with respect to certain bankruptcy
matters.
11
(m) On
the
Closing Date, the Underwriter shall have received an opinion of in-house
counsel
of Above-Cap Liquidity Provider, dated the Closing Date, in form and substance
reasonably satisfactory to the Underwriter.
(n) On
the
Closing Date, the Underwriter shall have received an opinion of Xxxxxx &
Xxxxxxx, special New York counsel for the Policy Provider, dated the Closing
Date, in form and substance reasonably satisfactory to the
Underwriter.
(o) On
the
Closing Date, the Underwriter shall have received an opinion of Vice President
and Senior Counsel of the Policy Provider, dated the Closing Date, in form
and
substance reasonably satisfactory to the Underwriter.
(p) On
the
Closing Date, the Underwriter shall have received an opinion of Xxxxxxx,
Tweed,
Xxxxxx & XxXxxx LLP, counsel for the Underwriter, dated as of the Closing
Date, with respect to the issuance and sale of the Certificates, the
Registration Statement, the Time of Sale Prospectus, the Prospectus and other
related matters as the Underwriter may reasonably require.
(q) Subsequent
to the execution and delivery of this Agreement, there shall not have occurred
any change, or any development or event involving a prospective change, in
the
condition (financial or other), business, properties or results of operations
of
the Company and its subsidiaries considered as one enterprise that, in the
Underwriter’s judgment, is material and adverse and that makes it, in the
Underwriter’s judgment, impracticable to proceed with the completion of the
public offering of the Certificates on the terms and in the manner contemplated
by the Time of Sale Prospectus.
(r) The
Underwriter shall have received on the Closing Date a certificate, dated
the
Closing Date and signed by the President or any Vice President of the Company,
to the effect that the representations and warranties of the Company contained
in this Agreement are true and correct as of the Closing Date as if made
on the
Closing Date (except to the extent that they relate solely to an earlier
date,
in which case they shall be true and accurate as of such earlier date), that
the
Company has performed all its obligations to be performed hereunder on or
prior
to the Closing Date and that, subsequent to the execution and delivery of
this
Agreement, there shall not have occurred any material adverse change, or
any
development or event involving a prospective material adverse change, in
the
condition (financial or other), business, properties or results of operations
of
the Company and its subsidiaries considered as one enterprise, except as
set
forth in or contemplated by the Time of Sale Prospectus.
(s) As
of the
Closing Date, the representations and warranties of the Policy Provider
contained in the Indemnification Agreement shall be true and correct in all
material respects as of the Closing Date (except to the extent that they
relate
solely to an earlier or later date, in which case they shall be true and
correct
as of such earlier or later date) and the Underwriter shall have received
a
certificate of the President or a Vice President of the Policy Provider,
dated
the Closing Date, to such effect.
12
(t) The
Underwriter shall have received from Ernst & Young LLP, (i) a letter, dated
no earlier than the date hereof, in form and substance satisfactory to the
Underwriter, 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 included or incorporated
by reference in the Registration Statement, the preliminary prospectus and
the
prospectus, and (ii) a letter, dated the Closing Date, which meets the above
requirements, except that the specified date therein referring to certain
procedures performed by Xxxxx & Young LLP will not be a date more than
three business days prior to the Closing Date for purposes of this subsection.
(u) Subsequent
to the execution and delivery of this Agreement and prior to the Closing
Date,
there shall not have been any downgrading in the rating accorded any of the
Company's securities (except for any pass through certificates) by any
"nationally recognized statistical rating organization", as such term is
defined
for purposes of Rule 436(g)(2) under the Securities Act, or any public
announcement that any such organization has under surveillance or review,
in
each case for possible change, its ratings of any such securities other than
pass through certificates (other than an announcement with positive implications
of a possible upgrading, and no implication of a possible downgrading, of
such
rating).
(v) SH&E
shall have furnished to the Underwriter a letter, addressed to the Company
and
dated the Closing Date, confirming that SH&E and each of its directors and
officers (i) is not an affiliate of the Company or any of its affiliates,
(ii) does not have any substantial interest, direct or indirect, in the
Company or any of its affiliates and (iii) is not connected with the
Company or any of its affiliates as an officer, employee, promoter, underwriter,
trustee, partner, director or person performing similar functions.
(w) At
the
Closing Date, each of the Operative Agreements shall have been duly executed
and
delivered by each of the parties thereto; and the representations and warranties
of the Company contained in each of such executed Operative Agreements shall
be
true and correct as of the Closing Date (except to the extent that they relate
solely to an earlier date, in which case they shall be true and correct as
of
such earlier date) and the Underwriter shall have received a certificate
of the
President or a Vice President of the Company, dated as of the Closing Date,
to
such effect.
(x) On
the
Closing Date, (i) the Class G Certificates shall be rated "AAA" by Standard
& Poor's Ratings Services, a division of The XxXxxx-Xxxx Companies, Inc.
("S&P")
and
"Aaa" by Xxxxx'x Investors Service, Inc. ("Moody's")
and
(ii) the Class B Certificates shall be rated not lower than "B+" by S&P and
not lower than "B1" by Moody's.
The
Company will furnish the Underwriter with such conformed copies of such
opinions, certificates, letters and documents as the Underwriter may reasonably
request.
4. Certain
Covenants of the Company.
The
Company covenants with the Underwriter as follows:
13
(a) During
the period described in the following sentence of this Section 4(a), the
Company
shall advise the Underwriter promptly of any proposal to amend or supplement
the
Registration Statement, Time of Sale Prospectus or the Prospectus (except
by
documents filed under the Exchange Act) and will not effect such amendment
or
supplement (except by documents filed under the Exchange Act) without the
consent of the Underwriter, which consent will not be unreasonably withheld.
If,
at any time after the public offering of the Certificates, the Prospectus
(or in
lieu thereof the notice referred to in Rule 173(a) under the Securities Act)
is
required by law to be delivered in connection with sales of the Certificates
by
the Underwriter or a dealer, any event shall occur as a result of which it
is
necessary to amend the Registration Statement or amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus (or in lieu thereof the notice referred
to in
Rule 173(a) under the Securities Act) is delivered to a purchaser, not
misleading in any material respect, or if it is necessary to amend the
Registration Statement or amend or supplement the Prospectus to comply with
law,
the Company shall prepare and furnish at its expense to the Underwriter and
to
the dealers (whose names and addresses the Underwriter will furnish to the
Company) to which Certificates may have been sold by the Underwriter 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 in any material respect or amendments or supplements
to
the Registration Statement or the Prospectus so that the Registration Statement
or the Prospectus, as so amended or supplemented, will comply with law and
cause
such amendments or supplements to be filed promptly with the
Commission.
(b) During
the period mentioned in paragraph (a) above, the Company shall notify the
Underwriter immediately of (i) the effectiveness of any amendment to the
Registration Statement, (ii) the transmittal to the Commission for filing
of any supplement to the Prospectus or any document that would as a result
thereof be incorporated by reference in the Prospectus, (iii) the receipt
of any comments from the Commission with respect to the Registration Statement
or the Prospectus, (iv) any request by the Commission to the Company for
any amendment to the Registration Statement or any supplement to the Prospectus
or for additional information relating thereto or to any document incorporated
by reference in the Prospectus and (v) receipt by the Company of any notice
of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement, the suspension of the qualification of the
Certificates for offering or sale in any jurisdiction, or the institution
or
threatening of any proceeding for any of such purposes; and the Company agrees
to use every reasonable effort to prevent the issuance of any such stop order
and, if any such order is issued, to obtain the lifting thereof at the earliest
possible moment and the Company shall (subject to the proviso to Section
4(i))
endeavor, in cooperation with the Underwriter, to prevent the issuance of
any
such stop order suspending such qualification and, if any such order is issued,
to obtain the lifting thereof at the earliest possible moment.
14
(c) During
the period mentioned in paragraph (a) above, the Company will furnish to
the Underwriter as many conformed copies of the Registration Statement (as
originally filed), Time of Sale Prospectus, the Prospectus, and all amendments
and supplements to such documents (excluding all exhibits and documents filed
therewith or incorporated by reference therein) and as many conformed copies
of
all consents and certificates of experts, in each case as soon as available
and
in such quantities as the Underwriter reasonably requests.
(d) Promptly
following the execution of this Agreement, the Company will prepare a Prospectus
that complies with the Securities Act and that sets forth the principal amount
of the Certificates and their terms not otherwise specified in the preliminary
prospectus or the Basic Prospectus included in the Registration Statement,
the
name of the Underwriter and the principal amount of the Certificates, the
price
at which the Certificates are to be purchased by the Underwriter from the
Trustee, any initial public offering price, any selling concession and
reallowance and any delayed delivery arrangements, and such other information
as
the Underwriter and the Company deem appropriate in connection with the offering
of the Certificates. The Company will timely transmit copies of the Prospectus
to the Commission for filing pursuant to Rule 424 under the Securities
Act.
(e) The
Company shall furnish to the Underwriter a copy of each free
writing prospectus relating to the offering of the Certificates prepared
by or
on behalf of, used by, or referred to by the Company and shall not use or
refer
to any proposed free writing prospectus to which the Underwriter reasonably
objects.
(f) If
the
Time of Sale Prospectus is being used to solicit offers to buy the Certificates
at a time when a 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 when delivered to a prospective
purchaser, not misleading in any material respect, 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
it is necessary to amend or supplement the Time of Sale Prospectus to comply
with applicable law, the Company shall forthwith prepare, file promptly with
the
Commission and furnish, at the Company's expense, to the Underwriter and
to the
dealers (whose names and addresses the Underwriter will furnish to the Company)
to which Certificates may have been sold by the Underwriter and to any other
dealers 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 in any material respect or so that the
Time
of Sale Prospectus, as so 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.
15
(g) The
Company shall, in cooperation with the Underwriter, endeavor to arrange for
the
qualification of the Certificates for offer and sale under the applicable
securities or "blue sky" laws of such jurisdictions in the United States
as the
Underwriter reasonably designates and will endeavor to maintain such
qualifications in effect so long as required for the distribution of the
Certificates; provided
that the
Company shall not be required to (i) qualify as a foreign corporation or as
a dealer in securities, (ii) file a general consent to service of process
or (iii) subject itself to taxation in any such jurisdiction.
(h) During
the period of ten years after the Closing Date, the Company will promptly
furnish to the Underwriter, upon request, copies of all Annual Reports on
Form
10-K and any definitive proxy statement of the Company filed with the
Commission; provided
that
providing a website address at which such Annual Reports and any such definitive
proxy statements may be accessed will satisfy this clause (h).
(i) If
the
third anniversary of the initial effective date of the Registration Statement
occurs before all the Certificates have been sold by the Underwriter, prior
to
the third anniversary, the Company shall file a new shelf registration statement
and take any other action necessary to permit the public offering of the
Certificates to continue without interruption, in which case references herein
to the Registration Statement shall include the new registration statement
as it
shall become effective.
(j) Between
the date of this Agreement and the Closing Date, the Company shall not, without
the prior written consent of the Underwriter, offer, sell, or enter into
any
agreement to sell (as public debt securities registered under the Securities
Act
(other than the Certificates) or as debt securities which may be resold in
a
transaction exempt from the registration requirements of the Securities Act
in
reliance on Rule 144A thereunder and which are marketed through the use of
a
disclosure document containing substantially the same information as a
prospectus for similar debt securities registered under the Securities Act),
any
equipment notes, pass through certificates, equipment trust certificates
or
equipment purchase certificates secured by aircraft spare parts owned by
the
Company (or rights relating thereto).
(k) The
Company shall prepare a final term sheet relating to the offering of the
Certificates, containing only information that describes the final terms
of the
Certificates or the offering in a form consented to by the Underwriter and
shall
file such final term sheet within the period required by Rule 433(d)(5)(ii)
under the Securities Act following the date the final terms have been
established for the offering of the Certificates.
(l) It
is
contemplated that the Company shall use part of the funds raised hereby to
redeem the Existing Notes. Prior to any such redemption, (i) the Company
shall
comply with all conditions precedent for redemption of the Existing Notes
set
forth in Article 4 of the Existing Indenture and any other applicable sections
of the Existing Indenture, subject to the receipt of the proceeds from the
sale
of the Equipment Notes pursuant to the Note Purchase Agreement, or (ii) the
Company shall ensure that MBIA Insurance Corporation, as policy provider
under
the Existing Indenture, waives
16
compliance
with such conditions precedent set forth in Section 4.1 of the Existing
Indenture and any other applicable sections of the Existing Indenture, in
each
case in accordance with the Existing Indenture; provided,
however,
that if
the Existing Trustee accepts the redemption payment and releases the security
interest on the Spare Parts Collateral (as defined in the Existing Indenture)
in
accordance with the terms of the Existing Indenture and the Security Agreement
(as defined in the Existing Indenture), the Company shall not be held liable
for
non-compliance with (i) or (ii) of this clause (l).
5. Certain
Covenants of the Underwriter.
(a) The
Underwriter represents and warrants
that it is a QIB within the meaning of Rule 144A under the Securities Act.
The
Underwriter represents, warrants and agrees with the Company that it has
solicited and will solicit offers for the Class B Certificates only from,
and
has offered and will offer and sell the Class B Certificates only to persons
that it reasonably believes to be QIBs; provided
that, in
purchasing the Class B Certificates, such persons are deemed to have represented
and agreed as provided in the Time of Sale Prospectus under the caption
"Description of the Certificates—Transfer Restrictions for Class B
Certificates".
(b) The
Underwriter represents, warrants and covenants that it has not made and will
not
make any offer relating to the Certificates that would constitute an issuer
free
writing prospectus; provided that
this
Section 5(b) shall not prevent the Underwriter from transmitting or otherwise
making use of one or more customary “Bloomberg Screens” to offer the
Certificates or convey final pricing terms thereof that contain only information
contained in the Time of Sale Prospectus.
6. Indemnification
and Contribution.
(a) The
Company agrees to indemnify and hold harmless the Underwriter, and each Person,
if any, who controls the Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act
from and against any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred by the
Underwriter or any such controlling person in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, any preliminary prospectus, the Time of Sale Prospectus, any
"issuer
free writing prospectus"
as
defined in Rule 433(h) under the Securities Act, any Company information
that
the Company has filed, or is required to file, pursuant to Rule 433(d) under
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 any of the aforementioned losses, claims, damages
or liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information furnished to the Company
in
writing by or through the Underwriter expressly for use in the Registration
Statement, any preliminary prospectus, the Time of Sale Prospectus, any issuer
free writing prospectus or the Prospectus, or any amendment or supplement
thereto (the "Underwriter
Information")
or
Policy Provider Information.
(b) The
Underwriter agrees to indemnify and hold harmless the Company, its directors,
its officers who signed the Registration Statement and each person, if any,
who
17
controls
the Company, within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act, to the same extent as the foregoing
indemnity from the Company to the Underwriter but only with reference to
the
Underwriter Information.
(c) In
case
any proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant
to
either paragraph (a) or (b) above, such person (the "indemnified
party")
shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying
party")
in
writing. The indemnifying party, upon request of the indemnified party, shall,
and the indemnifying party may elect to, retain counsel reasonably satisfactory
to the indemnified party to represent the indemnified party and any others
the
indemnifying party may designate in such proceeding and the indemnifying
party
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain
its
own
counsel,
but the fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel, (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation
of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them, or (iii) the indemnifying party shall
have failed to retain counsel as required by the prior sentence to represent
the
indemnified party within a reasonable amount of time. It is understood that
the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses
of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed
as
they are incurred. Such firm shall be designated in writing by the Underwriter
in the case of parties indemnified pursuant to paragraph (a) above and by
the
Company in the case of parties indemnified pursuant to paragraph (b) above.
The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or
if
there be a final judgment for the plaintiff, the indemnifying party agrees
to
indemnify the indemnified party from and against any loss or liability by
reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if
at
any time an indemnified party shall have requested in writing an indemnifying
party to reimburse the indemnified party for fees and expenses of counsel
as
contemplated by the second and third sentences of this paragraph (c), the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 90 days after receipt by such indemnifying party of
the
aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to
the
date of such settlement, unless such fees and expenses are being disputed
in
good faith. The indemnifying party at any time may, subject to the last sentence
of this paragraph (c), settle or compromise any proceeding described in this
paragraph (c), at the expense of the indemnifying party. 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
18
statement
as to, or an admission of, fault, culpability or a failure to act by or on
behalf of an indemnified party.
(d) To
the
extent the indemnification provided for in paragraph (a) or (b) of this Section
6 is required to be made but is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then the applicable indemnifying party under such paragraph,
in lieu
of indemnifying such indemnified party thereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company, on the one hand, and
the
Underwriter, on the other hand, from the offering of such Certificates or
(ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only
the
relative benefits referred to in clause (i) above but also the relative
fault of the Company, on the one hand, and the Underwriter, on the other
hand,
in connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the one
hand,
and the Underwriter, on the other hand, in connection with the offering of
such
Certificates shall be deemed to be in the same respective proportions as
the
proceeds from the offering of such Certificates received by the Trusts (before
deducting expenses), less total underwriting discounts and commissions received
by the Underwriter, and the total underwriting discounts and commissions
received by the Underwriter, in each case as set forth on the cover of the
Prospectus, bear to the aggregate initial public offering price of such
Certificates. The relative fault of the Company, on the one hand, and of
the
Underwriter, 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 information supplied by the Underwriter, and the
parties' relative intent, knowledge, access to information and opportunity
to
correct or prevent such statement or omission.
(e) The
Company and the Underwriter agree that it would not be just or equitable
if
contribution pursuant to this Section 6 were determined by pro rata
allocation or by any other method of allocation that does not take account
of
the equitable considerations referred to in paragraph (d) above. The amount
paid
or payable by an indemnified party as a result of the losses, claims, damages
and liabilities referred to in paragraph (d) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of
this
Section 6, the Underwriter shall not be required to contribute any amount
in excess of the amount by which the total price at which the Certificates
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that the 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.
(f) The
indemnity and contribution provisions contained in this Section 6 and the
representations and warranties of the Company contained in this Agreement
shall
remain
19
operative
and in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of the Underwriter
or any person controlling the Underwriter or by or on behalf of the Company,
its
officers or directors or any person controlling the Company, and
(iii) acceptance of and payment for any of the Certificates. The remedies
provided for in this Section 6 are not exclusive and shall not limit any
rights or remedies which may otherwise be available to any indemnified party
at
law or in equity.
7. Survival
of Certain Representations and Obligations.
The
respective indemnities, agreements, representations, warranties and other
statements of the Company or its officers and of the Underwriter set forth
in or
made pursuant to this Agreement will remain in full force and effect, regardless
of any termination of this Agreement, any investigation, or statement as
to the
results thereof, made by or on behalf of the Underwriter, the Company or
any of
their respective representatives, officers or directors or any controlling
person and will survive delivery of and payment for the Certificates. If
for any
reason the purchase of the Certificates by the Underwriter is not consummated,
the Company shall remain responsible for the expenses to be paid or reimbursed
by it pursuant to Section 9 hereof and the respective obligations of the
Company and the Underwriter pursuant to Section 6 hereof shall remain in
effect. If the purchase of the Certificates by the Underwriter is not
consummated for any reason other than solely because of the occurrence of
the
termination of the Agreement pursuant to Section 8 hereof, the Company will
reimburse the Underwriter for all out-of-pocket expenses (including reasonable
fees and disbursements of counsel) reasonably incurred by the Underwriter
in
connection with the offering of such Certificates and comply with its
obligations under Sections 6 and 9 hereof.
8. Termination.
This
Agreement shall be subject to termination by notice given by the Underwriter
to
the Company, if (a) after the execution and delivery of this Agreement and
prior to the Closing Date (i) trading generally shall have been materially
suspended or materially limited on or by, as the case may be, any of the
New
York Stock Exchange, the American Stock Exchange or the NASDAQ Global Market,
(ii) trading of any securities of the Company shall have been suspended on
any exchange or in any over-the-counter market, (iii) a general moratorium
on commercial banking activities in New York shall have been declared by
either
Federal or New York State authorities, (iv) there shall have occurred any
attack on, outbreak or escalation of hostilities or act of terrorism involving,
the United States, or any change in financial markets or any calamity or
crisis
that, in each case, in the Underwriter’s judgment, is material and adverse or
(v) any major disruption of settlements of securities or clearance services
in
the United States that would materially impair settlement and clearance with
respect to the Certificates and (b) in the case of any of the events
specified in clauses (a)(i) through (v), such event singly or together with
any
other such event makes it, in the Underwriter’s judgment, impracticable to
market the Certificates on the terms and in the manner contemplated in the
Time
of Sale Prospectus.
9. Payment
of Expenses.
As
between the Company and the Underwriter, the Company shall pay all expenses
incidental to the performance of the Company's obligations under this Agreement,
including the following:
(i) expenses
incurred in connection with (A) qualifying the Certificates for offer and
sale
under the applicable securities or "blue sky" laws of such jurisdictions
in
20
the
United States as the Underwriter reasonably designate (including filing fees
and
fees and disbursements of counsel for the Underwriter in connection therewith),
(B) endeavoring to maintain such qualifications in effect so long as
required for the distribution of such Certificates, (C) the review (if any)
of
the offering of the Certificates by the NASD, (D) the determination of the
eligibility of the Certificates for investment under the laws of such
jurisdictions as the Underwriter may designate and (E) the preparation and
distribution of any blue sky or legal investment memorandum by Underwriter’s
counsel;
(ii) expenses
incurred in connection with the preparation and distribution to the Underwriter
and the dealers (whose names and addresses the Underwriter will furnish to
the
Company) to which Certificates may have been sold by the Underwriter on its
behalf and to any other dealers upon request, either of (A) amendments to
the Registration Statement or amendments or supplements to the Time of Sale
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not materially
misleading or (B) amendments or supplements to the Registration Statement,
the Time of Sale Prospectus, or the Prospectus so that the Registration
Statement, the Time of Sale Prospectus or the Prospectus, as so amended or
supplemented, will comply with law and the expenses incurred in connection
with
causing such amendments or supplements to be filed promptly with the Commission,
all as set forth in Section 4(a) hereof;
(iii) the
expenses incurred in connection with the preparation, printing and filing
of the
Registration Statement (including financial statements and exhibits), as
originally filed and as amended, any preliminary prospectus, the Time of
Sale
Prospectus, the Prospectus, any issuer free writing prospectus and any
amendments and supplements to any of the foregoing, including the filing
fees
payable to the Commission relating to the Certificates (within the time period
required by Rule 456(b)(1), if applicable), and the cost of furnishing copies
thereof to the Underwriter and dealers;
(iv) expenses
incurred in connection with the preparation, printing and distribution of
this
Agreement, the Certificates and the Operative Agreements;
(v) expenses
incurred in connection with the delivery of the Certificates to the
Underwriter;
(vi) reasonable
fees and disbursements of the counsel and accountants for the
Company;
(vii) to
the
extent the Company is so required under any Operative Agreement to which
it is a
party, the fees and expenses of the Mortgagee, the Subordination Agent, the
Trustees, the Reference Agent, the Primary Liquidity Provider, the Above-Cap
Liquidity Provider and the Policy Provider and the reasonable fees and
disbursements of their respective counsel;
(viii) fees
charged by rating agencies for rating the Certificates (including annual
surveillance fees related to the Certificates as long as they are
outstanding);
21
(ix) reasonable
fees and disbursements of counsel for the Underwriter;
(x) all
fees
and expenses relating to appraisals of the Pledged Spare Parts; and
(xi) all
other
reasonable out-of-pocket expenses incurred by the Underwriter in connection
with
the transactions contemplated by this Agreement; and
(xii) except
as
otherwise provided in the foregoing clauses (i) through (xi), all other expenses
incidental to the performance of the Company's obligations under this Agreement,
other than pursuant to Section 6.
10. Notices.
All
communications hereunder shall be in writing and effective only upon receipt
and, if sent to the Underwriter, shall be mailed, delivered or sent by facsimile
transmission and confirmed to it at Xxxxxx Xxxxxxx & Co. Incorporated,
0000
Xxxxxxxx Xxx Xxxx, Xxx Xxxx 00000,
Attention: Equipment Finance Group, facsimile number (000) 000-0000; and,
if
sent to the Company, shall be mailed, delivered or sent by facsimile
transmission and confirmed to it at 0000 Xxxxx Xxxxxx, XXXXX, Xxxxxxx, XX
00000, Attention: Treasurer and General Counsel, facsimile number (000)
000-0000; provided,
however,
that
any notice to the Underwriter pursuant to Section 6 shall be sent by facsimile
transmission or delivered and confirmed to the Underwriter.
11. Successors.
This
Agreement will inure to the benefit of and be binding upon the parties hereto
and their respective successors and the controlling persons referred to in
Section 6, and no other person will have any right or obligation
hereunder.
12. Counterparts.
This
Agreement may be executed in any number of counterparts, each of which will
be
deemed to be an original, but all such counterparts shall together constitute
one and the same Agreement.
13. APPLICABLE
LAW.
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE
STATE OF NEW YORK OTHER THAN ANY LAW WHICH WOULD REQUIRE THE APPLICATION
OF A
LAW OF A DIFFERENT JURISDICTION.
14. Submission
to Jurisdiction; Venue; Appointment of Agent.
(a) Each
party hereto hereby irrevocably agrees, accepts and submits itself to the
non-exclusive jurisdiction of the courts of the State of New York in the
City
and County of New York and of the United States for the Southern District
of New
York, in connection with any legal action, suit or proceeding with respect
to
any matter relating to or arising out of or in connection with this Agreement.
Each of the parties to this Agreement agrees that a final action in any such
suit or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other lawful
manner.
22
(b) Each
party hereto hereby irrevocably waives, to the fullest extent permitted by
applicable law, and agrees not to assert, by stay of motion, as a defense,
or
otherwise, in any legal action or proceeding brought hereunder in any of
the
above-named courts, that such action or proceeding is brought in an inconvenient
forum, or that venue for the action or proceeding is improper.
(c) To
the
fullest extent permitted by applicable law, each party hereto hereby waives
its
respective rights to a jury trial or any claim or cause of action in any
court
in any jurisdiction based upon or arising out of or relating to this
Agreement.
15. LIBOR
for Initial Interest Period.
The
Debt Rate (as defined in the Indenture) for the initial Interest Period under
the Indenture shall be LIBOR, which the Underwriter shall determine as the
rate
for deposits in U.S. dollars for a period of three months that appears on
the
display designated as page "3750"
on the
Telerate Monitor as of 11.00 a.m., London time, on the second "Business
Day"
(as
defined in the Indenture) prior to the Closing Date, plus the Applicable
Margin.
16. No
Fiduciary Duty.
The
Company hereby acknowledges that in
connection with the offering of the Certificates: (a)
the
Underwriter has acted at arms length, is not an agent and
owes no
fiduciary duties to, the Company or any other person, (b)
the
Underwriter owes 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 (c) the Underwriter 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 Underwriter arising from
an
alleged breach of fiduciary duty in connection with the offering of the
Certificates.
17. 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.
23
If
the
foregoing is in accordance with the Underwriter's understanding of our
agreement, kindly sign and return to the Company one of the counterparts
hereof,
whereupon it will become a binding agreement between the Underwriter and
the
Company in accordance with its terms.
Very
truly yours,
CONTINENTAL
AIRLINES, INC.
|
||
|
|
|
By: | ||
Name: |
||
Title: |
The
foregoing
Underwriting Agreement
is
hereby confirmed and accepted
as
of the date first above written
XXXXXX
XXXXXXX & CO. INCORPORATED
|
By: | ||
Name: |
||
Title: |
24
SCHEDULE
I
(Continental
Airlines Pass Through Certificates)
CONTINENTAL
AIRLINES, INC.
Certificate
Designation
|
Aggregate
Principal
Amount
|
Interest
Rate
|
Final
Expected
Distribution
Date
|
2006-1G
|
$190,000,000
|
LIBOR
+ 0.350%
|
June
2, 2013
|
2006-1B
|
$130,000,000
|
LIBOR
+ 3.125%
|
June
2, 2013
|
25
SCHEDULE
II
CONTINENTAL
AIRLINES, INC.
Underwriting
commission
and
other compensation:
|
$2,800,000 |
Closing
date, time and location:
|
June
9, 2006
10:00
A.M.,
New
York time
Xxxxxx
Xxxxxxx & Xxxx LLP
Xxx
Xxxxxxx Xxxx Xxxxx
Xxx
Xxxx, XX 00000
|
26
SCHEDULE
III
27
Time
of Sale Prospectus
|
1.
Basic Prospectus dated April 10, 2006 relating to Shelf Securities
|
2.
the preliminary prospectus supplement dated May 24, 2006 relating
to the
Certificates
|
|
3.
pricing supplement in the form attached as Annex A
|
|
28
Issuer
Free Writing Prospectus
Filed
pursuant to Rule 433(d)
Registration
No. 333-133187
May
24, 2006
Continental
Airlines, Inc. ("Continental")
(NYSE
Symbol: CAL)
Securities:
|
Class
G Pass Through Certificates,
Series
2006-1 ("Class G Certificates")
|
Class
B Pass Through Certificates,
Series
2006-1 ("Class B Certificates" and,
together
with the Class G Certificates, the "Certificates")
|
|
Amount:
|
$190,000,000
|
$130,000,000
|
|
CUSIP:
|
210795
PR5
|
210795
PS3
|
|
ISIN:
|
US210795PR55
|
US210795PS39
|
|
Coupon:
|
USD
3-month LIBOR +0.350%
|
USD
3-month LIBOR + 3.125%
|
Maximum
Interest Rate:
|
Interest
rate for the Class G Certificates is subject to a maximum rate
of 10.35%
for any interest period commencing on any regular distribution
date if a
payment default by Continental occurs and is continuing on such
regular
distribution date
|
|
Capped
Interest Rate:
|
Capped
LIBOR (10% per annum) plus 0.35% per annum
|
|
Calculation
of Amounts Available under Primary Liquidity Facility:
|
The
amount available under the Primary Liquidity Facility for the
payment of
accrued interest on the Class G Certificates has been calculated
utilizing
the Capped Interest Rate of 10.35% per annum
|
|
Amount
Available under
Primary
Liquidity Facility at September 2, 2006:
|
$39,930,875
|
|
Optional
Redemption:
|
In
the case of an optional redemption of the Series B Equipment
Notes that
relate to the Class B Certificates on or after the third anniversary
and
prior to the fifth anniversary of the original issuance date
of the Class
B Certificates (except in connection with a redemption to satisfy
the
maximum Collateral Ratio requirements or the minimum Rotable
Ratio
requirement, or to the extent required as a result of certain
reductions
in Continental's aircraft fleet), the redemption price will include
a
Premium equal to the following percentage of the principal amount
redeemed:
|
|
If
redeemed during the year
prior to the anniversary of
the
original issuance date
indicated below
|
Series
B Premium
|
||
4th
|
4.0%
|
||
5th
|
2.0%
|
In
the case of an optional redemption of Equipment Notes that relate
to the
Certificates prior to the fifth anniversary of the original issuance
date
of the Certificates required as a result of certain reductions
in
Continental’s aircraft fleet, the redemption price will include a Premium
equal to the following percentage of the principal amount
redeemed:
|
If
redeemed during the year prior to the anniversary of the original
issuance
date indicated
below
|
Series
G
Premium
|
Series
B
Premium
|
||
1st
|
1.0%
|
4.0%
|
||
2nd
|
1.0%
|
4.0%
|
||
3rd
|
1.0%
|
4.0%
|
||
4th
|
None
|
4.0%
|
||
5th
|
None
|
2.0%
|
Public
Offering Price:
|
100%
|
|
Underwriting
Commission and Other Compensation:
|
$2,800,000
|
|
|
Dated
May 24, 2006
|
|
Use
of Proceeds:
|
The
proceeds will be used to acquire Equipment Notes issued by Continental.
Continental will use most of the proceeds from the sale of the
Equipment
Notes to redeem its outstanding Floating Rate Secured Notes Due
2007 and
Floating Rate Secured Subordinated Notes Due 2007, each of which
is
secured by the collateral that will secure the Equipment Notes.
Aggregate
redemption price will be approximately $293 million, including
accrued
interest, LIBOR breakage costs and, in the case of the Floating
Rate
Secured Subordinated Notes, a premium
|
|
Settlement:
|
June
9, 2006 (T+11) closing date, the 11th business day following the
date
hereof
|
|
Preliminary
Prospectus Supplement:
|
Continental
has prepared and filed with the SEC a Preliminary Prospectus Supplement,
dated May 24, 2006, which includes additional information regarding
the
Certificates
|
The
issuer has filed a registration statement (including a prospectus) with the
SEC
for the offering to which this communication relates. Before you invest,
you
should read the prospectus in that registration statement and other documents
the issuer has filed with the SEC for more complete information about the
issuer
and this offering. You may get these documents for free by visiting XXXXX
on the
SEC Web site at xxx.xxx.xxx. Alternatively, the issuer, any underwriter or
any
dealer participating in the offering will arrange to send you the prospectus
if
you request it by calling Xxxxxx Xxxxxxx toll-free 0-000-000-0000 (institutional
investors).