Initial Public Offering (IPO): Pre-Effective Amendment to Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1/A Pre-Effective Amendment to Registration Statement HTML 1.12M
(General Form)
2: EX-1.1 Underwriting Agreement 36 169K
3: EX-3.1 Articles of Incorporation/Organization or By-Laws 34 134K
4: EX-3.2 Articles of Incorporation/Organization or By-Laws 35 172K
5: EX-4.1 Instrument Defining the Rights of Security Holders 2 15K
6: EX-4.2 Instrument Defining the Rights of Security Holders 37 138K
7: EX-4.3 Instrument Defining the Rights of Security Holders 13 51K
8: EX-5.1 Opinion re: Legality 2 15K
9: EX-10.1 Material Contract 19 69K
10: EX-10.31 Material Contract 15 63K
11: EX-10.31(A) Material Contract 2 12K
12: EX-10.32 Material Contract 15 74K
13: EX-10.36 Material Contract 26 85K
14: EX-10.37 Material Contract 41 138K
15: EX-21.1 Subsidiaries of the Registrant 1 6K
16: EX-23.1 Consent of Experts or Counsel 1 8K
EX-1.1 — Underwriting Agreement
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Exhibit 1.1
ORBITZ, INC.
CLASS A COMMON STOCK (PAR VALUE $0.001 PER SHARE)
----------------
FORM OF UNDERWRITING AGREEMENT
December __, 2003
Goldman, Sachs & Co.
Credit Suisse First Boston LLC
Legg Mason Wood Walker, Incorporated
Thomas Weisel Partners LLC
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
Orbitz, Inc., a Delaware corporation (the "Company"), proposes, subject
to the terms and conditions stated herein, to issue and sell to the Underwriters
named in Schedule I hereto (the "Underwriters") an aggregate of _______ shares
of Class A Common Stock, par value $0.001 per share ("Stock"), of the Company
and the stockholders of the Company named in Schedule II hereto (the "Selling
Stockholders") propose, subject to the terms and conditions stated herein, to
sell to the Underwriters an aggregate of _______ shares and, at the election of
the Underwriters, up to _______ additional shares of Stock. The aggregate of
_______ shares to be sold by the Company and the Selling Stockholders is herein
called the "Firm Shares" and the aggregate of _______ additional shares to be
sold by the Selling Stockholders is herein called the "Optional Shares". The
Firm Shares and the Optional Shares that the Underwriters elect to purchase
pursuant to Section 2 hereof are herein collectively called the "Shares."
Each of the Selling Stockholders, the Company and Orbitz, LLC (the
"Operating Subsidiary") has executed and delivered the Exchange Agreement,
dated as of November 25, 2003, a copy of which has been delivered to you (the
"Exchange Agreement"). On the date hereof, each of the Selling Stockholders
holds membership interests ("LLC Units") of the Operating Subsidiary as set
forth in EXHIBIT A to the Exchange Agreement, and the Company holds the
remainder of the LLC Units. The Exchange Agreement provides that immediately
prior to the First Time of Delivery (as hereinafter defined):
(a) each Selling Stockholder will exchange all of its LLC Units for the
number of shares of Stock set forth in EXHIBIT B to the Exchange Agreement, the
number of shares of Class B Common Stock, par value $0.001 per share ("Class B
Stock"), of the Company set forth in EXHIBIT C to the Exchange Agreement, and
the number of shares of Series A Non-Voting Convertible Preferred Stock ("Series
A Preferred Stock"), par value $0.001 per share, of the Company set forth in
EXHIBIT D to the
Exchange Agreement, such that immediately prior to the First Time of Delivery,
the Company and its wholly owned subsidiary, O Holdings Inc. ("O Holdings"),
will be the sole holders of LLC Units and all the issued and outstanding Stock
(other than the Shares issued and sold to the several Underwriters pursuant to
this Agreement) will be held by the Selling Stockholders and the employees of
the Company;
(b) the Limited Liability Company Agreement of the Operating Subsidiary
is to be amended and restated so as to read in its entirety as set forth in
Schedule __ hereto;
(c) the Certificate of Incorporation and By-Laws of the Company are to
be amended and restated so as to read in their entirety as set forth in Schedule
__ hereto;
(d) the Company is to have taken all actions necessary or desirable on
its part to consummate the transactions contemplated in the Exchange Agreement
immediately prior to the First Time of Delivery.
The transactions contemplated in the Exchange Agreement, including
those described in (a) - (d) above and in Sections 5(n) and 6 below, are herein
called the "IPO Exchange".
1. (a) The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(i) A registration statement on Form S-1 (File No. 333-88646) (the
"Initial Registration Statement") in respect of the Shares has been filed with
the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each in the
form heretofore delivered to you, and, excluding exhibits thereto, to you for
each of the other Underwriters, have been declared effective by the Commission
in such form; other than a registration statement, if any, increasing the size
of the offering (a "Rule 462(b) Registration Statement"), filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended (the "Act"), which became
effective upon filing, no other document with respect to the Initial
Registration Statement has heretofore been filed with the Commission; and no
stop order suspending the effectiveness of the Initial Registration Statement,
any post-effective amendment thereto or the Rule 462(b) Registration Statement,
if any, has been issued and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus included in the Initial
Registration Statement or filed with the Commission pursuant to Rule 424(a) of
the rules and regulations of the Commission under the Act is hereinafter called
a "Preliminary Prospectus"; the various parts of the Initial Registration
Statement and the Rule 462(b) Registration Statement, if any, including all
exhibits thereto and including the information contained in the form of final
prospectus filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 5(a) hereof and deemed by virtue of Rule 430A under the
Act to be part of the Initial Registration Statement at the time it was declared
effective, each as amended at the time such part of the Initial Registration
Statement became effective or such part of the Rule 462(b) Registration
Statement, if any, became or hereafter becomes effective, are hereinafter
collectively called the "Registration Statement"; and such final prospectus, in
the form first filed pursuant to Rule 424(b) under the Act, is hereinafter
called the "Prospectus".
(ii) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary Prospectus,
at the time of filing thereof, conformed in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder, and 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
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the circumstances under which they were made, not misleading; PROVIDED, HOWEVER,
that this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter through Goldman, Sachs & Co. expressly
for use therein or by a Selling Stockholder expressly for use in the preparation
of the answers therein to Items 7 and 11(m) of Form S-1;
(iii) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the Act
and the rules and regulations of the Commission thereunder and do not and will
not, as of the applicable effective date as to the Registration Statement and
any amendment thereto, and as of the applicable filing date as to the Prospectus
and any amendment or supplement thereto, 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 not misleading; PROVIDED, HOWEVER, that
this representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in writing to
the Company by an Underwriter through Goldman, Sachs & Co. expressly for use
therein or by a Selling Stockholder expressly for use in the preparation of the
answers therein to Items 7 and 11(m) of Form S-1;
(iv) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included in the
Prospectus any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since the respective
dates as of which information is given in the Registration Statement and the
Prospectus, there has not been any change in the capital stock (other than
exercises of options that are set forth in the Prospectus) or long-term debt of
the Company or any of its subsidiaries or any material adverse change, or any
development that would reasonably be expected to involve a prospective material
adverse change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries (any such material adverse change or development involving a
prospective material adverse change, a "Material Adverse Effect"), otherwise
than as set forth or contemplated in the Prospectus;
(v) The Company and its subsidiaries have good and marketable title in
fee simple to all real property and good and marketable title to all personal
property owned by them, in each case free and clear of all liens, encumbrances
and defects except such as are described in the Prospectus or such as do not
materially affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by the Company and
its subsidiaries; and any real property and buildings held under lease by the
Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
materially interfere with the use made and proposed to be made of such property
and buildings by the Company and its subsidiaries;
(vi) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of Delaware, with power and
authority (corporate and other) to own its properties and conduct its business
as described in the Prospectus, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so qualified in
any such jurisdiction;
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(vii) Each subsidiary of the Company has been duly formed or
incorporated and is validly existing as a limited liability company or
corporation in good standing under the laws of its jurisdiction of formation or
incorporation. The Operating Subsidiary has power and authority (corporate and
other) to own its properties and conduct its business as described in the
Prospectus, and has been duly qualified as a foreign limited liability company
for the transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification or is subject to no material
liability or disability by reasons of the failure to be so qualified in any such
jurisdiction;
(viii) The Company has an authorized capitalization as set forth in the
Prospectus and all of the issued shares of capital stock of the Company
(including the Stock) have been duly and validly authorized and issued, are
fully paid and non-assessable and conform to the description of the capital
stock contained in the Prospectus;
(ix) All the issued LLC Units have been duly and validly authorized and
issued, are fully paid and non-assessable and (i) on the date hereof are owned
directly by the Selling Stockholders as set forth in EXHIBIT A to the Exchange
Agreement and by the Company, free and clear, in the case of the interests owned
by the Company, of all liens, encumbrances, equities or claims and (ii) at the
First Time of Delivery and any other Time of Delivery (as hereinafter defined)
will be owned directly by the Company and O Holdings, free and clear of all
liens, encumbrances, equities or claims. All of the issued shares of capital
stock of each subsidiary of the Company have been duly and validly authorized
and issued, are fully paid and non-assessable and are owned directly by the
Company, free and clear of all liens, encumbrances, equities and claims;
(x) On the date hereof, the Certificate of Incorporation and By-Laws of
the Company in the respective forms attached as Schedules __ and __ hereto and
the Limited Liability Company Agreement of the Operating Subsidiary in the form
attached as Schedule __ hereto are in full force and effect, and at the First
Time of Delivery and any other Time of Delivery, the Certificate of
Incorporation and By-Laws of the Company in the respective forms attached in
Schedule __ hereto will be in full force and effect;
(xi) The unissued Shares to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when issued
and delivered against payment therefor as provided herein, will be duly and
validly issued and fully paid and non-assessable and will conform to the
description of the Stock contained in the Prospectus;
(xii) The issue and sale of the Shares to be sold by the Company,
the compliance by the Company and the Operating Subsidiary with all of the
provisions of this Agreement and the Exchange Agreement and the consummation
of the transactions contemplated herein and in the Exchange Agreement will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any
of its subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, other than such conflicts,
breaches, violations or defaults as would not, individually or in the
aggregate, have a Material Adverse Effect or have a material adverse effect
on the consummation of the transactions contemplated herein and in the
Exchange Agreement, nor will such action result in any violation of any
statute or any order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company or any of its subsidiaries or
any of their properties other than those that would not, individually or in
the aggregate, have a Material Adverse Effect or have a material adverse
effect on the consummation of the transactions contemplated herein and in the
Exchange Agreement; nor will such action result in any violation of the
provisions of the Limited Liability
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Company Agreement (in the case of the Operating Subsidiary) or its Certificate
of Incorporation or By-Laws (in the case of the Company and its other
subsidiaries); and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Shares or the consummation by the Company
or the Operating Subsidiary of the transactions contemplated by this Agreement
and the Exchange Agreement, except (i) in the case of this Agreement, the
registration under the Act of the Shares and such consents, approvals,
authorizations, registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of
the Shares by the Underwriters and (ii) in the case of the Exchange Agreement,
the consents, approvals, authorizations, designations, declarations or filings
described in Schedule 3(b) and Schedule 3(c) thereof, all of which will have
been made or obtained as required prior to the date of this Agreement or, solely
in the case of consents to be delivered to the Company by the Selling
Stockholders under the Exchange Agreement, prior to the IPO Exchange;
(xiii) Neither the Company nor any of its subsidiaries is in
violation of its Certificate of Incorporation or By-Laws or other
constitutive documents (including in the case of the Operating Subsidiary,
the Limited Liability Company Agreement of the Operating Subsidiary) or in
default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture, mortgage, deed
of trust, loan agreement, lease or other agreement or instrument to which it
is a party or by which it or any of its properties may be bound, other than
such defaults as would not, individually or in the aggregate, have a Material
Adverse Effect or have a material adverse effect on the consummation of the
transactions contemplated herein and in the Exchange Agreement or which have
been disclosed in the Prospectus; and the Exchange Agreement has been duly
authorized, executed and delivered by the Company and the Operating
Subsidiary and is a valid and binding obligation of the Company and the
Operating Subsidiary enforceable in accordance with its terms;
(xiv) The statements set forth in the Prospectus under the caption
"Description of Capital Stock" insofar as they purport to constitute a
summary of the terms of the Stock and under the captions "Certain U.S.
Federal Tax Considerations for Non-U.S. Holders" and "Underwriting", insofar
as they purport to describe the provisions of the laws and documents referred
to therein, are accurate, complete and fair in all material respects;
(xv) Other than as disclosed in the Prospectus, there are no legal
or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of its
subsidiaries is the subject which, if determined adversely to the Company or
any of its subsidiaries, individually or in the aggregate would reasonably be
expected to have a material adverse effect on the current or future
consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries; and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others other than as disclosed in
the Prospectus;
(xvi) The Company is not and, after giving effect to the offering and
sale of the Shares, will not be an "investment company", as such term is defined
in the Investment Company Act of 1940, as amended (the "Investment Company
Act");
(xvii) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba within
the meaning of Section 517.075, Florida Statutes;
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(xviii) KPMG LLP, who have certified certain financial statements of
the Company and the Operating Subsidiary, are independent public accountants as
required by the Act and the rules and regulations of the Commission thereunder;
(xix) The Company and its subsidiaries each maintains a system of
internal accounting controls sufficient to provide reasonable assurance that (1)
transactions are executed in accordance with management's general or specific
authorizations; (2) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (3) access to assets is
permitted only in accordance with management's general or specific
authorization; and (4) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences;
(xx) Except to the extent described in the Prospectus with respect
to the ITA software license agreement, and as could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect: (A)
The Company and its subsidiaries own, possess, license or have other rights
to use the patents and patent applications, copyrights, trademarks, service
marks, trade names, Internet domain names, technology, confidential
information, software, know-how, trade secrets and other intellectual
property and proprietary rights necessary or used in any material respect to
conduct their business in the manner in which it is being conducted and in
the manner set forth in the Prospectus (collectively, the "Company
Intellectual Property"), and to the extent that the Company Intellectual
Property is not sufficient with respect to any products described in the
Prospectus as being under development the Company believes it can acquire
such rights on reasonable terms; (B) to the Company's and its subsidiaries'
knowledge, none of the Company Intellectual Property owned by the Company or
its subsidiaries is invalid or unenforceable and neither the Company nor any
of its subsidiaries has received any challenge (including without limitation,
notices of expiration) to the validity or enforceability thereof from any
third party or governmental authority and the Company and its subsidiaries
have made all filings and paid all fees necessary to maintain any Company
Intellectual Property owned by any of them; (C) the Company and its
subsidiaries have taken commercially reasonable measures to preserve the
confidentiality of all trade secrets and confidential information which
constitutes Company Intellectual Property; (D) neither the Company nor any of
its subsidiaries has received any claim of infringement or misappropriation
of (and neither the Company nor any of its subsidiaries knows of any
infringement or misappropriation of) intellectual property rights of others
by the Company or any of its subsidiaries; (E) the Company and its
subsidiaries are not in breach of, and have complied with all terms of, any
license or other agreement relating to any Company Intellectual Property, and
no party to any such agreement has given the Company or its subsidiaries
notice of its intention to cancel, terminate, alter the scope of rights under
or fail to renew any such agreement; and (F) no suit or other proceeding is
pending against the Company or any of its subsidiaries concerning any
agreement concerning the Company Intellectual Property, including any
proceeding concerning a claim that the Company or its subsidiaries or, to the
Company's or its subsidiaries' knowledge, another person has breached any
such agreement.
(xxi) The Company and its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are
engaged.
(xxii) The Company and its subsidiaries have all necessary consents,
authorizations, approvals, orders, certificates and permits of and from, and
have made all declarations and filings with, all federal, state, local, foreign
and other governmental authorities, all self-regulatory
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organizations and all courts and other tribunals, to own, lease, license and use
their properties and assets and to conduct their business in the manner in which
it is described or contemplated in the Prospectus, with such exceptions as would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect;
(xxiii) There are no contracts, agreements or understandings between
the Company or any of its subsidiaries and any person granting such person the
right to require the Company or any of its subsidiaries to file a registration
statement under the Act with respect to any securities of the Company or any of
its subsidiaries or to include any securities of the Company or any of its
subsidiaries with the Shares registered pursuant to the Registration Statement,
except as otherwise disclosed in the Prospectus; and
(xxiv) There are no contracts, agreements or other documents required
to be described in the Registration Statement or to be filed as exhibits to the
Registration Statement by the Act or by rules and regulations thereunder that
have not been described or filed as required.
(b) Each of the Selling Stockholders severally represents and warrants
to, and agrees with, each of the Underwriters and the Company that:
(i) All consents, approvals, authorizations and orders necessary for
the execution and delivery by such Selling Stockholder of this Agreement, the
Exchange Agreement and the Power of Attorney and the Custody Agreement
hereinafter referred to, and for the sale and delivery of the Shares to be sold
by such Selling Stockholder hereunder, have been obtained; and such Selling
Stockholder has full right, power and authority to enter into this Agreement,
the Exchange Agreement, the Power of Attorney and the Custody Agreement and to
sell, assign, transfer and deliver the Shares to be sold by such Selling
Stockholder hereunder;
(ii) The sale of the Shares to be sold by such Selling Stockholder
hereunder, the compliance by such Selling Stockholder with all of the provisions
of this Agreement, the Exchange Agreement, the Power of Attorney and the Custody
Agreement and the consummation of the transactions herein and therein
contemplated will not in any material respect conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any statute, indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which such Selling Stockholder is a party or
by which such Selling Stockholder is bound or to which any of the property or
assets of such Selling Stockholder is subject, nor will such action result in
any violation of the provisions of the Certificate of Incorporation or By-Laws
of such Selling Stockholder or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over such Selling
Stockholder or the property of such Selling Stockholder;
(iii) Such Selling Stockholder has, and immediately prior to each Time
of Delivery such Selling Stockholder will have, good and valid title to the
Shares to be sold by such Selling Stockholder hereunder, free and clear of all
liens, encumbrances, equities or claims;
(iv) Upon payment for the Shares to be sold by the Selling Stockholders
as provided in this Agreement, delivery of such Shares, as directed by the
Underwriters, to Cede & Co. ("Cede") or such other nominee as may be designated
by the Depository Trust Company ("DTC"), registration of such Shares in the name
of Cede or such other nominee and the crediting of such Shares on the records of
DTC to securities accounts of the Underwriters (assuming that neither DTC nor
the Underwriters has notice of any adverse claim (as such phrase is defined in
Section 8-105 of the Uniform Commercial Code of the state of New York (the
"UCC")) to such Shares), (A) DTC shall be a "protected purchaser" of such Shares
within the meaning of Section 8-303 of the UCC, (B) under
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Section 8-501 of the UCC, the Underwriters will acquire a valid security
entitlement in respect of such Shares and (C) no action based on any "adverse
claim" (as defined in Section 8-102 of the UCC) to such Shares may be asserted
against the Underwriters with respect to such security entitlement (it being
assumed that for the purposes of this representation and warranty that when such
payment, delivery and crediting occur, (x) such Shares will have been registered
in the name of Cede or another nominee designated by DTC, in each case on the
Company's share registry in accordance with its Certificate of Incorporation,
By-Laws and applicable law, (y) DTC will be registered as a "clearing
corporation" within the meaning of Section 8-102 of the UCC and (z) appropriate
entries to the account(s) of the Underwriters on the records of DTC will have
been made pursuant to the UCC).
(v) During the period beginning from the date hereof and continuing to
and including the date 180 days after the date of the Prospectus, such Selling
Stockholder will not offer, sell, contract to sell, pledge, grant any option to
purchase, make any short sale or otherwise dispose of, except as provided
hereunder or as required by law, any Stock or other securities of the Company
that are substantially similar to the Shares, or any securities that are
convertible into or exchangeable for, or that represent the right to receive,
Stock or any such substantially similar securities (other than as expressly
contemplated in the Exchange Agreement), without your prior written consent.
This restriction is expressly agreed to preclude such Selling Stockholder from
engaging in any hedging or other transaction which is designed to or which
reasonably could be expected to lead to or result in a sale or disposition of
such Selling Stockholder's Shares or other securities even if such Shares or
other securities would be disposed of by someone other than such Selling
Stockholder. Such prohibited hedging or other transactions would include without
limitation any short sale or any purchase, sale or grant of any right (including
without limitation any put or call option) with respect to any of such Selling
Stockholder's Shares or other securities or with respect to any security that
includes, relates to, or derives any significant part of its value from such
Shares or other securities. This restriction shall not apply to transfers of
securities to wholly-owned subsidiaries of such Selling Stockholder if the
transfers do not involve a disposition for value and if the transferee agrees in
writing as a condition precedent to such transfer to be bound by the terms of
this paragraph (iv). Notwithstanding the foregoing, with respect to UAL Loyalty
Services, Inc. or its parent or affiliates, this provision will not preclude any
pledge reasonably necessary in connection with (a) any exit financing subject to
requisite approvals by the United States Bankruptcy Court for the Northern
District of Illinois or (b) UAL Loyalty Services, Inc. or its parent's or
affiliates' successful emergence from Chapter 11 including, but not limited to,
a pledge given to support one or more pension funding waivers granted by the
U.S. Department of Labor or the Internal Revenue Service or to support any
non-cash contributions in lieu of pension funding that may be permitted by any
of the Department of Labor, Internal Revenue Service or Pension Benefit Guaranty
Corporation, provided that in each case the pledgee agrees to be bound by this
restriction for the remainder of the 180-day period. Furthermore, with respect
to any Stock or other securities of the Company that are substantially similar
to the Shares, or any securities that are convertible into or exchangeable for,
or that represent the right to receive, Stock or any such substantially similar
securities (other than as expressly contemplated in the Exchange Agreement) not
sold by UAL Loyalty Services, Inc. or its parent or affiliates in the IPO, the
parties acknowledge that there is an existing pledge of the Stock/Shares by
United Loyalty Services, Inc. to support the guaranty of Debtor-in-Possession
financing facilities of UAL, Inc. The parties further acknowledge that such
existing pledge, pursuant to which the pledgee would upon any foreclosure be
subject to the restrictions of this provision, does not constitute a violation
of any provision of this Agreement.
(vi) Such Selling Stockholder has not taken and will not take, directly
or indirectly, any action which is designed to or which has constituted or which
might reasonably be expected to cause or
8
result in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares;
(vii) All information furnished by such Selling Stockholder in
writing expressly for use in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto (which the
parties agree consists only of the information specifically relating to such
Selling Stockholder under the captions "Principal Stockholders" and "Selling
Stockholders") did not at the time they became effective or were filed with
the Commission, and will not at the time they become effective or are filed
with the Commission, as applicable, 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 in light of the
circumstances when they were made not misleading;
(viii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal Responsibility
Act of 1982 with respect to the transactions herein contemplated, such Selling
Stockholder will deliver to you prior to or at the First Time of Delivery (as
hereinafter defined) a properly completed and executed United States Treasury
Department Form W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof);
(ix) Certificates in negotiable form representing all of the Shares to
be sold by such Selling Stockholder hereunder have been placed in custody under
a Custody Agreement, in the form heretofore furnished to you (the "Custody
Agreement"), duly executed and delivered by such Selling Stockholder to American
Stock Transfer & Trust Company, as custodian (the "Custodian"), and such Selling
Stockholder has duly executed and delivered a Power of Attorney, in the form
heretofore furnished to you (the "Power of Attorney"), appointing the persons
indicated in Schedule II hereto, and each of them, as such Selling Stockholder's
attorneys-in-fact (the "Attorneys-in-Fact" or, any one of them, the
"Attorney-in-Fact") with authority to execute and deliver this Agreement on
behalf of such Selling Stockholder, to determine the purchase price to be paid
by the Underwriters to the Selling Stockholders as provided in Section 2 hereof,
to authorize the delivery of the Shares to be sold by such Selling Stockholder
hereunder and otherwise to act on behalf of such Selling Stockholder in
connection with the transactions contemplated by this Agreement and the Custody
Agreement; and
(x) The Shares represented by the certificates held in custody for such
Selling Stockholder under the Custody Agreement are subject to the interests of
the Underwriters hereunder; the arrangements made by such Selling Stockholder
for such custody, and the appointment by such Selling Stockholder of the
Attorneys-in-Fact by the Power of Attorney, are to that extent irrevocable; the
obligations of the Selling Stockholders hereunder shall not be terminated by
operation of law, whether by the dissolution of such corporation, or by the
occurrence of any other event; if any such corporation should be dissolved, or
if any other such event should occur, before the delivery of the Shares
hereunder, certificates representing the Shares shall be delivered by or on
behalf of the Selling Stockholders in accordance with the terms and conditions
of this Agreement and of the Custody Agreements; and actions taken by the
Attorneys-in-Fact pursuant to the Powers of Attorney shall be as valid as if
such dissolution or other event had not occurred, regardless of whether or not
the Custodian, the Attorneys-in-Fact, or any of them, shall have received notice
of such dissolution or other event.
2. Subject to the terms and conditions herein set forth, (a) the
Company agrees to issue and the Company and each of the Selling Stockholders
agree, severally and not jointly, to sell to each of the Underwriters, and each
of the Underwriters agrees, severally and not jointly, to purchase from the
Company and each of the Selling Stockholders, at a purchase price per share of
$______, the
9
number of Firm Shares (to be adjusted by you so as to eliminate fractional
shares) determined by multiplying the aggregate number of Firm Shares to be sold
by the Company and each of the Selling Stockholders as set forth opposite their
respective names in Schedule II hereto by a fraction, the numerator of which is
the aggregate number of Firm Shares to be purchased by such Underwriter as set
forth opposite the name of such Underwriter in Schedule I hereto and the
denominator of which is the aggregate number of Firm Shares to be purchased by
all of the Underwriters from the Company and all of the Selling Stockholders
hereunder and (b) in the event and to the extent that the Underwriters shall
exercise the election to purchase Optional Shares as provided below, each of the
Selling Stockholders agrees, severally and not jointly, to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from each of the Selling Stockholders, at the purchase price per share
set forth in clause (a) of this Section 2, that portion of the number of
Optional Shares as to which such election shall have been exercised (to be
adjusted by you so as to eliminate fractional shares) determined by allocating
such portion among the Selling Stockholders as set forth in the second sentence
of the next paragraph, and multiplying such allocated number of Optional Shares
by a fraction, the numerator of which is the maximum number of Optional Shares
which such Underwriter is entitled to purchase as set forth opposite the name of
such Underwriter in SCHEDULE I hereto and the denominator of which is the
maximum number of Optional Shares that all of the Underwriters are entitled to
purchase hereunder.
The Selling Stockholders, as and to the extent indicated in Schedule II
hereto, hereby grant, severally and not jointly, to the Underwriters the right
to purchase at their election up to ____________ Optional Shares, at the
purchase price per share set forth in the paragraph above, for the sole purpose
of covering sales of shares in excess of the number of Firm Shares. Any such
election to purchase Optional Shares shall be made in proportion to the maximum
number of Optional Shares to be sold by each Selling Stockholder as set forth in
Schedule II hereto. Any such election to purchase Optional Shares may be
exercised only by written notice from you to each Attorney-in-Fact, given within
a period of 30 calendar days after the date of this Agreement, setting forth the
aggregate number of Optional Shares to be purchased and the date on which such
Optional Shares are to be delivered, as determined by you but in no event
earlier than the First Time of Delivery (as defined in Section 4 hereof) or,
unless you and each Attorney-in-Fact otherwise agree in writing, earlier than
two or later than ten business days after the date of such notice.
3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Goldman, Sachs & Co. may request upon at least two New York Business
Days' (as hereinafter defined) prior notice to the Company and the Selling
Stockholders shall be delivered by or on behalf of the Company and the Selling
Stockholders to Goldman, Sachs & Co., through the facilities of DTC, for the
account of such Underwriter, against payment by or on behalf of such Underwriter
of the purchase price therefor by wire transfer of Federal (same-day) funds to
the account specified by the Company and the Custodian, as their interests may
appear, to Goldman, Sachs & Co. at least two New York Business Days in advance.
The Company will cause the certificates representing the Shares to be made
available for checking and packaging at least twenty-four hours prior to the
Time of Delivery (as defined below) with respect thereto at the office of DTC or
its designated custodian (the "Designated Office"). The time and date of such
delivery and payment shall be, with respect to the Firm Shares, 9:30 a.m., New
York City time, on ______, 2003 or such other time and date as Goldman, Sachs &
10
Co., the Company and the Selling Stockholders may agree upon in writing, and,
with respect to the Optional Shares, 9:30 a.m., New York City time, on the date
specified by Goldman, Sachs & Co. in the written notice given by Goldman, Sachs
& Co. of the Underwriters' election to purchase such Optional Shares, or such
other time and date as Goldman, Sachs & Co., the Company and the Selling
Stockholders may agree upon in writing. Such time and date for delivery of the
Firm Shares is herein called the "First Time of Delivery", such time and date
for delivery of the Optional Shares, if not the First Time of Delivery, is
herein called the "Second Time of Delivery", and each such time and date for
delivery is herein called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 8 hereof, including the cross
receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Section 8(k) hereof, will be delivered at the offices
of Latham & Watkins, Sears Tower Suite 5800, Chicago, Illinois (the "Closing
Location"), and the Shares will be delivered at the Designated Office, all at
such Time of Delivery. A meeting will be held at the Closing Location at _____
p.m., New York City time, on the New York Business Day next preceding such Time
of Delivery, at which meeting the final drafts of the documents to be delivered
pursuant to the preceding sentence will be available for review by the parties
hereto. For the purposes of this Section 4, "New York Business Day" shall mean
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in New York are generally authorized or obligated by law or
executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Act; to make no further
amendment or any supplement to the Registration Statement or Prospectus which
shall be disapproved by you promptly after reasonable notice thereof; to advise
you, promptly after it receives notice thereof, of the time when any amendment
to the Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed and to
furnish you with copies thereof; to advise you, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or
prospectus, of the suspension of the qualification of the Shares for offering or
sale in any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or prospectus or
suspending any such qualification, promptly to use its best efforts to obtain
the withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Shares, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York Business
Day next succeeding the date of this Agreement and from time to time, to furnish
the Underwriters with written and electronic copies of the Prospectus in New
York City in such quantities as you may reasonably
11
request, and, if the delivery of a prospectus is required at any time prior to
the expiration of nine months after the time of issue of the Prospectus in
connection with the offering or sale of the Shares and if at such time any event
shall have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
during such period to amend or supplement the Prospectus in order to comply with
the Act, to notify you and upon your request to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many written and
electronic copies as you may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such statement
or omission or effect such compliance (and to file each such amended or
supplemented Prospectus under the Act within the applicable time periods for
such filing), and in case any Underwriter is required to deliver a prospectus in
connection with sales of any of the Shares at any time nine months or more after
the time of issue of the Prospectus, upon your request but at the expense of
such Underwriter, to prepare and deliver to such Underwriter as many written and
electronic copies as you may request of an amended or supplemented Prospectus
complying with Section 10(a)(3) of the Act (and to file each such amended or
supplemented Prospectus under the Act within the applicable time periods for
such filing);
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), an
earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and regulations
thereunder (including, at the option of the Company, Rule 158);
(e) During the period beginning from the date hereof and continuing to
and including the date 180 days after the date of the Prospectus, not to offer,
sell, contract to sell or otherwise dispose of, except as provided hereunder,
any Stock or other securities of the Company that are substantially similar to
the Shares, or any securities that are convertible into or exchangeable for, or
that represent the right to receive, Stock or any such substantially similar
securities (other than pursuant to the Exchange Agreement and other than
pursuant to employee stock option plans existing on, or upon the conversion or
exchange of convertible or exchangeable securities outstanding as of, the date
of this Agreement), without your prior written consent. Notwithstanding the
foregoing, the Company may issue stock or substantially similar securities or
securities convertible into or exchangeable for shares of stock or substantially
similar securities as consideration in a merger, acquisition or other business
combination; PROVIDED, that each transferee agrees in writing to be bound by the
lock-up restrictions; and PROVIDED FURTHER that the total number of such
securities does not exceed 20% of the aggregate number of shares of Stock
outstanding (or issuable upon exercise of rights outstanding) on the date
hereof;
(f) To furnish to the Company's stockholders as soon as practicable
after the end of each fiscal year an annual report (including a balance sheet
and statements of income, stockholders' equity and cash flows of the Company and
its consolidated subsidiaries certified by independent public accountants) and,
as soon as practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the effective date
of the Registration Statement), to make available to its stockholders
consolidated summary financial information of the Company and its subsidiaries
for such quarter in reasonable detail;
(g) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to the
12
Company's stockholders, and to deliver to you (i) as soon as they are available,
copies of any reports and financial statements furnished to or filed with the
Commission or any national securities exchange on which any class of securities
of the Company is listed, other than such reports and financial statements that
are publicly available on the Commission's EDGAR system; and (ii) such
additional information concerning the business and financial condition of the
Company as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company and its subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission);
(h) To use the net proceeds received by it from the sale of the Shares
pursuant to this Agreement in the manner specified in the Prospectus under the
caption "Use of Proceeds";
(i) To use its best efforts to list for quotation the Shares on the
National Association of Securities Dealers Automated Quotations National Market
System ("NASDAQ");
(j) To file with the Commission such information on Form 10-Q or Form
10-K as may be required by Rule 463 under the Act;
(k) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in compliance with
Rule 462(b) by 10:00 p.m., Washington, D.C. time, on the date of this Agreement,
and the Company shall at the time of filing either pay to the Commission the
filing fee for the Rule 462(b) Registration Statement or give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under the Act;
(l) Upon request of any Underwriter, to furnish, or cause to be
furnished, to such Underwriter an electronic version of the Company's
trademarks, servicemarks and corporate logo for use on the website, if any,
operated by such Underwriter for the purpose of facilitating the on-line
offering of the Shares (the "License"); PROVIDED, HOWEVER, that the License
shall be used solely for the purpose described above, is granted without any fee
and may not be assigned or transferred;
(m) That it will not instruct the transfer agent for the Stock to
remove any restrictive legend on a Stock certificate to permit a transfer of
Stock from an employee of the Company to a third party in contravention of a
Lock-up Agreement (as defined herein); and
(n) To perform its obligations and enforce its rights under the
Exchange Agreement, and to take all other actions necessary or desirable to be
taken by it so that the IPO Exchange is consummated prior to the First Time of
Delivery (which actions shall include, without limiting the foregoing, making or
obtaining the consents, approvals, authorizations, designations, declarations or
filings described in Schedule 3(b) and Schedule 3(c) of the Exchange Agreement
that are to be made or obtained by the Company in each case so as to be
completed and effective prior to the First Time of Delivery); not to amend or
waive any provisions of the Exchange Agreement without the prior written consent
of Goldman, Sachs & Co. on behalf of the several Underwriters; and to execute
and deliver to you immediately prior to the First Time of Delivery a
certificate, in form and substance satisfactory to you and dated the date of the
First Time of Delivery, stating (i) that the IPO Exchange has been consummated
as contemplated herein and in the Exchange Agreement and (ii) that, to the
knowledge of the Company, there are no legal or governmental proceedings pending
or threatened against any of the Company, the Selling Stockholders and their
respective affiliates seeking to enjoin or otherwise challenge, or that would
materially interfere with, the IPO Exchange (the "Company IPO Exchange
Certificate"); PROVIDED that the failure of the IPO Exchange to be consummated
or of the Company to deliver the Company IPO Exchange Certificate prior to the
First Time of Delivery shall not result in a breach or default by the Company
under this Agreement to the extent that such failure results from the failure by
one or more of the Selling Stockholders to comply with these respective
13
obligations in the Exchange Agreement and the Company has used its best efforts
to enforce such obligations and otherwise has taken all actions required to be
taken by it hereunder and under the Exchange Agreement, and PROVIDED, FURTHER,
that to the extent such failure is due to one or more of the Selling
Stockholders and if Goldman, Sachs & Co. so requests, the Company shall agree
with the several Underwriters to postpone the First Time of Delivery for up to
seven full business days after the execution and delivery of this Agreement to a
day specified by Goldman, Sachs & Co. in order to permit the IPO Exchange to be
consummated.
6. (a) Each of the Selling Stockholders agrees with each of the
Underwriters to perform its obligations and enforce its rights under the
Exchange Agreement, and to take all other actions necessary or desirable to
be taken by it so that the IPO Exchange is consummated prior to the First
Time of Delivery; not to amend or waive any provisions of the Exchange
Agreement without the prior written consent of Goldman, Sachs & Co. on behalf
of the several Underwriters; and to execute and deliver to you immediately
prior to the First Time of Delivery a certificate, in form and substance
satisfactory to you and dated the date of the First Time of Delivery, stating
(i) that the IPO Exchange has been consummated as contemplated herein and in
the Exchange Agreement and (ii) that, to the knowledge of such Selling
Stockholder, there are no legal or governmental proceedings pending or
threatened against any of the Company, the Selling Stockholders and their
respective affiliates seeking to enjoin or otherwise challenge, or that would
materially interfere with, the IPO Exchange (each, a "Stockholder IPO
Exchange Certificate"); PROVIDED that the failure of the IPO Exchange to be
consummated or of such Selling Stockholder to deliver a Stockholder IPO
Exchange Certificate prior to the First Time of Delivery shall not result in
a breach or default by such Selling Stockholder under this Agreement to the
extent that such failure results from the failure by the Company or one or
more of the other Selling Stockholders to comply with these respective
obligations in the Exchange Agreement and such Selling Stockholder has used
commercially reasonable efforts to enforce such obligations and otherwise has
taken all actions required to be taken by it hereunder and under the Exchange
Agreement, and PROVIDED, FURTHER, that to the extent such failure is due to
the Company or one or more of the other Selling Stockholders and if Goldman,
Sachs & Co. so requests, such Selling Stockholder shall agree with the
several Underwriters to postpone the First Time of Delivery for up to seven
full business days after the execution and delivery of this Agreement to a
day specified by Goldman, Sachs & Co. in order to permit the IPO Exchange to
be consummated. Each of the Selling Stockholders agrees with each of the
Underwriters that it will not amend or waive the lock-up agreement in Section
4.02 of Stock Purchase Agreement, dated as of November 25, 2003, by and among
the Selling Stockholders or their affiliates and SAM Investments LDC.
(b) It is acknowledged and agreed that, prior to the IPO Exchange
and the First Time of Delivery, UAL Loyalty Services shall transfer by
dividend the LLC Units and Class B Stock owned by it to UAL Corporation, a
Delaware corporation, which shall transfer by a contribution to capital such
LLC Units and Class B Stock to United Air Lines, Inc., a Delaware corporation
("United"). Effective upon completion of, and as a condition to, such
transfers, United shall execute and deliver a Joinder to this Agreement in
the form attached as Annex IV hereto (the "Joinder"), pursuant to which
United shall assume all of rights and obligations of UAL Loyalty Services
under, and agree to be bound in all respects by, this Agreement as if the
undersigned were an original signatory hereto. Upon execution and delivery of
the Joinder, all references herein to, representations or warranties of, or
obligations to be performed by UAL Loyalty Services shall be deemed to be
references to, representations and warranties of, and obligations to be
performed by United.
7. The Company and each of the Selling Stockholders covenant and agree
with one another and with the several Underwriters that (a) the Company will pay
or cause to be paid the
14
following: (i) the fees, disbursements and expenses of the Company's counsel,
the Selling Stockholders' counsel and the Company's accountants in connection
with the registration of the Shares under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing any Agreement
among Underwriters, this Agreement, the Blue Sky Memorandum, closing documents
(including any compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the Shares; (iii) all expenses in
connection with the qualification of the Shares for offering and sale under
state securities laws as provided in Section 5(b) hereof, including the fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky survey (iv) all fees and
expenses in connection with listing the Shares on the NASDAQ; (v) the filing
fees incident to, and the fees and disbursements of counsel for the Underwriters
in connection with, securing any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Shares; (vi) the cost
of preparing stock certificates; (vii) the cost and charges of any transfer
agent or registrar; (viii) all other costs and expenses incident to the
performance of its obligations hereunder and under the Exchange Agreement which
are not otherwise specifically provided for in this Section; and (ix) the fees
and expenses of the Attorneys-in-Fact and the Custodian; and (b) each Selling
Stockholder will pay all expenses and taxes incident to the sale and delivery of
the Shares to be sold by such Selling Stockholder to the Underwriters hereunder.
In connection with clause (b) of the preceding sentence, Goldman, Sachs & Co.
agrees to pay New York State stock transfer tax, and the Selling Stockholder
agrees to reimburse Goldman, Sachs & Co. for associated carrying costs if such
tax payment is not rebated on the day of payment and for any portion of such tax
payment not rebated. It is understood that the Company shall bear, and the
Selling Stockholders shall not be required to pay or to reimburse the Company
for, the cost of any other matters not directly relating to the sale and
purchase of the Shares pursuant to this Agreement, and that, except as provided
in this Section, and Sections 9 and 12 hereof, the Underwriters will pay all of
their own costs and expenses, including the fees of their counsel, stock
transfer taxes on resale of any of the Shares by them, and any advertising
expenses connected with any offers they may make.
8. The obligations of the Underwriters hereunder, as to the Shares to
be delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company and of the Selling Stockholders herein are, at and as of such Time
of Delivery, true and correct, the condition that the Company and the Selling
Stockholders shall have performed all of its and their obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act and in
accordance with Section 5(a) hereof; if the Company has elected to rely
upon Rule 462(b), the Rule 462(b) Registration Statement shall have
become effective by 10:00 p.m., Washington, D.C. time, on the date of
this Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened
by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Sullivan & Cromwell LLP, counsel for the Underwriters,
shall have furnished to you such written opinion or opinions, dated
such Time of Delivery, with respect to such matters as
15
you may reasonably request, and such counsel shall have received such
papers and information as they may reasonably request to enable them to
pass upon such matters;
(c) Latham & Watkins LLP, counsel for the Company, shall have
furnished to you their written opinion, dated such Time of Delivery,
substantially in the form attached hereto as ANNEX III(a).
(d) Gary R. Doernhoefer, General Counsel for the Company,
shall have furnished to you his written opinion, dated such Time of
Delivery, substantially in the form attached hereto as ANNEX III(b).
(e) Bell, Boyd and Lloyd LLC, as patent and trademark counsel
for the Company, shall have furnished to you their written opinion (a
draft of such opinion is attached as ANNEX III(c) hereto), dated such
Time of Delivery, in form and substance satisfactory to you, to the
effect that:
(i) With respect to the statements in the Prospectus
under the captions "Risk Factors--Risks Related To Our
Business--Interruptions in service from third parties or
transitions to new service providers could impair the quality
of our service", "Risk Factors--Risks Related To Our Business
--We may not protect our technology effectively, which would
allow competitors to duplicate our products. This could make
it more difficult for us to compete with them", "Risk Factor--
Risk Related To Our Business--Defending against intellectual
property claims could be expensive and disruptive to our
business", "Business--Intellectual Property" and "Certain
Relationships And Related Transactions--Development, License
and Hosting Agreements", insofar as such statements relate to
the patent and trademark applications ("Patent and Trademark
Applications") listed in a schedule to such counsel's opinion
(provided that the Company provides a certificate to the
effect that such schedule includes all patent and trademark
applications that are material to the Company's business) or
any legal conclusions thereto, and except with regard to an
action entitled Trilegiant Corporation v. Orbitz, LLC (CA No.
03-0021) pending in the United District Court for the District
of Delaware, nothing has come to such counsel's attention that
has caused such counsel to believe that the above-mentioned
sections of the Registration Statement or the Prospectus, each
at the time it became effective, contained any untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading, or that the above-mentioned
sections of the Prospectus (or any supplement thereto) as of
its date or as of the Time of Delivery contained or contains
any untrue statement of material fact or omits to state a
material fact required to be stated therein or necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading; and
(ii) to such counsel's best knowledge (defined for
the purposes of this subparagraph (e) as the actual knowledge
of attorneys presently within such counsel's firm and all
knowledge that would have been gained upon such counsel's
reasonable investigation of its files), there is no pending or
overtly threatened action, suit, claim or proceeding relating
to the Company Intellectual Property purported to be owned by
the Company, except (1) as described in the Prospectus with
regard to the ITA software license agreement, (2) with regard
to a challenge by Iona Technologies PLC to the use and
registration of the mark "Orbitz" for software in
16
International Class 9 under the Nice Agreement, an action by
Orbitz against Iona Technologies PLC for partial removal of
the Australian trademark registration for "ORBIX" for computer
software, an opposition filed by Sibro S.A.F.I.y.C. in
Argentina to the trademark applications to register "ORBITZ"
in International Classes 39 and 42, and action by the Company
against Sibra S.A.F.I.y.C. for undue opposition, and an
opposition filed by Orbitel S.A.E.S.P. in Peru to register
"ORBITZ" in International Classes 9, 16, 29, 41 and 42, and
(3) assertions or inquiries made by patent and trademark
office examiners in the ordinary course of prosecuting pending
trademark applications;
(iii) to such counsel's best knowledge, except as
described in the Prospectus with regard to the ITA software
license agreement, and in the immediately preceding
subparagraph or as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect, such counsel is not aware of any basis for a finding
of unenforceability or invalidity of any patents or trademarks
granted pursuant to the Patent and Trademark Applications;
(iv) to such counsel's best knowledge, the Company or
the Operating Subsidiary, in its own name or its former name,
DUNC, LLC, is listed in the records of the United States
Patent and Trademark Office and in the records of the
appropriate foreign offices as the holder of record of the
Patent and Trademark Applications and the patents and
trademarks granted pursuant to the Patent and Trademark
Applications, the Company is the owner of such patent and
trademark rights and, except as described in the Prospectus
with regard to the ITA software license agreement, there is no
claim of any party other than the Company to any ownership
interest or lien with respect to such rights;
(v) to such Counsel's best knowledge, the Company has
taken such measures as are required to maintain the
enforceability of the Patent and Trademark Applications for
which such counsel has been retained.
(f) The respective counsel for each of the Selling
Stockholders, as indicated in Schedule II hereto, each shall have
furnished to you their written opinion with respect to each of the
Selling Stockholders for whom they are acting as counsel (a draft of
each such opinion is attached as Annex III(d) hereto), dated such Time
of Delivery, in form and substance satisfactory to you, to the effect
that:
(i) A Power-of-Attorney and a Custody Agreement have
been duly executed and, assuming the due execution and
delivery thereof by the other parties thereto, delivered by
such Selling Stockholder and constitute valid and binding
agreements of such Selling Stockholder in accordance with
their terms (subject to customary exceptions for bankruptcy,
insolvency, moratorium, reorganization, fraudulent conveyance
and other similar laws);
(ii) Each of this Agreement and the Exchange
Agreement has been duly executed and delivered by or on behalf
of such Selling Stockholder; and the sale of the Shares to be
sold by such Selling Stockholder hereunder and the compliance
by such Selling Stockholder with all of the provisions of this
Agreement, the Exchange Agreement, the Power-of-Attorney and
the Custody Agreement and the consummation of the transactions
herein and therein contemplated will not (a) violate the
certificate of incorporation or by-laws of such Selling
Stockholder, (b) breach or
17
result in a default under, cause the time for performance of
any obligation to be accelerated under, or result in the
creation or imposition of any lien, charge or encumbrance upon
any of the assets of such Selling Stockholder pursuant to the
terms of, any indenture, mortgage, deed of trust, loan
agreement, bond, debenture, note agreement, capital lease or
other agreement or evidence of indebtedness of which such
counsel has knowledge, (c) breach or otherwise violate any
existing obligation of such Selling Stockholder under any
court or administrative order, judgment or decree of which
such counsel has knowledge or (d) to such counsel's
knowledge, violate applicable provisions of any statute
or regulation of such Selling Stockholder's state of
incorporation or of the United States or any other statute
or regulation of which such counsel has knowledge, except
with respect to clause (b) above, as would not, individually
or in the aggregate have a material adverse effect on the
consummation by such Selling Stockholder of the transactions
contemplated in this Agreement and the Exchange Agreement;
(iii) To the best of such counsel's knowledge
after reasonable investigation, no consent, approval,
authorization or order of, or filing with, any court or
governmental agency or body is required in connection with
execution, delivery or performance of this Agreement or in
connection with the sale of the Shares by such Selling
Stockholder hereunder or in connection with execution,
delivery or performance of the Exchange Agreement by such
Selling Stockholder, except [name any such consent,
approval,] authorization or order] which [has] [have] been
duly obtained and [is] [are] in full force and effect, such
as have been obtained under the Act, such as may be required
under (a) state securities or "blue sky" laws or (b) the Act
or the Securities Exchange Act of 1934 in connection with the
purchase and distribution of such Shares by the Underwriters,
and, in connection with the Exchange Agreement, the consents,
approvals, authorizations, designations, declarations or
filings described in Schedule 3(b) and Schedule 3(c) of the
Exchange Agreement, which in each case have been made or
obtained as required; and
(iv) Upon payment for the Shares to be sold by such
Selling Stockholder as provided in this Agreement, delivery
of such Shares, as directed by the Underwriters, to Cede or
such other nominee as may be designated by DTC, registration
of such Shares in the name of Cede or such other nominee and
the crediting of such Shares on the records of DTC to
securities accounts of the Underwriters (assuming that neither
DTC nor the Underwriters has notice of any adverse claim (as
such phrase is defined in Section 8-105 of the UCC) to such
Shares), (A) DTC shall be a "protected purchaser" of such
Shares within the meaning of Section 8-303 of the UCC, (B)
under Section 8-501 of the UCC, the Underwriters will acquire
a valid security entitlement in respect of such Shares and (C)
no action based on any "adverse claim" (as defined in Section
8-102 of the UCC) to such Shares may be asserted against the
Underwriters with respect to such security entitlement (it
being understood that for the purpose of this opinion, such
counsel may assume that when such payment, delivery and
crediting occur, (x) such Shares will have been registered in
the name of Cede or another nominee designated by DTC, in each
case on the Company's share registry in accordance with its
Certificate of Incorporation, By-Laws and applicable law, (y)
DTC will be registered as a "clearing corporation" within the
meaning of Section 8-102 of the UCC and (z) appropriate
entries to the account(s) of the Underwriters on the records
of DTC will have been made pursuant to the UCC).
18
(g) On the date of the Prospectus at a time prior to the
execution of this Agreement, at 9:30 a.m., New York City time, on the
effective date of any post-effective amendment to the Registration
Statement filed subsequent to the date of this Agreement and also at
each Time of Delivery, KPMG LLP shall have furnished to you a letter or
letters, dated the respective dates of delivery thereof, in form and
substance satisfactory to you, to the effect set forth in Annex I
hereto (the executed copy of the letter delivered prior to the
execution of this Agreement is attached as ANNEX I(a) hereto and a
draft of the form of letter to be delivered on the effective date of
any post-effective amendment to the Registration Statement and as of
each Time of Delivery is attached as ANNEX I(b) hereto);
(h) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements included in the Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus, and (ii) since the respective dates as
of which information is given in the Prospectus there shall not have
been any change in the capital stock or long-term debt of the Company
or any of its subsidiaries or any change, or any development involving
a prospective change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of
the Company and its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case
described in clause (i) or (ii), is in the judgment of the
Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Shares being delivered at such Time of Delivery on the terms and in the
manner contemplated in the Prospectus;
(h) On or after the date hereof (i) no downgrading shall have
occurred in any rating accorded the Company's debt securities or
preferred stock by any "nationally recognized statistical rating
organization", as that term is defined by the Commission for purposes
of Rule 436(g)(2) under the Act, and (ii) no such organization shall
have publicly announced that it has under surveillance or review, with
possible negative implications, any rating of any of the Company's debt
securities or preferred stock;
(i) On or after the date hereof there shall not have occurred
any of the following: (i) a suspension or material limitation in
trading in securities generally on the New York Stock Exchange or on
NASDAQ; (ii) a suspension or material limitation in trading in the
Company's securities on NASDAQ; (iii) a general moratorium on
commercial banking activities declared by either Federal, New York
State or Illinois authorities or a material disruption in commercial
banking or securities settlement or clearance services in the United
States; (iv) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national
emergency or war or (v) the occurrence of any other calamity or crisis
or any change in financial, political or economic conditions in the
United States or elsewhere, if the effect of any such event specified
in clause (iv) or (v) in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares being delivered at such Time of Delivery on the
terms and in the manner contemplated in the Prospectus;
(j) The Shares to be sold at such Time of Delivery shall have
been duly listed for quotation on NASDAQ;
19
(k) The Company has obtained and delivered to the Underwriters
executed copies of agreements substantially in the form of Annex II
hereto (the "Lock-Up Agreements") of each director and officer of the
Company, each officer of the Operating Subsidiary and each other person
(other than the Selling Stockholders and SAM Investors LDC) who holds
capital stock of the Company or any option or other right to acquire
such capital stock (except for such other persons who hold, in the
aggregate, less than ___% of the aggregate number of shares of Stock
outstanding on the date hereof);
(l) The Company shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses on
the New York Business Day next succeeding the date of this Agreement;
(m) The Company and the Selling Stockholders shall have
furnished or caused to be furnished to you at such Time of Delivery
certificates of officers of the Company and of the Selling
Stockholders, respectively, satisfactory to you as to the accuracy of
the representations and warranties of the Company and the Selling
Stockholders, respectively, herein at and as of such Time of Delivery,
as to the performance by the Company and the Selling Stockholders of
all of their respective obligations hereunder to be performed at or
prior to such Time of Delivery and as to such other matters as you may
reasonably request, and the Company shall have furnished or caused to
be furnished certificates as to the matters set forth in subsections
(a) and (g) of this Section; and
(n) The IPO Exchange shall have been consummated as
contemplated herein and in the Exchange Agreement, there shall not be
any proceedings pending or threatened against any of the Company, the
Selling Stockholders or their respective affiliates seeking to enjoin
or otherwise challenge, or that could materially interfere with, the
consummation of the IPO Exchange and the Company and the Selling
Stockholders shall have executed the Company IPO Exchange Certificate
and Stockholder IPO Exchange Certificates, respectively, and delivered
them to you.
9. (a) The Company and the Operating Subsidiary, jointly and severally,
will indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; PROVIDED, HOWEVER, that the
Company and the Operating Subsidiary shall not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration Statement or the
Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through Goldman, Sachs & Co. expressly for use therein.
(b) Each Selling Stockholder will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue
20
statement or alleged untrue statement or omission or alleged omission was made
in any Preliminary Prospectus, the Registration Statement or the Prospectus or
any such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Selling Stockholder expressly for
use therein; and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that such Selling Stockholder shall not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through Goldman, Sachs & Co. expressly for use therein. Notwithstanding the
provisions of this subsection (b), the aggregate liability of any Selling
Stockholder under this Section 9 shall not exceed an amount equal to the initial
offering price of the Shares as set forth on the front cover page of the
Prospectus multiplied by the number of Shares sold by such Selling Stockholder
pursuant to this Agreement.
(c) Each Underwriter will indemnify and hold harmless the Company, the
Operating Subsidiary and each Selling Stockholder against any losses, claims,
damages or liabilities to which the Company or such Selling Stockholder may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through Goldman, Sachs
& Co. expressly for use therein; and will reimburse the Company and each Selling
Stockholder for any legal or other expenses reasonably incurred by the Company
or such Selling Stockholder in connection with investigating or defending any
such action or claim as such expenses are incurred.
(d) Promptly after receipt by an indemnified party under subsection
(a), (b) or (c) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or
21
contribution may be sought hereunder (whether or not the indemnified party is an
actual or potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of any indemnified party.
(e) If the indemnification provided for in this Section 9 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company, the Operating Subsidiary and the
Selling Stockholders on the one hand and the Underwriters on the other from the
offering of the Shares. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (d) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company, the Operating
Subsidiary and the Selling Stockholders on the one hand and the Underwriters on
the other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Company, the Operating Subsidiary and the Selling Stockholders on the one
hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company and the Selling Stockholders bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company, the Operating Subsidiary or the Selling Stockholders on the one hand or
the Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company, the Operating Subsidiary, each of the Selling
Stockholders and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this subsection (e) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (e). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (e) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (e),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (e) to contribute are several in proportion to their respective
underwriting obligations and not joint.
22
(f) The obligations of the Company, the Operating Subsidiary and the
Selling Stockholders under this Section 9 shall be in addition to any liability
which the Company, the Operating Subsidiary and the Selling Stockholders may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Underwriter within the meaning of the Act; and
the obligations of the Underwriters under this Section 9 shall be in addition to
any liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of the
Company (including any person who, with his or her consent, is named in the
Registration Statement as about to become a director of the Company) and to each
person, if any, who controls the Company or any Selling Stockholder within the
meaning of the Act.
10. (a) If any Underwriter shall default in its obligation to purchase
the Shares which it has agreed to purchase hereunder at a Time of Delivery, you
may in your discretion arrange for you or another party or other parties to
purchase such Shares on the terms contained herein. If within thirty-six hours
after such default by any Underwriter you do not arrange for the purchase of
such Shares, then the Company and the Selling Stockholders shall be entitled to
a further period of thirty-six hours within which to procure another party or
other parties satisfactory to you to purchase such Shares on such terms. In the
event that, within the respective prescribed periods, you notify the Company and
the Selling Stockholders that you have so arranged for the purchase of such
Shares, or the Company and the Selling Stockholders notify you that they have so
arranged for the purchase of such Shares, you or the Company and the Selling
Stockholders shall have the right to postpone such Time of Delivery for a period
of not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in your opinion
may thereby be made necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with like effect as if
such person had originally been a party to this Agreement with respect to such
Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company and
the Selling Stockholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased does not exceed one-eleventh of
the aggregate number of all the Shares to be purchased at such Time of Delivery,
then the Company and the Selling Stockholders shall have the right to require
each non-defaulting Underwriter to purchase the number of shares which such
Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Shares which such Underwriter agreed to purchase
hereunder) of the Shares of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company and
the Selling Stockholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased exceeds one-eleventh of the
aggregate number of all the Shares to be purchased at such Time of Delivery, or
if the Company and the Selling Stockholders shall not exercise the right
described in subsection (b) above to require non-defaulting Underwriters to
purchase Shares of a defaulting Underwriter or Underwriters, then this Agreement
(or, with respect to the Second Time of Delivery, the obligations of the
Underwriters to purchase and of the Selling Stockholders to sell the Optional
Shares) shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Company or
23
the Selling Stockholders, except for the expenses to be borne by the Company and
the Selling Stockholders and the Underwriters as provided in Section 7 hereof
and the indemnity and contribution agreements in Section 9 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
11. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Operating Subsidiary, the Selling
Stockholders and the several Underwriters, as set forth in this Agreement or
made by or on behalf of them, respectively, pursuant to this Agreement, shall
remain in full force and effect, regardless of any investigation (or any
statement as to the results thereof) made by or on behalf of any Underwriter or
any controlling person of any Underwriter, or the Company, or any of the Selling
Stockholders, or the Operating Subsidiary or any officer or director or
controlling person of the Company or any controlling person of any Selling
Stockholder and shall survive delivery of and payment for the Shares.
12. If this Agreement shall be terminated pursuant to Section 10
hereof, neither the Company nor the Selling Stockholders shall then be under any
liability to any Underwriter except as provided in Sections 7 and 9 hereof; but,
if for any other reason, any Shares are not delivered by or on behalf of the
Company and the Selling Stockholders as provided herein, the Company will
reimburse the Underwriters through you for all out-of-pocket expenses approved
in writing by you, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of the Shares not so delivered, but the Company and the Selling
Stockholders shall then be under no further liability to any Underwriter in
respect of the Shares not so delivered except as provided in Sections 7 and 9
hereof.
13. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Goldman, Sachs & Co. on behalf of you as the
representatives and in all dealings with any Selling Stockholder hereunder, you
and the Company shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of such Selling Stockholder made or given by any
or all of the Attorneys-in-Fact for such Selling Stockholder.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Goldman, Sachs &
Co., 85 Broad Street, New York, New York 10004, Attention: Registration
Department; if to any Selling Stockholder shall be delivered or sent by mail,
telex or facsimile transmission to counsel for such Selling Stockholder at its
address set forth in Schedule II hereto; and if to the Company or the Operating
Subsidiary shall be delivered or sent by mail to the address of the Company set
forth in the Registration Statement, Attention: Secretary; provided, however,
that any notice to an Underwriter pursuant to Section 9(c) hereof shall be
delivered or sent by mail, telex or facsimile transmission to such Underwriter
at its address set forth in its Underwriters' Questionnaire, or telex
constituting such Questionnaire, which address will be supplied to the Company
or the Selling Stockholders by you upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
14. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and the Selling Stockholders and, to
the extent provided in Sections 9 and 11 hereof, the Operating Subsidiary, the
officers and directors of the Company and each person who controls the Company,
any Selling Stockholder or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any
24
right under or by virtue of this Agreement. No purchaser of any of the Shares
from any Underwriter shall be deemed a successor or assign by reason merely of
such purchase.
15. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
16. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
17. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
18. The Company and the Selling Stockholders are authorized, subject to
applicable law, to disclose any and all aspects of this potential transaction
that are necessary to support any U.S. federal income tax benefits expected to
be claimed with respect to such transaction, and all materials of any kind
(including tax opinions and other tax analyses) related to those benefits,
without the Underwriters imposing any limitation of any kind.
25
If the foregoing is in accordance with your understanding, please sign
and return to us one for the Company and each of the Representatives plus one
for each counsel and the Custodian, if any, counterparts hereof, and upon the
acceptance hereof by you, on behalf of each of the Underwriters, this letter and
such acceptance hereof shall constitute a binding agreement among each of the
Underwriters, the Company and each of the Selling Stockholders. It is understood
that your acceptance of this letter on behalf of each of the Underwriters is
pursuant to the authority set forth in a form of Agreement among Underwriters,
the form of which shall be submitted to the Company for examination upon
request, but without warranty on your part as to the authority of the signers
thereof.
Any person executing and delivering this Agreement as Attorney-in-Fact
for a Selling Stockholder represents by so doing that he has been duly appointed
as Attorney-in-Fact by such Selling Stockholder pursuant to a validly existing
and binding Power-of-Attorney which authorizes such Attorney-in-Fact to take
such action.
Very truly yours,
ORBITZ, INC.
By: .......................................................
Name:
Title:
ORBITZ, LLC
By: .......................................................
Name:
Title:
AMERICAN AIRLINES, INC.
By: .......................................................
Name:
Title:
CONTINENTAL AIRLINES, INC.
By: .......................................................
Name:
Title:
26
NORTHWEST AIRLINES, INC.
By: .......................................................
Name:
Title:
OMICRON RESERVATIONS MANAGEMENT, INC.
By: .......................................................
Name:
Title:
UAL LOYALTY SERVICES, INC.
By: .......................................................
Name:
Title:
27
Accepted as of the date hereof:
Goldman, Sachs & Co.
Credit Suisse First Boston LLC
Legg Mason Wood Walker, Incorporated
Thomas Weisel Partners LLC
By:...............................................
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
28
SCHEDULE I
[Enlarge/Download Table]
NUMBER OF OPTIONAL
SHARES TO BE
TOTAL NUMBER OF PURCHASED IF
FIRM SHARES MAXIMUM OPTION
UNDERWRITER TO BE PURCHASED EXERCISED
----------- ---------------- ------------------
Goldman, Sachs & Co...............................................
Credit Suisse First Boston LLC....................................
Legg Mason Wood Walker, Incorporated..............................
Thomas Weisel Partners LLC........................................
[NAMES OF OTHER UNDERWRITERS].....................................
---------------- ------------------
Total.........................................
================ ==================
1
SCHEDULE II
[Enlarge/Download Table]
NUMBER OF OPTIONAL
SHARES TO BE
TOTAL NUMBER OF SOLD IF
FIRM SHARES MAXIMUM OPTION
TO BE SOLD EXERCISED
--------------- ------------------
The Company.........................................................
The Selling Stockholders:.....................................
AMERICAN AIRLINES, INC. (1)...........................
CONTINENTAL AIRLINES, INC. (2)........................
NORTHWEST AIRLINES, INC. (3)..........................
OMICRON RESERVATIONS MANAGEMENT, INC. (4).............
UAL LOYALTY SERVICES, INC. (5)........................
--------------- ------------------
Total......................................................
=============== ==================
-------------
(1) American Airlines, Inc. is represented by in-house counsel or outside
counsel [to be determined by American] and has appointed [NAME OF
ATTORNEY-IN-FACT TO BE DETERMINED BY AMERICAN] as its Attorney-in-Fact.
(2) Continental Airlines, Inc. is represented by in-house counsel or outside
counsel [to be determined by Continental] and has appointed [NAME OF
ATTORNEY-IN-FACT TO BE DETERMINED BY CONTINENTAL] as its Attorney-in-Fact.
(3) Northwest Airlines, Inc. is represented by in-house counsel or outside
counsel [to be determined by Northwest] and has appointed [NAME OF
ATTORNEY-IN-FACT TO BE DETERMINED BY NORTHWEST] as its Attorney-in-Fact.
(4) Omicron Reservations Management, Inc. is represented by in-house counsel or
outside counsel [to be determined by Delta] and has appointed [NAME OF
ATTORNEY-IN-FACT TO BE DETERMINED BY DELTA] as its Attorney-in-Fact.
(5) UAL Loyalty Services, Inc. is represented by in-house counsel or
outside counsel [to be determined by United] and has appointed
[NAME OF ATTORNEY-IN-FACT TO BE DETERMINED BY UNITED] as its
Attorney-in-Fact.
2
ANNEX I
FORM OF COMFORT LETTER
Pursuant to Section 8(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) examined by
them and included in the Prospectus or the Registration Statement
comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of
Certified Public Accountants of the unaudited consolidated interim
financial statements, selected financial data, pro forma financial
information, financial forecasts and/or condensed financial statements
derived from audited financial statements of the Company for the
periods specified in such letter, as indicated in their reports
thereon, copies of which have been furnished to the representatives of
the Underwriters (the "Representatives") and are attached hereto;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus as indicated in their reports thereon copies
of which are attached hereto and on the basis of specified procedures
including inquiries of officials of the Company and its subsidiaries
who have responsibility for financial and accounting matters regarding
whether the unaudited condensed consolidated financial statements
referred to in paragraph (vi)(A)(i) below comply as to form in all
material respects with the applicable accounting requirements of the
Act and the related published rules and regulations, nothing came to
their attention that cause them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the related published rules and regulations;
(iv) They have compared the information in the Prospectus
under selected captions with the disclosure requirements of Regulation
S-K and on the basis of limited procedures specified in such letter
nothing came to their attention as a result of the foregoing procedures
that caused them to believe that this information does not conform in
all material respects with the disclosure requirements of Items 301,
302, 402 and 503(d), respectively, of Regulation S-K;
(v) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included in
the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
3
(A) (i) the unaudited consolidated statements of
income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus do not
comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published
rules and regulations, or (ii) any material modifications
should be made to the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the
Prospectus for them to be in conformity with generally
accepted accounting principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included in the Prospectus;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived any
unaudited condensed financial statements referred to in clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in clause (B)
were not determined on a basis substantially consistent with
the basis for the audited consolidated financial statements
included in the Prospectus;
(D) any unaudited pro forma consolidated condensed
financial statements included in the Prospectus do not comply
as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not
been properly applied to the historical amounts in the
compilation of those statements;
(E) as of a specified date not more than five days
prior to the date of such letter, there have been any changes
in the consolidated capital stock (other than issuances of
capital stock upon exercise of options and stock appreciation
rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were
outstanding on the date of the latest financial statements
included in the Prospectus) or any increase in the
consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current
assets or stockholders' equity or other items specified by the
Representatives, or any increases in any items specified by
the Representatives, in each case as compared with amounts
shown in the latest balance sheet included in the Prospectus,
except in each case for changes, increases or decreases which
the Prospectus discloses have occurred or may occur or which
are described in such letter; and
(F) for the period from the date of the latest
financial statements included in the Prospectus to the
specified date referred to in clause (E) there were any
decreases in consolidated net revenues or operating profit or
the total or per share amounts of consolidated net income or
other items specified by the Representatives, or any increases
in any items specified by the Representatives, in each case as
compared with the comparable period of the preceding year and
with any other period of corresponding length specified by the
Representatives, except in each case for
4
decreases or increases which the Prospectus discloses have
occurred or may occur or which are described in such letter;
and
(vi) In addition to the examination referred to in their
report(s) included in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to
in paragraphs (iii) and (vi) above, they have carried out certain
specified procedures, not constituting an examination in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Representatives, which are derived from the general accounting records
of the Company and its subsidiaries, which appear in the Prospectus, or
in Part II of, or in exhibits and schedules to, the Registration
Statement specified by the Representatives, and have compared certain
of such amounts, percentages and financial information with the
accounting records of the Company and its subsidiaries and have found
them to be in agreement.
5
ANNEX II
ORBITZ, INC.
LOCK-UP AGREEMENT
_________, 2003
Goldman, Sachs & Co.
Credit Suisse First Boston LLC
Legg Mason Wood Walker, Incorporated
Thomas Weisel Partners LLC
c/o Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
Re: ORBITZ - LOCK-UP AGREEMENT
Ladies and Gentlemen:
The undersigned understands that you, as representatives (the
"Representatives"), propose to enter into an Underwriting Agreement on behalf of
the several Underwriters named in Schedule I to such agreement (collectively,
the "Underwriters"), with Orbitz, Inc., a Delaware corporation (the "Company"),
providing for a public offering of Class A Common Stock, par value $0.001 per
share, of the Company (the "Shares") pursuant to a Registration Statement on
Form S-1 to be filed with the Securities and Exchange Commission (the "SEC").
In consideration of the agreement by the Underwriters to offer and sell
the Shares, and of other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the undersigned agrees that, during
the period beginning from the date of the final Prospectus covering the public
offering of the Shares and continuing to and including the date 180 days after
the date of such final Prospectus, the undersigned will not offer, sell,
contract to sell, pledge, grant any option to purchase, make any short sale or
otherwise dispose of any shares of Common Stock of the Company, or any options
or warrants to purchase any shares of Common Stock of the Company, or any
securities convertible into, exchangeable for or that represent the right to
receive shares of Common Stock of the Company, whether now owned or hereinafter
acquired, owned directly by the undersigned (including holding as a custodian)
or with respect to which the undersigned has beneficial ownership within the
rules and regulations of the SEC (collectively the "Undersigned's Shares").
The foregoing restriction is expressly agreed to preclude the
undersigned from engaging in any hedging or other transaction which is designed
to or which reasonably could be expected to lead to or result in a sale or
disposition of the Undersigned's Shares even if such Shares would be disposed of
by someone other than the undersigned. Such prohibited hedging or other
transactions would include without limitation any short sale or any purchase,
sale or grant of any right (including without limitation any put or call option)
with respect to any of the Undersigned's Shares or with respect to any security
that includes, relates to, or derives any significant part of its value from
such Shares.
Notwithstanding the foregoing, the undersigned may transfer the
Undersigned's Shares (i) as a BONA FIDE gift or gifts, provided that the donee
or donees thereof agree to be bound in writing by the restrictions set forth
herein, (ii) to any trust for the direct or indirect benefit of the undersigned
or the immediate family of the undersigned, provided that the trustee of the
trust agrees to be bound in writing
1
by the restrictions set forth herein, and provided further that any such
transfer shall not involve a disposition for value, or (iii) with the prior
written consent of Goldman, Sachs & Co. on behalf of the Underwriters. For
purposes of this Lock-Up Agreement, "immediate family" shall mean any
relationship by blood, marriage or adoption, not more remote than first cousin.
In addition, notwithstanding the foregoing, if the undersigned is a corporation,
the corporation may transfer the capital stock of the Company to any
wholly-owned subsidiary of such corporation; PROVIDED, HOWEVER, that in any such
case, it shall be a condition to the transfer that the transferee execute an
agreement stating that the transferee is receiving and holding such capital
stock subject to the provisions of this Agreement and there shall be no further
transfer of such capital stock except in accordance with this Agreement, and
provided further that any such transfer shall not involve a disposition for
value. The undersigned now has, and, except as contemplated by clause (i), (ii),
or (iii) above, for the duration of this Lock-Up Agreement will have, good and
marketable title to the Undersigned's Shares, free and clear of all liens,
encumbrances, and claims whatsoever. The undersigned also agrees and consents to
the entry of stop transfer instructions with the Company's transfer agent and
registrar against the transfer of the Undersigned's Shares except in compliance
with the foregoing restrictions.
The undersigned understands that the Company and the Underwriters are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
offering. The undersigned further understands that this Lock-Up Agreement is
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors, and assigns.
Very truly yours,
----------------------------------------
Exact Name of Shareholder
----------------------------------------
Authorized Signature
----------------------------------------
Title
2
ANNEX IV
FORM OF JOINDER TO UNDERWRITING AGREEMENT
The undersigned, as the owner of 1,787 shares of Class B Common Stock
of Orbitz, Inc., a Delaware corporation, 9,387,615 Class A Interests of Orbitz,
LLC, a Delaware limited liability company (the "Company") and 159 Class B
Interests of the Company, hereby joins in the execution and delivery of that
certain Underwriting Agreement, dated as of _________, 2003 (the "Underwriting
Agreement"), and assumes all of the rights and obligations of UAL Loyalty
Services, Inc., a Delaware corporation, thereunder, and agrees to be bound in
all respects by, the Underwriting Agreement as if the undersigned were an
original signatory thereto.
Dated: __________ __, 2003 UNITED AIR LINES, INC.
By:
--------------------------------
Name:
Title:
3
Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘S-1/A’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| Filed as of: | | 11/26/03 | | | | | | | None on these Dates |
| Filed on: | | 11/25/03 | | 1 | | 14 |
| List all Filings |
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