View:
As filed with the Securities and Exchange Commission on May 13, 1996
Registration No. 333-[ ]
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
Continental Airlines, Inc.
(Exact name of registrant as specified in its charter)
Delaware 4512 74-2099724
(State or other (Primary standard (I.R.S. employer
jurisdiction of industrial identification
incorporation or classification code number)
organization) number)
2929 Allen Parkway, Suite 2010
Houston, Texas 77019
(713) 834-2950
(Address, including zip code, and telephone number,
including area code, of registrant's
principal executive offices)
-------------------
Jeffery A. Smisek, Esq.
Senior Vice President, General Counsel and Secretary
Continental Airlines, Inc.
2929 Allen Parkway, Suite 2010
Houston, Texas 77019
(713) 834-2950
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies of correspondence to:
Michael L. Ryan, Esq.
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
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Approximate date of commencement of proposed sale to the public:
As soon as practicable after the Registration Statement becomes effective.
-----------------
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box: ( )
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CALCULATION OF REGISTRATION FEE
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Title of Each Proposed Proposed
Class of Maximum Maximum
Securities Amount to Offering Aggregate Amount of
to be be Price Per Offering Registration
Registered Registered Unit Price (1) Fee
- ---------------- -------------- --------- -------------- ------------
10.22% Series B
Senior Unsecured
Sinking Fund
Notes due
July 1, 2000 $65,046,762.06 100% $65,046,762.06 $22,429.92
===========================================================================
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457.
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The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
===========================================================================
CONTINENTAL AIRLINES, INC.
CROSS-REFERENCE SHEET
(Pursuant to Item 501(b) of Regulation S-K Showing Location
in the Prospectus of Information Required by Items in Form S-4)
Caption or Location in
Item Prospectus
------------------------ -----------------------------
1. Forepart of Registration
Statement and Outside
Front Cover Page of
Prospectus. . . . . . . . . Facing Page of the
Registration Statement; Cross
Reference Sheet; Outside Front
Cover Page of Prospectus
2. Inside Front and Outside
Back Cover Pages of
Prospectus. . . . . . . . . Available Information; Outside
Back Cover Page of Prospectus
3. Risk Factors, Ratio of
Earnings to Fixed
Charges and Other
Information . . . . . . . . Prospectus Summary; Risk
Factors; Selected Financial
Data
4. Terms of the
Transaction . . . . . . . . Prospectus Summary; Risk
Factors; The Exchange Offer;
Description of Series B Notes;
Plan of Distribution; Certain
Federal Income Tax
Considerations
5. Pro Forma Financial
Information . . . . . . . . Not Applicable
6. Material Contacts With
the Company Being
Acquired. . . . . . . . . . Not Applicable
7. Additional Information
Required for Reoffering
by Persons and Parties
Deemed to be
Underwriters. . . . . . . . Not Applicable
8. Interests of Named
Experts and Counsel . . . . Not Applicable
9. Disclosure of
Commission Position
on Indemnification
for Securities Act
Liabilities . . . . . . . . Not Applicable
10. Information with
Respect to S-3
Registrants . . . . . . . . Prospectus Summary; Recent
Developments
11. Incorporation of
Certain Information
by Reference. . . . . . . . Available Information;
Incorporation of Certain
Documents by Reference
12. Information with
Respect to S-2 or
S-3 Registrants . . . . . . Not Applicable
13. Incorporation of
Certain Information
by Reference. . . . . . . . Not Applicable
14. Information with
Respect to Registrants
Other Than S-3 or S-2
Registrants . . . . . . . . Not Applicable
15. Information with
Respect to S-3
Companies . . . . . . . . . Not Applicable
16. Information with
Respect to S-2 or
S-3 Companies . . . . . . . Not Applicable
17. Information with
Respect to Companies
Other Than S-3 or
S-2 Companies . . . . . . . Not Applicable
18. Information if
Proxies, Consents or
Authorizations Are
to be Solicited . . . . . . Not Applicable
19. Information if
Proxies, Consents or
Authorizations Are Not
to be Solicited or in
an Exchange Offer . . . . . Prospectus Summary; The
Exchange Offer; Description of
Series B Notes
Information contained herein is subject to completion or
amendment. A registration statement relating to these securities
has been filed with the Securities and Exchange Commission.
These securities may not be sold nor may offers to buy be
accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell
or the solicitation of an offer to buy nor shall there be any
sale of these securities in any State in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such State.
SUBJECT TO COMPLETION-DATED MAY 13, 1996
PROSPECTUS
Continental Airlines, Inc.
Offer to Exchange its 10.22% Series B Senior Unsecured
Sinking Fund Notes due July 1, 2000,
which have been registered under the
Securities Act of 1933, as amended,
for any and all of its outstanding
10.22% Series A Senior Unsecured Sinking Fund Notes
due July 1, 2000
The Exchange Offer will expire at 5:00 p.m., New York City
time, on , 1996, unless extended.
Continental Airlines, Inc., a Delaware corporation (the
"Company" or "Continental"), hereby offers, upon the terms and
subject to the conditions set forth in this Prospectus and the
accompanying letter of transmittal (the "Letter of Transmittal"
and, together with this Prospectus, the "Exchange Offer"), to
exchange its 10.22% Series B Senior Unsecured Sinking Fund Notes
due July 1, 2000 (the "Series B Notes"), which have been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to a Registration Statement of which
this Prospectus is a part, for an equal principal amount of its
outstanding 10.22% Series A Senior Unsecured Sinking Fund Notes
due July 1, 2000 (the "Series A Notes"), of which $65,046,762.06
aggregate principal amount is outstanding as of the date hereof.
The Series B Notes and the Series A Notes are collectively
referred to herein as the "Notes."
The Company will accept for exchange any and all Series A
Notes that are validly tendered and not withdrawn on or prior to
5:00 P.M., New York City time, on the date the Exchange Offer
expires, which will be _________ , 1996 (20 business days
following the commencement of the Exchange Offer) unless the
Exchange Offer is extended (such date, including as extended, the
"Expiration Date"). Tenders of Series A Notes may be withdrawn
at any time prior to 5:00 P.M., New York City time on the
Expiration Date. The Exchange Offer is not conditioned upon any
minimum principal amount of Series A Notes being tendered for
exchange. However, the Exchange Offer is subject to certain
customary conditions which may be waived by the Company and to
the terms of the Registration Rights Agreement (as defined
herein). See "The Exchange Offer-Conditions."
The Series B Notes will be entitled to the benefits of the
same Indenture (as defined herein) which governs the Series A
Notes and will govern the Series B Notes. The form and terms of
the Series B Notes are the same in all material respects as the
form and terms of the Series A Notes, except that the Series B
Notes do not contain terms with respect to Liquidated Damages (as
defined herein) and the Series B Notes have been registered under
the Securities Act and therefore will not bear legends
restricting the transfer thereof. See "The Exchange Offer" and
"Description of Series B Notes."
The Series B Notes will mature on July 1, 2000 and will be
limited to $65,046,762.06 in aggregate principal amount. The
Series B Notes will be senior unsecured obligations of the
Company and will rank senior in right of payment to all existing
and future subordinated indebtedness of the Company. The Series
B Notes will rank pari passu in right of payment with all the
Company's senior indebtedness. The Series B Notes will be
effectively subordinated to all indebtedness of the Company's
Subsidiaries (as defined herein). The Indenture permits the
Company and its Restricted Subsidiaries (as defined herein) to
incur additional Debt (as defined herein) under certain
circumstances. See "Description of Series B Notes-Certain
Covenants."
The Series B Notes will bear interest at the rate of 10.22%
per annum, accruing from the last date on which such interest was
paid on the Series A Notes surrendered in exchange therefor.
Consequently, holders who exchange their Series A Notes for
Series B Notes will receive the same interest payment on the next
interest payment date that they would have received had they not
accepted the Exchange Offer. Interest on the Series B Notes is
payable quarterly on January 1, April 1, July 1 and October 1 of
each year. See "The Exchange Offer - Interest on Series B
Notes."
(continued on next page)
-------------------
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY
HOLDERS IN EVALUATING THE EXCHANGE OFFER, SEE "RISK FACTORS"
BEGINNING ON PAGE [ ] OF THIS PROSPECTUS.
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
----------------
The date of this Prospectus is , 1996
The Company may redeem the Notes, at its option on notice to
the holders of the Notes as provided in the Indenture, at any
time in whole or from time to time in part, otherwise than
through the operation of the Sinking Fund (as defined herein)
provided for therein, at a redemption price equal to 100% of the
aggregate principal amount of the Notes to be redeemed, plus
accrued and unpaid interest thereon to the date of redemption.
See "Description of Series B Notes--Optional Redemption."
On and after April 1, 1997, the Company is required to
redeem on January 1, April 1, July 1 and October 1 of each year,
a portion of the aggregate principal amount of the Notes as set
forth herein at a redemption price equal to 100% of the aggregate
principal amount of the Notes so redeemed, plus accrued and
unpaid interest to the redemption date. The principal amount of
Notes to be redeemed may at the option of the Company be reduced
in inverse order of maturity by an amount equal to the sum of (i)
the principal amount of Notes theretofore issued and acquired at
any time by the Company and delivered to the Trustee for
cancellation, and not theretofore made the basis for the
reduction of a Sinking Fund payment and (ii) the principal amount
of Notes at any time redeemed and paid pursuant to the optional
redemption provisions of the Notes or which shall at any time
have been duly called for redemption (otherwise than through
operation of the Sinking Fund) and the redemption price shall
have been deposited in trust for that purpose and which
theretofore have not been made the basis for the reduction of a
Sinking Fund Payment. "See Description of Series B Notes-Sinking
Fund."
Based on interpretations by the staff of the Securities and
Exchange Commission (the "Commission"), as set forth in no-action
letters issued to third parties, the Company believes that the
Series B Notes issued pursuant to the Exchange Offer may be
offered for resale, resold or otherwise transferred by holders
thereof (other than a broker-dealer who acquires such Series B
Notes directly from the Company for resale pursuant to Rule 144A
under the Securities Act or any other available exemption under
the Securities Act or any holder that is an "affiliate" of the
Company as defined under Rule 405 of the Securities Act), without
compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that such Series B
Notes are acquired in the ordinary course of such holders'
business and such holders are not engaged in, and do not intend
to engage in, a distribution of such Series B Notes and have no
arrangement with any person to participate in a distribution of
such Series B Notes. However, the staff of the Commission has
not considered the Exchange Offer in the context of a no-action
letter and there can be no assurance that the staff of the
Commission would make a similar determination with respect to the
Exchange Offer as in such other circumstances. By tendering the
Series A Notes in exchange for Series B Notes, each holder, other
than a broker-dealer, will represent to the Company that: (i) it
is not an affiliate of the Company (as defined under Rule 405 of
the Securities Act) nor a broker-dealer tendering Series A Notes
acquired directly from the Company for its own account; (ii) any
Series B Notes to be received by it will be acquired in the
ordinary course of its business; and (iii) it is not engaged in,
and does not intend to engage in, a distribution of such Series B
Notes and has no arrangement or understanding to participate in a
distribution of the Series B Notes. Each broker-dealer that
receives Series B Notes for its own account pursuant to the
Exchange Offer (a "Participating Broker-Dealer") must
acknowledge that it will deliver a prospectus in connection with
any resale of such Series B Notes. The Letter of Transmittal
states that by so acknowledging and by delivering a prospectus, a
Participating Broker-Dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act. The
Company is under no obligation to prepare a prospectus for use in
connection with any such resale. See "Plan of Distribution."
The Company will not receive any proceeds from this
offering. Pursuant to the Registration Rights Agreement, the
Company has agreed to pay the expenses of the Exchange Offer. No
underwriter is being utilized in connection with the Exchange
Offer.
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE
COMPANY ACCEPT SURRENDERS FOR EXCHANGE FROM, HOLDERS OF SERIES A
NOTES IN ANY JURISDICTION IN WHICH THE EXCHANGE OFFER OR THE
ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE SECURITIES
AND BLUE SKY LAWS OF SUCH JURISDICTION.
Prior to this Exchange Offer, there has been no public
market for the Series A Notes or the Series B Notes. If a market
for the Series B Notes should develop, the Series B Notes could
trade at prices higher or lower than their principal amount. The
Company does not intend to list the Series B Notes on a national
securities exchange or to apply for quotation of the Series B
Notes through any automated quotation system. There can be no
assurance that an active public market for the Series B Notes
will develop. See "Risk Factors-Risk Factors Relating to
Series B Notes-Absence of a Public Market for Series B Notes."
AVAILABLE INFORMATION
Continental is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and in accordance therewith files reports, proxy statements and
other information with the Commission. Such reports, proxy
statements and other information may be inspected and copied at
the following public reference facilities maintained by the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549; Seven World Trade Center, 13th Floor,
New York, New York 10048; and Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material may also be obtained from the Public Reference Section
of the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, upon payment of prescribed
rates. In addition, reports, proxy statements and other
information concerning Continental may be inspected and copied at
the offices of the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005.
Continental is the successor to Continental Airlines
Holdings, Inc. ("Holdings"), which merged with and into
Continental on April 27, 1993. Holdings had also been subject to
the informational requirements of the Exchange Act.
This Prospectus constitutes a part of a registration
statement on Form S-4 (together with all amendments and exhibits,
the "Registration Statement") filed by Continental with the
Commission under the Securities Act with respect to the Series B
Notes offered hereby. This Prospectus omits certain of the
information contained in the Registration Statement, and
reference is hereby made to the Registration Statement for
further information with respect to Continental and Holdings and
the securities offered hereby. Although statements concerning and
summaries of certain documents are included herein, reference is
made to the copy of such document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission.
These documents may be inspected without charge at the office of
the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and copies may be obtained at fees and
charges prescribed by the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission (File No.
0-9781) are hereby incorporated by reference in this Prospectus:
(i) Continental's Annual Report on Form 10-K for the year ended
December 31, 1995 (as amended by Forms 10-K/A1 and 10-K/A2 filed
on March 8, 1996 and April 10, 1996, respectively), (ii)
Continental's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996, (iii) Continental's Current Reports on Form 8-K,
filed on January 31, 1996, March 26, 1996 and May 7, 1996.
All reports and any definitive proxy or information
statements filed by Continental pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the
securities offered hereby shall be deemed to be incorporated by
reference into this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated herein by
reference, or contained in this Prospectus, shall be deemed to be
modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a
part of this Prospectus.
This prospectus incorporates documents by reference that are
not presented herein or delivered herewith. These documents are
available without charge to any person to whom a prospectus is
delivered, upon written or oral request of such person, from
Continental Airlines, Inc., 2929 Allen Parkway, Suite 2010,
Houston, Texas 77019, Attention: Secretary, telephone (713) 834-
2950. In order to ensure timely delivery of the documents, any
request should be made by , 1996.
PROSPECTUS SUMMARY
The following summary information is qualified in its
entirety by the detailed information and financial statements
(including the notes thereto) appearing elsewhere or incorporated
by reference in this Prospectus. Prospective investors should
consider carefully the matters discussed under the caption "Risk
Factors." Unless otherwise stated or unless the context
otherwise requires, references to "Continental" or the "Company"
include Continental Airlines, Inc. and its predecessors and
subsidiaries. All route, fleet, traffic and similar information
appearing in this Prospectus is as of or for the period ended
March 31, 1996, unless otherwise stated herein.
The Company
Continental Airlines, Inc. is a major United States air
carrier engaged in the business of transporting passengers, cargo
and mail. Continental is the fifth largest United States airline
(as measured by revenue passenger miles in the first three months
of 1996) and, together with its wholly owned subsidiary,
Continental Express, Inc. ("Express"), and its 91%-owned
subsidiary, Continental Micronesia, Inc. ("CMI"), serves 175
airports worldwide.
The Company operates its route system primarily through
domestic hubs at Newark, Houston Intercontinental and Cleveland,
and a Pacific hub on Guam and Saipan. Each of Continental's
three U.S. hubs is located in a large business and population
center, contributing to a high volume of "origin and destination"
traffic. The Guam/Saipan hub is strategically located to provide
service from Japanese and other Asian cities to popular resort
destinations in the western Pacific. Continental is the primary
carrier at each of these hubs, accounting for 51%, 78%, 54% and
58% of all daily jet departures, respectively.
Continental directly serves 118 U.S. cities, with additional
cities (principally in the western and southwestern United
States) connected to Continental's route system under agreements
with America West Airlines, Inc. ("America West").
Internationally, Continental flies to 57 destinations and offers
additional connecting service through alliances with foreign
carriers. Continental operates 52 weekly departures to five
European cities and markets service to four other cities through
code-sharing agreements. Continental is one of the leading
airlines providing service to Mexico and Central America, serving
more destinations in Mexico than any other United States airline.
In addition, Continental flies to four cities in South America
and plans to commence service between Newark and Bogota,
Colombia, with service on to Quito, Ecuador, in June 1996.
Through its Guam/Saipan hub, Continental provides extensive
service in the western Pacific, including service to more
Japanese cities than any other United States carrier.
The Company is a Delaware corporation. Its executive
offices are located at 2929 Allen Parkway, Suite 2010, Houston,
Texas 77019, and its telephone number is (713) 834-2950.
The Exchange Offer
Registration Rights
Agreement. . . . . . . . . . . The Series A Notes were issued
by the Company on September 29,
1995. In connection therewith,
the Company and the holders of
the Series A Notes entered into
the Registration Rights
Agreement providing, among
other things, for the Exchange
Offer. See "The Exchange
Offer."
The Exchange Offer . . . . . . Series B Notes are being
offered in exchange for an
equal aggregate principal
amount of Series A Notes. As
of the date hereof,
$65,046,762.06 aggregate
principal amount of Series A
Notes are outstanding.
Resale of Series B Notes . . . Based on interpretations by the
staff of the Commission, as set
forth in no-action letters
issued to third parties, the
Company believes that the
Series B Notes issued pursuant
to the Exchange Offer may be
offered for resale, resold or
otherwise transferred by
holders thereof (other than a
broker-dealer who acquires such
Series B Notes directly from
the Company for resale pursuant
to Rule 144A under the
Securities Act or any other
available exemption under the
Securities Act or any holder
that is an "affiliate" of the
Company as defined under Rule
405 of the Securities Act),
without compliance with the
registration and prospectus
delivery provisions of the
Securities Act, provided that
such Series B Notes are
acquired in the ordinary course
of such holders' business and
such holders are not engaged
in, and do not intend to engage
in, a distribution of such
Series B Notes and have no
arrangement with any person to
participate in a distribution
of such Series B Notes.
However, the staff of the
Commission has not considered
the Exchange Offer in the
context of a no-action letter
and there can be no assurance
that the staff of the
Commission would make a similar
determination with respect to
the Exchange Offer as in such
other circumstances. By
tendering the Series A Notes in
exchange for Series B Notes,
each holder, other than a
broker-dealer, will represent
to the Company that: (i) it is
not an affiliate of the Company
(as defined under Rule 405 of
the Securities Act) nor a
broker-dealer tendering Series
A Notes acquired directly from
the Company for its own
account; (ii) any Series B
Notes to be received by it will
be acquired in the ordinary
course of its business; and
(iii) it is not engaged in, and
does not intend to engage in, a
distribution of such Series B
Notes and has no arrangement or
understanding to participate in
a distribution of the Series B
Notes. Each Participating
Broker-Dealer that receives
Series B Notes for its own
account pursuant to the
Exchange Offer must acknowledge
that it will deliver a
prospectus in connection with
any resale of such Series B
Notes. The Letter of
Transmittal states that by so
acknowledging and by delivering
a prospectus, a Participating
Broker-Dealer will not be
deemed to admit that it is an
"underwriter" within the
meaning of the Securities Act.
The Company is under no
obligation to prepare a
prospectus for use in
connection with any such
resale. See "Plan of
Distribution." To comply with
the securities laws of certain
jurisdictions, it may be
necessary to qualify for sale
or register the Series B Notes
prior to offering or selling
such Series B Notes. The
Company has agreed, pursuant to
the Registration Rights
Agreement and subject to
certain specified limitations
therein, to register or qualify
the Series B Notes for offer or
sale under the securities or
"blue sky" laws of such
jurisdictions as may be
necessary to permit the holders
of Series B Notes to trade the
Series B Notes without any
restrictions or limitations
under the securities laws of
the several states of the
United States.
Consequences of Failure to
Exchange Series A Notes. . . . Upon consummation of the
Exchange Offer, subject to
certain exceptions, holders of
Series A Notes who do not
exchange their Series A Notes
for Series B Notes in the
Exchange Offer will no longer
be entitled to registration
rights and will not be able to
offer or sell their Series A
Notes, unless such Series A
Notes are subsequently
registered under the Securities
Act (which, subject to certain
limited exceptions, the Company
will have no obligation to do),
except pursuant to an exemption
from, or in a transaction not
subject to, the Securities Act
and applicable state securities
laws. See "Risk Factors-Risk
Factors Relating to Series B
Notes-Consequences of Failure
to Exchange" and "The Exchange
Offer-Terms of the Exchange
Offer."
Expiration Date. . . . . . . . 5:00 p.m., New York City time,
on , 1996 (20
business days following the
commencement of the Exchange
Offer), unless the Exchange
Offer is extended, in which
case the term "Expiration Date"
means the latest date and time
to which the Exchange Offer is
extended.
Interest on Series B Notes . . The Series B Notes will bear
interest at the rate of 10.22%
per annum, accruing from the
last date on which such
interest was paid on the Series
A Notes surrendered in exchange
therefor. Consequently,
holders who exchange their
Series A Notes for Series B
Notes will receive the same
interest payment on the next
interest payment date that they
would have received had they
not accepted the Exchange
Offer. Interest on the Series
B Notes is payable quarterly on
January 1, April 1, July 1 and
October 1 of each year. See
"The Exchange Offer-Interest on
Series B Notes."
Conditions to the
Exchange Offer . . . . . . . . The Exchange Offer is not
conditioned upon any minimum
principal amount of Series A
Notes being tendered for
exchange. However, the
Exchange Offer is subject to
certain customary conditions
which may be waived by the
Company and to the terms of the
Registration Rights Agreement.
See "The Exchange Offer-
Conditions." Except for the
requirements of applicable
Federal and state securities
laws, there are no Federal or
state regulatory requirements
to be complied with or obtained
by the Company in connection
with the Exchange Offer.
Procedures for Tendering
Series A Notes . . . . . . . . Each holder of Series A Notes
wishing to accept the Exchange
Offer must complete, sign and
date the Letter of Transmittal,
or a facsimile thereof, in
accordance with the
instructions contained herein
and therein, and mail or
otherwise deliver such Letter
of Transmittal, or such
facsimile, together with the
Series A Notes to be exchanged
and any other required
documentation to the Exchange
Agent (as defined herein) at
the address set forth herein.
See "The Exchange Offer-
Procedures for Tendering."
Guaranteed Delivery
Procedures . . . . . . . . . . Holders of Series A Notes who
wish to tender their Series A
Notes and whose Series A Notes
are not immediately available
or who cannot deliver their
Series A Notes and a properly
completed Letter of Transmittal
or any other documents required
by the Letter of Transmittal to
the Exchange Agent prior to the
Expiration Date may tender
their Series A Notes according
to the guaranteed delivery
procedures set forth in "The
Exchange Offer-Guaranteed
Delivery Procedures."
Withdrawal Rights. . . . . . . Tenders of Series A Notes may
be withdrawn at any time prior
to 5:00 p.m., New York City
time, on the Expiration Date.
To withdraw a tender of Series
A Notes, a written or facsimile
transmission notice of
withdrawal must be received by
the Exchange Agent at its
address set forth herein under
"The Exchange Offer-Exchange
Agent" prior to 5:00 p.m., New
York City time, on the
Expiration Date.
Acceptance of Series A
Notes and Delivery of
Series B Notes . . . . . . . . Subject to certain conditions,
the Company will accept for
exchange any and all Series A
Notes which are properly
tendered in the Exchange Offer
prior to 5:00 p.m., New York
City time, on the Expiration
Date. The Series B Notes
issued pursuant to the Exchange
Offer will be delivered
promptly following the
Expiration Date. See "The
Exchange Offer-Terms of the
Exchange Offer."
Certain Tax Considerations . . The exchange of Series B Notes
for Series A Notes should not
be a sale or exchange or
otherwise a taxable event for
Federal income tax purposes.
See "Certain Federal Income Tax
Considerations."
Exchange Agent . . . . . . . . Continental Airlines, Inc. is
serving as exchange agent (the
"Exchange Agent") in connection
with the Exchange Offer.
Fees and Expenses. . . . . . . All expenses incident to the
Company's consummation of the
Exchange Offer and compliance
with the Registration Rights
Agreement will be borne by the
Company. See "The Exchange
Offer-Fees and Expenses."
Use of Proceeds. . . . . . . . There will be no cash proceeds
payable to Continental from the
issuance of the Series B Notes
pursuant to the Exchange Offer.
See "Use of Proceeds."
Summary of Terms of Series B Notes
The Exchange Offer relates to the exchange of up to
$65,046,762.06 aggregate principal amount of Series B Notes for
up to an equal aggregate principal amount of Series A Notes. The
Series B Notes will be entitled to the benefits of the same
Indenture which governs the Series A Notes and will govern the
Series B Notes. The form and terms of the Series B Notes are the
same in all material respects as the form and terms of the Series
A Notes, except that the Series B Notes do not contain terms with
respect to Liquidated Damages and the Series B Notes have been
registered under the Securities Act and therefore will not bear
legends restricting the transfer thereof.
For additional information concerning the Series B Notes,
see "Description of Series B Notes."
Maturity Date. . . . . . . . . July 1, 2000.
Interest Rate. . . . . . . . . 10.22% per annum, computed on
the basis of a 360-day year of
twelve 30-day months.
Interest Payment Dates . . . . January 1, April 1, July 1 and
October 1 of each year.
Optional Redemption. . . . . . The Company may redeem the
Notes, at its option on notice
to the holders of the Notes as
provided in the Indenture, at
any time in whole or from time
to time in part, otherwise than
through the operation of the
Sinking Fund provided for
therein, at a redemption price
equal to 100% of the aggregate
principal amount of the Notes
to be redeemed, plus accrued
and unpaid interest thereon to
the date of redemption. See
"Description of Series B Notes-
Optional Redemption."
Sinking Fund . . . . . . . . . On and after April 1, 1997, the
Company is required to redeem
on January 1, April 1, July 1
and October 1 of each year, a
portion of the aggregate
principal amount of the Notes
as set forth herein at a
redemption price equal to 100%
of the aggregate principal
amount of the Notes so
redeemed, plus accrued and
unpaid interest to the
redemption date. The principal
amount of Notes to be redeemed
may at the option of the
Company be reduced in inverse
order of maturity by an amount
equal to the sum of (i) the
principal amount of Notes
theretofore issued and acquired
at any time by the Company and
delivered to the Trustee for
cancellation, and not
theretofore made the basis for
the reduction of a Sinking Fund
payment and (ii) the principal
amount of Notes at any time
redeemed and paid pursuant to
the optional redemption
provisions of the Notes or
which shall at any time have
been duly called for redemption
(otherwise than through
operation of the Sinking Fund)
and the redemption price shall
have been deposited in trust
for that purpose and which
theretofore have not been made
the basis for the reduction of
a Sinking Fund Payment. See
"Description of Series B Notes-
Sinking Fund."
Ranking. . . . . . . . . . . . The Notes will be senior
unsecured obligations of the
Company and will rank senior in
right of payment to all
existing and future
subordinated indebtedness of
the Company. The Notes will
rank pari passu in right of
payment with all the Company's
senior indebtedness. The
Series B Notes will be
effectively subordinated to all
indebtedness of the Company's
Subsidiaries. See "Description
of Series B Notes-General."
Covenants. . . . . . . . . . . The Indenture provides that
neither the Company nor any
Restricted Subsidiary shall at
any time directly or indirectly
create, incur or assume any
Debt (other than Excluded Debt)
(each, as defined herein) if,
at the date of (and after
giving effect to) such
creation, incurrence or
assumption, the pro forma
consolidated fixed charge
coverage ratio for the period
from September 28, 1995 through
December 31, 1996 is less than
1.75:1 and 2.0:1 thereafter.
See "Description of Series B
Notes-Certain Covenants."
Absence of Public Market
for the Series B Notes . . . . Prior to this Exchange Offer,
there has been no public market
for the Series A Notes or the
Series B Notes. If a market
for the Series B Notes should
develop, the Series B Notes
could trade at prices higher or
lower than their principal
amount. The Company does not
intend to list the Series B
Notes on a national securities
exchange or to apply for
quotation of the Series B
Notes through any automated
quotation system. There can be
no assurance that an active
public market for the Series B
Notes will develop. See "Risk
Factors-Risk Factors Relating
to Series B Notes-Absence of
Public Market for Series B
Notes."
RISK FACTORS
Holders of Series A Notes should carefully consider the
following risk factors, as well as other information set forth in
this Prospectus, before tendering their Series A Notes in the
Exchange Offer. The risk factors set forth below (other than "-
Risk Factors Relating to the Certificates-Consequences of Failure
to Exchange") are generally applicable to the Series A Notes as
well as the Series B Notes.
Risk Factors Relating to the Company
Continental's History of Operating Losses
Although Continental recorded net income of $224 million in
1995 and $88 million in the three months ended March 31, 1996, it
had experienced significant operating losses in the previous
eight years. In the long term, Continental's viability depends on
its ability to sustain profitable results of operations.
Leverage and Liquidity
Continental has successfully negotiated a variety of
agreements to increase its liquidity during 1995 and 1996.
Nevertheless, Continental remains more leveraged and has
significantly less liquidity than certain of its competitors,
several of whom have available lines of credit and/or significant
unencumbered assets. Accordingly, Continental may be less able
than certain of its competitors to withstand a prolonged
recession in the airline industry.
As of March 31, 1996, Continental and its consolidated
subsidiaries had approximately $1.7 billion (including current
maturities) of long-term indebtedness and capital lease
obligations and had approximately $702 million of minority
interest, preferred securities of trust, redeemable preferred
stock and common stockholders' equity. Common stockholders'
equity reflects the adjustment of the Company's balance sheet and
the recording of assets and liabilities at fair market value as
of April 27, 1993 in accordance with fresh start reporting.
During the first and second quarters of 1995, in connection
with negotiations with various lenders and lessors, Continental
ceased or reduced contractually required payments under various
agreements, which produced a significant number of events of
default under debt, capital lease and operating lease agreements.
Through agreements reached with the various lenders and lessors,
Continental has cured all of these events of default. The last
such agreement was put in place during the fourth quarter of
1995.
As of March 31, 1996, Continental had approximately $657
million of cash and cash equivalents, including restricted cash
and cash equivalents of $124 million. Continental does not have
general lines of credit and has no significant unencumbered
assets.
Continental has firm commitments with The Boeing Company
("Boeing") to take delivery of 43 new jet aircraft during the
years 1998 through 2002. The estimated aggregate cost of these
aircraft is $2.6 billion. In addition, six Beech 1900-D aircraft
are scheduled to be delivered later in 1996. The Company
currently anticipates that the firm financing commitments
available to it with respect to its acquisition of new aircraft
from Beech Acceptance Corporation ("Beech") will be sufficient to
fund all deliveries scheduled during 1996, and that it will have
remaining financing commitments from aircraft manufacturers of
$676 million for jet aircraft deliveries beyond 1996. However,
the Company believes that further financing will be needed to
satisfy the remaining amount of such capital commitments. There
can be no assurance that sufficient financing will be available
for all aircraft and other capital expenditures not covered by
firm financing commitments.
For 1996, Continental expects to incur cash expenditures
under operating leases of approximately $586 million, compared
with $521 million for 1995, relating to aircraft and
approximately $229 million relating to facilities and other
rentals, the same amount as for 1995. In addition, Continental
has capital requirements relating to compliance with regulations
that are discussed below. See "-Regulatory Matters."
Continental and CMI have secured borrowings from GE which
aggregated $373 million as of March 31, 1996. CMI's secured
loans contain significant financial covenants, including
requirements to maintain a minimum cash balance and consolidated
net worth, restrictions on unsecured borrowings and mandatory
prepayments on the sale of most assets. These financial covenants
limit the ability of CMI to pay dividends to Continental. In
addition, Continental's secured loans require Continental to,
among other things, maintain a minimum cumulative operating cash
flow, a minimum monthly cash balance and a minimum ratio of
operating cash flow to fixed charges. Continental also is
prohibited generally from paying cash dividends on its capital
stock, from purchasing or prepaying indebtedness and from
incurring certain additional secured indebtedness.
Aircraft Fuel
Since fuel costs constitute a significant portion of
Continental's operating costs (approximately 12.5% for the year
ended December 31, 1995 and 12.9% for the three months ended
March 31, 1996), significant changes in fuel costs would
materially affect the Company's operating results. Fuel prices
continue to be susceptible to international events, and the
Company cannot predict near or longer-term fuel prices. The
Company has entered into petroleum option contracts to provide
some short-term protection (currently approximately seven months)
against a sharp increase in jet fuel prices. In the event of a
fuel supply shortage resulting from a disruption of oil imports
or otherwise, higher fuel prices or curtailment of scheduled
service could result.
Certain Tax Matters
The Company's United States federal income tax return
reflects net operating loss carryforwards ("NOLs") of $2.5
billion, subject to audit by the Internal Revenue Service, of
which $1.2 billion are not subject to the limitations of Section
382 of the Internal Revenue Code ("Section 382"). As a result,
the Company will not pay United States federal income taxes
(other than alternative minimum tax) until it has recorded
approximately an additional $1.2 billion of taxable income
following December 31, 1995. For financial reporting purposes,
Continental will be required to begin accruing tax expense on its
income statement once it has realized an additional $122 million
of taxable income following March 31, 1996. Section 382 imposes
limitations on a corporation's ability to utilize NOLs if it
experiences an "ownership change." In general terms, an
ownership change may result from transactions increasing the
ownership of certain stockholders in the stock of a corporation
by more than 50 percentage points over a three-year period.
However, no assurance can be given that future transactions,
whether within or outside the control of the Company, will not
cause a change in ownership, thereby substantially limiting the
potential utilization of the NOLs in a given future year. In the
event that an ownership change should occur, utilization of
Continental's NOLs would be subject to an annual limitation under
Section 382. This Section 382 limitation for any post-change
year would be determined by multiplying the value of the
Company's stock (including both common and preferred stock) of
the time of the ownership change by the applicable long-term tax
exempt rate (which is 5.31% for April 1996). Unused annual
limitation may be carried over to later years, and the limitation
may under certain circumstances be increased by the built-in
gains in assets held by the Company at the time of the change
that are recognized in the five-year period after the change.
Under current conditions, if an ownership change were to occur,
Continental's NOL utilization would be limited to a minimum of
approximately $90 million.
In connection with the Company's 1993 reorganization under
Chapter 11 of the U.S. bankruptcy code effective April 27, 1993
(the "Reorganization") and the recording of assets and
liabilities at fair market value under the American Institute of
Certified Public Accountants' Statement of Position 90-7-
"Financial Reporting by Entities in Reorganization Under the
Bankruptcy Code" ("SOP 90-7"), the Company recorded a deferred
tax liability at April 27, 1993, net of the amount of the
Company's estimated realizable net operating loss carryforwards
as required by Statement of Financial Accounting Standards No.
109-"Accounting for Income Taxes." Realization of a substantial
portion of the Company's net operating loss carryforwards will
require the completion during the five-year period following the
Reorganization of transactions resulting in recognition of built-
in gains for federal income tax purposes. The Company has
consummated one such transaction, which had the effect of
realizing approximately 40% of the built-in gains required to be
realized over the five-year period, and currently intends to
consummate one or more additional transactions. If the Company
were to determine in the future that not all such transactions
will be completed, an adjustment to the net deferred tax
liability of up to $116 million would be charged to income in the
period such determination was made.
CMI
CMI's operating profit margins have consistently been
greater than the Company's margins overall. In addition to its
non-stop service between Honolulu and Tokyo, CMI's operations
focus on the neighboring islands of Guam and Saipan, resort
destinations that cater primarily to Japanese travelers. Because
the majority of CMI's traffic originates in Japan, its results of
operations are substantially affected by the Japanese economy and
changes in the value of the yen as compared to the dollar.
Appreciation of the yen against the dollar during 1993 and 1994
increased CMI's profitability and a decline of the yen against
the dollar may be expected to decrease it. To reduce the
potential negative impact on CMI's dollar earnings, CMI from time
to time purchases average rate options as a hedge against a
portion of its expected net yen cash flow position. Any
significant and sustained decrease in traffic or yields to and
from Japan could materially adversely affect Continental's
consolidated profitability.
Principal Stockholders
As of March 31, 1996, approximately 9.9% of the Company's
common equity interests and approximately 32.4% of the general
voting power of the Company's common stock were held by Air
Partners, a Texas limited partnership ("Air Partners") (after
giving effect to the distribution of all the 2,742,773 shares of
Class B common stock, effective March 29, 1996, held by Air
Partners to its partners), and approximately 18.0% of the common
equity interests and 23.6% of the general voting power were held
by Air Canada, a Canadian corporation ("Air Canada"), exclusive
in each case of warrants held by Air Partners and certain
exchange rights of Air Canada. Assuming (i) consummation of the
transactions described under "Recent Developments,"
(ii) consummation of the Secondary Offering (as defined herein),
pursuant to which Air Canada may sell up to 2,200,000 shares of
Class B Common Stock and (iii) exercise of the warrants held by
Air Partners, approximately 3.2% of the general voting power and
8.6% of the common equity interests would be held by Air Canada,
and 52.2% of the voting power and 23.4% of the common equity
interests would be held by Air Partners. See "Recent
Developments."
Various provisions in the Company's Restated Certificate of
Incorporation (the "Certificate of Incorporation"), the Company's
bylaws (the "Bylaws") and the Subscription and Stockholders'
Agreement among the Company, Air Partners and Air Canada dated as
of April 27, 1993 (the "Stockholders' Agreement") currently
provide Air Partners and Air Canada with a variety of special
rights to elect directors and otherwise affect the corporate
governance of the Company; a number of these provisions could
have the effect of delaying, deferring or preventing a change in
control of the Company. The Company has proposed to eliminate a
number of these provisions and will propose for approval by its
stockholders the related amendments to the Certificate of
Incorporation at its annual meeting of stockholders on June 26,
1996 (the "Annual Meeting"). Air Canada and Air Partners (unless
otherwise directed by its investors) have agreed to vote in favor
of these amendments at the Annual Meeting. See "Recent
Developments."
Industry Conditions and Competition
The airline industry is highly competitive and susceptible
to price discounting. The Company has in the past both responded
to discounting actions taken by other carriers and initiated
significant discounting actions itself. Continental's competitors
include carriers with substantially greater financial resources,
as well as smaller carriers with lower cost structures. Airline
profit levels are highly sensitive to, and during recent years
have been severely impacted by, changes in fuel costs, fare
levels (or "average yield") and passenger demand. Passenger
demand and yields have been adversely affected by, among other
things, the general state of the economy, international events
and actions taken by carriers with respect to fares. From 1990 to
1993, these factors contributed to the domestic airline
industry's incurring unprecedented losses. Although fare levels
have increased recently, significant industry-wide discounts
could be reimplemented at any time, and the introduction of
broadly available, deeply discounted fares by a major United
States airline would likely result in lower yields for the entire
industry and could have a material adverse effect on the
Company's operating results.
The airline industry has consolidated in past years as a
result of mergers and liquidations and may further consolidate in
the future. Among other effects, such consolidation has allowed
certain of Continental's major competitors to expand (in
particular) their international operations and increase their
market strength. Furthermore, the emergence in recent years of
several new carriers, typically with low cost structures, has
further increased the competitive pressures on the major United
States airlines. In many cases, the new entrants have initiated
or triggered price discounting. Aircraft, skilled labor and gates
at most airports continue to be readily available to start-up
carriers. Although management believes that Continental is better
able than some of its major competitors to compete with fares
offered by start-up carriers because of its lower cost structure,
competition with new carriers or other low cost competitors on
Continental's routes could negatively impact Continental's
operating results.
Regulatory Matters
In the last several years, the United States Federal
Aviation Administration (the "FAA") has issued a number of
maintenance directives and other regulations relating to, among
other things, retirement of older aircraft, collision avoidance
systems, airborne windshear avoidance systems, noise abatement,
commuter aircraft safety and increased inspections and
maintenance procedures to be conducted on older aircraft. The
Company expects to continue incurring expenses for the purpose of
complying with the FAA's noise and aging aircraft regulations. In
addition, several airports have recently sought to increase
substantially the rates charged to airlines, and the ability of
airlines to contest such increases has been restricted by federal
legislation, U.S. Department of Transportation regulations and
judicial decisions.
Management believes that the Company benefitted from the
expiration of the aviation trust fund tax (the "ticket tax") on
December 31, 1995, although the amount of any such benefit
resulting directly from the expiration of the ticket tax cannot
be determined. Reinstatement of the ticket tax will result in
higher costs to consumers, which may have an adverse effect on
passenger traffic, revenue and margins. The Company is unable to
predict when or in what form the ticket tax may be reenacted.
Additional laws and regulations have been proposed from time
to time that could significantly increase the cost of airline
operations by imposing additional requirements or restrictions on
operations. Laws and regulations have also been considered that
would prohibit or restrict the ownership and/or transfer of
airline routes or takeoff and landing slots. Also, the
availability of international routes to United States carriers is
regulated by treaties and related agreements between the United
States and foreign governments that are amendable. Continental
cannot predict what laws and regulations may be adopted or their
impact, but there can be no assurance that laws or regulations
currently enacted or enacted in the future will not adversely
affect the Company.
Risk Factors Relating to Series B Notes
Consequences of Failure to Exchange
Holders of Series A Notes who do not exchange their Series A
Notes for Series B Notes pursuant to the Exchange Offer will
continue to be subject to the restrictions on transfer of such
Series A Notes as set forth in the legend thereon as a
consequence of the issuance of the Series A Notes pursuant to
exemptions from, or in transactions not subject to, the
registration requirements of the Securities Act and applicable
state securities laws. In general, the Series A Notes may not be
offered or sold, unless registered under the Securities Act,
except pursuant to an exemption from, or in a transaction not
subject to, the Securities Act and applicable state securities
laws. The Company does not anticipate that it will register the
Series A Notes under the Securities Act. To the extent that
Series A Notes are tendered and accepted in the Exchange Offer,
the trading market, if any, for untendered and tendered but
unaccepted Series A Notes could be adversely affected.
Absence of a Public Market for Series B Notes
The Series B Notes are new securities for which there is
currently no public market. If a market for the Series B Notes
should develop, the Series B Notes could trade at prices higher
or lower than their principal amount. The Company does not
intend to list the Series B Notes on a national securities
exchange or to apply for quotation of the Series B Notes through
any automated quotation system. There can be no assurance that
an active public market for the Series B Notes will develop.
RECENT DEVELOPMENTS
On April 19, 1996, the Company's Board of Directors approved
certain agreements (the "Agreements") with its two major
stockholders, Air Canada and Air Partners. The Agreements
contain a variety of arrangements intended generally to reflect
the intention that Air Canada has expressed to the Company of
divesting its investment in Continental by early 1997, subject to
market conditions. Air Canada has indicated to the Company that
its original investment in Continental has become less central to
Air Canada in light of other initiatives it has undertaken -
particularly expansion within Canada and exploitation of the 1995
Open Skies agreement to expand Air Canada's own flights into the
U.S. Because of these initiatives Air Canada has determined it
appropriate to redeploy the funds invested in the Company into
other uses in Air Canada's business. The Agreements also reflect
the recent distribution by Air Partners, effective March 29,
1996, to its investors (the "AP Investors") of all of the shares
of the Class B common stock held by Air Partners and the desire
of some of the AP Investors to realize the increase in value of
their investment in in the Company by selling all or a portion of
their shares of Class B common stock.
Among other things, the Agreements required the Company to
file a registration statement under the Securities Act to permit
the sale (i) by Air Canada of up to 2,200,000 shares of Class B
common stock held by it and (ii) by certain AP Investors of up to
an aggregate of 2,271,015 such shares, pursuant to an
underwritten public offering arranged by the Company (the
"Secondary Offering"). The Secondary Offering was priced on May
9, 1996. Upon completion of such offering, the Agreements
provide for the following additional steps to be taken:
- in light of its then-reduced equity stake, Air Canada
will no longer be entitled to designate directors of
Continental, will cause the four present or former
members of Air Canada's Board of Directors currently
serving as Continental directors to decline nomination
for reelection as directors, and will convert all of
its Class A common stock to Class B common stock;
- Air Canada and Air Partners will be restricted, prior
to December 16, 1996, from the further disposition of
common stock of the Company held by either of them; and
- each of the existing Stockholders' Agreement and the
registration rights agreement among the parties will be
modified in a number of respects to reflect, among
other matters, the changing composition of the
respective equity interests of the parties.
Reflecting the reduction of Air Canada's interest and the
decision of the current directors designated by Air Canada not to
stand for reelection if the secondary offering is consummated
(except under certain limited circumstances), along with the
expiration of various provisions specifically included at the
time of the Company's reorganization, Continental's Board of
Directors has also approved changes to the Company's Certificate
of Incorporation and Bylaws (the "Proposed Amendments") generally
eliminating special classes of directors (except for Air
Partners' right to elect directors in certain circumstances) and
supermajority provisions, and making a variety of other
modifications aimed at streamlining the Company's corporate
governance structure.
The Proposed Amendments also provide that, at any time after
January 1, 1997, shares of Class A common stock would become
freely convertible into an equal number of Class B common stock.
Under agreements put in place at the time of the Company's
reorganization in 1993, and designed in part to ensure compliance
with the foreign ownership limitations applicable to United
States air carriers in light of the substantial stake in the
Company then held by Air Canada, holders of Class A common stock
(other than Air Canada) are not currently permitted under the
Company's Certificate of Incorporation to convert their shares to
Class B common stock. In recent periods, the market price of
Class A common stock has generally been below the price of Class
B common stock, which the Company believes is attributable in
part to the reduced liquidity present in the trading market for
Class A common stock. A number of Class A stockholders have
requested that the Company provide for free convertibility of
Class A common stock into Class B common stock, and in light of
the reduction of Air Canada's equity stake, the Company has
determined that the restriction is no longer necessary. Any such
conversion would effectively increase the relative voting power
of those Class B stockholders who do not convert.
The Company and Air Canada also expect to enter into
discussions regarding modifications to the Company's existing
"synergy" agreements with Air Canada, covering items such as
maintenance and ground facilities, with a view to resolving
certain outstanding commercial issues under the agreements and
otherwise modifying the agreements to reflect Continental's and
Air Canada's current needs. The Company has entered into an
agreement with Air Partners for the sale by Air Partners to the
Company from time to time at Air Partners' election for the one-
year period beginning August 15, 1996, of up to an aggregate of
$50 million in intrinsic value (then-current Class B common stock
price minus exercise price) of Air Partners' Class B common stock
warrants. The purchase price would be payable in cash. The
Board of Directors has authorized the Company to publicly issue
up to $50 million of Class B common stock in connection with any
such purchase. In connection with this agreement, the Company
will reclassify $50 million from common equity to redeemable
warrants.
Because certain aspects of the Agreements raised issues
under the change in control provisions of certain of the
Company's employment agreements and employee benefit plans, these
agreements and plans are being modified to provide a revised
change of control definition that the Company believes is
appropriate in light of the prospective changes to its equity
ownership structure. In connection with the modifications,
payments are being made to certain employees, benefits are being
granted to certain employees and options equal to 10% of the
amount of the options previously granted to each optionee are
being granted (subject to certain conditions) to substantially
all employees holding outstanding options.
Certain of the Proposed Amendments and employee benefit
actions are subject to stockholder approval at the Annual
Meeting. Air Canada has delivered an irrevocable proxy in favor
of Air Partners, authorizing Air Partners to vote, in its sole
discretion, all the shares of common stock beneficially owned,
directly or indirectly, by Air Canada as of the record date,
April 30, 1996, (approximately 23.6% of the voting power of all
voting securities outstanding as of such record date) with
respect to the Proposed Amendments and employee benefit actions,
among other matters to be voted on by the Company's stockholders.
Air Partners has indicated to the Company that it intends to vote
all such shares in favor of all such matters and, unless
otherwise directed by its investors with respect to the shares of
the Company held by Air Partners that are attributable to such
investors' respective limited partnership interests, to vote the
shares of common stock held by it as of the record date
(approximately 35.7% of the voting power of all voting securities
outstanding as of such date) in favor of all such matters. A
majority vote of shareholders is required to approve the employee
benefit matters; a two-thirds vote is required to approve the
Proposed Amendments.
Following the anticipated sale of Air Canada's Class B
common stock in the Secondary Offering (and the exercise of the
underwriters' overallotment option) and the conversion of all its
Class A common stock to Class B common stock, Air Canada is
expected to own approximately 4.0% of the voting power and 10.1%
of the equity of the Company and Air Partners to own
approximately 39.4% of the voting power and 9.9% of the equity of
the Company (assuming no exercise of the warrants held by Air
Partners).
USE OF PROCEEDS
There will be no cash proceeds payable to Continental from
the issuance of the Series B Notes pursuant to the Exchange
Offer. The Series A Notes were issued in exchange for
participants' interests in the Company's 10.22% Restructured Note
for Secured Class 9.37 due 2001 in connection with the
refinancing thereof.
RATIOS OF EARNINGS TO FIXED CHARGES
The following information for the years ended December 31,
1991 and 1992 and for the period January 1, 1993 through April
27, 1993 relates to Continental's predecessor, Holdings.
Information for the period April 28, 1993 through December 31,
1993, for the two years ended December 31, 1994 and 1995 and for
the three months ended March 31, 1995 and 1996 relates to
Continental. The information as to Continental has not been
prepared on a consistent basis of accounting with the information
as to Holdings due to Continental's adoption, effective April 27,
1993, of fresh start reporting in accordance with SOP 90-7.
For the years ended December 31, 1991 and 1992, for the
periods January 1, 1993 through April 27, 1993 and April 28, 1993
through December 31, 1993, for the year ended December 31, 1994
and for the three months ended March 31, 1995, earnings were not
sufficient to cover fixed charges. Additional earnings of $316
million, $131 million, $979 million, $60 million, $667 million
and $28 million, respectively, would have been required to
achieve ratios of earnings to fixed charges of 1.0. The ratio of
earnings to fixed charges for the year ended December 31, 1995
was 1.53. The ratio of earnings to fixed charges for the three
months ended March 31, 1996 was 1.70. For purposes of
calculating this ratio, earnings consist of earnings before
taxes, minority interest and extraordinary items plus interest
expense (net of capitalized interest), the portion of rental
expense deemed representative of the interest expense and
amortization of previously capitalized interest. Fixed charges
consist of interest expense and the portion of rental expense
representative of interest expense.
SELECTED FINANCIAL DATA
The following tables set forth selected financial data of
(i) the Company for the three months ended March 31, 1996 and
1995, the two years ended December 31, 1995 and 1994 and for the
period from April 28, 1993 through December 31, 1993 and (ii)
Holdings for the period from January 1, 1993 through April 27,
1993. The consolidated financial data of both the Company, for
the two years ended December 31, 1995 and 1994 and for the period
from April 28, 1993 through December 31, 1993, and Holdings, for
the period from January 1, 1993 through April 27, 1993, are
derived from their respective audited consolidated financial
statements. On April 27, 1993, in connection with the
Reorganization, the Company adopted fresh start reporting in
accordance with SOP 90-7. A vertical black line is shown in the
table below to separate Continental's post-reorganized
consolidated financial data from the pre-reorganized consolidated
financial data of Holdings since they have not been prepared on a
consistent basis of accounting. The consolidated financial data
of the Company for the three months ended March 31, 1996 and 1995
are derived from its unaudited consolidated financial statements,
which include all adjustments (consisting solely of normal
recurring accruals) that the Company considers necessary for the
presentation of the financial position and results of operations
for these periods. Operating results for the three months ended
March 31, 1996 are not necessarily indicative of the results that
may be expected for the year ending December 31, 1996. The
Company's selected consolidated financial data should be read in
conjunction with, and are qualified in their entirety by
reference to, the consolidated financial statements, including
the notes thereto, incorporated by reference herein.
Three Months Year Ended
Ended March 31, December 31,
--------------- ---------------
1996 1995 1995 1994
---- ---- ---- ----
(In millions of dollars,
Statement of except per share data)
Operations Data: (unaudited)
Operating Revenue:
Passenger . . . . $1,375 $1,240 $5,302 $5,036
Cargo, mail
and other . . . . 114 169 523 634
------ ------ ------ ------
1,489 1,409 5,825 5,670
------ ------ ------ ------
Operating Expenses:
Wages, salaries and
related costs . . 364 366 1,432(1) 1,532
Aircraft fuel . . 177 169 681 741
Aircraft rentals. 124 123 497 433
Commissions . . . 126 119 489 439
Maintenance,
materials and
repairs . . . . . 112 97 429 495
Other rentals and
landing fees. . . 84 92 356 392
Depreciation and
amortization. . . 65 64 253 258
Other . . . . . . 317 351 1,303 1,391
------ ------ ------ ------
1,369 1,381 5,440 5,681
------ ------ ------ ------
Operating Income
(Loss) 120 28 385 (11)
------ ------ ------ ------
Nonoperating Income
(Expense):
Interest expense. (47) (53) (213) (241)
Interest
capitalized . . . 1 1 6 17
Interest
income. . . . . . 9 6 31 23
Gain on
System One
transactions. . . - - 108 -
Reorganization
items, net. . . . - - - -
Other, net. . . . 12 (10) (7) (439)(2)
------ ------ ------ ------
(25) (56) (75) (640)
------ ------ ------ ------
Income (Loss)
before Income Taxes,
Minority Interest
and Extraordinary
Gain . . . . . . . 95 (28) 310 (651)
Net Income
(Loss) . . . . . . $88 $(30) $224 $(613)
Earnings (Loss)
per Common and
Common Equivalent
Share. . . . . . . $2.70 $(1.21) $7.20 $(23.76)
====== ====== ====== =======
Earnings (Loss)
per Common Share
Assuming Full
Dilution . . . . . $2.36 $(1.21) $6.29 $(23.76)
====== ====== ====== =======
Period from Period from
Reorganization January 1,
(April 28, 1993 1993
through through
December 31, December 31,
1993) 1993
--------------- ---------------
(In millions of dollars,
Statement of except per share data)
Operations Data:
Operating Revenue:
Passenger . . . . $3,493 $1,622
Cargo, mail
and other . . . . 417 235
------ ------
3,910 1,857
------ ------
Operating Expenses:
Wages, salaries and
related costs . . 1,000 502
Aircraft fuel . . 540 272
Aircraft rentals. 261 154
Commissions . . . 378 175
Maintenance,
materials and
repairs . . . . . 363 184
Other rentals and
landing fees. . . 258 120
Depreciation and
amortization. . . 162 77
Other . . . . . . 853 487
------ ------
3,815 1,971
------ ------
Operating Income
(Loss) 95 (114)
------ ------
Nonoperating Income
(Expense):
Interest expense. (165) (52)
Interest
capitalized . . . 8 2
Interest
income. . . . . . 14 -
Gain on
System One
transactions. . . - -
Reorganization
items, net. . . . - (818)
Other, net. . . . (4) 5
------ ------
(147) (863)
------ ------
Income (Loss)
before Income Taxes,
Minority Interest
and Extraordinary
Gain . . . . . . . (52) (977)
Net Income
(Loss) . . . . . . $(39) $2,640(3)
Earnings (Loss)
per Common and
Common Equivalent
Share. . . . . . . $(2.33) N.M.(4)
======
Earnings (Loss)
per Common Share
Assuming Full
Dilution . . . . . $(2.33) N.M.(4)
======
As of As of
March 31, December 31,
--------- ------------
1996 1995
--------- ------------
Balance Sheet Data: (In millions of dollars)
(unaudited)
Cash and Cash Equivalents,
including restricted Cash
and Cash Equivalents of $124
and $144, respectively(5). . . . . $657 $747
Other Current Assets . . . . . . . . 655 568
Total Property and Equipment, Net. . 1,410 1,461
Routes, Gates and Slots, Net . . . . 1,517 1,531
Other Assets, Net. . . . . . . . . . 507 514
------- -------
Total Assets. . . . . . . . . . . $4,746 $4,821
======= =======
Current Liabilities. . . . . . . . . 2,040 $1,984
Long-term Debt and Capital Leases. . 1,462 1,658
Deferred Credits and Other
Long-term Liabilities. . . . . . . 542 564
Minority Interest. . . . . . . . . . 28 27
Continental-Obligated Mandatorily
Redeemable Preferred Securities
of Trust(6). . . . . . . . . . . . 242 242
Redeemable Preferred Stock . . . . . 42 41
Common Stockholders' Equity. . . . . 390 305
------- -------
Total Liabilities and
Stockholders' Equity. . . . . . $4,746 $ 4,821
======= =======
- ------------------
(1) Includes a $20 million cash payment in 1995 by the Company
in connection with a 24-month collective bargaining
agreement entered into by the Company and the Independent
Association of Continental Pilots.
(2) Includes a provision of $447 million recorded in the fourth
quarter of 1994 associated with the planned early retirement
of certain aircraft and closed or underutilized airport and
maintenance facilities and other assets.
(3) Reflects a $3.6 billion extraordinary gain from
extinguishment of debt.
(4) Historical per share data for Holdings is not meaningful
since the Company has been recapitalized and has adopted
fresh start reporting as of April 27, 1993.
(5) Restricted cash and cash equivalents agreements relate
primarily to workers' compensation claims and the terms of
certain other agreements. In addition, CMI is required by
its loan agreement with GE to maintain certain minimum cash
balances and net worth levels, which effectively restrict
the amount of cash available to Continental from CMI.
(6) The sole assets of the Trust are convertible debentures
which are expected to be repaid by 2020. Upon repayment,
the Continental-Obligated Mandatorily Redeemable Preferred
Securities of Trust will be mandatorily redeemed.
THE EXCHANGE OFFER
The summary herein of certain provisions of the Registration
Rights Agreement does not purport to be complete and reference is
made to the provisions of the Registration Rights Agreement which
has been filed as an exhibit to the Registration Statement and a
copy of which is available upon request to the Trustee.
Terms of the Exchange Offer
General
In connection with the issuance of the Series A Notes
pursuant to an agreement dated as of September 29, 1995, between
the Company and the initial holders of the Series A Notes, such
holders and their assignees became entitled to the benefits of
the Registration Rights Agreement.
Under the Registration Rights Agreement, the Company is
obligated to (i) use its reasonable best efforts to file the
Registration Statement of which this Prospectus is a part for a
registered exchange offer with respect to an issue of Series B
Notes identical in all material respects to the Series A Notes as
soon as practicable after September 29, 1995, (ii) use its
reasonable best efforts to cause the Registration Statement to
become effective as soon as practicable after the filing date and
(iii) to use its reasonable best efforts to consummate the
Exchange Offer as soon as practicable thereafter, but in no event
later than June 25, 1996 (the "Target Completion Date"). The
Company will keep the Exchange Offer open for a period of not
less than 20 business days. The Exchange Offer being made
hereby, if commenced and consummated by the Target Completion
Date, will satisfy those requirements under the Registration
Rights Agreement.
Upon the terms and subject to the conditions set forth in
this Prospectus and in the Letter of Transmittal (which together
constitute the Exchange Offer), the Company will accept for
exchange all Series A Notes validly tendered and not withdrawn
prior to 5:00 p.m., New York City time, on the Expiration Date.
The Company will issue Series B Notes in exchange for an equal
aggregate principal amount of outstanding Series A Notes accepted
in the Exchange Offer. As of the date of this Prospectus,
$65,046,762.06 aggregate principal amount of Series A Notes is
outstanding. This Prospectus, together with the Letter of
Transmittal, is being sent to all registered holders as of
[ ], 1996. The Exchange Offer is not conditioned upon
any minimum principal amount of Series A Notes being tendered for
exchange. However, the Company's obligation to accept Series A
Notes for exchange pursuant to the Exchange Offer is subject to
certain conditions as set forth herein under "-Conditions."
The Company shall be deemed to have accepted validly
tendered Series A Notes when, as and if the Company has given
oral or written notice thereof to the Exchange Agent. The
Exchange Agent will act as agent for the tendering holders of
Series A Notes for the purposes of receiving the Series B Notes
from the Company and delivering Series B Notes to such holders.
Based on interpretations by the staff of the Commission, as
set forth in no-action letters issued to third parties, the
Company believes that the Series B Notes issued pursuant to the
Exchange Offer may be offered for resale, resold or otherwise
transferred by holders thereof (other than a broker-dealer who
acquires such Series B Notes directly from the Company for resale
pursuant to Rule 144A under the Securities Act or any other
available exemption under the Securities Act or any holder that
is an "affiliate" of the Company as defined under Rule 405 of the
Securities Act), without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided
that such Series B Notes are acquired in the ordinary course of
such holders' business and such holders are not engaged in, and
do not intend to engage in, a distribution of such Series B Notes
and have no arrangement with any person to participate in a
distribution of such Series B Notes. However, the staff of the
Commission has not considered the Exchange Offer in the context
of a no-action letter and there can be no assurance that the
staff of the Commission would make a similar determination with
respect to the Exchange Offer as in such other circumstances. By
tendering the Series A Notes in exchange for Series B Notes, each
holder, other than a broker-dealer, will represent to the Company
that: (i) it is not an affiliate of the Company (as defined
under Rule 405 of the Securities Act) nor a broker-dealer
tendering Series A Notes acquired directly from the Company for
its own account; (ii) any Series B Notes to be received by it
will be acquired in the ordinary course of its business; and
(iii) it is not engaged in, and does not intend to engage in, a
distribution of such Series B Notes and has no arrangement or
understanding to participate in a distribution of the Series B
Notes. Each Participating Broker-Dealer that receives Series B
Notes for its own account pursuant to the Exchange Offer must
acknowledge that it will deliver a prospectus in connection with
any resale of such Series B Notes. The Letter of Transmittal
states that by so acknowledging and by delivering a prospectus, a
Participating Broker-Dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
The Company is under no obligation to prepare a prospectus for
use in connection with any such resale. See "Plan of
Distribution."
In the event that Continental reasonably determines that any
changes in law or the applicable interpretations of the staff of
the Commission do not permit Continental to effect the Exchange
Offer or in the event that holders of at least 25% in aggregate
principal amount of the Series A Notes determine, based upon an
opinion of counsel which shall have been delivered, with notice
of such determination, to Continental, that because of changes in
law or the applicable interpretations of the staff of the
Commission, that (i) the Series B Notes would not be tradeable
without restriction under state or federal securities laws, (ii)
the Commission is unlikely to permit the Exchange Offer, (iii)
the participation of such holders in the Exchange Offer is not
legally permitted or (iv) a court decision or administrative
action may be reasonably expected to have a material adverse
effect on such holders in the event such holders participate in
the Exchange Offer, Continental will, in lieu of effecting the
registration of the Series B Notes pursuant to the Registration
Statement of which this Prospectus is a part, and at no cost to
the holders of Series A Notes, (a) as promptly as practicable,
file with the Commission a shelf registration statement covering
resales of the Series A Notes (the "Shelf Registration
Statement"), (b) use its best efforts to cause the Shelf
Registration Statement to be declared effective under the
Securities Act as soon as practicable thereafter, but in no event
later than the Target Completion Date and (c) use its best
efforts to keep effective the Shelf Registration Statement for a
period of 36 months after its effective date (or for such shorter
period as shall end when all of the Series A Notes covered by the
Shelf Registration Statement have been sold pursuant thereto or
may be freely sold pursuant to Rule 144 under the Securities
Act).
In the event that on the Target Completion Date neither (a)
the Exchange Offer has been consummated nor (b) a Shelf
Registration Statement has been declared effective, Continental
shall pay liquidated damages to the holders of the Series A Notes
("Liquidated Damages") in an amount equal to $.10 per $1,000
outstanding principal amount of the Series A Notes per week
beginning on the Target Completion Date. Such weekly Liquidated
Damages shall increase by an amount equal to an additional $.05
per $1,000 outstanding principal amount of the Series A Notes 90
days after the Target Completion Date, and shall thereafter
further increase by additional increments equal to $.05 per
$1,000 outstanding principal amount at the end of each subsequent
90-day period for so long as the Exchange Offer is not
consummated or the Shelf Registration Statement is not declared
effective, as the case may be.
Upon consummation of the Exchange Offer, subject to certain
exceptions, holders of Series A Notes who do not exchange their
Series A Notes for Series B Notes in the Exchange Offer will no
longer be entitled to registration rights and will not be able to
offer or sell their Series A Notes, unless such Series A Notes
are subsequently registered under the Securities Act (which,
subject to certain limited exceptions, the Company will have no
obligation to do), except pursuant to an exemption from, or in a
transaction not subject to, the Securities Act and applicable
state securities laws. See "Risk Factors-Risk Factors Relating
to Series B Notes-Consequences of Failure to Exchange."
Expiration Date; Extensions; Amendments; Termination
The term "Expiration Date" shall mean _________, 1996 (20
business days following the commencement of the Exchange Offer),
unless the Company, in its sole discretion, extends the Exchange
Offer, in which case the term "Expiration Date" shall mean the
latest date to which the Exchange Offer is extended.
Notwithstanding any extension of the Exchange Offer, if the
Exchange Offer is not consummated by June 25, 1996, Liquidated
Damages will be payable by the Company on the Series A Notes.
See "-General."
In order to extend the Expiration Date, the Company will
notify the Exchange Agent of any extension by oral or written
notice and will mail to the record holders of Series A Notes an
announcement thereof, each prior to 9:00 a.m., New York City
time, on the next business day after the previously scheduled
Expiration Date. Such announcement may state that the Company is
extending the Exchange Offer for a specified period of time.
The Company reserves the right (i) to delay accepting any
Series A Notes, to extend the Exchange Offer or to terminate the
Exchange Offer and not accept Series A Notes not previously
accepted if any of the conditions set forth herein under "-
Conditions" shall have occurred and shall not have been waived
by the Company, by giving oral or written notice of such delay,
extension or termination to the Exchange Agent, or (ii) to amend
the terms of the Exchange Offer in any manner deemed by it to be
advantageous to the holders of the Series A Notes. Any such
delay in acceptance, extension, termination or amendment will be
followed as promptly as practicable by oral or written notice
thereof to the Exchange Agent. If the Exchange Offer is amended
in a manner determined by the Company to constitute a material
change, the Company will promptly disclose such amendment in a
manner reasonably calculated to inform the holders of the Series
A Notes of such amendment.
Without limiting the manner in which the Company may choose
to make public announcement of any delay, extension, amendment or
termination of the Exchange Offer, the Company shall have no
obligation to publish, advertise, or otherwise communicate any
such public announcement, other than by making a timely release
to an appropriate news agency.
Interest on Series B Notes
The Series B Notes will bear interest at the rate of 10.22%
per annum, accruing from the last date on which interest was paid
on the Series A Notes. Consequently, holders who exchange their
Series A Notes for Series B Notes will receive the same interest
payment on the next interest payment date that they would have
received had they not accepted the Exchange Offer. Interest on
the Series B Notes is payable quarterly on January 1, April 1,
July 1 and October 1 of each year.
Procedures for Tendering
To tender in the Exchange Offer, a holder must complete,
sign and date the Letter of Transmittal, or a facsimile thereof,
have the signatures thereon guaranteed if required by the Letter
of Transmittal and mail or otherwise deliver such Letter of
Transmittal or such facsimile, together with any other required
documents, to the Exchange Agent prior to 5:00 p.m., New York
City time, on the Expiration Date. In addition, either (i)
certificates for such Series A Notes must be received by the
Exchange Agent along with the Letter of Transmittal or (ii) the
holder must comply with the guaranteed delivery procedures
described below. THE METHOD OF DELIVERY OF SERIES A NOTES,
LETTERS OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE
ELECTION AND RISK OF THE HOLDERS. IF SUCH DELIVERY IS BY MAIL,
IT IS RECOMMENDED THAT REGISTERED MAIL, PROPERLY INSURED, WITH
RETURN RECEIPT REQUESTED, BE USED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY. Delivery of all
documents must be made to the Exchange Agent at its address set
forth below. Holders may also request their respective brokers,
dealers, commercial banks, trust companies or nominees to effect
such tender for such holders.
The tender by a holder of Series A Notes will constitute an
agreement between such holder and the Company in accordance with
the terms and subject to the conditions set forth herein and in
the Letter of Transmittal.
Only a holder of Series A Notes may tender such Series A
Notes in the Exchange Offer. The term "holder" with respect to
the Exchange Offer means any person in whose name Series A Notes
are registered on the books of the Company or any other person
who has obtained a properly completed bond power from the
registered holder.
Any beneficial owner whose Series A Notes are registered in
the name of a broker, dealer, commercial bank, trust company or
other nominee and who wishes to tender should contact such
registered holder promptly and instruct such registered holder to
tender on his behalf. If such beneficial owner wishes to tender
on his own behalf, such beneficial owner must, prior to
completing and executing the Letter of Transmittal and delivering
his Series A Notes, either make appropriate arrangements to
register ownership of the Series A Notes in such owner's name or
obtain a properly completed bond power from the registered
holder. The transfer of registered ownership may take
considerable time.
Signatures on a Letter of Transmittal or a notice of
withdrawal, as the case may be, must be guaranteed by any member
firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc., a commercial
bank or trust company having an office or correspondent in the
United States or an "eligible guarantor" institution within the
meaning of Rule 17Ad-15 under the Exchange Act (each an "Eligible
Institution") unless the Series A Notes tendered pursuant thereto
are tendered (i) by a registered holder who has not completed the
box entitled "Special Issuance Instructions" or "Special Delivery
Instructions" on the Letter of Transmittal or (ii) for the
account of an Eligible Institution.
If the Letter of Transmittal is signed by a person other
than the registered holder of any Series A Notes listed therein,
such Series A Notes must be endorsed or accompanied by bond
powers and a proxy which authorizes such person to tender the
Series A Notes on behalf of the registered holder, in each case
as the name of the registered holder or holders appears on the
Series A Notes.
If the Letter of Transmittal or any Series A Notes or bond
powers are signed by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others
acting in a fiduciary or representative capacity, such persons
should so indicate when signing, and unless waived by the
Company, evidence satisfactory to the Company of their authority
to so act must be submitted with the Letter of Transmittal.
All questions as to the validity, form, eligibility
(including time of receipt) and withdrawal of the tendered Series
A Notes will be determined by the Company in its sole discretion,
which determination will be final and binding. The Company
reserves the absolute right to reject any and all Series A Notes
not properly tendered or any Series A Notes which, if accepted by
the Company, would, in the opinion of counsel for the Company, be
unlawful. The Company also reserves the absolute right to waive
any irregularities or conditions of tender as to particular
Series A Notes. The Company's interpretation of the terms and
conditions of the Exchange Offer (including the instructions in
the Letter of Transmittal) will be final and binding on all
parties. Unless waived, any defects or irregularities in
connection with tenders of Series A Notes must be cured within
such time as the Company shall determine. Neither the Company
nor any other person shall be under any duty to give notification
of defects or irregularities with respect to tenders of Series A
Notes, nor shall any of them incur any liability for failure to
give such notification. Tenders of Series A Notes will not be
deemed to have been made until such irregularities have been
cured or waived. Any Series A Notes received by the Exchange
Agent that are not properly tendered and as to which the defects
or irregularities have not been cured or waived will be returned
without cost to such holder by the Exchange Agent to the
tendering holders of Series A Notes, unless otherwise provided in
the Letter of Transmittal, as soon as practicable following the
Expiration Date.
In addition, the Company reserves the right in its sole
discretion, subject to the provisions of the Indenture, to (i)
purchase or make offers for any Series A Notes that remain
outstanding subsequent to the Expiration Date or, as set forth
under "- Conditions," to terminate the Exchange Offer in
accordance with the terms of the Registration Rights Agreement
and (ii) to the extent permitted by applicable law, purchase
Series A Notes in the open market, in privately negotiated
transactions or otherwise. The terms of any such purchases or
offers could differ from the terms of the Exchange Offer.
Acceptance of Series A Notes for Exchange; Delivery of Series B
Notes
Upon satisfaction or waiver of all of the conditions to the
Exchange Offer, the Company will accept, promptly after the
Expiration Date, all Series A Notes properly tendered and will
issue the Series B Notes promptly after acceptance of the Series
A Notes. See "- Conditions" below. For purposes of the Exchange
Offer, the Company shall be deemed to have accepted validly
tendered Series A Notes for exchange when, as and if the Company
has given oral or written notice thereof to the Exchange Agent.
In all cases, issuance of Series B Notes for Series A Notes
that are accepted for exchange pursuant to the Exchange Offer
will be made only after timely receipt by the Exchange Agent of
certificates for such Series A Notes, a properly completed and
duly executed Letter of Transmittal and all other required
documents. If any tendered Series A Notes are not accepted for
any reason set forth in the terms and conditions of the Exchange
Offer or if Series A Notes are submitted for a greater principal
amount than the holder desires to exchange, such unaccepted or
nonexchanged Series A Notes will be returned without expense to
the tendering holder thereof as promptly as practicable after the
expiration or termination of the Exchange Offer.
Guaranteed Delivery Procedures
If a registered holder of the Series A Notes desires to
tender such Series A Notes, and the Series A Notes are not
immediately available, or time will not permit such holder's
Series A Notes or other required documents to reach the Exchange
Agent before the Expiration Date, a tender may be effected if (i)
the tender is made through an Eligible Institution, (ii) prior to
the Expiration Date, the Exchange Agent receives from such
Eligible Institution a properly completed and duly executed
Letter of Transmittal (or a facsimile thereof) and Notice of
Guaranteed Delivery, substantially in the form provided by the
Company (by facsimile transmission, mail or hand delivery),
setting forth the name and address of the holder of Series A
Notes and the amount of Series A Notes tendered, stating that the
tender is being made thereby and guaranteeing that within three
New York Stock Exchange ("NYSE") trading days after the date of
execution of the Notice of Guaranteed Delivery, the certificates
for all physically tendered Series A Notes, in proper form for
transfer, and any other documents required by the Letter of
Transmittal will be deposited by the Eligible Institution with
the Exchange Agent and (iii) the certificates for all physically
tendered Series A Notes, in proper form for transfer, and all
other documents required by the Letter of Transmittal are
received by the Exchange Agent within three NYSE trading days
after the date of execution of the Notice of Guaranteed Delivery.
Withdrawal of Tenders
Tenders of Series A Notes may be withdrawn at any time prior
to 5:00 p.m., New York City time on the Expiration Date.
For a withdrawal to be effective, a written notice of
withdrawal must be received by the Exchange Agent prior to 5:00
p.m., New York City time on the Expiration Date at one of the
addresses set forth below under "-Exchange Agent." Any such
notice of withdrawal must specify the name of the person having
tendered the Series A Notes to be withdrawn, identify the Series
A Notes to be withdrawn (including the principal amount of such
Series A Notes) and (where certificates for Series A Notes have
been transmitted) specify the name in which such Series A Notes
are registered, if different from that of the withdrawing holder.
If certificates for Series A Notes have been delivered or
otherwise identified to the Exchange Agent, then, prior to the
release of such certificates, the withdrawing holder must also
submit the serial numbers of the particular certificates to be
withdrawn and a signed notice of withdrawal with signatures
guaranteed by an Eligible Institution unless such holder is an
Eligible Institution. All questions as to the validity, form and
eligibility (including time of receipt) of such notices will be
determined by the Company, whose determination shall be final and
binding on all parties. Any Series A Notes so withdrawn will be
deemed not to have been validly tendered for exchange for
purposes of the Exchange Offer. Any Series A Notes which have
been tendered for exchange but which are not exchanged for any
reason will be returned to the holder thereof without cost to
such holder as soon as practicable after withdrawal, rejection of
tender or termination of the Exchange Offer. Properly withdrawn
Series A Notes may be retendered by following one of the
procedures described under "- Procedures for Tendering" and "-
Book-entry Transfer" above at any time on or prior to the
Expiration Date.
Conditions
Notwithstanding any other term of the Exchange Offer, the
Company will not be required to accept for exchange, or to issue
Series B Notes in exchange for, any Series A Notes and may
terminate or amend the Exchange Offer as provided herein before
the acceptance of such Series A Notes, if because of any change
in law, or applicable interpretations thereof by the Commission,
the Company determines that it is not permitted to effect the
Exchange Offer, and the Company has no obligation to, and will
not knowingly, accept tenders of Series A Notes from affiliates
of the Company (within the meaning of Rule 405 under the
Securities Act) or from any other holder or holders who are not
eligible to participate in the Exchange Offer under applicable
law or interpretations thereof by the Commission, or if the
Series B Notes to be received by such holder or holders of Series
A Notes in the Exchange Offer, upon receipt, will not be tradable
by such holder without restriction under the Securities Act and
the Exchange Act and without material restrictions under the
"blue sky" or securities laws of substantially all of the states
of the United States.
Exchange Agent
Continental Airlines, Inc. will act as Exchange Agent for
the Exchange Offer. Questions and requests for assistance and
requests for additional copies of this Prospectus or of the
Letter of Transmittal should be directed to the Exchange Agent
addressed as follows:
By Mail, Hand or Overnight Delivery
Continental Airlines, Inc.
2929 Allen Parkway, Suite 2010
Houston, Texas 77019
Attention: Jeffery A. Smisek
Facsimile Transmission:
(713) 523-2831
Confirm by Telephone:
Jeffery A. Smisek
(713) 834-2948
Fees and Expenses
The expenses of soliciting tenders pursuant to the Exchange
Offer will be borne by the Company. The principal solicitation
for tenders pursuant to the Exchange Offer is being made by mail;
however, additional solicitations may be made by telegraph,
telephone, telecopy or in person by officers and regular
employees of the Company.
The Company will not make any payments to brokers, dealers
or other persons soliciting acceptances of the Exchange Offer.
The Company may pay brokerage houses and other custodians,
nominees and fiduciaries the reasonable out-of-pocket expenses
incurred by them in forwarding copies of the Prospectus and
related documents to the beneficial owners of the Series A Notes,
and in handling or forwarding tenders for exchange.
The expenses to be incurred in connection with the Exchange
Offer will be paid by the Company, including fees and expenses of
the Trustee and holders of the Series A Notes (as defined herein)
and accounting, legal, printing and related fees and expenses.
The Company will pay all transfer taxes, if any, applicable
to the exchange of Series A Notes pursuant to the Exchange Offer.
If, however, certificates representing Series B Notes or Series A
Notes for principal amounts not tendered or accepted for exchange
are to be delivered to, or are to be registered or issued in the
name of, any person other than the registered holder of the
Series A Notes tendered, or if tendered Series A Notes are
registered in the name of any person other than the person
signing the Letter of Transmittal, or if a transfer tax is
imposed for any reason other than the exchange of Series A Notes
pursuant to the Exchange Offer, then the amount of any such
transfer taxes (whether imposed on the registered holder or any
other persons) will be payable by the tendering holder. If
satisfactory evidence of payment of such taxes or exemption
therefrom is not submitted with the Letter of Transmittal, the
amount of such transfer taxes will be billed directly to such
tendering holder.
Accounting Treatment
The Series B Notes will be recorded in the Company's
accounting records at the same carrying value as the Series A
Notes as reflected in the Company's accounting records on the
date of the exchange. Accordingly, no gain or loss for
accounting purposes will be recognized upon the consummation of
the Exchange Offer.
DESCRIPTION OF SERIES B NOTES
Except as otherwise indicated below, the following summary
applies to both the Series A Notes and the Series B Notes. As
used herein, the term "Notes" shall mean the Series A Notes and
the Series B Notes, unless otherwise indicated.
The form and terms of the Series B Notes are the same in all
material respects as the form and terms of the Series A Notes,
except that the Series B Notes do not contain terms with respect
to Liquidated Damages and the Series B Notes have been registered
under the Securities Act and therefore will not bear legends
restricting the transfer thereof. As of the date hereof,
$65,046,762.06 aggregate principal amount of Series A Notes is
outstanding. See "The Exchange Offer."
General
The Series B Notes will be issued under the Indenture, dated
as of September 28, 1995 (the "Indenture"), between Continental
and Bank One, Texas, N.A., as trustee (the "Trustee"). The terms
of the Notes include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"). The following
summary of certain provisions of the Indenture does not purport
to be a complete description of the Notes, and reference is made
to the provisions of the Indenture and those terms made a part of
the Indenture by the Trust Indenture Act. A copy of the
Indenture is available as set forth under "Available Information"
and "Incorporation of Certain Documents by Reference." Certain
defined terms used in this section are defined under "-Certain
Definitions."
The Series B Notes will be senior unsecured obligations of
the Company and will rank senior in right of payment to all
existing and future subordinated indebtedness of the Company.
The Series B Notes will rank pari passu in right of payment with
all the Company's senior indebtedness. The Series B Notes will
be effectively subordinated to all indebtedness of the Company's
Subsidiaries.
Form; Denomination
The Series A Notes initially were and the Series B Notes
initially will be issued in registered form, without coupons.
The Notes will be issued in denominations of $1,000 and integral
multiples thereof and in any other denomination the Company
determines is necessary to issue the aggregate principal amount
of the Notes.
Principal, Maturity and Interest
The Notes will be limited to $65,046,762.06 in aggregate
principal amount and will mature on July 1, 2000. Interest will
accrue on the Notes at the rate of 10.22% per annum, and will be
payable quarterly in arrears on January 1, April 1, July 1 and
October 1 of each year to holders of record on the immediately
preceding December 15, March 15, June 15 and September 15.
Interest will accrue from the most recent date on which interest
on the Notes has been paid. Interest shall accrue with respect
to principal of any Note to, but not including, the date of
repayment of such principal. To the extent lawful, the Company
shall pay interest on overdue principal and interest at the rate
of interest borne by the Notes.
Optional Redemption
The Company may redeem the Notes, at its option on notice to
the holders of the Notes as provided in the Indenture, at any
time in whole or from time to time in part, otherwise than
through the operation of the Sinking Fund provided for herein and
therein, at a Redemption Price equal to 100% of the aggregate
principal amount of the Notes to be redeemed, plus accrued and
unpaid interest thereon to the Redemption Date.
Sinking Fund
On and after April 1, 1997, the Company is required to
redeem on January 1, April 1, July 1 and October 1 of each year
(each, a "Sinking Fund Payment Date"), a portion of the aggregate
principal amount of the Notes as set forth below (each, a
"Sinking Fund Payment") at a Redemption Price equal to 100% of
the aggregate principal amount of the Notes so redeemed, plus
accrued and unpaid interest to the Redemption Date:
Sinking Fund Principal Amount
Payment Date to be Redeemed
------------ ----------------
April 1, 1997 $3,923,146.60
July 1, 1997 4,023,382.99
October 1, 1997 4,126,180.43
January 1, 1998 4,231,604.34
April 1, 1998 4,339,721.83
July 1, 1998 4,450,601.72
October 1, 1998 4,564,314.60
January 1, 1999 4,680,932.83
April 1, 1999 4,800,530.67
July 1, 1999 4,923,184.23
October 1, 1999 5,048,971.58
January 1, 2000 5,177,972.81
April 1, 2000 5,310,270.01
July 1, 2000 5,445,947.42
The principal amount of Notes to be redeemed may at the option of
the Company be reduced in inverse order of maturity by an amount
equal to the sum of (i) the principal amount of Notes therefore
issued and acquired at any time by the Company and delivered to
the Trustee for cancellation, and not theretofore made the basis
for the reduction of a Sinking Fund Payment and (ii) the
principal amount of Notes at any time redeemed and paid pursuant
to the provisions of "-Optional Redemption," or which shall at
any time have been duly called for redemption (otherwise than
through operation of the Sinking Fund) and the Redemption Price
shall have been deposited in trust for that purpose and which
theretofore have not been made the basis for the reduction of a
Sinking Fund Payment.
Notice of Redemption
Notice of redemption, whether through operation of the
Sinking Fund or otherwise, will be mailed at least 15 days, but
not more that 60 days, before the Redemption Date to each holder
of Notes or portions thereof to be redeemed to the registered
address of the holder.
From and after any Redemption Date, if monies for the
redemption of the Notes called for redemption shall have been
made available for redemption on such Redemption Date, the Notes
called for redemption shall cease to bear interest and the only
right of holders of such Notes will be to receive payments of the
Redemption Price.
Certain Covenants
The Indenture contains, among others, the following
covenants:
Limitation on Indebtedness
The Indenture provides that neither the Company nor any
Restricted Subsidiary shall at any time directly or indirectly
create, incur or assume any Debt (other than Excluded Debt) if,
at the date of (and after giving effect to) such creation,
incurrence or assumption, the Pro Forma Consolidated Fixed Charge
Coverage Ratio (i) for the period from September 28, 1995 through
December 31, 1996 is less than 1.75:1 and (ii) is less than 2.0:1
thereafter.
A "Restricted Subsidiary" is any subsidiary of the Company
(other than Continental Express, Inc.) at the time of
determination, the accounts of which would be consolidated with
those of the Company in its consolidated financial statements as
of such date.
Provision of Certain Information
While the Company is subject to the requirements of Section
13 or 15(d) of the Exchange Act, the Company shall file with the
Commission all quarterly and annual reports and such other
information, documents or other reports required to be filed
pursuant to such provisions of the Exchange Act. If at any time
the Company is not required to file the aforementioned reports,
the Company (at its own expense) shall file with the Trustee
within 15 days after it would have been required to file such
information with the Commission, all information and financial
statements, including any notes thereto, and with respect to
annual reports, an auditors' report by an accounting firm of
established national reputation.
No Personal Liability of Directors, Officers, Employees and
Stockholders
No director, officer, employee, incorporator or stockholder
of the Company or any successor corporation or the Trustee shall
have any liability for any obligation of the Company under the
Indenture or the Notes or for any claim based on, in respect of,
or by reason of, any such obligation or the creation of any such
obligation. Each holder by accepting the Notes, waives and
releases such Persons from all such liability and such waiver and
release are part of the consideration for the issuance of the
Notes.
Defeasance and Covenant Defeasance
The Company may elect either (i)(a) within one year of the
maturity of the Notes or in the event all of the Notes will be
called for redemption within one year under arrangements
satisfactory to the Trustee for giving the notice of redemption
or (b) at any time, to defease and be discharged from any and all
obligations with respect to the Notes (except as described below)
("defeasance") or (ii) to be released from its obligations with
respect to certain covenants ("covenant defeasance"), upon the
deposit with the Trustee (or other qualifying trustee), in trust
for such purpose, of money and/or U.S. Government Obligations
which through the payment of principal and interest in accordance
with their terms will provide money in an amount sufficient to
pay the principal of and any premium or interest on such Notes to
maturity or redemption, as the case may be, and any mandatory
Sinking Fund or analogous payments thereon. With respect to a
defeasance as described under (i)(a) above, after such deposit,
the Company will be deemed to have paid and discharged the entire
indebtedness represented by the Notes (except for (a) the
Company's obligation to compensate and indemnify the Trustee and
(b) the Trustee's obligation to apply such deposited funds for
payments of principal of and interest on the Notes. With respect
to a defeasance as described under (i)(b) above, on the 123rd day
after such deposit (or, in the case of a holder that may be
deemed an "insider" under the U.S. Bankruptcy Code (the
"Bankruptcy Code"), one year), the Company will be deemed to have
paid and discharged the entire indebtedness represented by such
Notes (except for (a) the rights of holders of such Notes to
receive payments in respect of the principal of and interest on
such Notes when such payments are due, (b) the obligations of the
Company to pay or cause to be paid principal of and interest on
such Notes when such payments are due and (c) certain other
obligations as provided in the Indenture). Upon the occurrence
of a covenant defeasance, the Company will be released only from
its obligations to comply with certain covenants contained in the
Indenture relating to such Notes, will continue to be obligated
in all other respects under such Notes and will continue to be
liable with respect to the payment of principal of and interest
on such Notes.
The conditions with respect to a defeasance as described in
(i)(a) in the preceding paragraph are as follows: (i) such
defeasance or covenant defeasance must not result in a breach or
violation of, or constitute a Default or Event of Default under
the Indenture, or result in a breach or violation of, or
constitute a default under, any other material agreement or
instrument of the Company and (ii) the Company must deliver to
the Trustee an Officers' Certificate and an Opinion of Counsel
with respect to compliance with the conditions precedent to such
defeasance or covenant defeasance. The conditions with respect
to both a defeasance as described in (i)(b) in the preceding
paragraph and a covenant defeasance are as follows: (i) such
defeasance or covenant defeasance must not result in a breach or
violation of, or constitute a Default or Event of Default under
the Indenture, or result in a breach or violation of, or
constitute a default under, any other material agreement or
instrument of the Company; (ii) the Company must deliver to the
Trustee a ruling from the Internal Revenue Service or an Opinion
of Counsel to the effect that the holders of such Notes will not
recognize income, gain or loss for federal income tax purposes as
a result of such defeasance or covenant defeasance and will be
subject to federal income tax on the same amounts and in the same
manner and at all the same times as would have been the case if
such defeasance or covenant defeasance had not occurred; (iii)
the Company must deliver an Opinion of Counsel to the effect that
(x) the creation of the defeasance trust does not violate the
Investment Company Act of 1940, as amended, (y) the holders have
a valid first priority security interest in the trust fund and
(z) after the passage of 123 days (or in the case of an "insider"
one year) following deposit, such funds will not be subject to
Section 547 of the Bankruptcy Code or Section 15 of the New York
Debtor and Creditor Law and in the event of a case commenced by
or against the Company under either statute, such trust funds
will no longer remain the property of the Company, or if a court
were to rule that such trust funds remained the property of the
Company, the holders' interest in such trust funds would be
protected; and (iv) the Company must deliver to the Trustee an
Officers' Certificate and an Opinion of Counsel with respect to
compliance with the conditions precedent to such defeasance or
covenant defeasance. The Indenture requires that a nationally
recognized firm of independent public accountants deliver to the
Trustee a written certification as to the sufficiency of the
trust funds deposited for the defeasance or covenant defeasance
of such Notes.
Transfer and Exchange
A holder may register the transfer of or exchange Notes in
accordance with the Indenture. The registrar for the Notes may
require a holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Company need
not register the transfer of or exchange any Notes selected for
redemption, except, in the case of any Note to be redeemed in
part, the portion thereof not so redeemed. Additionally, the
Company need not issue, exchange or register the transfer of any
Notes for a period of 10 days prior to the first mailing of
notice of redemption of the Securities to be redeemed.
Modification of the Indenture
The Indenture contains provisions permitting the Company and
the Trustee to amend or supplement the Indenture or the Notes
without the consent of the holders of the Notes in order to (i)
cure any ambiguity, correct or supplement any provisions therein
which may be inconsistent with any other provision therein, or
make any other provisions with respect to matters or questions
arising under the Indenture which shall not be inconsistent with
the provisions of the Indenture, provided that such amendment
does not adversely affect the rights of the holders of the Notes;
(ii) provide for uncertificated Notes in addition to or in place
of certificated Notes; (iii) evidence the succession of another
corporation to the Company and provide for the assumption by such
successor of the Company's obligations to the holders of the
Notes; (iv) to make any change that would provide any additional
rights or benefits to holders of the Notes or not adversely
affect the legal rights under the Indenture of any holder; or (v)
comply with the requirements of the Commission in order to effect
or maintain the qualification of the Indenture under the Trust
Indenture Act.
The Indenture also contains provisions permitting the
Company and the Trustee to amend or supplement the Indenture or
the Notes with the written consent of the holders of at least a
majority in aggregate principal amount of the outstanding Notes,
and any existing Default or Event of Default or non-compliance
with any provision of the Indenture or the Notes may be waived
with the consent of the holders of at least a majority in
aggregate principal amount of the outstanding Notes. However, no
such amendment, supplement or waiver may, without the consent of
the holder of each Note so affected, (i) reduce the principal
amount of Notes whose holders must consent to an amendment,
supplement or waiver of any provision of the Indenture, (ii)
reduce the principal of or change the fixed maturity of any Note,
or alter the provisions with respect to the redemption of the
Notes including, without limitation, the provisions with respect
to the Sinking Fund obligations, in a manner adverse to the
holders, (iii) reduce the rate of or change the time of payment
of interest on any Note, (iv) waive a Default or Event of Default
in the payment of principal of or interest on the Notes or in the
payment of any Sinking Fund installment, (v) make any Note
payable in money other than U.S. Legal Tender, (vi) make any
change in the provisions of the Indenture relating to waivers of
past Defaults or the rights of holders to receive payments of
principal of or interest on the Notes or payments of any Sinking
Fund installments, (vii) waive a redemption payment with respect
to any Note, or (ix) modify particular provisions of the
Indenture relating to holders' rights to bring suit, waivers of
certain Defaults or any of the foregoing provisions.
Consolidation, Merger or Sale by the Company
The Indenture provides that the Company may not consolidate
with or merge into any other corporation or convey, lease or
transfer its properties and assets substantially as an entirety
to any Person, unless (i) the corporation formed by such
consolidation or into which the Company is merged or the Person
who acquires by conveyance, lease or transfer the properties and
assets of the Company substantially as an entirety shall be a
corporation organized and existing under the laws of the United
States of America or a state thereof and such corporation
expressly assumes by supplemental indenture all the obligations
of the Company under the Notes and under the Indenture, (ii)
immediately before and after such transaction, no Default or
Event of Default shall have occurred and be continuing and (iii)
the Company has delivered to the Trustee an Officer's Certificate
and Opinion of Counsel each stating that such consolidation,
merger conveyance or transfer and such supplemental indenture
comply with the foregoing provisions. In the event a successor
corporation assumes the obligations of the Company, such
successor corporation shall succeed to and be substituted for the
Company under the Indenture and under the Notes and all
obligations of the Company shall terminate.
Events of Default, Notice and Certain Rights on Default
The Indenture provides that, if an Event of Default occurs
with respect to the Notes and is continuing, the Trustee or the
holders of at least 25% in aggregate principal amount of all of
the outstanding Notes affected thereby (voting as a class), by
written notice to the Company (and to the Trustee, if notice is
given by such holders of Notes), may declare the entire unpaid
principal of all the Notes to be due and payable, provided that
the Notes shall become immediately due and payable without prior
notice upon the occurrence of certain events of bankruptcy,
insolvency or reorganization of the Company.
"Events of Default" with respect to the Notes are defined in
the Indenture as being: (i) default for 30 days in payment of
any interest on any Note or any additional amount payable with
respect to the Notes when due; (ii) default in payment of
principal of or premium, if any, on any Notes when due at
maturity, upon acceleration, redemption or otherwise; (iii)
default or breach for 30 days after notice to the Company by the
Trustee, or after notice by the holders of at least 25% in
aggregate principal amount of the outstanding Notes to the
Company and the Trustee, in the performance of any other covenant
or agreement in the Notes or the Indenture; (iv) an event of
default for 30 days with respect to any Indebtedness of the
Company or any of its Subsidiaries in excess of $25 million, or
the failure of the Company or any of its Subsidiaries to make any
payment (whether of principal, interest or other amount) of more
than $1 million on any Indebtedness, the principal amount of
which exceeds $25 million; (v) any final judgment or order (not
covered by insurance) for the payment of money in excess of $100
million in the aggregate rendered against the Company and not
discharged within sixty days; and (vi) certain events of
bankruptcy, insolvency or reorganization of the Company.
In case an Event of Default has occurred, has not been
waived and is continuing, the Trustee may in its discretion
proceed to protect and enforce the rights vested in it by the
Indenture by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any of such
rights, either at law or in equity or in bankruptcy or otherwise.
A holder of Notes may not pursue any remedy with respect to
the Indenture or the Notes unless (i) such holder gives to the
Trustee written notice of a continuing Event of Default; (ii) the
holders of at least 25% in aggregate principal amount of the
outstanding Notes make a written request to the Trustee to pursue
the remedy; (iii) such holder or holders offer to the Trustee
indemnity satisfactory to the Trustee against any costs,
liability or expense to be incurred in compliance with such
request; (iv) the Trustee does not comply with the request within
60 days after receipt of the request and the offer of indemnity;
and (v) during such 60-day period, the holders of a majority in
aggregate principal amount of the outstanding Notes do not give
the Trustee a direction that is inconsistent with the request.
The holders of at least a majority in aggregate principal
amount of the outstanding Notes, by written notice to the Company
and the Trustee, may waive all past Defaults and rescind and
annul a declaration of acceleration and its consequences if (i)
all existing Events of Default, other than the non-payment of the
principal of and interest on Notes that have become due solely by
such declaration of acceleration, have been cured or waived and
(ii) the rescission would not conflict with any judgment or
decree of a court of competent jurisdiction.
Payment, Paying Agent
Payments on the Notes will be made, at the option of the
holders thereof, at the office of the Paying Agent, which
initially will be the office of the Trustee's agent in the City
of New York.
The Company will pay interest on the Notes (except defaulted
interest) to the Persons who are registered holders at the close
of business on the record date next preceding the applicable
Interest Payment Date. If the Company defaults in the payment of
the interest due on such Interest Payment Date, such defaulted
interest will be paid to the Persons who are registered holders
of Notes at the close of business on a subsequent record date
established by notice given not less that 15 days prior to such
subsequent record date. The Company will pay the principal on
the Notes to the holder that surrenders such Notes to a Paying
Agent on or after July 1, 2000 or, in the event of a redemption
of the Notes, whether through the operation of the Sinking Fund
or otherwise, on or after the Redemption Date, as described in "-
Optional Redemption" and "-Sinking Fund." Payments will be made
in U.S. Legal Tender.
Governing Law
The Indenture and the Notes will be governed by, and
construed in accordance with, the laws of the State of New York.
Replacement Notes
In case any Note shall become mutilated, defaced, destroyed,
lost or stolen, the Company, in its discretion may execute, and
upon the Company's request, the Trustee will authenticate and
deliver a Note, of like series and tenor and equal principal
amount, registered in the same manner, dated the date of its
authentication and bearing interest from the date to which
interest has been paid on such Note, in exchange and substitution
for such Note (upon surrender and cancellation thereof) or in
lieu of and substitution for such Note. In case such Note is
destroyed, lost or stolen, at the request of the Company and the
Trustee in their reasonable discretion, the applicant for a
substituted Note shall furnish to the Company and the Trustee
such security or indemnity as may be required by them to save
each of them harmless, and, in every case of destruction, loss or
theft of such Note, the applicant shall also furnish to the
Company satisfactory evidence of the destruction, loss or theft
of such Note and of the ownership thereof. Upon the issuance of
any substituted Note, the Company may require the payment by the
registered holder thereof of a sum sufficient to cover fees and
expenses connected therewith.
Certain Definitions
"Adjusted Consolidated Interest Expense" means, without
duplication, with respect to the Company and its Restricted
Subsidiaries for any period, the sum of (a) the interest expense
of the Company and its Restricted Subsidiaries for such period,
on a consolidated basis, including, without limitation, (i)
amortization of debt discount, (ii) the net cost under interest
rate contracts (including amortization of discounts), (iii) the
interest portion of any deferred payment obligation and (iv)
accrued interest, but excluding all capitalized interest, plus
(b) the interest component of Capitalized Lease Obligations paid,
accrued and/or scheduled to be paid, or accrued by the Company
and its Restricted Subsidiaries during such period plus (c) one-
third of Consolidated Aircraft Rental Payments of the Company and
its Restricted Subsidiaries during such period. For purposes of
this definition, (x) interest on a Capitalized Lease Obligation
shall be deemed to accrue at an interest rate reasonably
determined by the Company to be the rate of interest implicit in
such Capitalized Lease Obligation in accordance with GAAP and (y)
interest expense attributable to any Debt represented by the
guaranty by the Company or a Restricted Subsidiary of an
obligation of another Person shall be deemed to be the interest
expense attributable to the Debt guaranteed.
"Affiliates" means, as applied to any Person, any other
Person directly or indirectly controlling, controlled by, or
under direct or indirect common control with, such Person. For
purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by"
and "under common control with"), as applied to any Person, is
defined to mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.
"Capitalized Lease Obligation" means, as applied to any
Person, obligations of such Person under any lease of any
property (whether real, personal or mixed) which, in accordance
with GAAP, is required to be capitalized on the balance sheet of
such Person, and the amount of Indebtedness represented by such
obligations shall be the capitalized amount of such obligations
determined in accordance with GAAP.
"Consolidated Aircraft Rental Payments" means, for any
period, the aggregate rental obligations of the Company and its
Restricted Subsidiaries (not including taxes, insurance,
maintenance and similar expenses that the lessee is obligated to
pay under the terms of the relevant lease), payable in respect of
such period under leases of aircraft and aircraft-related
equipment (net of income from subleases thereof, not including
taxes insurance, maintenance and similar expenses that the
sublessee is obligated to pay under the terms of such sublease)
having an original term of not less than one year, whether or not
such obligations are reflected as liabilities or commitments on a
consolidated balance sheet of the Company and its Restricted
Subsidiaries or in the notes thereto, excluding, however, in any
event, payments by the Company or any of its Restricted
Subsidiaries in respect of Capitalized Lease Obligations.
"Consolidated Fixed Charge Coverage Ratio" means for any
period the ratio of (a) EBITDAR for such period, of the Company
and its Restricted Subsidiaries on a consolidated basis to (b)
Adjusted Consolidated Interest Expense for such period.
"Debt" means at any date of determination all indebtedness
for borrowed money of the Company and its Restricted Subsidiaries
and all indebtedness for borrowed money of other Persons to the
extent such indebtedness is guaranteed by the Company or any
Restricted Subsidiary, in each case other than Excluded Debt.
"Default" means any event that is, or after the passage of
time or both would be, an Event of Default.
"Depositary" shall have the meaning set forth under "-Form;
Denomination."
"EBITDAR" means earnings before interest, taxes,
depreciation, amortization and Consolidated Aircraft Rental
Payments.
"Effective Registration" means that the Company shall have
(i) consummated the Exchange Offer pursuant to an effective
registration statement under the Securities Act or (ii) filed and
caused to become and remain effective a Shelf Registration
Statement under the Securities Act for sale of Notes by the
holders.
"Event of Default" shall have the meaning set forth under "-
Events of Default, Notice and Certain Rights on Default."
"Excluded Debt" means, with respect to the Company and any
Restricted Subsidiary, any and all (i) Debt outstanding on the
date of the Indenture, (ii) Debt of the Company or any Restricted
Subsidiary owed to any Restricted Subsidiary or the Company,
(iii) Debt consisting of payment obligations under an interest
rate swap or similar arrangement or under a foreign currency
hedge, exchange or similar arrangement which is incurred solely
to act as a hedge against increases in interest rates or changes
in currency exchange rates that may occur under the terms of
other outstanding Debt of the Company or any Restricted
Subsidiary, (iv) Debt in respect of Capitalized Lease
Obligations, mortgage or other secured financings or purchase
money obligations, (v) trade payables and guarantees incurred in
the ordinary course of business with suppliers, licensees,
franchisees, airport authorities, credit card processing
companies and customers, and (vi) renewals, extensions,
refinancings, refundings, substitutions or replacements of any
Excluded Debt.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect as of the date of the
Indenture, including, without limitation, those set forth in the
opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting
Standards Board.
"Guarantee" means any obligation, contingent or otherwise,
of any Person directly or indirectly guaranteeing any
Indebtedness or other obligation of any other Person and, without
limiting the generality of the foregoing, any obligation, direct
or indirect, contingent or otherwise, of such first Person (i) to
purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation of such other
Person (whether arising by virtue of partnership arrangements, or
by agreement to keep-well, to purchase assets, goods, securities
or services, to take-or-pay, or to maintain financial statements
conditions or otherwise) or (ii) entered into for purposes of
assuring in any other manner the obligee of such Indebtedness or
other obligation of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part);
provided that the term "Guarantee" shall not include endorsements
for collection or deposit in the ordinary course of business.
The term "Guarantee" used as a verb has a corresponding meaning.
"Indebtedness" means, with respect to any Person at any date
of determination (without duplication), (i) all indebtedness of
such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) all obligations of such Person in respect of
letters of credit or other similar instruments (including
reimbursement obligations with respect thereto), (iv) all
obligations of such Person to pay the deferred and unpaid
purchase price of property or services, except Trade Payables,
(v) all Capitalized Lease Obligations of such Person, (vi) all
Indebtedness of other Persons secured by a Lien on any asset of
such Person, whether or not such Indebtedness is assumed by such
Person; provided that the amount of such Indebtedness shall be
the lesser of (A) the fair market value of such asset at such
date of determination and (B) the stated principal amount of such
Indebtedness, and (vii) all Indebtedness of other Persons
Guaranteed by such Person to the extent such Indebtedness is
Guaranteed by such Person. The amount of Indebtedness of any
Person at any date shall be the outstanding balance at such date
of all unconditional obligations as described above and the
maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at such
date; provided that the amount outstanding at any time of any
Indebtedness issued with original issue discount is the face
amount of such Indebtedness less the remaining unamortized
portion of the original issue discount of such Indebtedness at
such time as determined in conformity with GAAP.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including, without
limitation, any conditional sale or other title retention
agreement or lease in the nature thereof, any sale with recourse
against the seller or any Affiliate of the seller, or any
agreement to give any security interest); provided, that in no
event shall a true operating lease be deemed to constitute a
Lien.
"Officers' Certificate" means a certificate signed by the
Chairman, the President, the Chief Financial Officer or a Vice
President of the Company and by the Controller, Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary of
the Company.
"Opinion of Counsel" means a written opinion of legal
counsel, who may be either internal or outside counsel for the
Company.
"Paying Agent" means Bank One, Texas, N.A. or any other
entity authorized by the Company to pay the principal of or
interest on the Notes on behalf of the Company.
"Person" means an individual, a corporation, a partnership,
an association, a business trust, a trust or any other entity or
organization, including a governmental or political subdivision
or any agency or instrumentality thereof.
"Pro Forma Consolidated Fixed Charge Coverage Ratio" means,
in connection with the creation, incurrence or assumption of any
Debt, the Consolidated Fixed Charge Coverage Ratio after giving
pro forma effect to: (i) the creation, incurrence or assumption
of such Debt at the beginning of the four fiscal quarter period
(or such shorter period of fiscal quarters as shall have
commenced on or after January 1, 1995) preceding such creation,
incurrence or assumption (and the application of the net proceeds
therefrom for the purposes described in the following clause
(ii)) and (ii) the incurrence, repayment or retirement of any
other Debt by the Company or its Restricted Subsidiaries since
the first day of such four-quarter period (or such shorter
period) and through and including the date of determination as if
such Debt had been incurred, repaid or retired at the beginning
of such period.
"Redemption Date" when used with respect to any Note to be
redeemed, means the date fixed for such redemption (including,
without limitation, through the operation of the Sinking Fund)
pursuant to the Indenture and the Notes.
"Redemption Price" when used with respect to any Note to be
redeemed, means the price fixed for such redemption pursuant to
the Indenture and the Notes upon the redemption of any Notes in
whole or in part either at the option of the Company or through
operation of the Sinking Fund, but such term shall not include
the amount of any accrued interest payable upon any redemption.
"Registered Global Note" shall have the meaning set forth
under "-Form; Denomination."
"Sinking Fund" shall mean the method provided in the
Indenture and the Notes of amortizing the aggregate principal
amount of the Notes.
"Subsidiary" of any Person means any corporation more than
50% of the outstanding shares of Voting Stock of which at the
time of determination are owned by such Person, directly or
indirectly through on or more Subsidiaries, or both.
"Trade Payables" means, with respect to any Person, any
accounts payable or any other indebtedness or monetary obligation
to trade creditors created, assumed or Guaranteed by such Person
or any of its Subsidiaries and arising in the ordinary course of
business in connection with the acquisition of goods or services.
"U.S. Government Obligations" shall mean securities that are
(i) direct obligations of the United States of America for the
payment of which its full faith and credit is pledged or (ii)
obligations of a Person controlled or supervised by and acting as
an agency or instrumentality of the United States of America the
payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in
either case, are not callable or redeemable at the option of the
issuer thereof at any time prior to July 1, 2000, and shall also
include a depository receipt issued by a bank or trust company as
custodian with respect to any such U.S. Government Obligation or
a specific payment of interest on or principal of any such U.S.
Government Obligation held by such custodian for the account of
the holder of a depository receipt; provided that (except as
required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or the specific payment
of interest on or principal of the U.S. Government Obligation
evidenced by such depository receipt.
"U.S. Legal Tender" means such coin or currency of the
United States of America as at the time of payment shall be legal
tender for the payment of public and private debts.
"Voting Stock" means any class or classes of capital stock
pursuant to which the holders thereof have the general voting
power under ordinary circumstances to vote for the election of
directors, managers or trustees of any Person (irrespective of
whether or not at the time stock of any class or classes will
have or might have voting power by the reason of the happening of
any contingency).
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
Exchange of Series A Notes for Series B Notes
The exchange of Series A Notes for Series B Notes (the
"Exchange") pursuant to the Exchange Offer will not be a taxable
event for U.S. federal income tax purposes. As a result, a
holder of a Series A Note whose Series A Note is accepted in an
Exchange Offer will not recognize gain on the Exchange. A
tendering holder's tax basis in the Series B Notes will be the
same as such holder's tax basis in its Series A Notes. A
tendering holder's holding period for the Series B Notes received
pursuant to the Exchange Offer will include its holding period
for the Series A Notes surrendered therefor.
ALL HOLDERS OF SERIES A NOTES ARE ADVISED TO CONSULT THEIR
OWN TAX ADVISORS REGARDING THE UNITED STATES FEDERAL, STATE AND
LOCAL TAX CONSEQUENCES OF THE EXCHANGE OF SERIES A NOTES FOR
SERIES B NOTES AND OF THE OWNERSHIP AND DISPOSITION OF SERIES B
NOTES RECEIVED IN THE EXCHANGE OFFER IN LIGHT OF THEIR OWN
PARTICULAR CIRCUMSTANCES.
PLAN OF DISTRIBUTION
Each broker-dealer that receives Series B Notes for its own
account pursuant to the Exchange Offer must acknowledge that it
will deliver a prospectus in connection with any resale of such
Series B Notes. The Company will not receive any proceeds from
any sale of Series B Notes by broker-dealers. Series B Notes
received by broker-dealers for their own account pursuant to the
Exchange Offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the Series B
Notes or a combination of such methods of resale, at market
prices prevailing at the time of resale, at prices related to
such prevailing market prices or negotiated prices. Any such
resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of
commissions or concessions from any such broker-dealer and/or the
purchasers of any such Series B Notes. Any broker-dealer that
resells Series B Notes that were received by it for its own
account pursuant to the Exchange Offer and any broker or dealer
that participates in a distribution of such Series B Notes may be
deemed to be an "underwriter" within the meaning of the
Securities Act and any profit of any such resale of Series B
Notes and any commissions or concessions received by any such
persons may be deemed to be underwriting compensation under the
Securities Act. The Letter of Transmittal states that by
acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
The Company is under no obligation to prepare a prospectus for
use in connection with any such resale.
The Company has agreed to pay all expenses incident to the
Exchange Offer (including the reasonable fees and expenses of one
counsel for the holders of the Notes) other than commissions or
concessions of any brokers or dealers and will indemnify the
holders of the Notes against certain liabilities, including
liabilities under the Securities Act.
LEGAL MATTERS
The validity of the Series B Notes is being passed upon for
Continental by Cleary, Gottlieb, Steen & Hamilton, New York, New
York.
EXPERTS
The consolidated financial statements (including schedules
incorporated by reference) of Continental Airlines, Inc. as of
December 31, 1995 and 1994, and for the two years ended December
31, 1995, December 31, 1994 and the period April 28, 1993 through
December 31, 1993 and the consolidated statements of operations,
redeemable and non-redeemable preferred stock and common
stockholders' equity and cash flows of Continental Airlines
Holdings, Inc. for the period January 1, 1993 to April 27, 1993,
incorporated by reference in this Prospectus have been audited by
Ernst & Young LLP, independent auditors, as set forth in their
reports therein and incorporated herein by reference, in reliance
upon such reports given upon the authority of such firm as
experts in accounting and auditing.
=================================================================
No person has been authorized to give any information or to make
any representations other than those contained or incorporated by
reference in this Prospectus and the accompanying Letter of
Transmittal and, if given or made, such information or
representations must not be relied upon as having been authorized
by the Company or the Exchange Agent. Neither this Prospectus
nor the accompanying Letter of Transmittal, or both together,
constitute an offer to sell or the solicitation of an offer to
buy securities in any jurisdiction to any person to whom it is
unlawful to make such offer or solicitation. Neither the
delivery of this Prospectus, nor the accompanying Letter of
Transmittal, or both together, nor any sale made hereunder shall,
under any circumstances, create an implication that there has
been no change in the affairs of the Company since the date
hereof or that the information contained herein is correct at any
time subsequent to the date hereof or thereof.
TABLE OF CONTENTS
Page
----
Available Information. . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents by Reference. . . . . 2
Prospectus Summary . . . . . . . . . . . . . . . . . . . 3
Risk Factors . . . . . . . . . . . . . . . . . . . . . . 9
Recent Developments. . . . . . . . . . . . . . . . . . . 14
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . 16
Ratio of Earnings to Fixed Charges . . . . . . . . . . . 16
Selected Financial Data. . . . . . . . . . . . . . . . . 17
The Exchange Offer . . . . . . . . . . . . . . . . . . . 19
Description of Series B Notes. . . . . . . . . . . . . . 27
Certain U.S. Federal Income Tax Consequences . . . . . . 37
Plan of Distribution . . . . . . . . . . . . . . . . . . 37
Legal Matters. . . . . . . . . . . . . . . . . . . . . . 38
Experts. . . . . . . . . . . . . . . . . . . . . . . . . 38
=================================================================
=================================================================
Continental Airlines, Inc.
Offer to Exchange its
10.22% Series B Senior Unsecured
Sinking Fund Notes
due July 1, 2000
which have been registered under the
Securities Act of 1933, as amended, for
any and all of its outstanding
10.22% Series A Senior Unsecured
Sinking Fund Notes
due July 1, 2000
PROSPECTUS
, 1996
=================================================================
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
The Company's Certificate of Incorporation and bylaws
provide that the Company will indemnify each of its directors and
officers to the full extent permitted by the laws of the State of
Delaware and may indemnify certain other persons as authorized by
the Delaware General Corporation Law (the "GCL"). Section 145 of
the GCL provides as follows:
"(a) A corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action
by or in the right of the corporation) by reason of the fact that
he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit
or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe
that his conduct was unlawful.
(b) A corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually
and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was
brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
(c) To the extent that a director, officer, employee or
agent of a corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred
to in subsections (a) and (b) of this section, or in defense of
any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of
this section (unless ordered by a court) shall be made by the
corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer,
employee or agent is proper in the circumstances because he has
met the applicable standard of conduct set forth in subsections
(a) and (b). Such determination shall be made (1) by a majority
vote of the board of directors who are not parties to such
action, suit or proceeding, even though less than a quorum, or
(2) if there are no such directors, or if such directors so
direct, by independent legal counsel in a written opinion, or (3)
by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an
officer or director in defending any civil, criminal,
administrative, or investigative action, suit or proceeding may
be paid by the corporation in advance of the final disposition of
such action, suit or proceeding upon receipt of an undertaking by
or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that he is not entitled to be
indemnified by the corporation as authorized in this section.
Such expenses (including attorneys' fees) incurred by other
employees and agents may be so paid upon such terms and
conditions, if any, as the board of directors deems appropriate.
(f) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other subsections of
this section shall not be deemed exclusive of any other rights to
which those seeking indemnification or advancement of expenses
may be entitled under any bylaw, agreement, vote of stockholders
or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while
holding such office.
(g) A corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted
against him and incurred by him in any such capacity, or arising
out of his status as such, whether or not the corporation would
have the power to indemnify him against such liability under this
section.
(h) For purposes of this section, references to "the
corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have
had power and authority to indemnify its directors, officers, and
employees or agents, so that any person who is or was a director,
officer, employee or agent for such constituent corporation, or
is or was serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall
stand in the same position under this section with respect to the
resulting or surviving corporation as he would have with respect
to such constituent corporation if its separate existence had
continued.
(i) For purposes of this section, references to "other
enterprises" shall include employee benefit plans; references to
"fines" shall include any excise taxes assessed on a person with
respect to an employee benefit plan; and references to "serving
at the request of the corporation" shall include any service as a
director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director,
officer, employee, or agent with respect to an employee benefit
plan, its participants, or beneficiaries; and a person who acted
in good faith and in a manner he reasonably believed to be in the
interest of the participants and beneficiaries of an employee
benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to
in this section.
(j) The indemnification and advancement of expenses
provided by, or granted pursuant to, this section shall, unless
otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive
jurisdiction to hear and determine all actions for advancement of
expenses or indemnification brought under this section or under
any bylaw, agreement, vote of stockholders or disinterested
directors, or otherwise. The Court of Chancery may summarily
determine a corporation's obligation to advance expenses
(including attorneys' fees)."
The Certificate of Incorporation and bylaws also limit the
personal liability of directors to the Company and its
stockholders for monetary damages resulting from certain breaches
of the directors' fiduciary duties. The bylaws of the Company
provide as follows:
"No Director of the Corporation shall be personally liable
to the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a Director, except for liability (i)
for any breach of the Director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the GCL, or
(iv) for any transaction from which the Director derived any
improper personal benefit. If the GCL is amended to authorize
corporate action further eliminating or limiting the personal
liability of Directors, then the liability of Directors of the
Corporation shall be eliminated or limited to the full extent
permitted by the GCL, as so amended."
The Company maintains directors' and officers' liability
insurance.
Item 21. Exhibits.
Exhibit
Number Exhibit Description
- ------- -------------------
4.1* Indenture dated September 28, 1995 for the 10.22%
Series A Senior Unsecured Notes and the 10.22% Series B
Senior Unsecured Notes between Continental and the
Trustee
4.2* Form of 10.22% Series B Senior Unsecured Sinking Fund
Note
5.1** Opinion of Cleary, Gottlieb, Steen & Hamilton as to the
validity of the Series B Notes
10.1* Form of Exchange Agreement among Continental and the
holders of the Series A Notes
10.2* Registration Rights Agreement among Continental and the
holders of the Series A Notes
10.3 Amendment to Stockholders' Agreement dated April 19,
1996 among the Company, Air Partners and Air Canada
(incorporated by reference to the Company's
Registration Statement on Form S-3 (File No. 333-
02701))
10.4 Amended and Restated Registration Rights Agreement
dated April 19, 1996 among the Company, Air Partners
and Air Canada (incorporated by reference to the
Company's Registration Statement on Form S-3 (File No.
333-02701))
10.5 Form of Warrant Purchase Agreement between the Company
and Air Partners (incorporated by reference to the
Company's Registration Statement on Form S-3 (File No.
333-02701))
12.1* Computation of Ratio of Earnings to Fixed Charges
23.1* Consent of Ernst & Young LLP
23.2** Consent of Cleary, Gottlieb, Steen & Hamilton (included
in its opinion filed as Exhibit 5.1)
24.1* Powers of Attorney
25.1** Form T-1, Statement of Eligibility under the Trust
Indenture Act of Bank One, Texas, N.A.
99.1* Form of Letter of Transmittal
99.2* Form of Notice of Guaranteed Delivery
99.3* Form of Letter to Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees
99.4* Form of Letter to Clients
- --------------------
* Filed herewith
** To be filed by amendment
Item 22. Undertakings.
The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant, pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by any such director,
officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of
whether or not such indemnification is against public policy as
expressed in the Securities Act of 1933 and will be governed by
the final adjudication of such issue.
The undersigned registrant hereby undertakes to respond to
requests for information that is incorporated by reference into
the prospectus pursuant to Item 4, 10(b), 11, or 13 of this form,
within one business day of receipt of such request, and to send
the incorporated documents by first class mail or other equally
prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration
statement through the date of responding to the request.
The undersigned registrant hereby undertakes to supply by
means of a post-effective amendment all information concerning a
transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration
statement when it became effective.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under
the Securities Act of 1933, the information omitted from the
form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act of 1933
shall be deemed to be part of this registration statement as
of the time it was declared effective.
(2) For the purpose of determining any liability under
the Securities Act of 1933, each post-effective amendment
that contains a form of prospectus shall be deemed to be a
new registration statement relating to the securities
offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering
thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-4 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of Houston, State of Texas, on May 13, 1996.
CONTINENTAL AIRLINES, INC.
By: /s/ Michael P. Bonds
---------------------------
Michael P. Bonds
Staff Vice President and
Controller
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities and on the dates indicated, on May 13,
1996.
Signature Title
- --------- -----
*
- -----------------------------
Gordon M. Bethune President, Chief Executive
Officer (Principal Executive
Officer) and Director
*
- -----------------------------
Lawrence W. Kellner Senior Vice President and Chief
Financial Officer (Principal
Financial Officer)
/s/ Michael P. Bonds
- -----------------------------
Michael P. Bonds Staff Vice President and
Controller
(Principal Accounting Officer)
*
- -----------------------------
Thomas J. Barrack, Jr. Director
*
- -----------------------------
David Bonderman Director
*
- -----------------------------
Gregory D. Brenneman Director
*
- -----------------------------
Joel H. Cowan Director
*
- -----------------------------
Patrick Foley Director
*
- -----------------------------
Rowland C. Frazee, C.C. Director
*
- -----------------------------
Hollis L. Harris Director
*
- -----------------------------
Dean C. Kehler Director
*
- -----------------------------
Robert L. Lumpkins Director
*
- -----------------------------
Douglas H. McCorkindale Director
*
- -----------------------------
David E. Mitchell, O.C. Director
*
- -----------------------------
Richard W. Pogue Director
*
- -----------------------------
William S. Price III Director
*
- -----------------------------
Donald L. Sturm Director
*
- -----------------------------
Claude I. Taylor, O.C. Director
*
- -----------------------------
Karen Hastie Williams Director
*
- -----------------------------
Charles A. Yamarone Director
*By: SCOTT R. PETERSON
------------------------------------
Scott R. Peterson, Attorney-in-fact
EXHIBIT INDEX
Exhibit
Number Exhibit Description
- ------- -------------------
4.1* Indenture dated September 28, 1995 for the 10.22%
Series A Senior Unsecured Notes and the 10.22% Series B
Senior Unsecured Notes between Continental and the
Trustee
4.2* Form of 10.22% Series B Senior Unsecured Sinking Fund
Note
5.1** Opinion of Cleary, Gottlieb, Steen & Hamilton as to the
validity of the Series B Notes
10.1* Form of Exchange Agreement among Continental and the
holders of the Series A Notes
10.2* Registration Rights Agreement among Continental and the
holders of the Series A Notes
10.3 Amendment to Stockholders' Agreement dated April 19,
1996 among the Company, Air Partners and Air Canada
(incorporated by reference to the Company's
Registration Statement on Form S-3 (File No. 333-
02701))
10.4 Amended and Restated Registration Rights Agreement
dated April 19, 1996 among the Company, Air Partners
and Air Canada (incorporated by reference to the
Company's Registration Statement on Form S-3 (File No.
333-02701))
10.5 Warrant Purchase Agreement dated May 2, 1996 between
the Company and Air Partners (incorporated by reference
to the Company's Registration Statement on Form S-3
(File No. 333-02701))
12.1* Computation of Ratio of Earnings to Fixed Charges
23.1* Consent of Ernst & Young LLP
23.2** Consent of Cleary, Gottlieb, Steen & Hamilton (included
in its opinion filed as Exhibit 5.1)
24.1* Powers of Attorney
25.1** Form T-1, Statement of Eligibility under the Trust
Indenture Act of Bank One, Texas, N.A.
99.1* Form of Letter of Transmittal
99.2* Form of Notice of Guaranteed Delivery
99.3* Form of Letter to Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees
99.4* Form of Letter to Clients
- --------------------
* Filed herewith
** To be filed by amendment.
- -----------------------------------------------------------------
CONTINENTAL AIRLINES, INC.
AND
BANK ONE, TEXAS, N.A.
Trustee
INDENTURE
Dated as of September 28, 1995
---------------------
$65,046,762.06
10.22% SERIES A SENIOR UNSECURED SINKING FUND NOTES
DUE JULY 1, 2000
10.22% SERIES B SENIOR UNSECURED SINKING FUND NOTES
DUE JULY 1, 2000
- -----------------------------------------------------------------
CROSS REFERENCE SHEET(1)
Provisions of Trust Indenture Act of 1939 and Indenture to
be dated as of September 28, 1995 among CONTINENTAL AIRLINES,
INC. and BANK ONE, TEXAS, N.A. Trustee.
Section of the Act Section of Indenture
310(a)(1) and (2). . . . 8.8, 8.9, 8.13
310(b) . . . . . . . . . 8.4,8.9,8.10,8.11
311(a) . . . . . . . . . 8.12
312(a) . . . . . . . . . 5.1
312(b) . . . . . . . . . 5.2
312(c) . . . . . . . . . 5.2
313(a) . . . . . . . . . 5.3
313(c) . . . . . . . . . 5.3
314(a) . . . . . . . . . 4.4(a)(b)(c)(d)
314(a)(4). . . . . . . . 4.4(a)
314(c)(1) and (2). . . . 11.1(A)(ii),11.1(B)(e),11.1(C)(f),
12.5
314(c)(3). . . . . . . . 11.1(B)(a)
314(e) . . . . . . . . . 12.5
315(a), (c) and (d). . . 8.1
315(b) . . . . . . . . . 7.11
315(e) . . . . . . . . . 7.12
316(a)(1). . . . . . . . 7.9, 7.10
316(a)(last sentence). . 7.6
316(b) . . . . . . . . . 7.7
317(a) . . . . . . . . . 7.2
317(b) . . . . . . . . . 4.3
318(a) . . . . . . . . . 12.7
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1 This Cross Reference Sheet is not part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE ONE - DEFINITIONS. . . . . . . . . . . . . . . 1
SECTION 1.1 Certain Terms Defined . . . . . . . . 1
"Acceleration Notice". . . . . . . . . . . . 1
"Adjusted Consolidated Interest Expense. . . 1
"Affiliates" . . . . . . . . . . . . . . . . 2
"Authenticating Agent" . . . . . . . . . . . 2
"Board of Directors" . . . . . . . . . . . . 2
"Business Day" . . . . . . . . . . . . . . . 2
"Capitalized Lease Obligation" . . . . . . . 2
"Capital Stock". . . . . . . . . . . . . . . 2
"Closing Date" . . . . . . . . . . . . . . . 2
"Commission" . . . . . . . . . . . . . . . . 2
"Common Stock" . . . . . . . . . . . . . . . 3
"Company". . . . . . . . . . . . . . . . . . 3
"Company Order". . . . . . . . . . . . . . . 3
"Consolidated" or "consolidated" . . . . . . 3
"Consolidated Aircraft Rental Payments". . . 3
"Consolidated Fixed Charge Coverage Ratio" . 3
"Corporate Trust Office" . . . . . . . . . . 3
"Debt" . . . . . . . . . . . . . . . . . . . 4
"Default". . . . . . . . . . . . . . . . . . 4
"Depository" . . . . . . . . . . . . . . . . 4
"EBITDAR". . . . . . . . . . . . . . . . . . 4
"Effective Registration" . . . . . . . . . . 4
"Event of Default" . . . . . . . . . . . . . 4
"Exchange Act" . . . . . . . . . . . . . . . 4
"Exchange Offer" . . . . . . . . . . . . . . 4
"Excluded Debt". . . . . . . . . . . . . . . 4
"GAAP" . . . . . . . . . . . . . . . . . . . 5
"Global Security". . . . . . . . . . . . . . 5
"Guarantee". . . . . . . . . . . . . . . . . 5
"Holder", "Holder of Securities",
"Securityholder" . . . . . . . . . . . . . 5
"Indebtedness" . . . . . . . . . . . . . . . 5
"Indenture". . . . . . . . . . . . . . . . . 6
"Interest Payment Date". . . . . . . . . . . 6
"Interest Record Date" . . . . . . . . . . . 6
"Lien" . . . . . . . . . . . . . . . . . . . 6
"Notice of Default". . . . . . . . . . . . . 6
"Officer". . . . . . . . . . . . . . . . . . 6
"Officers' Certificate". . . . . . . . . . . 6
"Opinion of Counsel" . . . . . . . . . . . . 7
"Outstanding". . . . . . . . . . . . . . . . 7
"Paying Agent" . . . . . . . . . . . . . . . 7
"Person" . . . . . . . . . . . . . . . . . . 7
"Pro Forma Consolidated Fixed Charge
Coverage Ratio". . . . . . . . . . . . . . 7
"Redemption Date". . . . . . . . . . . . . . 7
"Redemption Price" . . . . . . . . . . . . . 8
"Registration Rights Agreement". . . . . . . 8
"Responsible Officer". . . . . . . . . . . . 8
"Restricted Subsidiary". . . . . . . . . . . 8
"Securities" . . . . . . . . . . . . . . . . 8
"Securities Act" . . . . . . . . . . . . . . 8
"Series A Notes" . . . . . . . . . . . . . . 8
"Series B Notes" . . . . . . . . . . . . . . 8
"Shelf Registration Statement" . . . . . . . 9
"Sinking Fund" . . . . . . . . . . . . . . . 9
"Sinking Fund Payment Date". . . . . . . . . 9
"Stated Maturity". . . . . . . . . . . . . . 9
"Subsidiary" . . . . . . . . . . . . . . . . 9
"TIA". . . . . . . . . . . . . . . . . . . . 9
"Trade Payables" . . . . . . . . . . . . . . 9
"Trustee". . . . . . . . . . . . . . . . . . 9
"U.S. Government Obligations". . . . . . . . 9
"U.S. Legal Tender". . . . . . . . . . . . . 10
"Voting Stock" . . . . . . . . . . . . . . . 10
ARTICLE TWO - SECURITIES . . . . . . . . . . . . . . . 10
SECTION 2.1 Form and Dating . . . . . . . . . . 10
SECTION 2.2 Execution and Authentication. . . . 10
SECTION 2.3 Certificate of Authentication . . . 12
SECTION 2.4 Payments of Interest. . . . . . . . 12
SECTION 2.5 Registration, Transfer and Exchange 12
SECTION 2.6 Mutilated, Defaced, Destroyed, Lost
and Stolen Securities . . . . . . . 15
SECTION 2.7 Cancellation of Securities;
Destruction Thereof . . . . . . . . 16
SECTION 2.8 Temporary Securities. . . . . . . . 17
SECTION 2.9 Currency and Manner of Payments in
Respect of Securities . . . . . . . 17
SECTION 2.10 CUSIP Number. . . . . . . . . . . . 17
SECTION 2.11 Computation of Interest . . . . . . 17
SECTION 2.12 Effective Registration. . . . . . . 17
ARTICLE THREE - REDEMPTIONS; SINKING FUND. . . . . . . 18
SECTION 3.1 Notices to Trustee. . . . . . . . . 18
SECTION 3.2 Selection of Securities to
be Redeemed . . . . . . . . . . . . 18
SECTION 3.3 Notice of Redemption. . . . . . . . 19
SECTION 3.4 Effect of Notice of Redemption. . . 20
SECTION 3.5 Deposit of Redemption Price . . . . 20
SECTION 3.6 Securities Redeemed in Part . . . . 20
SECTION 3.7 Optional Redemption . . . . . . . . 20
SECTION 3.8 Sinking Fund. . . . . . . . . . . . 21
ARTICLE FOUR - COVENANTS OF THE COMPANY. . . . . . . . 22
SECTION 4.1 Payment of Principal and Interest . 22
SECTION 4.2 Offices for Payments, etc.. . . . . 22
SECTION 4.3 Paying Agents . . . . . . . . . . . 22
SECTION 4.4 Reports and Information . . . . . . 23
SECTION 4.5 Corporate Existence . . . . . . . . 25
SECTION 4.6 Payment of Taxes and Other Claims . 25
SECTION 4.7 Maintenance of Properties . . . . . 25
SECTION 4.8 Maintenance of Insurance. . . . . . 26
SECTION 4.9 Compliance with Laws. . . . . . . . 26
SECTION 4.10 Incurrence of Debt. . . . . . . . . 26
ARTICLE FIVE - SECURITYHOLDERS LISTS AND REPORTS
BY COMPANY AND THE TRUSTEE . . . . . . 26
SECTION 5.1 The Company to Furnish Trustee
Information as to Names and
Addresses of Securityholders. . . . 26
SECTION 5.2 Disclosure of Names and Addresses of
Securityholders . . . . . . . . . . 27
SECTION 5.3 Reports by the Trustee. . . . . . . 27
ARTICLE SIX - CONSOLIDATION, MERGER, CONVEYANCE OR
TRANSFER. . . . . . . . . . . . . . . . . 27
SECTION 6.1 Merger or Consolidation . . . . . . 27
SECTION 6.2 Successor Corporation Substituted . 28
ARTICLE SEVEN - REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT . . . . . . . . 29
SECTION 7.1 Event of Default Defined;
Acceleration of Maturity;
Waiver of Default . . . . . . . . . 29
SECTION 7.2 Collection of Indebtedness by
Trustee; Trustee May Prove Debt . . 32
SECTION 7.3 Application of Proceeds . . . . . . 34
SECTION 7.4 Suits for Enforcement . . . . . . . 35
SECTION 7.5 Restoration of Rights on Abandonment
of Proceedings. . . . . . . . . . . 35
SECTION 7.6 Limitations on Suits by
Securityholders . . . . . . . . . . 35
SECTION 7.7 Unconditional Right of
Securityholders to Institute
Certain Suits . . . . . . . . . . . 36
SECTION 7.8 Powers and Remedies Cumulative;
Delay or Omission Not Waiver of
Default . . . . . . . . . . . . . . 36
SECTION 7.9 Control by Holders of Securities. . 36
SECTION 7.10 Waiver of Past Defaults . . . . . . 37
SECTION 7.11 Trustees to Give Notice of
Default, But May Withhold in
Certain Circumstances . . . . . . . 38
SECTION 7.12 Right of Court to Require Filing
of Undertaking to Pay Costs . . . . 38
SECTION 7.13 Waiver of Stay, Extension or
Usury Laws. . . . . . . . . . . . . 39
ARTICLE EIGHT - CONCERNING THE TRUSTEE . . . . . . . . 39
SECTION 8.1 Duties and Responsibilities of
the Trustee; During Default;
Prior to Default. . . . . . . . . . 39
SECTION 8.2 Certain Rights of the Trustee . . . 40
SECTION 8.3 Trustee Not Responsible for
Recitals, Disposition of Securities
or Application of Proceeds Thereof. 41
SECTION 8.4 Trustee and Agents May Hold
Securities; Collections, etc. . . . 42
SECTION 8.5 Monies Held by Trustee. . . . . . . 42
SECTION 8.6 Compensation and Indemnification
of Trustee and Its Prior Claim. . . 42
SECTION 8.7 Right of Trustee to Rely on
Officers' Certificate, etc. . . . . 43
SECTION 8.8 Persons Eligible for Appointment
as Trustee. . . . . . . . . . . . . 43
SECTION 8.9 Resignation and Removal; Appointment
of Successor Trustee. . . . . . . . 44
SECTION 8.10 Acceptance of Appointment by
Successor Trustee . . . . . . . . . 45
SECTION 8.11 Merger, Conversion, Consolidation
or Succession to Business of
Trustee . . . . . . . . . . . . . . 46
SECTION 8.12 Preferential Collection of Claims
Against the Company . . . . . . . . 46
SECTION 8.13 Appointment of Authenticating
Agent . . . . . . . . . . . . . . . 46
ARTICLE NINE - CONCERNING THE SECURITYHOLDERS. . . . . 48
SECTION 9.1 Evidence of Action Taken by
Securityholders . . . . . . . . . . 48
SECTION 9.2 Proof of Execution of Instruments
and of Holding of Securities. . . . 48
SECTION 9.3 Holders to be Treated as Owners . . 48
SECTION 9.4 Securities Owned by the Company
Deemed Not Outstanding. . . . . . . 49
SECTION 9.5 Right of Revocation of Action
Taken . . . . . . . . . . . . . . . 49
ARTICLE TEN - AMENDMENTS . . . . . . . . . . . . . . . 50
SECTION 10.1 Amendment and Supplements Permitted
Without Consent of Holders. . . . . 50
SECTION 10.2 Amendments and Supplements
Requiring Consent of Holders. . . . 50
SECTION 10.3 Compliance with TIA . . . . . . . . 52
SECTION 10.4 Revocation and Effect of Consents . 52
SECTION 10.5 Notation on or Exchange of
Securities. . . . . . . . . . . . . 53
SECTION 10.6 Trustee Protected . . . . . . . . . 53
ARTICLE ELEVEN - SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONIES . . . . . . . . 53
SECTION 11.1 Satisfaction and Discharge of
Indenture . . . . . . . . . . . . . 53
SECTION 11.2 Application by Trustee of Funds
Deposited for Payment of
Securities; Other Miscellaneous
Provisions. . . . . . . . . . . . . 58
SECTION 11.3 Repayment of Monies Held by Paying
Agent . . . . . . . . . . . . . . . 59
SECTION 11.4 Return of Monies Held by Trustee
and Paying Agent Unclaimed for
Two Years . . . . . . . . . . . . . 59
SECTION 11.5 Indemnity for U.S. Government
Obligations . . . . . . . . . . . . 59
ARTICLE TWELVE - MISCELLANEOUS PROVISIONS. . . . . . . 60
SECTION 12.1 Incorporators, Stockholders,
Officers and Directors of the
Company Exempt from Individual
Liability. . . . . . . . . . . . . 60
SECTION 12.2 Provisions of Indenture for the
Sole Benefit of Parties
and Holders of Securities. . . . . 60
SECTION 12.3 Successors and Assigns of the
Company Bound by Indenture . . . . 60
SECTION 12.4 Notices. . . . . . . . . . . . . . 60
SECTION 12.5 Officers' Certificates and
Opinions of Counsel; Statements
to be Contained Therein. . . . . . 61
SECTION 12.6 Payments Due on Saturdays,
Sundays and Holidays . . . . . . . 62
SECTION 12.7 Conflict of Any Provision of
Indenture with Trust Indenture
Act of 1939. . . . . . . . . . . . 62
SECTION 12.8 New York Law to Govern . . . . . . 62
SECTION 12.9 Counterparts . . . . . . . . . . . 62
SECTION 12.10 Effect of Headings . . . . . . . . 62
SECTION 12.11 Severability . . . . . . . . . . . 63
INDENTURE, dated as of September 28, 1995, between
Continental Airlines, Inc., a Delaware corporation (the
"Company"), having its principal office at 2929 Allen Parkway,
Houston, Texas 77019, and Bank One, Texas, N.A., a national
banking association (the "Trustee"), having its principal office
at 910 Travis Street, Houston, Texas 77002.
Each party hereto agrees as follows for the benefit of
the other party and for the equal and ratable benefit of the
Holders of the Company's 10.22% Series A Senior Unsecured Sinking
Fund Notes due July 1, 2000 and 10.22% Series B Senior Unsecured
Sinking Fund Notes due July 1, 2000.
ARTICLE ONE - DEFINITIONS
SECTION 1.1 Certain Terms Defined. The following
terms (except as otherwise expressly provided or unless the
context otherwise clearly requires) for all purposes of this
Indenture shall have the respective meanings specified in this
Section. All other terms used in this Indenture that are defined
in the TIA or the definitions of which in the Securities Act are
referred to in the TIA, including terms defined therein by
reference to the Securities Act (except as herein otherwise
expressly provided or unless the context otherwise requires),
shall have the meanings assigned to such terms in the TIA and in
the Securities Act as in force at the date of this Indenture.
All accounting terms used herein and not expressly defined shall
have the meanings assigned to such terms in accordance with GAAP
applied on a consistent basis. The words "herein", "hereof" and
"hereunder" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section
or other subdivision. The terms defined in this Article have the
meanings assigned to them in this Article and include the plural
as well as the singular.
"Acceleration Notice" shall have the meaning set forth
in Section 7.1.
"Adjusted Consolidated Interest Expense" means, without
duplication, with respect to the Company and its Restricted
Subsidiaries for any period, the sum of (a) the interest expense
of the Company and its Restricted Subsidiaries for such period,
on a consolidated basis, including, without limitation, (i)
amortization of debt discount, (ii) the net cost under interest
rate contracts (including amortization of discounts), (ii) the
interest portion of any deferred payment obligation and (iv)
accrued interest, but excluding all capitalized interest, plus
(b) the interest component of capitalized lease obligations paid,
accrued and/or scheduled to be paid, or accrued by the company
and its Restricted Subsidiaries during such period plus (c) one-
third of Consolidated Aircraft Rental Payments of the Company and
its Restricted Subsidiaries during such period. For purposes of
this definition, (x) interest on a capitalized lease obligation
shall be deemed to accrue at an interest rate reasonably
determined by the Company to be the rate of interest implicit in
such capitalized lease obligation in accordance with GAAP and (y)
interest expense attributable to any Debt represented by the
guaranty by the Company or a Restricted Subsidiary of an
obligation of another Person shall be deemed to be the interest
expense attributable to the Debt guaranteed.
"Affiliates" means, as applied to any Person, any
other Person directly or indirectly controlling, controlled by,
or under direct or indirect common control with, such Person.
For purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by"
and "under common control with"), as applied to any Person, is
defined to mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.
"Authenticating Agent" shall have the meaning set forth
in Section 8.13.
"Board of Directors" when used with reference to any
Person, means the Board of Directors of such Person or any
committee of such Board duly authorized, with respect to any
particular matter, to exercise the power of the Board of
Directors of such Person.
"Business Day" means any day except a Saturday, Sunday
or other day on which commercial banks in the City of New York,
New York, the City of Houston, Texas or the city of the Corporate
Trust Office of the Trustee, are authorized or required by law to
close.
"Capitalized Lease Obligation" means, as applied to any
Person, obligations of such Person under any lease of any
property (whether real, personal or mixed) which, in accordance
with GAAP, is required to be capitalized on the balance sheet of
such Person, and the amount of Indebtedness represented by such
obligations shall be the capitalized amount of such obligations
determined in accordance with GAAP.
"Capital Stock" means, with respect to any Person, any
and all shares, interests, participations or other equivalents
(however designated, whether voting or non-voting) of such
Person's capital stock, whether now outstanding or issued after
the date of this Indenture, including, without limitation, all
Common Stock.
"Closing Date" means the date on which the Securities
are originally issued under this Indenture.
"Commission" means the Securities and Exchange
Commission, as from time to time constituted, or if at any time
after the execution and delivery of this Indenture such
Commission is not existing and performing the duties now assigned
to it under the TIA, then the body performing such duties on such
date.
"Common Stock" means, with respect to any Person, any
and all shares, interests, participations or other equivalents
(however designated, whether voting or non-voting) of such
Person's common stock, whether now outstanding or issued after
the date of this Indenture, including, without limitation, all
series and classes of such common stock.
"Company" means Continental Airlines, Inc., a Delaware
corporation and, subject to Article Six hereof, its successors
and assigns.
"Company Order" means a written statement, request or
order of the Company signed in its name by the Chairman, the
President, the Chief Financial Officer or a Vice President and by
the Controller, the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of the Company and delivered
to the Trustee.
"Consolidated" or "consolidated," when used with
reference to any accounting term, means the amount described by
such accounting term, determined on a consolidated basis in
accordance with GAAP, after elimination of intercompany items.
"Consolidated Aircraft Rental Payments" means, for any
period, the aggregate rental obligations of the Company and its
Restricted Subsidiaries (not including taxes, insurance,
maintenance and similar expenses that the lessee is obligated to
pay under the terms of the relevant leases), payable in respect
of such period under leases of aircraft and aircraft-related
equipment (net of income from subleases thereof, not including
taxes, insurance, maintenance and similar expenses that the
sublessee is obligated to pay under the terms of such sublease)
having an original term of not less than one year, whether or not
such obligations are reflected as liabilities or commitments on a
consolidated balance sheet of the Company and its Restricted
Subsidiaries or in the notes thereto, excluding, however, in any
event, payments by the Company or any of its Restricted
Subsidiaries in respect of capitalized lease obligations.
"Consolidated Fixed Charge Coverage Ratio" means for
any period the ratio of (a) EBITDAR for such period, of the
Company and its Restricted Subsidiaries on a consolidated basis
to (b) Adjusted Consolidated Interest Expense for such period.
"Corporate Trust Office" means the office of the
Trustee at which the corporate trust business of the Trustee
shall, at any particular time, be principally administered, which
office is, at the date as of which this Indenture is dated,
located at 910 Travis Street, Houston, Texas 77002.
"Debt" means at any date of determination all
indebtedness for borrowed money of the Company and its Restricted
Subsidiaries and all indebtedness for borrowed money of other
Persons to the extent such indebtedness is guaranteed by the
Company or any Restricted Subsidiary in each case other than
Excluded Debt.
"Default" means any event that is, or after notice or
passage of time or both would be, an Event of Default.
"Depository" means, with respect to the Securities
issued in the form of one or more Global Securities, each Person
designated as Depository by the Company until a successor
Depository shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depository" shall
mean or include each Person who is then a Depository hereunder.
"EBITDAR" means earnings before interest, taxes,
depreciation, amortization and Consolidated Aircraft Rental
Payments.
"Effective Registration" means that the Company shall
have (i) consummated the Exchange Offer pursuant to an effective
registration statement under the Securities Act or (ii) filed and
caused to become and remain effective a Shelf Registration
Statement under the Securities Act for the sale of Securities by
the Holders.
"Event of Default" means any event or condition
specified as such in Section 7.1
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Exchange Offer" shall have the meaning provided in the
Registration Rights Agreement.
"Excluded Debt" means, with respect to the Company and
any Restricted Subsidiary, any and all (i) Debt outstanding on
the date hereof, (ii) Debt of the Company or any Restricted
Subsidiary owed to any Restricted Subsidiary or the Company,
(iii) Debt consisting of payment obligations under an interest
rate swap or similar arrangement or under a foreign currency
hedge, exchange or similar arrangement which is incurred solely
to act as a hedge against increases in interest rates or changes
in currency exchange rates that may occur under the terms of
other outstanding Debt of the Company or any Restricted
Subsidiary, (iv) Debt in respect of capitalized lease
obligations, mortgage or other secured financings or purchase
money obligations, (v) trade payables and guarantees incurred in
the ordinary course of business with suppliers, licensees,
franchisees, airport authorities, credit card processing
companies and customers, and (vi) renewals, extensions,
refinancings, refundings, substitutions or replacements of any
Excluded Debt.
"GAAP" means generally accepted accounting principles
in the United States of America as in effect as of the date of
this Indenture, including, without limitation, those set forth in
the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants
and statements and pronouncements of the Financial Accounting
Standards Board.
"Global Security" means a Security evidencing all or a
part of the Securities, issued to a Depository or its nominee in
accordance with Section 2.2, and bearing the legend prescribed in
Section 2.2.
"Guarantee" means any obligation, contingent or
otherwise, of any Person directly or indirectly guaranteeing any
Indebtedness or other obligation of any other Person and, without
limiting the generality of the foregoing, any obligation, direct,
or indirect, contingent or otherwise, of such first Person (i) to
purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation of such other
Person (whether arising by virtue of partnership arrangements, or
by agreement to keep-well, to purchase assets, goods, securities
or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for purposes of
assuring in any other manner the obligee of such Indebtedness or
other obligation of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part);
provided that the term "Guarantee" shall not include endorsements
for collection or deposit in the ordinary course of business.
The term "Guarantee" used as a verb has a corresponding meaning.
"Holder", "Holder of Securities", "Securityholder" or
other similar terms means the Person in whose name a Security is
registered in the security register kept by the registrar for
that purpose in accordance with the terms hereof.
"Indebtedness" means, with respect to any Person at any
date of determination (without duplication), (i) all indebtedness
of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) all obligations of such Person in respect of
letters of credit or other similar instruments (including
reimbursement obligations with respect thereto), (iv) all
obligations of such Person to pay the deferred and unpaid
purchase price of property or services, except Trade Payables,
(v) all Capitalized Lease Obligations of such Person, (vi) all
Indebtedness of other Persons secured by a Lien on any asset of
such Person, whether or not such Indebtedness is assumed by such
Person; provided that the amount of such Indebtedness shall be
the lesser of (A) the fair market value of such asset at such
date of determination and (B) the stated principal amount of such
Indebtedness, and (vii) all Indebtedness of other Persons
Guaranteed by such Person to the extent such Indebtedness is
Guaranteed by such Person. The amount of Indebtedness of any
Person at any date shall be the outstanding balance at such date
of all unconditional obligations as described above and the
maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at such
date; provided that the amount outstanding at any time of any
Indebtedness issued with original issue discount is the face
amount of such Indebtedness less the remaining unamortized
portion of the original issue discount of such Indebtedness at
such time as determined in conformity with GAAP.
"Indenture" means this instrument as originally
executed and delivered or, if amended or supplemented as herein
provided, as so amended or supplemented or both, and shall
include the form and terms of the Securities as set forth herein.
"Interest Payment Date" means the first day of each
January, April, July and October, commencing October 1, 1995 and
continuing through July 1, 2000.
"Interest Record Date" means for the interest payable
on any Interest Payment Date the December 15, March 15, June 15
or September 15 (whether or not a Business Day), as the case may
be, next preceding such Interest Payment Date.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including, without
limitation, any conditional sale or other title retention
agreement or lease in the nature thereof, any sale with recourse
against the seller or any Affiliate of the seller, or any
agreement to give any security interest); provided, that in no
event shall a true operating lease be deemed to constitute a Lien
hereunder.
"Notice of Default" shall have the meaning provided in
Section 7.1(c).
"Officer" means with respect to any Person, the
Chairman, the President, the Secretary, any Assistant Secretary,
the Chief Financial Officer, the Controller, the Treasurer, any
Assistant Treasurer or any Vice President (other than, in the
case of the Company, a Vice President whose title is "Staff Vice
President") of such Person.
"Officers' Certificate" means a certificate signed by
the Chairman, the President, the Chief Financial Officer or a
Vice President of the Company and by the Controller, Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary
of the Company.
"Opinion of Counsel" means a written opinion of legal
counsel, who may be either internal or outside counsel for the
Company.
"Outstanding" when used with reference to Securities,
subject to the provisions of Section 9.4 means, as of any
particular time, all Securities authenticated and delivered by
the Trustee under this Indenture, except:
(a) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment
or redemption of which monies or U.S. Government Obligations (as
provided for in Section 11.1) in the necessary amount shall have
been deposited in trust with the Trustee or with any Paying
Agent; provided, however, that, if such Securities, or portions
thereof, are to be redeemed prior to the maturity thereof, notice
of such redemption shall have been given as herein provided, or
provision satisfactory to the Trustee shall have been made for
giving such notice; and
(c) Securities that shall have been paid or in
substitution for which other Securities shall have been
authenticated and delivered pursuant to the terms of Section 2.5
or 2.6.
"Paying Agent" means Bank One, Texas, N.A. or any other
Person authorized by the Company to pay the principal of or
interest on the Securities on behalf of the Company.
"Person" means an individual, a corporation, a
partnership, an association, a business trust, a trust or any
other entity or organization, including a governmental or
political subdivision or an agency or instrumentality thereof.
"Pro Forma Consolidated Fixed Charge Coverage Ratio"
means, in connection with the creation, incurrence or assumption
of any Debt, the Consolidated Fixed Charge Coverage Ratio after
giving pro forma effect to: (i) the creation, incurrence or
assumption of such Debt at the beginning of the four fiscal
quarter period (or such shorter period of fiscal quarters as
shall have commenced on or after January 1, 1995) preceding such
creation, incurrence or assumption (and the application of the
net proceeds therefrom for the purposes described in the
following clause (ii)) and (ii) the incurrence, repayment or
retirement of any other Debt by the Company or its Restricted
Subsidiaries since the first day of such four-quarter period (or
such shorter period) and through and including the date of
determination as if such Debt had been incurred, repaid or
retired at the beginning of such period.
"Redemption Date" when used with respect to any
Security to be redeemed, means the date fixed for such redemption
(including, without limitation, through the operation of the
Sinking Fund) pursuant to this Indenture and the Securities.
"Redemption Price" when used with respect to any
Security to be redeemed, means the price fixed for such
redemption pursuant to this Indenture and the Securities upon the
redemption of any Securities in whole or in part either at the
option of the Company or through the operation of the Sinking
Fund, but such term shall not include the amount of any accrued
interest payable upon any redemption.
"Registration Rights Agreement" means that certain
Registration Rights Agreement dated as of the date hereof by and
among the Company and the other signatories thereto.
"Responsible Officer" when used with respect to the
Trustee means the chairman of the board of directors, any vice
chairman of the board of directors, the chairman of the trust
committee, the chairman of the executive committee, any vice
chairman of the executive committee, the president, any vice
president (whether or not designated by numbers or words added
before or after the title "vice president"), the secretary, the
treasurer, any trust officer, any assistant trust officer, any
assistant secretary, any assistant treasurer, or any other
officer or assistant officer of the Trustee customarily
performing functions similar to those performed by the persons
who at the time shall be such officers, respectively, or to whom
any corporate trust matter is referred because of his knowledge
of and familiarity with the particular subject.
"Restricted Subsidiary" means at any date of
determination any Subsidiary of the Company (other than
Continental Express, Inc.) the accounts of which would be
consolidated with those of the Company in its consolidated
financial statements as of such date.
"Securities" means the Series A Notes and the Series B
Notes that are issued under this Indenture, treated as a single
class for all purposes.
"Securities Act" means the Securities Act of 1933, as
amended.
"Series A Notes" means the Company's 10.22% Series A
Senior Unsecured Sinking Fund Notes due July 1, 2000.
"Series B Notes" means the Company's 10.22% Series B
Senior Unsecured Sinking Fund Notes due July 1, 2000.
"Shelf Registration Statement" has the meaning provided
in the Registration Rights Agreement.
"Sinking Fund" means the method provided in this
Indenture and the Securities of amortizing the aggregate
principal amount of the Securities.
"Sinking Fund Payment Date" means the first day of each
January, April, July and October, commencing April 1, 1997 and
continuing through July 1, 2000.
"Stated Maturity" means, (i) with respect to any
scheduled installment of interest on any Security, the date
specified in such Security as the fixed date on which such
installment is due and payable and (ii) with respect to any
scheduled installment of principal on any Security (including,
without limitation, Sinking Fund installments), the date
specified in such Security as the fixed date on which such
installment is due and payable.
"Subsidiary" of any Person means any corporation more
than 50% of the outstanding shares of Voting Stock of which at
the time of determination are owned by such Person, directly or
indirectly through one or more Subsidiaries, or both.
"TIA" means the Trust Indenture Act of 1939, as
amended.
"Trade Payables" means, with respect to any Person, any
accounts payable or any other indebtedness or monetary obligation
to trade creditors created, assumed or Guaranteed by such Person
or any of its Subsidiaries and arising in the ordinary course of
business in connection with the acquisition of goods or services.
"Trustee" means the Person identified as the "Trustee"
in the first paragraph hereof and, subject to the provisions of
Article Eight, shall also include any successor trustee.
"Trustee" shall also mean or include each Person who is then a
trustee hereunder.
"U.S. Government Obligations" means securities that are
(i) direct obligations of the United States of America for the
payment of which its full faith and credit is pledged or (ii)
obligations of a Person controlled or supervised by and acting as
an agency or instrumentality of the United States of America the
payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in
either case, are not callable or redeemable at the option of the
issuer thereof at any time prior to July 1, 2000, and shall also
include a depository receipt issued by a bank or trust company as
custodian with respect to any such U.S. Government Obligation or
a specific payment of interest on or principal of any such U.S.
Government Obligation held by such custodian for the account of
the holder of a depository receipt; provided that (except as
required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or the specific payment
of interest on or principal of the U.S. Government Obligation
evidenced by such depository receipt.
"U.S. Legal Tender" means such coin or currency of the
United States of America as at the time of payment shall be legal
tender for the payment of public and private debts.
"Voting Stock" means any class or classes of Capital
Stock pursuant to which the holders thereof have the general
voting power under ordinary circumstances to vote for the
election of directors, managers or trustees of any Person
(irrespective of whether or not at the time stock of any class or
classes will have or might have voting power by the reason of the
happening of any contingency).
ARTICLE TWO - SECURITIES
SECTION 2.1 Form and Dating. The Securities and the
related Trustee's certificate of authentication shall be
substantially in the respective forms set forth in Exhibit A,
which exhibit is a part of this Indenture. The Securities may
have notations, legends or endorsements required by law, stock
exchange rule or usage. Whether or not issued on the Closing
Date, each Security shall be dated and bear interest from the
Closing Date, except as provided in Sections 2.5 and 2.6. The
Securities shall be issuable in registered form in denominations
of $1,000 and integral multiples thereof and in any other
denomination the Company determines is necessary to issue the
aggregate principal amount of the Securities.
The terms and provisions contained in the Securities
shall constitute, and are hereby expressly made, a part of this
Indenture and the Company and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and
provisions and agree to be bound thereby.
SECTION 2.2 Execution and Authentication. One Officer
of the Company shall sign each Security for the Company by manual
or facsimile signature, which signature shall be attested to by
another Officer of the Company (each of which Officers shall have
been duly authorized by all requisite corporate actions). If an
Officer whose signature is on a Security no longer holds that
office at the time any Securities are authenticated, such
Securities shall nevertheless be valid. The Company's seal shall
be reproduced on each Security. The seal of the Company may be
in the form of a facsimile thereof and may be impressed, affixed,
imprinted or otherwise reproduced on the Securities.
Typographical and other minor errors or defects in any such
reproduction of the seal or any such signature shall not affect
the validity or enforceability of any Security that has been duly
authenticated and delivered by the Trustee.
With respect to the sale and issuance of the
Securities, the Trustee shall, upon receipt of a written order of
the Company in the form of an Officers' Certificate, authenticate
Series A Notes for issuance on the Closing Date in the aggregate
principal amount of $65,046,762.06.
Following the occurrence of an Effective Registration
involving a Shelf Registration Statement with respect to the
Series A Notes pursuant to the Registration Rights Agreement,
unless a stop order is imposed or the effectiveness of the Shelf
Registration is for any other reason suspended or such Series A
Notes are being sold to an Affiliate of the Company, all
requirements with respect to legends on the Series A Notes will
cease to apply upon the sale thereof, and certificated Series A
Notes without legends will be available to the Holders. Upon the
occurrence of an Effective Registration involving the Exchange
Offer, the Trustee shall, on the terms and conditions set forth
in Section 2.12 (including receipt of a written order of the
Company in the form of an Officers' Certificate), authenticate
Series B Notes for issuance on consummation of the Exchange Offer
to Holders who duly tender their Series A Notes for exchange.
If any Securities are to be issued in the form of one
or more Global Securities, then the Company shall execute and the
Trustee shall authenticate and deliver one or more Global
Securities, that (i) shall be in denominations of $1,000 or
integral multiplies thereof or in such other denominations as may
be necessary to issue the aggregate principal amount of
Securities in the form of one or more Global Securities, (ii)
shall be registered in the name of the Depository for such Global
Security or Securities or the nominee of such Depository, (iii)
shall be delivered by the Trustee to such Depository or pursuant
to such Depository's instructions and (iv) shall bear a legend
substantially to the following effect:
Unless and until it is exchanged in whole or
in part for Securities in definitive
registered form, this Security may not be
transferred except as a whole by the
Depository to the nominee of the Depository
or by a nominee of the Depository to the
Depository or another nominee of the
Depository or by the Depository or any such
nominee to a successor Depository or a
nominee of such successor Depository.
Each Depository must, at the time of its designation
and at all times while it serves as Depository, be a clearing
agency registered under the Exchange Act and any other applicable
statute or regulation.
SECTION 2.3 Certificate of Authentication. Only such
Securities as shall bear thereon a certificate of authentication
substantially in the form set forth in Exhibit A hereto, executed
(subject to Section 8.13) by the Trustee by the manual signature
of one of its Responsible Officers, shall be entitled to the
benefits of this Indenture or be valid or obligatory for any
purpose. The execution of such certificate by the Trustee upon
any Security executed by the Company shall be conclusive
evidence, and the only evidence, that the Security so
authenticated has been duly authenticated and delivered hereunder
and that the Holder of such Security is entitled to the benefits
of this Indenture.
SECTION 2.4 Payments of Interest. The Securities
shall bear interest from July 1, 1995, and such interest shall be
payable on the Interest Payment Dates.
The Person in whose name any Security is registered at
the close of business on any Interest Record Date applicable to
such Security with respect to any Interest Payment Date for such
Security shall be entitled to receive the interest, if any,
payable on such Interest Payment Date notwithstanding any
transfer or exchange of such Security subsequent to the Interest
Record Date and prior to such Interest Payment Date, except if
and to the extent the Company shall default in the payment of the
interest due on such Interest Payment Date, in which case such
defaulted interest shall be paid to the Persons in whose names
Outstanding Securities are registered at the close of business on
a subsequent record date (which shall be not less than five
Business Days prior to the date of payment of such defaulted
interest) established by notice given by mail by or on behalf of
the Company to the Holders of Securities not less than 15 days
preceding such subsequent record date.
Subject to the foregoing provisions of this Section
2.4, each Security delivered under this Indenture upon transfer
of or in exchange for or in lieu of any other Security shall
carry the rights to interest accrued and unpaid, and to accrue,
which were carried by such other Security.
SECTION 2.5 Registration, Transfer and Exchange. The
Company will keep, or cause to be kept, at each office or agency
to be maintained for the purpose as provided in Section 4.2 a
register or registers in which, subject to such reasonable
regulations as it may prescribe, it will provide for the
registration of Securities and the registration of transfer of
Securities. Such register shall be in written form in the
English language or in any other form capable of being converted
into such form within a reasonable time. If and so long as the
Trustee shall not be the registrar for the Securities, at all
reasonable times such register or registers shall be open for
inspection by the Trustee.
Upon due presentation for registration of transfer of
any Security at any such office or agency to be maintained for
the purpose as provided in Section 4.2, the Company shall execute
and the Trustee shall authenticate and deliver in the name of the
transferee or transferees a new Security or Securities.
At the option of the Holder thereof, Securities (other
than a Global Security, except as set forth below) may be
exchanged for a Security or Securities having authorized
denominations in an equal aggregate principal amount, upon
surrender of such Securities to be exchanged at the agency of the
Company that shall be maintained for such purpose in accordance
with Section 4.2 and upon payment, if the Company shall so
require, of the amounts hereinafter provided.
All Securities presented for registration of transfer,
exchange, redemption or payment shall (if so required by the
Company or the Trustee) be duly endorsed by, or be accompanied by
a written instrument or instruments of transfer, in form
satisfactory to the Company and the Trustee and duly executed by
the Holder or the Holder's attorney duly authorized in writing.
The Company may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in
connection with any exchange or registration of transfer of
Securities. No service charge shall be made for any such
transaction.
The Company shall not be required to exchange or
register a transfer of (a) any Securities for a period of 10 days
next preceding the first mailing of notice of redemption of
Securities to be redeemed or (b) any Securities selected, called
or being called for redemption, in whole or in part, except, in
the case of any Security to be redeemed in part, the portion
thereof not so to be redeemed.
Notwithstanding any other provision of this Section
2.5, unless and until it is exchanged in whole or in part for
Securities in non-global form, a Global Security representing all
or a portion of the Securities may not be transferred except as a
whole by the Depository to a nominee of such Depository or by a
nominee of such Depository to such Depository or another nominee
of such Depository or by such Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
If at any time the Depository for any Securities
represented by one or more Global Securities notifies the Company
that it is unwilling or unable to continue as Depository for such
Securities or if at any time the Depository for such Securities
shall no longer be eligible under Section 2.2, the Company shall
appoint a successor Depository eligible under Section 2.2 with
respect to such Securities. If a successor Depository eligible
under Section 2.2 for such Securities is not appointed by the
Company within 90 days after the Company receives such notice or
becomes aware of such ineligibility, the Company will execute,
and the Trustee, upon receipt of an Officers' Certificate of the
Company for the authentication and delivery of Securities in non-
global form, will authenticate and deliver, Securities in non-
global form in exchange for such Global Security or Securities.
The Company may at any time and in its sole discretion
determine that the Securities issued in the form of one or more
Global Securities shall no longer be represented by a Global
Security or Securities. In such event the Company will execute,
and the Trustee, upon receipt of a Company Order for the
authentication and delivery of Securities in non-global form,
will authenticate and deliver, Securities in non-global form in
exchange for such Global Security or Securities.
Until the Securities have been registered under the
Securities Act only a Person or Persons having a beneficial
interest representing not less than 51% of the aggregate
beneficial interest in a Global Security may upon request
exchange such beneficial interest for Securities in non-global
form. After the Securities have been so registered any Person
having a beneficial interest in a Global Security may upon
request exchange such beneficial interest for Securities in non-
global form. Upon receipt by the Trustee of written instructions
(or such other form of instructions as is customary for the
Depository) from the Depository or its nominee on behalf of any
such Person or Persons and upon receipt by the Trustee of a
written order or such other form of instructions as is customary
for the Depository or the Person or Persons designated by the
Depository as having such a beneficial interest containing
registration instructions, then the Trustee will cause, in
accordance with the standing instructions and procedures existing
between the Depository and the Trustee, the aggregate principal
amount of the Global Security to be reduced accordingly and
following such reduction, the Company will execute and upon
receipt of an authentication order in the form of an Officers'
Certificate, the Trustee will authenticate and deliver,
Securities in non-global form.
Securities in non-global form issued in exchange for a
beneficial interest in a Global Security pursuant to this Section
2.5 shall be registered in such names and in such authorized
denominations as the Depository for such Global Security,
pursuant to instructions from its direct or indirect participants
or otherwise, shall instruct the Trustee or an agent of the
Company or the Trustee. The Trustee or such agent shall deliver
such Securities to or as directed by the Person or Persons in
whose names such Securities are so registered.
The Securities executed by the Company, and
authenticated and delivered by the Trustee, upon any transfer or
exchange contemplated by this Section 2.5 shall be dated the date
of their authentication, shall be in authorized denominations,
shall be in like aggregate principal amount and have the same
Stated Maturity date and interest rate as, and bear interest from
the later of (i) July 1, 1995 or (ii) the most recent date to
which interest has been paid on, the Securities surrendered upon
such transfer or exchange (or as the portion of any Global
Security being exchanged for Securities in non-global form, as
the case may be), and shall bear a number or other distinguishing
symbol not appearing on any Security contemporaneously
Outstanding.
All Securities issued upon any transfer or exchange of
Securities shall be valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such transfer or
exchange.
SECTION 2.6 Mutilated, Defaced, Destroyed, Lost and
Stolen Securities. In case any temporary or definitive Security
shall become mutilated, defaced or be destroyed, lost or stolen,
the Company in its discretion may execute, and upon the written
request of any Officer of the Company, the Trustee shall
authenticate and deliver, a new Security dated the date of its
authentication, of the same principal amount, Stated Maturity
date and interest rate as, and bearing interest from the later of
(i) July 1, 1995 or (ii) the most recent date to which interest
has been paid on, the mutilated or defaced Security, or the
Security so destroyed, lost or stolen, and bearing a number or
other distinguishing symbol not appearing on any Security
contemporaneously Outstanding, in exchange and substitution for
the mutilated or defaced Security, or in lieu of or in
substitution for the Security so destroyed, lost or stolen. At
the request of the Company and the Trustee in their reasonable
discretion, the applicant for a substitute Security shall furnish
to the Company and to the Trustee and any agent of the Company or
the Trustee such security or indemnity as may be required by them
to indemnify and defend and to save each of them harmless and, in
every case of destruction, loss or theft, evidence to their
satisfaction of the destruction, loss or theft of such Security
and of the ownership thereof and in the case of mutilation or
defacement, shall surrender the Security to the Trustee or such
agent.
Upon the issuance of any substitute Security, the
Company may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses
of the Trustee or its agent) connected therewith. In case any
Security that has matured or is about to mature or has been
called for redemption in full shall become mutilated or defaced
or be destroyed, lost or stolen, the Company may, instead of
issuing a substitute Security, pay or authorize the payment of
the same (without surrender thereof except in the case of a
mutilated or defaced Security), if the applicant for such payment
shall furnish to the Company and to the Trustee and any agent of
the Company or the Trustee such security or indemnity as any of
them may require to save each of them harmless, and, in every
case of destruction, loss or theft, the applicant shall also
furnish to the Company and the Trustee and any agent of the
Company or the Trustee evidence to their satisfaction of the
destruction, loss or theft of such Security and of the ownership
thereof.
Every substitute Security issued pursuant to the
provisions of this Section 2.6 by virtue of the fact that any
such Security is destroyed, lost or stolen shall constitute an
additional contractual obligation of the Company whether or not
the destroyed, lost or stolen Security shall be at any time
enforceable by anyone and shall be entitled to all the benefits
of (but shall be subject to all the limitations of rights set
forth in) this Indenture equally and proportionately with any
and all other Securities duly authenticated and delivered
hereunder. All Securities shall be held and owned upon the
express condition that, to the extent permitted by law, the
foregoing provisions are exclusive with respect to the
replacement or payment of mutilated, defaced or destroyed, lost
or stolen Securities and shall preclude any and all other rights
or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement
or payment of negotiable instruments or other securities without
their surrender.
SECTION 2.7 Cancellation of Securities; Destruction
Thereof.
(a) All Securities surrendered for payment,
redemption, registration of transfer or exchange, if surrendered
to the Company or any agent of the Company or any agent of the
Trustee, shall be delivered to the Trustee for cancellation and,
upon receipt thereof by the Trustee, shall be canceled by it; and
no Securities shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Indenture. The
Trustee shall destroy canceled Securities held by it and deliver
a certificate of destruction to the Company. If the Company or
any agent of the Company shall acquire any of the Securities,
such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Securities
unless and until the same are delivered to the Trustee for
cancellation.
(b) At such time as all beneficial interests in a
Global Security have either been exchanged for Securities in non-
global form, redeemed, repurchased or canceled, such Global
Security shall be returned to and canceled by the Trustee. At
any time prior to such cancellation, if any beneficial interest
in a Global Security is exchanged for Securities in non-global
form, redeemed, repurchased or canceled, the principal amount of
Securities represented by such Global Security shall be reduced
accordingly and an endorsement shall be made on such Global
Security by the Trustee to reflect such reduction.
SECTION 2.8 Temporary Securities. Until definitive
Securities are ready for delivery, the Company may prepare and
the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of definitive
Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable
delay, the Company shall prepare and the Trustee, upon receipt of
a written order signed by two Officers of the Company, shall
authenticate definitive Securities in exchange for temporary
Securities. Until such exchange, temporary Securities shall be
entitled to the same rights, benefits and privileges as
definitive Securities.
SECTION 2.9 Currency and Manner of Payments in Respect
of Securities. Payment of the principal of and premium (if any)
and interest on, any Security will be made in U.S. Legal Tender.
SECTION 2.10 CUSIP Number. A "CUSIP" number will be
printed on the Securities, and the Trustee shall use this CUSIP
number in notices of redemption, purchase or exchange as a
convenience to Holders, provided that any such notice may state
that no representation is made as to the correctness or accuracy
of the CUSIP number printed in the notice or on the Securities
and that reliance may be placed only on the other identification
numbers printed on the Securities. The Company will promptly
notify the Trustee of any change in the CUSIP number.
2.11 Computation of Interest. Except as otherwise
provided herein, interest on the Securities shall be computed on
the basis of a 360-day year consisting of twelve 30-day months.
2.12 Effective Registration. In the event that the
Company has an Effective Registration, the Company shall notify
the Trustee within two Business Days after the effective date of
such Effective Registration under the Securities Act. If the
Effective Registration involves a Shelf Registration Statement,
the Company shall cause to be delivered to the Trustee
certificates for Series A Notes without legends and the Trustee,
upon the sale of any Series A Notes by any Holder pursuant to the
Shelf Registration Statement, unless a stop order is imposed or
the effectiveness of the Shelf Registration is suspended for any
other reason or such Series A Notes are being sold to an
Affiliate of the Company, shall authenticate and deliver to the
transferee Series A Notes without legends. If the Effective
Registration involves the Exchange Offer, the Trustee shall
notify the Holders of receipt of such notice and (after receipt
by the Trustee of (i) a written order of the Company for the
authentication and delivery of the Series B Notes to be issued in
exchange for the Series A Notes which shall be in the form of an
Officers' Certificate and (ii) a properly completed letter of
transmittal or other requested documents from a Holder as
specified in the exchange offer documents relating to the
Exchange Offer) shall exchange such Holder's Series A Notes for
Series B Notes upon the terms set forth in such exchange offer
documents.
ARTICLE THREE - REDEMPTIONS; SINKING FUND
SECTION 3.1 Notices to Trustee. If the Company elects
to redeem Securities pursuant to Section 3.7 or is required to
redeem Securities pursuant to the operation of the Sinking Fund
set forth in Section 3.8, it shall furnish to the Trustee, at
least 10 but not more than 15 days before notice of any
redemption is to be mailed to Holders (or such shorter time as
may be satisfactory to the Trustee), an Officers' Certificate
stating that the Company has elected to redeem Securities
pursuant to Section 3.7 or is required to redeem Securities
pursuant to the operation of the Sinking Fund set forth in
Section 3.8, as the case may be, the date notice of redemption is
to be mailed to Holders, the Redemption Date, the aggregate
principal amount of Securities to be redeemed, the Redemption
Price for such Securities and the amount of accrued and unpaid
interest on such Securities as of the Redemption Date. If the
Trustee is not the registrar for the Securities, the Company
shall, concurrently with delivery of its notice to the Trustee of
a redemption, cause the registrar for the Securities to deliver
to the Trustee a certificate (upon which the Trustee may rely)
setting forth the name of, and the aggregate principal amount of
Securities held by, each Holder. The Company will also provide
the Trustee with any additional information that the Trustee
reasonably requests in connection with any redemption.
SECTION 3.2 Selection of Securities to be Redeemed.
If less than all Outstanding Securities are to be redeemed, the
Company shall select the Outstanding Securities to be redeemed or
accepted for payment in compliance with the requirements of the
principal national securities exchange, if any, on which the
Securities are listed or, if the Securities are not listed on a
national securities exchange, on a pro rata basis. If the
Company elects to mail notice of a redemption to Holders, the
Trustee shall, at least 5 days prior to the date notice of
redemption is to be mailed, (i) taking into account the Company's
selection, select the Securities to be redeemed from Securities
Outstanding not previously called for redemption, and (ii)
promptly notify the Company of the names of each Holder of
Securities selected for redemption, the principal amount of
Securities held by each such Holder and the principal amount of
such Holder's Securities that are to be redeemed. The Trustee
shall select for redemption Securities or portions of Securities
in principal amounts of $1,000 or integral multiples of $1,000;
except that if all of the Securities of a Holder are selected for
redemption, the aggregate principal amount of the Securities held
by such Holder, even if not a multiple of $1,000, may be
redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for
redemption.
SECTION 3.3 Notice of Redemption.
(a) At least 15 days but not more than 60 days before
any Redemption Date, notice of any redemption, whether through
operation of the Sinking Fund or otherwise, shall be mailed by
the Company by first class mail to the registered address of each
Holder of Securities or portions thereof that are to be redeemed.
With respect to any redemption of Securities, the notice shall
identify the Securities or portions thereof to be redeemed and
shall state: (1) the Redemption Date; (2) the Redemption Price
for the Securities and the amount of unpaid and accrued interest
on such Securities as of the date of redemption; (3) if any
Security is being redeemed in part, the portion of the principal
amount of such Security to be redeemed and that, after the
Redemption Date, upon surrender of such Security, a new Security
or Securities in principal amount equal to the unredeemed portion
will be delivered; (4) the name and address of the Paying Agent;
(5) that Securities called for redemption must be surrendered to
the Paying Agent to collect the Redemption Price for, and any
accrued and unpaid interest on, such Securities; (6) that, unless
the Company defaults in making such redemption payment, interest
on Securities called for redemption ceases to accrue on and after
the Redemption Date and the only remaining right of the Holders
of such Securities is to receive payment of the Redemption Price
upon surrender to the Paying Agent of the Securities redeemed;
(7) if fewer than all the Securities are to be redeemed, the
identification of the particular Securities (or portions thereof)
to be redeemed, as well as the aggregate principal amount of
Securities to be redeemed and the aggregate principal amount of
Securities to be outstanding after such partial redemption; and
(8) if the Securities are being redeemed pursuant to Section 3.8
that such Securities are being redeemed through the operation of
the Sinking Fund.
(b) At the Company's request, the Trustee shall (at
the Company's expense) give the notice of any redemption to
Holders; provided, however, that the Company shall deliver to the
Trustee, at least 10 days prior to the date that notice of the
redemption is to be mailed to Holders, an Officers' Certificate
that (i) requests the Trustee to give notice of the redemption to
Holders, (ii) sets forth the information to be provided to
Holders in the notice of redemption, as set forth in the
preceding paragraph, and (iii) sets forth the aggregate principal
amount of Securities to be redeemed and the amount of accrued and
unpaid interest thereon as of the Redemption Date. If the
Trustee is not the registrar for the Securities, the Company
shall, concurrently with any such request, cause the registrar
for the Securities to deliver to the Trustee a certificate (upon
which the Trustee may rely) setting forth the name of, the
address of, and the aggregate principal amount of Securities held
by, each Holder; provided further that any such Officers'
Certificate may be delivered to the Trustee on a date later than
permitted under this Section 3.3(b) if such later date is
acceptable to the Trustee.
SECTION 3.4 Effect of Notice of Redemption. Once
notice of redemption is mailed to the Holders, Securities called
for redemption shall become due and payable on the Redemption
Date at the Redemption Price. Upon surrender to the Trustee or
the Paying Agent, the Securities called for redemption shall be
paid at the Redemption Price.
SECTION 3.5 Deposit of Redemption Price.
(a) On or prior to any Redemption Date, the Company
shall deposit with the Paying Agent money sufficient to pay the
Redemption Price of, and accrued and unpaid interest on, all
Securities to be redeemed on that date. After any Redemption
Date, the Trustee or the Paying Agent shall promptly return to
the Company any money that the Company deposited with the Trustee
or the Paying Agent in excess of the amounts necessary to pay the
Redemption Price of, and accrued and unpaid interest on, all
Securities to be redeemed.
(b) If the Company complies with the preceding
paragraph, unless the Company defaults in the payment of such
Redemption Price, interest on the Securities to be redeemed will
cease to accrue on such Securities on the applicable Redemption
Date, whether or not such Securities are presented for payment.
If a Security is redeemed on or after an Interest Record Date but
on or prior to the related Interest Payment Date, then any
accrued and unpaid interest shall be paid to the Person in whose
name such Security was registered at the close of business on
such Interest Record Date. If any Security called for redemption
shall not be so paid upon surrender for redemption because of the
failure of the Company to comply with the preceding paragraph,
interest will be paid on the unpaid principal and interest from
the Redemption Date until such principal and interest is paid, at
the rate of interest provided in the Securities and Section 4.1.
SECTION 3.6 Securities Redeemed in Part. Upon
surrender of a Security that is redeemed in part, the Company
shall execute and the Trustee shall authenticate and deliver to
the Holder at the Company's expense a new Security equal in
principal amount to the unredeemed portion of the Security
surrendered. If a Global Security is so surrendered, such new
Security so issued shall be a new Global Security.
SECTION 3.7 Optional Redemption. The Company, at its
option on notice to the Holders as provided herein, may redeem
the Securities, at any time in whole or from time to time in
part, otherwise than through the operation of the Sinking Fund
provided for in Section 3.8, at a Redemption Price equal to 100%
of the aggregate principal amount of the Securities to be
redeemed, plus accrued and unpaid interest thereon to the
Redemption Date.
SECTION 3.8 Sinking Fund. (a) As and for a Sinking
Fund for the retirement of the Securities, the Company will,
until all the Securities are paid or payment thereof provided
for, deposit in accordance with Section 3.5 on or prior to each
Sinking Fund Payment Date an amount in cash sufficient to redeem
on such Sinking Fund Payment Date, at 100% of the aggregate
principal amount of the Securities so redeemed, such principal
amount of Securities as shall be set forth below or such lesser
principal amount as may be outstanding, plus all accrued and
unpaid interest thereon; provided, however, that such principal
amount of Securities to be redeemed may at the option of the
Company be reduced in inverse order of maturity by an amount
equal to the sum of (i) the principal amount of Securities
theretofore issued and acquired at any time by the Company and
delivered to the Trustee for cancellation, and not theretofore
made the basis for the reduction of a Sinking Fund payment and
(ii) the principal amount of Securities at any time redeemed and
paid pursuant to the provisions of Section 3.7, or which shall at
any time have been duly called for redemption (otherwise than
through operation of the Sinking Fund) and the Redemption Price
of which shall have been deposited in trust for that purpose and
which have not been theretofore made the basis for the reduction
of a Sinking Fund payment:
Sinking Fund Principal Amount
Payment Date to be Redeemed
------------ ----------------
April 1, 1997 $3,923,146.60
July 1, 1997 4,023,382.99
October 1, 1997 4,126,180.43
January 1, 1998 4,231,604.34
April 1, 1998 4,339,721.83
July 1, 1998 4,450,601.72
October 1, 1998 4,564,314.60
January 1, 1999 4,680,932.83
April 1, 1999 4,800,530.67
July 1, 1999 4,923,184.23
October 1, 1999 5,048,971.58
January 1, 2000 5,177,972.81
April 1, 2000 5,310,270.01
July 1, 2000 5,445,947.42
(b) Each Sinking Fund payment shall be applied to the
redemption of Securities on the related Sinking Fund Payment
Date.
(c) In the event that the Company elects to reduce the
amount to be paid to the Trustee or the Paying Agent pursuant to
the above provisions, the Officers' Certificate delivered to the
Trustee pursuant to Section 3.1 shall also state the amount of
reduction and the basis provided above for such reduction.
Notice of redemption on the Securities to be redeemed
on a Sinking Fund Payment Date, selection of such Securities and
the redemption of such Securities shall be made and selected on
the terms and in the manner stated in Sections 3.1, 3.2, 3.3, 3.4
and 3.6.
ARTICLE FOUR - COVENANTS OF THE COMPANY
SECTION 4.1 Payment of Principal and Interest. The
Company covenants and agrees that it will duly and punctually pay
or cause to be paid the principal of and interest on, each of the
Securities at the place or places, at the respective times and in
the manner provided in such Securities and in this Indenture. To
the extent lawful, the Company shall pay interest on overdue
principal and interest at a rate equal to the then applicable
interest rate on the Securities, compounded quarterly on each
Interest Payment Date.
SECTION 4.2 Offices for Payments, etc. So long as any
Securities are authorized for issuance pursuant to this Indenture
or are Outstanding hereunder, the Company will maintain in the
Borough of Manhattan, the City of New York, an office or agency
where the Securities may be presented for payment and for
exchange, and will cause the registrar for the Securities to
maintain in the Borough of Manhattan, the City of New York, an
office or agency where the Securities may be presented for
registration of transfer as in this Indenture provided.
Presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee as specified
in Section 12.4 hereof. Presentations and surrenders may also be
made at the aforementioned office or agency in the Borough of
Manhattan, the City of New York, the address of which, from time
to time, may be obtained by contacting the Corporate Trust Office
of the Trustee.
The Company may also from time to time designate one or
more other offices or agencies where the Securities may be
presented or surrendered for any or all such purposes and may
from time to time rescind such designations; provided, however,
that no such designation or recession shall in any manner relieve
the Company of its obligation to maintain an office or agency in
the Borough of Manhattan, the City of New York, for such
purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change
in the location of any such other office or agency.
SECTION 4.3 Paying Agents. Whenever the Company shall
appoint a Paying Agent other than the Trustee with respect to the
Securities, it will cause such Paying Agent to execute and
deliver to the Trustee an instrument in which such agent shall
agree with the Trustee, subject to the provisions of this Section
4.3,
(a) that it will hold all sums received by it as such
agent for the payment of the principal of and interest on the
Securities and the payment of any Sinking Fund installment
(whether such sums have been paid to it by the Company or any
other obligor on the Securities) in trust for the benefit of the
Holders of the Securities or of the Trustee,
(b) that it will give the Trustee notice of any
failure by the Company (or by any other obligor on the
Securities) to make any payment of the principal of or interest
on the Securities or any payment of a Sinking Fund installment
when the same shall be due and payable, and
(c) that it will pay any such sums so held in trust by
it to the Trustee upon the Trustee's written request, at any time
during the continuance of the failure referred to in clause (b)
above.
The Company will, on or prior to each due date of the
principal of or interest on the Securities or of any Sinking Fund
installment, deposit with the Paying Agent a sum sufficient to
pay such principal, interest or Sinking Fund installment so
becoming due, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of any failure to take
such action.
Anything in this Section 4.3 to the contrary
notwithstanding, but subject to Section 11.1, the Company may at
any time, for the purpose of obtaining a satisfaction and
discharge with respect to the Securities or for any other reason,
pay or cause to be paid to the Trustee all sums held in trust
with respect to the Securities by any Paying Agent hereunder, as
required by this Section, such sums to be held by the Trustee
upon the trusts herein contained.
Anything in this Section 4.3 to the contrary
notwithstanding, the agreement to hold sums in trust as provided
in this Section 4.3 is subject to the provisions of Sections 11.3
and 11.4 hereof.
SECTION 4.4 Reports and Information.
(a) The Company will furnish to the Trustee within 120
days after the end of each fiscal year an Officers' Certificate
stating that (i) a review of the activities of the Company and
its Subsidiaries during the preceding fiscal year has been made
to determine whether the Company has kept, observed, performed
and fulfilled all of its obligations under this Indenture and the
Securities, (ii) such review was supervised by the Officers of
the Company signing such certificate, and (iii) that to the best
knowledge of each Officer signing such certificate, (A) during
such year the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in
default in the performance or observance of any of the terms,
provisions and conditions of this Indenture (or, if a Default or
Event of Default occurred, describing all such Defaults or Events
of Default of which each such Officer may have knowledge and what
action the Company has taken or proposes to take with respect
thereto), and (B) no event has occurred and remains in existence
by reason of which payments on account of the principal of or
interest on the Securities or payments of any Sinking Fund
installment are prohibited or if such event has occurred, a
description of the event and what action the Company is taking or
proposes to take with respect thereto. The Company will, so long
as any of the Securities are outstanding, deliver to the Trustee,
promptly after any of the chief executive officer, chief
operating officer, principal financial officer or principal
accounting officer of the Company becomes aware of any event or
circumstance known by such person to constitute a Default or
Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking
or proposes to take with respect thereto.
(b) If the Company is subject to the requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall file
with the Commission all quarterly and annual reports and such
other information, documents or other reports (or copies of such
portions of any of the foregoing as the Commission may by rules
and regulations prescribe) required to be filed pursuant to such
provisions of the Exchange Act. The Company shall file with the
Trustee, within 10 days after it files the same with the
Commission, copies of the quarterly and annual reports and such
other information, documents, and reports (or copies of such
portions of any of the foregoing as the Commission may by rules
and regulations prescribe) that it files with the Commission as
contemplated by this Section 4.4(b). The Company shall also
comply with the other provisions of Section 314(a) of the TIA.
If the Company is not required to file the aforementioned
reports, the Company (at its own expense) shall file with the
Trustee within 15 days after it would have been required to file
such information with the Commission, all information and
financial statements, including any notes thereto and with
respect to annual reports, an auditors' report by an accounting
firm of established national reputation, and a "Management's
Discussion and Analysis of Financial Condition and Results of
Operations," comparable to the disclosure that the Company would
have been required to include in periodic reports on Forms 10-K,
10-Q and 8-K, if the Company were subject to the requirements of
Section 13 or 15(d) of the Exchange Act.
(c) The Company will file with the Trustee and the
Commission, in accordance with the rules and regulations
prescribed from time to time by the Commission, such additional
information, documents, and reports with respect to compliance by
the Company with the conditions and covenants provided for in
this Indenture as may be required from time to time by such rules
and regulations.
(d) The Company will mail, or cause the Trustee to
mail, to Holders at their addresses appearing in the register of
Securities at the time of such mailing within 10 days after the
filing thereof with the Trustee such summaries of any
information, documents and reports required to be filed by the
Company pursuant to subsections (b) and (c) of this Section 4.4
as may be required by rules and regulations prescribed from time
to time by the Commission.
SECTION 4.5 Corporate Existence. Subject to Article
Six, the Company will do or cause to be done all things necessary
to preserve and keep in full force and effect its corporate
existence and the corporate existence of each of its Subsidiaries
and the rights (charter and statutory) and franchises of the
Company and its Subsidiaries; provided, that the Company shall
not be required to preserve the corporate existence of any
Subsidiary or any right or franchise of the Company or any
Subsidiary if the Board of Directors of the Company shall
determine in the exercise of its business judgment that the
preservation thereof is no longer desirable in the conduct of the
business of the Company or any Subsidiary and that abandonment of
any such corporate existence, right or franchise shall have no
material adverse effect on the Company and its Subsidiaries
(taken as a whole) or the Holders.
SECTION 4.6 Payment of Taxes and Other Claims. The
Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes,
assessments and governmental charges levied or imposed upon the
Company and any Subsidiary of the Company or upon the income,
profits or property of the Company and any Subsidiary of the
Company, and (2) all lawful claims for labor, materials and
supplies that, if unpaid, might by law become a lien upon the
property of the Company or any Subsidiary of the Company;
provided, however, that the Company shall not be required to pay
or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim (a) the amount, applicability or
validity of which is being contested in good faith by appropriate
proceedings and with respect to which an adequate reserve has
been established by the Company to the extent required by GAAP,
or (b) if such failure to pay or discharge would not have a
material adverse effect on the Company and its Subsidiaries
(taken as a whole) or the Holders.
SECTION 4.7 Maintenance of Properties. The Company
shall, and shall cause each of its Subsidiaries to, maintain all
properties used or useful in the conduct of its business in good
condition, repair and working order and supply such properties
with all necessary equipment and make all necessary repairs,
renewals, replacements, betterments and improvements thereto, all
as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that
nothing in this Section shall prevent the Company or any
Subsidiary from discontinuing the operation and maintenance of
any of such properties if such discontinuance would not have a
material adverse effect on the Company and its Subsidiaries
(taken as a whole) or the Holders.
SECTION 4.8 Maintenance of Insurance. The Company
will, and will cause each of its Subsidiaries to, insure and keep
insured, with reputable insurance companies, such of their
respective properties, to such an extent and against such risks
(including liability to third parties), as property of a similar
character is usually so insured by companies engaged in a similar
business and owning similar properties in accordance with good
business practice.
SECTION 4.9 Compliance with Laws. The Company shall,
and shall cause each of its Subsidiaries to, comply with all
applicable statutes, rules, regulations, orders and restrictions
of the United States of America, all states and municipalities
thereof, and of any governmental department, commission, board,
regulatory authority, bureau, agency and instrumentality of the
foregoing, in respect of the conduct of their respective
businesses and the ownership of their respective properties,
except such as are being contested in good faith and by
appropriate proceedings and except for such noncompliance as
would not in the aggregate have a material adverse effect on the
Company and its Subsidiaries (taken as a whole) or the Holders.
SECTION 4.10 Incurrence of Debt. Neither the Company
nor any Restricted Subsidiary shall at any time directly or
indirectly create, incur or assume any Debt (other than Excluded
Debt) if, at the date of (and after giving effect to) such
creation, incurrence or assumption, the Pro Forma Consolidated
Fixed Charge Coverage Ratio is less than the applicable ratio set
forth below for such date.
Date Ratio
On or prior to December 31, 1996. . . . . . .1.75 to 1
On or after January 1, 1997 . . . . . . . . .2.0 to 1
ARTICLE FIVE - SECURITYHOLDERS LISTS AND
REPORTS BY COMPANY AND THE TRUSTEE
SECTION 5.1 The Company to Furnish Trustee Information
as to Names and Addresses of Securityholders. If and so long as
the Trustee shall not be the Security registrar for the
Securities, the Company covenants and agrees that it will furnish
or cause to be furnished to the Trustee a list in such form as
the Trustee may reasonably require of the names and addresses of
the Holders of the Securities pursuant to Section 312 of the TIA:
(a) semiannually and not more than 15 days after each
Interest Record Date or the record date for the payment of a
Sinking Fund installment, as the case may be, on such
Securities, as hereinabove specified and as of such record
date, and
(b) at such other times as the Trustee may request in
writing, within 30 days after receipt by the Company of any
such request as of a date not more than 15 days prior to the
time such information is furnished.
SECTION 5.2 Disclosure of Names and Addresses of
Securityholders. Each and every Holder of Securities, by
receiving and holding the same, agrees with the Company and the
Trustee that neither the Company nor the Trustee nor any agent of
the Company or the Trustee shall be held accountable by reason of
the disclosure of any such information as to the names and
addresses of the Holders of Securities in accordance with Section
312 of the TIA, regardless of the source from which such
information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a
request made under Section 312(b) of the TIA.
SECTION 5.3 Reports by the Trustee. Any Trustee's
report required under Section 313(a) of the TIA shall be
transmitted on or before May 15 in each year beginning May 15,
1996, as provided in Section 313(c) of the TIA, so long as any
Securities are outstanding hereunder, and shall be dated as of a
date convenient to the Trustee no more than 60 days prior
thereto.
ARTICLE SIX - CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER
SECTION 6.1 Merger or Consolidation. The Company
shall not consolidate with or merge into any other corporation or
convey, lease or transfer its properties and assets substantially
as an entirety to any Person, unless:
(a) the corporation formed by such consolidation or
into which the Company is merged or the Person that acquires
by conveyance, lease or transfer the properties and assets
of the Company substantially as an entirety shall be a
corporation organized and existing under the laws of the
United States of America or any State or the District of
Columbia, and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee,
in form satisfactory to the Trustee, the Company's
obligation for the due and punctual payment of the principal
of and interest on all the Securities according to their
tenor and the performance of every covenant of this
Indenture on the part of the Company to be performed or
observed;
(b) immediately before and after giving effect to
such transaction, no Default or Event of Default shall have
happened and be continuing; and
(c) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel each stating
that such consolidation, merger, conveyance, lease or
transfer and such supplemental indenture comply with this
Article and that all conditions precedent herein provided
for relating to such transaction have been complied with.
This Section shall only apply to a merger or
consolidation in which the Company is not the surviving
corporation and to conveyances, leases, and transfers by the
Company, as transferor or lessor.
SECTION 6.2 Successor Corporation Substituted. Upon
any consolidation or merger by the Company with or into any other
corporation, or any conveyance or transfer by the Company of its
properties and assets substantially as an entirety to any Person,
in accordance with Section 6.1, the successor corporation formed
by such consolidation or into which the Company is merged or to
which such conveyance or transfer is made shall succeed to, and
be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such
successor corporation had been named as the Company and in the
event of any such conveyance or transfer, the Company, except in
the event of a conveyance by way of lease, shall be discharged
from all obligations and covenants and released from all
liability under this Indenture and the Securities and may be
dissolved and liquidated. Such successor corporation may cause
to be signed, and may issue either in its own name or in the name
of the Company prior to such succession, any or all of the
Securities issuable hereunder that theretofore shall not have
been signed by the Company and delivered to the Trustee; and,
upon the order of such successor corporation, instead of the
Company and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any Securities that previously shall have been
signed and delivered by the officers of the Company to the
Trustee for authentication, and any Securities that such
successor corporation thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All the Securities so
issued shall in all respects have the same legal rank and benefit
under this Indenture as the Securities theretofore or thereafter
issued in accordance with the terms of this Indenture as though
all of such Securities had been issued at the date of the
execution hereof.
In case of any such consolidation, merger, conveyance
or transfer, such changes in phrasing and form (but not in
substance) may be made in the Securities that may be endorsed
thereon, as the case may be, thereafter to be delivered as may be
appropriate.
ARTICLE SEVEN - REMEDIES OF THE TRUSTEE
AND SECURITYHOLDERS ON EVENT OF DEFAULT
SECTION 7.1 Event of Default Defined; Acceleration of
Maturity; Waiver of Default. "Event of Default", with respect to
the Securities, means any one of the following events that shall
have occurred and be continuing (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary
or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of
any administrative or governmental body):
(a) default in the payment of the principal of any
Security when the same becomes due and payable at maturity,
upon acceleration, redemption (including redemption pursuant
to the operation of the Sinking Fund) or otherwise;
(b) default in the payment of interest on any Security
when the same becomes due and payable, and such default
continues for a period of 30 days;
(c) the Company defaults in the performance of or
breaches any other covenant or agreement of the Company in
this Indenture or under the Securities and such default or
breach continues for a period of 30 consecutive days after
the date on which written notice (a "Notice of Default")
specifying such failure, stating that such notice is a
Notice of Default under the Indenture and demanding that the
Company remedy the same, shall have been given by registered
or certified mail, return receipt requested, to the Company
by the Trustee or to the Company and the Trustee by the
Holders of 25% or more in aggregate principal amount of the
Securities Outstanding;
(d) there occurs with respect to any issue or issues
of Indebtedness of the Company or any of its Subsidiaries
(other than the Securities) having an outstanding principal
amount of $25 million or more in the aggregate for all such
issues, whether such Indebtedness now exists or shall
hereafter be created, an event of default and the expiration
of the applicable period of grace, if any, specified in the
instrument evidencing such Indebtedness, that has caused the
holder thereof to declare such Indebtedness to be due and
payable prior to its stated maturity and such Indebtedness
has not been discharged in full and such acceleration has
not been rescinded or annulled within 30 days of such
acceleration; or the Company or any of its Subsidiaries
fails to make, at the final or any interim fixed maturity of
an issue of Indebtedness having an outstanding principal
amount of $25 million or more, a payment (whether of
principal, interest or other amount) of more than $1 million
and such defaulted payment shall not have been made, waived
or extended within 30 days of such payment default;
provided, however, that the provisions of this Section
7.1(d) shall not be applicable to any such event of default,
declaration of acceleration or failure to pay that shall
have been disclosed in the Company's periodic filings with
the Commission under the Exchange Act prior to the date
hereof;
(e) any final judgment or order (not covered by
insurance) for the payment of money in excess of $100
million in the aggregate for all such final judgments or
orders against the Company (treating any deductibles, self-
insurance or retention as not so covered) shall be rendered
against the Company and shall not be discharged, and there
shall be any period of 60 consecutive days following entry
of the final judgment or order that causes the aggregate
amount for all such final judgments or orders outstanding
against the Company to exceed $100 million during which a
stay of enforcement of such final judgment or order, by
reason of a pending appeal or otherwise, shall not be in
effect;
(f) a court having jurisdiction in the premises enters
a decree or order for (i) relief in respect of the Company
in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect,
(ii) appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the
Company or for all or substantially all of the property and
assets of the Company or (iii) the winding up or liquidation
of the affairs of the Company and, in each case, such decree
or order shall remain unstayed and in effect for a period of
60 consecutive days; or
(g) the Company (i) commences a voluntary case under
any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or consents to the entry of an
order for relief in an involuntary case under any such law,
(ii) consents to the appointment of or taking possession by
a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or for all
or substantially all of the property and assets of the
Company or (iii) effects any general assignment for the
benefit of creditors of the Company.
If an Event of Default (other than an Event of Default
specified in clause (f) or (g) above that occurs with respect to
the Company) occurs and is continuing, the Trustee or the Holders
of at least 25% of the aggregate principal amount of the
Securities then Outstanding, by written notice to the Company
(and to the Trustee if such notice is given by the Holders (the
"Acceleration Notice")), may, and the Trustee at the request of
such Holders shall, declare the entire unpaid principal and
accrued interest on the Securities to be immediately due and
payable as specified below. Upon a declaration of acceleration,
such principal and accrued interest shall be immediately due and
payable. In the event of a declaration of acceleration because
an Event of Default set forth in clause (d) above has occurred
and is continuing, such declaration of acceleration shall be
automatically rescinded and annulled if the event of default
triggering such Event of Default shall be remedied, cured by the
Company or waived by the holders of the relevant Indebtedness
within 30 days after the occurrence of the Event of Default with
respect thereto and the Company has delivered to the Trustee an
Officers' Certificate to such effect. If an Event of Default
specified in clause (f) or (g) above occurs with respect to the
Company, all unpaid principal of and accrued interest on the
Securities then outstanding shall ipso facto become and be
immediately due and payable without declaration or other act on
the part of the Trustee or any Holder.
The Holders of at least a majority in principal amount
of the Outstanding Securities, by written notice to the Company
and the Trustee, may waive all past Defaults and rescind and
annul a declaration of acceleration and its consequences if (i)
all existing Events of Default, other than the non-payment of the
principal of and interest on Securities that have become due
solely by such declaration of acceleration, have been cured or
waived and (ii) the rescission would not conflict with any
judgment or decree of a court of competent jurisdiction.
Upon receipt by the Trustee of any Notice of Default
pursuant to this Section 7.1 with respect to Securities all or a
part of which are represented by a Global Security, a record date
shall be established for determining Holders of Outstanding
Securities entitled to join in such Notice of Default, which
record date shall be at the close of business on the day the
Trustee receives such Notice of Default. The Holders on such
record date, or their duly designated proxies, and only such
Persons shall be entitled to join in such Notice of Default,
whether or not such Holders remain Holders after such record
date; provided, that unless Holders of at least 25% in principal
amount of the Outstanding Securities, or their proxies, shall
have joined in such Notice of Default prior to the day which is
90 days after such record date, such Notice of Default shall
automatically and without further action by any Holder be
canceled and of no force and effect. Nothing in this paragraph
shall prevent a Holder, or a proxy of a Holder, from giving,
after expiration of such 90 day period, a new Notice of Default
identical to a Notice of Default which has been canceled pursuant
to the proviso to the preceding sentence, in which event a new
record date shall be established pursuant to the provisions of
this Section 7.1.
Upon receipt by the Trustee of any Acceleration Notice
or any rescission and annulment thereof, with respect to
Securities all or part or which are represented by a Global
Security, a record date shall be established for determining
Holders of Outstanding Securities entitled to join in such
notice, or rescission and annulment thereof, as the case may be,
which record date shall be at the close of business on the day
the Trustee receives such notice. The Holders on such record
date, or their duly designated proxies, and only such Persons,
shall be entitled to join in such notice or rescission and
annulment thereof, as the case may be, whether or not such
Holders remain Holders after such record date; provided, that
unless such declaration of acceleration, or rescission and
annulment, as the case may be, shall have become effective by
virtue of the requisite percentage having joined in such notice
prior to the day which is 90 days after such record date, such
notice of declaration of acceleration or rescission and
annulment, as the case may be, shall automatically and without
further action by any Holder be canceled and of no force and
effect. Nothing in this paragraph shall prevent a Holder, or a
proxy of a Holder, from giving, after expiration of such 90 day
period, a new written notice of declaration of acceleration, or
rescission and annulment thereof, as the case may be, that is
identical to a written notice which has been canceled pursuant to
the proviso to the preceding sentence, in which event a new
record date shall be established pursuant to the provisions of
this Section 7.1.
SECTION 7.2 Collection of Indebtedness by Trustee;
Trustee May Prove Debt. The Company covenants that (a) in case
default shall be made in the payment of any installment of
interest on any of the Securities when such interest shall have
become due and payable, and such default shall have continued for
a period of 30 days or (b) in case default shall be made in the
payment of all or any part of the principal of any of the
Securities when the same shall have become due and payable,
whether upon maturity of the Securities or upon any redemption or
by declaration or otherwise, then upon demand of the Trustee, the
Company will pay to the Trustee for the benefit of the Holders of
the Securities the whole amount that then shall have become due
and payable on all Securities for principal or interest, as the
case may be (with interest to the date of such payment upon the
overdue principal and, to the extent that payment of such
interest is enforceable under applicable law, on overdue
installments of interest at the same rate as the rate of interest
specified in the Securities); and in addition thereto, such
further amount as shall be sufficient to cover the costs and
expenses of collection, including reasonable compensation to the
Trustee and each predecessor Trustee, their respective agents,
attorneys and counsel, and any expenses and liabilities incurred,
and all advances made by the Trustee and each predecessor Trustee
except as a result of its negligence or bad faith.
Until such demand is made by the Trustee, the Paying
Agent may pay the principal of and interest on the Securities to
the registered Holders, whether or not the Securities are
overdue.
In case the Company shall fail forthwith to pay such
amounts upon such demand, the Trustee, in its own name and as
trustee of an express trust, shall be entitled and empowered to
institute any action or proceedings at law or in equity for the
collection of the sums so due and unpaid, and may prosecute any
such action or proceedings to judgment or final decree, and may
enforce any such judgment or final decree against the Company or
other obligor upon the Securities and collect in the manner
provided by law out of the property of the Company or other
obligor upon the Securities, wherever situated the monies
adjudged or decreed to be payable.
In case there shall be pending proceedings relative to
the Company or any other obligor upon the Securities under Title
11 of the United States Code or any other applicable federal or
state bankruptcy, insolvency or other similar law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Company or the property
of the Company or such other obligor, or in case of any other
judicial proceedings relative to the Company or other obligor
upon the Securities, or to the creditors or property of the
Company or such other obligor, the Trustee, irrespective of
whether the principal of the Securities shall then be due and
payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee will have made any demand
pursuant to the provisions of this Section, shall be entitled and
empowered, by intervention in such proceedings or otherwise:
(a) to file and prove a claim or claims for the whole
amount of principal and interest owing and unpaid in respect
of the Securities and to file such other papers or documents
as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for reasonable
compensation to the Trustee and each predecessor Trustee and
their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and
all advances made, by the Trustee and each predecessor
Trustee, except as a result of negligence or bad faith) and
of the Securityholders allowed in any judicial proceedings
relative to the Company or other obligor upon the
Securities, or to the creditors or property of the Company
or such other obligor,
(b) unless prohibited by applicable law and
regulations, to vote on behalf of the Holders of the
Securities in any election of a trustee or a standby trustee
in arrangement, reorganization, liquidation or other
bankruptcy or insolvency proceedings or person performing
similar functions in comparable proceedings, and
(c) to collect and receive any monies or other
property payable or deliverable on any such claims, and to
distribute all amounts received with respect to the claims
of the Securityholders and of the Trustee on their behalf;
and any trustee, receiver, or liquidator, custodian or other
similar official is hereby authorized by each of the
Securityholders to make payments to the Trustee, and, in the
event that the Trustee shall consent to the making of
payments directly to the Securityholders, to pay to the
Trustee such amounts as shall be sufficient to cover
reasonable compensation to the Trustee, each predecessor
Trustee and their respective agents, attorneys and counsel,
and all other expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee
except as a result of negligence or bad faith.
Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or vote for or accept or
adopt on behalf of any Securityholder any plan of reorganization,
arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee
to vote in respect of the claim of any Securityholder in any such
proceeding except, as aforesaid, to vote for the election of a
trustee in bankruptcy or similar person.
All rights of action and of asserting claims under this
Indenture, or under any of the Securities may be enforced by the
Trustee without the possession of any of the Securities or the
production thereof in any trial or other proceedings relating
thereto, and any such action or proceedings instituted by the
Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of
the expenses, disbursements and compensation of the Trustee, each
predecessor Trustee and their respective agents and attorneys,
shall be for the ratable benefit of the Holders of the Securities
in respect of which such judgment has been recovered.
In any proceedings brought by the Trustee (and also any
proceedings involving the interpretation of any provision of this
Indenture to which the Trustee shall be a party) the Trustee
shall be held to represent all the Holders of the Securities in
respect of which such action was taken, and it shall not be
necessary to make any Holders of such Securities parties to any
such proceedings.
SECTION 7.3 Application of Proceeds. Any monies
collected by the Trustee pursuant to this Article Seven in
respect of the Securities shall be applied in the following
order, at the date or dates fixed by the Trustee and, in the case
of the distribution of such monies on account of principal or
interest, upon presentation of the several Securities in respect
of which monies have been collected and stamping (or otherwise
noting) thereon the payment, or issuing Securities in reduced
principal amounts in exchange for the presented Securities if
only partially paid, or upon surrender thereof if fully paid:
FIRST: To the payment of amounts due the Trustee or
any predecessor Trustee under Section 8.6;
SECOND: In the case the principal of the Securities
shall not have become due, to the payment of interest on the
Securities in the order of the maturity of the installments
of such interest, with interest (so far as may be lawful and
to the extent that such interest has been collected by the
Trustee) upon the overdue installments of interest at the
rate borne by the Securities, such payments to be made
ratably to the Persons entitled thereto, without
discrimination or preference; and
THIRD: In the case the principal of the Securities
shall have become due, to the payment of the whole amount
then owing and unpaid upon the Securities for principal and
interest, with interest upon the overdue principal, and (so
far as may be lawful and to the extent that such interest
has been collected by the Trustee) upon overdue installments
of interest at the same rate as the rate of interest
specified in the Securities and in case such monies shall be
insufficient to pay in full the whole amount so due and
unpaid upon the Securities in default, then to the payment
of such principal and interest without preference or
priority of principal over interest or of interest over
principal, or of any installment of interest over any other
installment of interest, or of any Security in default over
any other Security in default, ratably to the aggregate of
such principal and accrued and unpaid interest.
SECTION 7.4 Suits for Enforcement. In case an Event
of Default has occurred, has not been waived and is continuing,
the Trustee may in its discretion proceed to protect and enforce
the rights vested in it by this Indenture by such appropriate
judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific
enforcement of any covenant or agreement contained in this
Indenture or in aid of the exercise of any power granted in this
Indenture or to enforce any other legal or equitable right vested
in the Trustee by this Indenture or by law.
SECTION 7.5 Restoration of Rights on Abandonment of
Proceedings. In case the Trustee or any Securityholder shall
have proceeded to enforce any right under this Indenture and such
proceedings shall have been discontinued or abandoned for any
reason, then and in every such case the Company and the Trustee
and the Securityholders shall be restored respectively to their
former positions and rights hereunder, and all rights, remedies
and powers of the Company, the Trustee and the Securityholders
shall continue as though no such proceedings had been taken.
SECTION 7.6 Limitations on Suits by Securityholders.
A Holder of Securities may not pursue any remedy with respect to
this Indenture or the Securities unless (i) such Holder gives to
the Trustee written notice of a continuing Event of Default; (ii)
the Holders of at least 25% in aggregate principal amount of
Outstanding Securities make a written request to the Trustee to
pursue the remedy; (iii) such Holder or Holders offer to the
Trustee indemnity satisfactory to the Trustee against any costs,
liability or expense to be incurred in compliance with such
request; (iv) the Trustee does not comply with the request within
60 days after receipt of the request and the offer of indemnity;
and (v) during such 60 day period, the Holders of a majority in
aggregate principal amount of the Outstanding Securities do not
give the Trustee a direction that is inconsistent with the
request.
For purposes of this Section 7.6, the Trustee shall
comply with Section 316(a) of the TIA in making any determination
of whether the Holders of the required aggregate principal amount
of Outstanding Securities have concurred in any request or
direction of the Trustee to pursue any remedy available to the
Trustee or the Holders with respect to this Indenture or the
Securities or otherwise under the law.
A Holder of Securities may not use this Indenture to
prejudice the rights of another Holder or to obtain a preference
or priority over such other Holder.
SECTION 7.7 Unconditional Right of Securityholders to
Institute Certain Suits. Notwithstanding any other provision in
this Indenture and any provision of any Security, the right of
any Holder of any Security to receive payment of the principal of
and interest on such Security and the payment of the Sinking Fund
installments on or after the respective due dates expressed in
such Security, or to institute suit for the enforcement of any
such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 7.8 Powers and Remedies Cumulative; Delay or
Omission Not Waiver of Default. Except as provided in Section
7.6, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every
other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
No delay or omission of the Trustee or of any Holder to
exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right
or power or shall be construed to be a waiver of any such Event
of Default or an acquiescence therein; and, subject to Section
7.6, every power and remedy given by this Indenture or by law to
the Trustee or to the Holders may be exercised from time to time,
and as often as shall be deemed expedient, by the Trustee or by
the Holders, as the case may be.
SECTION 7.9 Control by Holders of Securities. The
Holders of a majority in aggregate principal amount of the
Securities at the time Outstanding shall have the right to direct
the time, method, and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee with respect to the Securities by this
Indenture; provided, that such direction shall not be otherwise
than in accordance with law and the provisions of this Indenture;
and provided, further, that (subject to the provisions of Section
8.1) the Trustee shall have the right to decline to follow any
such direction if the Trustee, being advised by counsel, shall
determine that the action or proceeding so directed may not
lawfully be taken or if the Trustee in good faith by its board of
directors, the executive committee, or a trust committee of
directors or Responsible Officers of the Trustee shall determine
that the action or proceedings so directed would involve the
Trustee in personal liability or if the Trustee in good faith
shall so determine that the actions or forbearance specified in
or pursuant to such direction would be unduly prejudicial to the
interests of Holders not joining in the giving of said direction,
it being understood that (subject to Section 8.1) the Trustee
shall have no duty to ascertain whether or not such actions or
forbearance are unduly prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the
Trustee in its discretion to take any action deemed proper by the
Trustee and that is not inconsistent with such direction or
directions by the Holders.
Upon receipt by the Trustee of any written notice
directing the time, method or place of conducting any such
proceeding or exercising any such trust or power, with respect to
Securities all or part of which are represented by a Global
Security, a record date shall be established for determining
Holders of Outstanding Securities entitled to join in such
notice, which record date shall be at the close of business on
the day the Trustee receives such notice. The Holders on such
record date, or their duly designated proxies, and only such
Persons, shall be entitled to join in such notice, whether or not
such Holders remain Holders after such record date; provided,
that unless the Holders of a majority in principal amount of the
Outstanding Securities shall have joined in such notice prior to
the day which is 90 days after such record date, such notice
shall automatically and without further action by any Holder be
canceled and of no force and effect. Nothing in this paragraph
shall prevent a Holder, or a proxy of a Holder, from giving,
after expiration of such 90 day period, a new notice identical to
a notice which has been canceled pursuant to the proviso to the
preceding sentence, in which event a new record date shall be
established pursuant to the provisions of this Section 7.9.
SECTION 7.10 Waiver of Past Defaults. Subject to
Sections 7.1 and 7.7, the Holders of at least a majority in
principal amount of the Outstanding Securities, by notice to the
Trustee, may waive an existing Event of Default and its
consequences, except a Default in the payment of principal of or
interest on any Security as specified in clause (a) or (b) of
Section 7.1.
The Company may, but shall not be obligated to, fix a
record date for the purpose of determining the Persons entitled
to waive any past Default hereunder. If a record date is fixed,
the Holders on such record date, or their duly designated
proxies, and only such Persons, shall be entitled to waive any
Default hereunder, whether or not such Holders remain Holders
after such record date; provided, that unless such majority in
principal amount shall have waived such Default prior to the date
which is 90 days after such record date, any such waiver
previously given shall automatically and without further action
by any Holder be canceled and of no force and effect.
Upon any such waiver, such Default shall cease to exist
and be deemed to have been cured and not to have occurred, and
any Event of Default arising therefrom shall be deemed to have
been cured, and not to have occurred for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent
thereon.
SECTION 7.11 Trustees to Give Notice of Default, But
May Withhold in Certain Circumstances. The Trustee shall, within
90 days after the occurrence of a Default with respect to the
Securities, give notice of all Defaults known to the Trustee to
all Holders of Securities in the manner and to the extent
provided in Section 313(c) of the TIA, unless in each case such
Defaults shall have been cured before the mailing or publication
of such notice; provided, however, that, except in the case of
default in the payment of the principal of or interest on any of
the Securities or in the payment of any Sinking Fund installment,
the Trustee shall be protected in withholding such notice if and
as long as the Board of Directors, the executive committee, or a
trust committee of directors or trustees or Responsible Officers
of the Trustee, or any combination of the foregoing, in good
faith determines that the withholding of such notice is in the
interests of the Securityholders.
SECTION 7.12 Right of Court to Require Filing of
Undertaking to Pay Costs. All parties to this Indenture agree,
and each Holder of any Security by its acceptance thereof shall
be deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any right or remedy
under this Indenture or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing
by any party litigant in such suit of an undertaking to pay the
costs of such suit, and that such court may in its discretion
assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the
merit and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to
any suit instituted by the Trustee, to any suit instituted by any
Securityholder or group of Securityholders holding in the
aggregate more than 10% in aggregate principal amount of the
Securities Outstanding or to any suit instituted by any
Securityholder for the enforcement of the payment of the
principal of or interest on any Security on or after the due date
expressed in such Security or any date fixed for redemption
whether pursuant to the operation of the Sinking Fund or
otherwise.
SECTION 7.13 Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any
stay or extension law or any usury law or other law that would
prohibit or forgive the Company from paying all or any portion of
the principal of or interest on the Securities as contemplated
herein, wherever enacted, now or at any time hereafter in force,
or that may affect the covenants or the performance of this
Indenture; and (to the extent that it may lawfully do so) the
Company hereby expressly waives all benefit or advantage of any
such law and covenants that it will not hinder, delay or impede
the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as
though no such law had been enacted.
ARTICLE EIGHT - CONCERNING THE TRUSTEE
SECTION 8.1 Duties and Responsibilities of the
Trustee; During Default; Prior to Default. With respect to the
Holders of the Securities issued hereunder, the Trustee, prior to
the occurrence of an Event of Default with respect to the
Securities and after the curing or waiving of all Events of
Default that may have occurred, has undertaken to perform such
duties and only such duties as are specifically set forth in this
Indenture. In case an Event of Default with respect to the
Securities has occurred (that has not been cured or waived), the
Trustee shall exercise with respect to such Securities such of
the rights and powers vested in it by this Indenture, and use the
same degree of care and skill in their exercise, as a prudent
person would exercise or use under the circumstances in the
conduct of his or her own affairs.
No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action,
its own negligent failure to act or its own willful misconduct,
except that:
(a) prior to the occurrence of an Event of Default
with respect to the Securities and after the curing or
waiving of all such Events of Default with respect to such
Securities that may have occurred:
(i) the duties and obligations of the Trustee
with respect to the Securities shall be determined
solely by the express provisions of this Indenture, and
the Trustee shall not be liable except for the
performance of such duties and obligations as are
specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of
the Trustee, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the
opinions expressed therein, upon any statements,
certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but
in the case of any such statements, certificates or
opinions that by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this
Indenture;
(b) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Holders pursuant to
Section 7.9 relating to the time, method and place of
conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture.
None of the provisions contained in this Indenture
shall require the Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance
of any of its duties or in the exercise of any of its rights or
powers, unless there shall be reasonable ground for believing
that the repayment of such funds or adequate indemnity against
such liability is reasonably assured to it.
Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
The provisions of this Section 8.1 are in furtherance
of and subject to Section 315 of the TIA.
SECTION 8.2 Certain Rights of the Trustee. In
furtherance of and subject to the TIA, and subject to Section
8.1:
(a) the Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution,
Officers' Certificate or any other certificate, statement,
instrument, opinion, report, notice, request, consent,
order, bond, debenture, note, coupon, security or other
paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the
Company shall be sufficiently evidenced by an Officers'
Certificate of the Company (unless other evidence in respect
thereof be herein specifically prescribed); and any
resolution of the Board of Directors of the Company may be
evidenced to the Trustee by a copy thereof certified by the
secretary or an assistant secretary of the Company;
(c) the Trustee may consult with counsel and any
written advice or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any
action taken, suffered or omitted to be taken by it
hereunder in good faith and in reliance thereon in
accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to
exercise any of the trusts or powers vested in it by this
Indenture at the request, order or direction of any of the
Securityholders pursuant to the provisions of this
Indenture, unless such Securityholders shall have offered to
the Trustee reasonable security or indemnity against the
costs, expenses and liabilities that might be incurred
therein or thereby;
(e) the Trustee shall not be liable for any action
taken or omitted by it in good faith and believed by it to
be authorized or within the discretion, rights or powers
conferred upon it by this Indenture; and
(f) prior to the occurrence of an Event of Default
hereunder and after the curing or waiving of all Events of
Default, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval,
appraisal, bond, debenture, note, coupon, security, or other
paper or document unless requested in writing to so do by
the Holders of not less than a majority in aggregate
principal amount of the Securities then Outstanding;
provided, however, that, if the payment within a reasonable
time to the Trustee of the costs, expenses, or liabilities
likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded
to it by the terms of this Indenture, the Trustee may
require reasonable indemnity against such expenses or
liabilities as a condition to proceeding; the reasonable
expenses of every such investigation shall be paid by the
Company or, if paid by the Trustee or any predecessor
Trustee, shall be repaid by the Company upon demand.
SECTION 8.3 Trustee Not Responsible for Recitals,
Disposition of Securities or Application of Proceeds Thereof.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the
statements of the Company and the Trustee assumes no
responsibility for the correctness of the same. The Trustee
makes no representation as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be
accountable for the use or application by the Company of any of
the Securities or of the proceeds thereof.
The Trustee shall have no duty to inquire as to the
performance of the Company's covenants in Article Four hereof.
In addition, the Trustee shall not be deemed to have knowledge of
any Default or Event of Default, except (i) any Default or Event
of Default occurring pursuant to Section 7.1(a), 7.1(b) or 4.1,
or (ii) any Default or Event of Default of which the Trustee
shall have received written notification or obtained actual
knowledge.
SECTION 8.4 Trustee and Agents May Hold Securities;
Collections, etc. The Trustee or any agent of the Company or the
Trustee, in its individual or any other capacity, may become the
owner or pledgee of Securities with the same rights it would have
if it were not the Trustee or such agent and, subject to Section
8.12 hereof and Section 3.10(b) of the TIA, may otherwise deal
with the Company and receive, collect, hold and retain
collections from the Company with the same rights it would have
if it were not the Trustee or such agent.
SECTION 8.5 Monies Held by Trustee. Subject to the
provisions of Section 11.4 hereof, all monies received by the
Trustee shall, until used or applied as herein provided, be held
in trust for the purposes for which they were received, but need
not be segregated from other funds except to the extent required
by mandatory provisions of law. Neither the Trustee nor any
agent of the Company or the Trustee shall be under any liability
for interest on any monies received by it hereunder except as
otherwise agreed with the Company.
SECTION 8.6 Compensation and Indemnification of
Trustee and Its Prior Claim. The Company covenants and agrees to
pay to the Trustee from time to time, and the Trustee shall be
entitled to, reasonable compensation for all services rendered by
it hereunder (which shall not be limited by any provision of law
in regard to the compensation of a trustee of an express trust)
and the Company covenants and agrees to pay or reimburse the
Trustee and each predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made
by or on behalf of it in accordance with any of the provisions of
this Indenture (including the reasonable compensation and the
expenses and disbursements of its counsel and of all agents and
other persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence
or bad faith. The Company also covenants to indemnify the Trustee
and each predecessor Trustee for, and to hold it harmless
against, any loss, liability or expense incurred, without
negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of this
Indenture or the trusts hereunder and its duties hereunder,
including the reasonable costs and expenses of defending itself
against or investigating any claim of liability in the premises.
The obligations of the Company under this Section to compensate
and indemnify the Trustee and each predecessor Trustee and to pay
or reimburse the Trustee and each predecessor Trustee for
reasonable expenses, disbursements and advances shall constitute
additional indebtedness of the Company hereunder and shall
survive the satisfaction and discharge of this Indenture. Such
additional indebtedness shall be a senior claim to that of the
Securities upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the benefit of
the Holders of particular Securities, and the Securities are
hereby subordinated to such senior claim.
SECTION 8.7 Right of Trustee to Rely on Officers'
Certificate, etc. Subject to Sections 8.1 and 8.2, whenever in
the administration of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established
prior to taking or suffering or omitting any action hereunder,
such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad
faith on the part of the Trustee, be deemed to be conclusively
proved and established by an Officers' Certificate of the Company
delivered to the Trustee, and such Officers' Certificate, in the
absence of negligence or bad faith on the part of the Trustee,
shall be full warrant to the Trustee for any action taken,
suffered or omitted by it under the provisions of this Indenture
upon the faith thereof.
SECTION 8.8 Persons Eligible for Appointment as
Trustee. The Trustee shall at all times be a corporation
organized and doing business under the laws of the United States
of America or of any State or the District of Columbia, or a
corporation or other Person permitted to act as Trustee by the
Commission pursuant to the TIA, having a combined capital and
surplus of at least $50,000,000, and that is authorized under
such laws to exercise corporate trust powers and is subject to
supervision or examination by Federal, State or District of
Columbia authority. Such corporation shall have an address or
agent in the Borough of Manhattan, The City of New York for the
presentment of Securities. If such corporation or other Person
publishes reports of condition at least annually, pursuant to law
or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section, the combined
capital and surplus of such corporation or other Person shall be
deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published. In case at any
time the Trustee shall cease to be eligible in accordance with
the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect specified in
Section 8.9.
The provisions of this Section 8.8 are in furtherance
of and subject to Section 310(a) of the TIA.
SECTION 8.9 Resignation and Removal; Appointment of
Successor Trustee.
(a) The Trustee, or any trustee or trustees hereafter
appointed, may at any time resign by giving written notice
of resignation to the Company and by mailing notice of such
resignation to the Holders of then Outstanding Securities at
their addresses as they shall appear on the registry books.
Upon receiving such notice of resignation, the Company shall
promptly appoint a successor trustee or trustees by written
instrument in duplicate, executed by authority of the Board
of Directors of the Company, one copy of which instrument
shall be delivered to the resigning Trustee and one copy to
the successor trustee or trustees. If no successor trustee
shall have been so appointed and have accepted appointment
within 30 days after the mailing of such notice of
resignation, the resigning trustee may petition any court of
competent jurisdiction for the appointment of a successor
trustee, or any Securityholder who has been a bona fide
Holder of a Security or Securities for at least six months
may, subject to the provisions of Section 8.12, on behalf of
itself and all others similarly situated, petition any such
court for the appointment of a successor trustee. Such
court may thereupon, after such notice, if any, as it may
deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall
occur:
(i) the Trustee shall fail to comply with the
provisions of Section 310(b) of the TIA with respect to
the Securities after written request therefor by the
Company or by any Securityholder who has been a bona
fide Holder of a Security or Securities for at least
six months; or
(ii) the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.8 and
Section 310(a) of the TIA and shall fail to resign
after written request therefor by the Company or by any
Securityholder; or
(iii) the Trustee shall become incapable of
acting or shall be adjudged a bankrupt or insolvent, or
a receiver or liquidator of the Trustee or of its
property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation,
conservation or liquidation;
then, in any such case, unless the Trustee's duty to resign
has been stayed as provided pursuant to Section 310(b) of
the TIA, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate,
executed by order of the Board of Directors of the Company,
one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee,
or, subject to the provisions of Section 315(e) of the TIA,
any Securityholder who has been a bona fide Holder of a
Security or Securities of such series for at least six
months may on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a
successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, remove
the Trustee and appoint a successor trustee.
(c) The Holders of a majority in aggregate principal
amount of the Securities at the time Outstanding may at any
time remove the Trustee and appoint a successor trustee by
delivering to the Trustee so removed, to the successor
trustee so appointed, and to the Company the evidence
provided for in Section 9.1 of the action in that regard
taken by the Securityholders.
(d) Any resignation or removal of the Trustee and any
appointment of a successor trustee pursuant to any of the
provisions of this Section 8.9 shall become effective upon
acceptance of appointment by the successor trustee as
provided in Section 8.10.
SECTION 8.10 Acceptance of Appointment by Successor
Trustee. Any successor trustee appointed as provided in Section
8.9 shall execute and deliver to the Company and to its
predecessor Trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall
become vested with all rights, powers, duties and obligations of
its predecessor hereunder, with like effect as if originally
named as trustee hereunder; but nevertheless, on the written
request of the Company or of the successor trustee, upon payment
of its charges then unpaid, the Trustee ceasing to act shall,
subject to Section 11.4, pay over to the successor trustee all
monies at the time held by it hereunder and shall execute and
deliver an instrument transferring to such successor trustee all
such rights, powers, duties and obligations. Upon request of any
such successor trustee, the Company shall execute any and all
instruments in writing for more fully and certainly vesting in
and confirming to such successor trustee all such rights and
powers. Any Trustee ceasing to act shall, nevertheless, retain a
prior claim upon all property or funds held or collected by such
trustee to secure any amounts then due it pursuant to the
provisions of Section 8.6.
No successor trustee shall accept appointment as
provided in this Section 8.10 unless at the time of such
acceptance such successor trustee shall be qualified under
Section 310(b) of the TIA and eligible under the provisions of
Section 8.8.
Upon acceptance of appointment by any successor trustee
as provided in this Section 8.10, the Company shall give notice
thereof to the Holders of Securities, by mailing such notice to
such Holders at their addresses as they shall appear on the
registry books. If the acceptance of appointment is
substantially contemporaneous with the resignation, then the
notice called for by the preceding sentence may be combined with
the notice called for by Section 8.9. If the Company fails to
give such notice within ten days after acceptance of appointment
by the successor trustee, the successor trustee shall cause such
notice to be given at the expense of the Company.
SECTION 8.11 Merger, Conversion, Consolidation or
Succession to Business of Trustee. Any corporation into which
the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to the corporate trust
business of the Trustee, shall be the successor of the Trustee
hereunder; provided, however, that such corporation shall be
qualified under Section 310(b) of the TIA and eligible under the
provisions of Section 8.8, without the execution or filing of any
paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall
succeed to the trust created by this Indenture any of the
Securities shall have been authenticated but not delivered, any
such successor to the Trustee may adopt the certificate of
authentication of any predecessor Trustee and deliver such
Securities so authenticated; and, in case at that time any of the
Securities shall not have been authenticated, any successor to
the Trustee may authenticate such Securities either in the name
of any predecessor Trustee hereunder or in the name of the
successor Trustee; and in all such cases such certificate shall
have the full force that it has anywhere in the Securities or in
this Indenture; provided, however, that the right to adopt the
certificate of authentication of any predecessor Trustee or to
authenticate Securities in the name of any predecessor Trustee
shall apply only to its successor or successors by merger,
conversion or consolidation.
SECTION 8.12 Preferential Collection of Claims Against
the Company. The Trustee shall comply with Section 311(a) of the
TIA. Any Trustee that has resigned or been removed is subject to
Section 311(a) of the TIA to the extent indicated therein.
SECTION 8.13 Appointment of Authenticating Agent. As
long as any Securities remain Outstanding, the Trustee may, by an
instrument in writing, appoint an authenticating agent (the
"Authenticating Agent") that shall be authorized to act on behalf
of the Trustee to authenticate Securities, including Securities
issued upon exchange, registration of transfer, partial
redemption or pursuant to Section 2.5. Securities authenticated
by such Authenticating Agent shall be entitled to the benefits of
this Indenture and shall be valid and obligatory for all purposes
as if authenticated by the Trustee. Whenever reference is made
in this Indenture to the authentication and delivery of
Securities by the Trustee or to the Trustee's Certificate of
Authentication (including, without limitation, in Section 2.3),
such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and
a Certificate of Authentication executed on behalf of the Trustee
by such Authenticating Agent. Such Authenticating Agent shall at
all times be a corporation organized and doing business under the
laws of the United States of America or of any State or the
District of Columbia, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of
at least $5,000,000 (determined as provided in Section 8.8 with
respect to the Trustee) and subject to supervision or examination
by Federal or State authority.
Any corporation into which any Authenticating Agent may
be merged or converted, or with which it may be consolidated, or
any corporation resulting from any merger, conversion or
consolidation to which any Authenticating Agent shall be a party,
or any corporation succeeding to the corporate agency business of
any Authenticating Agent, shall continue to be the Authenticating
Agent with respect to all Securities for which it served as
Authenticating Agent without the execution or filing of any paper
or any further act on the part of the Trustee or such
Authenticating Agent. Any Authenticating Agent may at any time,
and if it shall cease to be eligible shall, resign by giving
written notice of resignation to the Trustee and to the Company.
The Trustee may at any time terminate the agency of the
Authenticating Agent by giving written notice of termination to
such Authenticating Agent and to the Company.
Upon receiving such a notice of resignation or upon
such a termination, or in case at any time any Authenticating
Agent shall cease to be eligible in accordance with the
provisions of this Section 8.13, the Trustee shall upon receipt
of a Company Order appoint a successor Authenticating Agent and
the Company shall provide notice of such appointment to all
Holders in the manner and to the extent provided in Section 12.4.
Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all rights,
powers, duties and responsibilities of its predecessor hereunder,
with like effect as if originally named as Authenticating Agent.
The Company agrees to pay to the Authenticating Agent from time
to time reasonable compensation. The Authenticating Agent for
the Securities shall have no responsibility or liability for any
action taken by it as such at the direction of the Trustee.
Sections 8.2, 8.3, 8.4, 8.6, 8.8 and 9.3 shall be
applicable to any Authenticating Agent as if each reference to
"Trustee" therein referred to the Authenticating Agent.
ARTICLE NINE - CONCERNING THE SECURITYHOLDERS
SECTION 9.1 Evidence of Action Taken by
Securityholders. Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this
Indenture to be given or taken by a specified percentage in
principal amount of the Securityholders may be embodied in and
evidenced by one or more instruments of substantially similar
tenor signed by such specified percentage of Securityholders in
person or by agent duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to
the Trustee. Proof of execution of any instrument or of a
writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Sections 8.1 and 8.2)
conclusive in favor of the Trustee and the Company, if made in
the manner provided in this Article Nine.
SECTION 9.2 Proof of Execution of Instruments and of
Holding of Securities. Subject to Sections 8.1 and 8.2, the
execution of any instrument by a Securityholder or his or her
agent or proxy may be proved in the following manner:
(a) The fact and date of the execution by any Holder
or his or her agent of any instrument may be proved by the
certificate of any notary public or other officer of any
jurisdiction authorized to take acknowledgments of deeds or
administer oaths that the person executing such instruments
acknowledged to him or her the execution thereof, or by an
affidavit of a witness to such execution sworn to before any
such notary or other such officer. Where such execution is
by or on behalf of any legal entity other than an
individual, such certificate or affidavit shall also
constitute sufficient proof of the authority of the person
executing the same.
(b) The ownership of Securities shall be proved by the
Security register or by a certificate of the Security
registrar.
The Company may set a record date for purposes of
determining the identity of Holders of Securities entitled to
vote or consent to any action referred to in Section 9.1, which
record date may be set at any time or from time to time by notice
to the Trustee, for any date or dates (in the case of any
adjournment or reconsideration) not more than 60 days nor less
than 5 days prior to the proposed date of such vote or consent,
and thereafter, notwithstanding any other provisions hereof, only
Holders of Securities of record on such record date shall be
entitled to so vote or give such consent or revoke such vote or
comment.
SECTION 9.3 Holders to be Treated as Owners. The
Company, the Trustee and any agent of the Company or the Trustee
may deem and treat the Person in whose name any Security shall be
registered upon the Security register as the absolute owner of
such Security (whether or not such Security shall be overdue and
notwithstanding any notation of ownership or other writing
thereon) for the purpose of receiving payment of or on account of
the principal of and interest on such Security and for all other
purposes, and neither the Company or the Trustee nor any agent of
the Company or the Trustee shall be affected by any notice to the
contrary.
SECTION 9.4 Securities Owned by the Company Deemed Not
Outstanding. In determining whether the Holders of the requisite
aggregate principal amount of Outstanding Securities have
concurred in any direction, consent or waiver under this
Indenture, Securities that are owned by the Company or any other
obligor on the Securities with respect to which such
determination is being made or by any Affiliate of the Company or
any other obligor on the Securities with respect to which such
determination is being made shall be disregarded and deemed not
to be Outstanding for the purpose of any such determination,
except that for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, consent or
waiver only Securities that the Trustee knows are so owned shall
be so disregarded. Securities so owned that have been pledged in
good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's
right so to act with respect to such Securities and that the
pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or any other obligor
on the Securities. In case of a dispute as to such right, the
advice of counsel shall be full protection in respect of any
decision made by the Trustee in accordance with such advice.
Upon request of the Trustee, the Company shall furnish to the
Trustee promptly an Officers' Certificate listing and identifying
all Securities, if any, known by the Company, to be owned or held
by or for the account of any of the above-described Persons; and,
subject to Sections 8.1 and 8.2, the Trustee shall be entitled to
accept such Officers' Certificate as conclusive evidence of the
facts therein set forth and of the fact that all Securities not
listed therein are Outstanding for the purpose of any such
determination.
SECTION 9.5 Right of Revocation of Action Taken. At
any time prior to (but not after) the evidencing to the Trustee,
as provided in Section 9.1, of the taking of any action by the
Holders of the percentage in aggregate principal amount of the
Securities specified in this Indenture in connection with such
action, any Holder of a Security the serial number of which is
shown by the evidence to be included among the serial numbers of
the Securities the Holders of which have consented to such action
may, by filing written notice at the Corporate Trust Office and
upon proof of holding as provided in this Article Nine, revoke
such action so far as it concerns such Security. Except as
aforesaid, any such action taken by the Holder of any Security
shall be conclusive and binding upon such Holder and upon all
future Holders and owners of such Security and of any Securities
issued in exchange or substitution therefor or on registration of
transfer thereof, irrespective of whether or not any notation in
regard thereto is made upon any such Security. Any action taken
by the Holders of the percentage in aggregate principal amount of
the Securities specified in this Indenture in connection with
such action shall be conclusively binding upon the Company, the
Trustee and the Holders of all the Securities affected by such
action.
ARTICLE TEN - AMENDMENTS
SECTION 10.1 Amendments and Supplements Permitted
Without Consent of Holders.
(a) Notwithstanding Section 10.2, the Company and the
Trustee may amend or supplement this Indenture or the
Securities without the consent of any Holder to: (i) cure
any ambiguity, correct or supplement any provisions herein
which may be inconsistent with any other provision herein,
or make any other provisions with respect to matters or
questions arising under this Indenture which shall not be
inconsistent with the provisions of this Indenture; provided
that such amendment does not adversely affect the rights of
the Holders; (ii) provide for uncertificated Securities in
addition to or in place of certificated Securities; (iii)
evidence the succession of another corporation to the
Company and provide for the assumption by such successor of
the Company's obligations to the Holders hereunder and under
the Securities as permitted under Article Six; (iv) make any
change that would (1) provide any additional rights or
benefits to Holders or (2) not adversely affect the legal
rights under the Indenture of any Holder; or (v) comply with
the requirements of the Commission in order to effect or
maintain the qualification of this Indenture under the TIA.
(b) Upon the Company's request, after receipt by the
Trustee of a resolution of the Board of Directors
authorizing the execution of any amended or supplemental
indenture, and the documents described in Section 10.6, the
Trustee shall join with the Company in the execution of any
amended or supplemental indenture authorized or permitted by
the terms of this Indenture and to make any further
appropriate agreements and stipulations that may be
contained in any such amended or supplemental indenture, but
the Trustee shall not be obligated to enter into an amended
or supplemental indenture that affects its own rights,
duties or immunities under this Indenture or otherwise.
SECTION 10.2 Amendments and Supplements Requiring
Consent of Holders.
(a) Except as otherwise provided in Section 10.1(a)
and 10.2(c), this Indenture and the Securities may be
amended or supplemented with the written consent of the
Holders of at least a majority in aggregate principal amount
of the then Outstanding Securities (including consents
obtained in connection with a tender offer or exchange offer
for the Securities), and any existing Default or Event of
Default or non-compliance with any provision of the
Indenture or the Securities may be waived with the consent
of Holders of at least a majority in principal of the then
Outstanding Securities (including consents obtained in
connection with a tender offer or exchange offer for the
Securities).
(b) Upon the Company's request and after receipt by
the Trustee of a resolution of the Board or Directors
authorizing the execution of any supplemental indenture,
evidence of the Holders' consent, and the documents
described in Section 10.6, the Trustee shall join with the
Company in the execution of such amended or supplemental
indenture unless such amended or supplemental indenture
affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise, in which case the Trustee may
in its discretion, but shall not be obligated to, enter into
such amended or supplemental indenture.
(c) Without the consent of each Holder affected, no
amendment, supplement or waiver to this Indenture shall:
(i) reduce the principal amount of Securities whose Holders
must consent to an amendment, supplement or waiver of any
provision of this Indenture on the Securities, (ii) reduce
the principal of or change the fixed maturity of any
Security, or alter the provisions with respect to the
redemption of the Securities including, without limitation,
the provisions with respect to the Sinking Fund obligations,
in a manner adverse to the Holders, (iii) reduce the rate of
or change the time for payment of interest on any Security,
(iv) waive a Default or Event of Default in the payment of
principal of or interest on the Securities or in the payment
of any Sinking Fund installment (except that Holders of at
least a majority in aggregate principal amount of the then
Outstanding Securities may rescind an acceleration of the
Securities and its consequences in accordance with Section
7.1, (v) make any Security payable in money other than U.S.
Legal Tender, (vi) make any change in the provisions of the
Indenture relating to waivers of past Defaults or the rights
of Holders to receive payments of principal of or interest
on the Securities or payments of any Sinking Fund
installments, (vii) waive a redemption payment with respect
to any Security, or (ix) make any change in Section 7.7,
Section 7.10 or this sentence.
(d) It shall not be necessary for the consent of the
Holders under this Section 10.2 to approve the particular
form of any proposed amendment or waiver, but it shall be
sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section
10.2 becomes effective, the Company shall mail to each
Holder affected thereby a notice briefly describing the
amendment, supplement or waiver. Any failure of the Company
to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any
such amended or supplemental indenture or waiver.
SECTION 10.3 Compliance with TIA. Every amendment or
supplement to this Indenture or the Securities shall be set forth
in an amended supplemental indenture that complies with the TIA
as then in effect.
SECTION 10.4 Revocation and Effect of Consents.
(a) Until an amendment, supplement or waiver becomes
effective, a consent to it by a Holder of a Security is a
continuing consent by the Holder and every subsequent Holder
of a Security or portion of a Security that evidences the
same Indebtedness as the consenting Holder's Security, even
if notation of the consent is not made on any Security.
However, any such Holder or subsequent Holder may revoke the
consent as to its Security or portion of a Security if the
Trustee receives the notice of revocation before the date on
which the Trustee receives an Officers' Certificate
certifying that the Holders of the requisite principal
amount of Securities have consented (and not theretofore
revoked such consent) to the amendment or waiver.
(b) The Company may, but shall not be obligated to,
fix a record date for the purpose of determining the Holders
of Securities entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then
notwithstanding the provisions of the immediately preceding
paragraph, those Persons who were Holders of Securities on
such record date (or their duly designated proxies), and
only those Persons, shall be entitled to consent to such
amendment, supplement or waiver or to revoke any consent
previously given, whether or not such Persons continue to be
Holders of Securities after such record date; provided, that
unless such consent shall have become effective by virtue of
the requisite percentage having been obtained prior to the
date which is 90 days after such record date, any such
consent previously given shall automatically and without
further action by any Holder be canceled and of no force and
effect.
(c) After an amendment or waiver becomes effective it
shall bind every Holder, unless it is of the type described
in Section 10.2(c), in which case the amendment or waiver
shall only bind each Holder that consented to it and every
subsequent Holder of a Security that evidences the same
indebtedness as the consenting Holder's Security.
SECTION 10.5 Notation on or Exchange of Securities.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Security thereafter authenticated.
The Company in exchange for all Securities may issue and the
Trustee shall authenticate new Securities that reflect the
amendment, supplement or waiver. Failure to make the appropriate
notation or issue a new Security shall not affect the validity
and effect of such amendment, supplement or waiver.
SECTION 10.6 Trustee Protected. The Trustee shall
sign any amendment or supplemental indenture authorized pursuant
to this Article Ten if the amendment does not adversely affect
the rights, duties, liabilities or immunities or the Trustee. If
it does, the Trustee may, but need not, sign it. In signing such
amendment or supplemental indenture, the Trustee shall be
entitled to receive and, subject to Section 8.1, shall be fully
protected in relying upon, an Officers' Certificate and Opinion
of Counsel as conclusive evidence that such amendment or
supplemental indenture is authorized or permitted by this
Indenture, that it is not inconsistent herewith, and that it will
be valid and binding upon the Company in accordance with its
terms. The Company may not sign an amendment or supplemental
indenture until the Board of Directors approves it.
ARTICLE ELEVEN - SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONIES
SECTION 11.1 Satisfaction and Discharge of Indenture.
(A) Except as otherwise provided in this Section 11.1,
the Company may terminate its obligations under the Securities
and this Indenture with respect to the Securities if:
(i) all Securities previously authenticated and
delivered (other than destroyed, lost or stolen Securities
that have been replaced or Securities that are paid pursuant
to Section 4.1 of this Indenture or Securities for whose
payment money or securities have theretofore been held in
trust and thereafter repaid to the Company, as provided in
Section 11.4 of this Indenture) have been delivered to the
Trustee for cancellation and the Company has paid all sums
payable by it hereunder; or
(ii) (A) the Securities mature within one year or all
of them are to be called for redemption within one year
under arrangements satisfactory to the Trustee for giving
the notice of redemption, (B) the Company irrevocably
deposits in trust with the Trustee during such one-year
period, under the terms of an irrevocable trust agreement in
form and substance satisfactory to the Trustee, as trust
funds solely for the benefit of the Holders for that
purpose, money or U.S. Government Obligations sufficient (in
the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification
thereof delivered to the Trustee), without consideration of
any reinvestment of any interest thereon, to pay principal
and interest on the Securities to maturity or redemption, as
the case may be, and to pay all other sums payable by it
hereunder, (C) no Event of Default with respect to the
Securities shall have occurred and be continuing on the date
of such deposit, (D) such deposit will not result in a
breach or violation of, or constitute a Default under, this
Indenture or any other agreement or instrument to which the
Company is a party or by which it is bound and (E) the
Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating
that all conditions precedent provided for herein relating
to the satisfaction and discharge of this Indenture have
been complied with.
With respect to the foregoing clause (i), the Company's
obligations under Section 8.6 shall survive. With respect to the
foregoing clause (ii), the Company's obligations in Sections 2.2,
2.3, 2.4, 2.5, 2.6, 4.1, 4.2, 4.3, 8.6, 8.9, 11.2, 11.4 and 11.5
of this Indenture shall survive until the Securities are no
longer Outstanding. Thereafter, only the Company's obligations
in Section 8.6 and 11.2 of this Indenture shall survive. After
any such irrevocable deposit, the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations
under the Securities and this Indenture with respect to the
Securities except for those surviving obligations specified
above.
(B) The Company will be deemed to have paid and will
be discharged from any and all obligations in respect of the
Securities on the 123rd day after the deposit referred to in
clause (a) of this paragraph, and the provisions of this
Indenture will no longer be in effect with respect to the
Securities, except as to (i) rights of registration of transfer
and exchange, (ii) substitution of apparently mutilated, defaced,
destroyed, lost or stolen Securities, (iii) rights of Holders to
receive payments of principal thereof and interest thereon, (iv)
the Company's obligations under Section 4.1, (v) the rights,
obligations and immunities of the Trustee hereunder and (vi) the
rights of the Holders of Securities as beneficiaries of this
Indenture with respect to the property so deposited with the
Trustee payable to all or any of them, and the Trustee, at the
expense of the Company, shall at the Company's request execute
proper instruments acknowledging the same; provided that the
following conditions shall have been satisfied:
(a) with reference to this Section 11.1(B), the
Company has irrevocably deposited or caused to be
irrevocably deposited with the Trustee (or another trustee
satisfying the requirements of Section 8.8) and conveyed all
right, title and interest for the benefit of the Holders of
the Securities, under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Trustee
as trust funds in trust, in and to (1) money in an amount,
(2) U.S. Government Obligations that, through the payment of
interest and principal in respect thereof in accordance with
their terms, will provide, not later than one day before the
due date of any payment referred to in this clause (a),
money in an amount or (3) a combination thereof in an amount
sufficient, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and
discharge, without consideration of the reinvestment of such
interest and after payment of all federal, state and local
taxes or other charges and assessments in respect thereof
payable by the Trustee, the principal of and interest on the
Outstanding Securities at the Stated Maturity of such
principal or interest; provided that the Trustee shall have
been irrevocably instructed to apply such money or the
proceeds of such U.S. Government Obligations to the payment
of such principal and interest with respect to the
Securities;
(b) such deposit will not result in a breach or
violation of, or constitute a default under, this Indenture
or any other agreement or instrument to which the Company is
a party or by which it is bound;
(c) the Company shall have delivered to the Trustee
(1) either (x) a ruling directed to the Trustee received
from the Internal Revenue Service to the effect that the
Holders of Securities will not recognize income, gain or
loss for federal income tax purposes as a result of the
Company's exercise of its option under this Section 11.1(B)
and will be subject to federal income tax on the same amount
and in the same manner and at the same times as would have
been the case if such option had not been exercised or (y)
an Opinion of Counsel to the same effect as the ruling
described in clause (x) above and (2) an Opinion of Counsel
to the effect that (w) the creation of the defeasance trust
does not violate the Investment Company Act of 1940, (x) the
Holders have a valid first-priority security interest in the
trust funds and (y) after the passage of 123 days following
the deposit (except, with respect to any trust funds for the
account of any Holder who may be deemed to be an "insider"
for purposes of the United States Bankruptcy Code, after one
year following the deposit), the trust funds will not be
subject to the effect of Section 547 of the United States
Bankruptcy Code or Section 15 of the New York Debtor and
Creditor Law in a case commenced by or against the Company
under either such statute, and either (I) the trust funds
will no longer remain the property of the Company (and
therefore will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar
laws affecting creditors' rights generally) or (II) if a
court were to rule under any such law in any case or
proceeding that the trust funds remained property of the
Company, (i) assuming such trust funds remained in the
possession of the Trustee prior to such court ruling to the
extent not paid to the Holders, the Trustee will hold, for
the benefit of the Holders, a valid and perfected security
interest in such trust funds that is not avoidable in
bankruptcy or otherwise except for the effect of Section
552(b) of the United States Bankruptcy Code on interest on
the trust funds accruing after the commencement of a case
under such statute and (ii) the Holders will be entitled to
receive adequate protection of their interests in such trust
funds if such trust funds are used in such case or
proceeding;
(d) if the Securities are then listed on a national
securities exchange, the Company shall have delivered to the
Trustee an Opinion of Counsel to the effect that such
deposit, defeasance and discharge will not cause the
Securities to be delisted; and
(e) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, in each
case stating that all conditions precedent provided for
herein relating to the defeasance contemplated by this
Section 11.1(B) have been complied with.
Notwithstanding the foregoing clause (a), prior to the
end of the 123-day period (or, in the case of a Holder who may be
deemed an "insider", the one year period) referenced in clause
(c)(2)(y) above, none of the Company's obligations under this
Indenture shall be discharged. Subsequent to the end of such
period with respect to this Section 11.1, the Company's
obligations in Sections 2.2, 2.3, 2.4, 2.5, 2.6, 4.1, 4.2, 4.3,
8.6, 8.9, 11.2, 11.4 and 11.5 shall survive until the Securities
are no longer Outstanding. Thereafter, only the Company's
obligations in Section 8.6 and 11.2 shall survive. If and when a
ruling from the Internal Revenue Service or an Opinion of Counsel
referred to in clause (c)(1) above is able to be provided
specifically without regard to, and not in reliance upon, the
continuance of the Company's obligations under Section 4.1, then
the Company's obligations under such Section 4.1 shall cease upon
delivery to the Trustee of such ruling or Opinion of Counsel and
compliance with the other conditions precedent provided for
herein relating to the defeasance contemplated by this Section
11.1.
After any such irrevocable deposit, the Trustee, upon
request, shall acknowledge in writing the discharge of the
Company's obligations under the Securities and this Indenture
with respect to the Securities except for those surviving
obligations in the immediately preceding paragraph.
(C) The Company may omit to comply with any term,
provision or condition set forth in Section 6.1 of this
Indenture, and clause (e) of Section 7.1 shall be deemed not to
be an Event of Default, in each case with respect to the
Outstanding Securities if:
(a) with reference to this Section 11.1(C), the
Company has irrevocably deposited or caused to be
irrevocably deposited with the Trustee (or another trustee
satisfying the requirements of Section 8.8) and conveyed in
and to all right, title and interest to the Trustee for the
benefit of the Holders, under the terms of an irrevocable
trust agreement in form and substance satisfactory to the
Trustee as trust funds in trust, specifically pledged to the
Trustee as security for payment of the principal of and
interest, if any, on the Securities for, and dedicated
solely to, the benefit of the Holders of the Securities, in
and to (1) money in an amount, (2) U.S. Government
Obligations that, through the payment of interest and
principal in respect thereof in accordance with their terms,
will provide, not later than one day before the due date of
any payment referred to in this clause (a), money in an
amount or (3) a combination thereof in an amount sufficient,
in the opinion of a nationally recognized firm of
independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and
discharge, without consideration of the reinvestment of such
interest and after payment of all federal, state and local
taxes or other charges and assessments in respect thereof
payable by the Trustee, the principal of and interest on the
Outstanding Securities at the Stated Maturity of such
principal or interest; provided that the Trustee shall have
been irrevocably instructed to apply such money or the
proceeds of such U.S. Government Obligations to the payment
of such principal and interest with respect to the
Securities;
(b) such deposit will not result in a breach or
violation of, or constitute a default under, this Indenture
or any other agreement or instrument to which the Company is
a party or by which it is bound;
(c) no Default or Event of Default shall have occurred
and be continuing on the date of such deposit;
(d) the Company has delivered to the Trustee an
Opinion of Counsel to the effect that (1) the creation of
the defeasance trust does not violate the Investment Company
Act of 1940, (2) the Holders of the Securities have a valid
first-priority security interest in the trust funds, (3) the
Holders will not recognize income, gain or loss for federal
income tax purposes as a result of such deposit and
defeasance of certain obligations and will be subject to
federal income tax on the same amount and in the same manner
and at the same times as would have been the case if such
deposit and defeasance had not occurred and (4) after the
passage of 123 days following the deposit (except, with
respect to any trust funds for the account of any Holder who
may be deemed to be an "insider" for purposes of the United
States Bankruptcy Code, after one year following the
deposit), the trust funds will not be subject to the effect
of Section 547 of the United States Bankruptcy Code or
Section 15 of the New York Debtor and Creditor Law in a case
commenced by or against the Company under either such
statute, and either (x) the trust funds will no longer
remain the property of the Company (and therefore will not
be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting
creditors' rights generally) or (y) if a court were to rule
under any such law in any case or proceeding that the trust
funds remained property of the Company, and (i) assuming
such trust funds remained in the possession of the Trustee
prior to such court ruling to the extent not paid to the
Holders, the Trustee will hold, for the benefit of the
Holders, a valid and perfected security interest in such
trust funds that is not avoidable in bankruptcy or otherwise
except for the effect of Section 552(b) of the United States
Bankruptcy Code on interest on the trust funds accruing
after the commencement of a case under such statute and (ii)
the Holders will be entitled to receive adequate protection
of their interests in such trust funds if such trust funds
are used in such case or proceeding;
(e) if the Securities are then listed on a national
securities exchange, the Company shall have delivered to the
Trustee an Opinion of Counsel to the effect that such
deposit, defeasance and discharge will not cause the
Securities to be delisted; and
(f) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, in each
case stating that all conditions precedent provided for
herein relating to the defeasance contemplated by this
Section 11.1(C) have been complied with.
SECTION 11.2 Application by Trustee of Funds Deposited
for Payment of Securities; Other Miscellaneous Provisions.
Subject to Section 11.4, all monies deposited with the Trustee
(or other trustee) pursuant to Section 11.1 shall be held in
trust and applied by it to the payment, either directly or
through any Paying Agent, to the Holders of the Securities for
the payment or redemption of which such monies have been
deposited with the Trustee, of all sums due and to become due
thereon for principal and interest, if any; but such money need
not be segregated from other funds except to the extent required
by law.
If the Trustee or any Paying Agent is unable to apply
any money or U.S. Government Obligations in accordance with
Section 11.1 by reason of any legal proceeding or by reason of
any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such
applications, the Company's obligations under this Indenture and
the Securities related thereto shall be revived and reinstated as
though no deposit had occurred pursuant to Section 11.1B(a) or
11.1C(a) until such time as the Trustee or any Paying Agent is
permitted to apply all such money or U.S. Government Obligations
in accordance with Section 11.1; provided, however, that if the
Company has made any payment of interest on or principal of the
Securities because of the reinstatement of its obligations
hereunder, the Company shall be subrogated to the rights of the
Holders of the Securities to receive such payment from the money
or U.S. Government Obligations held by the Trustee for such
purpose.
SECTION 11.3 Repayment of Monies Held by Paying Agent.
In connection with the satisfaction and discharge of this
Indenture with respect to Securities, all monies then held by any
Paying Agent under the provisions of this Indenture with respect
to such Securities shall, upon demand of the Company, be repaid
to the Company or paid to the Trustee and thereupon such Paying
Agent shall be released from all further liability with respect
to such monies.
SECTION 11.4 Return of Monies Held by Trustee and
Paying Agent Unclaimed for Two Years. Any monies deposited with
or paid to the Trustee or any Paying Agent for the payment of the
principal of or interest on any Security or the payment of any
Sinking Fund installment and not applied but remaining unclaimed
for two years after the date upon which such principal, interest
or Sinking Fund installment shall have become due and payable
shall, upon the written request of the Company and unless
otherwise required by mandatory provisions of applicable escheat
or abandoned or unclaimed property law, be repaid to the Company
by the Trustee or such Paying Agent, and the Holder of the
Securities shall, unless otherwise by mandatory provisions of
applicable escheat or abandoned or unclaimed property laws,
thereafter look only to the Company for any payment that such
Holder may be entitled to collect, and all liability of the
Trustee or any Paying Agent with respect to such monies shall
thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment
with respect to monies deposited with it for any payment, may at
the expense of the Company, mail by first-class mail to Holders
of such Securities at their addresses as they shall appear on the
security register notice, that such monies remain and that, after
a date specified therein, which shall not be less than thirty
days from the date of such mailing, any unclaimed balance of such
money then remaining will be repaid to the Company.
SECTION 11.5 Indemnity for U.S. Government
Obligations. The Company shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed
against the U.S. Government Obligations deposited by the Company
pursuant to Section 11.1 or the principal or interest received in
respect of such obligations.
ARTICLE TWELVE - MISCELLANEOUS PROVISIONS
SECTION 12.1 Incorporators, Stockholders, Officers and
Directors of the Company Exempt from Individual Liability. No
director, officer, employee, incorporator or stockholder, as
such, past, present or future, of the Company or any successor
corporation or the Trustee shall have any liability for any
obligation of the Company under this Indenture or the Securities
or for any claim based on, in respect of, or by reason of, any
such obligation or the creation of any such obligation. Each
Holder by accepting a Security waives and releases such Persons
from all such liability and such waiver and release is part of
the consideration for the issuance of the Securities.
SECTION 12.2 Provisions of Indenture for the Sole
Benefit of Parties and Holders of Securities. Nothing in this
Indenture or in the Securities, expressed or implied, shall give
or be construed to give to any Person, other than the parties
hereto and their successors and the Holders of the Securities any
legal or equitable right, remedy or claim under this Indenture or
under any covenant or provision herein contained, all such
covenants and provisions being for the sole benefit of the
parties hereto and their successors and of the Holders of the
Securities.
SECTION 12.3 Successors and Assigns of the Company
Bound by Indenture. All the covenants, stipulations, promises
and agreements in this Indenture contained by or on behalf of the
Company shall bind its successors and assigns, whether so
expressed or not.
SECTION 12.4 Notices. Any notice, communication or
demand that by any provision of this Indenture is required or
permitted to be given or served may be given or served by being
personally delivered, deposited postage prepaid, first-class
mail, return receipt requested or delivered by telecopier (with
receipt confirmed) or overnight air courier guaranteeing next day
delivery addressed if to the Company to: the attention of Chief
Financial Officer and General Counsel, at 2929 Allen Parkway,
Houston, Texas 77019; if to the Trustee to: 910 Travis Street,
Houston, Texas 77002. The Company or the Trustee by notice to
the other may designate additional or different addresses for
subsequent notices or communications.
Where this Indenture provides for notice to Holders,
such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to each Holder entitled thereto, at his or her last
address as it appears in the Security register. In any case
where notice to such Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the sufficiency of
such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be
filed with the Trustee, but each filing shall not be a condition
precedent to the validity of any action taken in reliance upon
such waiver.
SECTION 12.5 Officers' Certificates and Opinions of
Counsel; Statements to be Contained Therein. Upon any
application or demand by the Company to the Trustee to take any
action under any of the provisions of this Indenture, the Company
shall furnish to the Trustee an Officers' Certificate stating
that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied
with, except that in the case of any such application or demand
as to which the furnishing of such documents is specifically
required by any provision of this Indenture relating to such
particular application or demand, no additional certificate or
opinion need be furnished.
Each certificate or opinion provided for in this
Indenture and delivered to the Trustee with respect to compliance
with a condition or covenant provided for in this Indenture shall
include (a) a statement that the Person making such certificate
or opinion has read such covenant or condition, (b) a brief
statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in
such certificate or opinion are based, (c) a statement that, in
the opinion of such Person, he or she has made such examination
or investigation as is necessary to enable him or her to express
an informed opinion as to whether or not such covenant or
condition has been complied with and (d) a statement as to
whether or not, in the opinion of such Person, such condition or
covenant has been complied with.
Any certificate, statement or opinion of an officer of
the Company may be based, insofar as it relates to legal matters,
upon a certificate or opinion of or representations by counsel,
unless such officer knows that the certificate or opinion or
representations with respect to the matters upon which his or her
certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that
the same are erroneous. Any certificate, statement or opinion of
counsel may be based, insofar as it relates to factual matters or
information with respect to which is in the possession of the
Company, upon the certificate, statement or opinion of or
representations by an officer or officers of the Company unless
such counsel knows that the certificate, statement or opinion or
representations with respect to the matters upon which his or her
certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that
the same are erroneous.
Any certificate, statement or opinion of an officer of
the Company or of counsel may be based, insofar as it relates to
accounting matters, upon a certificate or opinion of or
representations by an accountant or firm of accountants in the
employ of the Company, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or
representations with respect to the accounting matters upon which
his or her certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable care
should know that the same are erroneous.
Any certificate or opinion of any independent firm of
public accountants filed with and directed to the Trustee shall
contain a statement that such firm is independent with respect to
the Company.
SECTION 12.6 Payments Due on Saturdays, Sundays and
Holidays. If the date of maturity of interest on or principal of
the Securities or the date fixed for redemption (whether pursuant
to the operation of the Sinking Fund or otherwise) or repayment
of any Security shall not be a Business Day, then payment of
interest or principal need not be made on such date, but may be
made on the next succeeding Business Day with the same force and
effect as if made on the date of maturity or the date fixed for
redemption, and no interest shall accrue for the period after
such date.
SECTION 12.7 Conflict of Any Provision of Indenture
with Trust Indenture Act of 1939. If and to the extent that any
provision of this Indenture limits, qualifies or conflicts with
the duties imposed by, or with another provision (an
"incorporated provision") included in this Indenture by operation
of, Sections 310 to 316, inclusive, of the Trust Indenture Act of
1939, such imposed duties or incorporated provision shall
control.
SECTION 12.8 New York Law To Govern. THIS INDENTURE
AND EACH SECURITY SHALL BE DEEMED TO BE A CONTRACT UNDER THE LAW
OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAW OF SUCH STATE WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAW.
SECTION 12.9 Counterparts. This Indenture may be
executed in any number of counterparts, each of which shall be an
original; but such counterparts shall together constitute but one
and the same instrument.
SECTION 12.10 Effect of Headings. The Article and
Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 12.11 Severability. In case any provision in
this Indenture or in the Securities shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired
thereby.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, all as of September
___, 1995.
CONTINENTAL AIRLINES, INC.
By:_____________________________
Jeffery A. Smisek
Senior Vice President
Attest:
By:_____________________________
Scott R. Peterson
Assistant Secretary
BANK ONE, TEXAS, N.A.
By:_____________________________
Title: Roark Ashie
Vice President
Attest:
By:_____________________________
Title:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ of September, 1995, before me personally
came Jeffery A. Smisek, to me personally known, who, being by me
duly sworn, did depose and say that he is a Senior Vice President
of Continental Airlines, Inc., one of the corporations described
in and which executed the above instrument; that he knows the
corporate seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation, and that
he signed his name thereto by like authority.
(NOTARIAL SEAL)
__________________________________
Notary Public
STATE OF ______________ )
) ss.:
COUNTY OF ____________ )
On this _____ of September, 1995, before me personally
came Roark Ashie, to me personally known who, being by me duly
sworn, did depose and say that he is a Vice President of Bank
One, Texas, N.A., one of the corporations described in and which
executed the above instrument; that he knows the corporate seal
of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was affixed by authority of the
Board of Directors of said corporation, and that he signed his
name thereto by like authority.
(NOTARIAL SEAL)
__________________________________
Notary Public
CONTINENTAL AIRLINES, INC.
10.22% SERIES B SENIOR UNSECURED SINKING FUND NOTE
DUE JULY 1, 2000
No. R-__________
Continental Airlines, Inc., a Delaware corporation (the
"Company"), which term includes any successor corporation, for
value received, promises to pay [ ], or
registered assigns, the principal sum of [ ] on July
1, 2000.
Interest Payment Dates: January 1, April 1, July 1 and
October 1, commencing October 1, 1995.
Interest Record Dates: December 15, March 15, June 15
and September 15.
Sinking Fund Payment Dates: January 1, April 1, July 1
and October 1, commencing April 1, 1997.
This Security is continued on the reverse hereof and
the additional provisions set forth therein shall for all
purposes have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this
Security to be signed manually or by facsimile by its duly
authorized officers and a facsimile of its corporate seal to be
affixed to, or imprinted on, this Security.
Dated: May ____, 1996
CONTINENTAL AIRLINES, INC.
By:_____________________________
Name: Jeffery A. Smisek
Title: Senior Vice President
Attest:
_____________________________
Assistant Secretary:
[Seal]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities described in the within
mentioned Indenture.
BANK ONE, TEXAS, N.A., as trustee
By:_____________________________
Authorized Signature
CONTINENTAL AIRLINES, INC.
10.22% SERIES B SENIOR UNSECURED SINKING FUND NOTES
DUE JULY 1, 2000
1. Interest.
Continental Airlines, Inc., a Delaware corporation (the
"Company"), promises to pay interest on the unpaid principal
amount of this Security to Persons who are registered Holders at
the close of business on the relevant Interest Record Date at the
rate of 10.22% per annum.
Interest shall be computed on the basis of a 360-day
year of twelve 30-day months and shall be payable quarterly on
January 1, April 1, July 1 and October 1 of each year commencing
October 1, 1995, or if any such day is not a Business Day, on the
next succeeding Business Day. Interest will accrue from the most
recent date to which interest has been paid or, if no interest
has been paid, from July 1, 1995. Interest shall accrue with
respect to principal of this Security to, but not including, the
date of repayment of such principal.
To the extent lawful, the Company shall pay interest on
overdue principal and interest at the rate of interest borne by
this Security. On each Interest Payment Date, interest on the
Securities will be paid for the immediately preceding accrual
period.
2. Method of Payment.
The Company will pay interest on the Securities (except
defaulted interest) to the persons who are registered Holders at
the close of business on the Interest Record Date next preceding
the applicable Interest Payment Date. If the Company defaults in
the payment of the interest due on such Interest Payment Date,
such defaulted interest will be paid to the Persons who are
registered Holders of Securities at the close of business on a
subsequent record date established by notice given not less than
15 days prior to such subsequent record date. The Company will
pay the principal of this Security to the Holder that surrenders
this Security to a Paying Agent on or after July 1, 2000 or, in
the event of a redemption of this Security, whether through the
operation of the Sinking Fund or otherwise, on or after the
Redemption Date, as described below. The Company will pay
principal and interest in U.S. Legal Tender. If this Security is
a Global Security, all payments in respect of this Security will
be made to the Depository or its nominee in immediately available
funds in accordance with customary procedures established from
time to time by the Depository.
3. Paying Agent and Registrar.
Bank One, Texas, N.A. (the "Trustee") will act as
initial Paying Agent and registrar for the Securities. The
Company may change any Paying Agent, co-Paying Agent, registrar
or co-registrar without notice. Except as provided in the
Indenture, the Company or any of its Subsidiaries may act as
registrar or co-registrar.
4. Indenture.
This Security has been issued under an Indenture dated
as of September 28, 1995 (the "Indenture") between the Company
and the Trustee. Capitalized terms herein are used as defined in
the Indenture unless otherwise defined herein. The terms of the
Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of
1939. The Securities are subject to all such terms, and Holders
of the Securities are referred to the Indenture and said Act for
a statement of such terms. In the event of any conflict between
this Security and the Indenture, the Indenture shall govern. The
Securities are general unsecured obligations of the Company
limited in aggregate principal amount to $65,046,762.06.
5. Optional Redemption.
The Securities may be redeemed prior to July 1, 2000 at
any time in whole or from time to time in part, otherwise than
through the operation of the Sinking Fund, at a Redemption Price
equal to 100% of the aggregate principal amount of the Securities
to be redeemed, plus accrued and unpaid interest thereon to the
Redemption Date.
If the Redemption Date is subsequent to an Interest
Record Date with respect to any Interest Payment Date and on or
prior to such Interest Payment Date, then such accrued interest,
if any, will be paid to the Person in whose name such Securities
are registered at the close of business on such Interest Record
Date and no other interest will be payable thereon.
6. Sinking Fund.
As more fully set forth in the Indenture, the Company
is required to redeem on January 1, April 1, July 1 and October 1
of each year, commencing April 1, 1997, a portion of the
principal amount of the Securities at a Redemption Price equal to
100% of the aggregate principal amount of the Securities so
redeemed, plus accrued and unpaid interest to the Redemption
Date.
7. Notice of Redemption.
Notice of Redemption, whether through operation of the
Sinking Fund or otherwise, will be mailed at least 15 days but
not more than 60 days before the Redemption Date to each Holder
of Securities or portions thereof to be redeemed at his or her
registered address. Securities in denominations larger than
$1,000 may be redeemed in part, but not in denominations of less
than $1,000.
From and after any Redemption Date, if monies for the
redemption of the Securities called for redemption shall have
been made available for redemption on such Redemption Date, the
Securities called for redemption will cease to bear interest and
the only right of the Holders of such Securities will be to
receive payment of the Redemption Price.
8. Denominations; Transfer; Exchange.
The Securities are in fully registered form, without
coupons, in denominations of $1,000 and integral multiples of
$1,000 and in any other denomination the Company determines is
necessary to issue the aggregate principal amount of the
Securities. A Holder may register the transfer of or exchange
Securities in accordance with the Indenture. The registrar for
the Securities may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to
pay any taxes and fees required by law or permitted by the
Indenture. The Company need not register the transfer of or
exchange any Securities selected for redemption, except, in the
case of any Security to be redeemed in part, the portion thereof
not so redeemed. Also, the Company need not issue, exchange or
register the transfer of any Securities for a period of 10 days
prior to the first mailing of notice of redemption of the
Securities to be redeemed.
In accordance with the provisions of the Indenture and
subject to certain limitations therein set forth, until the
Securities have been registered under the Securities Act only an
owner or owners of at least 51% of the aggregate beneficial
interest in a Global Security may request a Security in
certificated form, in exchange in whole or in part, as the case
may be, for such beneficial owner's interest in the Global
Security. After the Securities have been so registered any owner
of a beneficial interest in a Global Security may request a
Security in certificated form, in exchange in whole or in part,
as the case may be, for such beneficial owner's interest in the
Global Security. In any such instance, such owner of a
beneficial interest in a Global Security will be entitled to
physical delivery in certificated form of Securities in
authorized denominations equal in principal amount to such
beneficial interest and to have such Securities registered in its
name.
9. Persons Deemed Owners.
The registered Holder of a Security may be treated as
the owner of it for all purposes.
With respect to Global Securities, the Depository shall
grant proxies and otherwise authorize Holders of Global
Securities to give or take any request, demand, authorization,
direction, notice, consent, waiver or other action which a Holder
of a Security is entitled to give or take under the Indenture.
10. Unclaimed Money.
If money deposited with or paid to the Trustee or any
Paying Agent for the payment of principal of or interest on the
Securities or the payment of any Sinking Fund installment remains
unclaimed for 2 years, the Trustee and any such Paying Agent will
pay the money back to the Company at its request. After that,
all liability of the Trustee and such Paying Agent with respect
to such money shall cease.
11. Discharge Prior to Redemption or Maturity.
If the Company at any time deposits with the Trustee
money or U.S. Government Obligations sufficient to pay the
principal of and interest on the Securities to redemption or
maturity and complies with the other provisions of the Indenture
relating thereto, the Company will be discharged from certain
provisions of the Indenture and the Securities (excluding certain
obligations, including without limitation its obligation to pay
the principal of or interest on the Securities).
12. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the
Securities may be amended or supplemented with the consent of the
Holders of at least a majority in aggregate principal amount of
the Outstanding Securities and certain existing Defaults or
Events of Default or compliance with any provisions of the
Indenture may be waived with the consent of the Holders of at
least a majority in aggregate principal amount of the Outstanding
Securities. Without notice to or consent of any Holder, the
parties thereto may amend or supplement the Indenture or the
Securities to, among other things, cure any ambiguity, correct or
supplement any provision which may be inconsistent with any other
provision, or to make any other provisions with respect to
matters or questions arising under the Indenture which shall not
be inconsistent with the provisions of the Indenture (provided
such amendment or supplement does not adversely affect the rights
of any of the Holders), provide for any additional rights or
benefits to Holders or make any change that does not adversely
affect the rights of any Holder.
13. Successors.
When a successor assumes all the obligations of its
predecessor under the Securities and the Indenture, the
predecessor will be released from those obligations.
14. Defaults and Remedies.
If an Event of Default occurs and is continuing,
subject to certain exceptions, the Trustee or the Holders of at
least 25% in principal amount of the Outstanding Securities may
declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture.
Holders of Securities may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may
require indemnity satisfactory to it before it enforces the
Indenture or the Securities. Subject to certain limitations,
Holders of a majority in principal amount of the Securities then
Outstanding may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold notice in certain
circumstances.
15. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or
any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may
otherwise deal with the Company or its Affiliates as if it were
not the Trustee.
16. No Recourse Against Others.
No stockholder, director, officer, employee or
incorporator, as such, past, present or future, of the Company or
any successor corporation or the Trustee shall have any liability
for any obligation of the Company under the Securities or the
Indenture or for any claim based on, in respect of or by reason
of, such obligations or their creation. Each Holder of a
Security by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration
for the issue of the Securities.
17. Authentication.
This Security shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on
the face of this Security.
18. Abbreviation.
Customary abbreviations may be used in the name of a
Holder of a Security or an assignee, such as: TEN COM (= tenants
in common), TEN ENT (= tenants by the entireties), TEN (= joint
tenants with right of survivorship and not as tenants in common),
CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
19. Indenture.
The Holder hereof, by accepting this Security, agrees
to be bound by all of the terms and provisions of the Indenture
applicable to such Holder.
The Company will furnish to any Holder of a Security
upon written request and without charge a copy of the Indenture.
Requests may be made to: Continental Airlines, Inc., 2929 Allen
Parkway, Houston, Texas 77019, Attention: Corporate Secretary.
FORM OF ASSIGNMENT
I or we assign and transfer this Security to
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
(Print or type name, address and zip code of assignee)
Please insert social security or other
identifying number of assignee
____________________________
and irrevocably appoint ___________ agent to transfer this
Security on the books of the Company. This agent may substitute
another to act for him.
Dated______________________ Signed___________________________
_________________________________________________________________
(Sign exactly as name appears on the other side of this Security)
Signature Guarantee:__________________________
EXCHANGE AGREEMENT
EXCHANGE AGREEMENT dated as of September 29, 1995 between
Continental Airlines, Inc., a Delaware corporation (the
"Corporation") and the holder listed on the signature page hereto
(the "Holder"). Capitalized terms used but not defined elsewhere
in this Agreement have the meanings assigned to them in Section
7.1 below.
W I T N E S S E T H:
WHEREAS, the Corporation issued to American General Life
Insurance Company ("American General") a 10.22% Restructured Note
for Secured Class 9.37 due 2001 (the "Old Note") pursuant to that
certain Second Amended and Restated Note Purchase Agreement (the
"Credit Agreement"), dated as of April 27, 1993, between the
Corporation and American General;
WHEREAS, the Old Note is secured by the Corporation's
interests in certain ground and terminal leases (and certain
personal property contained therein) pursuant to the Amended
Deeds of Trust (as defined in the Credit Agreement) and certain
UCC-1 financing statements (collectively, the "Security
Interests");
WHEREAS, American General sold and assigned to Belmont
Capital Partners II, L.P. ("Belmont"), and Belmont purchased and
assumed from American General, all of American General's right,
title and interest in the Credit Agreement, including without
limitation the Old Note and the Security Interests, pursuant to
that certain Note Purchase Agreement, dated as of June 9, 1995,
between American General and Belmont (the "Note Purchase
Agreement"); and simultaneously therewith, Belmont granted
undivided participation interests therein to Holder and certain
other participants (collectively with the Holder, the
"Participants"; and collectively with Belmont and the Holder, the
"Holders") in the amounts set forth in Exhibit A attached hereto,
pursuant to certain Participation Agreements, dated as of June 9,
1995;
WHEREAS, the Corporation has offered, subject to the terms
and conditions hereof, to (i) elevate each Participant's
participation interest in the Old Note to a direct assignment
interest and (ii) simultaneously therewith exchange ("Exchange")
all of the Holders' interests in the Old Note and the Security
Interests for new 10.22% Series A Senior Unsecured Sinking Fund
Notes due July 1, 2000 (the "New Notes") of the Corporation in
the aggregate principal amount (for all Holders) of
$65,046,762.06, all on and subject to the terms set forth below.
NOW THEREFORE, the parties hereto, for good and valid
consideration, the receipt and sufficiency thereof being hereby
acknowledged, and intending to be legally bound hereby, have
agreed as follows:
ARTICLE 1. THE EXCHANGE
SECTION 1.1 Exchange of Securities and Release of
Collateral.
(a) At the Closing (as hereinafter defined), the
Corporation, in reliance upon the representations and warranties
of the Holder contained herein and subject to the terms and
conditions set forth herein, shall elevate the Holder's
participation interest in the Old Note to a direct assignment
interest and simultaneously therewith deliver to the Holder, and
the Holder irrevocably agrees to accept from the Corporation, in
exchange for the Holder's interest in the Old Note (including its
interest in principal, accrued interest and any other amounts due
thereunder or in respect thereof) a New Note in the original
principal amount set forth opposite the Holder's name on Exhibit
A.
(b) At the Closing, the Holder, in reliance upon the
representations and warranties of the Corporation contained
herein and subject to the terms and conditions set forth herein,
authorizes Belmont to tender or cause to be tendered the Old Note
to the Corporation for cancellation of the Holder's interest in
the Old Note and to release the Security Interests. Such tender
and release of Security Interests shall be irrevocable and
unconditional, subject only to (i) the issuance and delivery of a
New Note to the Holder, (ii) completion of the Exchange and (iii)
the satisfaction or waiver of the closing conditions set forth in
Section 2.1 below.
(c) The Corporation and the Holder agree that they
will treat for all federal and other income tax purposes the
terms of the New Notes as not constituting a significant
modification of the terms of the Old Note and that, therefore,
the New Notes and the Old Note will constitute the same debt
instrument and the issuance of the New Notes in exchange for the
Old Note will not be treated as an exchange (including for
purposes of section 1001 of the Code).
SECTION 1.2 The Closing. The Exchange shall take place at
a closing (the "Closing") at the offices of Cleary, Gottlieb,
Steen & Hamilton, counsel to the Corporation, on September 28,
1995 at 10:00 a.m. or at such other place or earlier or later
date or time as may be fixed by mutual agreement of the
Corporation and the Holders of a majority in interest in the Old
Note (the "Majority Holders") (the "Closing Date"). At the
Closing, the Corporation will deliver to the Holder a New Note in
the principal amount set forth opposite the Holder's name on
Exhibit A (registered in the name of the Holder or its nominee,
as the Holder may request) against delivery of the Holder's
interest in the Old Note. Upon (i) delivery of the New Note to
the Holder, and (ii) the satisfaction or waiver of the closing
conditions set forth in Sections 2.1 and 2.2, the Corporation
shall be deemed, without further action on the part of the Holder
or the Corporation, to have accepted the tender of the Holder's
interest in the Old Note.
ARTICLE 2. CLOSING CONDITIONS
SECTION 2.1 Conditions Precedent to Obligations of Holder
to Close. The obligation of the Holder to accept the New Note
pursuant to this Agreement in exchange for its interest in the
Old Note and the release of the Security Interests shall be
subject to the satisfaction of the following conditions, at or
prior to Closing:
(a) The representations and warranties of the
Corporation set forth in this Agreement shall be true and correct
on and as of the Closing Date; and the Corporation shall have
complied with and performed all covenants and agreements
hereunder required to be complied with or performed by it at or
prior to the Closing; and the Corporation shall have furnished to
the Holder a certificate of an authorized officer, dated the
Closing Date, to the foregoing effect, and to the further effect
that the conditions specified in this Section 2.1 (other than the
conditions specified in Section 2.1(e)) have been satisfied at
and as of the Closing;
(b) The Corporation and a bank or trust company
("Trustee") that satisfies the requirements of Section 310(a)(i)
of the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), shall have executed and delivered an indenture
for the New Notes in substantially the form attached hereto as
Exhibit B (the "Indenture") and the New Notes shall have been
duly executed and delivered by the Corporation and authenticated
by the Trustee under and pursuant to the Indenture;
(c) The Corporation shall have executed and delivered
to the Holder a registration rights agreement in substantially
the form attached hereto as Exhibit C (the "Registration Rights
Agreement");
(d) Each of the other Holders shall have executed and
delivered to the Corporation an Exchange Agreement in
substantially similar form to this Agreement;
(e) The exchange of the Holder's interest in the Old
Note for the New Note shall not at the Closing be prohibited by
or contrary to any applicable laws, regulations, credit controls
(whether voluntary or involuntary), or similar restraints
applicable to the Holder, and shall not be enjoined (temporarily
or permanently) under, prohibited by or contrary to, any
injunction, order or decree applicable to the Holder, shall not
subject the Holder to any penalty or other onerous condition
under or pursuant to any applicable law or governmental
regulation, and shall be permitted by the laws and regulations of
the jurisdiction to which the Holder is subject, and if requested
by the Holder, the Holder shall have received, at least two (2)
Business Days prior to the Closing Date, a certificate of an
authorized officer of the Corporation certifying as to such
matters of fact as may be reasonably requested by the Holder in
order to permit it to determine whether its acquisition of a New
Note is so prohibited or enjoined or would result in such
contravention or penalty;
(f) The Corporation shall have received all consents,
permits and other authorizations, and made all such filings and
declarations, as may be required from or with any Governmental
Authority or other Person, pursuant to any law, statute, rule or
regulation (Federal, state, local or foreign), or pursuant to any
loan agreement, indenture or other agreement, order or decree to
which the Corporation or any of its subsidiaries is a party or to
which it is subject, in connection with the transactions
contemplated by this Agreement and the other Transaction
Documents, except where the failure to do so would not have a
Material Adverse Effect; and
(g) The Holder shall have received the favorable
opinion of Cleary, Gottlieb, Steen & Hamilton, counsel to the
Corporation, dated the Closing Date, in substantially the form
attached hereto as Exhibit D.
SECTION 2.2 Conditions Precedent to Obligation of the
Corporation to Close. The obligation of the Corporation to issue
the New Note in exchange for the Holder's interest in the Old
Note and the release of the Security Interests pursuant to this
Agreement is subject to the satisfaction, at or prior to the
Closing, of the following conditions:
(a) The representations and warranties of the Holder
set forth in Section 4.1 hereof shall be true and correct on and
as of the Closing Date, and the Holder shall have complied with
and performed all covenants and agreements hereunder required to
be complied with or performed by it at or prior to the Closing
(and the acceptance by the Holder of the New Note pursuant to
this Agreement in exchange for its interest in the Old Note and
the release of the Security Interests shall be deemed a
certification by the Holder to such effect);
(b) The Corporation's exchange of the New Note for the
Holder's interest in the Old Note hereunder and the release of
the Security Interests shall not be prohibited by or contrary to
any law or regulation applicable to the Corporation and shall not
be enjoined (temporarily or permanently) or prohibited by or
contrary to any injunction, order or decree applicable to the
Corporation;
(c) The offer, sale and issuance of the New Note
hereunder shall be exempt from registration under the Securities
Act (as defined below) by virtue of the exemption contained in
Section 4(2) thereof, and shall be exempt from registration or
qualification under applicable state securities or blue sky laws
(or, if required, shall have been duly registered or qualified
under such laws);
(d) Each of the other Holders shall have executed and
delivered to the Corporation an Exchange Agreement in
substantially similar form to this Agreement; and
(e) The Corporation shall have received all consents,
permits and other authorizations, and made all such filings and
declarations, as may be required from or with any Governmental
Authority or other Person, pursuant to any law, statute, rule or
regulation (Federal, state, local or foreign), or pursuant to any
loan agreement, indenture or other agreement, order or decree to
which the Corporation or any of its subsidiaries is a party or to
which it is subject, in connection with the transactions
contemplated by this Agreement and the other Transaction
Documents, except where the failure to do so would not have a
Material Adverse Effect.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF THE CORPORATION
To induce the Holder to accept the New Note in exchange for
its interest in the Old Note and the release of the Security
Interests, the Corporation hereby represents and warrants that:
SECTION 3.1 Organization, Qualification and Authority. The
Corporation is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, and has
all requisite corporate power and authority to own and hold under
lease its properties and carry on its business as presently
conducted, and, except as set forth in Schedule 3.1 hereto, is
duly qualified, registered or licensed as a foreign corporation
to do business and is in good standing in each jurisdiction in
which the ownership or leasing of its properties or the character
of its present operations makes such qualification, registration
or licensing necessary, except where the failure so to qualify
would not have a Material Adverse Effect. The Corporation has
heretofore delivered to counsel for the Holder complete and
correct copies of its restated certificate of incorporation and
by-laws, each as amended to date and as presently in effect
(collectively, "Charter Documents").
SECTION 3.2 Subsidiaries. Except as set forth in Schedule
3.2 attached hereto, each Subsidiary of the Corporation is duly
organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, and has all requisite
corporate power and authority to own and hold under lease its
properties and carry on its business as presently conducted,
except where the failure to do any of the foregoing would not
have a Material Adverse Effect. Except as set forth in Schedule
3.2 attached hereto, each such Subsidiary is, or at the Closing
Date will be, duly qualified, registered or licensed as a foreign
corporation to do business and is in good standing in each
jurisdiction where the ownership or leasing of its properties or
the character of its operations makes such qualification
necessary, except where the failure so to qualify would not have
a Material Adverse Effect. None of the Subsidiaries of the
Corporation is in violation of any term of its organizational
documents or of any term of any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation,
applicable to such Subsidiary or to which such Subsidiary is a
party, except where any such violation would not have a Material
Adverse Effect.
SECTION 3.3 Licenses. Except as set forth on Schedule 3.3
attached hereto, the Corporation and each of its Subsidiaries
holds or at the Closing Date will hold all licenses, franchises,
permits, consents, registrations, certificates and other
approvals (including, without limitation, those relating to
environmental matters, public and worker health and safety,
buildings, highways or zoning) (individually, a "License" and,
collectively, "Licenses") required for the conduct of its
business as now being conducted and is operating in compliance
therewith, except where the failure to hold any such License or
to operate in compliance therewith would not have a Material
Adverse Effect. Except as set forth on Schedule 3.3 attached
hereto, the Corporation and each of its Subsidiaries is in
compliance with all laws, regulations, orders and decrees
applicable to it, except in each case where the failure so to
comply would not have a Material Adverse Effect.
SECTION 3.4 Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the
Corporation of each of the Transaction Documents to which it is a
party, the issuance to the Holder of the New Note pursuant
hereto, and the consummation of the Exchange, are within the
Corporation's corporate powers, having been duly authorized by
all necessary corporate action on the part of the Corporation; do
not require any License, authorization, approval, qualification
or formal exemption from, or other action by or in respect of, or
filing of a declaration or registration with, any court,
Governmental Authority, agency or official (except such as have
been obtained or as may be required under the Securities Act, the
Exchange Act, the Trust Indenture Act, or state securities or
Blue Sky laws); do not and will not contravene or constitute a
default under or violation of (i) any provision of applicable law
or regulation of any Governmental Authority, (ii) the Charter
Documents, (iii) any agreement (or require the consent of any
Person under any agreement, that has not been obtained) to which
the Corporation or any of its Subsidiaries is a party, or (iv)
any judgment, injunction, order, decree or other instrument
binding upon the Corporation, any of its Subsidiaries, or any of
their respective properties, which contravention, default or
violation would, in the case of clause (i), (iii) or (iv), have a
Material Adverse Effect.
SECTION 3.5 Validity and Binding Effect. This Agreement
has been duly executed and delivered by the Corporation, and is,
and as of the Closing each of the other Transaction Documents to
which the Corporation is a party will be, a legal, valid and
binding agreement of the Corporation, enforceable against the
Corporation in accordance with its terms, except (i) that such
enforceability may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors' rights generally; and (ii) that
such enforceability may be subject to general equitable
principles, including, without limitation, the principle that the
availability of equitable remedies, such as specific enforcement,
injunctive relief or reformation, is subject to the discretion of
the court before which any proceeding might be brought.
SECTION 3.6 Litigation; Defaults. Except as set forth in
Schedule 3.6 attached hereto, there is no action, suit,
proceeding or investigation pending or, to the knowledge of the
Corporation, threatened against or affecting the Corporation, any
of its Subsidiaries, or any of their respective properties,
before or by any court or arbitrator or any governmental body,
agency or official in which there is a reasonable possibility of
an adverse decision which (individually or in the aggregate)
could impair the ability of the Corporation to perform fully on a
timely basis any material obligation which it has or will have
under any Transaction Document to which it is a party. Except as
set forth in Schedule 3.6 and except for pending defaults on the
Old Note, the Corporation is not in violation of, or in default
under (and there does not exist any event or condition which,
after notice or lapse of time or both, would constitute such a
default under), its Charter Documents, any provision of
applicable law or regulation, or any agreement, judgment,
injunction, order, decree or other instrument binding upon the
Corporation or any of its properties, except in each case to the
extent that such violations or defaults, individually or in the
aggregate, could not reasonably (i) affect the validity of any
Transaction Documents or (ii) impair the ability of the
Corporation to perform fully on a timely basis any material
obligation which it has or will have under any Transaction
Document to which it is a party.
SECTION 3.7 Public Reports. Each report the Corporation
has filed with the Commission pursuant to the Exchange Act with
respect to events occurring, or periods ending, on or after
December 31, 1994 (the "SEC Filings") complied in all material
respects at the date of filing with the requirements of the
Exchange Act and the SEC Filings, taken as a whole, did not
contain an 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 (in the light of the circumstances in
which they were made) not misleading. Except as disclosed in the
SEC Filings or in Schedule 3.6, since June 30, 1995, there has
been no material adverse change in the financial condition,
assets, business, or results of operations of the Corporation and
its Subsidiaries taken as a whole.
SECTION 3.8 Private Offering. The Corporation represents
to the Holder that, assuming the accuracy of the representations
of the Holder as set forth in Section 4.1(a) hereof, neither of
the Corporation nor any Person acting on its behalf has taken or
will take any action which would subject the issuance of the New
Notes being issued hereunder to the provisions of Section 5 of
the Securities Act, except as contemplated by the Registration
Rights Agreement.
SECTION 3.9 Broker's or Finder's Commissions. In addition
to and not in limitation of any other rights hereunder, the
Corporation agrees that it will indemnify and hold harmless the
Holder from and against any and all claims, demands or
liabilities for broker's, finder's, placement agent's or other
similar fees or commissions incurred or alleged to have been
incurred by the Corporation or any Person acting on its behalf in
connection with the issuance of the New Notes, or any other
transaction contemplated by any of the Transaction Documents.
SECTION 3.10 Foreign Assets Control Regulation, Etc. The
issuance of the New Notes by the Corporation will not violate any
of the following regulations of the United States Treasury
Department (31 C.F.R., Subtitle B, Chapter V, as amended): the
Foreign Assets Control Regulations, the Transaction Control
Regulations, the Cuban Assets Control Regulations, the Foreign
Funds Control Regulations or the Iranian Assets Control
Regulations.
SECTION 3.11 Investment Company Act. The Corporation is
not an "investment company," or a company "controlled" by an
"investment company," within the meaning of the Investment
Company Act of 1940, as amended (the "1940 Act") and is not
deemed to be an "investment company" for purposes of Section
12(d)(6) of the 1940 Act.
SECTION 3.12 Public Utility Holding Company Act. The
Corporation is not a "holding company," or a "subsidiary company"
of a "holding company," or an "affiliate" of a "holding company"
or of a "subsidiary company" of a "holding company," as such
terms are defined in the Public Utility Holding Corporation Act
of 1935, as amended.
SECTION 3.13 Interstate Commerce Act. The Corporation is
not, and will not be, a "rail carrier," or a Person controlled by
or affiliated with a "rail carrier," within the meaning of Title
49, U.S.C., and the Corporation is not a "carrier" or other
Person to which 49 U.S.C. Section 11301(b)(1) is applicable.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF THE HOLDER
SECTION 4.1 Representations and Warranties of Holders. The
Holder represents and warrants that:
(a) The Holder, by reason of its business and
financial experience, has such knowledge, sophistication and
experience in business and financial matters as to be capable of
evaluating the merits and risk of the prospective investment, and
is acquiring the New Note for its own account (and/or on behalf
of managed accounts that are acquiring for their own account) for
investment and with no present intention of distributing or
reselling the same or any part thereof other than pursuant to a
registration statement under the Securities Act or an exemption
thereunder, without prejudice, however, to its right (subject to
the terms of this Agreement) at all times to sell or otherwise
dispose of all or any part of said New Note pursuant to a
registration under the Securities Act and subject, nevertheless,
to the disposition of its assets being at all times within its
control.
(b) The Holder has full power and authority to
execute, deliver and perform this Agreement, the other
Transaction Documents and the documentation releasing the
Security Interests to which it is a party and to carry out the
transactions (including the release of the Security Interests)
contemplated by this Agreement; the execution, delivery and
performance of this Agreement, the other Transaction Documents
and the documentation releasing the Security Interests to which
it is a party have been duly authorized by all requisite
corporate (or similar) action on the part of the Holder; and this
Agreement, the other Transaction Documents and the documentation
releasing the Security Interests to which it is a party have been
duly executed and delivered by the Holder and are the legal,
valid and binding obligations of the Holder enforceable in
accordance with their respective terms, except: (i) that such
enforceability may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors' rights generally; and (ii) that
such enforceability may be subject to general equitable
principles, including, without limitation, the principle that the
availability of equitable remedies, such as specific enforcement,
injunctive relief or reformation, is subject to the discretion of
the court before which any proceeding might be brought.
(c) To the same extent received from American General,
the Holder is the beneficial owner of an undivided participation
interest, equal to the amount set forth opposite the Holder's
name on Exhibit A in the Old Note, free and clear of all liens,
security interests or other encumbrances and has not conveyed any
interest in or granted any lien, security interest or other
encumbrance on its participation interest to any other Person.
American General represented to Belmont in the Note Purchase
Agreement that at the time of assignment of the Old Note to
Belmont, American General was the sole legal and beneficial owner
and holder of the Assigned Rights (as defined in the Note
Purchase Agreement) free and clear of all liens, charges,
encumbrances, or other security interests, and to the extent that
the Corporation may be damaged as a result of the breach by
American General of such representation, the Holder hereby
authorizes the Corporation to exercise rights that Holder may
have against American General in respect thereof to recover from
American General such damages.
ARTICLE 5. RELEASES
SECTION 5.1 Releases. Effective as of the Closing Date,
and to the fullest extent permitted by law (i) the Holder hereby
waives and discharges, absolutely and forever, all rights, claims
and causes of action against the Corporation, and any present or
former director, officer, subsidiary, affiliate, agent, employee,
attorney, predecessor, legal successor, heir, survivor, assignee
or shareholder of the Corporation, and (ii) the Corporation
hereby waives and discharges, absolutely and forever, all rights,
claims, and causes of action against the Holder, and any present
or former director, officer, subsidiary, trustee, partner,
affiliate, agent, employee, attorney, predecessor, legal
successor, heir, survivor, assignee or shareholder of the Holder,
which, in the case of the preceding clauses (i) and (ii), is
based upon or arises out of the Credit Agreement, the Amended
Deeds of Trust, the Security Interests or the purchase, ownership
or sale of the Holder's interest in the Old Note, whether known
or unknown, including without limitation, claims of or relating
to fraudulent transfers, breach of contract, breach of fiduciary
duty, debts, actions, causes of action, liabilities, liens,
obligations, or other losses, costs, expenses or demands of
whatever nature, character or kind which exist or may be asserted
in the future; provided however, that this provision shall not
operate as a waiver or a release of any rights, claims, or causes
of action of the Holder under the anti-fraud provisions of
Federal or state securities laws or regulations relating to the
Exchange, the New Note or the Transaction Documents, or under any
Federal or state bankruptcy statute, including but not limited to
the United States Bankruptcy Code, with regard to the Old Note;
it being agreed that the Holder retains its rights to make any
argument with respect to the treatment of its claims in any
bankruptcy involving the Corporation or the effect of the
Exchange on the subsequent treatment of any claims in such
bankruptcy. This Agreement is not intended to, and does not,
release any claims of the Holder against the Corporation, or of
the Corporation against the Holder, except as expressly set forth
in this Section 5.1.
ARTICLE 6. RESTRICTIONS ON TRANSFER
SECTION 6.1 Restrictive Legend. Each certificate
evidencing New Notes issued to a Holder or to any subsequent
transferee shall, unless otherwise permitted by the provisions of
Section 6.2, be stamped or otherwise imprinted with a legend
substantially in the following form:
"THE SECURITIES REPRESENTED BY THIS NOTE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT
BE OFFERED, SOLD, TRANSFERRED OR HYPOTHECATED OR
OTHERWISE ASSIGNED EXCEPT PURSUANT TO (I) A
REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES
WHICH IS EFFECTIVE UNDER SUCH ACT OR (II) RULE 144 OR
144A UNDER SUCH ACT OR ANY OTHER AVAILABLE EXEMPTION
FROM REGISTRATION UNDER SUCH ACT RELATING TO
DISPOSITION OF SECURITIES."
Whenever the legend requirement imposed by this Section 6.1
shall terminate the respective holders of New Notes for which
such legend requirements have terminated shall, upon request,
promptly receive from the Corporation, at the Corporation's
expense, replacement certificates representing New Notes without
such legend.
SECTION 6.2 Notice of Transfer; Opinions of Counsel. The
holder of each certificate representing a New Note bearing the
restrictive legend set forth in Section 6.1 above ("Restricted
Security"), agrees to provide to the Corporation (a) upon
request, a written description of the manner or circumstances of
any transfer of any Restricted Security and (b) upon reasonable
request by the Corporation, an opinion of counsel (including
in-house counsel) reasonably satisfactory to the Corporation and
in form and substance reasonably satisfactory to the Corporation,
to the effect that the transfer of such Restricted Security may
be effected without registration of such Restricted Security
under the Securities Act. If the holder of the Restricted
Security delivers to the Corporation an opinion of counsel
(including in-house counsel or regular counsel to such holder or
its investment adviser) reasonably satisfactory to the
Corporation and in form and substance reasonably satisfactory to
the Corporation that a proposed transfer and any subsequent
transfers of such Restricted Security will not require
registration under the Securities Act, the Corporation will
promptly after such transfer deliver new certificates for such
Restricted Security which do not bear the legend set forth in
Section 6.1 above. The restrictions imposed by this Section 6
upon the transferability of any particular Restricted Security
shall cease and terminate when such Restricted Security has been
sold pursuant to an effective registration statement under the
Securities Act or transferred pursuant to Rule 144 promulgated
under the Securities Act and the transferee is not an Affiliate
of the Corporation. The Corporation shall promptly provide the
holder of any Restricted Security as to which such restrictions
shall have terminated with a new security of the same type but
not bearing the restrictive legend set forth in Section 6.1 and
not containing any other reference to the restrictions imposed by
this Section 6. Notwithstanding any of the foregoing, no opinion
of counsel will be required to be rendered pursuant to this
Section 6.2 with respect to the transfer of any securities on
which the restrictive legend has been removed in accordance with
this Section 6.2. As used in this Section 6.2, the term
"transfer" encompasses any sale, transfer or other disposition of
any Securities referred to herein.
ARTICLE 7. DEFINITIONS
SECTION 7.1 Definitions. Capitalized terms used herein but
not defined elsewhere in this Agreement have the meanings
indicated as follows:
"Affiliate" means, with respect to any Person, any Person
that, directly or indirectly, controls, is controlled by or is
under common control with such Person. For the purposes of this
definition, "control" (including, with correlative meanings, the
terms "controlled by" and "under common control with"), as used
with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agreement" means this Agreement, as the same may be
amended, supplemented or modified from time to time in accordance
with the terms hereof then in effect.
"Business Day" means any day other than a Saturday, a Sunday
or a day on which banking institutions in the City of New York,
New York or Houston, Texas are authorized or obligated by law or
executive order to close.
"Code" means the Internal Revenue Code of 1986, and the
rules and regulations promulgated thereunder, in each case as
amended from time to time
"Commission" means the Securities and Exchange Commission or
any successor agency then having jurisdiction to enforce the
Securities Act.
"Exchange Act" means the Securities Exchange Act of 1934 and
the rules and regulations promulgated thereunder, in each case as
amended from time to time.
"Governmental Authority" means any governmental or quasi-
governmental authority, including, without limitation, any
federal, state, territorial, county, municipal or other
governmental or quasi-governmental agency, board, branch, bureau,
commission, court, department or other instrumentality or
political unit or subdivision, whether domestic or foreign.
"Holder" means (i) the Holder signatory hereto, and (ii)
each assignee or transferee of the New Note, other than the
Corporation and its Affiliates, who acquires such security.
"Material Adverse Effect" means a material adverse effect on
the financial condition, assets, business or results of
operations of the Corporation and its Subsidiaries on a
consolidated basis.
"Person" means any individual, corporation, partnership,
joint venture, association, joint-stock company, trust,
unincorporated organization or government or a political
subdivision, agency or instrumentality thereof or other entity or
organization of any kind.
"Securities Act" means the Securities Act of 1933, as
amended from time to time, and the rules and regulations
promulgated thereunder.
"Subsidiary" means, with respect to any Person (the
"Parent") (A) a corporation a majority of whose capital stock
with voting power, under ordinary circumstances, to elect
directors is at the time, directly or indirectly, owned by the
Parent, by a Subsidiary or Subsidiaries (as the case may be) of
the Parent, or by the Parent and a Subsidiary or Subsidiaries (as
the case may be), or (B) any other Person (other than a
corporation) in which the Parent, one or more Subsidiaries of the
Parent (as the case may be), or the Parent and one more of its
Subsidiaries (as the case may be), directly or indirectly, at the
date of determination thereof, has at least a majority equity
ownership interest.
"Transaction Documents" means, collectively, this Agreement,
the Registration Rights Agreement, the New Notes, the Indenture,
and all other documents, instruments and agreements executed and
delivered by the Corporation in connection with the Exchange.
"Trust Indenture Act" means Trust Indenture Act of 1939, as
amended from time to time, and the rules and regulations
promulgated thereunder.
ARTICLE 8. MISCELLANEOUS
SECTION 8.1 Indemnification; Expenses, Etc.
(a) In addition to any and all obligations of the
Corporation to indemnify the Holder hereunder or under the
Indenture or the other Transaction Documents, the Corporation
agrees, without limitation as to time, to indemnify and hold
harmless the Holder, its Affiliates, and the employees, officers,
trustees, partners, directors, and agents of the Holder and its
Affiliates (individually, a "Holder Indemnified Party" and
collectively, the "Holder Indemnified Parties") from and against
any and all losses, claims, damages, liabilities and reasonable
costs (including the costs of preparation and attorneys' fees)
and expenses (including expenses of investigation) (collectively,
"Losses") incurred or suffered by a Holder Indemnified Party (i)
in connection with or arising out of any breach of any warranty,
or the inaccuracy of any representation, as the case may be, made
by the Corporation, or the failure of the Corporation to fulfill
any agreement or covenant contained in this Agreement or (ii) in
connection with any proceeding against the Corporation or any
Holder Indemnified Party brought by any third party arising out
of or in connection with this Agreement or any of the other
Transaction Documents or any of the transactions contemplated
hereby or thereby or any action taken in connection herewith or
therewith (or any other document or instrument executed herewith
or pursuant hereto or thereto), whether or not the transactions
contemplated by this Agreement are consummated and whether or not
any Holder Indemnified Party is a formal party to any proceeding;
provided, however, that the Corporation shall not be liable for
any Losses resulting from action on the part of any Holder
Indemnified Party which is finally determined in such proceeding
to be wrongful or which is an act of gross negligence,
recklessness, or willful misconduct by such Holder Indemnified
Party. The Corporation agrees promptly to reimburse any Holder
Indemnified Party for all such Losses as they are incurred or
suffered by such Holder Indemnified Party.
Except as otherwise provided herein, the Corporation agrees
(for the benefit of the Holder) to pay, and to hold the Holder
harmless from and against, all reasonable costs and expenses
(including, without limitation, attorneys' fees, expenses and
disbursements), if any, in connection with the preparation,
negotiations and enforcement against the Corporation, as the case
may be, of this Agreement or any other Transaction Document or
any other agreement or instrument furnished pursuant hereto or
thereto or in connection herewith or therewith in any action in
which the Holder is attempting to enforce any of the foregoing
shall prevail.
(b) In addition to any and all indemnification
obligations of the Holder hereunder or under the other
Transaction Documents, the Holder agrees, without limitation as
to time, to indemnify and hold harmless the Corporation, its
Affiliates, and the employees, officers, trustees, partners,
directors, and agents of the Corporation and its Affiliates
(individually, a "Corporation Indemnified Party" and
collectively, the "Corporation Indemnified Parties") from and
against any and all Losses incurred or suffered by a Corporation
Indemnified Party in connection with or arising out of any breach
of any warranty, or the inaccuracy of any representation, as the
case may be, made by the Holder, or the failure of the Holder to
fulfill any of its agreements or covenants contained in this
Agreement.
(c) If any Holder Indemnified Party or Corporation
Indemnified Party (individually, an "Indemnified Party" and,
collectively the "Indemnified Parties") is entitled to
indemnification hereunder, such Indemnified Party shall give
prompt notice to the indemnifying party of any claim or of the
commencement of any proceeding against the indemnifying party or
any Indemnified Party brought by any third party with respect to
which such Indemnified Party seeks indemnification pursuant
hereto; provided, however, that the failure so to notify the
indemnifying party shall not relieve the indemnifying party from
any obligation or liability except to the extent the indemnifying
party is prejudiced by such failure. The indemnifying party
shall have the right, exercisable by giving written notice to an
Indemnified Party promptly after the receipt of written notice
from such Indemnified Party of such claim or proceeding, to
assume, at the expense of the indemnifying party, the defense of
any such claim or proceeding with counsel reasonably satisfactory
to such Indemnified Party. Neither the indemnifying party nor
the Indemnified Party or Parties will be subject to any liability
for any settlement made without its or their consent (but such
consent will not be unreasonably withheld). Neither the
Indemnified Party nor the indemnifying party shall consent to
entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by claimant
or plaintiff to such Indemnified Party or Parties, as the case
may be, of a release, in form and substance satisfactory to the
released party, from all liability in respect of such claim,
litigation or proceeding.
(d) In addition to any other obligations of the
Corporation to indemnify the Holder herein or pursuant to any of
the Transaction Documents or any other agreements or documents
executed and delivered in connection therewith, the Corporation
will pay, and will save the Holder harmless from liability for
the cost of delivering to the Holder's principal office, insured
to its satisfaction, the New Note delivered to the Holder
hereunder and any New Note delivered to the Holder upon any
substitution of New Note pursuant to the Indenture and of the
Holder's delivering any New Note, insured to its satisfaction,
upon any such substitution.
SECTION 8.2 Survival of Representations and Warranties;
Severability. All representations and warranties contained in
this Agreement or the Transaction Documents by or on behalf of
the Corporation or the Holder in connection with the transactions
contemplated by this Agreement or the Transaction Documents shall
survive, for the duration of any statutes of limitation
applicable thereto, the execution and delivery of this Agreement,
any investigation at any time made by the Holder or the
Corporation or on the Holder's or the Corporation's behalf, the
purchase of the New Note by the Holder under this Agreement and
any disposition of or payment on the New Note. All statements
contained in any certificate or other instrument delivered to the
Holder by or on behalf of the Corporation pursuant to this
Agreement or the Transaction Documents shall be deemed
representations and warranties of the Corporation under this
Agreement. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof or affecting the validity or enforceability of such
provisions in any other jurisdiction.
SECTION 8.3 Amendment and Waiver. This Agreement may be
amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may be given, provided that
the same are in writing and signed by the Holder and the
Corporation.
SECTION 8.4 Notices, Etc. Except as otherwise provided in
this Agreement, notices and other communications under this
Agreement shall be in writing and shall be delivered, or mailed
by registered or certified mail, return receipt requested, or by
a nationally recognized overnight courier, postage prepaid,
addressed, (a) if to the Holder, at the address as the Holder
shall have furnished to the Corporation in writing, or (b) if to
any other holder of any New Note, at such address as such other
holder shall have furnished to the Corporation in writing, or,
until any such other holder so furnishes to the Corporation an
address, then to and at the address of the last holder of such
security who has furnished an address to the Corporation, or (c)
if to the Corporation, at 2929 Allen Parkway, Suite 2010,
Houston, Texas 77019 to the attention of Chief Financial Officer
and General Counsel, or at such other address, or to the
attention of such other officer, as the Corporation shall have
furnished to the Holder and each such other holder in writing.
This Agreement and the other Transaction Documents and all
documents delivered in connection herewith or therewith embody
the entire agreement and understanding between the Holders and
the Corporation and supersede all prior agreements and
understandings relating to the subject matter hereof. The
Corporation acknowledges and agrees that the obligations of each
Holder hereunder are limited in the manner and to the extent set
forth on such Holder's signature page hereto.
SECTION 8.5 Successors and Assigns. Except as otherwise
provided in the following sentence, whenever in this Agreement
any of the parties hereto are referred to, such reference shall
be deemed to include the successors and assigns of such party and
all covenants, promises and agreements by or on behalf of the
respective parties which are contained in this Agreement shall
bind and inure to the benefit of the successors and assigns of
the parties. The terms and provisions of this Agreement, the
Indenture and the other Transaction Documents shall inure to the
benefit of and shall be binding upon any assignee or transferee
of each Holder provided the transfer was not effected pursuant to
an effective registration statement (a "Non-Public Transfer"),
and in the event of a Non-Public Transfer, the rights and
privileges herein conferred upon the Holder shall automatically
extend to and be vested in, and become an obligation of, such
transferee or assignee, all subject to the terms and conditions
hereof. In connection with a proposed Non-Public Transfer, a
Holder may disclose all documents and information which it now or
hereafter may have relating to the New Notes, this Agreement, the
Indenture, the Transaction Documents, the Corporation, any other
Persons referred to herein or any of the business of any of the
foregoing entities to any prospective assignee or transferee (and
such Holder hereby agrees to inform such prospective assignee or
transferee that such documentation and information may be deemed
non-public information).
SECTION 8.6 Descriptive Headings. The headings in this
Agreement are for purposes of reference only and shall not limit
or otherwise affect the meaning hereof.
SECTION 8.7 Governing Law. THIS AGREEMENT AND THE NEW
NOTES SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE
RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE
OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAW.
SECTION 8.8 Service of Process. The Corporation (a) hereby
irrevocably submits itself to the jurisdiction of the state
courts of the State of New York and to the jurisdiction of the
United States District Court for the Southern District of New
York for the purpose of any suit, action or other proceeding
arising out of or based upon this Agreement, the New Notes, the
other Transaction Documents or the subject matter hereof or
thereof brought by the Holder or their successors or assigns and
(b) hereby waives, and agrees not to assert, by way of motion, as
a defense, or otherwise, in any such suit, action or proceeding,
any claim that it is not subject personally to the jurisdiction
of the above-named courts, that its property is exempt or immune
from attachment or execution, that the suit, action or proceeding
is brought in an inconvenient forum, that the venue of the suit,
action or proceeding is improper or that this Agreement or the
subject matter hereof may not be enforced in or by such court.
The Corporation hereby consents to service of process by
registered mail at the address to which notices are to be given.
The Corporation agrees that its submission to jurisdiction and
its consent to service of process by mail is made for the express
benefit of the Holder. Final judgment against the Corporation in
any such action, suit or proceeding shall be conclusive and may
be enforced in other jurisdictions (a) by suit, action or
proceeding on the judgment, a certified or true copy of which
shall be conclusive evidence of the fact and of the amount of any
indebtedness or liability of the Corporation therein described or
(b) in any other manner provided by or pursuant to the laws of
such other jurisdiction; provided, however, that the Holder may
at its option bring suit or institute other judicial proceedings
against the Corporation or any of the Corporation's or its assets
in any state or federal court of the United States or in any
country or place where the Corporation or such assets may be
found.
SECTION 8.9 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall
be deemed an original, and it shall not be necessary in making
proof of this Agreement to produce or account for more than one
such counterpart.
SECTION 8.10 No Adverse Interpretation of Other Agreements.
This Agreement may not be used to interpret another agreement,
indenture, loan or debt agreement of the Corporation or any
Subsidiary. Any such agreement, indenture, loan or debt
agreement may not be used to interpret this Agreement.
SECTION 8.11 Waiver of Jury Trial. THE CORPORATION HEREBY
WAIVES TRIAL BY JURY IN ANY LITIGATION, SUIT OR PROCEEDING, IN
ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF
THIS AGREEMENT, THE INDENTURE, THE NEW NOTES, ANY OTHER
TRANSACTION DOCUMENTS, OR ANY INSTRUMENT OR DOCUMENT DELIVERED
PURSUANT TO THIS AGREEMENT, THE INDENTURE, THE NEW NOTES OR ANY
OTHER TRANSACTION DOCUMENT, OR THE VALIDITY, PROTECTION,
INTERPRETATION, COLLECTION OR ENFORCEMENT, THEREOF.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized, as of the date first above written.
CONTINENTAL AIRLINES, INC.
By:_________________________
Name:
Title:
SPARTAN HIGH INCOME FUND
By:_________________________
Name:
Title:
Wire Instruction Information: Notice Information:
The Bank of New York/Cust Spartan High Income Fund
ABA #: 021-000-018 Fidelity Investments
Acct #: 114673/Spartan
High Income Fund 82 Devonshire Street - F7E
Transaction
Description: Continental Boston, Massachusetts 02109
Contact: Jeff Wredy Attention: Portfolio Manager
Telephone No.: 212-495-3395 Telephone No.: (617) 563-7882
Telecopy No.: (212) 495-2884
or 2885 Telecopy No.: (617) 476-3316
with copies to:
Robert M. Gervis, Esq.
Associate General Counsel
Fidelity Investments
82 Devonshire Street - F7D
Boston, Massachusetts 02109
Telephone No.: (617) 563-6048
Telecopy No.: (617) 476-7774
Limitation of Liability: Spartan High Income Fund ("Holder") is a
Massachusetts business trust. A copy of the Holder's Declaration
of Trust (under the name Fidelity Fixed-Income Trust) is on file
with the Secretary of State of the Commonwealth of Massachusetts.
Each of the parties hereto acknowledges and agrees that this
Agreement is not executed on behalf of any of the trustees of
Holder as individuals and the obligations of this Agreement are
not binding upon any of the trustees, officers, employees or
beneficiaries of Holder individually but are binding only upon
the assets and property of Holder. The Corporation agrees that
no beneficiary, trustees, employee or officer of Holder may be
held personally liable or responsible for any obligations of
Holder arising out of this Agreement. With respect to
obligations of Holder arising out of this Agreement, the
Corporation shall look for payment or satisfaction of any claim
solely to the assets and property of Holder. The Corporation is
expressly put on notice that the rights and obligations of each
series of shares of the Holder under its Declaration of Trust are
separate and distinct from those of any and all series.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized, as of the date first above written.
CONTINENTAL AIRLINES, INC.
By:_________________________
Name:
Title:
FIDELITY GALILEO FUND, L.P.
By: Fidelity Galileo Corp.,
general partner
By:_________________________
Name:
Title:
Wire Instruction Information: Notice Information:
Chase Manhattan Bank, NY Fidelity Galileo Fund, L.P.
ABA #: 021-000-021 Fidelity Investments
F/A/O Goldman Sachs & Co. 82 Devonshire Street - F7E
A/C #930-1-011483/Fidelity
Galileo Fund, L.P. Boston, Massachusetts 02109
F/F/C Fidelity Galileo
Fund, L.P. Attention: Portfolio Manager
A/C #022-02918-9/Fidelity
Galileo Fund, L.P. Telephone No.: (617) 563-7882
Contact: Jay Adames Telecopy No.: (617) 476-3316
Telephone No.: 212-902-4739
Telecopy No.: (212) 346-4054 with copies to:
Robert M. Gervis, Esq.
Associate General Counsel
Fidelity Investments
82 Devonshire Street - F7D
Boston, Massachusetts 02109
Telephone No.: (617) 563-6048
Telecopy No.: (617) 476-7774
Limitation of Liability: Fidelity Galileo Fund, L.P. ("Holder")
is a Delaware limited partnership. Each of the parties hereto
acknowledges and agrees that this Agreement is not executed on
behalf of any of the partners of Holder as individuals and the
obligations of this Agreement are not binding upon any of the
partners, officers, employees or beneficiaries of Holder
individually but are binding only upon the assets and property of
Holder. The Corporation agrees that no beneficiary, partner,
employee or officer of Holder may be held personally liable or
responsible for any obligations of Holder arising out of this
Agreement. With respect to obligations of Holder arising out of
this Agreement, the Corporation shall look for payment or
satisfaction of any claim solely to the assets and property of
Holder.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized, as of the date first above written.
CONTINENTAL AIRLINES, INC.
By:_________________________
Name:
Title:
GOLDMAN, SACHS & CO.
By:_________________________
Name:
Title:
Wire Instruction Information: Notice Information:
Chase Manhattan Bank, NY Goldman, Sachs & Co.
ABA #: 021-0000-21 85 Broad Street
Goldman Sachs & Co. New York, NY 10004
A/C #930-1-011483/Goldman,
Sachs & Co. Attn: Jonathan Kolatch
Attn: Kathy Martin Telephone No.: (800) 882-3211
Telecopy No.: (212) 902-9492
EXHIBIT A
HOLDER INTEREST IN PRINCIPAL OF
NAME OLD NOTE NEW NOTE
- ------ ----------- ------------
Belmont Capital
Partners II, L.P. 61.33385% $39,895,683.47
Spartan High Income Fund 15.46646% $10,060,431.44
Fidelity Galileo Fund, L.P. 7.73323% $ 5,030,215.71
Goldman Sachs & Co. 15.46646% $10,060,431.44
========== ==============
Total: 100.00000% $65,046,762.06
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made
and entered into as September 29, 1995 by and among Continental
Airlines, Inc., a Delaware corporation (the "Corporation"), and
each of the Persons executing a signature page hereto (herein
referred to collectively as the "Holders" and individually as a
"Holder").
This Agreement is made pursuant to those certain Exchange
Agreements dated as of the date hereof by and between the
Corporation and each of the Holders (collectively, the "Exchange
Agreements"). In order to induce the Holders to enter into their
respective Exchange Agreements and to consummate the Exchange (as
defined therein), the Corporation has agreed to provide the
registration rights set forth in this Agreement for the benefit
of the Holders, from time to time, of Registrable Securities (as
hereinafter defined). The execution of this Agreement is a
condition to the closing of the transactions contemplated by the
Exchange Agreement.
In consideration of the foregoing, the parties hereby agree
as follows:
1. Definitions.
Capitalized terms used herein without definition shall have
the respective meanings given such terms as set forth in the
Exchange Agreement. As used in this Agreement, the following
terms shall have the following meanings:
"Advice" has the meaning set forth in Section 7.
"Business Day" means any day other than a day on which banks
are authorized or required to be closed in New York, New York or
Houston, Texas.
"Commission" means the Securities and Exchange Commission.
"Consummate" or "Consummation" means, with respect to an
Exchange Offer hereunder, (a) the filing and causing to become
effective under the Securities Act of a Registration Statement
covering the Exchange Offer, (b) the maintenance of such
Registration Statement continuously effective for the period
required by Section 3(a) hereof, and (c) the delivery by the
Corporation to the registrar under the Indenture of the Exchange
Securities in the same aggregate principal amount as the
aggregate principal amount of Registrable Securities tendered by
Holders pursuant to an Exchange Offer.
"Corporation" has the meaning set forth in the Preamble and
shall include the Corporation's successors by merger,
acquisition, reorganization or otherwise.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission
promulgated thereunder.
"Exchange Agreement" has the meaning set forth in the
preamble.
"Exchange Offer" means the offer to exchange any of the
Registrable Securities for Exchange Securities made by the
Corporation pursuant to Section 3.
"Exchange Securities" means the Corporation's 10.22% Series
B Unsecured Sinking Fund Notes due July 1, 2000 to be issued in
accordance with the Indenture and which are identical to the
Registrable Securities in all material respects except that they
have been registered pursuant to an effective Registration
Statement under the Securities Act.
"Holder" or "Holders" means any holder of record of the
Registrable Securities.
"Holders' Counsel" means Goodwin, Procter & Hoar, special
counsel to the Holders, or any one successor counsel or firm of
counsel selected by Holders of a majority of the aggregate
principal amount of Registrable Securities.
"Indenture" means the Indenture of even date herewith
between the Corporation and the Trustee, pursuant to which the
Registrable Securities are being issued and the Exchange
Securities may be issued, as amended, modified or supplemented
from time to time, together with any exhibits, schedules or other
attachments thereto.
"Inspectors" has the meaning set forth in Section 7(m).
"Issue Date" means the date on which the New Notes are
issued to the Holders pursuant to the Exchange Agreements.
"NASD" has the meaning set forth in Section 7(p).
"New Notes" means the Corporation's 10.22% Series A
Unsecured Sinking Fund Notes due July 1, 2000 issued pursuant to
the Exchange Agreements and in accordance with the Indenture in
an aggregate principal amount of $65,046,762.06.
"Majority Holders" means, in connection with any
Registration Statement, the Holders of a majority of the
aggregate principal amount of Registrable Securities registered
under such Registration Statement.
"Objection Notice" has the meaning set forth in Section
7(a).
"Permitted Suspension Period" shall have the meaning set
forth in Section 7.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association,
joint-stock corporation, trust, unincorporated organization or
government or other agency or political subdivision thereof.
"Prospectus" means the prospectus included in any
Registration Statement (including, without limitation, a
prospectus that discloses information previously omitted from a
prospectus filed as part of an effective registration statement
in reliance upon Rule 430A promulgated under the Securities Act),
as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the
Securities covered by such Registration Statement, and all other
amendments and supplements to the prospectus, including
post-effective amendments, and all material incorporated by
reference or deemed to be incorporated by reference in such
prospectus.
"Records" shall have the meaning set forth in Section 7(m).
"Registrable Securities" means the New Notes until such time
as (i) such New Notes have been exchanged for the Exchange
Securities pursuant to an Exchange Offer in accordance with
Section 3 hereof, (ii) a Registration Statement covering such New
Notes prepared pursuant to Section 4 hereof has been declared
effective and such New Notes have been disposed of pursuant to
such effective Registration Statement, (iii) such New Notes are
transferred to the public pursuant to Rule 144, or (iv) such New
Notes are saleable pursuant to Rule 144(k) and new certificates
therefor not bearing a legend restricting transfer shall have
been delivered in exchange therefor by the Corporation and
subsequent disposition of such securities shall not require
registration or qualification under the Securities Act or any
similar state law then in force.
"Registration Expenses" shall have the meaning set forth in
Section 8.
"Registration Statement" means any registration statement of
the Corporation that covers any of the Securities pursuant to the
provisions of this Agreement, including the Prospectus,
amendments and supplements to such registration statements,
including post-effective amendments, all exhibits, and all
material incorporated by reference or deemed to be incorporated
by reference in such registration statement.
"Rule 144" shall have the meaning set forth in Section
10(a).
"Rule 144A" shall have the meaning set forth in Section
10(b).
"Securities" means the Registrable Securities and the
Exchange Securities.
"Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations of the Commission
promulgated thereunder.
"Selling Holders" means, in connection with any Registration
Statement, the Holders whose Registrable Securities are covered
by such Registration Statement.
"Shelf Notice" shall have the meaning set forth in Section
3(b).
"Shelf Registration" shall have the meaning set forth in
Section 4(a).
"Suspension Notice" shall have the meaning set forth in
Section 7.
"Suspension Period" shall have the meaning set forth in
Section 7.
"Target Completion Date" means 270 days after the Issue
Date.
"Target Effective Period" shall have the meaning set forth
in Section 4(b).
"Trustee" means Bank One, Texas, N.A., as Trustee under the
Indenture, or any successor Trustee under the Indenture.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended, or any successor statute, as in effect from time to
time.
2. Registration Obligation. The Corporation agrees that
on or before the Target Completion Date, it will, in its sole
discretion subject only to Section 3(b), either (i) Consummate
the Exchange Offer in accordance with Section 3 or (ii) cause the
Shelf Registration to be declared and kept effective in
accordance with Section 4.
3. Exchange Offer.
(a) Subject to Section 2, the Corporation shall (i)
use its reasonable best efforts to cause to be filed with the
Commission as soon as practicable after the date hereof a
Registration Statement with respect to the Exchange Offer, (ii)
use its reasonable best efforts to cause such Registration
Statement to be declared effective as soon as practicable after
such filing date and (iii) use its reasonable best efforts to
cause the Consummation of the Exchange Offer as soon as
practicable thereafter but in no event later than the Target
Completion Date. The Exchange Offer will be registered under the
Securities Act on the appropriate form selected by the
Corporation and duly registered or qualified under applicable
state securities or blue sky laws and will comply with all
applicable tender offer rules and regulations under the Exchange
Act and state securities or blue sky laws. Each of the Holders
represents (and any Person who shall hereafter become a Holder
shall be deemed to have represented) that it its not an
"affiliate" of the Corporation (as such term is defined in Rule
405 of the Securities Act) and that any Exchange Securities
received by it will be acquired in the ordinary course of its
business and that, at the time of the Consummation of the
Exchange Offer, such Holder will have no arrangement or
understanding with any Person or the intent to enter into any
such arrangement or understanding to participate in the
distribution of the Exchange Securities. The Corporation further
agrees to supplement or amend the Registration Statement filed in
respect of the Exchange Offer to the extent required by
applicable law, rules or regulations or by the instructions
applicable to the registration form used by the Corporation for
such Registration Statement. The Corporation shall keep the
Registration Statement relating to the Exchange Offer
continuously effective for a period of not less than the minimum
period required under applicable federal and state securities
laws; provided, however, that (i) the Exchange Offer shall remain
open and (ii) the Registration Statement relating to the Exchange
Offer shall remain continuously effective for a period of at
least 20 consecutive Business Days. Upon Consummation of an
Exchange Offer in accordance with this Section 3, the provisions
of this Agreement shall continue to apply; provided that the
Corporation (i) shall have no further obligations under Sections
5 and 6 and may omit to comply with such of the procedures set
forth in Section 7 as are required to be complied with only in
connection with a Shelf Registration or as may be appropriate
under the circumstances without adversely affecting the interests
of the Holders of Registrable Securities under this Agreement,
taken as a whole, and (ii) shall have no further obligation to
register Registrable Securities pursuant to Sections 2, 3 or 4 of
this Agreement.
(b) If, prior to the Consummation of the Exchange
Offer,
(i) the Corporation reasonably determines that
because of a change in law or applicable interpretations
thereof by the Commission's staff, the Corporation is not
permitted to effect an Exchange Offer as contemplated by
this Section 3 or (ii) the Holders of at least 25% of the
aggregate principal amount of Registrable Securities, who
were Holders on or prior to the date the Corporation caused
to be filed with the Commission a Registration Statement
with respect to the Exchange Offer, determine based upon a
written opinion of counsel to such effect (and deliver
notice thereof (including a copy of such opinion of counsel)
to the Corporation) that because of a change in law or
applicable interpretations thereof by the Commission's
staff, that (A) the Exchange Securities would not, upon
receipt, be tradeable by each such Holder without
restriction under the Securities Act and the Exchange Act
and without material restrictions under applicable blue sky
or state securities laws, (B) the Commission is unlikely to
permit the Consummation of the Exchange Offer, (C) the
participation of such Holders in the Exchange Offer is not
legally permitted or (D) a court decision or administrative
action may be reasonably expected to have a material adverse
effect on such Holders in the event such Holders
participated in the Exchange Offer,
then the Corporation shall promptly deliver to the Holders and
the Trustee notice thereof (the "Shelf Notice") and shall file a
Shelf Registration pursuant to Section 4. The parties hereto
agree that, following the delivery of a Shelf Notice, the
Corporation shall have no further obligation under this Section
3.
4. Shelf Registration.
(a) If the Corporation elects pursuant to Section 2 to
not effect the Exchange Offer or if the Corporation is required
to deliver a Shelf Notice as contemplated by Section 3(b), then
the Corporation shall use its reasonable best efforts to prepare
and file with the Commission as soon as practicable a "shelf"
Registration Statement on the appropriate form selected by the
Corporation for an offering to be made on a continuous basis
pursuant to Rule 415 under the Securities Act covering all of the
Registrable Securities (the "Shelf Registration"). The
Corporation will use its reasonable best efforts to have the
Shelf Registration declared effective as soon as practicable, but
in any event not later than the Target Completion Date. The
Corporation further agrees, if necessary, to supplement or amend
the Shelf Registration, as required by the registration form used
by the Corporation for such Shelf Registration or by the
instructions applicable to such registration form or by the
Securities Act, and the Corporation agrees to furnish to Holders'
Counsel and any managing underwriter (if any) copies of any such
supplement or amendment prior to its being used and/or filed with
the Commission. Holders of Registrable Securities shall be
permitted to withdraw all or any part of the Registrable
Securities from a Shelf Registration at any time prior to the
effective date of such Shelf Registration.
(b) Once a Shelf Registration is effective pursuant to
Section 4(a), the Corporation will use its reasonable best
efforts to keep such Shelf Registration continuously effective
for a period (the "Target Effective Period") of at least 36
months following the date on which such Shelf Registration is
declared effective (or such shorter period which will terminate
when all Registrable Securities covered by such Shelf
Registration have been sold or withdrawn, but not prior to the
expiration of the applicable period referred to in Section 4(3)
of the Securities Act and Rule 174 thereunder, if applicable);
provided, however, that with respect to such Shelf Registration
(x) the Corporation may suspend use of such Shelf Registration at
any time if the continued effectiveness thereof would require the
Corporation to disclose a material financing, acquisition or
other corporate transaction, which disclosure the Board of
Directors of the Corporation shall have determined in good faith
is not in the best interests of the Corporation and its
stockholders and (y) the Corporation may suspend use of such
Shelf Registration during any period if each of the Corporation
and the Majority Holders consents in writing to such suspension
for such period.
(c) If the Majority Holders so elect, the offering of
Registrable Securities pursuant to a Shelf Registration shall be
in the form of an underwritten offering. If they so elect, the
Majority Holders shall select one or more nationally recognized
firms of investment bankers to act as the book-running managing
underwriter or underwriters in connection with such offering;
provided that such selection shall be subject to the consent of
the Corporation, which consent shall not be unreasonably
withheld.
(d) The Corporation may require each Holder of
Registrable Securities to which such Shelf Registration relates
to furnish to the Corporation such information concerning the
Holder and the distribution of the Registrable Securities held by
such Holder as the Corporation may from time to time reasonably
request. Prior to the filing of the initial Shelf Registration
and, if requested by the Corporation, the filing of any
amendments or supplements thereto, each Holder of Registrable
Securities to which such Shelf Registration relates or its
counsel or agent or representative shall deliver to the
Corporation written confirmation that neither the Shelf
Registration, nor the Prospectus contained therein, contains any
untrue statement of a material fact relating to such Holder nor
omits to state a material fact with respect to such Holder
necessary to make the statements therein not misleading;
provided, however, that a Holder's failure to deliver such
written confirmation shall in no way relieve such Holder from
liability under Section 9.
5. Liquidated Damages.
(a) If on the Target Completion Date neither the
Exchange Offer has been Consummated in accordance with Section 3
nor the Shelf Registration has been declared and remains
effective in accordance with Section 4, the Corporation shall pay
liquidated damages to each Holder in an amount equal to $.10 per
$1,000 outstanding principal amount of the Registrable Securities
per week beginning on the Target Completion Date. The weekly
liquidated damages associated with a late Consummation of the
Exchange Offer or a late declaration of effectiveness of the
Shelf Registration, as the case may be, shall increase by an
amount equal to an additional $.05 per $1,000 outstanding
principal amount of the Registrable Securities 90 days after the
Target Completion Date, and shall thereafter further increase by
additional increments equal to $.05 per $1,000 outstanding
principal amount at the end of each subsequent 90 day period for
so long as the Exchange Offer is not Consummated or the Shelf
Registration is not declared effective, as the case may be.
If during the Target Effective Period, a stop order is
imposed or if for any other reason the effectiveness of the Shelf
Registration is suspended and such suspension is not a Permitted
Suspension Period (defined in the second to last paragraph of
Section 7 below), then the Corporation shall pay liquidated
damages to each Holder of Registrable Securities then covered by
such Shelf Registration and remaining unsold in an amount equal
to $.10 per $1,000 outstanding principal amount of Registrable
Securities per week. Such liquidated damages shall commence
accruing (i) on the day such stop order is imposed or such
effectiveness is otherwise suspended if the suspension is not
deemed a Permitted Suspension Period, or (ii) if such suspension
is initially deemed a Permitted Suspension Period but then
exceeds the 15-day period referred to the second to last
paragraph of Section 7, on the 16th day of such suspension. The
weekly liquidated damages associated with any such stop order or
suspension of effectiveness shall increase by an amount equal to
an additional $.05 per $1,000 outstanding principal amount of the
Registrable Securities then covered by such Shelf Registration
and remaining unsold 90 days after the date the liquidated
damages began to accrue for said stop order or suspension, and
shall thereafter further increase by additional increments equal
to $.05 per $1,000 principal amount of Registrable Securities
then covered by such Shelf Registration and remaining unsold at
the end of each subsequent 90 day period for so long as such stop
order continues or the effectiveness remains suspended.
(b) The Corporation shall pay the liquidated damages
due with respect to the Registrable Securities by depositing with
the Trustee or paying agent under the Indenture, in trust, for
the benefit of the Holders of Registrable Securities which are
entitled to such liquidated damages in accordance with this
Section 5, on or prior to any Interest Payment Date (as defined
in the Indenture), in federal or other immediately available
funds, sums sufficient to pay the liquidated damages then due.
Liquidated damages not previously paid, if any, shall be payable
on each such Interest Payment Date, and the liquidated damages
shall be paid to the record holders of such Registrable
Securities (as of the record date with respect to each applicable
Interest Payment Date) entitled to receive such liquidated
damages. The Corporation shall notify the Trustee immediately
after the occurrence of each and every event which, pursuant to
this Section 5, results in any liquidated damages being payable
with respect to the Registrable Securities.
(c) The liquidated damages to be paid to Holders
pursuant to this Section 5 shall be deemed to commence accruing
on the day in which the event triggering such liquidated damages
occurs and shall cease to accrue, (i) with respect to the
liquidated damages for failure to Consummate the Exchange Offer
or to have the Shelf Registration declared effective, on or prior
to the Target Completion Date, on the day after the Exchange
Offer is Consummated or the Shelf Registration is declared
effective, as the case may be, or (ii) with respect to the
liquidated damages for the suspension of effectiveness, on the
day after the reinstatement of effectiveness of the Shelf
Registration; provided, however, that in no event shall
liquidated damages accrue or be payable in respect of any
Permitted Suspension Periods.
(d) The parties hereto agree that (i) the liquidated
damages provided for in this Section 5 constitute a reasonable
estimate of the damages that will be suffered by each Holder
entitled to such liquidated damages by reason of the failure (A)
to Consummate the Exchange Offer or to have the Shelf
Registration Statement declared effective, on or prior to the
Target Completion Date, as the case may be, or (B) to keep the
Shelf Registration effective in accordance with this Agreement
and (ii) such liquidated damages shall be the sole remedy of each
such Holder with respect to the matters set forth in this Section
5.
6. Trust Indenture Act Qualification; Rating.
At or prior to the effectiveness of the Exchange Offer or
the Shelf Registration:
(a) Qualification under Trust Indenture Act. The
Corporation will qualify the Indenture relating to the
Registrable Securities and the Exchange Securities under the
Trust Indenture Act, and shall use its reasonable best efforts to
effect such registration to permit the sale of such Registrable
Securities or the exchange of the Exchange Securities in
accordance with the intended method or methods of disposition
thereof; and
(b) Rating. If notified by a nationally recognized
rating agency that the Registrable Securities are being rated, or
in the event of an Exchange Offer the Exchange Securities are
being rated, the Corporation agrees to cooperate in providing
customary written information and making a presentation to such
agency.
7. Registration Procedures.
In connection with the registration obligations of the
Corporation pursuant to the terms and conditions of this
Agreement, the Corporation shall:
(a) prior to filing a Registration Statement or
Prospectus or any amendments or supplements thereto, excluding
for purposes of this Section 7(a) documents incorporated by
reference after the initial filing of the Registration Statement,
furnish to Holders' Counsel and the underwriters, if any, draft
copies of all such documents proposed to be filed at least ten
(10) Business Days prior thereto, which documents will be subject
to the review of such Holders' Counsel and the underwriters, if
any. The Corporation will not, unless required by law, file any
Registration Statement or amendment thereto or any Prospectus or
any supplement thereto to which Majority Holders shall reasonably
object pursuant to notice given to the Corporation prior to the
filing of such amendment or supplement (the "Objection Notice")
and no later than five (5) Business Days after receipt of the
documents to which the Objection Notice relates. The Objection
Notice shall set forth the objections and the specific areas in
the draft documents where such objections arise. The Corporation
will make the corrections reasonably requested by such Majority
Holders in the Objection Notice prior to filing any document to
which the Objection Notice relates;
(b) promptly prepare and file with the Commission such
amendments and post-effective amendments to the Registration
Statement as may be necessary to keep such Registration Statement
effective for the period required pursuant to Section 3 or
Section 4, as the case may be; cause the Prospectus to be
supplemented by any required Prospectus supplement, and, as so
supplemented, to be filed pursuant to Rule 424 under the
Securities Act; and comply with the provisions of the Securities
Act applicable to it with respect to the disposition of all
Registrable Securities covered by such Registration Statement
during the applicable period in accordance with the intended
methods of disposition by the Selling Holders set forth in such
Registration Statement or supplement to the Prospectus;
(c) promptly furnish to any Selling Holder and the
underwriters, if any, without charge, such number of conformed
copies of such Registration Statement and any post-effective
amendment thereto and such number of copies of the Prospectus
(including each preliminary Prospectus) and any amendments or
supplements thereto, and any documents incorporated by reference
therein, as such Selling Holder or underwriter may reasonably
request in order to facilitate the disposition of the Registrable
Securities being sold by such Selling Holder (it being understood
that the Corporation consents to the use of the Prospectus and
any amendment or supplement thereto by each Selling Holder and
the underwriters, if any, in connection with the offering and
sale of the Registrable Securities covered by the Prospectus or
any amendment or supplement thereto);
(d) on or prior to the date on which the Registration
Statement is declared effective, use its reasonable best efforts
to register or qualify such Registrable Securities under such
other securities or "blue sky" laws of such jurisdictions as any
Selling Holder reasonably requests and do any and all other acts
and things which may be reasonably necessary to enable such
Selling Holder to consummate the disposition in such
jurisdictions of such Registrable Securities owned by such
Selling Holder; use its reasonable best efforts to keep each such
registration or qualification (or exemption therefrom) effective
during the period which such Registration Statement is required
to be kept effective; and use its reasonable best efforts to do
any and all other acts or things reasonably necessary or
advisable to enable the disposition in such jurisdictions of the
Registrable Securities covered by the applicable Registration
Statement; provided that the Corporation will not be required to
qualify generally to do business in any jurisdiction where it is
not then so qualified or to take any action which would subject
it to general service of process or to taxation in any such
jurisdiction where it is not then so subject;
(e) use its reasonable best efforts to cause the
Registrable Securities covered by such Registration Statement to
be registered with or approved by such other governmental
agencies or authorities as may be reasonably necessary by virtue
of the business and operations of the Corporation to enable the
Selling Holders to consummate the disposition of such Registrable
Securities in accordance with the plan of distribution set forth
in the applicable Registration Statement;
(f) promptly notify each Selling Holder (or Holders'
Counsel) and any underwriter and (if requested by any such
Person) confirm such notice in writing, (i) of any request by the
Commission or any state securities authority for amendments and
supplements to a Registration Statement or Prospectus or for
additional information after the Registration Statement has
become effective, (ii) when a Prospectus or any Prospectus
supplement or post-effective amendment has been filed and, with
respect to a Registration Statement or any post-effective
amendment, when the same has become effective, (iii) of the
issuance by the Commission of any stop order suspending the
effectiveness of a Registration Statement or the initiation or
threatening of any proceedings for that purpose, (iv) of the
issuance by any state securities commission or other regulatory
authority of any order suspending the qualification or exemption
from qualification of any of the Registrable Securities under
state securities or "blue sky" laws or the initiation of any
proceedings for that purpose, (v) at the closing of any sale of
Registrable Securities, if, between the effective date of the
Registration Statement and such closing, the representations and
warranties of the Corporation contained in any underwriting
agreement, securities sales agreement or other similar agreement,
if any, relating to the offering cease to be true and correct in
all material respects, and (vi) of the happening of any event
which makes any statement made in a Registration Statement or
related Prospectus untrue or which requires the making of any
changes in such Registration Statement, Prospectus or documents
so that they will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading; and, as promptly as practicable thereafter, prepare
and file with the Commission and furnish a supplement or
amendment to such Prospectus so that, as thereafter deliverable
to the Holders of such Registrable Securities, such Prospectus
will not contain any untrue statement of a 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;
(g) make generally available to the Holders an
earnings statement satisfying the provisions of Section 11(a) of
the Securities Act and Rule 158 under the Securities Act no later
than fifteen (15) months after the effective date of a
Registration Statement;
(h) promptly use its reasonable best efforts to
prevent the issuance of any order suspending the effectiveness of
a Registration Statement, and if one is issued, use its
reasonable best efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement at the
earliest possible moment;
(i) if requested by the managing underwriter or
underwriters, if any, Holders' Counsel, or any Selling Holder,
promptly prepare and file an amendment to a Registration
Statement to include therein (and incorporate in the related
Prospectus supplement or post-effective amendment) such
information as the managing underwriter or underwriters or
Holders' Counsel reasonably requests to be included therein
relating to the Selling Holders, the underwriters, the "Plan of
Distribution" of the Registrable Securities, the principal amount
of Registrable Securities being sold by such Selling Holder to
such underwriter or underwriters, the purchase price being paid
therefor by such underwriter or underwriters and with respect to
any other terms of the underwritten offering of the Registrable
Securities to be sold in such offering, and promptly make all
required filings of such Prospectus supplement or post-effective
amendment;
(j) as promptly as practicable after filing with the
Commission of any document which is incorporated by reference
into a Registration Statement (in the form in which it was
incorporated), deliver a copy of each such document to each of
the Selling Holders and to Holders' Counsel upon their respective
request;
(k) cooperate with the Selling Holders and the
managing underwriter or underwriters, if any, to facilitate the
timely preparation and delivery of certificates (which shall not
bear any restrictive legends unless required under applicable law
and shall be in a form eligible for deposit with Depository Trust
Corporation) representing securities sold under such Registration
Statement, and enable such securities to be in such denominations
authorized by the terms of the Indenture and registered in such
names as the managing underwriter or underwriters, if any, or
such Selling Holders may request and keep available and make
available to the Corporation's transfer agent prior to the
effectiveness of such Registration Statement a supply of such
certificates;
(l) if applicable, enter into such customary
agreements (including an underwriting agreement in customary
form) and take such other actions as the Majority Holders or the
underwriters retained by Selling Holders participating in an
underwritten public offering, if any, may reasonably request in
order to expedite or facilitate the disposition of such
Registrable Securities;
(m) in connection with the preparation and filing of a
Registration Statement, provide any Selling Holder, any
underwriter participating in any disposition pursuant to such
Registration Statement, and any attorney, accountant or other
agent or representative retained by any such Selling Holder or
underwriter (collectively, the "Inspectors") with reasonable
access to its books and records (collectively, the "Records") and
such opportunities to discuss the business of the Corporation
with the Corporation's officers and the independent public
accountants who have certified its financial statements as shall
be necessary in the reasonable opinion of Holders' Counsel to
conduct a reasonable investigation within the meaning of the
Securities Act; provided that, unless the disclosure of such
Records is necessary to avoid or correct a misstatement or
omission in the Registration Statement or the release of such
Records is ordered pursuant to a subpoena or other order from a
court of competent jurisdiction, the Corporation shall not be
required to provide any information under this paragraph (m) if
the Corporation believes, after consultation with counsel for the
Corporation and counsel for the Holders, that to do so would
cause the Corporation to forfeit an attorney-client privilege
that was applicable to such information or if either (i) the
Corporation has requested and been granted from the Commission
confidential treatment of such information contained in any
filing with the Commission or documents provided supplementally
or otherwise or (ii) the Corporation reasonably determines in
good faith that such Records are confidential and so notifies the
Inspectors in writing unless, prior to furnishing any such
information with respect to (i) or (ii), such Holder of
Registrable Securities requesting such information agrees to
enter into a confidentiality agreement in customary form and
subject to customary exceptions; and provided further that each
Holder of Registrable Securities agrees that it will, upon
learning that disclosure of such Records is sought in a court of
competent jurisdiction, give notice to the Corporation and allow
the Corporation at its expense, to undertake appropriate action
and to prevent disclosure of the Records deemed confidential;
(n) use reasonable efforts to obtain a cold comfort
letter from the Corporation's independent public accountants in
customary form and covering such matters of the type customarily
covered by cold comfort letters as the Majority Holders may
request;
(o) provide a CUSIP number of all Registrable
Securities or Exchange Securities, as the case may be, covered by
a Registration Statement not later than the effective date of
such Registration Statement;
(p) cooperate with each Selling Holder and each
underwriter participating in the disposition of such Registrable
Securities and their respective counsel in connection with any
filings required to be made with the National Association of
Securities Dealers ("NASD");
(q) during the period when the Prospectus is required
to be delivered under the Securities Act, file in a timely manner
all documents required to be filed with the Commission pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act; and
(r) appoint a transfer agent and registrar for all
Registrable Securities or Exchange Securities, as the case may
be, covered by a Registration Statement not later than the
effective date.
Each Selling Holder, upon receipt of any notice from the
Corporation of the happening of any event of the kind described
in subsection (f) (i), (iii), (iv) or (vi) of this Section 7 or
the proviso to subsection (b) of Section 4 (a "Suspension
Notice"), shall forthwith discontinue disposition of the
Registrable Securities pursuant to the Registration Statement
relating thereto until such Selling Holder receives copies of
the supplemented or amended Prospectus contemplated hereby or
until it is advised in writing (the "Advice") by the Corporation
that the use of the Prospectus may be resumed, and has received
copies of any additional or supplemental filings which are
incorporated by reference in the Prospectus, and, if so directed
by the Corporation, such Selling Holder will, or will request the
managing underwriter or underwriters, if any, to, deliver to the
Corporation (at the Corporation's expense) all copies, other than
permanent file copies then in such Selling Holder's possession,
of the Prospectus covering such Registrable Securities current at
the time of receipt of such notice. The period from the date on
which any Holder receives a Suspension Notice to the date on
which any Holder receives either the Advice or copies of the
supplemented or amended Prospectus contemplated hereby relating
to such notice shall hereinafter be referred to as a "Suspension
Period". A Suspension Period shall constitute a "Permitted
Suspension Period" for purposes of Section 5 hereof if the
following conditions are met: (i) during the twelve consecutive
month period immediately prior to the commencement of such
Suspension Period, the Corporation has not already given three
(3) or more Suspension Notices; (ii) such Suspension Period does
not exceed fifteen (15) days; and (iii) such Suspension Period
has commenced not earlier than forty-five (45) days after the
termination of the most recent prior Suspension Period. In the
event that the Corporation shall give any Suspension Notice, (i)
the Corporation shall use its best efforts and take such actions
as are reasonably necessary to render Advice and end the
Suspension Period as promptly as practicable and (ii) the time
periods for which a Registration Statement is required to be kept
effective pursuant to Sections 3 or 4, as the case may be, hereof
shall be extended by the number of days during the period from
and including the date of the giving of such Suspension Notice to
and including the date when each Selling Holder shall have
received (A) the copies of the supplemented or amended Prospectus
contemplated by Section 7(f) or (B) the Advice.
If any Registration Statement refers to any Selling Holder
by name or otherwise as the holder of any securities of the
Corporation, then such Selling Holder shall have the right to
require (i) the insertion therein of language, in form and
substance reasonably satisfactory to such Selling Holder, to the
effect that the holding by such Selling Holder of such securities
is not to be construed as a recommendation by such Selling Holder
of the investment quality of the Corporation's securities covered
thereby and that such holding does not imply that such Selling
Holder will assist in meeting any future financial requirements
of the Corporation, or (ii) in the event that such reference to
such Selling Holder by name or otherwise is not required by the
Securities Act or any similar federal or state "blue sky" statute
and the rules and regulations thereunder then in force, the
deletion of the reference to such Selling Holder.
8. Registration Expenses.
Any and all expenses incident to the Corporation's
performance of or compliance with the registration requirements
this Agreement, including without limitation, all Commission and
securities exchange or NASD registration and filing fees, fees
and expenses of compliance with securities or blue sky laws
(including reasonable fees and disbursements of counsel in
connection with blue sky qualifications of the Registrable
Securities), rating agency fees, printing expenses, messenger and
delivery expenses, internal expenses (including, without
limitation, all salaries and expenses of the Corporation's
officers and employees performing legal or accounting duties),
and reasonable fees and disbursements of counsel for the
Corporation and its independent certified public accountants
(including the expenses of any special audit or "cold comfort"
letters required by or incident to such performance), Securities
Act liability insurance (if the Corporation elects to obtain such
insurance), the fees and expenses of any special experts retained
by the Corporation in connection with such registration,
reasonable fees and expenses of other Persons retained by the
Corporation, and the reasonable fees and expenses of Holders'
Counsel and any reasonable out-of-pocket expenses of the Holders
incurred in connection with each registration hereunder (but not
including any underwriting fees, discounts or commissions and
transfer taxes, if any, attributable to the sale of Registrable
Securities, all of which shall be paid by the Holders) (all such
expenses being herein called "Registration Expenses"), will be
borne by the Corporation whether or not the Exchange Offer or the
Shelf Registration, as the case may be, becomes effective.
9. Indemnification; Contribution.
(a) Indemnification by the Corporation. The
Corporation agrees to indemnify and hold harmless, to the full
extent permitted by law, each Selling Holder, its partners,
trustees, stockholders, officers, directors, employees, agents,
investment advisers and each Person who controls such Selling
Holder (within the meaning of the Securities Act), from and
against all losses, claims, damages, liabilities and expenses
(including reasonable attorneys' fees and costs of investigation)
arising out of or based upon any untrue or alleged untrue
statement of material fact contained in any Registration
Statement under which the Registrable Securities of such Selling
Holder were registered, any amendment or supplement thereto, any
Prospectus or preliminary Prospectus or 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 the same arise out of or are based
upon any such untrue statement or alleged untrue statement or
omission or alleged omission based upon information with respect
to such Selling Holder furnished in writing to the Corporation by
or on behalf of such Selling Holder expressly for use therein or
arise out of or are based upon such Selling Holder's failure to
deliver or cause to be delivered to the Corporation all copies of
the Prospectus requested by the Corporation to be delivered
pursuant to Section 7 above; provided that, in the event that the
untrue statement or omission of material fact contained in the
preliminary Prospectus shall have been corrected and current
copies of such corrected Prospectus shall have been furnished to
a Selling Holder, such indemnity with respect to the preliminary
Prospectus shall not inure to the benefit of such Selling Holder
or any other Indemnified Person if it was the responsibility of
such Selling Holder to provide the Person asserting such loss,
claim, damage or liability with a current copy of the corrected
Prospectus and such Person did not receive a current copy of such
corrected Prospectus; and provided further that, in the event
that the Prospectus shall have been amended or supplemented and
copies thereof, as so amended or supplemented, shall have been
furnished to a Selling Holder prior to the confirmation of any
sales of Registrable Securities, such indemnity with respect to
the Prospectus shall not inure to the benefit of such Selling
Holder if the Person asserting such loss, claim, damage or
liability and who purchased the Registrable Securities from such
Selling Holder did not, at or prior to the confirmation of the
sale of the Registrable Securities to such Person, receive a copy
of the Prospectus as so amended or supplemented and the untrue
statement or omission of a material fact contained in the
Prospectus was corrected in the Prospectus as so amended or
supplemented. In connection with an underwritten offering, the
Corporation will indemnify the underwriters thereof, their
officers and directors and each Person who controls such
underwriters (within the meaning of the Securities Act) to the
same extent as provided above with respect to the indemnification
of the Selling Holders of Registrable Securities except with
respect to information provided by the underwriter specifically
for inclusion therein. Such indemnity shall remain in full force
and effect, regardless of any investigation made by or on behalf
of a Selling Holder or any such director, officer, employee,
agent or participating or controlling Person and shall survive
the transfer of such securities by such prospective seller.
(b) Indemnification by Selling Holders of Registrable
Securities. In connection with any Registration Statement in
which a Selling Holder is participating, each such Selling Holder
will furnish to the Corporation in writing such information with
respect to the name and address of such Selling Holder and such
other information as may be reasonably required for use in
connection with any such Registration Statement or Prospectus and
agrees to indemnify (and the inclusion of any such Selling
Holder's Registrable Securities in a Registration Statement filed
pursuant to Section 4 shall constitute an agreement by such
Selling Holder (which will be confirmed at the reasonable request
of the Corporation) to indemnify), to the full extent permitted
by law, the Corporation, its directors, officers, employees and
agents and each Person who controls the Corporation (within the
meaning of the Securities Act) against any losses, claims,
damages, liabilities and expenses (including reasonable
attorney's fees and costs of investigation) arising out of or
based upon any untrue or alleged untrue statement of a material
fact or any omission or alleged omission of a material fact
required to be stated in the Registration Statement, Prospectus
or preliminary Prospectus or any amendment thereof or supplement
thereto or necessary to make the statements therein not
misleading, to the extent, but only to the extent, that such
untrue or alleged untrue statement is contained in or such
omission or alleged omission relates to any information with
respect to such Selling Holder so furnished in writing or the
accuracy of which was confirmed in writing by such Selling Holder
specifically for inclusion therein; provided, however, that such
Selling Holder shall not be liable in any such case to the extent
that prior to the filing of any such Registration Statement or
Prospectus or amendment thereof or supplement thereto, such
Selling Holder has furnished in writing to the Corporation
information expressly for use in such Registration Statement or
Prospectus or any amendment thereof or supplement thereto which
corrected or made not misleading information previously furnished
to the Corporation. In no event shall the liability of any
Selling Holder of Registrable Securities hereunder be greater in
amount than the dollar amount of the proceeds received by such
Selling Holder upon the sale of the Registrable Securities giving
rise to such indemnification obligation. Such indemnity shall
remain in full force and effect, regardless of any investigation
made by or on behalf of the Corporation or any such director,
officer, employee, agent or participating or controlling Person
and shall survive the transfer of such securities by such
prospective seller.
(c) Conduct of Indemnification Proceedings. Any
Person entitled to indemnification hereunder agrees to give
prompt written notice to the indemnifying party after the receipt
by such Person of any notice of the commencement of any action,
suit, proceeding or investigation or threat thereof for which
such Person will claim indemnification or contribution pursuant
to this Agreement, provided that the failure of any indemnified
party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under this Section 9 except
to the extent that the indemnifying party is materially
prejudiced by such failure to give notice. In case any such
action is brought against an indemnified party, the indemnifying
party shall be entitled to participate in and assume the defense
thereof with counsel reasonably satisfactory to such indemnified
party and after notice from the indemnifying party to such
indemnified party of its election to assume the defense thereof,
the indemnifying party shall not be liable to such indemnified
party for any legal fees or other expenses subsequently incurred
by the latter in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that if, in
such indemnified party's reasonable judgment, a conflict of
interest between such indemnified party and indemnifying party
may exist with respect to such claim, such indemnified party
shall be entitled to separate counsel or firm of counsel at the
expense of the indemnifying party; and provided, further, that,
unless in the reasonable judgment of any indemnified party there
exists a conflict of interest between it and any other
indemnified party, all indemnified parties in respect of such
claim shall be entitled to only one counsel or firm of counsel
for all such indemnified parties. Whether or not such defense is
assumed by the indemnifying party, the indemnifying party will
not be subject to any liability for any settlement made without
its consent (but such consent will not be unreasonably withheld).
No indemnifying party will consent to entry of any judgment or
enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all
liability in respect of such claim or litigation. If the
indemnifying party elects not to assume the defense of a claim,
it will not be obligated to pay the fees and expenses of more
than one counsel with respect to such claim, unless in the
reasonable judgment of any indemnified party a conflict of
interest may exist between such indemnified party and any other
of such indemnified parties with respect to such claim, in which
event the indemnifying party shall be obligated to pay the
reasonable fees and expenses of one additional counsel or firm of
counsel for each such indemnified party for whom a conflict
exists. For the purposes of this Section 9(c), the term
"conflict of interest" shall mean that there are one or more
legal defenses available to the indemnified party that are
different from or additional to those available to the
indemnifying party or such other indemnified parties, as
applicable, which different or additional defenses make joint
representation inappropriate.
(d) Contribution. If the indemnification from the
indemnifying party provided for in this Section 9 is unavailable
to an indemnified party hereunder in respect of any losses,
claims, damages, liabilities or expenses referred to herein
(other than for the reasons expressly specified in this Section
9), then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable
by such indemnified party as a result of such losses, claims,
damages, liabilities or expenses in such proportion as is
appropriate to reflect the relative fault of the indemnifying
party and indemnified parties in connection with the actions
which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations.
The relative fault of such indemnifying party and indemnified
parties shall be determined by reference to, among other things,
whether any action in question, including with respect to any
untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact, has been
made by, or relates to information supplied by, such indemnifying
party or indemnified parties, and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such action. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses
referred to above shall be deemed to include, subject to the
limitations set forth in Section 9(c), any reasonable legal or
other fees or expenses reasonably incurred by such party in
connection with any investigation or proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 9(d) were
determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable
considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 9(d),
no underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the
Registrable Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any
damages which such underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission
or alleged omission, and no Selling Holder shall be required to
contribute any amount in excess of the amount by which the total
price at which the Registrable Securities of such Selling Holder
were offered to the public (less any underwriting discounts and
commissions) exceeds the amount of any damages which such Selling
Holder has otherwise been required to pay by reason of such
untrue statement or 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. Each
Holder's obligation to contribute pursuant to this Section 9(d)
is several and not joint.
If indemnification is available under this Section 9, the
indemnifying parties shall indemnify each indemnified party to
the full extent provided in Sections 9(a) and (b) without regard
to the relative fault of said indemnifying party or indemnified
party or any other equitable consideration provided for in this
Section 9(d).
10. Rule 144 and Rule 144A.
(a) Rule 144. The Corporation covenants that it will
file the reports required to be filed by it under the Securities
Act and the Exchange Act (or, if the Corporation is not required
to file such reports, it will, upon the request of any Holder,
make publicly available other information with respect to the
Corporation within the meaning of paragraph (c)(2) of Rule 144
under the Securities Act), and it will take such further action
as any Holder may request, all to the extent required from time
to time to enable such Holder to sell Registrable Securities
without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144 under the
Securities Act, as such rule may be amended from time to time, or
any similar rule or regulation hereafter adopted by the
Commission ("Rule 144"). Upon the reasonable request of any
Holder, the Corporation will deliver to such Holder a written
statement as to whether it has complied with such requirements;
provided, however, that nothing in this Section 10(a) shall
require the Corporation to file reports under the Securities Act
or the Exchange Act, to register any of its securities under the
Exchange Act, or to make publicly available any information
concerning the Corporation at any time when it is not required by
law or by any agreement by which it is bound to do any of the
foregoing.
(b) Rule 144A. Upon the request of any Holder, the
Corporation shall deliver to such Holder within twenty (20) days
following receipt by the Corporation of such request, the
information required by Rule (d)(4) of Rule 144A under the
Securities Act, as such rule may be amended from time to time or
any similar rule or regulation hereafter adopted by the
Commission ("Rule 144A"), and will take such further action as
any Holder may request, all to the extent required from time to
time to enable such Holder to sell Registrable Securities without
registration under the Securities Act within the limitations or
the exemptions provided by Rule 144A. All information shall be
"reasonably current" as defined in Rule 144A.
11. Transfer or Assignment of Registration Rights.
The rights to cause the Corporation to register Registrable
Securities granted pursuant to this Agreement may be transferred
or assigned by any Holder to a transferee or assignee of any of
its Registrable Securities, and any such transfer or assignment
shall automatically be deemed to include an assumption by such
transferee or assignee of all of the obligations of such Holder
hereunder.
12. Miscellaneous.
(a) Other Registration Rights. The Corporation may
grant registration rights that would permit any Person the right
to piggy-back or may itself exercise its right to piggy-back, on
any Shelf Registration, provided that if the managing underwriter
or underwriters, if any, of such offering delivers an opinion to
the Selling Holders that the total amount of securities which
they and the holders of such new piggy-back rights intend to
include in any Shelf Registration is so large as to materially
and adversely affect the success of such offering (including the
price at which such securities can be sold), then only the
amount, number or kind of securities to be offered for the
account of holders of such new piggy-back rights will be reduced
to the extent necessary to reduce the total amount of securities
to be included in such offering to the amount, number or kind
recommended by the managing underwriter prior to any reduction in
the amount of Registrable Securities to be included; and provided
further that if such offering is not underwritten, then such
piggy-back rights shall only be exercised with the consent of the
Majority Holders.
(b) Amendments and Waivers. Except as otherwise
provided herein, the provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given unless the
Corporation has obtained the written consent of Holders of at
least a majority of the aggregate principal amount of the
Registrable Securities then outstanding which are affected by
such amendment, modification, waiver or departure.
(c) Notices. All notices and other communications
provided for or permitted hereunder shall be in writing and shall
be deemed to have been duly given if delivered personally or sent
by telex or telecopier, registered or certified mail (return
receipt requested), postage prepaid or courier to the parties at
their respective addresses set forth on the signature pages
hereto (or at such other address for any party as shall be
specified by like notice, provided that notices of a change of
address shall be effective only upon receipt thereof). Notices
sent by mail shall be effective two (2) days after mailing;
notices sent by telex shall be effective when answered back,
notices sent by telecopier shall be effective when receipt is
acknowledged, and notices sent by courier guaranteeing next day
delivery shall be effective on the next business day after timely
delivery to the courier:
(i) if to a Holder, at the most current
address given by such Holder to the Corporation in writing;
(ii) if to the Corporation, at its address
set forth in the Exchange Agreement with copies as set forth
in the Exchange Agreement.
(d) Successors and Assigns. This Agreement shall
inure to the benefit of the and be binding upon the respective
successors and assigns of the Corporation and each of the
Holders.
(e) Counterparts. This Agreement may be executed in
any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute
one and the same agreement.
(f) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
(g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
(h) Severability. In the event that any one or more
of the provisions contained herein, or the application thereof in
any circumstances, is held invalid, illegal or unenforceable in
any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and
of the remaining provisions contained herein shall not be in any
way impaired thereby, it being intended that all of the rights
and privileges of the Holders shall be enforceable to the fullest
extent permitted by law.
(i) Entire Agreement. This Agreement, together with
the Exchange Agreements and the Indenture, is intended by the
parties as a final expression of their agreement and is intended
to be the complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject
matter contained herein and therein. There are no restrictions,
promises, warranties or undertakings, other than those set forth
or referred to herein and therein. This Agreement, the Indenture
and the Exchange Agreements (including the exhibits to each)
supersede all prior agreements and understandings between the
parties with respect to such subject matter.
(j) Attorneys' Fees. In any action or proceeding
brought to enforce any provision of this Agreement or where any
provision hereof is validly asserted as a defense, the successful
party shall, to the extent permitted by applicable law, be
entitled to recover reasonable attorneys' fees in addition to any
other available remedy.
(k) Remedies. Except with respect to matters set
forth in Section 5, in the event of a breach or a threatened
breach by any party to this Agreement of its obligations under
this Agreement, any party injured or to be injured by such breach
will be entitled to specific performance of its rights under this
Agreement or to injunctive relief, in addition to being entitled
to exercise all rights provided in this Agreement and granted by
law. Except with respect to matters set forth in Section 5, the
parties agree that the provisions of this Agreement shall be
specifically enforceable, it being agreed by the parties that the
remedy at law, including monetary damages, for objection in any
action for specific performance or injunctive relief that a
remedy at law would be adequate is waived.
(l) Limitation of Liability. The Corporation
acknowledges and agrees that the obligations of each Holder
hereunder are limited in the manner and to the extent set forth
on such Holder's signature page hereto.
(m) No Third Party Beneficiary. The terms and
provisions of this agreement are intended solely for the benefit
of each party, their respective successors and permitted assigns
and it is not the intention of the parties to confer third-party
beneficiary rights upon any other Person other than any Person
entitled to indemnity under Section 9.
[Remainder of page intentionally left blank]
REGISTRATION RIGHTS AGREEMENT CORPORATION SIGNATURE PAGE
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
CONTINENTAL AIRLINES, INC.
By:______________________________
Name:
Title:
Address:
2929 Allen Parkway, Suite 2010
Houston, Texas 77019
Attn: CFO and General Counsel
Fax: (713) 523-2831
With a copy to:
Cleary, Gottlieb, Steen
& Hamilton
One Liberty Plaza
New York, New York 10006
Attn: Stephen H. Shalen
Fax: (212) 225-3999
REGISTRATION RIGHTS AGREEMENT HOLDER SIGNATURE PAGE
BELMONT CAPITAL PARTNERS II, L.P.
By: Fidelity Capital Partners II
Corp., as general partner
By:_____________________________
Name:
Title:
Notice Information:
Belmont Capital Partners II, L.P.
Fidelity Investments
82 Devonshire Street - F7E
Boston, Massachusetts 02109
Attention: Portfolio Manager
Telephone No.: (617) 563-7882
Telecopy No.: (617) 476-3316
with copies to:
Robert M. Gervis, Esq.
Associate General Counsel
Fidelity Investments
82 Devonshire Street - F7D
Boston, Massachusetts 02109
Telephone No.: (617) 563-6048
Telecopy No.: (617) 476-7774
Limitation of Liability: Belmont Capital Partners II, L.P.
("Holder") is a Delaware limited partnership. Each of the
parties hereto acknowledges and agrees that this Agreement is not
executed on behalf of any of the partners of Holder as
individuals and the obligations of this Agreement are not binding
upon any of the partners, officers, employees or beneficiaries of
Holder individually but are binding only upon the assets and
property of Holder. The Corporation agrees that no beneficiary,
partner, employee or officer of Holder may be held personally
liable or responsible for any obligations of Holder arising out
of this Agreement. With respect to obligations of Holder arising
out of this Agreement, the Corporation shall look for payment or
satisfaction of any claim solely to the assets and property of
Holder.
REGISTRATION RIGHTS AGREEMENT HOLDER SIGNATURE PAGE
SPARTAN HIGH INCOME FUND
By:____________________________
Name:
Title:
Notice Information:
Spartan High Income Fund
Fidelity Investments
82 Devonshire Street - F7E
Boston, Massachusetts 02109
Attention: Portfolio Manager
Telephone No.: (617) 563-7882
Telecopy No.: (617) 476-3316
with copies to:
Robert M. Gervis, Esq.
Associate General Counsel
Fidelity Investments
82 Devonshire Street - F7D
Boston, Massachusetts 02109
Telephone No.: (617) 563-6048
Telecopy No.: (617) 476-7774
Limitation of Liability: Spartan High Income Fund ("Holder") is a
Massachusetts business trust. A copy of the Holder's Declaration
of Trust (under the name Fidelity Fixed-Income Trust) is on file
with the Secretary of State of the Commonwealth of Massachusetts.
Each of the parties hereto acknowledges and agrees that this
Agreement is not executed on behalf of any of the trustees of
Holder as individuals and the obligations of this Agreement are
not binding upon any of the trustees, officers, employees or
beneficiaries of Holder individually but are binding only upon
the assets and property of Holder. The Corporation agrees that
no beneficiary, trustees, employee or officer of Holder may be
held personally liable or responsible for any obligations of
Holder arising out of this Agreement. With respect to
obligations of Holder arising out of this Agreement, the
Corporation shall look for payment or satisfaction of any claim
solely to the assets and property of Holder. The Corporation is
expressly put on notice that the rights and obligations of each
series of shares of the Holder under its Declaration of Trust are
separate and distinct from those of any and all series.
REGISTRATION RIGHTS AGREEMENT HOLDER SIGNATURE PAGE
FIDELITY GALILEO FUND, L.P.
By: Fidelity Galileo Corp.,
general partner
By:____________________________
Name:
Title:
Notice Information:
Fidelity Galileo Fund, L.P.
Fidelity Investments
82 Devonshire Street - F7E
Boston, Massachusetts 02109
Attention: Portfolio Manager
Telephone No.: (617) 563-7882
Telecopy No.: (617) 476-3316
with copies to:
Robert M. Gervis, Esq.
Associate General Counsel
Fidelity Investments
82 Devonshire Street - F7D
Boston, Massachusetts 02109
Telephone No.: (617) 563-6048
Telecopy No.: (617) 476-7774
Limitation of Liability: Fidelity Galileo Fund, L.P. ("Holder")
is a Delaware limited partnership. Each of the parties hereto
acknowledges and agrees that this Agreement is not executed on
behalf of any of the partners of Holder as individuals and the
obligations of this Agreement are not binding upon any of the
partners, officers, employees or beneficiaries of Holder
individually but are binding only upon the assets and property of
Holder. The Corporation agrees that no beneficiary, partner,
employee or officer of Holder may be held personally liable or
responsible for any obligations of Holder arising out of this
Agreement. With respect to obligations of Holder arising out of
this Agreement, the Corporation shall look for payment or
satisfaction of any claim solely to the assets and property of
Holder.
REGISTRATION RIGHTS AGREEMENT HOLDER SIGNATURE PAGE
GOLDMAN, SACHS & CO.
By:__________________________
Name:
Title:
Notice Information:
Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
Attn: Jonathan Kolatch
Telephone No.: (800) 882-3211
Telecopy No.: (212) 902-9492
Exhibit 12
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
CONTINENTAL AIRLINES, INC.
COMPUTATION OF RATIO OF EARNINGS
TO FIXED CHARGES
(IN MILLIONS, EXCEPT FOR COVERAGE RATIO)
March 31,
---------------
1996 1995 1995 1994
---- ---- ---- ----
Earnings:
Earnings (Loss)
Before Income Taxes,
Minority Interest
and Extraordinary
Items $95 $(28) $310 $(651)
Plus:
Interest Expense (a) 47 53 213 241
Capitalized Interest (1) (1) (6) (17)
Amortization of
Capitalized Interest 1 1 2 1
Portion of Rental
Expense
Representative of
Interest Expense (a) 89 89 360 337
----- ----- ----- -----
Adjusted Earnings (Loss) 231 114 879 (89)
----- ----- ----- -----
Fixed Charges:
Interest Expense (a) 47 53 213 241
Portion of Rental
Expense
Representative of
Interest Expense (a) 89 89 360 337
----- ----- ----- -----
Total Fixed Charges 136 142 573 578
----- ----- ----- -----
Coverage Adequacy
(Deficiency) $95 $(28) $306 $(667)
===== ===== ===== =====
Coverage Ratio 1.70 n/a 1.53 n/a
4/28/93 1/1/93
through through
12/31/93 4/27/93 1992 1991
-------- ------- ---- ----
Earnings:
Earnings (Loss)
Before Income Taxes,
Minority Interest
and Extraordinary
Items $(52) $(977) $(125) $(304)
Plus:
Interest Expense (a) 165 52 153 174
Capitalized Interest (8) (2) (6) (12)
Amortization of
Capitalized Interest 0 0 0 0
Portion of Rental
Expense
Representative of
Interest Expense (a) 216 117 324 333
----- ----- ----- -----
Adjusted Earnings (Loss) 321 (810) 346 191
----- ----- ----- -----
Fixed Charges:
Interest Expense (a) 165 52 153 174
Portion of Rental
Expense
Representative of
Interest Expense (a) 216 117 324 333
----- ----- ----- -----
Total Fixed Charges 381 169 477 507
----- ----- ----- -----
Coverage Adequacy
(Deficiency) $(60) $(979) $(131) $(316)
===== ===== ===== =====
Coverage Ratio n/a n/a n/a n/a
(a) Includes Fair Market Value Adjustments resulting from the
Company's emergence from bankruptcy.
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Experts" in the Registration Statement (Form S-4) and related
Prospectus of Continental Airlines, Inc. for the registration of
$65,046,762 of its 10.22% Series B Senior Unsecured Sinking Fund
Notes due July 1, 2000 and to the incorporation by reference
therein of our reports dated February 12, 1996, with respect to
the consolidated financial statements and schedules of
Continental Airlines, Inc. included in its Annual Report (Form
10-K) for the year ended December 31, 1995, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
Houston, Texas
May 9, 1996
Exhibit 24.1(a)
POWER OF ATTORNEY
The undersigned officer and director of Continental
Airlines, Inc., a Delaware corporation (the "Company"), does
hereby constitute and appoint Lawrence W. Kellner, Jeffery A.
Smisek and Scott R. Peterson, or any of them, as the
undersigned's true and lawful attorneys in-fact and agents to do
any and all things in the undersigned's name and behalf in the
undersigned's capacity as an officer or director of the Company,
and to execute any and all instruments for the undersigned and in
the undersigned's name and capacity as an officer or director
that such person or persons may deem necessary or advisable to
enable the Company to comply with the Securities Act of 1933, as
amended, and any rules, regulations or requirements of the
Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Company's 10.22% Series B Unsecured Sinking Fund Notes due July
1, 2000 (the "Registration Statement"), including specifically,
but not limited to, power and authority to sign for the
undersigned in the capacity as an officer or director of the
Company the Registration Statement, and any and all amendments
thereto, including post-effective amendments, and the undersigned
does hereby ratify and confirm all that such person or persons
shall do or cause to be done by virtue hereof.
/s/Gordon M. Bethune
-----------------------------
Printed Name: Gordon M. Bethune
-----------------------------
Dated and effective as of April 30, 1996
Exhibit 24.1(b)
POWER OF ATTORNEY
The undersigned officer and director of Continental
Airlines, Inc., a Delaware corporation (the "Company"), does
hereby constitute and appoint Jeffery A. Smisek and Scott R.
Peterson, or either of them, as the undersigned's true and lawful
attorneys in-fact and agents to do any and all things in the
undersigned's name and behalf in the undersigned's capacity as an
officer or director of the Company, and to execute any and all
instruments for the undersigned and in the undersigned's name and
capacity as an officer or director that such person or persons
may deem necessary or advisable to enable the Company to comply
with the Securities Act of 1933, as amended, and any rules,
regulations or requirements of the Securities and Exchange
Commission in connection with that certain Registration Statement
on Form S-4 relating to the Company's 10.22% Series B Unsecured
Sinking Fund Notes due July 1, 2000 (the "Registration
Statement"), including specifically, but not limited to, power
and authority to sign for the undersigned in the capacity as an
officer or director of the Company the Registration Statement,
and any and all amendments thereto, including post-effective
amendments, and the undersigned does hereby ratify and confirm
all that such person or persons shall do or cause to be done by
virtue hereof.
/s/Lawrence W. Kellner
------------------------------
Printed Name: Lawrence W. Kellner
------------------------------
Dated and effective as of April 30, 1996
Exhibit 24.1(c)
POWER OF ATTORNEY
The undersigned officer and director of Continental
Airlines, Inc., a Delaware corporation (the "Company"), does
hereby constitute and appoint Jeffery A. Smisek and Scott R.
Peterson, or either of them, as the undersigned's true and lawful
attorneys in-fact and agents to do any and all things in the
undersigned's name and behalf in the undersigned's capacity as an
officer or director of the Company, and to execute any and all
instruments for the undersigned and in the undersigned's name and
capacity as an officer or director that such person or persons
may deem necessary or advisable to enable the Company to comply
with the Securities Act of 1933, as amended, and any rules,
regulations or requirements of the Securities and Exchange
Commission in connection with that certain Registration Statement
on Form S-4 relating to the Company's 10.22% Series B Unsecured
Sinking Fund Notes due July 1, 2000 (the "Registration
Statement"), including specifically, but not limited to, power
and authority to sign for the undersigned in the capacity as an
officer or director of the Company the Registration Statement,
and any and all amendments thereto, including post-effective
amendments, and the undersigned does hereby ratify and confirm
all that such person or persons shall do or cause to be done by
virtue hereof.
/s/Michael P. Bonds
---------------------------
Printed Name: Michael P. Bonds
---------------------------
Dated and effective as of April 30, 1996
Exhibit 24.1(d)
POWER OF ATTORNEY
The undersigned officer and director of Continental
Airlines, Inc., a Delaware corporation (the "Company"), does
hereby constitute and appoint Lawrence W. Kellner, Jeffery A.
Smisek and Scott R. Peterson, or any of them, as the
undersigned's true and lawful attorneys in-fact and agents to do
any and all things in the undersigned's name and behalf in the
undersigned's capacity as an officer or director of the Company,
and to execute any and all instruments for the undersigned and in
the undersigned's name and capacity as an officer or director
that such person or persons may deem necessary or advisable to
enable the Company to comply with the Securities Act of 1933, as
amended, and any rules, regulations or requirements of the
Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Company's 10.22% Series B Unsecured Sinking Fund Notes due July
1, 2000 (the "Registration Statement"), including specifically,
but not limited to, power and authority to sign for the
undersigned in the capacity as an officer or director of the
Company the Registration Statement, and any and all amendments
thereto, including post-effective amendments, and the undersigned
does hereby ratify and confirm all that such person or persons
shall do or cause to be done by virtue hereof.
/s/Thomas J. Barrack, Jr.
----------------------------
Printed Name: Thomas J. Barrack, Jr.
----------------------------
Dated and effective as of April 30, 1996
Exhibit 24.1(e)
POWER OF ATTORNEY
The undersigned officer and director of Continental
Airlines, Inc., a Delaware corporation (the "Company"), does
hereby constitute and appoint Lawrence W. Kellner, Jeffery A.
Smisek and Scott R. Peterson, or any of them, as the
undersigned's true and lawful attorneys in-fact and agents to do
any and all things in the undersigned's name and behalf in the
undersigned's capacity as an officer or director of the Company,
and to execute any and all instruments for the undersigned and in
the undersigned's name and capacity as an officer or director
that such person or persons may deem necessary or advisable to
enable the Company to comply with the Securities Act of 1933, as
amended, and any rules, regulations or requirements of the
Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Company's 10.22% Series B Unsecured Sinking Fund Notes due July
1, 2000 (the "Registration Statement"), including specifically,
but not limited to, power and authority to sign for the
undersigned in the capacity as an officer or director of the
Company the Registration Statement, and any and all amendments
thereto, including post-effective amendments, and the undersigned
does hereby ratify and confirm all that such person or persons
shall do or cause to be done by virtue hereof.
/s/David Bonderman
--------------------------
Printed Name: David Bonderman
--------------------------
Dated and effective as of April 30, 1996
Exhibit 24.1(f)
POWER OF ATTORNEY
The undersigned officer and director of Continental
Airlines, Inc., a Delaware corporation (the "Company"), does
hereby constitute and appoint Lawrence W. Kellner, Jeffery A.
Smisek and Scott R. Peterson, or any of them, as the
undersigned's true and lawful attorneys in-fact and agents to do
any and all things in the undersigned's name and behalf in the
undersigned's capacity as an officer or director of the Company,
and to execute any and all instruments for the undersigned and in
the undersigned's name and capacity as an officer or director
that such person or persons may deem necessary or advisable to
enable the Company to comply with the Securities Act of 1933, as
amended, and any rules, regulations or requirements of the
Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Company's 10.22% Series B Unsecured Sinking Fund Notes due July
1, 2000 (the "Registration Statement"), including specifically,
but not limited to, power and authority to sign for the
undersigned in the capacity as an officer or director of the
Company the Registration Statement, and any and all amendments
thereto, including post-effective amendments, and the undersigned
does hereby ratify and confirm all that such person or persons
shall do or cause to be done by virtue hereof.
/s/Gregory D. Brenneman
-------------------------------
Printed Name: Gregory D. Brenneman
-------------------------------
Dated and effective as of April 30, 1996
Exhibit 24.1(g)
POWER OF ATTORNEY
The undersigned officer and director of Continental
Airlines, Inc., a Delaware corporation (the "Company"), does
hereby constitute and appoint Lawrence W. Kellner, Jeffery A.
Smisek and Scott R. Peterson, or any of them, as the
undersigned's true and lawful attorneys in-fact and agents to do
any and all things in the undersigned's name and behalf in the
undersigned's capacity as an officer or director of the Company,
and to execute any and all instruments for the undersigned and in
the undersigned's name and capacity as an officer or director
that such person or persons may deem necessary or advisable to
enable the Company to comply with the Securities Act of 1933, as
amended, and any rules, regulations or requirements of the
Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Company's 10.22% Series B Unsecured Sinking Fund Notes due July
1, 2000 (the "Registration Statement"), including specifically,
but not limited to, power and authority to sign for the
undersigned in the capacity as an officer or director of the
Company the Registration Statement, and any and all amendments
thereto, including post-effective amendments, and the undersigned
does hereby ratify and confirm all that such person or persons
shall do or cause to be done by virtue hereof.
/s/Joel H. Cowan
------------------------
Printed Name: Joel H. Cowan
------------------------
Dated and effective as of April 30, 1996
Exhibit 24.1(h)
POWER OF ATTORNEY
The undersigned officer and director of Continental
Airlines, Inc., a Delaware corporation (the "Company"), does
hereby constitute and appoint Lawrence W. Kellner, Jeffery A.
Smisek and Scott R. Peterson, or any of them, as the
undersigned's true and lawful attorneys in-fact and agents to do
any and all things in the undersigned's name and behalf in the
undersigned's capacity as an officer or director of the Company,
and to execute any and all instruments for the undersigned and in
the undersigned's name and capacity as an officer or director
that such person or persons may deem necessary or advisable to
enable the Company to comply with the Securities Act of 1933, as
amended, and any rules, regulations or requirements of the
Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Company's 10.22% Series B Unsecured Sinking Fund Notes due July
1, 2000 (the "Registration Statement"), including specifically,
but not limited to, power and authority to sign for the
undersigned in the capacity as an officer or director of the
Company the Registration Statement, and any and all amendments
thereto, including post-effective amendments, and the undersigned
does hereby ratify and confirm all that such person or persons
shall do or cause to be done by virtue hereof.
/s/Patrick Foley
------------------------
Printed Name: Patrick Foley
------------------------
Dated and effective as of April 30, 1996
Exhibit 24.1(i)
POWER OF ATTORNEY
The undersigned officer and director of Continental
Airlines, Inc., a Delaware corporation (the "Company"), does
hereby constitute and appoint Lawrence W. Kellner, Jeffery A.
Smisek and Scott R. Peterson, or any of them, as the
undersigned's true and lawful attorneys in-fact and agents to do
any and all things in the undersigned's name and behalf in the
undersigned's capacity as an officer or director of the Company,
and to execute any and all instruments for the undersigned and in
the undersigned's name and capacity as an officer or director
that such person or persons may deem necessary or advisable to
enable the Company to comply with the Securities Act of 1933, as
amended, and any rules, regulations or requirements of the
Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Company's 10.22% Series B Unsecured Sinking Fund Notes due July
1, 2000 (the "Registration Statement"), including specifically,
but not limited to, power and authority to sign for the
undersigned in the capacity as an officer or director of the
Company the Registration Statement, and any and all amendments
thereto, including post-effective amendments, and the undersigned
does hereby ratify and confirm all that such person or persons
shall do or cause to be done by virtue hereof.
/s/ Rowland C. Frazee, C.C.
------------------------------
Printed Name: Rowland C. Frazee, C.C.
------------------------------
Dated and effective as of April 30, 1996
Exhibit 24.1(j)
POWER OF ATTORNEY
The undersigned officer and director of Continental
Airlines, Inc., a Delaware corporation (the "Company"), does
hereby constitute and appoint Lawrence W. Kellner, Jeffery A.
Smisek and Scott R. Peterson, or any of them, as the
undersigned's true and lawful attorneys in-fact and agents to do
any and all things in the undersigned's name and behalf in the
undersigned's capacity as an officer or director of the Company,
and to execute any and all instruments for the undersigned and in
the undersigned's name and capacity as an officer or director
that such person or persons may deem necessary or advisable to
enable the Company to comply with the Securities Act of 1933, as
amended, and any rules, regulations or requirements of the
Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Company's 10.22% Series B Unsecured Sinking Fund Notes due July
1, 2000 (the "Registration Statement"), including specifically,
but not limited to, power and authority to sign for the
undersigned in the capacity as an officer or director of the
Company the Registration Statement, and any and all amendments
thereto, including post-effective amendments, and the undersigned
does hereby ratify and confirm all that such person or persons
shall do or cause to be done by virtue hereof.
/s/Hollis L. Harris
---------------------------
Printed Name: Hollis L. Harris
---------------------------
Dated and effective as of April 30, 1996
Exhibit 24.1(k)
POWER OF ATTORNEY
The undersigned officer and director of Continental
Airlines, Inc., a Delaware corporation (the "Company"), does
hereby constitute and appoint Lawrence W. Kellner, Jeffery A.
Smisek and Scott R. Peterson, or any of them, as the
undersigned's true and lawful attorneys in-fact and agents to do
any and all things in the undersigned's name and behalf in the
undersigned's capacity as an officer or director of the Company,
and to execute any and all instruments for the undersigned and in
the undersigned's name and capacity as an officer or director
that such person or persons may deem necessary or advisable to
enable the Company to comply with the Securities Act of 1933, as
amended, and any rules, regulations or requirements of the
Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Company's 10.22% Series B Unsecured Sinking Fund Notes due July
1, 2000 (the "Registration Statement"), including specifically,
but not limited to, power and authority to sign for the
undersigned in the capacity as an officer or director of the
Company the Registration Statement, and any and all amendments
thereto, including post-effective amendments, and the undersigned
does hereby ratify and confirm all that such person or persons
shall do or cause to be done by virtue hereof.
/s/Dean C. Kehler
-------------------------
Printed Name: Dean C. Kehler
-------------------------
Dated and effective as of April 30,
1996
Exhibit 24.1(l)
OWER OF ATTORNEY
The undersigned officer and director of Continental
Airlines, Inc., a Delaware corporation (the "Company"), does
hereby constitute and appoint Lawrence W. Kellner, Jeffery A.
Smisek and Scott R. Peterson, or any of them, as the
undersigned's true and lawful attorneys in-fact and agents to do
any and all things in the undersigned's name and behalf in the
undersigned's capacity as an officer or director of the Company,
and to execute any and all instruments for the undersigned and in
the undersigned's name and capacity as an officer or director
that such person or persons may deem necessary or advisable to
enable the Company to comply with the Securities Act of 1933, as
amended, and any rules, regulations or requirements of the
Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Company's 10.22% Series B Unsecured Sinking Fund Notes due July
1, 2000 (the "Registration Statement"), including specifically,
but not limited to, power and authority to sign for the
undersigned in the capacity as an officer or director of the
Company the Registration Statement, and any and all amendments
thereto, including post-effective amendments, and the undersigned
does hereby ratify and confirm all that such person or persons
shall do or cause to be done by virtue hereof.
/s/Robert L. Lumpkins
-----------------------------
Printed Name: Robert L. Lumpkins
-----------------------------
Dated and effective as of April 30, 1996
Exhibit 24.1(m)
POWER OF ATTORNEY
The undersigned officer and director of Continental
Airlines, Inc., a Delaware corporation (the "Company"), does
hereby constitute and appoint Lawrence W. Kellner, Jeffery A.
Smisek and Scott R. Peterson, or any of them, as the
undersigned's true and lawful attorneys in-fact and agents to do
any and all things in the undersigned's name and behalf in the
undersigned's capacity as an officer or director of the Company,
and to execute any and all instruments for the undersigned and in
the undersigned's name and capacity as an officer or director
that such person or persons may deem necessary or advisable to
enable the Company to comply with the Securities Act of 1933, as
amended, and any rules, regulations or requirements of the
Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Company's 10.22% Series B Unsecured Sinking Fund Notes due July
1, 2000 (the "Registration Statement"), including specifically,
but not limited to, power and authority to sign for the
undersigned in the capacity as an officer or director of the
Company the Registration Statement, and any and all amendments
thereto, including post-effective amendments, and the undersigned
does hereby ratify and confirm all that such person or persons
shall do or cause to be done by virtue hereof.
/s/Douglas H. McCorkindale
----------------------------------
Printed Name: Douglas H. McCorkindale
----------------------------------
Dated and effective as of April 30,
1996
Exhibit 24.1(n)
POWER OF ATTORNEY
The undersigned officer and director of Continental
Airlines, Inc., a Delaware corporation (the "Company"), does
hereby constitute and appoint Lawrence W. Kellner, Jeffery A.
Smisek and Scott R. Peterson, or any of them, as the
undersigned's true and lawful attorneys in-fact and agents to do
any and all things in the undersigned's name and behalf in the
undersigned's capacity as an officer or director of the Company,
and to execute any and all instruments for the undersigned and in
the undersigned's name and capacity as an officer or director
that such person or persons may deem necessary or advisable to
enable the Company to comply with the Securities Act of 1933, as
amended, and any rules, regulations or requirements of the
Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Company's 10.22% Series B Unsecured Sinking Fund Notes due July
1, 2000 (the "Registration Statement"), including specifically,
but not limited to, power and authority to sign for the
undersigned in the capacity as an officer or director of the
Company the Registration Statement, and any and all amendments
thereto, including post-effective amendments, and the undersigned
does hereby ratify and confirm all that such person or persons
shall do or cause to be done by virtue hereof.
/s/David E. Mitchell, O.C.
-------------------------------
Printed Name: David E. Mitchell, O.C.
-------------------------------
Dated and effective as of April 30, 1996
Exhibit 24.1(o)
POWER OF ATTORNEY
The undersigned officer and director of Continental
Airlines, Inc., a Delaware corporation (the "Company"), does
hereby constitute and appoint Lawrence W. Kellner, Jeffery A.
Smisek and Scott R. Peterson, or any of them, as the
undersigned's true and lawful attorneys in-fact and agents to do
any and all things in the undersigned's name and behalf in the
undersigned's capacity as an officer or director of the Company,
and to execute any and all instruments for the undersigned and in
the undersigned's name and capacity as an officer or director
that such person or persons may deem necessary or advisable to
enable the Company to comply with the Securities Act of 1933, as
amended, and any rules, regulations or requirements of the
Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Company's 10.22% Series B Unsecured Sinking Fund Notes due July
1, 2000 (the "Registration Statement"), including specifically,
but not limited to, power and authority to sign for the
undersigned in the capacity as an officer or director of the
Company the Registration Statement, and any and all amendments
thereto, including post-effective amendments, and the undersigned
does hereby ratify and confirm all that such person or persons
shall do or cause to be done by virtue hereof.
/s/Richard W. Pogue
---------------------------
Printed Name: Richard W. Pogue
---------------------------
Dated and effective as of April 30, 1996
Exhibit 24.1(p)
POWER OF ATTORNEY
The undersigned officer and director of Continental
Airlines, Inc., a Delaware corporation (the "Company"), does
hereby constitute and appoint Lawrence W. Kellner, Jeffery A.
Smisek and Scott R. Peterson, or any of them, as the
undersigned's true and lawful attorneys in-fact and agents to do
any and all things in the undersigned's name and behalf in the
undersigned's capacity as an officer or director of the Company,
and to execute any and all instruments for the undersigned and in
the undersigned's name and capacity as an officer or director
that such person or persons may deem necessary or advisable to
enable the Company to comply with the Securities Act of 1933, as
amended, and any rules, regulations or requirements of the
Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Company's 10.22% Series B Unsecured Sinking Fund Notes due July
1, 2000 (the "Registration Statement"), including specifically,
but not limited to, power and authority to sign for the
undersigned in the capacity as an officer or director of the
Company the Registration Statement, and any and all amendments
thereto, including post-effective amendments, and the undersigned
does hereby ratify and confirm all that such person or persons
shall do or cause to be done by virtue hereof.
/s/Williams S. Price III
--------------------------------
Printed Name: Williams S. Price III
--------------------------------
Dated and effective as of April 30, 1996
Exhibit 24.1(q)
POWER OF ATTORNEY
The undersigned officer and director of Continental
Airlines, Inc., a Delaware corporation (the "Company"), does
hereby constitute and appoint Lawrence W. Kellner, Jeffery A.
Smisek and Scott R. Peterson, or any of them, as the
undersigned's true and lawful attorneys in-fact and agents to do
any and all things in the undersigned's name and behalf in the
undersigned's capacity as an officer or director of the Company,
and to execute any and all instruments for the undersigned and in
the undersigned's name and capacity as an officer or director
that such person or persons may deem necessary or advisable to
enable the Company to comply with the Securities Act of 1933, as
amended, and any rules, regulations or requirements of the
Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Company's 10.22% Series B Unsecured Sinking Fund Notes due July
1, 2000 (the "Registration Statement"), including specifically,
but not limited to, power and authority to sign for the
undersigned in the capacity as an officer or director of the
Company the Registration Statement, and any and all amendments
thereto, including post-effective amendments, and the undersigned
does hereby ratify and confirm all that such person or persons
shall do or cause to be done by virtue hereof.
/s/Donald L. Sturm
--------------------------
Printed Name: Donald L. Sturm
--------------------------
Dated and effective as of April 30, 1996
Exhibit 24.1(r)
POWER OF ATTORNEY
The undersigned officer and director of Continental
Airlines, Inc., a Delaware corporation (the "Company"), does
hereby constitute and appoint Lawrence W. Kellner, Jeffery A.
Smisek and Scott R. Peterson, or any of them, as the
undersigned's true and lawful attorneys in-fact and agents to do
any and all things in the undersigned's name and behalf in the
undersigned's capacity as an officer or director of the Company,
and to execute any and all instruments for the undersigned and in
the undersigned's name and capacity as an officer or director
that such person or persons may deem necessary or advisable to
enable the Company to comply with the Securities Act of 1933, as
amended, and any rules, regulations or requirements of the
Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Company's 10.22% Series B Unsecured Sinking Fund Notes due July
1, 2000 (the "Registration Statement"), including specifically,
but not limited to, power and authority to sign for the
undersigned in the capacity as an officer or director of the
Company the Registration Statement, and any and all amendments
thereto, including post-effective amendments, and the undersigned
does hereby ratify and confirm all that such person or persons
shall do or cause to be done by virtue hereof.
/s/Claude I. Taylor, O.C.
----------------------------------
Printed Name: Claude I. Taylor, O.C.
----------------------------------
Dated and effective as of April 30, 1996
Exhibit 24.1(s)
POWER OF ATTORNEY
The undersigned officer and director of Continental
Airlines, Inc., a Delaware corporation (the "Company"), does
hereby constitute and appoint Lawrence W. Kellner, Jeffery A.
Smisek and Scott R. Peterson, or any of them, as the
undersigned's true and lawful attorneys in-fact and agents to do
any and all things in the undersigned's name and behalf in the
undersigned's capacity as an officer or director of the Company,
and to execute any and all instruments for the undersigned and in
the undersigned's name and capacity as an officer or director
that such person or persons may deem necessary or advisable to
enable the Company to comply with the Securities Act of 1933, as
amended, and any rules, regulations or requirements of the
Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Company's 10.22% Series B Unsecured Sinking Fund Notes due July
1, 2000 (the "Registration Statement"), including specifically,
but not limited to, power and authority to sign for the
undersigned in the capacity as an officer or director of the
Company the Registration Statement, and any and all amendments
thereto, including post-effective amendments, and the undersigned
does hereby ratify and confirm all that such person or persons
shall do or cause to be done by virtue hereof.
/s/Karen Hastie Williams
--------------------------------
Printed Name: Karen Hastie Williams
--------------------------------
Dated and effective as of April 30, 1996
Exhibit 24.1(t)
POWER OF ATTORNEY
The undersigned officer and director of Continental
Airlines, Inc., a Delaware corporation (the "Company"), does
hereby constitute and appoint Lawrence W. Kellner, Jeffery A.
Smisek and Scott R. Peterson, or any of them, as the
undersigned's true and lawful attorneys in-fact and agents to do
any and all things in the undersigned's name and behalf in the
undersigned's capacity as an officer or director of the Company,
and to execute any and all instruments for the undersigned and in
the undersigned's name and capacity as an officer or director
that such person or persons may deem necessary or advisable to
enable the Company to comply with the Securities Act of 1933, as
amended, and any rules, regulations or requirements of the
Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Company's 10.22% Series B Unsecured Sinking Fund Notes due July
1, 2000 (the "Registration Statement"), including specifically,
but not limited to, power and authority to sign for the
undersigned in the capacity as an officer or director of the
Company the Registration Statement, and any and all amendments
thereto, including post-effective amendments, and the undersigned
does hereby ratify and confirm all that such person or persons
shall do or cause to be done by virtue hereof.
/s/Charles A. Yamarone
------------------------------
Printed Name: Charles A. Yamarone
------------------------------
Dated and effective as of April 30, 1996
Exhibit 99.1
LETTER OF TRANSMITTAL
Continental Airlines, Inc.
Offer to Exchange its
10.22% Series B Senior Unsecured Sinking Fund Notes
due July 1, 2000 which have been registered under
the Securities Act of 1933, as amended,
for any and all of its Outstanding
10.22% Series A Senior Unsecured Sinking Fund Notes
due July 1, 2000
Pursuant to the Prospectus, dated May [ ], 1996.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.
NEW YORK CITY TIME, ON [________], 1996,
UNLESS EXTENDED (THE "EXPIRATION DATE"). TENDERS
MAY BE WITHDRAWN PRIOR TO 5:00 P.M.,
NEW YORK CITY TIME, ON [________], 1996.
By Mail, Hand or Facsimile
Overnight Delivery: Transmission Number:
Continental Airlines, Inc. (713) 523-2831
2929 Allen Parkway, Suite 2010
Houston, Texas 77019 Confirm by Telephone:
Attention: Jeffery A. Smisek (713) 834-2948
For Information Call:
Jeffery A. Smisek
(713) 834-2948
Delivery of this instrument to an address other than as set
forth above, or transmission of instructions via facsimile other
than as set forth above, will not constitute a valid delivery.
The undersigned acknowledges receipt of the Prospectus,
dated May [ ], 1996 (the "Prospectus"), of Continental Airlines,
Inc., a Delaware corporation (the "Company"), and this Letter of
Transmittal (this "Letter"), which together constitute the
Company's offer (the "Exchange Offer") to exchange an aggregate
principal amount of up to $65,046,762.06 of 10.22% Series B
Senior Unsecured Sinking Fund Notes due July 1, 2000 (the "Series
B Notes") of the Company for an equal aggregate principal amount
of the Company's outstanding 10.22% Series A Senior Unsecured
Sinking Fund Notes due July 1, 2000 (the "Series A Notes").
For each Series A Note accepted for exchange, the holder of
such Series A Note will receive a Series B Note having a
principal amount at maturity equal to that of the surrendered
Series A Note. The Series B Notes will bear interest at the rate
of 10.22% accruing from the last date on which interest was paid
on the Series A Notes surrendered in exchange therefor. Interest
on the Series B Notes is payable on January 1, April 1, July 1
and October 1 of each year. In the event that neither the
Exchange Offer is consummated nor a shelf registration statement
is declared effective prior to June 25, 1996 (the "Target
Completion Date"), Continental shall pay liquidated damages
("Liquidated Damages") to the holders of the Series A Notes in an
amount equal to $.10 per $1,000 outstanding principal amount of
the Series A Notes per week beginning on the Target Completion
Date. Such weekly Liquidated Damages shall increase by an amount
equal to an additional $.05 per $1,000 outstanding principal
amount of the Series A Notes 90 days after the Target Completion
Date, and shall thereafter further increase by additional
increments equal to $.05 per $1,000 outstanding principal amount
at the end of each subsequent 90 day period for so long as the
Exchange Offer is not consummated or the shelf registration
statement is not declared effective, as the case may be. The
Company reserves the right, at any time or from time to time, to
extend the Exchange Offer at its discretion, in which event the
term "Expiration Date" shall mean the latest time and date to
which the Exchange Offer is extended. The Company shall notify
the holders of the Series A Notes of any extension by means of a
press release or other public announcement prior to 9:00 A.M.,
New York City time, on the next business day after the previously
scheduled Expiration Date.
This Letter is to be completed by a holder of Series A Notes
if Series A Notes are to be forwarded herewith pursuant to the
procedure set forth in "The Exchange Offer" section of the
Prospectus. Holders of Series A Notes whose certificates are not
immediately available, or who are unable to deliver their
certificates and all other documents required by this Letter to
the Exchange Agent on or prior to the Expiration Date, must
tender their Series A Notes according to the guaranteed delivery
procedures set forth in "The Exchange Offer-Guaranteed Delivery
Procedures" section of the Prospectus. See Instruction 1.
The undersigned has completed the appropriate boxes below
and signed this Letter to indicate the action the undersigned
desires to take with respect to the Exchange Offer.
List below the Series A Notes to which this Letter relates.
If the space provided below is inadequate, the certificate
numbers and principal amount of Series A Notes should be listed
on a separate signed schedule affixed hereto.
DESCRIPTION OF
SERIES A NOTES 1 2 3
------------ ------------ -----------
Name(s) and
Address(es) of Aggregate
Registered Principal
Holder(s) Amount Principal
(Please fill Certificate of Series Amount
in, if blank) Number(s) A Note(s) Tendered*
------------ ------------ ------------
____________ ____________ ____________
____________ ____________ ____________
Total ____________ ____________
* Unless otherwise indicated in this column, a holder will be
deemed to have tendered ALL of the Series A Notes
represented by the Series A Notes indicated in column 2.
See Instruction 2.
( ) CHECK HERE IF TENDERED SERIES A NOTES ARE BEING DELIVERED
PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT
TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s)_____________________________
Window Ticket Number (if any)_______________________________
Date of Execution of
Notice of Guaranteed Delivery_______________________________
Name of Institution which
guaranteed delivery_________________________________________
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange
Offer, the undersigned hereby tenders to the Company the
aggregate principal amount of Series A Notes indicated above.
Subject to, and effective upon, the acceptance for exchange of
the Series A Notes tendered hereby, the undersigned hereby sells,
assigns and transfers to, or upon the order of, the Company all
right, title and interest in and to such Series A Notes as are
being tendered hereby.
The undersigned hereby represents and warrants that the
undersigned has full power and authority to tender, sell, assign
and transfer the Series A Notes tendered hereby and that the
Company will acquire good and unencumbered title thereto, free
and clear of all liens, restrictions, changes and encumbrances
and not subject to any adverse claim when the same are accepted
by the Company. The undersigned hereby further represents that
any Series B Notes acquired in exchange for Series A Notes
tendered hereby will have been acquired in the ordinary course of
business of the person receiving such Series B Notes, whether or
not such person is the undersigned, that neither the holder of
such Series A Notes nor any such other person is engaged in, or
intends to engage in a distribution of such Series B Notes, or
has an arrangement or understanding with any person to
participate in the distribution of such Series B Notes, and that
neither the holder of such Series A Notes nor any such other
person is an "affiliate," as defined in Rule 405 under the
Securities Act of 1933, as amended (the "Securities Act"), of the
Company.
The undersigned also acknowledges that this Exchange Offer
is being made by the Company based upon the Company's
understanding of an interpretation by the staff of the Securities
and Exchange Commission (the "Commission") as set forth in no-
action letters issued to third parties, that the Series B Notes
issued in exchange for the Series A Notes pursuant to the
Exchange Offer may be offered for resale, resold and otherwise
transferred by holders thereof (other than a broker-dealer who
acquires such Series B Notes directly from the Company for resale
pursuant to Rule 144A under the Securities Act or any other
available exemption under the Securities Act or any such holder
that is an "affiliate" of the Company within the meaning of Rule
405 under the Securities Act), without compliance with the
registration and prospectus delivery provisions of the Securities
Act, provided that such Series B Notes are acquired in the
ordinary course of such holders' business and such holders are
not engaged in, and do not intend to engage in, a distribution of
such Series B Notes and have no arrangement with any person to
participate in the distribution of such Series B Notes. However,
the staff of the Commission has not considered the Exchange Offer
in the context of a no-action letter and there can be no
assurance that the staff of the Commission would make a similar
determination with respect to the Exchange Offer as in other
circumstances. If a holder of Series A Notes is an affiliate of
the Company, and is engaged in or intends to engage in a
distribution of the Series B Notes or has any arrangement or
understanding with respect to the distribution of the Series B
Notes to be acquired pursuant to the Exchange Offer, such holder
could not rely on the applicable interpretations of the staff of
the Commission and must comply with the registration and
prospectus delivery requirements of the Securities Act in
connection with any secondary resale transaction. If the
undersigned is a broker-dealer that will receive Series B Notes
for its own account in exchange for Series A Notes, it represents
that the Series A Notes to be exchanged for the Series B Notes
were acquired by it as a result of market-making activities or
other trading activities and acknowledges that it will deliver a
prospectus in connection with any resale of such Series B Notes;
however, by so acknowledging and by delivering a prospectus, the
undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
The undersigned will, upon request, execute and deliver any
additional documents deemed by the Company to be necessary or
desirable to complete the sale, assignment and transfer of the
Series A Notes tendered hereby. All authority conferred or
agreed to be conferred in this Letter and every obligation of the
undersigned hereunder shall be binding upon the successors,
assigns, heirs, executors, administrators, trustees in bankruptcy
and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the
undersigned. This tender may be withdrawn only in accordance
with the procedures set forth in "The Exchange Offer-Withdrawal
of Tenders" section of the Prospectus.
Unless otherwise indicated herein in the box entitled
"Special Issuance Instructions" below, please deliver the Series
A Notes (and, if applicable, substitute certificates representing
Series A Notes for any Series A Notes not exchanged) in the name
of the undersigned. Similarly, unless otherwise indicated under
the box entitled "Special Delivery Instructions" below, please
send the Series A Notes (and, if applicable, substitute
certificates representing Series A Notes for any Series A Notes
not exchanged) to the undersigned at the address shown above in
the box entitled "Description of Series A Notes."
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION
OF SERIES A NOTES" ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED
TO HAVE TENDERED THE SERIES A NOTES AS SET FORTH IN SUCH BOX
ABOVE.
=================================================================
SPECIAL ISSUANCE INSTRUCTIONS
(See Instructions 3 and 4)
To be completed ONLY if certificates for Series A Notes not
exchanged and/or Series B Notes are to be issued in the name of
and sent to someone other than the person(s) whose signature(s)
appear(s) on this Letter above.
Issue Series B Notes and/or Series A Notes to:
Name(s): . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Please Type or Print)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Please Type or Print)
Address: . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Including Zip Code)
(Complete accompanying Substitute Form W-9)
=================================================================
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 3 and 4)
To be completed ONLY if certificates for Series A Notes not
exchanged and/or Series B Notes are to be sent to someone other
than the person(s) whose signature(s) appear(s) on this Letter
above or to such person(s) at an address other than shown in the
box entitled "Description of Series A Notes" on this Letter
above.
Mail Series B Notes and/or Series A Notes to:
Name(s): . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Please Type or Print)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Please Type or Print)
Address: . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Including Zip Code)
(Complete accompanying Substitute Form W-9)
=================================================================
IMPORTANT: THIS LETTER OR A FACSIMILE HEREOF (TOGETHER WITH THE
CERTIFICATES FOR SERIES A NOTES AND ALL OTHER REQUIRED DOCUMENTS
OR THE NOTICE OF GUARANTEED DELIVERY) MUST BE RECEIVED BY THE
EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE
EXPIRATION DATE.
PLEASE READ THIS LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING ANY BOX ABOVE.
=================================================================
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS)
(Complete accompanying Substitute Form W-9 on reverse side)
Dated: . . . . . . . . . . . . . . . . . . . . . . . . . . , 1996
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Signature(s) of Owner) (Date)
Area Code and Telephone Number: . . . . . . . . . . . . . .
If a holder is tendering any Series A Notes, this Letter
must be signed by the registered holder(s) as the name(s)
appear(s) on the certificate(s) for the Series A Notes or by any
person(s) authorized to become registered holder(s) by
endorsements and documents transmitted herewith. If signature is
by a trustee, executor, administrator, guardian, officer or other
person acting in a fiduciary or representative capacity, please
set forth full title. See Instruction 3.
Name(s):. . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Please Type or Print)
Capacity: . . . . . . . . . . . . . . . . . . . . . . . .
Address:. . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Including Zip Code)
SIGNATURE GUARANTEE
(if required by Instruction 3)
Signature(s) Guaranteed by
an Eligible Institution:. . . . . . . . . . . . . . . . .
(Authorized Signature)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Title)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Name and Firm)
Dated: . . . . . . . . . . . . . . . . . . . . . . . . . . .,
1996
=================================================================
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
to Exchange 10.22% Series B Senior Unsecured Sinking Fund Notes
due July 1, 2000
which have been registered under the Securities Act of 1933,
as amended
for any and all
10.22% Series A Senior Unsecured Sinking Fund Notes
due July 1, 2000
of Continental Airlines, Inc.
1. Delivery of this Letter and Series A Notes; Guaranteed
Delivery Procedures.
This Letter is to be completed by holders of Series A Notes
if certificates are to be forwarded herewith. Certificates for
all physically tendered Series A Notes, as well as a properly
completed and duly executed Letter of Transmittal (or facsimile
thereof) and any other documents required by this Letter, must be
received by the Exchange Agent at the address set forth herein on
or prior to the Expiration Date, or the tendering holder must
comply with the guaranteed delivery procedures set forth below.
Holders of Series A Notes whose certificates for Series A
Notes are not immediately available or who cannot deliver their
certificates and all other required documents to the Exchange
Agent on or prior to the Expiration Date, may tender their Series
A Notes pursuant to the guaranteed delivery procedures set forth
in "The Exchange Offer-Guaranteed Delivery Procedures" section of
the Prospectus. Pursuant to such procedures, (i) such tender
must be made through an Eligible Institution (as defined below),
(ii) prior to the Expiration Date, the Exchange Agent must
receive from such Eligible Institution a properly completed and
duly executed Letter of Transmittal (or facsimile thereof) and
Notice of Guaranteed Delivery, substantially in the form provided
by the Company (by facsimile transmission, mail or hand
delivery), setting forth the name and address of the holder of
Series A Notes and the amount of Series A Notes tendered, stating
that the tender is being made thereby and guaranteeing that
within three New York Stock Exchange ("NYSE") trading days after
the date of execution of the Notice of Guaranteed Delivery, the
certificates for all physically tendered Series A Notes, and any
other documents required by this letter will be deposited by the
Eligible Institution with the Exchange Agent, and (iii) the
certificates for all physically tendered Series A Notes, in
proper form for transfer, and all other documents required by
this Letter, are received by the Exchange Agent within three NYSE
trading days after the date of execution of the Notice of
Guaranteed Delivery.
The method of delivery of this Letter, the Series A Notes
and all other required documents is at the election and risk of
the tendering holders, but the delivery will be deemed made only
when actually received or confirmed by the Exchange Agent. If
Series A Notes are sent by mail, it is suggested that the mailing
be made sufficiently in advance of the Expiration Date to permit
delivery to the Exchange Agent prior to 5:00 p.m., New York City
time, on the Expiration Date.
See "The Exchange Offer" section of the Prospectus.
2. Partial Tenders.
If less than all of the Series A Notes evidenced by a
submitted certificate are to be tendered, the tendering holder(s)
should fill in the aggregate principal amount of Series A Notes
to be tendered in the box above entitled "Description of Series A
Notes-Principal Amount Tendered." A reissued certificate
representing the balance of nontendered Series A Notes will be
sent to such tendering holder, unless otherwise provided in the
appropriate box on this Letter, promptly after the Expiration
Date. All of the Series A Notes delivered to the Exchange Agent
will be deemed to have been tendered unless otherwise indicated.
3. Signatures of this Letter; Bond Powers and Endorsements;
Guarantee of Signatures.
If this Letter is signed by the registered holder of the
Series A Notes tendered hereby, the signature must correspond
exactly with the name as written on the face of the certificates
without any change whatsoever.
If any tendered Series A Notes are owned of record by two or
more joint owners, all such owners must sign this Letter.
If any tendered Series A Notes are registered in different
names on several certificates, it will be necessary to complete,
sign and submit as many separate copies of this Letter as there
are different registrations of certificates.
When this Letter is signed by the registered holder of the
Series A Notes specified herein and tendered hereby, no
endorsements of certificates or separate bond powers are
required. If, however, the Series B Notes are to be issued, or
any untendered Series A Notes are to be reissued, to a person
other than the registered holder, then endorsements of any
certificates transmitted hereby or separate bond powers are
required. Signatures on such certificates must be guaranteed by
an Eligible Institution.
If this Letter is signed by a person other than the
registered holder of any certificates specified herein, such
certificates must be endorsed or accompanied by appropriate bond
powers, in either case signed exactly as the name of the
registered holder appears on the certificates and the signatures
on such certificates must be guaranteed by an Eligible
Institution.
If this Letter or any certificates or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-
fact, officers of corporations or others acting in a fiduciary or
representative capacity, such persons should so indicate when
signing, and, unless waived by the Company, proper evidence
satisfactory to the Company of their authority to so act must be
submitted.
Endorsements on certificates for Series A Notes or
signatures on bond powers required by this Instruction 3 must be
guaranteed by a firm which is a member of a registered national
securities exchange or a member of the National Association of
Securities Dealers, Inc., by a commercial bank or trust company
having an office or correspondent in the United States or by an
"eligible guarantor" institution within the meaning of Rule 17Ad-
15 under the Securities Exchange Act of 1934 (an "Eligible
Institution").
Signatures on this Letter need not be guaranteed by an
Eligible Institution, provided the Series A Notes are tendered:
(i) by a registered holder of Series A Notes tendered who has not
completed the box entitled "Special Issuance Instructions" or
"Special Delivery Instructions" on this Letter, or (ii) for the
account of an Eligible Institution.
4. Special Issuance and Delivery Instructions.
Tendering holders of Series A Notes should indicate in the
applicable box the name and address to which Series B Notes
issued pursuant to the Exchange Offer and/or substitute
certificates evidencing Series A Notes not exchanged are to be
issued or sent, if different from the name or address of the
person signing this Letter. In the case of issuance in a
different name, the employer identification or social security
number of the person named must also be indicated.
5. Tax Identification Number.
Federal income tax law generally requires that a tendering
holder whose Series A Notes are accepted for exchange must
provide the Company (as payor) with such Holder's correct
Taxpayer Identification Number ("TIN") on Substitute Form W-9
below, which, in the case of a tendering holder who is an
individual, is his or her social security number. If the Company
is not provided with the current TIN or an adequate basis for an
exemption, such tendering holder may be subject to a $50 penalty
imposed by the Internal Revenue Service. In addition, delivery
of Series B Notes to such tendering holder may be subject to
backup withholding in an amount equal to 31% of all reportable
payments made after the exchange. If withholding results in an
overpayment of taxes, a refund may be obtained.
Exempt holders of Series A Notes (including, among others,
all corporations and certain foreign individuals) are not subject
to these backup withholding and reporting requirements. See the
enclosed Guidelines of Certification of Taxpayer Identification
Number on Substitute Form W-9 (the "W-9 Guidelines") for
additional instructions.
To prevent backup withholding, each tendering holder of
Series A Notes must provide its correct TIN by completing the
"Substitute Form W-9" set forth below, certifying that the TIN
provided is correct (or that such holder is awaiting a TIN) and
that (i) the holder is exempt from backup withholding, (ii) the
holder has not been notified by the Internal Revenue Service that
such holder is subject to a backup withholding as a result of a
failure to report all interest or dividends or (iii) the Internal
Revenue Service has notified the holder that such holder is no
longer subject to backup withholding. If the tendering holder of
Series A Notes is a nonresident alien or foreign entity not
subject to backup withholding, such holder must give the Company
a completed Form W-8, Certificate of Foreign Status. These forms
may be obtained from the Exchange Agent. If the Series A Notes
are in more than one name or are not in the name of the actual
owner, such holder should consult the W-9 Guidelines for
information on which TIN to report. If such holder does not have
a TIN, such holder should consult the W-9 Guidelines for
instructions on applying for a TIN, check the box in Part 2 of
the Substitute Form W-9 and write "applied for" in lieu of its
TIN. Note: checking this box and writing "applied for" on the
form means that such holder has already applied for a TIN or that
such holder intends to apply for one in the near future. If such
holder does not provide its TIN to the Company within 60 days,
backup withholding will begin and continue until such holder
furnishes its TIN to the Company.
6. Transfer Taxes.
The Company will pay all transfer taxes, if any, applicable
to the transfer of Series A Notes to it or its order pursuant to
the Exchange Offer. If, however, Series B Notes and/or
substitute Series A Notes not exchanged are to be delivered to,
or are to be registered or issued in the name of, any person
other than the registered holder of the Series A Notes tendered
hereby, or if tendered Series A Notes are registered in the name
of any person other than the person signing this Letter, or if a
transfer tax is imposed for any reason other than the transfer of
Series A Notes to the Company or its order pursuant to the
Exchange Offer, the amount of any such transfer taxes (whether
imposed on the registered holder or any other persons) will be
payable by the tendering holder. If satisfactory evidence of
payment of such taxes or exemption therefrom is not submitted
herewith, the amount of such transfer taxes will be billed
directly to such tendering holder.
Except as provided in this Instruction 6, it is not
necessary for transfer tax stamps to be affixed to the Series A
Notes specified in this Letter.
7. Waiver of Conditions.
The Company reserves the absolute right to waive
satisfaction of any or all conditions enumerated in the
Prospectus.
8. No Conditional Tenders.
No alternative, conditional, irregular or contingent tenders
will be accepted. All tendering holders of Series A Notes, by
execution of this Letter, shall waive any right to receive notice
of the acceptance of their Series A Notes for exchange.
Neither the Company nor any other person is obligated to
give notice of any defect or irregularity with respect to any
tender of Series A Notes nor shall any of them incur any
liability for failure to give any such notice.
9. Mutilated, Lost, Stolen or Destroyed Series A Notes.
Any holder whose Series A Notes have been mutilated, lost,
stolen or destroyed should contact the Exchange Agent at the
address indicated above for further instructions.
10. Requests for Assistance or Additional Copies.
Questions relating to the procedure for tendering, as well
as requests for additional copies of the Prospectus and this
Letter, may be directed to the Exchange Agent, at the address and
telephone number indicated above.
TO BE COMPLETED BY ALL TENDERING HOLDERS
(See Instruction 5)
PAYOR'S NAME: CONTINENTAL AIRLINES, INC.
- -----------------------------------------------------------------
SUBSTITUTE Part 1 - PLEASE PROVIDE
Form W-9 YOU TIN IN THE BOX AT TIN:___________________
RIGHT AND CERTIFY BY
SIGNING AND DATING BELOW. (Social Security Number
or
Employer Identification
Number)
--------------------------------------------------
Department of Part 2 - TIN Applied for
the Treasury
Internal --------------------------------------------------
Revenue CERTIFICATION: UNDER THE PENALTIES OF PERJURY, I
Service THAT:
(1) the number shown on this form is my correct
Taxpayer Identification Number (or I am
Payor's waiting for a number to be issued to me).
Request For (2) I am not subject to backup withholding either
Taxpayer because: (a) I am exempt from backup
Identification withholding, or (b) I have not been notified
Number by the Internal Revenue Service (the "IRS")
("TIN") and that I am subject to backup withholding as a
Certification result of a failure to report all interest or
dividends, or (c) the IRS has notified me
that I am no longer subject to backup
withholding, and
(3) any other information provided on this form
is true and correct.
SIGNATURE . . . . . . . . . . . . . . . . . . . .
DATE. . . . . . . . . . . . . . . . . . . . . . .
- -----------------------------------------------------------------
You must cross out item (2) of the above certification if you
have been notified by the IRS that you are subject to backup
withholding because of underreporting of interest or dividends on
your tax return and you hae not been notified by the IRS that you
are no longer subject to backup withholding.
- -----------------------------------------------------------------
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 2 OF SUBSTITUTE FORM W-9
- -----------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer
identification number has not been issued to me, and either (a) I
have mailed or delivered an application to receive a taxpayer
identification number to the appropriate Internal Revenue Service
Center or Social Security Administration Office or (b) I intend
to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification
number by the time of the exchange, 31 percent of all reportable
payments made to me thereafter will be withheld until I provide a
number.
____________________________________ ________________________
Signature Date
- ----------------------------------------------------------------
Exhibit 99.2
NOTICE OF GUARANTEED DELIVERY FOR
CONTINENTAL AIRLINES, INC.
This form or one substantially equivalent hereto must be
used to accept the Exchange Offer of Continental Airlines, Inc.
(the "Company") made pursuant to the Prospectus, dated May [__],
1996 (the "Prospectus"), and the enclosed Letter of Transmittal
(the "Letter of Transmittal") if certificates for Series A Notes
of the Company are not immediately available or time will not
permit all required documents to reach the Company prior to 5:00
P.M., New York City time, on the Expiration Date of the Exchange
Offer. Such form may be delivered or transmitted by facsimile
transmission, mail or hand delivery to Continental Airlines, Inc.
(the "Exchange Agent") as set forth below. In addition, in order
to utilize the guaranteed delivery procedure to tender Series A
Notes pursuant to the Exchange Offer, a completed, signed and
dated Letter of Transmittal (or facsimile thereof) must also be
received by the Exchange Agent prior to 5:00 P.M., New York City
time, on the Expiration Date. Capitalized terms not defined
herein are defined in the Prospectus.
Delivery to: Continental Airlines, Inc., Exchange Agent
By Mail, Hand or Facsimile
Overnight Delivery: Transmission Number:
Continental Airlines, Inc. (713) 523-2831
2929 Allen Parkway, Suite 2010
Houston, Texas 77019 Confirm by Telephone:
Attention: Jeffery A. Smisek (713) 834-2948
For Information Call:
Jeffery A. Smisek
(713) 834-2948
Delivery of this instrument to an address other than as set
forth above, or transmission of instructions via facsimile other
than as set forth above, will not constitute a valid delivery.
Ladies and Gentlemen:
Upon the terms and conditions set forth in the Prospectus
and the accompanying Letter of Transmittal, the undersigned
hereby tenders to the Company the principal amount of Series A
Notes set forth below, pursuant to the guaranteed delivery
procedure described in "The Exchange Offer - Guaranteed Delivery
Procedures" section of the Prospectus.
Principal Amount of Series A Notes Tendered:
$______________________________________
Certificate Nos. (if available):
_______________________________________
Total Principal Amount Represented by Series A Notes
Certificate(s):
$_____________________________________
Exhibit 99.3
CONTINENTAL AIRLINES, INC.
Offer to Exchange its
10.22% Series B Senior Unsecured Sinking Fund Notes
due July 1, 2000
which have been registered under the Securities Act of 1933,
as amended
for any and all of its Outstanding
10.22% Series A Senior Unsecured Sinking Fund Notes
due July 1, 2000
To:Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
Continental Airlines, Inc. (the "Company") is offering to
exchange (the "Exchange Offer"), upon and subject to the terms
and conditions set forth in the Prospectus, dated May [ ], 1996
(the "Prospectus"), and the enclosed Letter of Transmittal (the
"Letter of Transmittal"), its 10.22% Series B Senior Unsecured
Sinking Fund Notes due July 1, 2000 (the "Series B Notes") for
any and all of its outstanding 10.22% Series A Senior Unsecured
Sinking Fund Notes due July 1, 2000 (the "Series A Notes"). The
Exchange Offer is being made in order to satisfy certain
obligations of the Company contained in the Registration Rights
Agreement dated as of September 29, 1995, between the Company and
the initial holders of the Series A Notes.
We are requesting that you contact your clients for whom you
hold Series A Notes regarding the Exchange Offer. For your
information and for forwarding to your clients for whom you hold
Series A Notes registered in your name or in the name of your
nominee, or who hold Series A Notes registered in their own
names, we are enclosing the following documents:
1. Prospectus dated May [__], 1996;
2. The Letter of Transmittal for your use and for the
information of your clients;
3. A Notice of Guaranteed Delivery to be used to accept
the Exchange Offer if certificates for Series A Notes are not
immediately available or time will not permit all required
documents to reach the Exchange Agent prior to the Expiration
Date (as defined below);
4. A form of letter which may be sent to your clients for
whose account you hold Series A Notes registered in your name or
the name of your nominee, with space provided for obtaining such
clients' instructions with regard to the Exchange Offer;
5. Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9; and
6. Return envelopes addressed to Continental Airlines,
Inc., the Exchange Agent for the Series A Notes.
Your prompt action is requested. The Exchange Offer will
expire at 5:00 p.m., New York City time, on [ ], 1996 (the
"Expiration Date") (20 business days following the commencement
of the Exchange Offer), unless extended by the Company. The
Series A Notes tendered pursuant to the Exchange Offer may be
withdrawn at any time before the Expiration Date.
To participate in the Exchange Offer, a duly executed and
promptly completed Letter of Transmittal (or facsimile thereof),
with any required signature guarantees and any other required
documents, should be sent to the Exchange Agent and certificates
representing the Series A Notes should be delivered to the
Exchange Agent, all in accordance with the instructions set forth
in the Letter of Transmittal and the Prospectus.
If holders of Series A Notes wish to tender, but it is
impracticable for them to forward their certificates for Series A
Notes prior to the expiration of the Exchange Offer, a tender may
be effected by following the guaranteed delivery procedures
described in the Prospectus under "The Exchange Offer -
Guaranteed Delivery Procedures."
Exhibit 99.4
CONTINENTAL AIRLINES, INC.
Offer to Exchange its
10.22% Series B Senior Unsecured Sinking Fund Notes
due July 1, 2000
which have been registered under the Securities Act of 1933,
as amended
for any and all of its Outstanding
10.22% Series A Senior Unsecured Sinking Fund Notes
due July 1, 2000
To Our Clients:
Enclosed for your consideration is a Prospectus, dated May
[__], 1996 (the "Prospectus"), and the enclosed Letter of
Transmittal (the "Letter of Transmittal") relating to the offer
(the "Exchange Offer") of Continental Airlines, Inc. (the
"Company") to exchange its registered 10.22% Series B Senior
Unsecured Sinking Fund Notes due July 1, 2000 (the "Series B
Notes") for any and all of its outstanding 10.22% Series A Senior
Unsecured Sinking Fund Notes due July 1, 2000 (the "Series A
Notes"), upon the terms and subject to the conditions described
in the Prospectus. The Exchange Offer is being made in order to
satisfy certain obligations of the Company contained in the
Registration Rights Agreement dated as of September 29, 1995,
between the Company and the initial holders of the Series A
Notes.
This material is being forwarded to you as the beneficial
owner of the Series A Notes carried by us in your account but not
registered in your name. A tender of such Series A Notes may
only be made by us as the holder of record and pursuant to your
instructions.
Accordingly, we request instructions as to whether you wish
us to tender on your behalf the Series A Notes held by us for
your account, pursuant to the terms and conditions set forth in
the enclosed Prospectus and Letter of Transmittal.
Your instructions should be forwarded to us as promptly as
possible in order to permit us to tender the Series A Notes on
your behalf in accordance with the provisions of the Exchange
Offer. The Exchange Offer will expire at 5:00 p.m., New York
City time, on [__], 1996 (the "Expiration Date") (20 business
days following the commencement of the Exchange Offer), unless
extended by the Company. Any Series A Notes tendered pursuant to
the Exchange Offer may be withdrawn at any time before 5:00 p.m.,
New York City time on the Expiration Date.
Your attention is directed to the following:
1. The Exchange Offer is for any and all Series A Notes.
2. The Exchange Offer is subject to certain conditions set
forth in the Prospectus in the section captioned "The Exchange
Offer - Conditions."
3. Any transfer taxes incident to the transfer of Series A
Notes from the holder to the Company will be paid by the Company,
except as otherwise provided in the Instructions in the Letter of
Transmittal.
4. The Exchange Offer expires at 5:00 p.m., New York City
time, on the Expiration Date unless extended by the Company.
If you wish to have us tender your Series A Notes, please so
instruct us by completing, executing and returning to us the
instruction form on the back of this letter. The Letter of
Transmittal is furnished to you for information only and may not
be used directly by you to tender Series A Notes.