<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) October 6, 1999
------------------------------
AMERICAN AIRLINES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-2691 13-1502798
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(State of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
4333 Amon Carter Blvd. Fort Worth, Texas 76155
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(Address of principal executive offices) (Zip Code)
(817) 963-1234
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(Registrant's telephone number)
<PAGE> 2
ITEM 7. EXHIBITS. The following documents are filed with reference to the
Registration Statement on Form S-3 (Registration No. 333-74937) of American
Airlines, Inc. (the "Company"):
<TABLE>
<S> <C>
1 Underwriting Agreement, dated September 23, 1999, between the
Company and Credit Suisse First Boston Corporation and Morgan
Stanley & Co. Incorporated.
4(a)(1) Pass Through Trust Agreement dated as of October 1, 1999 between the
Company and State Street Bank and Trust Company of Connecticut,
National Association, as Trustee (the "Pass Through Trustee")
4(a)(2) Trust Supplement No. 1999-1A-1, dated as of October 6, 1999, between
the Company and the Pass Through Trustee
4(a)(3) Form of 6.855% American Airlines Pass Through Certificate, Series
1999-1A-1 (included in Exhibit 4(a)(2))
4(a)(4) Trust Supplement No. 1999-1A-2, dated as of October 6, 1999, between
the Company and the Pass Through Trustee
4(a)(5) Form of 7.024% American Airlines Pass Through Certificate, Series
1999-1A-2 (included in Exhibit 4(a)(4))
4(a)(6) Trust Supplement No. 1999-1B, dated as of October 6, 1999, between
the Company and the Pass Through Trustee
4(a)(7) Form of 7.324% American Airlines Pass Through Certificate, Series
1999-1B (included in Exhibit 4(a)(6))
4(a)(8) Trust Supplement No. 1999-1C, dated as of October 6, 1999, between
the Company and the Pass Through Trustee
4(a)(9) Form of 7.155% American Airlines Pass Through Certificate, Series
1999-1C (included in Exhibit 4(a)(8))
4(b)(1) Intercreditor Agreement, dated as of October 6, 1999, among the Pass
Through Trustee, Bayerische Landesbank Girozentrale (the "Liquidity
Provider") and State Street Bank and Trust Company of Connecticut,
National Association, as Subordination Agent (the "Subordination
Agent")
4(c)(1) Revolving Credit Agreement (1999-1A-1), dated as of October 6, 1999,
between the Subordination Agent and the Liquidity Provider
</TABLE>
2
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<TABLE>
<S> <C>
4(c)(2) Revolving Credit Agreement (1999-1A-2), dated as of October 6, 1999,
between the Subordination Agent and the Liquidity Provider
4(c)(3) Revolving Credit Agreement (1999-1B), dated as of October 6, 1999,
between the Subordination Agent and the Liquidity Provider
4(c)(4) Revolving Credit Agreement (1999-1C), dated as of October 6, 1999,
between the Subordination Agent and the Liquidity Provider
4(d)(1) Participation Agreement (N908AN), dated as of October 6, 1999, among
the Company, the Pass Through Trustee, the Subordination Agent and
State Street Bank and Trust Company of Connecticut, National
Association, as loan trustee (the "Loan Trustee"), and State Street
Bank and Trust Company of Connecticut, National Association, in its
individual capacity as set forth therein
4(d)(2) Indenture and Security Agreement (N908AN), dated as of October 6,
1999, between the Company and the Loan Trustee
4(d)(3) Form of Series 1999-1 Equipment Notes issued in connection with the
Boeing aircraft bearing U.S. registration no. N908AN (included in
Exhibit 4(d)(2))
23(a) Consent, dated September 22, 1999, of Aircraft Information Services,
Inc.
23(b) Consent, dated September 22, 1999, of Aviation Solutions, Inc.
23(c) Consent, dated September 22, 1999, of Morten Beyer & Agnew
99(a) Schedule I
</TABLE>
Pursuant to Instruction 2 to Item 601 of Regulation S-K, Exhibit 99(a)
filed herewith contains a list of other documents applicable to the Boeing
aircraft that relate to the offering of the Company's Pass Through
Certificates, Series 1999-1, which documents are substantially identical to
those applicable to the Boeing 737-823 aircraft bearing United States
registration number N908AN and which are filed herewith as Exhibits 4(d)(1),
4(d)(2) and 4(d)(3). Exhibit 99(a) sets forth the details by which such other
documents differ from the corresponding documents filed in respect of the
aircraft bearing United States registration number N908AN.
3
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMERICAN AIRLINES, INC.
Date: October 6, 1999 By: /s/ Charles D. MarLett
-------------------------------------
Charles D. MarLett
Corporate Secretary
4
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
1 Underwriting Agreement, dated September 23, 1999, between the
Company and Credit Suisse First Boston Corporation and Morgan
Stanley & Co. Incorporated.
4(a)(1) Pass Through Trust Agreement dated as of October 1, 1999 between the
Company and State Street Bank and Trust Company of Connecticut,
National Association, as Trustee ("the Pass Through Trustee")
4(a)(2) Trust Supplement No. 1999-1A-1, dated as of October 6, 1999, between
the Company and the Pass Through Trustee
4(a)(3) Form of 6.855% American Airlines Pass Through Certificate, Series
1999-1A-1 (included in Exhibit 4(a)(2))
4(a)(4) Trust Supplement No. 1999-1A-2, dated as of October 6, 1999, between
the Company and the Pass Through Trustee
4(a)(5) Form of 7.024% American Airlines Pass Through Certificate, Series
1999-1A-2 (included in Exhibit 4(a)(4))
4(a)(6) Trust Supplement No. 1999-1B, dated as of October 6, 1999, between
the Company and the Pass Through Trustee
4(a)(7) Form of 7.324% American Airlines Pass Through Certificate, Series
1999-1B (included in Exhibit 4(a)(6))
4(a)(8) Trust Supplement No. 1999-1C, dated as of October 6, 1999, between
the Company and the Pass Through Trustee
4(a)(9) Form of 7.155% American Airlines Pass Through Certificate, Series
1999-1C (included in Exhibit 4(a)(8))
4(b)(1) Intercreditor Agreement, dated as of October 6, 1999, among the Pass
Through Trustee, Bayerische Landesbank Girozentrale (the "Liquidity
Provider") and State Street Bank and Trust Company of Connecticut,
National Association, as Subordination Agent (the "Subordination
Agent")
4(c)(1) Revolving Credit Agreement (1999-1A-1), dated as of October 6, 1999,
between the Subordination Agent and the Liquidity Provider
</TABLE>
5
<PAGE> 6
<TABLE>
<S> <C>
4(c)(2) Revolving Credit Agreement (1999-1A-2), dated as of October 6, 1999,
between the Subordination Agent and the Liquidity Provider
4(c)(3) Revolving Credit Agreement (1999-1B), dated as of October 6, 1999,
between the Subordination Agent and the Liquidity Provider
4(c)(4) Revolving Credit Agreement (1999-1C), dated as of October 6, 1999,
between the Subordination Agent and the Liquidity Provider
4(d)(1) Participation Agreement (N908AN), dated as of October 6, 1999, among
the Company, the Pass Through Trustee, the Subordination Agent and
State Street Bank and Trust Company of Connecticut, National
Association, as loan trustee (the "Loan Trustee"), and State Street
Bank and Trust Company of Connecticut, National Association, in its
individual capacity as set forth therein
4(d)(2) Indenture and Security Agreement (N908AN), dated as of October 6,
1999, between the Company and the Loan Trustee
4(d)(3) Form of Series 1999-1 Equipment Notes issued in connection with the
Boeing aircraft bearing U.S. registration no. N908AN (included in
Exhibit 4(d)(2))
23(a) Consent, dated September 22, 1999, of Aircraft Information Services,
Inc.
23(b) Consent, dated September 22, 1999, of Aviation Solutions, Inc.
23(c) Consent, dated September 22, 1999, of Morten Beyer & Agnew
99(a) Schedule I
</TABLE>
6
<PAGE> 1
EXHIBIT 1
EXECUTION COPY
=========================================
AMERICAN AIRLINES, INC.
Pass Through Certificates, Series 1999-1
UNDERWRITING AGREEMENT
=========================================
Dated: September 23, 1999
<PAGE> 2
AMERICAN AIRLINES, INC.
Pass Through Certificates, Series 1999-1
UNDERWRITING AGREEMENT
September 23, 1999
To the Underwriters named in Schedule I
Ladies and Gentlemen:
American Airlines, Inc., a Delaware corporation (the "Company"),
proposes that State Street Bank and Trust Company of Connecticut, National
Association, acting not in its individual capacity but solely as pass through
trustee (the "Trustee") under the Pass Through Trust Agreement to be dated as of
October 1, 1999 (the "Basic Agreement"), as supplemented for each class of pass
through certificates (the "Pass Through Certificates") to be purchased hereunder
(each, a "Class") by a Trust Supplement (each, a "Trust Supplement"), in each
case between the Company and the Trustee (for each Class, the Basic Agreement,
as supplemented by the related Trust Supplement, being referred to herein
individually as a "Designated Agreement"), issue and sell to the underwriters
named in Schedule I hereto its Pass Through Certificates in the aggregate
amounts and with the applicable interest rates and final expected distribution
dates set forth on Schedule A hereto (the "Offered Certificates") on the terms
and conditions stated herein and in Schedule II.
Each Class of Pass Through Certificates will represent interests in a
separate trust (each, a "Pass Through Trust") established pursuant to the
related Designated Agreement to fund the purchase of equipment notes (the
"Equipment Notes") to be issued by the Company in connection with the financing
of fifteen Aircraft. The Equipment Notes will be issued under fifteen separate
Indenture and Security Agreements between State Street Bank and Trust Company of
Connecticut, National Association ("State Street"), as Loan Trustee (the "Loan
Trustee"), and the Company (each, including any Supplements thereto, an
"Indenture" and, collectively, the "Indentures").
Certain amounts of interest payable with respect to the Pass Through
Certificates will be entitled to the benefits of separate liquidity facilities.
Bayerische Landesbank Girozentrale (the "Liquidity Provider") will enter into a
separate revolving credit agreement with respect to each Pass Through Trust
(each, a "Liquidity Facility"), to be dated as of the date on which the Closing
Time (as defined below) occurs, for the benefit of the
<PAGE> 3
2
holders of the respective Class of Pass Through Certificates. The Liquidity
Provider and the holders of the Offered Certificates will be entitled to the
benefits of an Intercreditor Agreement to be dated as of the date on which the
Closing Time occurs (the "Intercreditor Agreement") among State Street, as
Trustee of each Pass Through Trust, the Liquidity Provider and State Street, as
Subordination Agent (the "Subordination Agent").
As used herein, unless the context otherwise requires, the term
"Underwriters" shall mean firms named as Underwriters in Schedule I and the term
"you" shall mean Credit Suisse First Boston Corporation and Morgan Stanley & Co.
Incorporated ("Morgan Stanley").
Capitalized terms used but not otherwise defined in this Agreement
shall have the meanings specified in or pursuant to the Designated Agreements or
the Intercreditor Agreement; provided that as used in this Agreement, the term
"Operative Documents" shall mean the Intercreditor Agreement, the Liquidity
Facilities, the Designated Agreements, the Participation Agreements and the
Indentures.
The Company has prepared and filed on Form S-3 with the Securities and
Exchange Commission (the "Commission") a registration statement (File No.
333-74937) (as amended at the date hereof, including the exhibits thereto and
the documents incorporated by reference therein, the "Registration Statement")
relating to certain pass through certificates (including the Offered
Certificates) and the offering thereof from time to time in accordance with Rule
415 under the Securities Act of 1933, as amended (the "Securities Act"). The
Registration Statement includes a basic prospectus referred to below which, as
supplemented from time to time, will be used in connection with all offerings of
such pass through certificates. As provided in Section 3(a), a prospectus
supplement reflecting the terms of the Offered Certificates, the terms of the
offering thereof and the other matters set forth therein has been prepared and
will be filed together with the basic prospectus referred to below pursuant to
Rule 424 under the Securities Act (such prospectus supplement, in the form first
filed on or after the date hereof pursuant to Rule 424, is herein referred to as
the "Prospectus Supplement"). The basic prospectus included in the Registration
Statement and relating to all offerings of pass through certificates under the
Registration Statement, as supplemented by the Prospectus Supplement, is herein
called the "Prospectus", except that, if such basic prospectus is amended on or
prior to the date on which the Prospectus Supplement is first filed pursuant to
Rule 424, the term "Prospectus" shall refer to such basic prospectus as so
amended and as supplemented by the Prospectus Supplement, in either case
including the documents filed by the Company with the Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are
incorporated by reference therein. The term "preliminary prospectus" means a
preliminary prospectus supplement specifically relating to the Offered
Certificates, together with the basic prospectus and including the documents
filed by the Company with the Commission pursuant to the Exchange Act that are
incorporated by reference therein. Any reference herein to the terms "amendment"
or "supplement" with
<PAGE> 4
3
respect to the Registration Statement, the Prospectus, or any preliminary
prospectus shall be deemed to refer to and include any documents filed with the
Commission under the Exchange Act after the date hereof, the date the Prospectus
is filed with the Commission, or the date of such preliminary prospectus, as the
case may be, and incorporated therein by reference pursuant to Item 12 of Form
S-3 under the Securities Act.
1. Representations and Warranties. The Company represents and
warrants to, and agrees with, each Underwriter that:
(a) The Company meets the requirements for use of Form S-3
under the Securities Act.
(b) The Registration Statement has been declared effective by
the Commission. On the original effective date of the Registration
Statement, on the effective date of any post-effective amendment
thereto, and on the date of the filing by the Company of any Annual
Report on Form 10-K after the original filing of such Registration
Statement, such Registration Statement complied in all material
respects with the applicable requirements of the Securities Act and the
rules and regulations of the Commission thereunder (the "Securities Act
Regulations"), and the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), and the applicable rules and regulations of the
Commission thereunder (the "Trust Indenture Act Regulations") and did
not include 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; the Registration Statement and any
amendments thereof, on the date hereof, and the Prospectus, and any
amendments thereof and supplements thereto, as of their respective
filing or issue dates and at the Closing Time, comply and will comply
in all material respects with the requirements of the Securities Act,
the Securities Act Regulations, the Trust Indenture Act and the Trust
Indenture Act Regulations, and (i) neither the Registration Statement
nor any amendments thereof, as of any such respective dates, includes
or will include an untrue statement of a material fact or omits or will
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and (ii)
neither the Prospectus nor any amendments thereof or supplements
thereto, as of any such respective dates, includes or will include an
untrue statement of a material fact or omits or will omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; except that
this representation and warranty does not apply to statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company in connection with the Registration
Statement or the Prospectus or any amendment thereof or supplement
thereto by or on behalf of any Underwriter through either of you
expressly for use in the Registration Statement or the Prospectus, or
to statements or omissions in that part of the Registration Statement
<PAGE> 5
4
which constitutes the Statement of Eligibility under the Trust
Indenture Act (Form T-1) of the Trustee.
(c) The consolidated financial statements incorporated by
reference in the Registration Statement and Prospectus present fairly
the consolidated financial position of the Company and its subsidiaries
as of the dates indicated and the consolidated results of their
operations and cash flows for the periods specified and have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis during the periods involved, except as
indicated therein, and the supporting schedules incorporated by
reference in the Registration Statement present fairly the information
required to be stated therein.
(d) The documents incorporated by reference in the Prospectus,
at the time they were or hereafter are filed with the Commission,
complied and will comply in all material respects with the requirements
of the Exchange Act and the rules and regulations thereunder.
(e) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein or contemplated thereby, there has been no
material adverse change in the condition, financial or otherwise,
results of operations or general affairs of the Company and its
subsidiaries taken as a whole.
(f) The Company is a corporation duly incorporated and validly
existing in good standing under the laws of the State of Delaware, has
the corporate power and authority under such laws to own its properties
and conduct its business as described in the Prospectus.
(g) The Company (i) is an "air carrier" within the meaning of
49 U.S.C. Section 40102(a), (ii) holds an air carrier operating
certificate issued by the Secretary of Transportation pursuant to
Chapter 447 of Title 49 of the United States Code for aircraft capable
of carrying 10 or more individuals or 6,000 pounds or more of cargo,
(iii) is a "citizen of the United States" as defined in 49 U.S.C.
Section 40102 and (iv) is duly qualified to do business as a foreign
corporation in good standing in the jurisdictions in the United States
of America in which the Company has intrastate routes, a principal
office (including the jurisdiction in which its principal place of
business is located) or major overhaul facility. All of the issued and
outstanding capital stock of the Company has been duly authorized and
validly issued, is fully paid and nonassessable and is owned by AMR
Corporation directly, free and clear of any liens, encumbrances,
equities or claims.
<PAGE> 6
5
(h) The execution and delivery by the Company of this
Agreement, the Equipment Notes and the Operative Documents to which the
Company is, or is to be, a party, the consummation by the Company of
the transactions herein and therein contemplated, and the compliance by
the Company with the terms hereof and thereof do not and will not
conflict with, or result in a breach of, any of the terms or provisions
of, or constitute a default under, the Certificate of Incorporation or
By-Laws, as amended, of the Company or any of its subsidiaries or any
material indenture, mortgage, or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which any of
their respective properties is bound, or any applicable law, rule,
regulation, judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over
the Company or any of its subsidiaries or any of their respective
properties; and no consent, approval, authorization, order or license
of, or filing with or notice to, any government, governmental
instrumentality, regulatory body or authority or court, domestic or
foreign, is required for the valid authorization, issuance and delivery
of the Offered Certificates and the Equipment Notes, the valid
authorization, execution, delivery and performance by the Company of
this Agreement, the Equipment Notes and the Operative Documents to
which the Company is, or is to be, a party, or the consummation by the
Company of the transactions contemplated by this Agreement, the
Equipment Notes and the Operative Documents to which the Company is, or
is to be, a party, except (i) such as are required under the Securities
Act, the Trust Indenture Act and the securities or Blue Sky laws of the
various states and, (ii) filings or recordings with the Federal
Aviation Administration ("FAA") and under the Uniform Commercial Code
as in effect in Texas, which filings or recordings shall have been made
or duly presented for filing on or prior to the Closing Time.
(i) This Agreement, the Equipment Notes and the Operative
Documents to which the Company is, or is to be, a party, have each been
duly authorized by the Company, and this Agreement and each Operative
Document to which the Company is, or is to be, a party, have been or
will be at or prior to the Closing Time, duly executed and delivered by
the Company. The Equipment Notes will be duly executed and delivered by
the Company at or prior to the Closing Time. The Equipment Notes and
the Operative Documents to which the Company is or is to be, a party,
when duly executed and delivered by the Company, assuming in the case
of the Operative Documents that such documents constitute the legal,
valid and binding obligation of each other party thereto, constitute or
will constitute valid and binding obligations of the Company. The Basic
Agreement as executed is substantially in the form filed as an exhibit
to the Registration Statement and has been duly qualified under the
Trust Indenture Act. The Offered Certificates, the Equipment Notes, and
the Operative Documents will conform in all material respects to the
descriptions thereof in the Prospectus.
<PAGE> 7
6
(j) Ernst & Young LLP, who reported on the annual consolidated
financial statements of the Company incorporated by reference in the
Registration Statement and the Prospectus, are independent accountants
as required by the Securities Act and the Securities Act Regulations.
(k) When duly executed, authenticated and delivered by the
Trustee in accordance with the terms of the related Designated
Agreements and sold and paid for as provided in this Agreement, the
Offered Certificates will be validly issued pursuant to the related
Designated Agreements and will constitute valid and binding obligations
of the related Trustees enforceable against the Trustees in accordance
with their terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting enforcement
of creditors' rights generally and by general principles of equity; and
the holders thereof will be entitled to the benefits of the related
Designated Agreements.
(l) The Equipment Notes, when duly executed and delivered by
the Company and when duly authenticated by the Loan Trustee in
accordance with the terms of the related Indentures, will be duly
issued under such Indentures and will constitute valid and binding
obligations of the Company; and the holders thereof will be entitled to
the benefits of the related Indentures.
2. Purchase and Sale. (a) On the basis of the representations
and warranties herein contained (except as may be otherwise specified in
Schedule II) and subject to the terms and conditions herein and therein set
forth, the Company agrees to cause the Trustee to sell to each Underwriter, and
each Underwriter agrees, severally and not jointly, to purchase from the
Trustee, at a purchase price of 100% of the principal amount thereof, the
aggregate principal amount of each Class of Offered Certificates set forth
opposite the name of such Underwriter in Schedule A.
(b) Payment of the purchase price for, and delivery of, the
Offered Certificates shall be made at the date, time and location or locations
specified in Schedule II, or at such other date, time or location or locations
as shall be agreed upon by the Company and you, or as shall otherwise be
provided in Section 7 (such date and time being herein called the "Closing
Time"). Unless otherwise specified in Schedule II, payment shall be made to or
upon the order of the Trustees by federal funds wire transfer or other
immediately available funds against delivery to the account of Morgan Stanley at
The Depository Trust Company for the respective accounts of the several
Underwriters of the Offered Certificates. Such Offered Certificates shall be
registered in the name of Cede & Co. or in such other names, and in such
authorized denominations as you may request in writing at least two full
business days before the Closing Time. Certificates for such Offered
Certificates, which may be in temporary form, will be made available for
examination and packaging by you at the location or locations at
<PAGE> 8
7
which they are to be delivered at the Closing Time (or such other location as
may be specified for that purpose in Schedule II) not later than 10:00 A.M. on
the business day prior to the Closing Time.
(c) The Company will pay to Morgan Stanley at the Closing Time
for the accounts of the Underwriters any fee, commission or other compensation
which is specified in Schedule II hereto. Such payment will be made by federal
funds wire transfer or other immediately available funds.
3. Agreements. The Company covenants with each Underwriter as
follows:
(a) Immediately following the execution of this Agreement, the
Company will prepare a Prospectus Supplement that complies with the
Securities Act and the Securities Act Regulations and which sets forth
the principal amount of the Offered Certificates and their terms not
otherwise specified in the basic prospectus relating to all offerings
of pass through certificates under the Registration Statement, the name
of each Underwriter participating in the offering and the principal
amount of the Offered Certificates that each severally has agreed to
purchase, the name of each Underwriter, if any, acting as
representative of the Underwriters in connection with the offering, the
price at which the Offered Certificates are to be purchased by the
Underwriters from the Trustee, any initial public offering price, any
selling concession and reallowance, and such other information as you
and the Company deem appropriate in connection with the offering of the
Offered Certificates. The Company will promptly transmit copies of the
Prospectus Supplement and the Prospectus to the Commission for filing
pursuant to Rule 424 under the Securities Act and will furnish to the
Underwriters as many copies of the Prospectus Supplement and the
Prospectus as you shall reasonably request.
(b) During the period when a prospectus relating to the
Offered Certificates is required to be delivered under the Securities
Act, the Company will promptly advise you of (i) the effectiveness of
any amendment to the Registration Statement, (ii) the transmittal to
the Commission for filing of any supplement to the Prospectus or any
document that would as a result thereof be incorporated by reference in
the Prospectus, (iii) any request by the Commission for any amendment
of the Registration Statement or any amendment or supplement to the
Prospectus or for any additional information relating thereto or to any
document incorporated by reference therein, (iv) the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any
proceeding for that purpose, and (v) the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Offered Certificates for sale in any jurisdiction or the institution or
<PAGE> 9
8
threatening of any proceeding for such purpose. The Company will use
its best efforts to prevent the issuance of any such stop order and, if
issued, to obtain as soon as possible the withdrawal thereof.
(c) If, at any time when a prospectus relating to the Offered
Certificates is required to be delivered under the Securities Act, any
event occurs as a result of which the Prospectus as then amended or
supplemented would include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or if it shall be necessary to amend or supplement the
Prospectus to comply with the Securities Act or the Securities Act
Regulations, the Company promptly will prepare and file with the
Commission, subject to paragraph (d) of this Section 3, an amendment or
supplement which will correct such statement or omission or an
amendment or supplement which will effect such compliance. Neither your
consent to, nor the Underwriters' delivery of, any such amendment or
supplement shall constitute a waiver of any of the conditions set forth
in Section 4.
(d) At any time when a prospectus relating to the Offered
Certificates is required to be delivered under the Securities Act or
the Securities Act Regulations, the Company will give you notice of its
intention to file any amendment to the Registration Statement or any
amendment or supplement to the Prospectus, whether pursuant to the
Exchange Act, the Securities Act or otherwise, will furnish you with
copies of any such amendment or supplement or other documents proposed
to be filed within a reasonable time in advance of filing, and will not
file any such amendment or supplement or other documents in a form to
which you shall reasonably object.
(e) The Company has furnished or will furnish to you and your
counsel, without charge, conformed copies of the Registration Statement
as originally filed and of all amendments thereto, whether filed before
or after such Registration Statement originally became effective
(including exhibits thereto and the documents incorporated therein by
reference) and, so long as delivery of a prospectus by an underwriter
or dealer may be required by the Securities Act, as many copies of each
preliminary prospectus, the Prospectus and any amendments thereof and
supplements thereto as you may reasonably request.
(f) The Company will take such actions as you may request to
qualify the Offered Certificates for sale under the laws of such
jurisdictions as you may reasonably request and will maintain such
qualifications in effect so long as required for the distribution of
such Offered Certificates. The Company, however, shall not be obligated
to qualify as a foreign corporation or file any general consent to
service of
<PAGE> 10
9
process under the laws of any such jurisdiction or subject itself to
taxation as doing business in any such jurisdiction.
(g) The Company, during the period when a prospectus relating
to the Offered Certificates is required to be delivered under the
Securities Act and the Securities Act Regulations, will file promptly
all documents required to be filed with the Commission pursuant to
Section 13 or 14 of the Exchange Act.
(h) The Company will make generally available to its security
holders, in each case as soon as practicable, but not later than 45
days after the close of the period covered thereby (90 days in case the
period covered corresponds to a fiscal year of the Company), earnings
statements of the Company, which will comply as to form with the
provisions of Rule 158 under the Securities Act.
(i) Between the date of this Agreement and the Closing Time,
the Company will not, without your prior consent, offer, sell or enter
into any agreement to sell any public debt securities registered under
the Securities Act (other than the Offered Certificates) or any debt
securities which may be sold in a transaction exempt from the
registration requirements of the Securities Act in reliance on Rule
144A under the Securities Act and which are marketed through the use of
a disclosure document containing substantially the same information as
a prospectus for similar debt securities registered under the
Securities Act; provided, however, that it is understood and agreed
that the restrictions of this paragraph shall not apply to the
approximately $210 million Dallas-Forth Worth International Airport
Facility Improvement Corporation American Airlines, Inc. Revenue Bonds,
Series 1999, currently scheduled to close in October 1999, and related
transactions.
(j) If and to the extent specified in Schedule II, the Company
will promptly after the date hereof, in the event it has not already
done so, file an application for the listing of the Offered
Certificates on the securities exchange specified in said Schedule II
and will use its best efforts to cause such Offered Certificates to be
duly authorized for listing thereon, subject to official notice of
issuance, and to be registered under the Exchange Act.
4. Conditions to the Obligations of the Underwriters. Except
as otherwise provided in Schedule II, the obligations of the Underwriters to
purchase and pay for the Offered Certificates pursuant to this Agreement shall
be subject to the accuracy of and compliance with the representations and
warranties of the Company contained herein as of the date hereof and the Closing
Time, to the accuracy of the statements of the Company's officers made in any
certificates furnished pursuant to the provisions hereof, to the performance by
the
<PAGE> 11
10
Company of its covenants and other obligations hereunder and to the following
additional conditions:
(a) At the Closing Time, no stop order suspending the
effectiveness of the Registration Statement shall have been issued
under the Securities Act and no proceedings therefor shall have been
instituted or threatened by the Commission.
(b) At the Closing Time, you shall have received:
(1) An opinion, dated the Closing Time, from Anne H.
McNamara, Esq., Senior Vice President and General Counsel of
the Company, in form reasonably satisfactory to you and your
counsel, to the effect that:
(i) The Company has been duly incorporated
and is validly existing as a corporation in good
standing under the laws of the State of Delaware and
has the corporate power and authority under such laws
to own its properties and to conduct its business as
described in the Prospectus; and all of the issued
and outstanding shares of capital stock of the
Company have been duly authorized and validly issued
and are fully paid and non-assessable and the capital
stock of the Company is owned by AMR Corporation,
directly, free and clear of any liens, encumbrances,
equities or claims. The Company is duly qualified to
do business as a foreign corporation in good standing
in the state in which its principal place of business
is located. The Company holds an air carrier
operating certificate issued by the Secretary of
Transportation pursuant to Chapter 447 of Title 49 of
the United States Code pursuant to which the Company
is authorized to operate the Aircraft and the Company
is a "citizen of the United States" as defined in 49
U.S.C. Section 40102;
(ii) The Company has the corporate power and
authority under Delaware law to perform its
obligations hereunder and under the Equipment Notes
and the Operative Documents to which the Company is,
or is to be, a party;
(iii) The Offered Certificates, the
Equipment Notes and the Operative Documents conform
in all material respects to the descriptions thereof
contained in the Prospectus and such descriptions
conform in all material respects to the rights set
forth in the instruments defining the same;
<PAGE> 12
11
(iv) No authorization, approval, consent,
order or license of or filing with or notice to any
government, governmental instrumentality, regulatory
body or authority or court is required for the valid
authorization, issuance, sale and delivery of the
Offered Certificates or the Equipment Notes, the
valid authorization, execution, delivery and
performance by the Company of this Agreement and the
Operative Documents to which the Company is, or is to
be, a party, or the consummation by the Company of
the transactions contemplated by this Agreement and
the other Operative Documents to which the Company
is, or is to be, a party, except such as have been
obtained under the Securities Act and the Trust
Indenture Act, and such as may be required under the
securities or Blue Sky laws of the various states and
except for the filing of Uniform Commercial Code
financing statements (or amendments to any such
financing statements) and the filing of continuation
statements with respect thereto required to be filed
at periodic intervals under the Uniform Commercial
Code and any filings or recordings with the Federal
Aviation Administration, as to which such counsel
need express no opinion;
(v) The Registration Statement has become
effective under the Securities Act, the Basic
Agreement has been duly qualified under the Trust
Indenture Act and, to the best knowledge of such
counsel, no stop order suspending the effectiveness
of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or
threatened;
(vi) The Registration Statement, the
Prospectus and each amendment thereof or supplement
thereto (except in each case for the financial
statements and other financial or statistical data
included or incorporated by reference therein, as to
which such counsel need express no opinion) comply as
to form in all material respects with the
requirements of the Securities Act and the Securities
Act Regulations; the Basic Agreement and the
Statement of Eligibility of the Trustee on Form T-1
filed with the Commission as part of the Registration
Statement comply as to form in all material respects
with the requirements of the Trust Indenture Act and
the rules and regulations thereunder; and each
document filed pursuant to the Exchange Act and
incorporated by reference in the Prospectus (except
in each case for the financial statements and other
financial or statistical data included or
incorporated by reference therein, as to which
counsel need express no opinion) appeared on its
face, as of its respective filing date, to comply as
to form
<PAGE> 13
12
in all material respects with the requirements of the
Exchange Act and the rules and regulations
thereunder;
(vii) This Agreement has been duly
authorized, validly executed and delivered by the
Company;
(viii) Each of the Operative Documents to
which the Company is, or is to be, a party has been
duly authorized, executed and delivered by the
Company and each is a valid and binding obligation of
the Company enforceable against the Company in
accordance with its respective terms, except as may
be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting
enforcement of creditors' rights generally and by
general principles of equity;
(ix) The execution and delivery by the
Company of this Agreement, the Equipment Notes and
the Operative Documents to which the Company is, or
is to be, a party, the consummation by the Company of
the transactions herein and therein contemplated and
in the manner herein and therein contemplated and
compliance by the Company with the terms hereof and
thereof, do not and will not conflict with, or result
in a breach of, any of the terms or provisions of, or
constitute a default under, the Certificate of
Incorporation or By-Laws, as amended, of the Company
or any of its subsidiaries or any indenture or other
agreement or instrument known to such counsel 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 any law, rule, regulation,
judgment, decree or order known to such counsel to be
applicable to the Company or any of its subsidiaries
of any court, regulatory body, administrative agency,
government or governmental body having jurisdiction
over the Company or any of its subsidiaries;
(x) The Loan Trustee under each Indenture
will be entitled to the benefits of Section 1110 of
the Bankruptcy Code with respect to the airframe and
the engines comprising the Aircraft originally
subject to the lien of such Indenture;
(xi) The Equipment Notes, when duly
authorized, executed and delivered by the Company and
duly authenticated by the related Loan Trustee, will
constitute valid and binding obligations of the
Company, enforceable against the Company in
accordance with their terms, except as may be limited
by bankruptcy, insolvency, reorganization,
<PAGE> 14
13
moratorium or other similar laws affecting
enforcement of creditors' rights generally and by
general principles of equity and the holders of the
Equipment Notes will be entitled to the benefits of
the respective Indentures; and
(xii) Such counsel has no reason to believe
that the statements in the Registration Statements
and the Prospectus with respect to statutes,
administrative orders and regulations and legal and
governmental proceedings do not fairly and accurately
present in all material respects the information
required to be set forth therein except that such
counsel need express no opinion as to the matters to
be addressed in clauses (ii), (iii) and (iv) of the
opinion referred to in Section 4(b)(2) hereof and
paragraphs 6, 7 and 9 of the form of opinion of
Bingham Dana LLP set forth in Exhibit A hereto; and
there are, to the best of such counsel's knowledge,
no statutes, administrative orders or regulations or
legal or governmental proceedings required to be
described in the Registration Statements or the
Prospectus which are not described as required, nor
any contracts or documents of a character required to
be described in the Registration Statements or the
Prospectus, or to be filed as exhibits to the
Registration Statements, that are not so described or
filed as required;
(xiii) The routes presently operated by the
Company are being operated pursuant to valid
certificates or exemption orders issued by the
Department of Transportation or its predecessor, the
Civil Aeronautics Board, and no such certificate or
exemption order is the subject of any "show cause" or
other order of, or any proceeding before, or any
investigation by, the Department of Transportation or
its predecessor (other than proceedings for the
renewal of temporary rights) which in the opinion of
such counsel might reasonably result in a final order
impairing the validity of such certificates or
exemption orders; and
(xiv) Assuming due authorization, execution
and delivery by the Trustee and the Subordination
Agent of the Participation Agreements, each
Participation Agreement constitutes the valid and
binding obligation of each such party, enforceable in
accordance with its terms, except as may be limited
by bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting enforcement of
creditors' rights generally and by general principles
of equity;
and to such further effect with respect to other legal matters relating to this
Agreement, the Equipment Notes and the Operative Documents to which the Company
is, or is to be, a party
<PAGE> 15
14
and the sale of the Offered Certificates hereunder as counsel for the
Underwriters may reasonably request.
Such counsel shall also state that no facts have come to the
attention of such counsel which have caused such counsel to believe (A) that the
Registration Statement or any amendment thereto, on the original effective date
thereof, on the effective date of any post-effective amendment thereto, or on
the date of the filing by the Company of its most recent Annual Report on Form
10-K after the filing of the Registration Statement (except, in each case, for
the financial statements and other financial and statistical data included or
incorporated by reference therein, and except for the Statement of Eligibility
on Form T-1 of the Trustee under the Basic Agreement, as to which such counsel
need express no belief), contained an 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 (B) that the Prospectus at the
time the Prospectus Supplement was issued or the Prospectus, together with any
amendment or supplement thereto, at the time any such amended or supplemental
Prospectus was issued or at the Closing Time (except, in each case, for the
financial statements and other financial and statistical data included or
incorporated by reference therein, as to which such counsel need express no
belief), contained or contains any untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. In giving such opinion, such counsel may state that such opinion
is limited to the laws of the States of New York and Texas, the General
Corporation Law of the State of Delaware and the Federal laws of the United
States, except that such counsel expresses no opinion as to the securities laws
of any state. In rendering the opinions set forth above, such counsel may rely
upon certificates of officers of the Company and of public officials as to
matters of fact.
(2) An opinion, dated the Closing Time, of Debevoise
& Plimpton, as counsel for the Company, in form reasonably
satisfactory to you and your counsel, to the effect that:
(i) The Offered Certificates have been duly
authorized and validly executed, issued and delivered
by the Trustee pursuant to the related Designated
Agreements and constitute valid and binding
obligations of the Trustee enforceable against the
Trustee in accordance with their terms, except as may
be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting
enforcement of creditors' rights generally and by
general principles of equity; the holders of the
Offered Certificates are entitled to the benefits of
the related Designated Agreements;
<PAGE> 16
15
(ii) The statements in the Registration
Statement and Prospectus under the headings "Certain
Federal Income Tax Consequences" and "ERISA
Considerations", to the extent that they constitute
matters of law or legal conclusions with respect
thereto, have been prepared or reviewed by such
counsel and are correct in all material respects;
(iii) The Pass Through Trusts should not be
classified as associations (or as publicly traded
partnerships) taxable as corporations for federal
income tax purposes, but rather, based on an
interpretation of analogous authorities under
existing law, each Pass Through Trust should be
classified as a grantor trust under subpart E, Part I
of Subchapter J of Chapter 1 of subtitle A of the
Internal Revenue Code of 1986, as amended, and each
of the Certificate Owners should be treated as the
owner of a pro rata undivided interest in each of the
related Equipment Notes and any other property held
in the related Pass Through Trust;
(iv) Section 1110 of the Bankruptcy Code
("Section 1110") conforms in all material respects to
the description thereof contained in "Description of
the Equipment Notes - Remedies" in the Prospectus.
Such counsel notes that during 1998, the U.S.
District Court for the District of Colorado issued
opinions arising from the bankruptcy proceedings of
Western Pacific Airlines, Inc. relating to Section
1110. The decisions held that, once an airline debtor
reaffirms its obligations and cures its defaults
under an aircraft lease within the prescribed period
in accordance with Section 1110, the lessor under
such lease is not entitled to repossess the aircraft
under Section 1110 if the airline subsequently
defaults under such lease. In the opinion of such
counsel, such District Court holdings are erroneous
because they are inconsistent with the overriding
purpose of Section 1110 to protect creditors secured
by qualifying aircraft against being stayed from
exercising their rights while defaults under their
financing agreements remain uncured;
(v) The Trusts are not required to be
registered under the Investment Company Act of 1940,
as amended; and
(vi) Assuming due authorization, execution
and delivery by the Trustee of the Designated
Agreements and the Intercreditor Agreement and by the
Subordination Agent of the Intercreditor Agreement
and the Liquidity Facilities, each such agreement
constitutes the valid and binding obligation of each
respective party, enforceable in accordance
<PAGE> 17
16
with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting enforcement of
creditors' rights generally and by general principles
of equity.
The opinions of such counsel expressed in the immediately
preceding clause (vi) shall be limited to the laws of the State of New York
governing the enforceability of contracts as such and in giving such opinion,
such counsel may rely as to certain matters acceptable to you upon the opinions
referred to in Section 4(b)(1) and Section 4(b)(3) hereof, in which case the
opinion shall state that such counsel believes that it and the Underwriters are
entitled to so rely. In rendering the opinions set forth above, such counsel may
rely upon certificates of officers of the Company and of public officials as to
matters of fact.
(3) An opinion, dated the Closing Time, of Bingham
Dana LLP, counsel for State Street, individually, as
Subordination Agent, Trustee and Loan Trustee, in form and
substance reasonably satisfactory to you and your counsel and
substantially to the effect set forth in Exhibit A hereto.
(4) An opinion, dated the Closing Time, from (i)
Winthrop, Stimson, Putnam & Roberts, counsel for the Liquidity
Provider, in form and substance satisfactory to you and your
counsel and substantially to the effect set forth in Exhibit
B-1 hereto, and (ii) Schwarz Kurtze Schniewind Kelwing Wicke,
German counsel for the Liquidity Provider, in form and
substance satisfactory to you and your counsel and
substantially to the effect set forth in Exhibit B-2 hereto.
(5) An opinion, dated the Closing Time, from Shearman
& Sterling, counsel for the Underwriters, to the effect that
the opinions delivered pursuant to subsections (b)(1) through
(b)(4) of this Section 4 appear on their face to be
appropriately responsive to the requirements of this Agreement
except, specifying the same, to the extent waived by you and
with respect to the issuance and sale of the Offered
Certificates, the Registration Statement, the Prospectus and
other related matters as you may reasonably require.
(c) (1) At the Closing Time, there shall not have been, since
the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change
in the condition, financial or otherwise, of the Company and its
subsidiaries considered as one enterprise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary
course of business, and you shall have received a certificate of the
President, an Executive Vice President, a Senior Vice President or a
Vice President of the Company, dated as of such Closing Time, to the
effect that there
<PAGE> 18
17
has been no such material adverse change and to the effect that the
representations and warranties of the Company contained in Section 1
hereof are true and correct with the same force and effect as though
made at such Closing Time.
(2) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Time, neither Moody's Investors Service, Inc.
nor Standard & Poor's Ratings Services shall have downgraded its rating
accorded to any of the Company's taxable debt securities with
maturities greater than one year.
(d) You shall have received the letter specified in Schedule
III at the Closing Time.
(e) At the Closing Time, each of the Equipment Notes and
Operative Documents shall have been executed and delivered by each
party thereto; the representations and warranties of the Company
contained in the Operative Agreements shall be accurate as of the
Closing Time and you shall have received a certificate of the
President, an Executive Vice President, a Senior Vice President or a
Vice President of the Company, dated as of the Closing Time, to such
effect.
(f) The Company shall have furnished to you and your counsel,
in form and substance satisfactory to them, such other documents,
certificates and opinions as such counsel may reasonably request for
the purpose of enabling such counsel to pass upon the matters referred
to in subsection (b)(5) of this Section 4 and in order to evidence the
accuracy and completeness of any of the representations, warranties or
statements, the performance of any covenant by the Company theretofore
to be performed, or the compliance with any of the conditions herein
contained.
(g) If the Offered Certificates are specified in Schedule II
as securities to be listed on a securities exchange, the Offered
Certificates shall have been duly authorized for listing by the
securities exchange specified in said Schedule II, subject only to
official notice of issuance.
(h) Each of the Appraisers shall have furnished to the
Underwriters a letter from such Appraiser, addressed to the Company and
dated the Closing Time, confirming that such Appraiser and each of its
directors and officers (i) is not an affiliate of the Company or any of
its affiliates, (ii) does not have any substantial interest, direct or
indirect, in the Company or any of its affiliates and (iii) is not
connected with the Company or any of its affiliates as an officer,
employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
<PAGE> 19
18
(i) At the Closing Time, the Offered Certificates shall be
rated "AAA", in the case of the Offered Certificates of the Class A-1
Trust, "AAA", in the case of the Offered Certificates of the Class A-2
Trust, "AA-", in the case of the Offered Certificates of the Class B
Trust and "A", in the case of the Offered Certificates of the Class C
Trust, by Standard & Poor's Ratings Services; and "Aa1", in the case of
the Offered Certificates of the Class A-1 Trust, "Aa1", in the case of
the Offered Certificates of the Class A-2 Trust, "Aa3", in the case of
the Offered Certificates of the Class B Trust and "A1", in the case of
the Offered Certificates of the Class C Trust, by Moody's Investors
Service, Inc.
(j) At the Closing Time, all conditions precedent specified in
each Participation Agreement with respect to the funding of the related
Equipment Notes, shall have been satisfied; the representations and
warranties of the Company, the Pass Through Trustee, the Subordination
Agent and the Loan Trustee contained in each of the Participation
Agreements shall be accurate as of the Closing Time (except to the
extent that they relate solely to an earlier date in which case they
shall be accurate as of such earlier date) and you shall have received
certificates of the Company and appropriate officers of the
Subordination Agent, Pass Through Trustees and Loan Trustees, dated as
of the Closing Time, to such effect; and you shall have received a copy
of each opinion required to be delivered under each of the
Participation Agreements dated as of the Closing Time, and addressed to
you, and of such other documents furnished in connection with the
fulfillment of such conditions as you may reasonably request.
All such opinions, certificates, letters and documents shall
be deemed to be in compliance with the provisions hereof only if they are in all
respects satisfactory to you and your counsel.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, other than by reason of any
default by any Underwriter, such failure to fulfill a condition may be waived by
you, or this Agreement may be terminated by you by notice to the Company at any
time at or prior to the Closing Time, and such termination shall be without
liability of any party to any other party, except as provided in Sections 5, 6
and 8 hereof, which provisions shall remain in effect notwithstanding such
termination.
5. Payment of Expenses. The Company will pay or cause to be
paid all expenses incident to the performance of the obligations of the Company
under this Agreement, including (i) expenses relating to the preparation,
printing, filing and distribution of any preliminary prospectus supplements, the
Prospectus, the Registration Statement and any amendments thereof or supplements
thereto, (ii) expenses relating to the preparation, printing and distribution of
any agreement among underwriters, this Agreement, the Offered
<PAGE> 20
19
Certificates, the Equipment Notes, the Operative Documents, any Underwriter's
Questionnaire, the Blue Sky Survey and any Legal Investment Survey by the
Underwriter's counsel, (iii) expenses relating to the issuance and delivery of
the Offered Certificates to the Underwriters, (iv) the fees and disbursements of
the Company's counsel and accountants, (v) expenses of qualifying the Offered
Certificates under state securities laws in accordance with Section 3(f),
including filing fees and fees and disbursements of counsel for the Underwriters
in connection therewith and in connection with the Blue Sky Survey and any Legal
Investment Survey, (vi) the fees and expenses of the Trustee, the Subordination
Agent, the Loan Trustees and the Liquidity Provider and the fees and
disbursements of their respective counsel, (vii) any fees charged by rating
agencies for rating the Offered Certificates, (viii) certain fees and expenses
of counsel for the Underwriters as heretofore agreed, and (ix) the fees and
expenses, if any, incurred in connection with the listing of the Offered
Certificates on any securities exchange. The Company will also cause to be paid
all expenses incident to the performance of its obligations under the Operative
Documents and each of the other agreements and instruments referred to therein.
If this Agreement is terminated by you in accordance with the
provisions of Section 4 or Section 9(i) hereof, the Company shall reimburse the
Underwriters for all of their out-of-pocket expenses, including the reasonable
fees and disbursements of counsel for the Underwriters, incurred by them in
connection with the offering contemplated by this Agreement.
6. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person who controls any
Underwriter within the meaning of the Securities Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Securities Act, the Exchange Act, or other Federal
or state statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement as originally filed
or in any amendment thereof, or in any preliminary prospectus relating to the
Offered Certificates or in the Prospectus, or in any amendment thereof 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 agrees to reimburse
each such indemnified party for any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that (i) the Company will 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 any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon,
and in conformity with, written information relating to any Underwriter
furnished to the Company by or on behalf of such Underwriter through either of
you
<PAGE> 21
20
specifically for use in connection with the preparation thereof or made in the
part of the Registration Statement constituting the Statement of Eligibility
under the Trust Indenture Act of the Trustee on Form T-1, (ii) the foregoing
indemnity agreement, with respect to any preliminary prospectus, shall not inure
to the benefit of any Underwriter (or any person controlling such Underwriter)
as to whom it shall be established did not send or deliver to the person
asserting any such loss, claim, damage or liability and who purchased Offered
Certificates which are the subject thereof a copy of the Prospectus as amended
or supplemented (exclusive of material incorporated by reference) at or prior to
the written confirmation of the sale of such Offered Certificates in any case
where such delivery is required by the Securities Act, and the untrue statement
or omission of a material fact contained in such preliminary prospectus was
corrected in the Prospectus as amended or supplemented and the Company had
previously furnished copies thereof to such Underwriter, and (iii) the Company
will not be liable for any loss, liability or expense of any settlement of any
pending or threatened litigation or any pending or threatened governmental
agency investigation or proceeding if such settlement is effected without the
prior written consent of the Company. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who signed the
Registration Statement, and each person who controls the Company within the
meaning of the Securities Act, against any and all losses, claims, damages,
liabilities and expenses described in the indemnity contained in Section 6(a),
but only with respect to untrue statements or alleged untrue statements or
omissions or alleged omissions made in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information relating to such
Underwriter furnished to the Company by or on behalf of such Underwriter through
either of you specifically for use in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement thereto).
This indemnity agreement will be in addition to any liability which any
Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 6 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 6, notify the indemnifying party or parties in writing of the
commencement thereof; but the omission so to notify the indemnifying party or
parties will not relieve it from any liability which it may have to any
indemnified party otherwise than under this Section 6. In case any such action
is brought against any indemnified party and it notifies the indemnifying party
or parties of the commencement thereof, the indemnifying party or parties will
be entitled to participate therein, and to the extent that it may elect, by
written notice delivered to such indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense thereof,
with counsel satisfactory to such indemnified party; provided, however, that
<PAGE> 22
21
if, in the reasonable judgment of such indemnified party, a conflict of interest
exists where it is advisable for such indemnified party to be represented by
separate counsel, the indemnified party shall have the right to employ separate
counsel in any such action, in which event the fees and expenses of such
separate counsel shall be borne by the indemnifying party or parties. Upon
receipt of notice from the indemnifying party or parties to such indemnified
party of the election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party or parties will not be
liable to such indemnified party under this Section 6 for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof unless (i) the indemnified party shall have employed separate
counsel in accordance with the proviso to the next preceding sentence (it being
understood, however, that the indemnifying party or parties shall not be liable
for the expenses of more than one such separate counsel representing the
indemnified parties under subparagraph (a) of this Section 6 who are parties to
such action), (ii) the indemnifying party or parties shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of commencement of the action or (iii) the
indemnifying party or parties have authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party or parties; and
except that, if clause (i) or (iii) is applicable, such liability shall be only
in respect of the counsel referred to in such clause (i) or (iii). It is
understood that all such fees and expenses of counsel for the indemnified party
for which the indemnifying party is liable shall be reimbursed as they are
incurred. No indemnifying party shall, without the prior written consent of the
indemnified party (which consent shall not be unreasonably withheld), effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding and does not include a statement
as to or an admission of fault, culpability or failure to act by or on behalf of
any indemnified party.
(d) If the indemnification provided for in paragraph (a) or
(b) of this Section 6 is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other hand from the offering of the Offered
Certificates pursuant to this Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the
Underwriters on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriters on the
<PAGE> 23
22
other hand in connection with the offering of the Offered Certificates pursuant
to this Agreement shall be deemed to be in the same proportion as the total
proceeds from the offering of the Offered Certificates pursuant to this
Agreement (net of compensation paid to the Underwriters but before deducting
expenses) received by the Company and the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth on the cover
of the Prospectus, bears to the aggregate initial public offering price of the
Offered Certificates as set forth on such cover. The relative fault of the
Company on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 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 Section. The aggregate amount of
losses, liabilities, claims, damages and expenses incurred by an indemnified
party and referred to above in this Section shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any such action or claim.
Notwithstanding the provisions of this Section, no Underwriter shall be required
to contribute any amount in excess of the amount by which the total price at
which the Offered Certificates 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 any such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section, each
person, if any, who controls an Underwriter within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act shall have the same rights
to contribution as such Underwriter, and each director of the Company, each
officer of the Company who signed the Registration Statement, and each person,
if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Company. The Underwriters' respective obligations to
contribute pursuant to this Section are several in proportion to the principal
amount of Offered Certificates set forth opposite their respective names in
Schedule I hereto and not joint.
7. Default. If any one or more Underwriters shall fail at the
Closing Time to purchase and pay for any of the Offered Certificates agreed to
be purchased by such Underwriter or Underwriters pursuant to this Agreement and
such failure to purchase shall constitute a default in the performance of its or
their obligations under this Agreement, the remaining Underwriters shall be
obligated severally to take up and pay for (in the respective
<PAGE> 24
23
proportions which the aggregate principal amount of Offered Certificates
specified to be purchased by them in Schedule I bears to the aggregate principal
amount of Offered Certificates to be purchased by all the remaining
Underwriters) the Offered Certificates which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the event
that the aggregate principal amount of Offered Certificates that the defaulting
Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of
the aggregate principal amount of Offered Certificates to be purchased pursuant
to this Agreement, the remaining Underwriters shall have the right, but not the
obligation within 24 hours thereafter, to make arrangements to purchase all, but
not less than all, of such Offered Certificates, and if such nondefaulting
Underwriters do not complete such arrangements within such 24 hour period, then
this Agreement will terminate without liability to any nondefaulting
Underwriters or the Company. In the event of any such termination, the
provisions of Sections 5, 6 and 8 shall remain in effect. In the event of a
default by any Underwriter as set forth in this Section 7 that does not result
in a termination of this Agreement, the Closing Time shall be postponed for such
period, not exceeding seven days, as the nondefaulting Underwriters or the
Company shall determine in order that the required changes in the Registration
Statement and the Prospectus or in any other documents or arrangements may be
effected. Nothing contained in this Agreement shall relieve any defaulting
Underwriter of its liability, if any, to the Company and to any nondefaulting
Underwriters for damages occasioned by its default hereunder.
8. Representations, Warranties, Indemnities and Agreements to
Survive Delivery. All representations, warranties, indemnities and agreements
contained in this Agreement, or contained in certificates of officers of the
Company submitted pursuant hereto, shall remain operative and in full force and
effect, regardless of any investigation made by or on behalf of the Company or
any Underwriter or any controlling person of either and shall survive delivery
of any Offered Certificates to the Underwriters.
9. Termination. This Agreement may be terminated immediately
upon notice from you to the Company at any time at or prior to the Closing Time
(i) if there has been, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, any material adverse
change in the condition, financial or otherwise, of the Company and its
subsidiaries considered as one enterprise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
if there has occurred any outbreak or escalation of hostilities or other
calamity or crisis the effect of which on the financial markets is such as to
make it, in your judgment, impracticable to market the Offered Certificates or
enforce contracts for the sale of the Offered Certificates, or (iii) if trading
in the securities of the Company has been suspended by the Commission or a
national securities exchange, or if trading generally on the New York Stock
Exchange has been suspended, or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices for securities have been required, by said
exchange or by order of the Commission or any other
<PAGE> 25
24
governmental authority, or if a banking moratorium has been declared by either
Federal or New York authorities. In the event of any such termination, the
provisions of Sections 5, 6 and 8 shall remain in effect.
10. Notices. All notices and other communications hereunder
shall be in writing and effective only upon receipt, and, if sent to the
Underwriters, will be mailed or transmitted by any standard form of
telecommunication to the Underwriters as set forth in Schedule I or, if sent to
the Company, will be mailed or transmitted by any standard form of
telecommunication to it at P.O. Box 619616, Dallas/Fort Worth Airport, Texas
75261-9616, attention of the Treasurer.
11. Parties. This Agreement shall inure to the benefit of and
be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
parties hereto and their respective successors and the controlling persons and
officers and directors referred to in Section 6 and their successors, heirs and
legal representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the parties and their respective successors and said
controlling persons and officers and directors and their successors, heirs and
legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Offered Certificates from any Underwriter shall be
deemed to be a successor by reason merely of such purchase.
<PAGE> 26
25
12. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK.
13. Counterparts. This Agreement may be executed in one or
more counterparts and when a counterpart has been executed by each party hereto
all such counterparts taken together shall constitute one and the same
agreement.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement between the Company and each
Underwriter in accordance with its terms.
Very truly yours,
AMERICAN AIRLINES, INC.
By: /s/ LESLIE MANDEVILLE
---------------------------
Name: Leslie Mandeville
Title: Managing Director -
Corporate Financing
and Banking
confirmed and accepted as of
the date first above written:
CREDIT SUISSE FIRST BOSTON CORPORATION
MORGAN STANLEY & CO. INCORPORATED
By: CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ THOMAS L. SMITH
-------------------------------------
Name: Thomas L. Smith
Title: Director
By: MORGAN STANLEY & CO. INCORPORATED
By: /s/ PATRICK KAUFER
-------------------------------------
Name: Patrick Kaufer
Title: Vice President
<PAGE> 27
SCHEDULE A
to
Underwriting
Agreement
<TABLE>
<CAPTION>
Class of Aggregate Final Expected
Pass Through Principal Regular Distribution
Certificates Amounts Interest Rate Date
- ------------ --------- ------------- ---------------------
<S> <C> <C> <C>
1999-1, Class A-1 $150,889,000 6.855% April 15, 2009
1999-1, Class A-2 316,969,000 7.024% October 15, 2009
1999-1, Class B 84,525,000 7.324% October 15, 2009
1999-1, Class C 47,617,000 7.155% October 15, 2004
</TABLE>
<PAGE> 28
SCHEDULE I
to
Underwriting
Agreement
Dated: September 23, 1999
AMERICAN AIRLINES, INC.
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL PRINCIPAL PRINCIPAL
AMOUNT OF AMOUNT OF AMOUNT OF AMOUNT OF
CLASS A-1 CLASS A-2 CLASS B CLASS C
UNDERWRITER CERTIFICATES CERTIFICATES CERTIFICATES CERTIFICATES
- ----------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Credit Suisse First Boston Corporation ...... $ 30,179,000 $ 63,395,000 $ 16,905,000 $ 9,524,000
-------------- -------------- -------------- --------------
Morgan Stanley & Co. Incorporated ........... 30,179,000 63,395,000 16,905,000 9,524,000
-------------- -------------- -------------- --------------
Goldman Sachs & Co. ......................... 30,177,000 63,393,000 16,905,000 9,523,000
-------------- -------------- -------------- --------------
Merrill Lynch, Pierce, Fenner & Smith ....... 30,177,000 63,393,000 16,905,000 9,523,000
-------------- -------------- -------------- --------------
Incorporated
Salomon Smith Barney ........................ 30,177,000 63,393,000 16,905,000 9,523,000
-------------- -------------- -------------- --------------
Total ....................................... $ 150,889,000 $ 316,969,000 $ 84,525,000 $ 47,617,000
============== ============== ============== ==============
</TABLE>
All notices to the Underwriters shall be sent as follows:
<TABLE>
<S> <C> <C>
c/o Credit Suisse First Boston Corporation c/o Morgan Stanley & Co. Incorporated
Eleven Madison Avenue 1585 Broadway
New York, NY 10010 AND New York, NY 10036
Attention: Transaction Advisory Group Attention: Equipment Finance Group
Fax no: (212) 325-8278 Fax no: (212) 761-0786
</TABLE>
<PAGE> 29
SCHEDULE II
to
Underwriting
Agreement
Dated: September 23, 1999
AMERICAN AIRLINES, INC.
Underwriting fees, discounts, commissions or other compensation: $3,900,000
Closing date, time and location: 10:00 A.M. on October 6, 1999 at the
offices of Debevoise & Plimpton, 875
Third Avenue, New York, NY 10022
Listing requirement: None.
Other terms and conditions: None
<PAGE> 30
SCHEDULE III
to
Underwriting
Agreement
Dated:
AMERICAN AIRLINES, INC.
Matters to be covered by Letter or Letters of
Independent Auditors
Ernst & Young shall have furnished to you the following
letter, dated as of the Closing Time, in form and substance satisfactory to you,
to the effect that:
(i) They are independent certified public accountants with
respect to the Company and AMR Corporation within the meaning of the
Securities Act and the applicable published rules and regulations
thereunder, and the answer to Item 10 of the Registration Statement
insofar as it relates to them is none;
(ii) In their opinion, the audited consolidated financial
statements and financial statement schedule incorporated by reference
in the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the Securities
Act and the Exchange Act and the related published rules and
regulations thereunder;
(iii) On the basis of performing the procedures specified by
the American Institute of Certified Public Accountants for a review of
interim financial information as described in SAS No. 71, "Interim
Financial Information", on the unaudited consolidated financial
statements of the Company contained in the Company's Quarterly Report
on Form 10-Q for the quarters ended March 31 and June 30, 1999, a
reading of the latest unaudited consolidated financial statements made
available by the Company, a reading of the minutes of the Board of
Directors of the Company and any committees thereof and of the consent
of the sole stockholder of the Company, and a reading of the minutes of
the Board of Directors of AMR Corporation and any committees thereof
and of the stockholders of AMR Corporation, since the date of the
latest audited consolidated financial statements incorporated by
reference in the Registration Statement, inquiries of officials of the
Company responsible for financial and accounting matters and such other
inquiries and procedures as may be specified in such
<PAGE> 31
2
letter, which do not constitute an audit conducted in accordance with
generally accepted auditing standards and which would not necessarily
reveal matters of significance with respect to the comments set forth
in such letter, nothing came to their attention that caused them to
believe that:
(A) the unaudited consolidated financial statements
incorporated by reference in the Registration Statement do not
comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the Exchange
Act and the rules and regulations thereunder as they apply to
Form 10-Q or that any material modifications should be made to
such unaudited consolidated financial statements for them to
be in conformity with generally accepted accounting
principles;
(B) as of August 31, 1999, and as of a specified date
not more than five calendar days prior to the date of delivery
of such letter, there has been any change in the consolidated
capital stock or consolidated long-term debt of the Company,
or any decrease in consolidated net current assets or
consolidated stockholder's equity of the Company or other
items specified by you, in each case as compared with amounts
shown in the latest consolidated balance sheet incorporated by
reference in the Registration Statement, except in each case
for changes or decreases which the Registration Statement
discloses have occurred or may occur or which are described in
such letter; and
(C) for the period July 1, 1999 to August 31, 1999,
and for the period from the date of the latest consolidated
financial statements of the Company incorporated by reference
in the Registration Statement to a specified date not more
than five calendar days prior to the date of delivery of such
letter, there were any decreases in consolidated total
operating revenues, consolidated operating income or
consolidated net earnings of the Company, in each case as
compared with the comparable period of the preceding year and
with any other period of corresponding length reasonably
specified by you, except in each case for decreases which the
Registration Statement discloses have occurred or may occur or
which are described in such letter; and
(iv) They have performed certain procedures specified in their
letter for the purpose of determining whether certain financial
information with respect to the Company and its consolidated
subsidiaries appearing or incorporated by reference in the Registration
Statement and specified in said letter agrees with indicated amounts in
the applicable financial statements or accounting records of the
Company and its subsidiaries or affiliates.
<PAGE> 32
3
EXHIBIT B-1
to
Underwriting
Agreement
Form of Opinion of Winthrop, Stimson, Putnam & Roberts
1. The Revolving Credit Agreements and the Intercreditor Agreement
(collectively, the "Liquidity Documents") constitute the valid and legally
binding agreements of the parties thereto, enforceable against each party
thereto in accordance with their respective terms.
2. The execution, delivery and performance by Bayerische Landesbank
Girozentrale ("Bayerische") of the Liquidity Documents and the consummation of
the transactions contemplated therein do not violate any banking law, or any
governmental rule or regulation relating thereto, of the United States of
America or the State of New York.
3. No authorization, consent, approval or other action by, and no
notice to or filing with, any banking authority or regulatory body of the United
States of America or the State of New York is required for the due execution,
delivery and performance by Bayerische of the Liquidity Documents, other than
administrative and ministerial filings which Bayerische is obligated to make in
the ordinary course of its business (which filings we have assumed have been and
will continue to be made in a timely manner).
Our opinion is subject to the following qualifications and limitations:
(a) Our opinion in paragraph 1 above is subject to (i) the
effect of applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance and other laws affecting creditors' rights generally, (ii)
general equitable principles, (iii) requirements of reasonableness,
good faith and fair dealing, and (iv) additionally, in the case of
indemnities and exculpatory provisions (including certain waivers) in
the Liquidity Documents, the effect of public policy.
(b) Our opinion is limited to the law of the State of New York
and the federal law of the United States of America.
The above opinions may be subject to such assumptions and
qualifications as may be acceptable to the Underwriters.
<PAGE> 33
EXHIBIT B-2
to
Underwriting
Agreement
Form of Opinion of Schwarz Kurtze Schniewind Kelwing Wicke
1. Bayerische Landesbank Girozentrale ("Bayerische") is a German public
law banking institution (Anstalt des Offentlichen Rechts) duly established and
validly existing under the laws of the Federal Republic of Germany.
2. Bayerische has the power to enter into the Revolving Credit
Agreements and the Intercreditor Agreement (collectively, the "Liquidity
Documents") which are duly executed on behalf of Bayerische when signed by the
two officers of Bayerische, Mr. Bernd Lonner and Mr. Rudiger Fern.
3. The obligations of Bayerische under the Liquidity Documents are
legal, valid, binding and enforceable against Bayerische in accordance with
their respective terms, except to the extent that enforcement may be limited by
equitable principles and applicable bankruptcy, insolvency, re-organization,
moratorium or other similar laws affecting creditors' rights generally.
4. It is not necessary that any of the Liquidity Documents be filed,
recorded or enrolled with any public office, governmental authority or court in
the Federal Republic of Germany, or that any German stamp or similar tax be paid
in order to ensure the legality or validity in the Federal Republic of Germany.
5. No consent or approval of any governmental or public bodies or
authorities or courts of the Federal Republic of Germany is required by
Bayerische in connection with the execution and delivery of the Liquidity
Documents and the performance by Bayerische of its obligations under the
Liquidity Documents.
6. The execution, delivery and performance of the Liquidity Documents
does not violate any law of the Federal Republic of Germany applicable to
Bayerische.
7. The choice of the law of the State of New York to govern the
obligations of the parties under the Liquidity Documents will be upheld as a
valid choice of law in any action brought in connection with the Liquidity
Documents in the courts of Germany against Bayerische and the submission by
Bayerische to the non-exclusive jurisdiction of the courts of the State of New
York sitting in the City of New York and the United States District Court for
the Southern District of New York is binding on it.
<PAGE> 34
2
8. Any final and conclusive judgment rendered by the Supreme Court of
the State of New York or by the United States District Court for the Southern
District of New York for a definite sum for the recovery of amounts due and
unpaid by Bayerische under the Revolving Credit Agreements will be enforceable
against Bayerische in the Federal Republic of Germany subject to the applicable
rules for obtaining a necessary executory decision (action upon the foreign
judgment) issued by a competent German court.
9. The payment obligations of Bayerische under the Revolving Credit
Agreements rank pari passu with its obligations to pay any other unsecured and
unprivileged obligations of Bayerische for borrowed money that are not preferred
by contractual stipulations or by law or in proceedings under the German
Composition Code (Vergleichsordnung) or Bankruptcy Code (Konkursordnung) or
Insolvency Code (Insolvenzordnung) or by similar laws affecting creditors'
rights generally.
The above opinions may be subject to such assumptions and
qualifications as may be acceptable to the Underwriters.
<PAGE> 1
EXHIBIT 4(a)(1)
PASS THROUGH TRUST AGREEMENT
Dated as of October 1, 1999
between
AMERICAN AIRLINES, INC.
and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
as Trustee
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE I
DEFINITIONS
<S> <C> <C>
Section 1.01. Definitions..................................................2
Section 1.02. Compliance Certificates and Opinions........................11
Section 1.03. Form of Documents Delivered to Trustee......................12
Section 1.04. Directions of Certificateholders............................12
ARTICLE II
ORIGINAL ISSUANCE OF CERTIFICATES:
ACQUISITION OF TRUST PROPERTY
Section 2.01. Amount Unlimited; Issuable in Series .......................14
Section 2.02. Acquisition of Equipment Notes..............................17
Section 2.03. Acceptance by Trustee ......................................19
Section 2.04. Limitation of Powers .......................................19
ARTICLE III
THE CERTIFICATES
Section 3.01. Form, Denomination and Execution of Certificates............19
Section 3.02. Authentication of Certificates..............................20
Section 3.03. Temporary Certificates......................................20
Section 3.04. Transfer and Exchange.......................................21
Section 3.05. Book-Entry and Definitive Certificates......................21
Section 3.06. Mutilated, Destroyed, Lost or Stolen Certificates...........23
Section 3.07. Persons Deemed Owners.......................................24
Section 3.08. Cancellation................................................24
Section 3.09. Limitation of Liability for Payments........................24
Section 3.10. CUSIP Numbers...............................................25
ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS
Section 4.01. Certificate Account and Special Payments Account............25
Section 4.02. Distributions from Certificate Account and Special
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
Payments Account....................................26
Section 4.03. Statements to Certificateholders.............................27
Section 4.04. Investment of Special Payment Moneys.........................28
ARTICLE V
THE COMPANY
Section 5.01. Maintenance of Corporate Existence...........................29
Section 5.02. Consolidation, Merger, Etc...................................29
ARTICLE VI
DEFAULT
Section 6.01. Indenture Events of Default and Triggering Events............29
Section 6.02. Incidents of Sale of Equipment Notes.........................31
Section 6.03. Judicial Proceedings Instituted by Trustee; Trustee
May Bring Suit......................................32
Section 6.04. Control by Certificateholders................................32
Section 6.05. Waiver of Past Defaults......................................33
Section 6.06. Right of Certificateholders to Receive Payments Not
to Be Impaired......................................34
Section 6.07. Certificateholders May Not Bring Suit Except Under
Certain Conditions..................................34
Section 6.08. Remedies Cumulative..........................................35
Section 6.09. Discontinuance of Proceedings................................35
Section 6.10. Undertaking for Costs........................................35
ARTICLE VII
THE TRUSTEE
Section 7.01. Certain Duties and Responsibilities..........................35
Section 7.02. Notice of Defaults...........................................36
Section 7.03. Certain Rights of Trustee....................................37
Section 7.04. Not Responsible for Recitals or Issuance of Certificates.....38
Section 7.05. May Hold Certificates........................................38
Section 7.06. Money Held in Trust..........................................38
Section 7.07. Compensation and Reimbursement...............................38
Section 7.08. Corporate Trustee Required; Eligibility......................39
Section 7.09. Resignation and Removal; Appointment of Successor............40
Section 7.10. Acceptance of Appointment by Successor...................... 42
Section 7.11. Merger, Conversion, Consolidation or Succession to
Business............................................42
Section 7.12. Maintenance of Agencies......................................43
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
Section 7.13. Money for Certificate Payments to be Held in Trust.........44
Section 7.14. Registration of Equipment Notes in Trustee's Name..........44
Section 7.15. Representations and Warranties of Trustee..................45
Section 7.16. Withholding Taxes; Information Reporting...................46
Section 7.17. Trustee's Liens............................................46
Section 7.18. Preferential Collection of Claims..........................46
Section 7.19. Capacity in Which Acting...................................46
ARTICLE VIII
CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE
Section 8.01. The Company to Furnish Trustee with Names and
Addresses of Certificateholders...................47
Section 8.02. Preservation of Information; Communications to
Certificateholders................................47
Section 8.03. Reports by Trustee.........................................47
Section 8.04. Reports by the Company.....................................47
ARTICLE IX
SUPPLEMENTAL AGREEMENTS
Section 9.01. Supplemental Agreements Without Consent of
Certificateholders................................48
Section 9.02. Supplemental Agreements with Consent of
Certificateholders................................50
Section 9.03. Documents Affecting Immunity or Indemnity..................51
Section 9.04. Execution of Supplemental Agreements.......................51
Section 9.05. Effect of Supplemental Agreements..........................51
Section 9.06. Conformity with Trust Indenture Act........................51
Section 9.07. Reference in Certificates to Supplemental Agreement........51
ARTICLE X
AMENDMENTS TO INDENTURES AND OTHER NOTE DOCUMENTS
Section 10.01. Amendments and Supplements to Indentures and Other
Note Documents....................................52
ARTICLE XI
TERMINATION OF TRUSTS
Section 11.01. Termination of the Trusts................................53
</TABLE>
iii
<PAGE> 5
<TABLE>
ARTICLE XII
MISCELLANEOUS PROVISIONS
<S> <C> <C>
Section 12.01. Limitation on Rights of Certificateholders.................54
Section 12.02. Certificates Nonassessable and Fully Paid..................54
Section 12.03. Registration of Equipment Notes in Name of
Subordination Agent.................................54
Section 12.04. Notices....................................................54
Section 12.05. Governing Law..............................................56
Section 12.06. Severability of Provisions.................................56
Section 12.07. Trust Indenture Act Controls...............................56
Section 12.08. Effect of Headings and Table of Contents...................56
Section 12.09. Successors and Assigns.....................................56
Section 12.10. Benefits of Agreement......................................56
Section 12.11. Legal Holidays.............................................56
Section 12.12. Counterparts...............................................57
Section 12.13. Communication by Certificateholders with Other
Certificateholders..................................57
Section 12.14. Normal Commercial Relations................................57
Section 12.15. No Recourse Against Others.................................57
EXHIBIT A - Form of Certificate...............................................A-1
</TABLE>
iv
<PAGE> 6
Reconciliation and tie between American Airlines Pass Through Trust Agreement,
dated as of October 1, 1999 and the Trust Indenture Act of 1939. This
reconciliation does not constitute part of the Pass Through Trust Agreement.
<TABLE>
<CAPTION>
Trust Indenture Act Pass Through Trust
of 1939 Section Agreement Section
- ------------------- ------------------
<S> <C>
310(a)(1) 7.08
(a)(2) 7.08
312(a) 7.12; 8.01; 8.02
313(a) 8.03
313(b) 8.03
314(a)(1)-(3) 8.04(a)-(c)
(a)(4) 8.04(d)
(c)(1) 1.02
(c)(2) 1.02
(d)(1) 1.02; 7.13; 11.01
(d)(2) 1.02; 7.13; 11.01
(d)(3) 1.02; 2.01
(e) 1.02
315(b) 7.02
315(c) 7.01(b)
316(a)(last sentence) 1.04(c)
(a)(1)(A) 6.04
(a)(1)(B) 6.05
(b) 6.06
(c) 1.04(d)
317(a)(1) 6.03
(b) 7.13
318(a) 12.07
</TABLE>
v
<PAGE> 7
PASS THROUGH TRUST AGREEMENT
This PASS THROUGH TRUST AGREEMENT, dated as of October 1, 1999 (the
"Basic Agreement"), between American Airlines, Inc., a Delaware corporation, and
State Street Bank and Trust Company of Connecticut, National Association, a
national banking association, as Trustee, is made with respect to the formation
from time to time of separate American Airlines Pass Through Trusts, and the
issuance from time to time of separate series of Pass Through Certificates
representing fractional undivided interests in the respective Trusts.
W I T N E S S E T H:
--------------------
WHEREAS, from time to time, the Company and the Trustee may enter into
a Trust Supplement (this and certain other defined terms used herein are defined
in Section 1.01) pursuant to which the Trustee shall declare the creation of a
separate Trust for the benefit of the Holders of the series of Certificates to
be issued in respect of such Trust, and the initial Holders of the Certificates
of such series, as the grantors of such Trust, by their respective acceptances
of the Certificates of such series, shall join in the creation of such Trust
with the Trustee;
WHEREAS, all Certificates to be issued in respect of each separate
Trust will be issued as a separate series pursuant to this Agreement, will
evidence fractional undivided interests in such Trust and will have no rights,
benefits or interests in respect of any other separate Trust or the property
held therein, subject, however, to the provisions of any Intercreditor Agreement
to which one or more Trusts may be a party and to any provisions to the contrary
in any applicable Trust Supplement;
WHEREAS, from time to time, pursuant to the terms and conditions of
this Agreement with respect to each separate Trust formed hereunder, the Trustee
on behalf of such Trust shall purchase one or more issues of Equipment Notes
having the identical interest rate as, and final maturity dates not later than
the final Regular Distribution Date of, the series of Certificates issued in
respect of such Trust and, subject to the terms of any related Intercreditor
Agreement and to any terms to the contrary in any applicable Trust Supplement,
shall hold such Equipment Notes in trust for the benefit of the
Certificateholders of such Trust;
WHEREAS, to facilitate the sale of Equipment Notes to, and the purchase
of Equipment Notes by, the Trustee on behalf of each Trust created from time to
time pursuant to this Agreement, the Company as the "issuer", as such term is
defined in and solely for purposes of the Securities Act of 1933, as amended, of
the Certificates to be issued in respect of each Trust and as the "obligor", as
such term is defined in and solely for purposes of the Trust Indenture Act of
1939, as amended to date, has duly authorized the execution and delivery of this
Basic Agreement and is undertaking to perform certain administrative and
ministerial duties hereunder and is also undertaking to pay the fees and
expenses of the Trustee; and
<PAGE> 8
WHEREAS, this Agreement, as supplemented from time to time, is subject
to the provisions of the Trust Indenture Act and shall, to the extent
applicable, be governed by such provisions;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and of other good and valuable consideration the receipt and adequacy
of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. For all purposes of this Basic Agreement,
except as otherwise expressly provided or unless the context otherwise requires:
(1) the terms used herein that are defined in this Article I have
the meanings assigned to them in this Article I, and include
the plural as well as the singular;
(2) all other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, or by
the rules promulgated under the Trust Indenture Act, have the
meanings assigned to them therein;
(3) all references in this Basic Agreement to designated
"Articles", "Sections", "Subsections" and other subdivisions
are to the designated Articles, Sections, Subsections and
other subdivisions of this Basic Agreement;
(4) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Basic Agreement as a whole and
not to any particular Article, Section, Subsection or other
subdivision;
(5) unless the context otherwise requires, whenever the words
"including", "include" or "includes" are used herein, it shall
be deemed to be followed by the phrase "without limitation";
and
(6) the term "this Agreement" (as distinguished from "this Basic
Agreement") refers, unless the context otherwise requires, to
this Basic Agreement as supplemented by the Trust Supplement
creating a particular Trust and establishing the series of
Certificates issued or to be issued in respect thereof, with
reference to such Trust and such series of Certificates, as
this Basic Agreement as so supplemented may be further
supplemented with respect to such Trust and such series of
Certificates.
Act: Has the meaning, with respect to any Certificateholder, specified
in Section 1.04(a).
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Affiliate: Means, with respect to any specified Person, any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power,
directly or indirectly, to direct the management and policies of such Person,
whether through the ownership of voting securities or by contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
Aircraft: Means one or more aircraft, including engines therefor, owned
by or leased to the Company and securing one or more Equipment Notes.
Authorized Agent: Means, with respect to the Certificates of any
series, any Paying Agent or Registrar for the Certificates of such series.
Basic Agreement: Means this Pass Through Trust Agreement, as the same
may from time to time be supplemented, amended or modified, but does not include
any Trust Supplement.
Book-Entry Certificates: Means, with respect to the Certificates of any
series, a beneficial interest in the Certificates of such series, ownership and
transfers of which shall be made through book entries as described in Section
3.05.
Business Day: Means, with respect to the Certificates of any series,
any day other than a Saturday, a Sunday or a day on which commercial banks are
required or authorized to close in New York, New York, Dallas, Texas, or, so
long as any Certificate of such series is outstanding, the city and state in
which the Trustee or any related Loan Trustee maintains its Corporate Trust
Office or receives and disburses funds.
Certificate: Means any one of the certificates executed and
authenticated by the Trustee, substantially in the form of Exhibit A hereto.
Certificate Account: Means, with respect to the Certificates of any
series, the account or accounts created and maintained for such series pursuant
to Section 4.01(a) and the related Trust Supplement.
Certificateholder or Holder: Means, with respect to the Certificates of
any series, the Person in whose name a Certificate of such series is registered
in the Register for Certificates of such series.
Certificate Owner: Means, with respect to the Certificates of any
series, for purposes of Section 3.05, a Person who owns a Book-Entry Certificate
of such series.
Clearing Agency: Means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended.
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Clearing Agency Participant: Means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects, directly or indirectly, book-entry transfers and pledges of
securities deposited with the Clearing Agency.
Company: Means American Airlines, Inc., a Delaware corporation, or its
successor in interest pursuant to Section 5.02.
Controlling Party: Means, with respect to the Certificates of any
series, the Person entitled to act as such pursuant to the terms of the related
Intercreditor Agreement.
Corporate Trust Office: Means, with respect to the Trustee or any Loan
Trustee, the office of such trustee in the city at which at any particular time
its corporate trust business shall be principally administered.
Cut-off Date: Means, with respect to the Certificates of any series,
the date designated as such in the Trust Supplement establishing such series.
Definitive Certificates: Has the meaning, with respect to the
Certificates of any series, specified in Section 3.05.
Direction: Has the meaning specified in Section 1.04(a).
Distribution Date: Means any Regular Distribution Date, Special
Distribution Date or Initial Regular Distribution Date.
Equipment Note: Means, with respect to any Trust, any one of the notes,
certificates or instruments issued pursuant to any Indenture and described as
"Equipment Notes" in, or on a schedule attached to, the Trust Supplement in
respect of such Trust and to be held by the Trustee as part of such Trust,
including any Equipment Note (as so defined) issued under the applicable
Indenture in replacement thereof or substitution therefor.
ERISA: Means the Employee Retirement Income Security Act of 1974, as
amended from time to time, or any successor federal statute.
Escrow Account: Has the meaning, with respect to any Trust, specified
in Section 2.02(b).
Escrowed Funds: Has the meaning, with respect to any Trust, specified
in Section 2.02(b).
Event of Default: Means, in respect of any Trust, an Indenture Event of
Default under any Indenture pursuant to which Equipment Notes held by such Trust
were issued and such other event as may be designated under the related Trust
Supplement as an "Event of Default".
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Fractional Undivided Interest: Means the fractional undivided interest
in a Trust that is evidenced by a Certificate relating to such Trust.
Holder: Has the meaning specified in the definition of
"Certificateholder or Holder".
Indenture: Means, with respect to any Trust, each of the one or more
separate trust indenture and security agreements or trust indenture and
mortgages or similar documents described in, or on a schedule attached to, the
Trust Supplement and an indenture having substantially the same terms and
conditions which relates to a Substitute Aircraft, as each such indenture may be
amended or supplemented in accordance with its respective terms; and
"Indentures" means all of such agreements.
Indenture Event of Default: Means, with respect to any Indenture, any
Event of Default (as such term is defined in such Indenture).
Initial Regular Distribution Date: Means, with respect to the
Certificates of any series, the first Regular Distribution Date on which a
Scheduled Payment is to be made.
Intercreditor Agreement: Means (a) any agreement by and among the
Trustee, as trustee with respect to one or more Trusts, one or more Liquidity
Providers, if applicable, and a Subordination Agent providing, among other
things, for the distribution of payments made in respect of Equipment Notes held
by such Trusts, or (b) such other agreement or agreements designated as an
"Intercreditor Agreement" in the Trust Supplement relating to any Trust.
Issuance Date: Means, with respect to the Certificates of any series,
the date of the issuance of such Certificates.
Lease: Means any lease between an Owner Trustee, as the lessor (or such
other Person acting as the lessor), and the Company, as the lessee, referred to
in the related Indenture, as such lease may be amended, supplemented or
otherwise modified in accordance with its terms; and "Leases" means all such
Leases.
Letter of Representations: Means, with respect to the Certificates of
any series, an agreement among the Company, the Trustee and the initial Clearing
Agency substantially in the form attached as an Exhibit to the related Trust
Supplement, as such letter may be modified or supplemented, or any successor
letter thereto.
Liquidity Facility: Means, with respect to the Certificates of any
series or any Equipment Notes, (a) any revolving credit agreement, letter of
credit, insurance policy, surety bond or financial guaranty or similar facility
for the provision of liquidity support relating to the Certificates of such
series between a Liquidity Provider and a Subordination Agent or one or more
other Persons, as amended, replaced, supplemented or otherwise modified from
time to time in accordance with its
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terms and, if applicable, the terms of any Intercreditor Agreement, or (b) such
other agreement or agreements designated as a "Liquidity Facility" in the Trust
Supplement relating to any Trust.
Liquidity Provider: Means, with respect to the Certificates of any
series, a bank, insurance company, financial institution or other Person that
agrees to provide a Liquidity Facility for the benefit of the holders of
Certificates of such series.
Loan Trustee: Means, with respect to any Equipment Note or the
Indenture applicable thereto, the bank, trust company or other financial
institution designated as loan or indenture trustee under such Indenture, and
any successor to such Loan Trustee as such trustee; and "Loan Trustees" means
all of the Loan Trustees under the Indentures.
Note Documents: Means, with respect to the Certificates of any series,
the Equipment Notes with respect to such Certificates and, with respect to such
Equipment Notes, the related Indenture, Note Purchase Agreement, and, if the
related Aircraft is leased to the Company, the related Lease and the related
Purchase Agreement Assignment (as defined in the related Lease), if any.
Note Purchase Agreement: Means, with respect to the Certificates of any
series, any note purchase, refunding, participation or similar agreement
providing for, among other things, the purchase of Equipment Notes by the
Trustee on behalf of the relevant Trust; and "Note Purchase Agreements" means
all such agreements.
Officer's Certificate: Means a certificate signed, (a) in the case of
the Company, by the Chairman or Vice Chairman of the Board of Directors, the
President, any Executive Vice President, any Senior Vice President, any Vice
President or the Treasurer of the Company or (b) in the case of the Trustee or
an Owner Trustee or a Loan Trustee, a Responsible Officer of the Trustee or such
Owner Trustee or such Loan Trustee, as the case may be.
Opinion of Counsel: Means a written opinion of legal counsel who (a) in
the case of counsel for the Company may be (i) a senior attorney of the Company
one of whose principal duties is furnishing advice as to legal matters, (ii)
Debevoise & Plimpton or (iii) such other counsel designated by the Company and
reasonably acceptable to the Trustee and (b) in the case of any Owner Trustee or
any Loan Trustee, such counsel as they may designate, whether or not such
counsel is an employee of any of them, and who shall be reasonably acceptable to
the Trustee.
Outstanding: When used with respect to Certificates of any series,
means, as of the date of determination, all Certificates of such series
theretofore authenticated and delivered under this Agreement, except:
(i) Certificates of such series theretofore cancelled by the Registrar
or delivered to the Trustee or the Registrar for cancellation;
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(ii) all of the Certificates of such series if money in the full amount
required to make the final distribution with respect to such series pursuant to
Section 11.01 hereof has been theretofore deposited with the Trustee in trust
for the Holders of the Certificates of such series as provided in Section 4.01,
pending distribution of such money to such Certificateholders pursuant to
payment of such final distribution payment; and
(iii) Certificates of such series in exchange for or in lieu of which
other Certificates of such series have been authenticated and delivered pursuant
to this Agreement.
Owner Participant: Means, with respect to any Equipment Note, the
"Owner Participant", if any, as referred to in the Indenture pursuant to which
such Equipment Note is issued and any permitted successor or assign of such
Owner Participant; and "Owner Participants" at any time of determination means
all of the Owner Participants thus referred to in the Indentures.
Owner Trustee: Means, with respect to any Equipment Note, the "Owner
Trustee", if any, as referred to in the Indenture pursuant to which such
Equipment Note is issued, not in its individual capacity but solely as trustee;
and "Owner Trustees" means all of the Owner Trustees party to any of the related
Indentures.
Paying Agent: Means, with respect to the Certificates of any series,
the paying agent maintained and appointed for the Certificates of such series
pursuant to Section 7.12.
Permitted Investments: Means obligations of the United States of
America or agencies or instrumentalities thereof for the payment of which the
full faith and credit of the United States of America is pledged, maturing in
not more than 60 days after the date of acquisition thereof or such lesser time
as is required for the distribution of any Special Payments on a Special
Distribution Date.
Person: Means any person, including any individual, corporation,
limited liability company, partnership, joint venture, association, joint-stock
company, trust, trustee, unincorporated organization, or government or any
agency or political subdivision thereof.
Pool Balance: Means, with respect to the Certificates of any series as
of any date, except to the extent otherwise provided in the applicable Trust
Supplements, (i) the original aggregate face amount of the Certificates of such
series less (ii) the aggregate amount of all distributions made in respect of
such Certificates other than distributions made in respect of interest or
premium or reimbursement of any costs or expenses incurred in connection
therewith. The Pool Balance as of any Regular Distribution Date or Special
Distribution Date with respect to such series shall be computed after giving
effect to the payment of principal, if any, on the Equipment Notes or other
Trust Property held in the Trust and the distribution thereof to be made on such
date.
Pool Factor: Means, with respect to any series of Certificates as of
any date, except to the extent otherwise provided in the applicable Trust
Supplement, the quotient (rounded to the seventh decimal place, with 0.00000005
being rounded upward) computed by dividing (i) the Pool Balance
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<PAGE> 14
of such series as of such date by (ii) the original aggregate face amount of the
Certificates of such series. The Pool Factor as of any Regular Distribution Date
or Special Distribution Date with respect to such series shall be computed after
giving effect to the payment of principal, if any, on the Equipment Notes or
other Trust Property held in the Trust relating to such series and the
distribution thereof to be made on such date.
Postponed Notes: Means, with respect to any Trust or the related series
of Certificates, the Equipment Notes to be held in such Trust as to which a
Postponement Notice shall have been delivered pursuant to Section 2.02(b).
Postponement Notice: Means, with respect to any Trust or the related
series of Certificates, an Officer's Certificate of the Company (i) requesting
that the Trustee temporarily postpone purchase of the related Equipment Notes to
a date later than the Issuance Date of such series of Certificates, (ii)
identifying the amount of the purchase price of each such Equipment Note and the
aggregate purchase price for all such Equipment Notes, (iii) setting forth the
reasons for such postponement and (iv) with respect to each such Equipment Note,
either (a) setting or resetting a new Transfer Date (which shall be on or prior
to the applicable Cut-off Date) for payment by the Trustee of such purchase
price and issuance of the related Equipment Note (subject to subsequent change
from time to time in accordance with the relevant Note Purchase Agreement), or
(b) indicating that such new Transfer Date (which shall be on or prior to the
applicable Cut-off Date) will be set by subsequent written notice not less than
one Business Day prior to such new Transfer Date (subject to subsequent change
from time to time in accordance with the relevant Note Purchase Agreement).
Potential Purchaser: Has the meaning, with respect to any
Certificateholder, specified in Section 6.01(d).
Purchasing Certificateholder: Has the meaning, with respect to any
Certificateholder, specified in Section 6.01(d).
Record Date: Means, with respect to any Trust or the related series of
Certificates, (i) for Scheduled Payments to be distributed on any Regular
Distribution Date, other than the final distribution with respect to such
series, the 15th day (whether or not a Business Day) preceding such Regular
Distribution Date, or such other date as shall be specified for such series in
the applicable Trust Supplement, and (ii) for Special Payments to be distributed
on any Special Distribution Date, other than the final distribution with respect
to such series, the 15th day (whether or not a Business Day) preceding such
Special Distribution Date, or such other date as shall be specified for such
series in the applicable Trust Supplement.
Register and Registrar: Means, with respect to the Certificates of any
series, the register maintained and the registrar appointed pursuant to Sections
3.04 and 7.12, respectively.
Regular Distribution Date: Means, with respect to distributions of
Scheduled Payments in respect of any series of Certificates, each date
designated as such in this Agreement, until payment
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of all the Scheduled Payments to be made under the Equipment Notes held in the
Trust have been made or until such Equipment Notes have been redeemed or
otherwise prepaid in full.
Request: Means a request by the Company setting forth the subject
matter of the request accompanied by an Officer's Certificate and an Opinion of
Counsel as provided in Section 1.02 of this Basic Agreement.
Responsible Officer: Means, with respect to any Trustee, any Loan
Trustee and any Owner Trustee, any officer in the Corporate Trust Department or
similar department of the Trustee, such Loan Trustee or such Owner Trustee, as
the case may be, or any other officer customarily performing functions similar
to those performed by the persons who at the time shall be such officers or to
whom any corporate trust matter is referred because of his knowledge of and
familiarity with a particular subject.
Responsible Party: Means, with respect to the Certificates of any
series, the Company or the other Person designated as such in the related Trust
Supplement.
Scheduled Payment: Means, with respect to any Equipment Note, except to
the extent otherwise provided in the applicable Trust Supplement, (i) any
payment of principal or interest on such Equipment Note (other than any such
payment which is not in fact received by the Trustee or any Subordination Agent
within five days after the date on which such payment is scheduled to be made)
or (ii) any distribution in respect of principal or interest on such Equipment
Note to the Holders of the Certificates of any series with funds drawn under the
Liquidity Facility for such series (other than any such payment which is not in
fact received by the Trustee or any Subordination Agent within five days after
the date upon which payment is scheduled to be made), which payment in the case
of clause (i) or clause (ii) represents an installment of principal on such
Equipment Note at the stated maturity of such installment, or the payment of
regularly scheduled interest accrued on the unpaid principal amount of such
Equipment Note, or both; provided, however, that any payment of principal,
premium, if any, or interest resulting from the redemption or purchase of any
Equipment Note shall not constitute a Scheduled Payment.
SEC: Means the Securities and Exchange Commission, as from time to time
constituted or created under the Securities Exchange Act of 1934, as amended,
or, if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties on such date.
Selling Certificateholder: Has the meaning, with respect to any
Certificateholder, specified in Section 6.01(d).
Special Distribution Date: Means, with respect to the Certificates of
any series, each date on which a Special Payment is to be distributed as
specified in this Agreement.
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Special Payment: Means, except to the extent otherwise provided in the
applicable Trust Supplement, (i) any payment (other than a Scheduled Payment) in
respect of, or any proceeds of, any Equipment Note held in a Trust or the
Collateral or Trust Indenture Estate, as the case may be (in each case, as
defined in each Indenture relating to such Trust), (ii) the amounts required to
be distributed pursuant to the last paragraph of Section 2.02(b), or (iii) the
amounts required to be distributed pursuant to the penultimate paragraph of
Section 2.02(b).
Special Payments Account: Means, with respect to the Certificates of
any series, the account or accounts created and maintained for such series
pursuant to Section 4.01(b) and the related Trust Supplement.
Specified Investments: Means, with respect to any Trust, unless
otherwise specified in the related Trust Supplement, (i) obligations of the
United States Government or agencies thereof, or obligations guaranteed by the
United States Government, (ii) open market commercial paper of any corporation
incorporated under the laws of the United States of America or any State thereof
rated at least P-2 or its equivalent by Moody's Investors Service, Inc. or at
least A-2 or its equivalent by Standard & Poor's Ratings Services (including the
Trustee if such conditions are met), (iii) certificates of deposit issued by
commercial banks organized under the laws of the United States or of any
political subdivision thereof having a combined capital and surplus in excess of
$500,000,000 which banks or their holding companies have a rating of A or its
equivalent by Moody's Investors Service, Inc. or A2 or its equivalent by
Standard & Poor's Ratings Services (including the Trustee if such conditions are
met); provided, however, that the aggregate amount at any one time so invested
in certificates of deposit issued by any one bank shall not exceed 5% of such
bank's capital and surplus, (iv) U.S. dollar denominated offshore certificates
of deposit issued by, or offshore time deposits with, any commercial bank
described in (iii) or any subsidiary thereof, and (v) repurchase agreements with
any financial institution having combined capital and surplus of at least
$500,000,000 (including the Trustee if such conditions are met) with any of the
obligations described in clauses (i) through (iv) as collateral; provided
further that if all of the above investments are unavailable, the entire amounts
to be invested may be used to purchase Federal Funds from an entity described in
clause (iii) above; and provided further that no investment shall be eligible as
a "Specified Investment" unless the final maturity or date of return of such
investment is on or before the Special Distribution Date next following the
Cut-off Date for such Trust by at least 15 days.
Subordination Agent: Has the meaning, with respect to the Certificates
of any series, specified therefor in the relevant Intercreditor Agreement.
Substitute Aircraft: Means, with respect to any Trust, any Aircraft of
a type specified in this Agreement and, at the election of the Company,
substituted prior to the applicable Cut-off Date, if any, pursuant to the terms
of this Agreement.
Transfer Date: Has the meaning, with respect to the Certificates of any
series, assigned to that term or any of the terms "Delivery Date", "Funding
Date" or "Closing Date" in any relevant
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Note Purchase Agreement, and in any event refers to any such date as it may be
changed from time to time in accordance with the terms of such Note Purchase
Agreement.
Triggering Event: Has the meaning, with respect to the Certificates of
any series, specified therefor in the relevant Intercreditor Agreement.
Trust: Means, with respect to the Certificates of any series, the
separate trust created under this Agreement.
Trustee: Means, with respect to any particular Trust, the institution
executing this Agreement as the Trustee, or its successor in interest, and any
successor or other trustee appointed as provided herein (it being understood
that the same institution need not act as the Trustee in respect of all of the
Trusts created pursuant to this Basic Agreement and the Trust Supplements).
Trust Indenture Act: Except as otherwise provided in Section 9.06,
means, with respect to any particular Trust, the Trust Indenture Act of 1939, as
amended and in force at the date as of which the related Trust Supplement was
executed.
Trust Property: Means, with respect to any Trust, except to the extent
otherwise provided in the applicable Trust Supplement, (i) subject to any
related Intercreditor Agreement, the Equipment Notes held as the property of
such Trust, all monies at any time paid thereon and all monies due and to become
due thereunder, (ii) debt instruments issued by the Company in accordance with
the first paragraph of Section 2.02(b), (iii) funds from time to time deposited
in the related Escrow Account, the related Certificate Account and the related
Special Payments Account and, subject to any related Intercreditor Agreement,
any proceeds from the sale by the Trustee pursuant to Article VI hereof of any
Equipment Note referred to in (i) above, (iv) all rights of such Trust and the
Trustee, on behalf of the Trust, under any Intercreditor Agreement or Liquidity
Facility, including, without limitation, all rights to receive all monies and
other property payable thereunder, and (v) all monies or other property
receivable under any Intercreditor Agreement or Liquidity Facility for such
Trust.
Trust Supplement: Means an agreement supplemental hereto pursuant to
which (i) a separate Trust is created for the benefit of the Holders of the
Certificates of a series, (ii) the issuance of the Certificates of such series
representing fractional undivided interests in such Trust is authorized and
(iii) the terms of the Certificates of such series are established, as such
agreement may from time to time be supplemented, amended or otherwise modified.
Section 1.02. Compliance Certificates and Opinions. Upon any
application or request (except with respect to matters set forth in Article II)
by the Company, any Owner Trustee or any Loan Trustee to the Trustee to take any
action under any provision of this Basic Agreement or, in respect of the
Certificates of any series, this Agreement, the Company, such Owner Trustee or
such Loan Trustee, as the case may be, shall furnish to the Trustee (i) an
Officer's Certificate stating that, in the opinion of the signer or signers, all
conditions precedent, if any, provided for in this Basic Agreement or this
Agreement relating to the proposed action have been complied with and (ii) an
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Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Basic Agreement or this
Agreement relating to such particular application or request, no additional
certificate or opinion need be furnished. Every certificate or opinion with
respect to compliance with a condition or covenant provided for in this Basic
Agreement or, in respect of the Certificates of any series, this Agreement
(other than a certificate provided pursuant to Section 8.04(d)) or any Trust
Supplement shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the
definitions in this Basic Agreement or this Agreement relating
thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 1.03. Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters and any such Person may certify or give an opinion as to such
matters in one or several documents.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Basic Agreement or, in respect of the Certificates of any
series, this Agreement, they may, but need not, be consolidated and form one
instrument.
Section 1.04. Directions of Certificate Holders. (a) Any direction,
consent, request, demand, authorization, notice, waiver or other action provided
by this Agreement or in respect of the Certificates of any series to be given or
taken by Certificateholders (a "Direction") may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by such
Certificateholders in person or by an agent or proxy duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
when it is expressly required pursuant to this Agreement, to the Company or any
Loan Trustee. Such instrument or instruments (and the action
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embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Certificateholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent or
proxy shall be sufficient for any purpose of this Agreement and conclusive in
favor of the Trustee, the Company and the related Loan Trustee, if made in the
manner provided in this Section 1.04.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the certificate of any notary public or
other officer of any jurisdiction authorized to take acknowledgments of deeds or
administer oaths that the Person executing such instrument acknowledged to him
the execution thereof, or by an affidavit of a witness to such execution sworn
to before any such notary or such other officer, and where such execution is by
an officer of a corporation or association or a member of a partnership, on
behalf of such corporation, association or partnership, such certificate or
affidavit shall also constitute sufficient proof of his authority. The fact and
date of the execution of any such instrument or writing, or the authority of the
Person executing the same, may also be proved in any other reasonable manner
which the Trustee deems sufficient.
(c) In determining whether the Certificateholders of the requisite
Fractional Undivided Interests of Certificates of any series Outstanding have
given any Direction under this Agreement, Certificates owned by the Company, any
related Owner Trustee, any related Owner Participant or any Affiliate of any
such Person shall be disregarded and deemed not to be Outstanding for purposes
of any such determination. In determining whether the Trustee shall be protected
in relying upon any such Direction, only Certificates which the Trustee knows to
be so owned shall be so disregarded. Notwithstanding the foregoing, (i) if any
such Person owns 100% of the Certificates of any series Outstanding, such
Certificates shall not be so disregarded, and (ii) if any amount of Certificates
of any series owned by any such Person have been pledged in good faith, such
Certificates shall not be disregarded if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Certificates and that the pledgee is not the Company, any related Owner Trustee,
any related Owner Participant or any Affiliate of any such Person.
(d) The Company may, at its option, by delivery of an Officer's
Certificate to the Trustee, set a record date to determine the
Certificateholders in respect of the Certificates of any series entitled to give
any Direction. Notwithstanding Section 316(c) of the Trust Indenture Act, such
record date shall be the record date specified in such Officer's Certificate,
which shall be a date not more than 30 days prior to the first solicitation of
Certificateholders of the applicable series in connection therewith. If such a
record date is fixed, such Direction may be given before or after such record
date, but only the Certificateholders of record of the applicable series at the
close of business on such record date shall be deemed to be Certificateholders
for the purposes of determining whether Certificateholders of the requisite
proportion of Outstanding Certificates of such series have authorized or agreed
or consented to such Direction, and for that purpose the Outstanding
Certificates of such series shall be computed as of such record date; provided,
however, that no such Direction by the Certificateholders on such record date
shall be deemed effective unless it shall become effective pursuant to the
provisions of this Agreement not later than one year after such
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record date. Nothing in this paragraph shall be construed to prevent the Company
from setting a new record date for any action for which a record date has
previously been set pursuant to this paragraph (whereupon the record date
previously set shall automatically and with no action by any Person be deemed
cancelled and of no effect).
(e) Any Direction by the Holder of any Certificate shall bind the
Holder of every Certificate issued upon the transfer thereof or in exchange
therefor or in lieu thereof, whether or not notation of such Direction is made
upon such Certificate.
(f) Except as otherwise provided in Section 1.04(c), Certificates of
any series owned by or pledged to any Person shall have an equal and
proportionate benefit under the provisions of this Agreement, without
preference, priority or distinction as among all of the Certificates of such
series.
(g) The Company and the Trustee may make reasonable rules for action by
or at a meeting of Certificateholders.
ARTICLE II
ORIGINAL ISSUANCE OF CERTIFICATES;
ACQUISITION OF TRUST PROPERTY
Section 2.01. Amount Unlimited; Issuable in Series. (a) The aggregate
face amount of Certificates that may be authenticated and delivered under this
Basic Agreement is unlimited. The Certificates may be issued from time to time
in one or more series and shall be designated generally as the "Pass Through
Certificates", with such further designations added or incorporated in such
title for the Certificates of each series as are specified in the related Trust
Supplement. Each Certificate shall bear upon its face the designation so
selected for the series to which it belongs. All Certificates of the same series
shall be substantially identical except that the Certificates of a series may
differ as to denomination and as may otherwise be provided in the Trust
Supplement establishing the Certificates of such series. Each series of
Certificates issued pursuant to this Agreement will evidence fractional
undivided interests in the related Trust and, except as may be specified in any
Intercreditor Agreement or in the applicable Trust Supplement, will have no
rights, benefits or interests in respect of any other Trust or the Trust
Property held therein. All Certificates of the same series shall be in all
respects equally and ratably entitled to the benefits of this Agreement without
preference, priority or distinction on account of the actual time or times of
authentication and delivery, all in accordance with the terms and provisions of
this Agreement.
(b) The following matters shall be established with respect to the
Certificates of each series issued hereunder by a Trust Supplement executed and
delivered by and between the Company and the Trustee:
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(1) the formation of the Trust as to which the Certificates of
such series represent fractional undivided interests and its
designation (which designation shall distinguish such Trust
from each other Trust created under this Basic Agreement and a
Trust Supplement);
(2) the specific title of the Certificates of such series (which
title shall distinguish the Certificates of such series from
each other series of Certificates created under this Basic
Agreement and a Trust Supplement);
(3) subject to Section 2.01(a) hereof, any limit upon the
aggregate face amount of the Certificates of such series which
may be authenticated and delivered under this Basic Agreement
(which limit shall not pertain to Certificates authenticated
and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Certificates of the series pursuant
to Sections 3.03, 3.04, 3.05(d) and 3.06);
(4) the Cut-off Date with respect to the Certificates of such
series and the related Trust;
(5) the Regular Distribution Dates applicable to the Certificates
of such series;
(6) the Special Distribution Dates applicable to the Certificates
of such series;
(7) if other than as provided in Section 3.04 or Section 7.12(b),
the Registrar or the Paying Agent for the Certificates of such
series, including any Co-Registrar or additional Paying Agent;
(8) if other than as provided in Section 3.01, the denominations
in which the Certificates of such series shall be issuable;
(9) if other than United States dollars, the currency or
currencies (including composite currencies or currency units)
in which the Certificates of such series shall be denominated
or payable;
(10) the specific form of the Certificates of such series
(including the interest rate applicable thereto) and whether
or not Certificates of such series are to be issued as
Book-Entry Certificates and, if such Certificates are to be
Book-Entry Certificates, the form of Letter of
Representations, if any (or, in the case of any Certificates
denominated or payable in a currency other than United States
dollars and if other than as provided in Section 3.05, whether
and the circumstances under which beneficial owners of
interests in such Certificates in permanent global form may
exchange such interests for Certificates of such series and of
like tenor of any authorized form and denomination);
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(11) a description of the Equipment Notes to be acquired and held
in the Trust formed by such Trust Supplement and of the
related Aircraft and Note Documents;
(12) provisions with respect to the terms for which the definitions
set forth in Article I hereof or the terms of any Section
hereof, including Section 11.01 hereof, permit or require
further specification in the related Trust Supplement;
(13) any restrictions (including legends) in respect of ERISA or
tax matters;
(14) the acceptance of appointment by the institution named to act
as Trustee with respect to such Trust, if different from the
institution executing this Basic Agreement or its successor;
(15) whether such series will be subject to an Intercreditor
Agreement and, if so, the specific designation of such
Intercreditor Agreement and the rights of Potential Purchasers
upon the occurrence of a Triggering Event;
(16) whether such series will have the benefit of a Liquidity
Facility and, if so, any terms appropriate thereto;
(17) whether there will be a deposit agreement, escrow agreement or
other arrangement prior to the delivery of one or more
Aircraft or the commencement of the Lease in respect of one or
more Aircraft and, if so, any terms appropriate thereto;
(18) the extent, if any, to which the Company may acquire
Certificates and deliver such Certificates or cash to the
respective Trusts and obtain the release of Equipment Notes or
other Trust Property held by such Trusts;
(19) if the Certificates of such series are to be issued in bearer
form, the forms thereof and any other special terms relating
thereto;
(20) the "Responsible Party" for purposes of directing the Trustee
to make Specified Investments; and
(21) any other terms of the Certificates of such series (which
terms shall not be inconsistent with the provisions of the
Trust Indenture Act but may modify, amend, supplement or
delete any of the terms of this Basic Agreement), including
any terms of the Certificates of such series which may be
required or advisable under United States laws or regulations
or advisable (as determined by the Company) in connection with
the marketing of Certificates of the series.
(c) At any time and from time to time after the execution and delivery
of this Basic Agreement and a Trust Supplement forming a Trust and establishing
the terms of Certificates of a
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series, Certificates of such series shall be executed, authenticated and
delivered by the Trustee to the Person or Persons specified by the Company upon
request of the Company and upon satisfaction or waiver of any conditions
precedent set forth in such Trust Supplement or in any other document to which a
Trustee is a party relating to the issuance of the Certificates of such series.
Section 2.02. Acquisition of Equipment Notes. (a) Unless otherwise
specified in the related Trust Supplement, on or prior to the Issuance Date of
the Certificates of a series, the Trustee shall execute and deliver the related
Note Purchase Agreements in the form delivered to the Trustee by the Company.
The Trustee shall issue and sell such Certificates, in authorized denominations
and in such Fractional Undivided Interests, so as to result in the receipt of
consideration in an amount equal to the aggregate purchase price of the
Equipment Notes contemplated to be purchased by the Trustee under the related
Note Purchase Agreements and, concurrently therewith (unless the Company shall
have delivered to the Trustee the Postponement Notice relating to one or more
Postponed Notes pursuant to Subsection (b) below), the Trustee shall purchase,
pursuant to the terms and conditions of the Note Purchase Agreements, such
Equipment Notes (except Postponed Notes, if any) at a purchase price equal to
the amount of such consideration so received. Except as provided in Sections
3.03, 3.04, 3.05 and 3.06 hereof, the Trustee shall not execute, authenticate or
deliver Certificates of such series in excess of the aggregate amount specified
in this paragraph. The provisions of this Subsection (a) are subject to the
provisions of Subsection (b) below.
(b) If on or prior to the Issuance Date with respect to a series of
Certificates the Company shall deliver to the Trustee a Postponement Notice
relating to one or more Postponed Notes, the Trustee shall postpone the purchase
of such Postponed Notes and shall deposit into an escrow account (as to the
related Trust, the "Escrow Account") to be maintained as part of the related
Trust an amount equal to the purchase price of such Postponed Notes (the
"Escrowed Funds"). The portion of the Escrowed Funds so deposited with respect
to any particular Postponed Notes shall be invested (a) by the Trustee at the
direction and risk of, and for the benefit of, the Responsible Party in
Specified Investments or (b) if provided in the Trust Supplement relating to
such series of Certificates and subject to the terms and conditions set forth
therein, in debt instruments of the Company, in each case (i) maturing no later
than any scheduled Transfer Date relating to such Postponed Notes, or (ii) if no
such Transfer Date has been scheduled, maturing on the next Business Day, or
(iii) if subsequent to the giving of the applicable Postponement Notice the
Company has given notice to the Trustee that such Postponed Notes will not be
issued, maturing on the next applicable Special Distribution Date, if such
investments are reasonably available for purchase. The Trustee shall make
withdrawals from the Escrow Account only as provided in this Agreement. Upon
request of the Company on one or more occasions and the satisfaction or waiver
of the closing conditions specified in the applicable Note Purchase Agreements
on or prior to the related Cut-off Date, the Trustee shall purchase the
applicable Postponed Notes, on the terms specified in such Note Purchase
Agreements, with the Escrowed Funds withdrawn from the Escrow Account.
The Trustee shall hold all Specified Investments until the maturity
thereof and will not sell or otherwise transfer Specified Investments. If
Specified Investments held in an Escrow Account mature prior to any applicable
Transfer Date, any proceeds received on the maturity of such
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Specified Investments (other than any earnings thereon) shall be reinvested by
the Trustee at the written direction and risk of, and for the benefit of, the
Responsible Party in Specified Investments maturing as provided in the preceding
paragraph.
Subject to the provisions of the Intercreditor Agreement, any earnings
on Specified Investments received from time to time by the Trustee shall be
promptly distributed to the Responsible Party. The Responsible Party shall pay
to the Trustee for deposit to the relevant Escrow Account an amount equal to any
net losses on any Specified Investments made at its direction and risk as
incurred. On any Regular Distribution Date in respect of the Certificates of any
series occurring prior to the date of purchase of any Postponed Notes by the
Trustee, the Responsible Party will pay (in immediately available funds) to the
Trustee an amount equal to the interest that would have accrued on such
Postponed Notes if such Postponed Notes had been purchased on the later of the
Issuance Date or the previous Regular Distribution Date in respect of the
Certificates of such series to, but not including, such Regular Distribution
Date. On the first Regular Distribution Date in respect of the Certificates of
any series following the purchase of any Postponed Notes by the Trustee, the
Responsible Party will pay (in immediately available funds) to the Trustee an
amount equal to the interest that would have accrued on such Postponed Notes if
such Postponed Notes had been purchased on the later of the Issuance Date or the
previous Regular Distribution Date in respect of the Certificates of such series
to, but not including, the date of the purchase of such Postponed Notes by the
Trustee.
If, in respect of the Certificates of any series, the Company notifies
the Trustee prior to the Cut-off Date that any Postponed Notes will not be
issued on or prior to the Cut-off Date for any reason, on the next Special
Distribution Date for such Certificates occurring not less than 15 days
following the date of such notice, (i) the Responsible Party shall pay (in
immediately available funds) to the Trustee for deposit in the related Special
Payments Account, an amount equal to the interest that would have accrued on the
Postponed Notes designated in such notice from the later of the Issuance Date or
the previous Regular Distribution Date in respect of the Certificates of such
series to, but not including, such Special Distribution Date and (ii) the
Trustee shall transfer an amount equal to that amount of Escrowed Funds that
would have been used to purchase the Postponed Notes designated in such notice
and the amount paid by the Responsible Party pursuant to the immediately
preceding clause (i) to the related Special Payments Account for distribution as
a Special Payment in accordance with the provisions hereof.
If, on such Cut-off Date, an amount equal to less than all of the
Escrowed Funds (other than Escrowed Funds referred to in the immediately
preceding paragraph) has been used to purchase Postponed Notes, on the next
Special Distribution Date occurring not less than 15 days following such Cut-off
Date (i) the Responsible Party shall pay to the Trustee for deposit in such
Special Payments Account, in immediately available funds, an amount equal to the
interest that would have accrued on such Postponed Notes contemplated to be
purchased with such unused Escrowed Funds (other than Escrowed Funds referred to
in the immediately preceding paragraph) but not so purchased from the later of
the Issuance Date or the previous Regular Distribution Date in respect of the
Certificates of such series to, but not including, such Special Distribution
Date and (ii) the
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Trustee shall transfer such unused Escrowed Funds and the amount paid by the
Responsible Party pursuant to the immediately preceding clause (i) to such
Special Payments Account for distribution as a Special Payment in accordance
with the provisions hereof.
Section 2.03. Acceptance by Trustee. The Trustee, by the execution and
delivery of a Trust Supplement creating a Trust and establishing a series of
Certificates, shall acknowledge its acceptance of all right, title and interest
in and to the Trust Property to be acquired pursuant to Section 2.02 hereof and
the related Note Purchase Agreements and shall declare that the Trustee holds
and will hold such right, title and interest for the benefit of all then present
and future Certificateholders of such series, upon the trusts herein and in such
Trust Supplement set forth. By the acceptance of each Certificate of such series
issued to it under this Agreement, each initial Holder of such series as grantor
of such Trust shall thereby join in the creation and declaration of such Trust.
No Certificateholder of any series shall have legal title to any part of the
Trust Property of the related Trust.
Section 2.04. Limitation of Powers. Each Trust shall be constituted
solely for the purpose of making the investment in the Equipment Notes provided
for in the related Trust Supplement, and, except as set forth herein or in such
related Trust Supplement, the Trustee shall not be authorized or empowered to
acquire any other investments or engage in any other activities. Except to the
extent otherwise provided in the applicable Trust Supplement, the Trustee shall
not be authorized or empowered to do anything that would cause such Trust to
fail to qualify as a "grantor trust" for federal income tax purposes (including
as subject to this restriction, acquiring any Aircraft (as defined in the
related Indentures) by bidding such Equipment Notes or otherwise, or taking any
action with respect to any such Aircraft once acquired).
ARTICLE III
THE CERTIFICATES
Section 3.01. Form, Denomination and Execution of Certificates. Except
to the extent otherwise specified in the applicable Trust Supplement, the
Certificates of each series shall be issued in fully registered form without
coupons and shall be substantially in the form attached hereto as Exhibit A,
with such omissions, variations and insertions as are permitted by this
Agreement, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with any applicable laws, rules, regulations or the rules of any securities
exchange on which such Certificates may be listed or to conform to any usage in
respect thereof, or as may, consistently herewith, be determined by the Trustee
or the officers executing such Certificates, as evidenced by the Trustee's or
such officers' execution of the Certificates.
Except as provided in Section 3.05, the definitive Certificates of such
series shall be typed, printed, lithographed or engraved or produced by any
combination of these methods or may be
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produced in any other manner permitted by the rules of any securities exchange
on which the Certificates may be listed, all as determined by the officers
executing such Certificates, as evidenced by their execution of such
Certificates.
Except as otherwise provided in the related Trust Supplement, the
Certificates of each series shall be issued in minimum denominations of $1,000
or integral multiples thereof except that one Certificate of such series may be
issued in a different denomination. The Certificates of such series shall be
executed on behalf of the Trustee by manual or facsimile signature of a
Responsible Officer of the Trustee. Certificates of any series bearing the
manual or facsimile signature of an individual who was, at the time when such
signature was affixed, authorized to sign on behalf of the Trustee shall be
valid and binding obligations of the Trustee, notwithstanding that such
individual has ceased to be so authorized prior to the authentication and
delivery of such Certificates or did not hold such office at the date of such
Certificates.
Section 3.02. Authentication of Certificates. (a) Except to the extent
otherwise specified in the applicable Trust Supplement, on the Issuance Date,
the Trustee shall duly execute, authenticate and deliver Certificates of each
series in authorized denominations equaling in the aggregate the aggregate face
amount of the Equipment Notes that may be purchased by the Trustee pursuant to
the related Note Purchase Agreements, and evidencing the entire ownership of the
related Trust. Thereafter, the Trustee shall duly execute, authenticate and
deliver the Certificates of such series as herein provided.
(b) No Certificate of any series shall be entitled to any benefit under
this Agreement, or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication substantially in the form set forth
in Exhibit A hereto executed by the Trustee by manual signature, and such
certificate of authentication upon any Certificate shall be conclusive evidence,
and the only evidence, that such Certificate has been duly authenticated and
delivered hereunder. All Certificates of any series shall be dated the date of
their authentication.
Section 3.03. Temporary Certificates. Until definitive Certificates are
ready for delivery, the Trustee shall execute, authenticate and deliver
temporary Certificates of each series. Temporary Certificates of each series
shall be substantially in the form of definitive Certificates of such series but
may have insertions, substitutions, omissions and other variations determined to
be appropriate by the officers executing the temporary Certificates of such
series, as evidenced by their execution of such temporary Certificates. If
temporary Certificates of any series are issued, the Trustee will cause
definitive Certificates of such series to be prepared without unreasonable
delay. After the preparation of definitive Certificates of such series, the
temporary Certificates shall be exchangeable for definitive Certificates upon
surrender of such temporary Certificates at the Corporate Trust Office or the
office or agency of the Trustee designated for such purpose pursuant to Section
7.12, without charge to the Certificateholder. Upon surrender for cancellation
of any one or more temporary Certificates, the Trustee shall execute,
authenticate and deliver in exchange therefor a like face amount of definitive
Certificates of like series, in authorized denominations and of a like
Fractional
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Undivided Interest. Until so exchanged, such temporary Certificates shall be
entitled to the same benefits under this Agreement as definitive Certificates of
such series.
Section 3.04. Transfer and Exchange. The Trustee shall cause to be kept
at the office or agency to be maintained by it in accordance with the provisions
of Section 7.12 a register (the "Register") for each series of Certificates in
which, subject to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates of such series and of
transfers and exchanges of such Certificates as herein provided. The Trustee
shall initially be the registrar (the "Registrar") for the purpose of
registering such Certificates of each series and transfers and exchanges of such
Certificates as herein provided.
All Certificates issued upon any registration of transfer or exchange
of Certificates of any series shall be valid obligations of the applicable
Trust, evidencing the same interest therein, and entitled to the same benefits
under this Agreement, as the Certificates of such series surrendered upon such
registration of transfer or exchange.
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office or such other office or agency, the Trustee shall
execute, authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of like series, in authorized
denominations of a like aggregate Fractional Undivided Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of like series, in authorized denominations and of a like
aggregate Fractional Undivided Interest, upon surrender of the Certificates to
be exchanged at any such office or agency. Whenever any Certificates are so
surrendered for exchange, the Trustee shall execute, authenticate and deliver
the Certificates that the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for registration of transfer
or exchange shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Registrar duly executed by
the Certificateholder thereof or its attorney duly authorized in writing.
No service charge shall be made to a Certificateholder for any
registration of transfer or exchange of Certificates, but the Trustee shall
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates. All
Certificates surrendered for registration of transfer or exchange shall be
cancelled and subsequently destroyed by the Trustee.
Section 3.05. Book-Entry and Definitive Certificates. (a) Except for
one Certificate of each series that may be issued in a denomination of other
than an even multiple of $1,000, the Certificates of any series may be issued at
the option of the Company in the form of one or more typewritten Certificates
representing the Book-Entry Certificates of such series, to be delivered to The
Depository Trust Company, the initial Clearing Agency, by, or on behalf of, the
Company. In such case, the Certificates of such series delivered to The
Depository Trust Company shall initially be registered on the Register in the
name of Cede & Co., the nominee of the initial Clearing Agency,
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and no Certificate Owner will receive a definitive certificate representing such
Certificate Owner's interest in the Certificates of such series, except as
provided in Subsection (d) below. As to the Certificates of any such series
(other than the one Certificate or such series issued in a denomination of other
than an even multiple of $1,000), unless and until definitive, fully registered
Certificates (the "Definitive Certificates") have been issued pursuant to
Subsection (d) below:
(1) the provisions of this Section 3.05 shall be in full force and
effect;
(2) the Company, the Paying Agent, the Registrar and the Trustee
may deal with the Clearing Agency for all purposes (including
the making of distributions on the Certificates);
(3) to the extent that the provisions of this Section 3.05
conflict with any other provisions of this Agreement (other
than the provisions of any Trust Supplement expressly amending
this Section 3.05 as permitted by this Basic Agreement), the
provisions of this Section 3.05 shall control;
(4) the rights of Certificate Owners shall be exercised only
through the Clearing Agency and shall be limited to those
established by law and agreements between such Certificate
Owners and the Clearing Agency Participants; and until
Definitive Certificates are issued pursuant to Subsection (d)
below, the Clearing Agency will make book-entry transfers
among the Clearing Agency Participants and receive and
transmit distributions of principal, interest and premium, if
any, on the Certificates to such Clearing Agency Participants;
(5) such Certificates of such series may be transferred in whole,
but not in part, and in the manner provided in Section 3.04,
by the Clearing Agency holding such Certificates to a nominee
of such Clearing Agency, or by such Clearing Agency to a
successor Clearing Agency that has been selected or approved
by the Company or to a nominee of such successor Clearing
Agency; and
(6) whenever this Agreement requires or permits actions to be
taken based upon instructions or directions of
Certificateholders of such series holding Certificates of such
series evidencing a specified percentage of the Fractional
Undivided Interests in the related Trust, the Clearing Agency
shall be deemed to represent such percentage only to the
extent that it has received instructions to such effect from
Clearing Agency Participants owning or representing,
respectively, such required percentage of the beneficial
interest in Certificates of such series and has delivered such
instructions to the Trustee. Neither the Company nor the
Trustee shall have any obligation to determine whether the
Clearing Agency has in fact received any such instructions.
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<PAGE> 29
(b) Whenever notice or other communication to the Certificateholders of
a series is required under this Agreement, unless and until Definitive
Certificates shall have been issued pursuant to Subsection (d) below, the
Trustee shall give all such notices and communications specified herein to be
given to Certificateholders of such series to the Clearing Agency.
(c) Except as otherwise provided in the related Trust Supplement, the
Trustee shall enter into the applicable Letter of Representations with respect
to each series of Certificates and fulfill its responsibilities thereunder.
(d) If with respect to the Certificates of any series (i) the Company
advises the Trustee in writing that the Clearing Agency is no longer willing or
able to discharge properly its responsibilities and the Trustee or the Company
is unable to locate a qualified successor, (ii) the Company, at its option,
advises the Trustee in writing that it elects to terminate the book-entry system
through the Clearing Agency or (iii) after the occurrence of an Event of
Default, Certificate Owners of Book-Entry Certificates of such series evidencing
Fractional Undivided Interests aggregating not less than a majority in interest
in the related Trust, by Act of such Certificate Owners delivered to the Company
and the Trustee, advise the Company, the Trustee and the Clearing Agency through
the Clearing Agency Participants in writing that the continuation of a
book-entry system through the Clearing Agency Participants is no longer in the
best interests of the Certificate Owners of such series, then the Trustee shall
notify all Certificate Owners of such series, through the Clearing Agency, of
the occurrence of any such event and of the availability of Definitive
Certificates. Upon surrender to the Trustee of all the Certificates of such
series held by the Clearing Agency, accompanied by registration instructions
from the Clearing Agency Participants for registration of Definitive
Certificates in the names of Certificate Owners of such series, the Trustee
shall issue and deliver the Definitive Certificates of such series in accordance
with the instructions of the Clearing Agency. Neither the Company, the
Registrar, the Paying Agent nor the Trustee shall be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such registration instructions. Upon the issuance of
Definitive Certificates of such series, the Trustee shall recognize the Persons
in whose names the Definitive Certificates are registered in the Register as
Certificateholders hereunder. Neither the Company nor the Trustee shall be
liable if the Trustee or the Company is unable to locate a qualified successor
Clearing Agency.
(e) The provisions of this Section 3.05 may be made inapplicable to any
series or may be amended with respect to any series in the related Trust
Supplement.
Section 3.06. Mutilated, Destroyed, Lost or Stolen Certificates. If (i)
any mutilated Certificate is surrendered to the Registrar, or the Registrar
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Registrar and the Trustee such
security, indemnity or bond as may be required by them to save each of them and
the Company harmless, then, in the absence of notice to the Registrar or the
Trustee that such destroyed, lost or stolen Certificate has been acquired by a
protected purchaser (within the meaning of Article 8 of the Uniform Commercial
Code in effect in any applicable jurisdiction), and provided that the
requirements of Section 8-405 of the Uniform Commercial Code in effect in any
applicable
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jurisdiction are met, the Trustee shall execute, authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate or Certificates of like series, in authorized
denominations and of like Fractional Undivided Interest and bearing a number not
contemporaneously outstanding.
In connection with the issuance of any new Certificate under this
Section 3.06, the Trustee shall require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Trustee and the
Registrar) connected therewith.
Any duplicate Certificate issued pursuant to this Section 3.06 shall
constitute conclusive evidence of the appropriate Fractional Undivided Interest
in the related Trust, as if originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.
The provisions of this Section 3.06 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Certificates.
Section 3.07. Persons Deemed Owners. Prior to due presentment of a
Certificate for registration of transfer, the Company, the Trustee, the
Registrar and any Paying Agent shall deem and treat the Person in whose name any
Certificate is registered (as of the day of determination) on the Register as
the owner of such Certificate and the Certificateholder for the purpose of
receiving distributions pursuant to Article IV and for all other purposes
whatsoever, and none of the Company, the Trustee, the Registrar or any Paying
Agent shall be affected by any notice to the contrary. All payments or
distributions made to any such Person shall be valid and, to the extent of the
sum or sums so paid, effectual to satisfy and discharge the liability for moneys
payable on any such Certificate.
Section 3.08. Cancellation. All Certificates surrendered for payment or
transfer or exchange shall, if surrendered to the Trustee or any agent of the
Trustee other than the Registrar, be delivered to the Registrar for cancellation
and shall promptly be cancelled by it. No Certificates shall be authenticated in
lieu of or in exchange for any Certificates cancelled as provided in this
Section 3.08, except as expressly permitted by this Agreement. All cancelled
Certificates held by the Registrar shall be destroyed and a certification of
their destruction delivered to the Trustee.
Section 3.09. Limitation of Liability for Payments. All payments and
distributions made to Certificateholders of any series in respect of the
Certificates of such series shall be made only from the Trust Property of the
related Trust and only to the extent that the Trustee shall have sufficient
income or proceeds from such Trust Property to make such payments in accordance
with the terms of Article IV of this Agreement. Each Certificateholder, by its
acceptance of a Certificate, agrees that it will look solely to the income and
proceeds from the Trust Property of the related Trust for any payment or
distribution due to such Certificateholder pursuant to the terms of this
Agreement and that it will not have any recourse to the Company, the Trustee,
the Loan Trustees, any Owner
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Trustee or any Owner Participant except as otherwise expressly provided in this
Agreement, in any Note Document or in any related Intercreditor Agreement.
The Company is a party to this Agreement solely for purposes of meeting
the requirements of the Trust Indenture Act, and therefore shall not have any
right, obligation or liability hereunder, or under the terms of any Trust
Supplement or any Certificates (except as otherwise expressly provided herein or
therein).
Section 3.10. CUSIP Numbers. The Certificates may include "CUSIP"
numbers (if then generally in use), and if so, the Trustee may use the CUSIP
numbers in notices in respect of the Certificates; provided, however, that any
such notice may state that no representation is made as to the correctness or
accuracy of the CUSIP number printed in the notice or on the Certificates, that
reliance may be placed only on the other identification numbers printed on the
Certificates, and any such notice shall not be affected by any defect or
omission of such CUSIP numbers.
ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS
Section 4.01. Certificate Account and Special Payments Account. (a) The
Trustee shall establish and maintain on behalf of the Certificateholders of each
series a Certificate Account as one or more non-interest-bearing accounts. The
Trustee shall hold such Certificate Account in trust for the benefit of the
Certificateholders of such series, and shall make or permit withdrawals
therefrom only as provided in this Agreement or any Intercreditor Agreement. On
each day when a Scheduled Payment is made to the Trustee or the Subordination
Agent, as the case may be, as holder of the Equipment Notes issued under the
related Indenture, with respect to the Certificates of any series, the Trustee,
upon receipt of the payments to it, shall immediately deposit the aggregate
amount of such Scheduled Payment in the applicable Certificate Account.
(b) The Trustee shall establish and maintain on behalf of the
Certificateholders of each series a Special Payments Account as one or more
accounts, which shall be non-interest bearing except as provided in Section
4.04. The Trustee shall hold the Special Payments Account in trust for the
benefit of the Certificateholders of such series and shall make or permit
withdrawals therefrom only as provided in this Agreement or any Intercreditor
Agreement. On each day when one or more Special Payments are made to the Trustee
or the Subordination Agent, as the case may be, as holder of the Equipment Notes
issued under the related Indenture or to the Trustee pursuant to the last two
paragraphs of Section 2.02(b) with respect to the Certificates of any series,
the Trustee, upon receipt of the payments to it, shall immediately deposit the
aggregate amount of such Special Payments in the applicable Special Payments
Account.
(c) The Trustee shall present (or, if applicable, cause the
Subordination Agent to present) to the Loan Trustee to which an Equipment Note
relates such Equipment Note on the date of its
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stated final maturity or, in the case of any Equipment Note which is to be
redeemed or purchased in whole pursuant to the related Indenture, on the
applicable redemption or purchase date under such Indenture.
Section 4.02. Distributions from Certificate Account and Special
Payments Account. (a) Subject to the provisions of any Intercreditor Agreement,
on each Regular Distribution Date with respect to a series of Certificates or as
soon thereafter as the Trustee has confirmed receipt of the payment of all or
any part of the Scheduled Payments due on the Equipment Notes held in the
related Trust on such date, the Trustee shall distribute out of the applicable
Certificate Account the entire amount deposited therein pursuant to Section
4.01(a). There shall be so distributed to each Certificateholder of record of
such series on the Record Date with respect to such Regular Distribution Date
(other than as provided in Section 11.01 concerning the final distribution) by
check mailed to such Certificateholder, at the address appearing in the
Register, such Certificateholder's pro rata share (based on the aggregate
Fractional Undivided Interest in the related Trust held by such
Certificateholder) of the total amount in the applicable Certificate Account,
except that, with respect to Certificates registered on the Record Date in the
name of a Clearing Agency (or its nominee), such distribution shall be made by
wire transfer in immediately available funds to the account designated by such
Clearing Agency (or such nominee).
(b) Subject to the provisions of any Intercreditor Agreement, on each
Special Distribution Date with respect to any Special Payment with respect to a
series of Certificates or as soon thereafter as the Trustee has confirmed
receipt of any Special Payments due on the Equipment Notes held in the related
Trust or realized upon the sale of such Equipment Notes, the Trustee shall
distribute out of the applicable Special Payments Account the entire amount of
such applicable Special Payment deposited therein pursuant to Section 4.01(b).
There shall be so distributed to each Certificateholder of record of such series
on the Record Date with respect to such Special Distribution Date (other than as
provided in Section 11.01 concerning the final distribution) by check mailed to
such Certificateholder, at the address appearing in the Register, such
Certificateholder's pro rata share (based on the aggregate Fractional Undivided
Interest in the related Trust held by such Certificateholder) of the total
amount in the applicable Special Payments Account on account of such Special
Payment, except that, with respect to Certificates registered on the Record Date
in the name of a Clearing Agency (or its nominee), such distribution shall be
made by wire transfer in immediately available funds to the account designated
by such Clearing Agency (or such nominee).
(c) The Trustee shall, at the expense of the Company, cause notice of
each Special Payment with respect to a series of Certificates to be mailed to
each Certificateholder of such series at his address as it appears in the
Register. Subject to the provisions of any Intercreditor Agreement: (i) in the
event of redemption or purchase of Equipment Notes held in the related Trust,
such notice shall be mailed not less than 15 days prior to the Special
Distribution Date for the Special Payment resulting from such redemption or
purchase, which Special Distribution Date shall be the date of such redemption
or purchase; (ii) in the event that the Trustee receives a notice from the
Company pursuant to Section 2.02(b) that Postponed Notes will not be purchased
by the Trustee, such notice of Special Payment shall be mailed as soon as
practicable after receipt of such notice from the
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Company and shall state the Special Distribution Date for such Special Payment,
which shall occur 15 days after the date of such notice of Special Payment or
(if such 15th day is not practicable) as soon as practicable thereafter; (iii)
in the event that any Special Payment is to be made pursuant to the last
paragraph of Section 2.02(b), such notice of Special Payment shall be mailed on
the Cut-off Date (or, if such mailing on the Cut-off Date is not practicable, as
soon as practicable after the Cut-off Date) and shall state the Special
Distribution Date for such Special Payment, which shall occur 15 days after the
date of such notice of Special Payment or (if such 15th day is not practicable)
as soon as practicable thereafter; and (iv) in the case of any other Special
Payments, such notice of Special Payment shall be mailed as soon as practicable
after the Trustee has confirmed that it has received funds for such Special
Payment and shall state the Special Distribution Date for such Special Payment,
which shall occur 15 days after the date of such notice of Special Payment or
(if such 15th day is not practicable) as soon as practicable thereafter. Notices
mailed by the Trustee as provided in the paragraphs above shall set forth:
(i) the Special Distribution Date and the Record Date therefor (except
as otherwise provided in Section 11.01);
(ii) the amount of the Special Payment (taking into account any payment
to be made by the Responsible Party pursuant to Section 2.02(b)) for each $1,000
face amount Certificate and the amount thereof constituting principal, premium,
if any, and interest;
(iii) the reason for the Special Payment; and
(iv) if the Special Distribution Date is the same date as a Regular
Distribution Date for the Certificates of such series, the total amount to be
received on such date for each $1,000 face amount Certificate.
If the amount of premium, if any, payable upon the redemption or
purchase of an Equipment Note has not been calculated at the time that the
Trustee mails notice of a Special Payment, it shall be sufficient if the notice
sets forth the other amounts to be distributed and states that any premium
received will also be distributed.
If any redemption or purchase of the Equipment Notes held in any Trust
is cancelled, the Trustee, as soon as possible after learning thereof, shall
cause notice thereof to be mailed to each Certificateholder of the related
series at its address as it appears on the Register.
Section 4.03. Statements to Certificateholders. (a) On each Regular
Distribution Date and Special Distribution Date, the Trustee will include with
each distribution to Certificateholders of the related series a statement,
giving effect to the distribution to be made on such Regular Distribution Date
or Special Distribution Date, and, except to the extent otherwise provided in
the applicable Trust Supplement, setting forth the following information (per
$1,000 aggregate face amount of Certificate as to (i) and (ii) below):
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(i) the amount of such distribution allocable to principal and the
amount allocable to premium, if any;
(ii) the amount of such distribution allocable to interest; and
(iii) the Pool Balance and the Pool Factor of the related Trust.
With respect to the Certificates registered in the name of a Clearing
Agency or its nominee, on the Record Date prior to each Regular Distribution
Date and Special Distribution Date, the Trustee will request from the Clearing
Agency a securities position listing setting forth the names of all the Clearing
Agency Participants reflected on the Clearing Agency's books as holding
interests in the Certificates on such Record Date. On each Regular Distribution
Date and Special Distribution Date, the applicable Trustee will mail to each
such Clearing Agency Participant the statement described above and will make
available additional copies as requested by such Clearing Agency Participants
for forwarding to holders of interests in the Certificates.
(b) Within a reasonable period of time after the end of each calendar
year but not later than the latest date permitted by law, except to the extent
otherwise provided in the applicable Trust Supplement, the Trustee shall furnish
to each Person who at any time during such calendar year was a Certificateholder
of record a statement containing the sum of the amounts determined pursuant to
clauses (a)(i) and (a)(ii) above with respect to the related Trust for such
calendar year or, in the event such Person was a Certificateholder of record
during a portion of such calendar year, for the applicable portion of such year,
and such other items as are readily available to the Trustee and which a
Certificateholder may reasonably request as necessary for the purpose of such
Certificateholder's preparation of its federal income tax returns. With respect
to Certificates registered in the name of a Clearing Agency or its nominee, such
statement and such other items shall be prepared on the basis of information
supplied to the Trustee by the Clearing Agency Participants and shall be
delivered by the Trustee to such Clearing Agency Participants to be available
for forwarding by such Clearing Agency Participants to the holders of interests
in the Certificates.
Section 4.04. Investment of Special Payment Moneys. Any money received
by the Trustee pursuant to Section 4.01(b) representing a Special Payment which
is not distributed on the date received shall, to the extent practicable, be
invested by the Trustee in Permitted Investments selected by the Company in
telephonic (confirmed in writing) or written instructions to the Trustee pending
distribution of such Special Payment pursuant to Section 4.02. Any investment
made pursuant to this Section 4.04 shall be in such Permitted Investments having
maturities not later than the date that such moneys are required to be used to
make the payment required under Section 4.02 on the applicable Special
Distribution Date and the Trustee shall hold any such Permitted Investments
until maturity. Absent receipt of instructions from the Company, such Special
Payment shall remain uninvested by the Trustee pending receipt of investment
instructions. The Trustee shall have no liability with respect to any investment
made pursuant to this Section 4.04, other than by reason of the willful
misconduct or negligence of the Trustee. All income and earnings from such
investments
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shall be distributed on such Special Distribution Date as part of such Special
Payment.
ARTICLE V
THE COMPANY
Section 5.01. Maintenance of Corporate Existence. The Company, at its
own cost and expense, will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence, rights and
franchises, except as otherwise specifically permitted in Section 5.02;
provided, however, that the Company shall not be required to preserve any right
or franchise if the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company.
Section 5.02. Consolidation, Merger, Etc. (a) The Company shall not
consolidate with or merge into any other corporation under circumstances where
the Company is not the surviving corporation or convey, transfer or lease
substantially all of its assets as an entirety to any Person unless the
corporation formed by such consolidation or into which the Company is merged or
the Person that acquires by conveyance, transfer or lease substantially all of
the assets of the Company as an entirety shall be organized and validly existing
under the laws of the United States of America or any state thereof or the
District of Columbia, and such corporation or Person shall execute and deliver
to the Trustee an agreement in form and substance reasonably satisfactory to the
Trustee containing an assumption by such successor corporation or Person of the
due and punctual performance and observance of each covenant and condition of
this Agreement.
(b) Upon any consolidation or merger, or any conveyance, transfer or
lease of substantially all of the assets of the Company as an entirety in
accordance with this Section 5.02, the successor corporation or Person formed by
such consolidation or into which the Company is merged or to which such
conveyance, transfer or lease is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under this Agreement with
the same effect as if such successor corporation or Person had been named as the
Company herein.
(c) The Trustee may receive an Officer's Certificate and an Opinion of
Counsel of the Company as conclusive evidence that any such consolidation,
merger, conveyance, transfer or lease, and any such assumption, complies with
the provisions of this Section 5.02.
ARTICLE VI
DEFAULT
Section 6.01. Indenture Events of Default and Triggering Events. (a) If
in respect of any Trust, any Indenture Event of Default shall occur and be
continuing, then, and in each and every
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case, so long as such Indenture Event of Default shall be continuing, and
subject to the provisions of any Intercreditor Agreement, the Trustee may vote
all of the Equipment Notes issued under the related Indenture and held in such
Trust, and, upon the direction of the Certificateholders holding Certificates
evidencing Fractional Undivided Interests in such Trust aggregating not less
than a majority in interest in such Trust, the Trustee shall vote not less than
a corresponding majority of such Equipment Notes in favor of directing the Loan
Trustee under such Indenture to declare the unpaid principal amount of the
Equipment Notes then outstanding to which such Indenture Event of Default
relates and accrued interest thereon to be due and payable under, and in
accordance with the provisions of, the relevant Indenture. In addition, if an
Indenture Event of Default shall have occurred and be continuing under any
Indenture, subject to the provisions of any Intercreditor Agreement, the Trustee
may in accordance with the relevant Indenture vote the Equipment Notes held in
the Trust to which such Indenture Event of Default relates to direct the Loan
Trustee regarding the exercise of remedies provided in such Indenture.
(b) In addition, after an Indenture Event of Default shall have
occurred and be continuing with respect to any Equipment Note, subject to the
provisions of any Intercreditor Agreement, the Trustee may in its discretion,
and upon the direction of the Certificateholders holding Certificates evidencing
Fractional Undivided Interests aggregating not less than a majority in interest
in the related Trust shall, by such officer or agent as it may appoint, sell,
convey, transfer and deliver such Equipment Note or Equipment Notes, without
recourse to or warranty by the Trustee or any Certificateholder, to any Person.
In any such case, the Trustee shall sell, assign, contract to sell or otherwise
dispose of and deliver such Equipment Note or Equipment Notes in one or more
parcels at public or private sale or sales, at any location or locations at the
option of the Trustee, all upon such terms and conditions as it may reasonably
deem advisable and at such prices as it may reasonably deem advisable, for cash.
If the Trustee so decides or is required to sell or otherwise dispose of any
Equipment Note pursuant to this Section, the Trustee shall take such of the
actions described above as it may reasonably deem most effectual to complete the
sale or other disposition of such Equipment Note, so as to provide for the
payment in full of all amounts due on the related series of Certificates.
Notwithstanding the foregoing, any action taken by the Trustee under this
Section shall not, in the reasonable judgment of the Trustee, be adverse to the
best interests of the Certificateholders of such series.
(c) If an Intercreditor Agreement is applicable, upon the occurrence
and during the continuation of any Indenture Event of Default under any
Indenture, the Trustee may, to the extent it is the Controlling Party at such
time (as determined pursuant to the related Intercreditor Agreement), direct the
exercise of remedies as provided in such related Intercreditor Agreement.
(d) If an Intercreditor Agreement is applicable, by acceptance of its
Certificate, each Certificateholder agrees that at any time after the occurrence
and during the continuation of a Triggering Event, each Certificateholder of
Certificates of certain series (each, a "Potential Purchaser" and, collectively,
the "Potential Purchasers") may have certain rights to purchase the Certificates
of one or more other series, all as set forth in the Trust Supplement applicable
to the Certificates held by such Potential Purchaser. The purchase price with
respect to the Certificates of
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any series, and the procedure for such purchase, shall be specified in such
Trust Supplement or the applicable Intercreditor Agreement. By acceptance of its
Certificate, each Certificateholder (each, a "Selling Certificateholder" and,
collectively, the "Selling Certificateholders") of a series that is subject to
purchase by Potential Purchasers, all as set forth in the Trust Supplement
applicable to the Certificates held by the Selling Certificateholders, agrees
that, at any time after the occurrence and during the continuance of a
Triggering Event, it will, upon payment of the applicable purchase price by one
or more Potential Purchasers (upon such purchase, a "Purchasing
Certificateholder"), forthwith sell, assign, transfer and convey to such
Purchasing Certificateholder (without recourse, representation or warranty of
any kind except for its own acts) all of the right, title, interest and
obligation of such Selling Certificateholder in this Agreement, any related
Intercreditor Agreement, any related Liquidity Facility, the related Note
Documents and all Certificates of such series held by such Selling
Certificateholder (excluding all right, title and interest under any of the
foregoing to the extent such right, title or interest is with respect to an
obligation not then due and payable as respects any action or inaction or state
of affairs occurring prior to such sale) and the Purchasing Certificateholder
shall assume all of such Selling Certificateholder's obligations under this
Agreement, any related Intercreditor Agreement, any related Liquidity Facility
and the related Note Documents. The Certificates of such series will be deemed
to be purchased on the date payment of the purchase price is made
notwithstanding the failure of any Selling Certificateholder to deliver any
Certificates of such series and, upon such a purchase, (i) the only rights of
the Selling Certificateholders will be to deliver the Certificates to the
Purchasing Certificateholder and receive the purchase price for such
Certificates of such series and (ii) if the Purchasing Certificateholder shall
so request, such Selling Certificateholder will comply with all of the
provisions of Section 3.04 hereof to enable new Certificates of such series to
be issued to the Purchasing Certificateholder in such denominations as it shall
request. All charges and expenses in connection with the issuance of any such
new Certificates shall be borne by the Purchasing Certificateholder.
Section 6.02. Incidents of Sale of Equipment Notes. Upon any sale of
all or any part of the Equipment Notes held in the Trust made either under the
power of sale given under this Agreement or otherwise for the enforcement of
this Agreement, the following shall be applicable:
(1) Certificateholders and Trustee May Purchase Equipment Notes.
Any Certificateholder, the Trustee in its individual or any
other capacity or any other Person may bid for and purchase
any of the Equipment Notes held in the Trust, and upon
compliance with the terms of sale, may hold, retain, possess
and dispose of such Equipment Notes in their own absolute
right without further accountability.
(2) Receipt of Trustee Shall Discharge Purchaser. The receipt of
the Trustee making such sale shall be a sufficient discharge
to any purchaser for its purchase money, and, after paying
such purchase money and receiving such receipt, such purchaser
or its personal representative or assigns shall not be obliged
to see to the application of such purchase money, or be in any
way answerable for any loss, misapplication or non-application
thereof.
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(3) Application of Moneys Received Upon Sale. Any moneys collected
by the Trustee upon any sale made either under the power of
sale given by this Agreement or otherwise for the enforcement
of this Agreement shall be applied as provided in Section
4.02. In the event that the proceeds of such sale of Equipment
Notes are less than the principal amount of the Certificates
of such series Outstanding, the Certificateholders shall have
no claim for such shortfall against the Company, the Trustee
or any other Person including the related Owner Trustee or
related Owner Participant, if any.
Section 6.03. Judicial Proceedings Instituted by Trustee; Trustee May
Bring Suit. If there shall be a failure to make payment of the principal of,
premium, if any, or interest on any Equipment Note held in the related Trust, or
if there shall be any failure to pay Rent (as defined in the relevant Lease)
under any Lease when due and payable, then the Trustee, in its own name and as
trustee of an express trust, as holder of such Equipment Notes, to the extent
permitted by and in accordance with the terms of any related Intercreditor
Agreement and any related Note Documents (subject to rights of the applicable
Owner Trustee or Owner Participant, if any, to cure any such failure to pay
principal of, premium, if any, or interest on any Equipment Note or to pay Rent
under any Lease in accordance with the applicable Indenture and to the rights of
the Lessee under any applicable Lease), shall be entitled and empowered to
institute any suits, actions or proceedings at law, in equity or otherwise, for
the collection of the sums so due and unpaid on such Equipment Notes or under
such Lease and may prosecute any such claim or proceeding to judgment or final
decree with respect to the whole amount of any such sums so due and unpaid.
All rights of action and of asserting claims under this Agreement, or
under any of the Certificates, may be prosecuted and enforced by the Trustee
without the possession of any of such Certificates or the production thereof in
any trial or other proceedings relative thereto, and any such action or
proceedings instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment, subject to the
payment of the expenses, disbursements and compensation of the Trustee, each
predecessor Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Certificateholders of the related series.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Agreement, any Trust
Supplement, any Intercreditor Agreement or any Liquidity Facility to which the
Trustee shall be a party) the Trustee shall be held to represent all the
Certificateholders of the related series, and it shall not be necessary to make
any such Certificateholders parties to any such proceedings.
Section 6.04. Control by Certificateholders. Subject to Section 6.03
and any related Intercreditor Agreement, the Certificateholders holding
Certificates of a series evidencing Fractional Undivided Interests aggregating
not less than a majority in interest in the related Trust shall have the right
to direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee with respect to such Trust or pursuant to the terms of
such Intercreditor Agreement or any Liquidity Facility to which such Trustee is
a party, or exercising any trust or power conferred
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on the Trustee under this Agreement or such Intercreditor Agreement or Liquidity
Facility, including any right of the Trustee as Controlling Party under such
Intercreditor Agreement or as holder of the Equipment Notes held in the related
Trust; provided that:
(1) such Direction shall not in the opinion of the Trustee be in
conflict with any rule of law or with this Agreement and would
not involve the Trustee in personal liability or expense;
(2) the Trustee shall not determine that the action so directed
would be unjustly prejudicial to the Certificateholders of
such series not taking part in such Direction;
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such Direction; and
(4) if an Indenture Event of Default under a related Indenture
shall have occurred and be continuing, such direction shall
not obligate the Trustee to vote more than a corresponding
majority of the related Equipment Notes held by the Trust in
favor of directing any action by the related Loan Trustee with
respect to such Indenture Event of Default.
Section 6.05. Waiver of Past Defaults. Subject to any related
Intercreditor Agreement, the Certificateholders holding Certificates of a series
evidencing Fractional Undivided Interests aggregating not less than a majority
in interest in the related Trust (i) may on behalf of all of the
Certificateholders of such series waive any past default or Event of Default
hereunder and its consequences or (ii) if the Trustee is the Controlling Party,
may direct the Trustee to instruct the applicable Loan Trustee to waive any past
Indenture default, Indenture Event of Default or, if applicable, the
corresponding Lease default, under any related Indenture and its consequences,
and thereby annul any Direction given by such Certificateholders or the Trustee
to such Loan Trustee with respect thereto, except a default:
(1) in the deposit of any Scheduled Payment or Special Payment
under Section 4.01 or in the distribution of any payment under
Section 4.02 on the Certificates of a series; or
(2) in the payment of the principal of, premium, if any, or
interest on the Equipment Notes held in the related Trust; or
(3) in respect of a covenant or provision hereof which under
Article IX hereof cannot be modified or amended without the
consent of each Certificateholder holding an Outstanding
Certificate of the series affected thereby.
Upon any such waiver, such default shall cease to exist with respect to
the Certificates of such series and any Event of Default arising therefrom shall
be deemed to have been cured for every
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purpose in respect of such series and any direction given by the Trustee on
behalf of the Certificateholders of such series to the relevant Loan Trustee
shall be annulled with respect thereto; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon. Upon any such waiver, the Trustee shall vote the Equipment Notes issued
under the relevant Indenture to waive the corresponding Indenture Event of
Default (and, if applicable, the corresponding Lease default).
Section 6.06. Right of Certificateholders to Receive Payments Not to Be
Impaired. Anything in this Agreement (including Section 6.07) to the contrary
notwithstanding, but subject to any related Intercreditor Agreement, the right
of any Certificateholder to receive distributions of payments required pursuant
to Section 4.02 hereof on the applicable Certificates when due, or to institute
suit for the enforcement of any such payment on or after the applicable Regular
Distribution Date or Special Distribution Date, shall not be impaired or
affected without the consent of such Certificateholder.
Section 6.07. Certificateholders May Not Bring Suit Except Under
Certain Conditions. A Certificateholder of any series shall not have the right
to institute any suit, action or proceeding at law or in equity or otherwise
with respect to this Agreement for the appointment of a receiver or for the
enforcement of any other remedy under this Agreement, unless:
(1) such Certificateholder previously shall have given written
notice to the Trustee of a continuing Event of Default;
(2) Certificateholders holding Certificates of such series
evidencing Fractional Undivided Interests aggregating not less
than 25% of the related Trust shall have requested the Trustee
in writing to institute such action, suit or proceeding and
shall have offered to the Trustee indemnity as provided in
Section 7.03(e);
(3) the Trustee shall have refused or neglected to institute any
such action, suit or proceeding for 60 days after receipt of
such notice, request and offer of indemnity; and
(4) no direction inconsistent with such written request shall have
been given to the Trustee during such 60-day period by
Certificateholders holding Certificates of such series
evidencing Fractional Undivided Interests aggregating not less
than a majority in interest in the related Trust.
Except to the extent provided in any applicable Intercreditor Agreement
or in any applicable Trust Supplement, it is understood and intended that no one
or more of the Certificateholders of any series shall have any right in any
manner whatsoever hereunder or under the related Trust Supplement or under the
Certificates of such series to (i) surrender, impair, waive, affect, disturb or
prejudice any property in the Trust Property of the related Trust, or the lien
of any related Indenture on any property subject thereto, or the rights of the
Certificateholders of such series or the holders
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of the related Equipment Notes, (ii) obtain or seek to obtain priority over or
preference with respect to any other such Certificateholder of such series or
(iii) enforce any right under this Agreement, except in the manner provided in
this Agreement and for the equal, ratable and common benefit of all the
Certificateholders of such series subject to the provisions of this Agreement.
Section 6.08. Remedies Cumulative. Every right or remedy given
hereunder to the Trustee or to any of the Certificateholders of any series shall
not be exclusive of any other right or remedy or remedies, and every such right
or remedy shall be cumulative and in addition to every other right or remedy
given hereunder or now or hereafter given by statute, law, equity or otherwise.
No delay or omission by the Trustee or of any such Certificateholder in the
exercise of any right, remedy or power or in the pursuance of any remedy shall
impair any such right, power or remedy or be construed to be a waiver of any
default on the part of the applicable Owner Trustee, if any, or the Company, as
the case may be, or to be an acquiescence therein.
Section 6.09. Discontinuance of Proceedings. If the Trustee or any
Certificateholder of any Series institutes any proceeding to enforce any right,
power or remedy under the related Trust, and such proceeding is discontinued or
abandoned for any reason or is determined adversely to the Trustee or such
Certificateholder, then and in every such case the applicable Owner Trustee, if
any, and the applicable Indenture Trustee, the Trustee, the Certificateholders
of such Series and the Company shall, subject to any determination in such
proceeding, be restored to their former positions and rights under such Trust
with respect to the Trust Property and all rights, remedies and powers of the
Trustee and such Certificateholders shall continue as if no such proceeding had
been instituted.
Section 6.10. Undertaking for Costs. All parties to this Agreement, and
each Certificateholder by acceptance of a Certificate, shall be deemed to have
agreed that, in any suit for the enforcement of any right or remedy under this
Agreement, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act or by any other applicable law; provided, however, that neither
this Section 6.10 nor the Trust Indenture Act shall be deemed to authorize any
court to require such an undertaking or to make such an assessment in any suit
instituted by the Company.
ARTICLE VII
THE TRUSTEE
Section 7.01. Certain Duties and Responsibilities. (a) Except during
the continuance of an Event of Default in respect of a Trust, (1) the Trustee
undertakes to perform such duties in respect of such Trust as are specifically
set forth in this Agreement, the Intercreditor Agreement and the Note Documents,
and no implied covenants or obligations shall be read into such agreements
against
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the Trustee; and (2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Agreement; but in the case of
any such certificates or opinions that by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the requirements of
this Agreement.
(b) In case an Event of Default in respect of a Trust has occurred and
is continuing, the Trustee shall exercise such of the rights and powers vested
in it by this Agreement in respect of such Trust, and use the same degree of
care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(c) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(1) this Subsection (c) shall not be construed to limit the effect of
Subsection (a) of this Section 7.01; and
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining the
pertinent facts.
(d) Whether or not herein expressly so provided, every provision of
this Agreement relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 7.01.
Section 7.02. Notice of Defaults. As promptly as practicable after, and
in any event within 90 days after, the occurrence of any default (as such term
is defined below) hereunder known to the Trustee, the Trustee shall transmit by
mail to the Company, any related Owner Trustees, any related Owner Participants,
the related Loan Trustees and the Certificateholders holding Certificates of the
related series, in the manner and to the extent provided in Section 313(c) of
the Trust Indenture Act, notice of such default hereunder known to the Trustee,
unless such default shall have been cured or waived; provided that, in the case
of defaults not relating to the payment of money, the Trustee shall not give
such notice until the earlier of the time at which such default becomes an Event
of Default and the expiration of 60 days from the occurrence of such default;
and provided, however, that, except in the case of a default in the payment of
the principal, premium, if any, or interest on any Equipment Note, the Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee or a trust committee of directors and/or
Responsible Officers of the Trustee in good faith shall determine that the
withholding of such notice is in the interests of the Certificateholders of the
related series. For the purpose of this Section 7.02 in respect of any Trust,
the term "default" means any event that is, or after notice or lapse of time or
both would
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become, an Event of Default in respect of that Trust or a Triggering
Event under any Intercreditor Agreement.
Section 7.03. Certain Rights of Trustee. Subject to the provisions of
Section 315 of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting in reliance upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Request;
(c) whenever in the administration of this Agreement or any
Intercreditor Agreement the Trustee shall deem it desirable that a matter be
proved or established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein specifically prescribed)
may, in the absence of bad faith on its part, rely upon an Officer's Certificate
of the Company, any related Owner Trustee or any related Loan Trustee;
(d) the Trustee may consult with counsel and the advice of such counsel
or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement or any Intercreditor Agreement
at the Direction of any of the Certificateholders pursuant to this Agreement or
any Intercreditor Agreement, unless such Certificateholders shall have offered
to the Trustee reasonable security or indemnity against the cost, expenses and
liabilities which might be incurred by it in compliance with such Direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture or
other paper or document;
(g) the Trustee may execute any of the trusts or powers under this
Agreement or any Intercreditor Agreement or perform any duties under this
Agreement or any Intercreditor Agreement either directly or by or through agents
or attorneys, and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
under this Agreement or any Intercreditor Agreement;
(h) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the Direction of the
Certificateholders holding Certificates of any series evidencing Fractional
Undivided Interests aggregating not less than a majority in interest
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in the related Trust relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Agreement or any Intercreditor
Agreement; and
(i) the Trustee shall not be required to expend or risk its own funds
in the performance of any of its duties under this Agreement, or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
is not reasonably assured to it.
Section 7.04. Not Responsible for Recitals or Issuance of Certificates.
The recitals contained herein and in the Certificates of each series, except the
certificates of authentication, shall not be taken as the statements of the
Trustee, and the Trustee assumes no responsibility for their correctness.
Subject to Section 7.15, the Trustee makes no representations as to the validity
or sufficiency of this Basic Agreement, any Equipment Notes, any Intercreditor
Agreement, any Liquidity Facility to which the Trustee may be a party, the
Certificates of any series, any Trust Supplement or any Note Documents, except
that the Trustee hereby represents and warrants that this Basic Agreement has
been, and each Trust Supplement, each Certificate, each Note Purchase Agreement,
each Intercreditor Agreement and any such Liquidity Facility of, or relating to,
each series will be, executed and delivered by one of its officers who is duly
authorized to execute and deliver such document on its behalf.
Section 7.05. May Hold Certificates. The Trustee, any Paying Agent,
Registrar or any of their Affiliates or any other agent, in their respective
individual or any other capacity, may become the owner or pledgee of
Certificates and, subject to Sections 310(b) and 311 of the Trust Indenture Act,
if applicable, may otherwise deal with the Company, any Owner Trustees, any
Owner Participants or the Loan Trustees with the same rights it would have if it
were not Trustee, Paying Agent, Registrar or such other agent.
Section 7.06. Money Held in Trust. Money held by the Trustee or the
Paying Agent in trust under this Agreement need not be segregated from other
funds except to the extent required herein or by law and neither the Trustee nor
the Paying Agent shall have any liability for interest upon any such moneys
except as provided for herein or in the applicable Trust Supplement.
Section 7.07. Compensation and Reimbursement. The Company agrees:
(1) to pay, or cause to be paid, to the Trustee from time to time
such compensation for all services rendered by it hereunder as
the Company and the Trustee may agree in writing from time to
time (which compensation shall not be limited by any provision
of law in regard to the compensation of a trustee of an
express trust); and
(2) except as otherwise expressly provided herein or in any Trust
Supplement, to reimburse, or cause to be reimbursed, the
Trustee upon its request for all reasonable out-of-pocket
expenses, disbursements and advances incurred or made by the
Trustee
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in accordance with any provision of this Basic Agreement, any
Trust Supplement, any Intercreditor Agreement or any Liquidity
Facility to which the Trustee may be a party (including the
reasonable compensation and the expenses and disbursements of
its agents and counsel), except any such expense, disbursement
or advance as may be attributable to the Trustee's negligence,
willful misconduct or bad faith or as may be incurred due to
the Trustee's breach of its representations and warranties set
forth in Section 7.15; and
(3) to indemnify, or cause to be indemnified, the Trustee, solely
in its individual capacity, for, and to hold it harmless
against, any loss, liability, tax (other than any tax referred
to in the next paragraph or any tax attributable to the
Trustee's compensation for serving as such), cost or expense
incurred without negligence, willful misconduct or bad faith
on its part, arising out of or in connection with the
acceptance or administration of any Trust, including the costs
and expenses of (a) defending itself against any claim or
liability in connection with the exercise or performance of
any of its powers or duties hereunder or under any Trust
Supplement or (b) contesting the imposition of any such tax,
except in each case for any such loss, liability, tax, cost or
expense incurred by reason of the Trustee's breach of its
representations and warranties set forth in Section 7.15 or in
any Trust Supplement or the Trustee's failure to perform any
of its obligations hereunder or under any Trust Supplement.
The Trustee shall notify the Company promptly of any claim or
tax for which it may seek indemnity. The Company shall defend
the claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel with the consent of the
Company and the Company will pay the reasonable fees and
expenses of such counsel. The Company need not pay for any
settlement made or any taxes paid, in settlement or otherwise,
without its consent.
The Trustee shall be entitled to reimbursement from, and shall have a
lien prior to the Certificates of each series upon, all property and funds held
or collected by the Trustee in its capacity as Trustee with respect to such
series or the related Trust for any tax incurred without negligence, bad faith
or willful misconduct, on its part, arising out of or in connection with the
acceptance or administration of such Trust (other than any tax attributable to
the Trustee's compensation for serving as such), including any costs and
expenses incurred in contesting the imposition of any such tax. The Trustee
shall notify the Company of any claim for any tax for which it may seek
reimbursement. If the Trustee reimburses itself from the Trust Property of such
Trust for any such tax, it will mail a brief report within 30 days setting forth
the amount of such tax and the circumstances thereof to all Certificateholders
of such series as their names and addresses appear in the Register.
Section 7.08. Corporate Trustee Required; Eligibility. Each Trust shall
at all times have a Trustee which shall be a bank, trust company or other
financial institution organized and doing business under the laws of the United
States or any state thereof, shall be eligible to act as a trustee under Section
310(a) of the Trust Indenture Act and shall have a combined capital and surplus
of at
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least $75,000,000 (or a combined capital and surplus in excess of $5,000,000 and
the obligations of which, whether now in existence or hereafter incurred, are
fully and unconditionally guaranteed by a corporation organized and doing
business under the laws of the United States or any state or territory thereof
or the District of Columbia and having a combined capital and surplus of at
least $75,000,000). If such bank, trust company or other financial institution
or such corporation publishes reports of conditions at least annually, pursuant
to law or to the requirements of federal, state, territorial or District of
Columbia supervising or examining authority, then for the purposes of this
Section 7.08 the combined capital and surplus of such bank, trust company or
other financial institution or such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
conditions so published.
In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 7.08 to act as Trustee of any
Trust, the Trustee shall resign immediately as Trustee of such Trust in the
manner and with the effect specified in Section 7.09. If the Trustee has or
shall acquire a conflicting interest within the meaning of the Trust Indenture
Act, the Trustee shall either eliminate such interest or resign, to the extent
and in the manner provided by, and subject to the provisions of, the Trust
Indenture Act and this Agreement.
Section 7.09. Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Trustee and no appointment of a successor Trustee
of any Trust pursuant to this Article VII shall become effective until the
acceptance of appointment by the successor Trustee under Section 7.10.
(b) The Trustee may resign at any time as Trustee of any or all Trusts
by giving prior written notice thereof to the Company, the Authorized Agents,
any related Owner Trustees and the related Loan Trustees. If an instrument of
acceptance by a successor Trustee shall not have been delivered to the Company,
any related Owner Trustees and the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time as Trustee of any Trust by
Direction of the Certificateholders of the related series holding Certificates
of such series evidencing Fractional Undivided Interests aggregating not less
than a majority in interest in such Trust delivered to the Trustee and to the
Company, any related Owner Trustees and the related Loan Trustees.
(d) If at any time in respect of any Trust:
(1) the Trustee shall fail to comply with Section 310(b) of the Trust
Indenture Act, if applicable, after written request therefor by
the Company or by any Certificateholder who has been a bona fide
Certificateholder for at least six months; or
(2) the Trustee shall cease to be eligible under Section 7.08 and
shall fail to resign after written request therefor by the Company
or by any such Certificateholder; or
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(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation;
then, in any such case, (i) the Company may remove the Trustee or (ii) any
Certificateholder of the related series who has been a bona fide
Certificateholder for at least six months may, on behalf of itself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee of such Trust.
(e) If a Responsible Officer of the Trustee shall obtain actual
knowledge of an Avoidable Tax (as defined below) in respect of any Trust which
has been or is likely to be asserted, the Trustee shall promptly notify the
Company and shall, within 30 days of such notification, either relocate the
administration of the Trust to another jurisdiction as described in the
definition of "Avoidable Tax" or resign as Trustee of such Trust hereunder
unless within such 30-day period the Trustee shall have received notice that the
Company has agreed to pay such tax. Provided that there is a corporation in a
jurisdiction where there are no Avoidable Taxes that is willing to act as
Trustee and is eligible under Section 7.08, the Company shall promptly after any
such resignation by such Trustee appoint a successor Trustee of such Trust in a
jurisdiction where there are no Avoidable Taxes. As used herein, an "Avoidable
Tax" in respect of such Trust means a state or local tax: (i) upon (w) such
Trust, (x) the Trust Property of such Trust, (y) Certificateholders of such
Trust or (z) the Trustee for which the Trustee is entitled to seek reimbursement
from the Trust Property of such Trust, and (ii) which would be avoided if the
Trust were administered in a different jurisdiction in the United States or if
the Trustee were located in another state, or jurisdiction within a state,
within the United States. A tax shall not be an Avoidable Tax in respect of any
Trust if the Company or any Owner Trustee shall agree to pay, and shall pay,
such tax.
(f) If the Trustee shall resign, be removed or become incapable of
acting as Trustee of any Trust or if a vacancy shall occur in the office of the
Trustee of any Trust for any cause, the Company shall promptly appoint a
successor Trustee of such Trust. If, within one year after such resignation,
removal or incapability, or other occurrence of such vacancy, a successor
Trustee of such Trust shall be appointed by Direction of the Certificateholders
of the related series holding Certificates of such series evidencing Fractional
Undivided Interests aggregating not less than a majority in interest in such
Trust delivered to the Company, any related Owner Trustees, the related Loan
Trustee and the retiring Trustee, then the successor Trustee of such Trust so
appointed shall, with the approval of the Company of such appointment, which
approval shall not be unreasonably withheld, forthwith upon its acceptance of
such appointment, become the successor Trustee of such Trust and supersede the
successor Trustee of such Trust appointed by the Company as provided above. If
no successor Trustee shall have been so appointed by the Company as provided
above and accepted appointment in the manner hereinafter provided, the resigning
Trustee or any Certificateholder who has been a bona fide Certificateholder of
the related series for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee of such Trust.
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(g) The successor Trustee of a Trust shall give notice of the
resignation and removal of the Trustee and appointment of the successor Trustee
by mailing written notice of such event by first-class mail, postage prepaid, to
the Certificateholders of the related series as their names and addresses appear
in the Register. Each notice shall include the name of such successor Trustee
and the address of its Corporate Trust Office.
Section 7.10. Acceptance of Appointment by Successor. Every successor
Trustee appointed hereunder shall execute and deliver to the Company and to the
retiring Trustee with respect to any or all Trusts an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
with respect to such Trust or Trusts shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee with respect
to such Trust or Trusts; but, on request of the Company or the successor
Trustee, such retiring Trustee shall execute and deliver an instrument
transferring to such successor Trustee all such rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all Trust Property held by such retiring Trustee in respect of such
Trusts hereunder (subject nevertheless to its lien, if any, provided for in
Section 7.07) and all books and records, or true, correct and complete copies
thereof, held by such retiring Trustee in respect of such Trusts hereunder. Upon
request of any such successor Trustee, the Company, the retiring Trustee and
such successor Trustee shall execute and deliver any and all instruments
containing such provisions as shall be necessary or desirable to transfer and
confirm to, and for more fully and certainly vesting in, such successor Trustee
all such rights, powers and trusts.
If a successor Trustee is appointed with respect to one or more (but
not all) Trusts, the Company, the predecessor Trustee and each successor Trustee
with respect to any Trust shall execute and deliver a supplemental agreement
hereto which shall contain such provisions as shall be deemed necessary or
desirable to confirm that all of the rights, powers, trusts and duties of the
predecessor Trustee with respect to the Trusts as to which the predecessor
Trustee is not retiring shall continue to be vested in the predecessor Trustee,
and shall add to or change any of the provisions of this Basic Agreement and the
applicable Trust Supplements as shall be necessary to provide for or facilitate
the administration of the Trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental agreement shall
constitute such Trustees as co-Trustees of the same Trust and that each such
Trustee shall be Trustee of separate Trusts.
No institution shall accept its appointment as a successor Trustee
hereunder unless at the time of such acceptance such institution shall be
qualified and eligible under this Article VII.
Section 7.11. Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be otherwise qualified and eligible under
this Article VII, without the execution
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or filing of any paper or any further act on the part of any of the parties
hereto. In case any Certificates shall have been executed or authenticated, but
not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
execution or authentication and deliver the Certificates so executed or
authenticated with the same effect as if such successor Trustee had itself
executed or authenticated such Certificates.
Section 7.12. Maintenance of Agencies. (a) With respect to each series
of Certificates, there shall at all times be maintained an office or agency in
the location set forth in Section 12.04 where Certificates of such series may be
presented or surrendered for registration of transfer or for exchange, and for
payment thereof, and where notices and demands to or upon the Trustee in respect
of such Certificates or this Agreement may be served; provided that, if it shall
be necessary that the Trustee maintain an office or agency in another location
with respect to the Certificates of any series (e.g., the Certificates of such
series shall be represented by Definitive Certificates and shall be listed on a
national securities exchange), the Trustee will make all reasonable efforts to
establish such an office or agency. Written notice of the location of each such
other office or agency and of any change of location thereof shall be given by
the Trustee to the Company, any Owner Trustees, the Loan Trustees (in the case
of any Owner Trustee or Loan Trustee, at its address specified in the Note
Documents or such other address as may be notified to the Trustee) and the
Certificateholders of such series. In the event that no such office or agency
shall be maintained or no such notice of location or of change of location shall
be given, presentations and demands may be made and notices may be served at the
Corporate Trust Office of the Trustee.
(b) There shall at all times be a Registrar and a Paying Agent
hereunder with respect to the Certificates of each series. Each such Authorized
Agent shall be a bank, trust company or other financial institution organized
and doing business under the laws of the United States or any state thereof,
with a combined capital and surplus of at least $75,000,000 (or combined capital
and surplus in excess of $5,000,000, the obligations of which are fully and
unconditionally guaranteed by a corporation organized and doing business under
the laws of the United States or any state or territory thereof or the District
of Columbia, with a combined capital and surplus of at least $75,000,000), and
shall be authorized under such laws to exercise corporate trust powers, subject
to supervision by federal or state authorities. The Trustee shall initially be
the Paying Agent and, as provided in Section 3.04, Registrar hereunder with
respect to the Certificates of each series. Each Registrar other than the
Trustee shall furnish to the Trustee, at stated intervals of not more than six
months, and at such other times as the Trustee may request in writing, a copy of
the Register maintained by such Registrar.
(c) Any corporation into which any Authorized Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authorized Agent shall
be a party, or any corporation succeeding to the corporate trust business of any
Authorized Agent, shall be the successor of such Authorized Agent, if such
successor corporation is otherwise eligible under this Section 7.12, without the
execution or filing of any paper or any further act on the part of the parties
hereto or such Authorized Agent or such successor corporation.
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(d) Any Authorized Agent may at any time resign by giving written
notice of resignation to the Trustee, the Company, any related Owner Trustees
and the related Loan Trustees. The Company may, and at the request of the
Trustee shall, at any time terminate the agency of any Authorized Agent by
giving written notice of termination to such Authorized Agent and to the
Trustee. Upon the resignation or termination of an Authorized Agent or in case
at any time any such Authorized Agent shall cease to be eligible under this
Section 7.12 (when, in either case, no other Authorized Agent performing the
functions of such Authorized Agent shall have been appointed), the Company shall
promptly appoint one or more qualified successor Authorized Agents, reasonably
satisfactory to the Trustee, to perform the functions of the Authorized Agent
which has resigned or whose agency has been terminated or who shall have ceased
to be eligible under this Section 7.12. The Company shall give written notice of
any such appointment made by it to the Trustee, any related Owner Trustees and
the related Loan Trustees; and in each case the Trustee shall mail notice of
such appointment to all Certificateholders of the related series as their names
and addresses appear on the Register for such series.
(e) The Company agrees to pay, or cause to be paid, from time to time
to each Authorized Agent such compensation for its services as the Company and
the Trustee may agree in writing from time to time and to reimburse it for its
reasonable expenses to the extent set forth in Section 7.07(2).
Section 7.13. Money for Certificate Payments to Be Held in Trust. All
moneys deposited with any Paying Agent for the purpose of any payment on
Certificates shall be deposited and held in trust for the benefit of the
Certificateholders entitled to such payment, subject to the provisions of this
Section 7.13. Moneys so deposited and held in trust shall constitute a separate
trust fund for the benefit of the Certificateholders with respect to which such
money was deposited.
The Trustee may at any time, for the purpose of obtaining the
satisfaction and discharge of this Agreement or for any other purpose, direct
any Paying Agent to pay to the Trustee all sums held in trust by such Paying
Agent, such sums to be held by the Trustee upon the same trusts as those upon
which such sums were held by such Paying Agent; and, upon such payment by any
Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such money.
Section 7.14. Registration of Equipment Notes in Trustee's Name.
Subject to the provisions of any Intercreditor Agreement and Section 12.03
hereof, the Trustee agrees that all Equipment Notes to be purchased by any
Trust, Specified Investments, if any, to be held by the Trustee on behalf of a
Trust and Permitted Investments, if any, to be held by the Trustee on behalf of
a Trust shall be issued in the name of the Trustee as trustee for the applicable
Trust or its nominee and held by the Trustee in trust for the benefit of the
Certificateholders of such series, or, if not so held, the Trustee or its
nominee shall be reflected as the owner of such Equipment Notes, Specified
Investments or Permitted Investments, as the case may be, in the register of the
issuer of such Equipment Notes, Specified Investments or Permitted Investments,
as the case may be. In no event shall the Trustee invest in, or hold, Equipment
Notes, Specified Investments or Permitted Investments in a manner that would
cause the Trustee not to have the ownership interest in (or a
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securities entitlement with respect to) such Equipment Notes, Specified
Investments or Permitted Investments under the applicable provisions of the
Uniform Commercial Code in effect where the Trustee holds such Equipment Notes,
Specified Investments or Permitted Investments or other applicable law then in
effect.
Section 7.15. Representations and Warranties of Trustee. The Trustee
hereby represents and warrants that:
(a) the Trustee is a national banking association duly organized and
validly existing in good standing under the laws of the United States;
(b) the Trustee has full power, authority and legal right to execute,
deliver and perform this Agreement, any Intercreditor Agreement, any Liquidity
Facility, the Certificates and the Note Purchase Agreements and has taken all
necessary action to authorize the execution, delivery and performance by it of
this Agreement, any Intercreditor Agreement, any Liquidity Facility, the
Certificates and the Note Purchase Agreements;
(c) the execution, delivery and performance by the Trustee of this
Agreement, any Intercreditor Agreement, any Liquidity Facility, the Certificates
and the Note Purchase Agreements (i) will not violate any provision of any
United States federal law or the law of the state of the United States where
such Trustee is located and which governs the banking and trust powers of the
Trustee or any order, writ, judgment, or decree of any court, arbitrator or
governmental authority applicable to the Trustee or any of its assets, (ii) will
not violate any provision of the articles of association or by-laws of the
Trustee, and (iii) will not violate any provision of, or constitute, with or
without notice or lapse of time or both, a default under, or result in the
creation or imposition of any lien on any properties included in the Trust
Property pursuant to the provisions of any mortgage, indenture, contract,
agreement or other undertaking to which it is a party;
(d) the execution, delivery and performance by the Trustee of this
Agreement, any Intercreditor Agreement, any Liquidity Facility, the Certificates
and the Note Purchase Agreements will not require the authorization, consent, or
approval of, the giving of notice to, the filing or registration with, or the
taking of any other action in respect of, any governmental authority or agency
of the United States or the state of the United States where such Trustee is
located and regulating the banking and corporate trust activities of the
Trustee, other than the filing of a Statement of Eligibility on Form T-1 in
connection with the registration of any Certificates;
(e) this Agreement, any Intercreditor Agreement, any Liquidity
Facility, the Certificates and the Note Purchase Agreements have been or will be
duly executed and delivered by the Trustee and constitute or upon such execution
and delivery will constitute the legal, valid and binding agreements of the
Trustee, enforceable against it in accordance with their respective terms;
provided, however, that enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
rights of creditors generally, and (ii) general principles of equity; and
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(f) the statements made by it in a Statement of Eligibility on Form T-1
supplied or to be supplied to the Company in connection with the registration of
any Certificates are and will be true and accurate subject to the qualifications
set forth therein; and that such statement complies and will comply in all
material respects with the requirements of the Trust Indenture Act and the
Securities Act.
The representation and warranties set forth above shall be deemed to be
made by the Trustee on each Issuance Date, except as otherwise provided in the
applicable Trust Supplement.
Section 7.16. Withholding Taxes; Information Reporting. As to the
Certificates of any series, the Trustee, as trustee of the related grantor trust
created by this Agreement, shall exclude and withhold from each distribution of
principal, premium, if any, and interest and other amounts due under this
Agreement or under the Certificates of such series any and all withholding taxes
applicable thereto as required by law. The Trustee agrees to act as such
withholding agent and, in connection therewith, whenever any present or future
taxes or similar charges are required to be withheld with respect to any amounts
payable in respect of the Certificates of such series, to withhold such amounts
and timely pay the same to the appropriate authority in the name of and on
behalf of the Certificateholders of such series, that it will file any necessary
withholding tax returns or statements when due, and that, as promptly as
possible after the payment thereof, it will deliver to each such
Certificateholder of such series appropriate documentation showing the payment
thereof, together with such additional documentary evidence as such
Certificateholders may reasonably request from time to time. The Trustee agrees
to file any other information reports as it may be required to file under United
States law.
Section 7.17. Trustee's Liens. The Trustee in its individual capacity
agrees that it will, in respect of each Trust created by this Agreement, at its
own cost and expense (and without right of indemnity hereunder, including
Section 7.07), promptly take any action as may be necessary to duly discharge
and satisfy in full any mortgage, pledge, lien, charge, encumbrance, security
interest or claim ("Trustee's Liens") on or with respect to the Trust Property
of such Trust which is attributable to the Trustee either (i) in its individual
capacity and which is unrelated to the transactions contemplated by this
Agreement or the related Note Documents or (ii) as Trustee hereunder or in its
individual capacity and which arises out of acts or omissions which are not
contemplated by this Agreement.
Section 7.18. Preferential Collection of Claims. The Trustee shall
comply with Section 311(a) of the Trust Indenture Act, excluding any creditor
relationship listed in Section 311(b) of the Trust Indenture Act. If the Trustee
shall resign or be removed as Trustee, it shall be subject to Section 311(a) of
the Trust Indenture Act to the extent provided therein.
Section 7.19. Capacity in Which Acting. The Trustee acts hereunder and
under any Trust not in its individual capacity but solely as trustee except as
expressly provided herein or in the related Trust Supplement.
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ARTICLE VIII
CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE
Section 8.01. The Company to Furnish Trustee with Names and Addresses
of Certificateholders. With respect to the Certificates of each series, the
Company will furnish (or cause to be furnished) to the Trustee within 15 days
after each Record Date with respect to a Scheduled Payment (and, in any case, at
intervals of not more than six months), and at such other times as the Trustee
may request in writing within 30 days after receipt by the Company of any such
request, a list, in such form as the Trustee may reasonably require, of all
information in the possession or control of the Company as to the names and
addresses of the Certificateholders of such series, in each case as of a date
not more than 15 days prior to the time such list is furnished; provided,
however, that so long as the Trustee is the sole Registrar for such series, no
such list need be furnished; and provided further, that no such list need be
furnished for so long as a copy of the Register is being furnished to the
Trustee pursuant to Section 7.12.
Section 8.02. Preservation of Information; Communications to
Certificateholders. The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Certificateholders of each
series contained in the most recent list furnished to the Trustee as provided in
Section 7.12 or Section 8.01, as the case may be, and the names and addresses of
Certificateholders of each series received by the Trustee in its capacity as
Registrar, if so acting. The Trustee may destroy any list furnished to it as
provided in Section 7.12 or Section 8.01, as the case may be, upon receipt of a
new list so furnished.
Section 8.03. Reports by Trustee. Within 60 days after May 15 of each
year commencing with the first full year following the issuance of any series of
Certificates, the Trustee shall transmit to the Certificateholders of such
series, as provided in Section 313(c) of the Trust Indenture Act, a brief report
dated as of such May 15, if required by and in compliance with Section 313(a) of
the Trust Indenture Act. The Trustee shall also transmit to Certificateholders
such reports, if any, as may be required pursuant to Section 313(b) of the Trust
Indenture Act at the times and in the manner provided pursuant thereto and to
Section 313(c) thereof.
Section 8.04. Reports by the Company. The Company shall:
(a) file with the Trustee, within 30 days after the Company is required
to file the same with the SEC, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the SEC may from time to time by rules and regulations
prescribe) which the Company is required to file with the SEC pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934, as amended;
or, if the Company is not required to file information, documents or reports
pursuant to either of such sections, then to file with the Trustee and the SEC,
in accordance with rules and regulations prescribed by the SEC, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to
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section 13 of the Securities Exchange Act of 1934, as amended, in respect of a
security listed and registered on a national securities exchange as may be
prescribed in such rules and regulations;
(b) file with the Trustee and the SEC, in accordance with the rules and
regulations prescribed by the SEC, such additional information, documents and
reports with respect to compliance by the Company with the conditions and
covenants of the Company provided for in this Agreement, as may be required by
such rules and regulations;
(c) transmit to all Certificateholders, in the manner and to the extent
provided in Section 313(c) of the Trust Indenture Act, such summaries of any
information, documents and reports required to be filed by the Company pursuant
to subsections (a) and (b) of this Section 8.04 as may be required by rules and
regulations prescribed by the SEC; and
(d) furnish to the Trustee, not less often than annually, a brief
certificate from the principal executive officer, principal financial officer or
principal accounting officer as to his or her knowledge of the Company's
compliance with all conditions and covenants of the Company under this Agreement
(it being understood that for purposes of this paragraph (d), such compliance
shall be determined without regard to any grace period or requirement of notice
provided under this Agreement).
ARTICLE IX
SUPPLEMENTAL AGREEMENTS
Section 9.01. Supplemental Agreements Without Consent of
Certificateholders. Without the consent of any Certificateholders, the Company
may (but will not be required to), and the Trustee (subject to Section 9.03)
shall, at the Company's request, at any time and from time to time, enter into
one or more agreements supplemental hereto or, if applicable, to an
Intercreditor Agreement, a Note Purchase Agreement or a Liquidity Facility, for
any of the following purposes:
(1) to provide for the formation of a Trust, the issuance of a
series of Certificates and other matters contemplated by
Section 2.01(b); or
(2) to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants of
the Company contained in this Agreement or of the Company's
obligations under any Intercreditor Agreement, any Note
Purchase Agreement or any Liquidity Facility; or
(3) to add to the covenants of the Company for the benefit of the
Certificateholders of any series, or to surrender any right or
power conferred upon the Company in this Agreement, any Note
Purchase Agreement, any Intercreditor Agreement or any
Liquidity Facility; or
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(4) to cure any ambiguity or to correct any mistake or
inconsistency contained herein or in any related Trust
Supplement, any Intercreditor Agreement or any Liquidity
Facility; or
(5) to make or modify any other provision in regard to matters or
questions arising under this Basic Agreement or any related
Trust Supplement, any Intercreditor Agreement or any Liquidity
Facility as the Company may deem necessary or desirable and
that will not materially adversely affect the interests of the
related Certificateholders; or
(6) to comply with any requirement of the SEC, any applicable law,
rules or regulations of any exchange or quotation system on
which the Certificates of any series are listed or of any
regulatory body; or
(7) to modify, eliminate or add to the provisions of this
Agreement, any Intercreditor Agreement or any Liquidity
Facility to such extent as shall be necessary to continue the
qualification of this Agreement (including any supplemental
agreement), any Intercreditor Agreement or any Liquidity
Facility under the Trust Indenture Act or under any similar
Federal statute hereafter enacted, and to add to this
Agreement, any Intercreditor Agreement or any Liquidity
Facility such other provisions as may be expressly permitted
by the Trust Indenture Act, excluding, however, the provisions
referred to in Section 316(a)(2) of the Trust Indenture Act as
in effect at the date as of which this Basic Agreement was
executed or any corresponding provision in any similar Federal
statute hereafter enacted; or
(8) to evidence and provide for the acceptance of appointment by a
successor Trustee under this Agreement, any Intercreditor
Agreement, any Note Purchase Agreement, any Indenture or any
Liquidity Facility with respect to one or more Trusts and to
add to or change any of the provisions of this Agreement, any
Intercreditor Agreement or any Liquidity Facility as shall be
necessary to provide for or facilitate the administration of
the Trust hereunder and thereunder by more than one Trustee,
pursuant to the requirements of Section 7.10; or
(9) to provide the information required under Section 7.12 and
Section 12.04 as to the Trustee; or
(10) to add to or change any of the provisions of this Agreement or
any Trust Supplement to such extent as shall be necessary to
facilitate the issuance of Certificates in bearer form or to
facilitate or provide for the issuance of Certificates in
global form in addition to or in place of Certificates in
certificated form; or
(11) to provide for the delivery of agreements supplemental hereto
or the Certificates of any series in or by any means of any
computerized, electronic or other medium, including without
limitation by computer diskette; or
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(12) to correct or supplement the description of any property
constituting property of such Trust; or
(13) to modify, eliminate or add to the provisions of this Basic
Agreement or any Trust Supplement in order to reflect the
substitution of a Substitute Aircraft for any aircraft; or
(14) to make any other amendments or modifications hereto, provided
that such amendments or modifications shall only apply to
Certificates of one or more series to be thereafter issued;
provided, however, that no such supplemental agreement shall cause any Trust to
become an association taxable as a corporation for United States federal income
tax purposes.
Section 9.02. Supplemental Agreements with Consent of
Certificateholders. With respect to each separate Trust and the series of
Certificates relating thereto, with the consent of the Certificateholders
holding Certificates of such series (including consents obtained in connection
with a consent solicitation, tender offer or exchange offer for the
Certificates) evidencing Fractional Undivided Interests aggregating not less
than a majority in interest in such Trust, by Direction of said
Certificateholders delivered to the Company and the Trustee, the Company may
(with the consent of the Owner Trustees, if any, relating to such Certificates,
which consent shall not be unreasonably withheld), but shall not be obligated
to, and the Trustee (subject to Section 9.03) shall, enter into an agreement or
agreements supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement,
any Intercreditor Agreement or any Liquidity Facility to the extent applicable
to such Certificateholders or of modifying in any manner the rights and
obligations of such Certificateholders under this Agreement, any Intercreditor
Agreement or any Liquidity Facility; provided, however, that no such agreement
shall, without the consent of the Certificateholder of each Outstanding
Certificate adversely affected thereby:
(1) reduce in any manner the amount of, or delay the timing of,
any receipt by the Trustee of payments on the Equipment Notes
held in such Trust or distributions that are required to be
made herein on any Certificate of such series, or change any
date of payment on any Certificate of such series, or change
the place of payment where, or the coin or currency in which,
any Certificate of such series is payable (other than as
provided for in such Certificate), or impair the right to
institute suit for the enforcement of any such payment or
distribution on or after the Regular Distribution Date or
Special Distribution Date applicable thereto; or
(2) except as permitted by this Agreement or the applicable
Intercreditor Agreement or Liquidity Facility, permit the
disposition of any Equipment Note included in the Trust
Property of such Trust or otherwise deprive such
Certificateholder of the benefit of the ownership of the
Equipment Notes in such Trust; or
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(3) alter the priority of distributions specified in the relevant
Intercreditor Agreement, if any, in a manner materially
adverse to the interests of the Certificateholders of any
series; or
(4) modify any of the provisions of this Section 9.02 with respect
to such series of Certificates, except to increase the
specified percentage of the aggregate Fractional Undivided
Interests of such Trust that is required for any supplemental
agreement as set forth therein, or to provide that certain
other provisions of this Agreement cannot be modified or
waived without the consent of the Certificateholder of each
Certificate of such series affected thereby; or
(5) cause any Trust to become an association taxable as a
corporation for United States federal income tax purposes.
It shall not be necessary for any Direction of such Certificateholders
under this Section 9.02 to approve the particular form of any proposed
supplemental agreement, but it shall be sufficient if such Direction shall
approve the substance thereof.
Section 9.03. Documents Affecting Immunity or Indemnity. If in the
opinion of the Trustee any document required to be executed by it pursuant to
the terms of Section 9.01 or 9.02 affects any interest, right, duty, immunity or
indemnity in favor of the Trustee under this Basic Agreement or any Trust
Supplement, the Trustee may in its discretion decline to execute such document.
Section 9.04. Execution of Supplemental Agreements. In executing, or
accepting the additional trusts created by, any supplemental agreement permitted
by this Article IX or the modifications thereby of the trusts created by this
Agreement, the Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental agreement is authorized or permitted by this Agreement.
Section 9.05. Effect of Supplemental Agreements. Upon the execution of
any agreement supplemental to this Agreement under this Article IX, this
Agreement shall be modified in accordance therewith, and such supplemental
agreement shall form a part of this Agreement for all purposes, and every
Certificateholder of each series theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby to the extent applicable to such
series.
Section 9.06. Conformity with Trust Indenture Act. Every supplemental
agreement executed pursuant to this Article IX shall conform to the requirements
of the Trust Indenture Act as then in effect.
Section 9.07. Reference in Certificates to Supplemental Agreements.
Certificates of each series authenticated and delivered after the execution of
any supplemental agreement applicable to such series pursuant to this Article IX
may bear a notation in form approved by the Trustee as to any
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matter provided for in such supplemental agreement; and, in such case, suitable
notation may be made upon Outstanding Certificates of such series after proper
presentation and demand.
ARTICLE X
AMENDMENTS TO INDENTURES AND OTHER NOTE DOCUMENTS
Section 10.01. Amendments and Supplements to Indentures and Other Note
Documents. In the event that the Trustee, as holder (or beneficial owner through
the Subordination Agent) of any Equipment Notes (or as a prospective purchaser
of any Postponed Notes) in trust for the benefit of the Certificateholders of
any series or as Controlling Party under an Intercreditor Agreement, receives
(directly or indirectly through the Subordination Agent) a request for a consent
to any amendment, modification, waiver or supplement under any Indenture or
other Note Document, subject to Section 9.01 hereof, the Trustee shall forthwith
send a notice of such proposed amendment, modification, waiver or supplement to
each Certificateholder of such series registered on the Register as of the date
of such notice. The Trustee shall request from the Certificateholders of such
series a Direction as to (a) whether or not to take or refrain from taking (or
direct the Subordination Agent to take or refrain from taking) any action which
a holder of (or, with respect to Postponed Notes, a prospective purchaser of)
such Equipment Note has the option to direct, (b) whether or not to give or
execute (or direct the Subordination Agent to give or execute) any waivers,
consents, amendments, modifications or supplements as a holder of (or, with
respect to Postponed Notes, a prospective purchaser of) such Equipment Note or a
Controlling Party and (c) how to vote (or direct the Subordination Agent to
vote) any Equipment Note (or, with respect to a Postponed Note, its commitment
to acquire such Postponed Note) if a vote has been called for with respect
thereto. Provided such a request for Certificateholder Direction shall have been
made, in directing any action or casting any vote or giving any consent as the
holder of any Equipment Note (or in directing the Subordination Agent in any of
the foregoing), (i) other than as Controlling Party, the Trustee shall vote for
or give consent to any such action with respect to such Equipment Note (or
Postponed Note) in the same proportion as that of (A) the aggregate face amount
of all Certificates actually voted in favor of or for giving consent to such
action by such Direction of Certificateholders to (B) the aggregate face amount
of all Outstanding Certificates and (ii) as Controlling Party, the Trustee shall
vote as directed in such Certificateholder Direction by the Certificateholders
of such series evidencing a Fractional Undivided Interest aggregating not less
than a majority in interest in the Trust. For purposes of the immediately
preceding sentence, a Certificate shall have been "actually voted" if the Holder
of such Certificate has delivered to the Trustee an instrument evidencing such
Holder's consent to such Direction prior to one Business Day before the Trustee
directs such action or casts such vote or gives such consent. Notwithstanding
the foregoing, but subject to Section 6.04 and any Intercreditor Agreement, the
Trustee may, with respect to the Certificates of any series, in its own
discretion and at its own direction, consent and notify the relevant Loan
Trustee of such consent (or direct the Subordination Agent to consent and notify
the Loan Trustee of such consent) to any amendment, modification, waiver or
supplement under any related Indenture or any other related Note Document if an
Event of Default hereunder shall have
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occurred and be continuing or if such amendment, modification, waiver or
supplement will not materially adversely affect the interests of the
Certificateholders of such series.
ARTICLE XI
TERMINATION OF TRUSTS
Section 11.01. Termination of the Trusts. In respect of each Trust
created by the Basic Agreement as supplemented by a related Trust Supplement,
the respective obligations and responsibilities of the Company and the Trustee
with respect to such Trust shall terminate upon the distribution to all Holders
of Certificates of the series of such Trust and the Trustee of all amounts
required to be distributed to them pursuant to this Agreement and the
disposition of all property held as part of the Trust Property of such Trust;
provided, however, that in no event shall such Trust continue beyond the final
expiration date determined as provided in such Trust Supplement.
Notice of any termination of a Trust, specifying the applicable Regular
Distribution Date (or applicable Special Distribution Date, as the case may be)
upon which the Certificateholders of any series may surrender their Certificates
to the Trustee for payment of the final distribution and cancellation, shall be
mailed promptly by the Trustee to Certificateholders of such series not earlier
than 60 days and not later than 15 days preceding such final distribution
specifying (i) the Regular Distribution Date (or Special Distribution Date, as
the case may be) upon which the proposed final payment of the Certificates of
such series will be made upon presentation and surrender of Certificates of such
series at the office or agency of the Trustee therein specified, (ii) the amount
of any such proposed final payment, and (iii) that the Record Date otherwise
applicable to such Regular Distribution Date (or Special Distribution Date, as
the case may be) is not applicable, payments being made only upon presentation
and surrender of the Certificates of such series at the office or agency of the
Trustee therein specified. The Trustee shall give such notice to the Registrar
at the time such notice is given to Certificateholders of such series. Upon
presentation and surrender of the Certificates of such series in accordance with
such notice, the Trustee shall cause to be distributed to Certificateholders of
such series amounts distributable on such Regular Distribution Date (or Special
Distribution Date, as the case may be) pursuant to Section 4.02.
In the event that all of the Certificateholders of such series shall
not surrender their Certificates for cancellation within six months after the
date specified in the above-mentioned written notice, the Trustee shall give a
second written notice to the remaining Certificateholders of such series to
surrender their Certificates for cancellation and receive the final distribution
with respect thereto. No additional interest shall accrue on the Certificates of
such series after any Regular Distribution Date (or Special Distribution Date,
as the case may be) of such series, as specified in the first written notice. In
the event that any money held by the Trustee for the payment of distributions on
the Certificates of such series shall remain unclaimed for two years (or such
lesser time as the Trustee shall be satisfied, after 60 days' notice from the
Company, is one month prior to the escheat period provided under applicable law)
after the final distribution date with respect
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thereto, the Trustee shall pay to each Loan Trustee the appropriate amount of
money relating to such Loan Trustee and shall give written notice thereof to any
related Owner Trustees and the Company.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. Limitation on Rights of Certificateholders. (a) The
insolvency, death or incapacity of any Certificateholder of any series shall not
operate to terminate this Agreement or the related Trust, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a partition or
winding up of the Trust, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them. No Certificateholder of any
series shall be entitled to revoke the related Trust.
(b) No transfer, by operation of law or otherwise, of any Certificate
or other right, title and interest of any Certificateholder in and to the
applicable Trust Property or under the related Trust shall operate to terminate
the Trust or entitle such Certificateholder or any successor or transferee of
such Certificateholder to an accounting or to the transfer to it of legal title
to any part of such Trust Property.
Section 12.02. Certificates Nonassessable and Fully Paid.
Certificateholders of each series shall not be personally liable for obligations
of the related Trust, the Fractional Undivided Interests represented by the
Certificates of such series shall be nonassessable for any losses or expenses of
such Trust or for any reason whatsoever, and Certificates of such series upon
authentication thereof by the Trustee pursuant to Section 3.02 are and shall be
deemed fully paid. No Certificateholder of such series shall have any right
(except as expressly provided herein) to vote or in any manner otherwise control
the operation and management of the related Trust Property, the related Trust,
or the obligations of the parties hereto, nor shall anything set forth herein,
or contained in the terms of the Certificates of such series, be construed so as
to constitute the Certificateholders of such series from time to time as
partners or members of an association.
Section 12.03. Registration of Equipment Notes in Name of Subordination
Agent. If a Trust is party to an Intercreditor Agreement, the Trustee agrees
that all Equipment Notes to be purchased by such Trust may be issued in the name
of the Subordination Agent under such Intercreditor Agreement or its nominee and
held by such Subordination Agent in trust for the benefit of the
Certificateholders, or, if not so held, such Subordination Agent or its nominee
shall be reflected as the owner of such Equipment Notes in the register of the
issuer of such Equipment Notes.
Section 12.04. Notices. (a) Unless otherwise expressly specified or
permitted by the terms hereof or in the applicable Trust Supplement with respect
to any Trust created thereby, all notices required or permitted under the terms
and provisions of this Basic Agreement or such Trust Supplement shall be in
English and in writing, and any such notice may be given by U.S. mail, courier
service or facsimile or any other customary means of communication, and any such
notice
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shall be effective when delivered (or, if mailed, three Business Days after
deposit, postage prepaid, in the first class U.S. mail and, if delivered by
facsimile, upon completion of transmission and confirmation by the sender (by a
telephone call to a representative of the recipient or by machine confirmation)
that the transmission was received),
if to the Company, to:
American Airlines, Inc.
4333 Amon Carter Blvd.
Maildrop 5662
Fort Worth, Texas 76155
Attention: Treasurer
Telephone: (817) 963-1234
Facsimile: (817) 967-4318
if to the Trustee, to:
State Street Bank and Trust Company of Connecticut,
National Association
225 Asylum Street, Goodwin Square
Hartford, Connecticut 06103
Attention: Corporate Trust Division
Telephone: (860) 244-1844
Facsimile: (860) 244-1881
(b) The Company or the Trustee, by notice to the other, may designate
additional or different addresses for subsequent notices or communications.
(c) Any notice or communication to Certificateholders of any series
shall be mailed by first-class mail to the addresses for Certificateholders of
such series shown on the Register kept by the Registrar and to addresses filed
with the Trustee for Certificate Owners of such series. Failure so to mail a
notice or communication or any defect in such notice or communication shall not
affect its sufficiency with respect to other Certificateholders or Certificate
Owners of such series.
(d) If a notice or communication is mailed in the manner provided
above, it is conclusively presumed to have been duly given, whether or not the
addressee receives it.
(e) If the Company mails a notice or communication to the
Certificateholders of such series, it shall mail a copy to the Trustee and to
each Paying Agent for such series at the same time.
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(f) The Trustee shall promptly furnish the Company with a copy of any
demand, notice or written communication received by the Trustee hereunder from
any Certificateholder, Certificate Owner, Owner Trustee, Loan Trustee, Liquidity
Provider or Subordination Agent.
Section 12.05. Governing Law. THIS BASIC AGREEMENT HAS BEEN DELIVERED
IN THE STATE OF NEW YORK AND THIS BASIC AGREEMENT, TOGETHER WITH ALL TRUST
SUPPLEMENTS AND CERTIFICATES, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
Section 12.06. Severability of Provisions. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 12.07. Trust Indenture Act Controls. This Agreement is subject
to the provisions of the Trust Indenture Act and if any provision of this
Agreement limits, qualifies or conflicts with another provision which is
required to be included in this Agreement by the Trust Indenture Act, the
required provision shall control. If any provision of this Agreement modifies or
excludes any provision of the Trust Indenture Act that may be so modified or
excluded, the latter provision shall be deemed to apply to this Agreement as so
modified, or to be excluded, as the case may be, whether or not such provision
of this Agreement refers expressly to such provision of the Trust Indenture Act.
Section 12.08. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
Section 12.09. Successors and Assigns. All covenants, agreements,
representations and warranties in this Agreement by the Trustee and the Company
shall bind and, to the extent permitted hereby, shall inure to the benefit of
and be enforceable by their respective successors and assigns, whether so
expressed or not. Any request, notice, direction, consent, waiver or other
instrument or action by any Certificateholder shall bind the successors and
assigns of such Certificateholder.
Section 12.10. Benefits of Agreement. Nothing in this Agreement or in
the Certificates of any series, express or implied, shall give to any Person,
other than the parties hereto and their successors hereunder, and the
Certificateholders of each series, any benefit or any legal or equitable right,
remedy or claim under this Agreement, except as provided expressly herein.
Section 12.11. Legal Holidays. In any case where any Regular
Distribution Date or Special Distribution Date relating to any Certificate of
any series shall not be a Business Day with respect
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to such series, then (notwithstanding any other provision of this Agreement)
payment need not be made on such date, but may be made on the next succeeding
Business Day with the same force and effect as if made on such Regular
Distribution Date or Special Distribution Date, and no interest shall accrue
during the intervening period.
Section 12.12. Counterparts. For the purpose of facilitating the
execution of this Agreement and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.
Section 12.13. Communication by Certificateholders with Other
Certificateholders. Certificateholders of any series may communicate with other
Certificateholders of such series with respect to their rights under this Basic
Agreement, the related Trust Supplement or the Certificates of such series
pursuant to Section 312(b) of the Trust Indenture Act. The Company, the Trustee
and any and all other persons benefitted by this Agreement shall have the
protection afforded by Section 312(c) of the Trust Indenture Act.
Section 12.14. Normal Commercial Relations. Anything contained in this
Agreement to the contrary notwithstanding, the Trustee and any
Certificateholder, or any bank or other affiliate of any such party, may conduct
any banking or other financial transactions, and have banking or other
commercial relationships, with the Company fully to the same extent as if this
Agreement were not in effect, including without limitation the making of loans
or other extensions of credit to the Company for any purpose whatsoever, whether
related to any of the transactions contemplated hereby or otherwise.
Section 12.15. No Recourse Against Others. No past, present or future
director, officer, employee, agent, member, manager, trustee or stockholder, as
such, of the Company or any successor Person shall have any liability for any
obligations of the Company or any successor Person, either directly or through
the Company or any successor Person, under the Certificates or this Agreement or
for any claim based on, in respect of or by reason of such obligations or their
creation, whether by virtue of any rule of law, statute or constitutional
provision or by the enforcement of any assessment or by any legal or equitable
proceeding or otherwise. By accepting a Certificate, each Certificateholder
agrees to the provisions of this Section 12.15 and waives and releases all such
liability. Such waiver and release shall be part of the consideration for the
issue of the Certificates.
57
<PAGE> 64
IN WITNESS WHEREOF, the parties have caused this Pass Through Trust
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first written above.
AMERICAN AIRLINES, INC.
By: /s/ JEFFREY C. CAMPBELL
---------------------------------
Name: Jeffrey C. Campbell
Title: Vice President - Corporate
Development and Treasurer
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Trustee
By: /s/ JOHN G. CORREIA
---------------------------------
Name: John G. Correia
Title: Assistant Secretary
58
<PAGE> 65
EXHIBIT A
TO
PASS THROUGH TRUST AGREEMENT
FORM OF CERTIFICATE
*Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to Issuer or
its agent for registration of transfer, exchange or payment, and any Certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
AMERICAN AIRLINES, INC. PASS THROUGH TRUST [ ]
__% AMERICAN AIRLINES PASS THROUGH CERTIFICATE, SERIES [ ]
Final Regular Distribution Date: [ ],
evidencing a fractional undivided interest in a
trust, the property of which includes or will
include, among other things, certain Equipment Notes
each secured by Aircraft owned by or leased to
American Airlines, Inc.
Certificate No.[] $[ ] Fractional Undivided Interest representing 0.
_________% of the Trust per $1,000 face amount
THIS CERTIFIES THAT [ ], for value received, is the registered owner of
a $[ ] ([ ] dollars) Fractional Undivided Interest in the American Airlines Pass
Through Trust, Series [ ] (the "Trust") created by ______________________, as
trustee (the "Trustee"), pursuant to a Pass Through Trust Agreement dated as of
October 1, 1999 (the "Basic Agreement"), as supplemented by Trust Supplement No.
[] thereto dated [ ], [ ](collectively, the "Agreement"), between the
- ---------------------------
*This legend to appear on Book-Entry Certificates to be deposited with
The Depository Trust Company.
A-1
<PAGE> 66
Trustee and American Airlines, Inc., a corporation incorporated under Delaware
law (the "Company"), a summary of certain of the pertinent provisions of which
is set forth below. To the extent not otherwise defined herein, the capitalized
terms used herein have the meanings assigned to them in the Agreement. This
Certificate is one of the duly authorized Certificates designated as "[ ]%
American Airlines Pass Through Certificates, Series [ ]" (herein called the
"Certificates"). This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement. By virtue of its acceptance hereof,
the Certificateholder of this Certificate assents to and agrees to be bound by
the provisions of the Agreement and any related Intercreditor Agreement. The
property of the Trust includes or will include certain Equipment Notes and all
rights of the Trust and the Trustee, on behalf of the Trust, to receive any
payments under any Intercreditor Agreement or Liquidity Facility (the "Trust
Property"). Each issue of the Equipment Notes is or will be secured by, among
other things, a security interest in Aircraft leased to or owned by the Company.
The Certificates represent fractional undivided interests in the Trust
and the Trust Property, and, except as may be specified in any Intercreditor
Agreement or in the applicable Trust Supplement, will have no rights, benefits
or interest in respect of any other separate trust established pursuant to the
terms of the Basic Agreement for any other series of certificates issued
pursuant thereto.
Subject to and in accordance with the terms of the Agreement and any
related Intercreditor Agreement, from funds then available to the Trustee, there
will be distributed on each ____________ and _______________ (a "Regular
Distribution Date"), commencing on ___________, ____, to the Person in whose
name this Certificate is registered at the close of business on the 15th day
preceding the Regular Distribution Date or such other date as shall be specified
for such series in the applicable Trust Supplement, an amount in respect of the
Scheduled Payments on the Equipment Notes due on such Regular Distribution Date,
the receipt of which has been confirmed by the Trustee, equal to the product of
the percentage interest in the Trust evidenced by this Certificate and an amount
equal to the sum of such Scheduled Payments. Subject to and in accordance with
the terms of the Agreement and any related Intercreditor Agreement, in the event
that Special Payments on the Equipment Notes are received by the Trustee, from
funds then available to the Trustee, there shall be distributed on the
applicable Special Distribution Date, to the Person in whose name this
Certificate is registered at the close of business on the 15th day preceding the
Special Distribution Date or such other date as shall be specified for such
series in the applicable Trust Supplement, an amount in respect of such Special
Payments on the Equipment Notes, the receipt of which has been confirmed by the
Trustee, equal to the product of the percentage interest in the Trust evidenced
by this Certificate and an amount equal to the sum of such Special Payments so
received. If a Regular Distribution Date or Special Distribution Date is not a
Business Day, distribution shall be made on the immediately following Business
Day with the same force and effect as if made on such Regular Distribution Date
or Special Distribution Date and no interest shall accrue during the intervening
period. The Trustee shall mail notice of each Special Payment and the Special
Distribution Date therefor to the Certificateholder of this Certificate.
A-2
<PAGE> 67
Distributions on this Certificate will be made by the Trustee by check
mailed to the Person entitled thereto, without the presentation or surrender of
this Certificate or the making of any notation hereon, except that with respect
to Certificates registered on the Record Date in the name of a Clearing Agency
(or its nominee), such distributions shall be made by wire transfer. Except as
otherwise provided in the Agreement and notwithstanding the above, the final
distribution on this Certificate will be made after notice mailed by the Trustee
of the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency of the Trustee specified in such
notice.
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company, the Trustee, the Loan
Trustee, any Owner Trustee or any Owner Participant or any Affiliate thereof.
The Certificates are limited in right of payment, all as more specifically set
forth on the face hereof and in the Agreement. All payments or distributions
made to Certificateholders under the Agreement shall be made only from the Trust
Property and only to the extent that the Trustee shall have sufficient income or
proceeds from the Trust Property to make such payments in accordance with the
terms of the Agreement. Each Certificateholder of this Certificate, by its
acceptance hereof, agrees that it will look solely to the income and proceeds
from the Trust Property for any payment or distribution due to such
Certificateholder pursuant to the terms of the Agreement and that it will not
have any recourse to the Company, the Trustee, the Loan Trustees, any Owner
Trustee or any Owner Participant except as otherwise expressly provided in the
Agreement, in any Note Document or in the Intercreditor Agreement. This
Certificate does not purport to summarize the Agreement and reference is made to
the Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds, and duties evidenced hereby. A copy of the Agreement may
be examined during normal business hours at the principal office of the Trustee,
and at such other places, if any, designated by the Trustee, by any
Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any time
by the Company and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the Trust. Any such consent by the
Certificateholder of this Certificate shall be conclusive and binding on such
Certificateholder and upon all future Certificateholders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Certificateholders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations set
forth, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the offices or
agencies maintained by the Trustee in its capacity as Registrar, or by any
successor Registrar duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Registrar, duly executed by
the Certificateholder hereof or such
A-3
<PAGE> 68
Certificateholder's attorney duly authorized in writing, and thereupon one or
more new Certificates of authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Trust will be issued to the designated
transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in minimum denominations of $1,000 Fractional Undivided Interest and
integral multiples thereof except that one Certificate may be issued in a
different denomination. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Trust, as requested by the
Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee shall require payment of a sum sufficient to cover any
tax or governmental charge payable in connection therewith.
The Company, the Trustee, the Registrar, and any Paying Agent shall
deem and treat the person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Company, the Trustee, the
Registrar or any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
the Agreement and the disposition of all property held as part of the Trust
Property.
THIS CERTIFICATE AND THE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES AND CERTIFICATEHOLDERS HEREUNDER AND THEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
A-4
<PAGE> 69
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
AMERICAN AIRLINES, INC. PASS THROUGH TRUST_______
By:
-------------------------------,
as Trustee
By:
-------------------------------
Title:
----------------------------
Dated:
----------------------------
[FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Certificates referred to in the within-mentioned
Agreement.
- -------------------------------,
as Trustee
By:
----------------------------
Authorized Officer
A-5
<PAGE> 1
EXHIBIT 4(a)2
================================================================================
TRUST SUPPLEMENT NO. 1999-1A-1
Dated as of October 6, 1999
between
AMERICAN AIRLINES, INC.
and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
as Trustee,
to
PASS THROUGH TRUST AGREEMENT
Dated as of October 1, 1999
American Airlines, Inc. Pass Through Trust 1999-1A-1
6.855% American Airlines
Pass Through Certificates,
Series 1999-1A-1
================================================================================
<PAGE> 2
TRUST SUPPLEMENT NO. 1999-1A-1
This TRUST SUPPLEMENT NO. 1999-1A-1, dated as of October 6, 1999 (the
"Trust Supplement"), between American Airlines, Inc., a Delaware corporation,
and State Street Bank and Trust Company of Connecticut, National Association, a
national banking association, as Trustee, to the Pass Through Trust Agreement,
dated as of October 1,1999, between the Company (such term and other capitalized
terms used herein without definition being defined as provided in Section 1.01)
and the Trustee (the "Basic Agreement").
W I T N E S S E T H:
--------------------
WHEREAS, the Basic Agreement, which is unlimited as to the aggregate
face amount of Certificates that may be issued and authenticated thereunder, has
heretofore or concurrently herewith been executed and delivered;
WHEREAS, the Company is the Owner of fifteen Boeing aircraft described
in Schedule III (collectively, the "Aircraft");
WHEREAS, pursuant to each Indenture, the Company will issue the
Equipment Notes, which Equipment Notes are to be secured by a security interest
in all right, title and interest of the Company in and to the Aircraft and
certain other property described therein;
WHEREAS, the Trustee shall hereby declare the creation of the Class A-1
Trust (as defined below) for the benefit of Holders of the Class A-1
Certificates (as defined below) to be issued in respect of such Class A-1 Trust,
and the initial Holders of the Class A-1 Certificates, as grantors of such Class
A-1 Trust, by their respective acceptances of the Class A-1 Certificates, shall
join in the creation of the Class A-1 Trust with the Trustee;
WHEREAS, all Certificates to be issued by the Class A-1 Trust will
evidence Fractional Undivided Interests in the Class A-1 Trust and will have no
rights, benefits or interests in respect of any other separate Trust or the
property held therein;
WHEREAS, pursuant to the terms and conditions of the Basic Agreement,
as supplemented by this Trust Supplement, and the Note Purchase Agreements, the
Trustee on behalf of the Class A-1 Trust shall purchase the Equipment Notes
issued by the Company pursuant to the Indentures relating to the Aircraft having
the identical interest rate as, and final maturity dates not later than the
final Regular Distribution Date of, the Class A-1 Certificates issued hereunder
and shall hold such Equipment Notes in trust for the benefit of the Class A-1
Certificateholders;
1
<PAGE> 3
WHEREAS, pursuant to the terms and conditions of the Intercreditor
Agreement referred to in Section 3.01(h) hereof (the "Intercreditor Agreement"),
the Trustee and the other parties thereto will agree to the terms of
subordination set forth therein.
WHEREAS, all of the conditions and requirements necessary to make this
Trust Supplement, when duly executed and delivered, a valid, binding and legal
instrument in accordance with its terms and for the purposes herein expressed,
have been done, performed and fulfilled, and the execution and delivery of this
Trust Supplement in the form and with the terms hereof have been in all respects
duly authorized;
WHEREAS, this Trust Supplement is subject to the provisions of the
Trust Indenture Act and shall, to the extent applicable, be governed by such
provisions;
NOW THEREFORE, in consideration of the mutual agreements herein
contained, and of other good and valuable consideration the receipt and adequacy
of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Unless otherwise specified herein or the
context otherwise requires, capitalized terms used but not defined herein shall
have the respective meanings set forth, and shall be construed and interpreted
in the manner described, in the Basic Agreement or, to the extent not defined
therein, in the Intercreditor Agreement.
ARTICLE II
DECLARATION OF TRUST
Section 2.01. Declaration of Trust. The Trustee hereby declares the
creation of a Trust, designated the "American Airlines Pass Through Trust
1999-1A-1" (the "Class A-1 Trust"), for the benefit of the Holders of the Class
A-1 Certificates to be issued in respect of such Class A-1 Trust, and the
initial Holders of the Class A-1 Certificates, as grantors of such Class A-1
Trust, by their respective acceptances of the Class A-1 Certificates, join in
the creation of such Class A-1 Trust with the Trustee. The Trustee, by the
execution and delivery of this Trust Supplement, acknowledges its acceptance of
all right, title and interest in and to the Trust Property to be acquired
pursuant to Section 2.02 of the Basic Agreement and the Note Purchase Agreements
and the Trustee will hold such right, title and interest for the benefit of all
present and future Holders of the Class A-1 Certificates, upon the trusts set
forth in the Basic Agreement and this Trust Supplement.
2
<PAGE> 4
ARTICLE III
THE CERTIFICATES
Section 3.01. The Certificates. There is hereby created a series of
Certificates to be issued under this Agreement designated as "6.855% American
Airlines Pass Through Certificates, Series 1999-1A-1" (the "Class A-1
Certificates"). Each Class A-1 Certificate represents a Fractional Undivided
Interest in the Class A-1 Trust created hereby. The Class A-1 Certificates shall
be the only instruments evidencing a Fractional Undivided Interest in the Class
A-1 Trust.
The terms and conditions applicable to the Class A-1 Certificates and
the Class A-1 Trust are as follows:
(a) The aggregate face amount of the Class A-1 Certificates that may be
authenticated and delivered under this Agreement (except for Class A-1
Certificates authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Class A-1 Certificates pursuant to Sections
3.03, 3.04, 3.05 and 3.06 of the Basic Agreement) is $150,889,000.
(b) The Cut-off Date is November 6, 1999.
(c) The Regular Distribution Dates with respect to any payment of
Scheduled Payments means April 15 and October 15 of each year, commencing on
April 15, 2000, until payment of all of the Scheduled Payments to be made under
the Equipment Notes has been made. The principal amount of the Equipment Notes
to be held by the Class A-1 Trust is scheduled for payment on April 15 and
October 15 in certain years, beginning on April 15, 2000 and ending on April 15,
2009, as set out in Schedules I-A and I-B.
(d) The Special Distribution Dates with respect to the Class A-1
Certificates means any Business Day on which a Special Payment is to be
distributed pursuant to this Agreement.
(e) The Class A-1 Certificates shall be in the form attached hereto as
Exhibit A, shall be Book-Entry Certificates and shall be subject to the
conditions set forth in the Letter of Representations between the Company and
The Depository Trust Company, as initial Clearing Agency, attached hereto as
Exhibit B.
(f) The proceeds of the Class A-1 Certificates issued by the Class A-1
Trust shall be used to acquire the Equipment Notes described in Schedule II,
such Equipment Notes to relate to the Aircraft described in Schedule III and the
Note Documents described in Schedule IV.
(g) Any Person acquiring or accepting a Class A-1 Certificate or an
interest therein will, by such acquisition or acceptance, be deemed to represent
and warrant to the Company, the Loan Trustees and the Trustee that either (i) no
assets of an employee benefit plan subject to Title I of
3
<PAGE> 5
ERISA, or of an employee benefit plan or an individual retirement account
subject to Section 4975 of the Internal Revenue Code of 1986, as amended (the
"Code"), or any trust established under such plan or account, have been used to
purchase Class A-1 Certificates or an interest therein or (ii) the purchase and
holding of Class A-1 Certificates or interests therein by such Person is exempt
from the prohibited transaction restrictions of ERISA and the Code pursuant to
one or more prohibited transaction statutory or administrative exemptions.
(h) The Class A-1 Certificates will be subject to the following
Intercreditor Agreement (and to the extent the terms thereof (including the
definitions of defined terms) are inconsistent with the terms of this Agreement,
such Intercreditor Agreement shall control): that certain Intercreditor
Agreement, dated as of October 6, 1999, among State Street Bank and Trust
Company of Connecticut, National Association, as Trustee under each Trust (as
defined therein), Bayerische Landesbank Girozentrale, as Class A-1 Liquidity
Provider, Class A-2 Liquidity Provider, Class B Liquidity Provider and Class C
Liquidity Provider, and State Street Bank and Trust Company of Connecticut,
National Association, as Subordination Agent thereunder. Potential Purchasers
shall have the rights upon the occurrence of a Triggering Event set forth in
Article IV hereof. The Trustee and, by acceptance of any Class A-1 Certificate,
each Certificateholder thereof, agrees to be bound by all of the provisions of
the Intercreditor Agreement, including the subordination provisions of Section
9.09 thereof.
(i) The Class A-1 Certificates will have the benefit of the following
Liquidity Facility: that certain Revolving Credit Agreement, dated as of October
6, 1999, between State Street Bank and Trust Company of Connecticut, National
Association, as Subordination Agent under the Intercreditor Agreement, as agent
and trustee for the Class A-1 Trust, and Bayerische Landesbank Girozentrale.
(j) Subject to Section 2.02(b) of the Basic Agreement, there will not
be any deposit agreement, escrow agreement or other similar arrangement prior to
delivery of the Aircraft.
(k) The Company may at any time purchase any of the Class A-1
Certificates at any price in the open market and may hold such Class A-1
Certificates to maturity.
(l) The Responsible Party is the Company.
(m) Section 9.02 of the Basic Agreement shall be amended with respect
to the Class A-1 Trust by deleting from the second line of the proviso in the
first sentence thereof the word "adversely".
Section 3.02. Delivery of Documents. The Trustee is hereby directed (i)
to execute and deliver the Intercreditor Agreement referred to in Section
3.01(h) of this Trust Supplement in the form delivered to the Trustee by the
Company and (ii) subject to the respective terms thereof, to perform its
obligations thereunder.
4
<PAGE> 6
ARTICLE IV
DEFAULT
Section 4.01. Purchase Rights of Certificateholders. (a) By acceptance
of its Class A-1 Certificate, each Class A-1 Certificateholder agrees that at
any time after the occurrence and during the continuation of a Triggering Event,
(i) if the Class A-2 Trustee is then the Controlling Party, each Class
A-1 Certificateholder shall have the right to purchase, for the purchase price
set forth in the Class A-2 Trust Agreement, all, but not less than all, of the
Class A-2 Certificates upon ten days' prior written notice to the Class A-2
Trustee and each other Class A-1 Certificateholder, provided that (A) if prior
to the end of such ten-day period any other Class A-1 Certificateholder notifies
such purchasing Class A-1 Certificateholder that such other Class A-1
Certificateholder wants to participate in such purchase, then such other Class
A-1 Certificateholder may join with the purchasing Class A-1 Certificateholder
to purchase all, but not less than all, of the Class A-2 Certificates pro rata
based on the Fractional Undivided Interest in the Class A-1 Trust held by each
such Class A-1 Certificateholder and (B) if prior to the end of such ten-day
period any other Class A-1 Certificateholder fails to notify the purchasing
Class A-1 Certificateholder of such other Class A-1 Certificateholder's desire
to participate in such a purchase, then such other Class A-1 Certificateholder
shall lose its right to purchase the Class A-2 Certificates pursuant to this
Section 4.01(a)(i); and
(ii) if the Trustee is then the Controlling Party, each Class A-2
Certificateholder shall have the right to purchase all, but not less than all,
of the Class A-1 Certificates upon ten days' prior written notice to the Trustee
and each other Class A-2 Certificateholder, provided that (A) if prior to the
end of such ten-day period any other Class A-2 Certificateholder notifies such
purchasing Class A-2 Certificateholder that such other Class A-2
Certificateholder wants to participate in such purchase, then such other Class
A-2 Certificateholder may join with the purchasing Class A-2 Certificateholder
to purchase all, but not less than all, of the Class A-1 Certificates pro rata
based on the Fractional Undivided Interest in the Class A-2 Trust held by each
such Class A-2 Certificateholder and (B) if prior to the end of such ten-day
period any other Class A-2 Certificateholder fails to notify the purchasing
Class A-2 Certificateholder of such other Class A-2 Certificateholder's desire
to participate in such a purchase, then such other Class A-2 Certificateholder
shall lose its right to purchase the Class A-1 Certificates pursuant to this
Section 4.01(a)(ii); and
(iii) each Class B Certificateholder shall have the right (which shall
not expire upon any purchase of the Class A-1 Certificates or the Class A-2
Certificates pursuant to clause (i) or (ii) above) to purchase all, but not less
than all, of the Class A-1 Certificates and the Class A-2 Certificates upon ten
days' prior written notice to the Trustee, the Class A-2 Trustee and each other
Class B Certificateholder, provided that (A) if prior to the end of such ten-day
period any other Class
5
<PAGE> 7
B Certificateholder notifies such purchasing Class B Certificateholder that such
other Class B Certificateholder wants to participate in such purchase, then such
other Class B Certificateholder may join with the purchasing Class B
Certificateholder to purchase all, but not less than all, of the Class A-1
Certificates and the Class A-2 Certificates pro rata based on the Fractional
Undivided Interest in the Class B Trust held by each such Class B
Certificateholder and (B) if prior to the end of such ten-day period any other
Class B Certificateholder fails to notify the purchasing Class B
Certificateholder of such other Class B Certificateholder's desire to
participate in such a purchase, then such other Class B Certificateholder shall
lose its right to purchase the Class A-1 Certificates and the Class A-2
Certificates pursuant to this Section 4.01(a)(iii);
(iv) each Class C Certificateholder shall have the right (which shall
not expire upon any purchase of the Class A-1 Certificates or the Class A-2
Certificates pursuant to clause (i), (ii) or (iii) above) to purchase all, but
not less than all, of the Class A-1 Certificates, the Class A-2 Certificates and
the Class B Certificates upon ten days' prior written notice to the Trustee, the
Class A-2 Trustee, the Class B Trustee and each other Class C Certificateholder,
provided that (A) if prior to the end of such ten-day period any other Class C
Certificateholder notifies such purchasing Class C Certificateholder that such
other Class C Certificateholder wants to participate in such purchase, then such
other Class C Certificateholder may join with the purchasing Class C
Certificateholder to purchase all, but not less than all, of the Class A-1
Certificates, the Class A-2 Certificates and the Class B Certificates pro rata
based on the Fractional Undivided Interest in the Class C Trust held by each
such Class C Certificateholder and (B) if prior to the end of such ten-day
period any other Class C Certificateholder fails to notify the purchasing Class
C Certificateholder of such other Class C Certificateholder's desire to
participate in such a purchase, then such other Class C Certificateholder shall
lose its right to purchase the Class A-1 Certificates, the Class A-2
Certificates and the Class B Certificates pursuant to this Section 4.01(a)(iv);
and
(v) each Class D Certificateholder (if Class D Certificates are issued)
shall have the right (which shall not expire upon any purchase of the Class A-1
Certificates, the Class A-2 Certificates or the Class B Certificates pursuant to
clause (i), (ii), (iii) or (iv) above) to purchase all, but not less than all,
of the Class A-1 Certificates, the Class A-2 Certificates, the Class B
Certificates and the Class C Certificates upon ten days' prior written notice to
the Trustee, the Class A-2 Trustee, the Class B Trustee, the Class C Trustee and
each other Class D Certificateholder, provided that (A) if prior to the end of
such ten-day period any other Class D Certificateholder notifies such purchasing
Class D Certificateholder that such other Class D Certificateholder wants to
participate in such purchase, then such other Class D Certificateholder may join
with the purchasing Class D Certificateholder to purchase all, but not less than
all, of the Class A-1 Certificates, the Class A-2 Certificates, the Class B
Certificates and the Class C Certificates pro rata based on the Fractional
Undivided Interest in the Class D Trust held by each such Class D
Certificateholder and (B) if prior to the end of such ten-day period any other
Class D Certificateholder fails to notify the purchasing Class D
Certificateholder of such other Class D Certificateholder's desire to
participate in such a purchase, then such other Class D Certificateholder shall
lose its right to purchase the Class A-1
6
<PAGE> 8
Certificates, the Class A-2 Certificates, the Class B Certificates and the Class
C Certificates pursuant to this Section 4.01(a)(v).
The purchase price with respect to the Class A-1 Certificates shall be
equal to the Pool Balance of the Class A-1 Certificates, together with accrued
and unpaid interest in respect thereof to the date of such purchase, without
premium, but including any other amounts then due and payable to the Class A-1
Certificateholders under this Agreement, the Intercreditor Agreement or any Note
Document or on or in respect of the Class A-1 Certificates; provided, however,
that if such purchase occurs after the Record Date relating to any Distribution
Date, such purchase price shall be reduced by the amount to be distributed
hereunder on such related Distribution Date (which deducted amounts shall remain
distributable to, and may be retained by, the Class A-1 Certificateholders as of
such Record Date); provided, further that no such purchase of Class A-1
Certificates pursuant to clause (iii), (iv) or (v) above shall be effective
unless the purchaser(s) shall certify to the Trustee that contemporaneously with
such purchase, such purchaser(s) is purchasing, pursuant to the terms of this
Agreement and the Intercreditor Agreement, all of the Class A-1 Certificates,
the Class A-2 Certificates, the Class B Certificates and the Class C
Certificates that are senior to the securities held by such purchaser(s). Each
payment of the purchase price of the Class A-1 Certificates referred to in the
first sentence hereof shall be made to an account or accounts designated by the
Trustee and each such purchase shall be subject to the terms of this Section
4.01(a). Each Class A-1 Certificateholder agrees by its acceptance of its
Certificate that it will, upon payment from such Class A-2 Certificateholder(s),
Class B Certificateholder(s), Class C Certificateholder(s) or Class D
Certificateholder(s), as the case may be, of the purchase price set forth in the
first sentence of this paragraph, forthwith sell, assign, transfer and convey to
the purchaser(s) thereof (without recourse, representation or warranty of any
kind except as to its own acts) all of the right, title, interest and obligation
of such Class A-1 Certificateholder in this Agreement, the Intercreditor
Agreement, the Liquidity Facility, the Note Documents and all Class A-1
Certificates held by such Class A-1 Certificateholder (excluding all right,
title and interest under any of the foregoing to the extent such right, title or
interest is with respect to an obligation not then due and payable as respects
any action or inaction or state of affairs occurring prior to such sale) and the
purchaser(s) shall assume all of such Class A-1 Certificateholder's obligations
under this Agreement, the Intercreditor Agreement, the Liquidity Facility, the
Note Documents and all such Class A-1 Certificates. The Class A-1 Certificates
will be deemed to be purchased on the date payment of the purchase price is made
notwithstanding the failure of any Class A-1 Certificateholder to deliver any
Class A-1 Certificate and, upon such a purchase, (i) the only rights of the
Class A-1 Certificateholders will be to deliver the Class A-1 Certificates and
(ii) if the purchaser(s) shall so request, each such Class A-1 Certificateholder
will comply with all the provisions of Section 3.04 of the Basic Agreement to
enable new Class A-1 Certificates to be issued to the purchaser(s) in such
denominations as it shall request. All charges and expenses in connection with
the issuance of any such new Class A-1 Certificates shall be borne by the
purchaser(s) thereof.
As used in this Section 4.01(a), the terms "Class A-1
Certificateholder", "Class A-2 Certificate", "Class A-2 Certificateholder",
"Class A-2 Trust", "Class A-2 Trust Agreement", "Class
7
<PAGE> 9
A-2 Trustee", "Class B Certificate", "Class B Certificateholder", "Class B
Trust", "Class B Trustee", "Class C Certificate", "Class C Certificateholder",
"Class C Trust", "Class C Trustee", "Class D Certificate", "Class D
Certificateholder", "Class D Trust" and "Class D Trustee" shall have the
respective meanings assigned to such terms in the Intercreditor Agreement.
(b) This Section 4.01 supplements and, to the extent inconsistent with
any provision of Section 6.01(d) of the Basic Agreement, replaces the provisions
of Section 6.01(d) of the Basic Agreement. Notwithstanding anything to the
contrary set forth herein or in any Operative Agreement, the provisions of this
Section 4.01 may not be amended in any manner without the consent of each Class
A-2 Certificateholder, Class B Certificateholder, Class C Certificateholder or
Class D Certificateholder, if any, that would be adversely affected thereby.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.01. Final Termination Date. The respective obligations and
responsibilities of the Company and the Trustee created hereby and the Class A-1
Trust created hereby shall terminate upon the distribution to all
Certificateholders of Class A-1 Certificates and the Trustee of all amounts
required to be distributed to them pursuant to this Agreement and the
disposition of all property held as part of the Trust Property; provided,
however, that in no event shall the Trust created hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants of
Joseph P. Kennedy, Sr., the father of John F. Kennedy, former President of the
United States, living on the date of this Trust Supplement.
Section 5.02. Basic Agreement Ratified. Except and so far as herein
expressly provided, all of the provisions, terms and conditions of the Basic
Agreement are in all respects ratified and confirmed; and the Basic Agreement
and this Trust Supplement shall be taken, read and construed as one and the same
instrument.
Section 5.03. Governing Law. THIS AGREEMENT HAS BEEN DELIVERED IN THE
STATE OF NEW YORK AND THIS AGREEMENT AND THE CLASS A-1 CERTIFICATES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER AND THEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 5.04. Counterparts. This Trust Supplement may be executed in
any number of counterparts (and each of the parties shall not be required to
execute the same counterpart). Each counterpart of this Trust Supplement
including a signature page or pages executed by each of the
8
<PAGE> 10
parties hereto shall be an original counterpart of this Trust Supplement, but
all of such counterparts together shall constitute one instrument.
Section 5.05. Intention of Parties. The parties hereto intend that the
Class A-1 Trust be classified for United States federal income tax purposes as a
grantor trust under Part 1E of Chapter 1J of Subtitle A of the Internal Revenue
Code of 1986, as amended, and not as a trust or association taxable as a
corporation or as a partnership. Each Certificateholder of a Class A-1
Certificate, by its acceptance of its Class A-1 Certificate or a beneficial
interest therein, agrees to treat the Class A-1 Trust as a grantor trust for all
United States federal, state and local income tax purposes. The Trustee shall
not be authorized or empowered to do anything that would cause the Class A-1
Trust to fail to qualify as a grantor trust for such tax purposes (including as
subject to this restriction, acquiring any Aircraft by bidding the Equipment
Notes relating thereto or otherwise, or taking any action with respect to any
such Aircraft once acquired).
9
<PAGE> 11
IN WITNESS WHEREOF, the parties have caused this Trust Supplement to be
duly executed by their respective officers thereto duly authorized as of the
date first written above.
AMERICAN AIRLINES, INC.
By: /s/ JEFFREY C. CAMPBELL
----------------------------------------------
Name: Jeffrey C. Campbell
Title: Vice President - Corporate Development
and Treasurer
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Trustee
By: /s/ JOHN G. CORREIA
----------------------------------------------
Name: John G. Correia
Title: Assistant Secretary
10
<PAGE> 12
EXHIBIT A to
TRUST SUPPLEMENT NO. 1999-1A-1
FORM OF CERTIFICATE
*Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to Issuer or
its agent for registration of transfer, exchange or payment, and any Certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
AMERICAN AIRLINES, INC. PASS THROUGH TRUST 1999-1A-1
6.855% AMERICAN AIRLINES PASS THROUGH CERTIFICATE, SERIES 1999-1A-1
Final Expected Regular Distribution Date: April 15, 2009
evidencing a fractional undivided interest
in a trust, the property of which includes
or will include, among other things, certain
Equipment Notes each secured by an Aircraft
owned by American Airlines, Inc.
<TABLE>
<S> <C> <C>
Certificate Cusip
No. ______ $____________ Fractional Undivided Interest No.____
representing 0.000662739% of the Trust
per $1,000 face amount
</TABLE>
THIS CERTIFIES THAT ________, for value received, is the registered
owner of a $______ (______ dollars) Fractional Undivided Interest in the
American Airlines Pass Through Trust, Series 1999-1A-1 (the "Trust") created by
State Street Bank and Trust Company of Connecticut, National Association, as
trustee (the "Trustee"), pursuant to a Pass Through Trust Agreement, dated as of
October 1, 1999 (the "Basic Agreement"), as supplemented by Trust Supplement No.
1999-1A-1 thereto dated October 6, 1999 (collectively, the "Agreement"), between
the Trustee and American Airlines, Inc., a corporation
- --------------
*This legend to appear on Book-Entry Certificates to be deposited with
The Depository Trust Company.
A-1
<PAGE> 13
incorporated under Delaware law (the "Company"), a summary of certain of the
pertinent provisions of which is set forth below. To the extent not otherwise
defined herein, the capitalized terms used herein have the meanings assigned to
them in the Agreement. This Certificate is one of the duly authorized
Certificates designated as "6.855% American Airlines Pass Through Certificates,
Series 1999-1A-1" (herein called the "Certificates"). This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement.
By virtue of its acceptance hereof, the Certificateholder of this Certificate
assents to and agrees to be bound by all of the provisions of the Agreement and
the Intercreditor Agreement, including the subordination provisions of Section
9.09 of the Intercreditor Agreement. The property of the Trust includes or will
include certain Equipment Notes and all rights of the Trust and the Trustee, on
behalf of the Trust, to receive any payments under the Intercreditor Agreement
or the Liquidity Facility (the "Trust Property"). Each issue of the Equipment
Notes is or will be secured by, among other things, a security interest in
Aircraft owned by the Company.
The Certificates represent Fractional Undivided Interests in the Trust
and the Trust Property, and will have no rights, benefits or interest in respect
of any other separate trust established pursuant to the terms of the Basic
Agreement for any other series of certificates issued pursuant thereto.
Subject to and in accordance with the terms of the Agreement and the
Intercreditor Agreement, from funds then available to the Trustee, there will be
distributed on each April 15 and October 15 (a "Regular Distribution Date"),
commencing on April 15, 2000, to the Person in whose name this Certificate is
registered at the close of business on the 15th day preceding the Regular
Distribution Date, an amount in respect of the Scheduled Payments on the
Equipment Notes due on such Regular Distribution Date, the receipt of which has
been confirmed by the Trustee, equal to the product of the percentage interest
in the Trust evidenced by this Certificate and an amount equal to the sum of
such Scheduled Payments. Subject to and in accordance with the terms of the
Agreement and the Intercreditor Agreement, in the event that Special Payments on
the Equipment Notes are received by the Trustee, from funds then available to
the Trustee, there shall be distributed on the applicable Special Distribution
Date, to the Person in whose name this Certificate is registered at the close of
business on the 15th day preceding the Special Distribution Date, an amount in
respect of such Special Payments on the Equipment Notes, the receipt of which
has been confirmed by the Trustee, equal to the product of the percentage
interest in the Trust evidenced by this Certificate and an amount equal to the
sum of such Special Payments so received. If a Regular Distribution Date or
Special Distribution Date is not a Business Day, distribution shall be made on
the immediately following Business Day with the same force and effect as if made
on such Regular Distribution Date or Special Distribution Date and no interest
shall accrue during the intervening period. The Trustee shall mail notice of
each Special Payment and the Special Distribution Date therefor to the
Certificateholder of this Certificate.
Distributions on this Certificate will be made by the Trustee by check
mailed to the Person entitled thereto, without the presentation or surrender of
this Certificate or the making of any notation hereon, except that with respect
to Certificates registered on the Record Date in the name of a Clearing Agency
(or its nominee), such distributions shall be made by wire transfer. Except as
otherwise provided in the Agreement and notwithstanding the above, the final
distribution on this Certificate will be made after
A-2
<PAGE> 14
notice mailed by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency of the
Trustee specified in such notice.
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company, the Trustee or any
Loan Trustee or any Affiliate thereof. The Certificates are limited in right of
payment, all as more specifically set forth on the face hereof and in the
Agreement. All payments or distributions made to Certificateholders under the
Agreement shall be made only from the Trust Property and only to the extent that
the Trustee shall have sufficient income or proceeds from the Trust Property to
make such payments in accordance with the terms of the Agreement. Each
Certificateholder of this Certificate, by its acceptance hereof, agrees that it
will look solely to the income and proceeds from the Trust Property to the
extent available for any payment or distribution to such Certificateholder
pursuant to the terms of the Agreement and that it will not have any recourse to
the Company, the Trustee or the Loan Trustees except as otherwise expressly
provided in the Agreement, in any Note Document or in the Intercreditor
Agreement. This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby.
A copy of the Agreement may be examined during normal business hours at the
principal office of the Trustee, and at such other places, if any, designated by
the Trustee, by any Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any time
by the Company and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the Trust. Any such consent by the
Certificateholder of this Certificate shall be conclusive and binding on such
Certificateholder and upon all future Certificateholders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Certificateholders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the Register
upon surrender of this Certificate for registration of transfer at the offices
or agencies maintained by the Trustee in its capacity as Registrar, or by any
successor Registrar duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Registrar, duly executed by
the Certificateholder hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided Interest in the
Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in minimum denominations of $1,000 Fractional Undivided Interest and
integral multiples thereof except that one Certificate may be issued in a
different denomination. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of authorized
A-3
<PAGE> 15
denominations evidencing the same aggregate Fractional Undivided Interest in the
Trust, as requested by the Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee shall require payment of a sum sufficient to cover any
tax or governmental charge payable in connection therewith.
The Company, the Trustee, the Registrar and any Paying Agent shall deem
and treat the person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Company, the Trustee, the Registrar or
any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
the Agreement and the disposition of all property held as part of the Trust
Property.
Any Person acquiring or accepting this Certificate or an interest
herein will, by such acquisition or acceptance, be deemed to represent and
warrant to the Company, the Loan Trustees and the Trustee that either: (i) no
assets of an employee benefit plan subject to Title I of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or of an employee benefit
plan or an individual retirement account subject to Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code"), or any trust established under
such plan or account, have been used to purchase this Certificate or an interest
herein or (ii) the purchase and holding of this Certificate or interest herein
by such Person are exempt from the prohibited transaction restrictions of ERISA
and the Code pursuant to one or more prohibited transaction statutory or
administrative exemptions.
THIS CERTIFICATE AND THE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES AND CERTIFICATEHOLDERS HEREUNDER AND THEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
A-4
<PAGE> 16
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
AMERICAN AIRLINES, INC. PASS THROUGH TRUST 1999-1A-1
By : STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------------
Title:
---------------------------------
Dated:
---------------------------------
FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------------
Authorized Officer
A-5
<PAGE> 17
EXHIBIT B to
TRUST SUPPLEMENT NO. 1999-1A-1
[DTC Letter of Representations]
B-1
<PAGE> 18
SCHEDULE I-B to
TRUST SUPPLEMENT NO. 1999-1A-1
AGGREGATE EQUIPMENT NOTE PRINCIPAL PAYMENTS
<TABLE>
<CAPTION>
Date Scheduled Principal Payments
- ---- ----------------------------
<S> <C>
April 15, 2000 $ 9,709,596.65
October 15, 2000 23,673,769.33
April 15, 2001 9,709,596.65
October 15, 2001 3,764,916.00
April 15, 2002 9,709,596.65
October 15, 2002 3,764,916.00
April 15, 2003 9,709,596.65
October 15, 2003 3,764,916.00
April 15, 2004 9,709,596.65
October 15, 2004 3,764,916.00
April 15, 2005 9,709,596.65
October 15, 2005 3,764,916.00
April 15, 2006 9,709,596.65
October 15, 2006 3,764,916.00
April 15, 2007 9,709,596.65
October 15, 2007 3,764,916.00
April 15, 2008 9,709,596.65
October 15, 2008 3,764,916.00
April 15, 2009 9,709,532.82
----------------
Total: $ 150,889,000.00
</TABLE>
IB-1
<PAGE> 19
SCHEDULE II to
TRUST SUPPLEMENT NO. 1999-1A-1
EQUIPMENT NOTES, PRINCIPAL AMOUNTS
AND MATURITIES
<TABLE>
<CAPTION>
Equipment Notes Principal Amount Maturity
- --------------- ---------------- --------
<S> <C> <C>
Series 1999-1A-1 Equipment Note (N908AN) $ 7,169,266.67 April 15, 2009
Series 1999-1A-1 Equipment Note (N909AN) 7,169,783.33 April 15, 2009
Series 1999-1A-1 Equipment Note (N910AN) 7,169,783.33 April 15, 2009
Series 1999-1A-1 Equipment Note (N912AN) 7,177,533.33 April 15, 2009
Series 1999-1A-1 Equipment Note (N914AN) 6,572,344.83 October 15, 2008
Series 1999-1A-1 Equipment Note (N915AN) 6,572,816.50 October 15, 2008
Series 1999-1A-1 Equipment Note (N916AN) 6,577,061.50 October 15, 2008
Series 1999-1A-1 Equipment Note (N917AN) 6,577,061.50 October 15, 2008
Series 1999-1A-1 Equipment Note (N918AN) 6,581,306.50 October 15, 2008
Series 1999-1A-1 Equipment Note (N919AN) 6,581,306.50 October 15, 2008
Series 1999-1A-1 Equipment Note (N394AN) 13,738,416.50 April 15, 2009
Series 1999-1A-1 Equipment Note (N398AN) 13,956,716.67 April 15, 2009
Series 1999-1A-1 Equipment Note (N399AN) 13,972,216.67 April 15, 2009
Series 1999-1A-1 Equipment Note (N778AN) 20,535,950.00 April 15, 2009
Series 1999-1A-1 Equipment Note (N779AN) 20,537,436.17 April 15, 2009
----------------
Total: $ 150,889,000.00
</TABLE>
II-1
<PAGE> 20
SCHEDULE III to
TRUST SUPPLEMENT NO. 1999-1A-1
AIRCRAFT
<TABLE>
<CAPTION>
Aircraft Type Registration
- ------------- Number
------------
<S> <C>
Boeing 737-823 N908AN
Boeing 737-823 N909AN
Boeing 737-823 N910AN
Boeing 737-823 N912AN
Boeing 737-823 N914AN
Boeing 737-823 N915AN
Boeing 737-823 N916AN
Boeing 737-823 N917AN
Boeing 737-823 N918AN
Boeing 737-823 N919AN
Boeing 767-323ER N394AN
Boeing 767-323ER N398AN
Boeing 767-323ER N399AN
Boeing 777-223 N778AN
Boeing 777-223 N779AN
</TABLE>
III-1
<PAGE> 21
SCHEDULE IV to
TRUST SUPPLEMENT NO. 1999-1A-1
NOTE DOCUMENTS
<TABLE>
<CAPTION>
Aircraft
Registration
Aircraft Number Note Documents
- -------- ------ --------------
<S> <C> <C>
Boeing 737-823 N908AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N909AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N910AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N912AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N914AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
</TABLE>
IV-1
<PAGE> 22
SCHEDULE IV to
TRUST SUPPLEMENT NO. 1999-1A-1
<TABLE>
<S> <C> <C>
Boeing 737-823 N915AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1 B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N916AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N917AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N918AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N919AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
</TABLE>
IV-2
<PAGE> 23
SCHEDULE IV to
TRUST SUPPLEMENT NO. 1999-1A-1
<TABLE>
<S> <C> <C>
Boeing 767-323ER N394AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 767-323ER N398AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 767-323ER N399AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 777-223 N778AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 777-223 N779AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
</TABLE>
IV-3
<PAGE> 1
EXHIBIT 4(a)4
================================================================================
TRUST SUPPLEMENT NO. 1999-1A-2
Dated as of October 6, 1999
between
AMERICAN AIRLINES, INC.
and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
as Trustee,
to
PASS THROUGH TRUST AGREEMENT
Dated as of October 1, 1999
American Airlines, Inc. Pass Through Trust 1999-1A-2
7.024% American Airlines
Pass Through Certificates,
Series 1999-1A-2
================================================================================
<PAGE> 2
TRUST SUPPLEMENT NO. 1999-1A-2
This TRUST SUPPLEMENT NO. 1999-1A-2, dated as of October 6, 1999 (the
"Trust Supplement"), between American Airlines, Inc., a Delaware corporation,
and State Street Bank and Trust Company of Connecticut, National Association, a
national banking association, as Trustee, to the Pass Through Trust Agreement,
dated as of October 1,1999, between the Company (such term and other capitalized
terms used herein without definition being defined as provided in Section 1.01)
and the Trustee (the "Basic Agreement").
W I T N E S S E T H:
--------------------
WHEREAS, the Basic Agreement, which is unlimited as to the aggregate
face amount of Certificates that may be issued and authenticated thereunder, has
heretofore or concurrently herewith been executed and delivered;
WHEREAS, the Company is the Owner of fifteen Boeing aircraft described
in Schedule II (collectively, the "Aircraft");
WHEREAS, pursuant to each Indenture, the Company will issue the
Equipment Notes, which Equipment Notes are to be secured by a security interest
in all right, title and interest of the Company in and to the Aircraft and
certain other property described therein;
WHEREAS, the Trustee shall hereby declare the creation of the Class A-2
Trust (as defined below) for the benefit of Holders of the Class A-2
Certificates (as defined below) to be issued in respect of such Class A-2 Trust,
and the initial Holders of the Class A-2 Certificates, as grantors of such Class
A-2 Trust, by their respective acceptances of the Class A-2 Certificates, shall
join in the creation of the Class A-2 Trust with the Trustee;
WHEREAS, all Certificates to be issued by the Class A-2 Trust will
evidence Fractional Undivided Interests in the Class A-2 Trust and will have no
rights, benefits or interests in respect of any other separate Trust or the
property held therein;
WHEREAS, pursuant to the terms and conditions of the Basic Agreement,
as supplemented by this Trust Supplement, and the Note Purchase Agreements, the
Trustee on behalf of the Class A-2 Trust shall purchase the Equipment Notes
issued by the Company pursuant to the Indentures relating to the Aircraft having
the identical interest rate as, and final maturity dates not later than the
final Regular Distribution Date of, the Class A-2 Certificates issued hereunder
and shall hold such Equipment Notes in trust for the benefit of the Class A-2
Certificateholders;
1
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WHEREAS, pursuant to the terms and conditions of the Intercreditor
Agreement referred to in Section 3.01(h) hereof (the "Intercreditor Agreement"),
the Trustee and the other parties thereto will agree to the terms of
subordination set forth therein.
WHEREAS, all of the conditions and requirements necessary to make this
Trust Supplement, when duly executed and delivered, a valid, binding and legal
instrument in accordance with its terms and for the purposes herein expressed,
have been done, performed and fulfilled, and the execution and delivery of this
Trust Supplement in the form and with the terms hereof have been in all respects
duly authorized;
WHEREAS, this Trust Supplement is subject to the provisions of the
Trust Indenture Act and shall, to the extent applicable, be governed by such
provisions;
NOW THEREFORE, in consideration of the mutual agreements herein
contained, and of other good and valuable consideration the receipt and adequacy
of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Unless otherwise specified herein or the
context otherwise requires, capitalized terms used but not defined herein shall
have the respective meanings set forth, and shall be construed and interpreted
in the manner described, in the Basic Agreement or, to the extent not defined
therein, in the Intercreditor Agreement.
ARTICLE II
DECLARATION OF TRUST
Section 2.01. Declaration of Trust. The Trustee hereby declares the
creation of a Trust, designated the "American Airlines Pass Through Trust
1999-1A-2" (the "Class A-2 Trust"), for the benefit of the Holders of the Class
A-2 Certificates to be issued in respect of such Class A-2 Trust, and the
initial Holders of the Class A-2 Certificates, as grantors of such Class A-2
Trust, by their respective acceptances of the Class A-2 Certificates, join in
the creation of such Class A-2 Trust with the Trustee. The Trustee, by the
execution and delivery of this Trust Supplement, acknowledges its acceptance of
all right, title and interest in and to the Trust Property to be acquired
pursuant to Section 2.02 of the Basic Agreement and the Note Purchase Agreements
and the Trustee will hold such right, title and interest for the benefit of all
present and future Holders of the Class A-2 Certificates, upon the trusts set
forth in the Basic Agreement and this Trust Supplement.
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ARTICLE III
THE CERTIFICATES
Section 3.01. The Certificates. There is hereby created a series of
Certificates to be issued under this Agreement designated as "7.024% American
Airlines Pass Through Certificates, Series 1999-1A-2" (the "Class A-2
Certificates"). Each Class A-2 Certificate represents a Fractional Undivided
Interest in the Class A-2 Trust created hereby. The Class A-2 Certificates shall
be the only instruments evidencing a Fractional Undivided Interest in the Class
A-2 Trust.
The terms and conditions applicable to the Class A-2 Certificates and
the Class A-2 Trust are as follows:
(a) The aggregate face amount of the Class A-2 Certificates that may be
authenticated and delivered under this Agreement (except for Class A-2
Certificates authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Class A-2 Certificates pursuant to Sections
3.03, 3.04, 3.05 and 3.06 of the Basic Agreement) is $316,969,000.
(b) The Cut-off Date is November 6, 1999.
(c) The Regular Distribution Dates with respect to any payment of
Scheduled Payments means April 15 and October 15 of each year, commencing on
April 15, 2000, until payment of all of the Scheduled Payments to be made under
the Equipment Notes has been made. The principal amount of the Equipment Notes
to be held by the Class A-2 Trust is scheduled for payment on October 15, 2009.
(d) The Special Distribution Dates with respect to the Class A-2
Certificates means any Business Day on which a Special Payment is to be
distributed pursuant to this Agreement.
(e) The Class A-2 Certificates shall be in the form attached hereto as
Exhibit A, shall be Book-Entry Certificates and shall be subject to the
conditions set forth in the Letter of Representations between the Company and
The Depository Trust Company, as initial Clearing Agency, attached hereto as
Exhibit B.
(f) The proceeds of the Class A-2 Certificates issued by the Class A-2
Trust shall be used to acquire the Equipment Notes described in Schedule I, such
Equipment Notes to relate to the Aircraft described in Schedule II and the Note
Documents described in Schedule III.
(g) Any Person acquiring or accepting a Class A-2 Certificate or an
interest therein will, by such acquisition or acceptance, be deemed to represent
and warrant to the Company, the Loan Trustees and the Trustee that either (i) no
assets of an employee benefit plan subject to Title I of ERISA, or of an
employee benefit plan or an individual retirement account subject to Section
4975
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<PAGE> 5
of the Internal Revenue Code of 1986, as amended (the "Code"), or any trust
established under such plan or account, have been used to purchase Class A-2
Certificates or an interest therein or (ii) the purchase and holding of Class
A-2 Certificates or interests therein by such Person is exempt from the
prohibited transaction restrictions of ERISA and the Code pursuant to one or
more prohibited transaction statutory or administrative exemptions.
(h) The Class A-2 Certificates will be subject to the following
Intercreditor Agreement (and to the extent the terms thereof (including the
definitions of defined terms) are inconsistent with the terms of this Agreement,
such Intercreditor Agreement shall control): that certain Intercreditor
Agreement, dated as of October 6, 1999, among State Street Bank and Trust
Company of Connecticut, National Association, as Trustee under each Trust (as
defined therein), Bayerische Landesbank Girozentrale, as Class A-1 Liquidity
Provider, Class A-2 Liquidity Provider, Class B Liquidity Provider and Class C
Liquidity Provider, and State Street Bank and Trust Company of Connecticut,
National Association, as Subordination Agent thereunder. Potential Purchasers
shall have the rights upon the occurrence of a Triggering Event set forth in
Article IV hereof. The Trustee and, by acceptance of any Class A-2 Certificate,
each Certificateholder thereof, agrees to be bound by all of the provisions of
the Intercreditor Agreement, including the subordination provisions of Section
9.09 thereof.
(i) The Class A-2 Certificates will have the benefit of the following
Liquidity Facility: that certain Revolving Credit Agreement, dated as of October
6, 1999, between State Street Bank and Trust Company of Connecticut, National
Association, as Subordination Agent under the Intercreditor Agreement, as agent
and trustee for the Class A-2 Trust, and Bayerische Landesbank Girozentrale.
(j) Subject to Section 2.02(b) of the Basic Agreement, there will not
be any deposit agreement, escrow agreement or other similar arrangement prior to
delivery of the Aircraft.
(k) The Company may at any time purchase any of the Class A-2
Certificates at any price in the open market and may hold such Class A-2
Certificates to maturity.
(l) The Responsible Party is the Company.
(m) Section 9.02 of the Basic Agreement shall be amended with respect
to the Class A-2 Trust by deleting from the second line of the proviso in the
first sentence thereof the word "adversely".
Section 3.02. Delivery of Documents. The Trustee is hereby directed (i)
to execute and deliver the Intercreditor Agreement referred to in Section
3.01(h) of this Trust Supplement in the form delivered to the Trustee by the
Company and (ii) subject to the respective terms thereof, to perform its
obligations thereunder.
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ARTICLE IV
DEFAULT
Section 4.01. Purchase Rights of Certificateholders. (a) By acceptance
of its Class A-2 Certificate, each Class A-2 Certificateholder agrees that at
any time after the occurrence and during the continuation of a Triggering Event,
(i) if the Trustee is then the Controlling Party, each Class A-1
Certificateholder shall have the right to purchase all, but not less than all,
of the Class A-2 Certificates upon ten days' prior written notice to the Trustee
and each other Class A-1 Certificateholder, provided that (A) if prior to the
end of such ten-day period any other Class A-1 Certificateholder notifies such
purchasing Class A-1 Certificateholder that such other Class A-1
Certificateholder wants to participate in such purchase, then such other Class
A-1 Certificateholder may join with the purchasing Class A-1 Certificateholder
to purchase all, but not less than all, of the Class A-2 Certificates pro rata
based on the Fractional Undivided Interest in the Class A-1 Trust held by each
such Class A-1 Certificateholder and (B) if prior to the end of such ten-day
period any other Class A-1 Certificateholder fails to notify the purchasing
Class A-1 Certificateholder of such other Class A-1 Certificateholder's desire
to participate in such a purchase, then such other Class A-1 Certificateholder
shall lose its right to purchase the Class A-2 Certificates pursuant to this
Section 4.01(a)(i); and
(ii) if the Class A-1 Trustee is then the Controlling Party, each Class
A-2 Certificateholder shall have the right to purchase, for the purchase price
set forth in the Class A-1 Trust Agreement, all, but not less than all, of the
Class A-1 Certificates upon ten days' prior written notice to the Class A-1
Trustee and each other Class A-2 Certificateholder, provided that (A) if prior
to the end of such ten-day period any other Class A-2 Certificateholder notifies
such purchasing Class A-2 Certificateholder that such other Class A-2
Certificateholder wants to participate in such purchase, then such other Class
A-2 Certificateholder may join with the purchasing Class A-2 Certificateholder
to purchase all, but not less than all, of the Class A-1 Certificates pro rata
based on the Fractional Undivided Interest in the Class A-2 Trust held by each
such Class A-2 Certificateholder and (B) if prior to the end of such ten-day
period any other Class A-2 Certificateholder fails to notify the purchasing
Class A-2 Certificateholder of such other Class A-2 Certificateholder's desire
to participate in such a purchase, then such other Class A-2 Certificateholder
shall lose its right to purchase the Class A-1 Certificates pursuant to this
Section 4.01(a)(ii); and
(iii) each Class B Certificateholder shall have the right (which shall
not expire upon any purchase of the Class A-1 Certificates or the Class A-2
Certificates pursuant to clause (i) or (ii) above) to purchase all, but not less
than all, of the Class A-1 Certificates and the Class A-2 Certificates upon ten
days' prior written notice to the Trustee, the Class A-1 Trustee and each other
Class B Certificateholder, provided that (A) if prior to the end of such ten-day
period any other Class
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<PAGE> 7
B Certificateholder notifies such purchasing Class B Certificateholder that such
other Class B Certificateholder wants to participate in such purchase, then such
other Class B Certificateholder may join with the purchasing Class B
Certificateholder to purchase all, but not less than all, of the Class A-1
Certificates and the Class A-2 Certificates pro rata based on the Fractional
Undivided Interest in the Class B Trust held by each such Class B
Certificateholder and (B) if prior to the end of such ten-day period any other
Class B Certificateholder fails to notify the purchasing Class B
Certificateholder of such other Class B Certificateholder's desire to
participate in such a purchase, then such other Class B Certificateholder shall
lose its right to purchase the Class A-1 Certificates and the Class A-2
Certificates pursuant to this Section 4.01(a)(iii);
(iv) each Class C Certificateholder shall have the right (which shall
not expire upon any purchase of the Class A-1 Certificates or the Class A-2
Certificates pursuant to clause (i), (ii) or (iii) above) to purchase all, but
not less than all, of the Class A-1 Certificates, the Class A-2 Certificates and
the Class B Certificates upon ten days' prior written notice to the Trustee, the
Class A-1 Trustee, the Class B Trustee and each other Class C Certificateholder,
provided that (A) if prior to the end of such ten-day period any other Class C
Certificateholder notifies such purchasing Class C Certificateholder that such
other Class C Certificateholder wants to participate in such purchase, then such
other Class C Certificateholder may join with the purchasing Class C
Certificateholder to purchase all, but not less than all, of the Class A-1
Certificates, the Class A-2 Certificates and the Class B Certificates pro rata
based on the Fractional Undivided Interest in the Class C Trust held by each
such Class C Certificateholder and (B) if prior to the end of such ten-day
period any other Class C Certificateholder fails to notify the purchasing Class
C Certificateholder of such other Class C Certificateholder's desire to
participate in such a purchase, then such other Class C Certificateholder shall
lose its right to purchase the Class A-1 Certificates, the Class A-2
Certificates and the Class B Certificates pursuant to this Section 4.01(a)(iv);
and
(v) each Class D Certificateholder (if Class D Certificates are issued)
shall have the right (which shall not expire upon any purchase of the Class A-1
Certificates, the Class A-2 Certificates or the Class B Certificates pursuant to
clause (i), (ii), (iii) or (iv) above) to purchase all, but not less than all,
of the Class A-1 Certificates, the Class A-2 Certificates, the Class B
Certificates and the Class C Certificates upon ten days' prior written notice to
the Trustee, the Class A-1 Trustee, the Class B Trustee, the Class C Trustee and
each other Class D Certificateholder, provided that (A) if prior to the end of
such ten-day period any other Class D Certificateholder notifies such purchasing
Class D Certificateholder that such other Class D Certificateholder wants to
participate in such purchase, then such other Class D Certificateholder may join
with the purchasing Class D Certificateholder to purchase all, but not less than
all, of the Class A-1 Certificates, the Class A-2 Certificates, the Class B
Certificates and the Class C Certificates pro rata based on the Fractional
Undivided Interest in the Class D Trust held by each such Class D
Certificateholder and (B) if prior to the end of such ten-day period any other
Class D Certificateholder fails to notify the purchasing Class D
Certificateholder of such other Class D Certificateholder's desire to
participate in such a purchase, then such other Class D Certificateholder shall
lose its right to purchase the Class A-1
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<PAGE> 8
Certificates, the Class A-2 Certificates, the Class B Certificates and the Class
C Certificates pursuant to this Section 4.01(a)(v).
The purchase price with respect to the Class A-2 Certificates shall be
equal to the Pool Balance of the Class A-2 Certificates, together with accrued
and unpaid interest in respect thereof to the date of such purchase, without
premium, but including any other amounts then due and payable to the Class A-2
Certificateholders under this Agreement, the Intercreditor Agreement or any Note
Document or on or in respect of the Class A-2 Certificates; provided, however,
that if such purchase occurs after the Record Date relating to any Distribution
Date, such purchase price shall be reduced by the amount to be distributed
hereunder on such related Distribution Date (which deducted amounts shall remain
distributable to, and may be retained by, the Class A-2 Certificateholders as of
such Record Date); provided, further that no such purchase of Class A-2
Certificates pursuant to clause (iii), (iv) or (v) above shall be effective
unless the purchaser(s) shall certify to the Trustee that contemporaneously with
such purchase, such purchaser(s) is purchasing, pursuant to the terms of this
Agreement and the Intercreditor Agreement, all of the Class A-1 Certificates,
the Class A-2 Certificates, the Class B Certificates and the Class C
Certificates that are senior to the securities held by such purchaser(s). Each
payment of the purchase price of the Class A-2 Certificates referred to in the
first sentence hereof shall be made to an account or accounts designated by the
Trustee and each such purchase shall be subject to the terms of this Section
4.01(a). Each Class A-2 Certificateholder agrees by its acceptance of its
Certificate that it will, upon payment from such Class A-1 Certificateholder(s),
Class B Certificateholder(s), Class C Certificateholder(s) or Class D
Certificateholder(s), as the case may be, of the purchase price set forth in the
first sentence of this paragraph, forthwith sell, assign, transfer and convey to
the purchaser(s) thereof (without recourse, representation or warranty of any
kind except as to its own acts) all of the right, title, interest and obligation
of such Class A-2 Certificateholder in this Agreement, the Intercreditor
Agreement, the Liquidity Facility, the Note Documents and all Class A-2
Certificates held by such Class A-2 Certificateholder (excluding all right,
title and interest under any of the foregoing to the extent such right, title or
interest is with respect to an obligation not then due and payable as respects
any action or inaction or state of affairs occurring prior to such sale) and the
purchaser(s) shall assume all of such Class A-2 Certificateholder's obligations
under this Agreement, the Intercreditor Agreement, the Liquidity Facility, the
Note Documents and all such Class A-2 Certificates. The Class A-2 Certificates
will be deemed to be purchased on the date payment of the purchase price is made
notwithstanding the failure of any Class A-2 Certificateholder to deliver any
Class A-2 Certificate and, upon such a purchase, (i) the only rights of the
Class A-2 Certificateholders will be to deliver the Class A-2 Certificates and
(ii) if the purchaser(s) shall so request, each such Class A-2 Certificateholder
will comply with all the provisions of Section 3.04 of the Basic Agreement to
enable new Class A-2 Certificates to be issued to the purchaser(s) in such
denominations as it shall request. All charges and expenses in connection with
the issuance of any such new Class A-2 Certificates shall be borne by the
purchaser(s) thereof.
As used in this Section 4.01(a), the terms "Class A-1 Certificate",
"Class A-1 Certificateholder", "Class A-1 Trust", "Class A-1 Trust Agreement",
"Class A-1 Trustee", "Class
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A-2 Certificateholder", "Class A-2 Trust", "Class B Certificate", "Class B
Certificateholder", "Class B Trust", "Class B Trustee", "Class C Certificate",
"Class C Certificateholder", "Class C Trust", "Class C Trustee", "Class D
Certificate", "Class D Certificateholder", "Class D Trust" and "Class D Trustee"
shall have the respective meanings assigned to such terms in the Intercreditor
Agreement.
(b) This Section 4.01 supplements and, to the extent inconsistent with
any provision of Section 6.01(d) of the Basic Agreement, replaces the provisions
of Section 6.01(d) of the Basic Agreement. Notwithstanding anything to the
contrary set forth herein or in any Operative Agreement, the provisions of this
Section 4.01 may not be amended in any manner without the consent of each Class
A-1 Certificateholder, Class B Certificateholder, Class C Certificateholder or
Class D Certificateholder, if any, that would be adversely affected thereby.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.01. Final Termination Date. The respective obligations and
responsibilities of the Company and the Trustee created hereby and the Class A-2
Trust created hereby shall terminate upon the distribution to all
Certificateholders of Class A-2 Certificates and the Trustee of all amounts
required to be distributed to them pursuant to this Agreement and the
disposition of all property held as part of the Trust Property; provided,
however, that in no event shall the Trust created hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants of
Joseph P. Kennedy, Sr., the father of John F. Kennedy, former President of the
United States, living on the date of this Trust Supplement.
Section 5.02. Basic Agreement Ratified. Except and so far as herein
expressly provided, all of the provisions, terms and conditions of the Basic
Agreement are in all respects ratified and confirmed; and the Basic Agreement
and this Trust Supplement shall be taken, read and construed as one and the same
instrument.
Section 5.03. Governing Law. THIS AGREEMENT HAS BEEN DELIVERED IN THE
STATE OF NEW YORK AND THIS AGREEMENT AND THE CLASS A-2 CERTIFICATES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER AND THEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 5.04. Counterparts. This Trust Supplement may be executed in
any number of counterparts (and each of the parties shall not be required to
execute the same counterpart). Each counterpart of this Trust Supplement
including a signature page or pages executed by each of the
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parties hereto shall be an original counterpart of this Trust Supplement, but
all of such counterparts together shall constitute one instrument.
Section 5.05. Intention of Parties. The parties hereto intend that the
Class A-2 Trust be classified for United States federal income tax purposes as a
grantor trust under Part 1E of Chapter 1J of Subtitle A of the Internal Revenue
Code of 1986, as amended, and not as a trust or association taxable as a
corporation or as a partnership. Each Certificateholder of a Class A-2
Certificate, by its acceptance of its Class A-2 Certificate or a beneficial
interest therein, agrees to treat the Class A-2 Trust as a grantor trust for all
United States federal, state and local income tax purposes. The Trustee shall
not be authorized or empowered to do anything that would cause the Class A-2
Trust to fail to qualify as a grantor trust for such tax purposes (including as
subject to this restriction, acquiring any Aircraft by bidding the Equipment
Notes relating thereto or otherwise, or taking any action with respect to any
such Aircraft once acquired).
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IN WITNESS WHEREOF, the parties have caused this Trust Supplement to be
duly executed by their respective officers thereto duly authorized as of the
date first written above.
AMERICAN AIRLINES, INC.
By: /s/ JEFFREY C. CAMPBELL
---------------------------
Name: Jeffrey C. Campbell
Title: Vice President - Corporate
Development and Treasurer
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Trustee
By: /s/ JOHN G. CORREIA
---------------------------
Name: John G. Correia
Title: Assistant Secretary
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<PAGE> 12
EXHIBIT A to
TRUST SUPPLEMENT NO. 1999-1A-2
FORM OF CERTIFICATE
*Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to Issuer or
its agent for registration of transfer, exchange or payment, and any Certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
AMERICAN AIRLINES, INC. PASS THROUGH TRUST 1999-1A-2
7.024% AMERICAN AIRLINES PASS THROUGH CERTIFICATE, SERIES 1999-1A-2
Final Expected Regular Distribution Date: October 15, 2009
evidencing a fractional undivided interest
in a trust, the property of which includes
or will include, among other things, certain
Equipment Notes each secured by an Aircraft
owned by American Airlines, Inc.
<TABLE>
<S> <C> <C>
Certificate Cusip
No. ______ $____________ Fractional Undivided Interest No.____
representing 0.000315488% of the Trust
per $1,000 face amount
</TABLE>
THIS CERTIFIES THAT ________, for value received, is the registered
owner of a $______ (______ dollars) Fractional Undivided Interest in the
American Airlines Pass Through Trust, Series 1999-1A-2 (the "Trust") created by
State Street Bank and Trust Company of Connecticut, National Association, as
trustee (the "Trustee"), pursuant to a Pass Through Trust Agreement, dated as of
October 1, 1999 (the "Basic Agreement"), as supplemented by Trust Supplement No.
1999-1A-2 thereto dated October 6, 1999 (collectively, the "Agreement"), between
the Trustee and American Airlines, Inc., a corporation
- ------------------
*This legend to appear on Book-Entry Certificates to be deposited with
The Depository Trust Company.
A-1
<PAGE> 13
incorporated under Delaware law (the "Company"), a summary of certain of the
pertinent provisions of which is set forth below. To the extent not otherwise
defined herein, the capitalized terms used herein have the meanings assigned to
them in the Agreement. This Certificate is one of the duly authorized
Certificates designated as "7.024% American Airlines Pass Through Certificates,
Series 1999-1A-2" (herein called the "Certificates"). This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement.
By virtue of its acceptance hereof, the Certificateholder of this Certificate
assents to and agrees to be bound by all of the provisions of the Agreement and
the Intercreditor Agreement, including the subordination provisions of Section
9.09 of the Intercreditor Agreement. The property of the Trust includes or will
include certain Equipment Notes and all rights of the Trust and the Trustee, on
behalf of the Trust, to receive any payments under the Intercreditor Agreement
or the Liquidity Facility (the "Trust Property"). Each issue of the Equipment
Notes is or will be secured by, among other things, a security interest in
Aircraft owned by the Company.
The Certificates represent Fractional Undivided Interests in the Trust
and the Trust Property, and will have no rights, benefits or interest in respect
of any other separate trust established pursuant to the terms of the Basic
Agreement for any other series of certificates issued pursuant thereto.
Subject to and in accordance with the terms of the Agreement and the
Intercreditor Agreement, from funds then available to the Trustee, there will be
distributed on each April 15 and October 15 (a "Regular Distribution Date"),
commencing on April 15, 2000, to the Person in whose name this Certificate is
registered at the close of business on the 15th day preceding the Regular
Distribution Date, an amount in respect of the Scheduled Payments on the
Equipment Notes due on such Regular Distribution Date, the receipt of which has
been confirmed by the Trustee, equal to the product of the percentage interest
in the Trust evidenced by this Certificate and an amount equal to the sum of
such Scheduled Payments. Subject to and in accordance with the terms of the
Agreement and the Intercreditor Agreement, in the event that Special Payments on
the Equipment Notes are received by the Trustee, from funds then available to
the Trustee, there shall be distributed on the applicable Special Distribution
Date, to the Person in whose name this Certificate is registered at the close of
business on the 15th day preceding the Special Distribution Date, an amount in
respect of such Special Payments on the Equipment Notes, the receipt of which
has been confirmed by the Trustee, equal to the product of the percentage
interest in the Trust evidenced by this Certificate and an amount equal to the
sum of such Special Payments so received. If a Regular Distribution Date or
Special Distribution Date is not a Business Day, distribution shall be made on
the immediately following Business Day with the same force and effect as if made
on such Regular Distribution Date or Special Distribution Date and no interest
shall accrue during the intervening period. The Trustee shall mail notice of
each Special Payment and the Special Distribution Date therefor to the
Certificateholder of this Certificate.
Distributions on this Certificate will be made by the Trustee by check
mailed to the Person entitled thereto, without the presentation or surrender of
this Certificate or the making of any notation hereon, except that with respect
to Certificates registered on the Record Date in the name of a Clearing Agency
(or its nominee), such distributions shall be made by wire transfer. Except as
otherwise provided in the Agreement and notwithstanding the above, the final
distribution on this Certificate will be made after
A-2
<PAGE> 14
notice mailed by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency of the
Trustee specified in such notice.
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company, the Trustee or any
Loan Trustee or any Affiliate thereof. The Certificates are limited in right of
payment, all as more specifically set forth on the face hereof and in the
Agreement. All payments or distributions made to Certificateholders under the
Agreement shall be made only from the Trust Property and only to the extent that
the Trustee shall have sufficient income or proceeds from the Trust Property to
make such payments in accordance with the terms of the Agreement. Each
Certificateholder of this Certificate, by its acceptance hereof, agrees that it
will look solely to the income and proceeds from the Trust Property to the
extent available for any payment or distribution to such Certificateholder
pursuant to the terms of the Agreement and that it will not have any recourse to
the Company, the Trustee or the Loan Trustees except as otherwise expressly
provided in the Agreement, in any Note Document or in the Intercreditor
Agreement. This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby.
A copy of the Agreement may be examined during normal business hours at the
principal office of the Trustee, and at such other places, if any, designated by
the Trustee, by any Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any time
by the Company and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the Trust. Any such consent by the
Certificateholder of this Certificate shall be conclusive and binding on such
Certificateholder and upon all future Certificateholders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Certificateholders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the Register
upon surrender of this Certificate for registration of transfer at the offices
or agencies maintained by the Trustee in its capacity as Registrar, or by any
successor Registrar duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Registrar, duly executed by
the Certificateholder hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided Interest in the
Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in minimum denominations of $1,000 Fractional Undivided Interest and
integral multiples thereof except that one Certificate may be issued in a
different denomination. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of authorized
A-3
<PAGE> 15
denominations evidencing the same aggregate Fractional Undivided Interest in the
Trust, as requested by the Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee shall require payment of a sum sufficient to cover any
tax or governmental charge payable in connection therewith.
The Company, the Trustee, the Registrar and any Paying Agent shall deem
and treat the person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Company, the Trustee, the Registrar or
any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
the Agreement and the disposition of all property held as part of the Trust
Property.
Any Person acquiring or accepting this Certificate or an interest
herein will, by such acquisition or acceptance, be deemed to represent and
warrant to the Company, the Loan Trustees and the Trustee that either: (i) no
assets of an employee benefit plan subject to Title I of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or of an employee benefit
plan or an individual retirement account subject to Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code"), or any trust established under
such plan or account, have been used to purchase this Certificate or an interest
herein or (ii) the purchase and holding of this Certificate or interest herein
by such Person are exempt from the prohibited transaction restrictions of ERISA
and the Code pursuant to one or more prohibited transaction statutory or
administrative exemptions.
THIS CERTIFICATE AND THE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES AND CERTIFICATEHOLDERS HEREUNDER AND THEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
A-4
<PAGE> 16
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
AMERICAN AIRLINES, INC. PASS THROUGH TRUST 1999-1A-2
By: STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Trustee
By:
-------------------------------------
Title:
----------------------------------
Dated:
----------------------------------
FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Trustee
By:
-------------------------------------
Authorized Officer
A-5
<PAGE> 17
EXHIBIT B to
TRUST SUPPLEMENT NO. 1999-1A-2
[DTC Letter of Representations]
B-1
<PAGE> 18
SCHEDULE I to
TRUST SUPPLEMENT NO. 1999-1A-2
EQUIPMENT NOTES, PRINCIPAL AMOUNTS
AND MATURITIES
<TABLE>
<CAPTION>
Equipment Notes Principal Amount Maturity
- --------------- ---------------- --------
<S> <C> <C>
Series 1999-1A-2 Equipment Note (N908AN) $ 14,569,800.00 October 15, 2009
Series 1999-1A-2 Equipment Note (N909AN) 14,570,850.00 October 15, 2009
Series 1999-1A-2 Equipment Note (N910AN) 14,570,850.00 October 15, 2009
Series 1999-1A-2 Equipment Note (N912AN) 14,586,600.00 October 15, 2009
Series 1999-1A-2 Equipment Note (N914AN) 15,258,058.50 October 15, 2009
Series 1999-1A-2 Equipment Note (N915AN) 15,259,153.50 October 15, 2009
Series 1999-1A-2 Equipment Note (N916AN) 15,269,008.50 October 15, 2009
Series 1999-1A-2 Equipment Note (N917AN) 15,269,008.50 October 15, 2009
Series 1999-1A-2 Equipment Note (N918AN) 15,278,863.50 October 15, 2009
Series 1999-1A-2 Equipment Note (N919AN) 15,278,863.50 October 15, 2009
Series 1999-1A-2 Equipment Note (N394AN) 26,827,283.51 October 15, 2009
Series 1999-1A-2 Equipment Note (N398AN) 28,363,650.00 October 15, 2009
Series 1999-1A-2 Equipment Note (N399AN) 28,395,150.00 October 15, 2009
Series 1999-1A-2 Equipment Note (N778AN) 41,734,350.00 October 15, 2009
Series 1999-1A-2 Equipment Note (N779AN) 41,737,510.49 October 15, 2009
----------------
Total: $ 316,969,000.00
</TABLE>
I-1
<PAGE> 19
SCHEDULE II to
TRUST SUPPLEMENT NO. 1999-1A-2
AIRCRAFT
<TABLE>
<CAPTION>
Aircraft Type Registration
- ------------- Number
------------
<S> <C>
Boeing 737-823 N908AN
Boeing 737-823 N909AN
Boeing 737-823 N910AN
Boeing 737-823 N912AN
Boeing 737-823 N914AN
Boeing 737-823 N915AN
Boeing 737-823 N916AN
Boeing 737-823 N917AN
Boeing 737-823 N918AN
Boeing 737-823 N919AN
Boeing 767-323ER N394AN
Boeing 767-323ER N398AN
Boeing 767-323ER N399AN
Boeing 777-223 N778AN
Boeing 777-223 N779AN
</TABLE>
II-1
<PAGE> 20
SCHEDULE III to
TRUST SUPPLEMENT NO. 1999-1B
NOTE DOCUMENTS
<TABLE>
<CAPTION>
Aircraft
Registration
Aircraft Number Note Documents
- -------- ------ --------------
<S> <C> <C>
Boeing 737-823 N908AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999- A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N909AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N910AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N912AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N914AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
</TABLE>
III-1
<PAGE> 21
SCHEDULE III to
TRUST SUPPLEMENT NO. 1999-1B
<TABLE>
<S> <C> <C>
Boeing 737-823 N915AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N916AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N917AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N918AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N919AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
</TABLE>
III-2
<PAGE> 22
SCHEDULE III to
TRUST SUPPLEMENT NO. 1999-1B
<TABLE>
<S> <C> <C>
Boeing 767-323ER N394AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 767-323ER N398AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 767-323ER N399AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 777-223 N778AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 777-223 N779AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
</TABLE>
III-3
<PAGE> 1
Exhibit 4(a)6
================================================================================
TRUST SUPPLEMENT NO. 1999-1B
Dated as of October 6, 1999
between
AMERICAN AIRLINES, INC.
and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
as Trustee,
to
PASS THROUGH TRUST AGREEMENT
Dated as of October 1, 1999
American Airlines, Inc. Pass Through Trust 1999-1B
7.324% American Airlines
Pass Through Certificates,
Series 1999-1B
================================================================================
<PAGE> 2
TRUST SUPPLEMENT NO. 1999-1B
This TRUST SUPPLEMENT NO. 1999-1B, dated as of October 6, 1999 (the
"Trust Supplement"), between American Airlines, Inc., a Delaware corporation,
and State Street Bank and Trust Company of Connecticut, National Association, a
national banking association, as Trustee, to the Pass Through Trust Agreement,
dated as of October 1,1999, between the Company (such term and other capitalized
terms used herein without definition being defined as provided in Section 1.01)
and the Trustee (the "Basic Agreement").
W I T N E S S E T H:
--------------------------
WHEREAS, the Basic Agreement, which is unlimited as to the aggregate
face amount of Certificates that may be issued and authenticated thereunder, has
heretofore or concurrently herewith been executed and delivered;
WHEREAS, the Company is the Owner of fifteen Boeing aircraft described
in Schedule II (collectively, the "Aircraft");
WHEREAS, pursuant to each Indenture, the Company will issue the
Equipment Notes, which Equipment Notes are to be secured by a security interest
in all right, title and interest of the Company in and to the Aircraft and
certain other property described therein;
WHEREAS, the Trustee shall hereby declare the creation of the Class B
Trust (as defined below) for the benefit of Holders of the Class B Certificates
(as defined below) to be issued in respect of such Class B Trust, and the
initial Holders of the Class B Certificates, as grantors of such Class B Trust,
by their respective acceptances of the Class B Certificates, shall join in the
creation of the Class B Trust with the Trustee;
WHEREAS, all Certificates to be issued by the Class B Trust will
evidence Fractional Undivided Interests in the Class B Trust and will have no
rights, benefits or interests in respect of any other separate Trust or the
property held therein;
WHEREAS, pursuant to the terms and conditions of the Basic Agreement,
as supplemented by this Trust Supplement, and the Note Purchase Agreements, the
Trustee on behalf of the Class B Trust shall purchase the Equipment Notes issued
by the Company pursuant to the Indentures relating to the Aircraft having the
identical interest rate as, and final maturity dates not later than the final
Regular Distribution Date of, the Class B Certificates issued hereunder and
shall hold such Equipment Notes in trust for the benefit of the Class B
Certificateholders;
1
<PAGE> 3
WHEREAS, pursuant to the terms and conditions of the Intercreditor
Agreement referred to in Section 3.01(h) hereof (the "Intercreditor Agreement"),
the Trustee and the other parties thereto will agree to the terms of
subordination set forth therein.
WHEREAS, all of the conditions and requirements necessary to make this
Trust Supplement, when duly executed and delivered, a valid, binding and legal
instrument in accordance with its terms and for the purposes herein expressed,
have been done, performed and fulfilled, and the execution and delivery of this
Trust Supplement in the form and with the terms hereof have been in all respects
duly authorized;
WHEREAS, this Trust Supplement is subject to the provisions of the
Trust Indenture Act and shall, to the extent applicable, be governed by such
provisions;
NOW THEREFORE, in consideration of the mutual agreements herein
contained, and of other good and valuable consideration the receipt and adequacy
of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Unless otherwise specified herein or the
context otherwise requires, capitalized terms used but not defined herein shall
have the respective meanings set forth, and shall be construed and interpreted
in the manner described, in the Basic Agreement or, to the extent not defined
therein, in the Intercreditor Agreement.
ARTICLE II
DECLARATION OF TRUST
Section 2.01. Declaration of Trust. The Trustee hereby declares the
creation of a Trust, designated the "American Airlines Pass Through Trust
1999-1B" (the "Class B Trust"), for the benefit of the Holders of the Class B
Certificates to be issued in respect of such Class B Trust, and the initial
Holders of the Class B Certificates, as grantors of such Class B Trust, by their
respective acceptances of the Class B Certificates, join in the creation of such
Class B Trust with the Trustee. The Trustee, by the execution and delivery of
this Trust Supplement, acknowledges its acceptance of all right, title and
interest in and to the Trust Property to be acquired pursuant to Section 2.02 of
the Basic Agreement and the Note Purchase Agreements and the Trustee will hold
such right, title and interest for the benefit of all present and future Holders
of the Class B Certificates, upon the trusts set forth in the Basic Agreement
and this Trust Supplement.
2
<PAGE> 4
ARTICLE III
THE CERTIFICATES
Section 3.01. The Certificates. There is hereby created a series of
Certificates to be issued under this Agreement designated as "7.324% American
Airlines Pass Through Certificates, Series 1999-1B" (the "Class B
Certificates"). Each Class B Certificate represents a Fractional Undivided
Interest in the Class B Trust created hereby. The Class B Certificates shall be
the only instruments evidencing a Fractional Undivided Interest in the Class B
Trust.
The terms and conditions applicable to the Class B Certificates and the
Class B Trust are as follows:
(a) The aggregate face amount of the Class B Certificates that may be
authenticated and delivered under this Agreement (except for Class B
Certificates authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Class B Certificates pursuant to Sections
3.03, 3.04, 3.05 and 3.06 of the Basic Agreement) is $84,525,000.
(b) The Cut-off Date is November 6, 1999.
(c) The Regular Distribution Dates with respect to any payment of
Scheduled Payments means April 15 and October 15 of each year, commencing on
April 15, 2000, until payment of all of the Scheduled Payments to be made under
the Equipment Notes has been made. The principal amount of the Equipment Notes
to be held by the Class B Trust is scheduled for payment on October 15, 2009.
(d) The Special Distribution Dates with respect to the Class B
Certificates means any Business Day on which a Special Payment is to be
distributed pursuant to this Agreement.
(e) The Class B Certificates shall be in the form attached hereto as
Exhibit A, shall be Book-Entry Certificates and shall be subject to the
conditions set forth in the Letter of Representations between the Company and
The Depository Trust Company, as initial Clearing Agency, attached hereto as
Exhibit B.
(f) The proceeds of the Class B Certificates issued by the Class B
Trust shall be used to acquire the Equipment Notes described in Schedule I, such
Equipment Notes to relate to the Aircraft described in Schedule II and the Note
Documents described in Schedule III.
(g) Any Person acquiring or accepting a Class B Certificate or an
interest therein will, by such acquisition or acceptance, be deemed to represent
and warrant to the Company, the Loan Trustees and the Trustee that either (i) no
assets of an employee benefit plan subject to Title I of ERISA, or of an
employee benefit plan or an individual retirement account subject to Section
4975
3
<PAGE> 5
of the Internal Revenue Code of 1986, as amended (the "Code"), or any trust
established under such plan or account, have been used to purchase Class B
Certificates or an interest therein or (ii) the purchase and holding of Class B
Certificates or interests therein by such Person is exempt from the prohibited
transaction restrictions of ERISA and the Code pursuant to one or more
prohibited transaction statutory or administrative exemptions.
(h) The Class B Certificates will be subject to the following
Intercreditor Agreement (and to the extent the terms thereof (including the
definitions of defined terms) are inconsistent with the terms of this Agreement,
such Intercreditor Agreement shall control): that certain Intercreditor
Agreement, dated as of October 6, 1999, among State Street Bank and Trust
Company of Connecticut, National Association, as Trustee under each Trust (as
defined therein), Bayerische Landesbank Girozentrale, as Class A-1 Liquidity
Provider, Class A-2 Liquidity Provider, Class B Liquidity Provider and Class C
Liquidity Provider, and State Street Bank and Trust Company of Connecticut,
National Association, as Subordination Agent thereunder. Potential Purchasers
shall have the rights upon the occurrence of a Triggering Event set forth in
Article IV hereof. The Trustee and, by acceptance of any Class B Certificate,
each Certificateholder thereof, agrees to be bound by all of the provisions of
the Intercreditor Agreement, including the subordination provisions of Section
9.09 thereof.
(i) The Class B Certificates will have the benefit of the following
Liquidity Facility: that certain Revolving Credit Agreement, dated as of October
6, 1999, between State Street Bank and Trust Company of Connecticut, National
Association, as Subordination Agent under the Intercreditor Agreement, as agent
and trustee for the Class B Trust, and Bayerische Landesbank Girozentrale.
(j) Subject to Section 2.02(b) of the Basic Agreement, there will not
be any deposit agreement, escrow agreement or other similar arrangement prior to
delivery of the Aircraft.
(k) The Company may at any time purchase any of the Class B
Certificates at any price in the open market and may hold such Class B
Certificates to maturity.
(l) The Responsible Party is the Company.
(m) Section 9.02 of the Basic Agreement shall be amended with respect
to the Class B Trust by deleting from the second line of the proviso in the
first sentence thereof the word "adversely".
Section 3.02. Delivery of Documents. The Trustee is hereby directed
(i) to execute and deliver the Intercreditor Agreement referred to in Section
3.01(h) of this Trust Supplement in the form delivered to the Trustee by the
Company and (ii) subject to the respective terms thereof, to perform its
obligations thereunder.
4
<PAGE> 6
ARTICLE IV
DEFAULT
Section 4.01. Purchase Rights of Certificateholders. (a) By acceptance
of its Class B Certificate, each Class B Certificateholder agrees that at any
time after the occurrence and during the continuation of a Triggering Event,
(i) each Class B Certificateholder shall have the right (which shall
not expire upon any purchase of the Class A-1 Certificates pursuant to the Class
A-2 Trust Agreement or the Class A-2 Certificates pursuant to the Class A-1
Trust Agreement) to purchase, for the purchase price set forth in the Class A-1
Trust Agreement and the Class A-2 Trust Agreement, respectively, all, but not
less than all, of the Class A-1 Certificates and the Class A-2 Certificates upon
ten days' prior written notice to the Class A-1 Trustee, the Class A-2 Trustee
and each other Class B Certificateholder, provided that (A) if prior to the end
of such ten-day period any other Class B Certificateholder notifies such
purchasing Class B Certificateholder that such other Class B Certificateholder
wants to participate in such purchase, then such other Class B Certificateholder
may join with the purchasing Class B Certificateholder to purchase all, but not
less than all, of the Class A-1 Certificates and the Class A-2 Certificates pro
rata based on the Fractional Undivided Interest in the Class B Trust held by
each such Class B Certificateholder and (B) if prior to the end of such ten-day
period any other Class B Certificateholder fails to notify the purchasing Class
B Certificateholder of such other Class B Certificateholder's desire to
participate in such a purchase, then such other Class B Certificateholder shall
lose its right to purchase the Class A-1 Certificates and the Class A-2
Certificates pursuant to this Section 4.01(a)(i);
(ii) each Class C Certificateholder shall have the right (which shall
not expire upon any purchase of the Class A-1 Certificates pursuant to the Class
A-2 Trust Agreement, the Class A-2 Certificates pursuant to the Class A-1 Trust
Agreement or the Class A-1 Certificates and Class A-2 Certificates pursuant to
clause (i) above) to purchase all, but not less than all, of the Class A-1
Certificates, the Class A-2 Certificates and the Class B Certificates upon ten
days' prior written notice to the Class A-1 Trustee, the Class A-2 Trustee, the
Trustee and each other Class C Certificateholder, provided that (A) if prior to
the end of such ten-day period any other Class C Certificateholder notifies such
purchasing Class C Certificateholder that such other Class C Certificateholder
wants to participate in such purchase, then such other Class C Certificateholder
may join with the purchasing Class C Certificateholder to purchase all, but not
less than all, of the Class A-1 Certificates, the Class A-2 Certificates and the
Class B Certificates pro rata based on the Fractional Undivided Interest in the
Class C Trust held by each such Class C Certificateholder and (B) if prior to
the end of such ten-day period any other Class C Certificateholder fails to
notify the purchasing Class C Certificateholder of such other Class C
Certificateholder's desire to participate in such a purchase, then such other
Class C Certificateholder shall lose its right to purchase the Class A-1
Certificates, the Class A-2 Certificates and the Class B Certificates pursuant
to this Section 4.01(a)(ii); and
5
<PAGE> 7
(iii) each Class D Certificateholder (if Class D Certificates are
issued) shall have the right (which shall not expire upon any purchase of the
Class A-1 Certificates pursuant to the Class A-2 Trust Agreement, the Class A-2
Certificates pursuant to the Class A-1 Trust Agreement or the Class A-1
Certificates, Class A-2 Certificates or Class B Certificates pursuant to clause
(i) or (ii) above) to purchase all, but not less than all, of the Class A-1
Certificates, the Class A-2 Certificates, the Class B Certificates and the Class
C Certificates upon ten days' prior written notice to the Class A-1 Trustee, the
Class A-2 Trustee, the Trustee, the Class C Trustee and each other Class D
Certificateholder, provided that (A) if prior to the end of such ten-day period
any other Class D Certificateholder notifies such purchasing Class D
Certificateholder that such other Class D Certificateholder wants to participate
in such purchase, then such other Class D Certificateholder may join with the
purchasing Class D Certificateholder to purchase all, but not less than all, of
the Class A-1 Certificates, the Class A-2 Certificates, the Class B Certificates
and the Class C Certificates pro rata based on the Fractional Undivided Interest
in the Class D Trust held by each such Class D Certificateholder and (B) if
prior to the end of such ten-day period any other Class D Certificateholder
fails to notify the purchasing Class D Certificateholder of such other Class D
Certificateholder's desire to participate in such a purchase, then such other
Class D Certificateholder shall lose its right to purchase the Class A-1
Certificates, the Class A-2 Certificates, the Class B Certificates and the Class
C Certificates pursuant to this Section 4.01(a)(iii).
The purchase price with respect to the Class B Certificates shall be
equal to the Pool Balance of the Class B Certificates, together with accrued and
unpaid interest in respect thereof to the date of such purchase, without
premium, but including any other amounts then due and payable to the Class B
Certificateholders under this Agreement, the Intercreditor Agreement or any Note
Document or on or in respect of the Class B Certificates; provided, however,
that if such purchase occurs after the Record Date relating to any Distribution
Date, such purchase price shall be reduced by the amount to be distributed
hereunder on such related Distribution Date (which deducted amounts shall remain
distributable to, and may be retained by, the Class B Certificateholders as of
such Record Date); provided, further that no such purchase of Class B
Certificates pursuant to this Section 4.01(a) shall be effective unless the
purchaser(s) shall certify to the Trustee that contemporaneously with such
purchase, such purchaser(s) is purchasing, pursuant to the terms of this
Agreement and the Intercreditor Agreement, all of the Class A-1 Certificates,
the Class A-2 Certificates, the Class B Certificates and the Class C
Certificates that are senior to the securities held by such purchaser(s). Each
payment of the purchase price of the Class B Certificates referred to in the
first sentence hereof shall be made to an account or accounts designated by the
Trustee and each such purchase shall be subject to the terms of this Section
4.01(a). Each Class B Certificateholder agrees by its acceptance of its
Certificate that it will, upon payment from such Class C Certificateholder(s) or
Class D Certificateholder(s), as the case may be, of the purchase price set
forth in the first sentence of this paragraph, forthwith sell, assign, transfer
and convey to the purchaser(s) thereof (without recourse, representation or
warranty of any kind except as to its own acts) all of the right, title,
interest and obligation of such Class B Certificateholder in this Agreement, the
Intercreditor Agreement, the Liquidity Facility, the Note Documents and all
Class B Certificates held by such Class B Certificateholder (excluding all
right, title and interest under any of the foregoing to the extent such
6
<PAGE> 8
right, title or interest is with respect to an obligation not then due and
payable as respects any action or inaction or state of affairs occurring prior
to such sale) and the purchaser(s) shall assume all of such Class B
Certificateholder's obligations under this Agreement, the Intercreditor
Agreement, the Liquidity Facility, the Note Documents and all such Class B
Certificates. The Class B Certificates will be deemed to be purchased on the
date payment of the purchase price is made notwithstanding the failure of any
Class B Certificateholder to deliver any Class B Certificate and, upon such a
purchase, (i) the only rights of the Class B Certificateholders will be to
deliver the Class B Certificates and (ii) if the purchaser(s) shall so request,
each such Class B Certificateholder will comply with all the provisions of
Section 3.04 of the Basic Agreement to enable new Class B Certificates to be
issued to the purchaser(s) in such denominations as it shall request. All
charges and expenses in connection with the issuance of any such new Class B
Certificates shall be borne by the purchaser(s) thereof.
As used in this Section 4.01(a), the terms "Class A-1 Certificate",
"Class A-1 Certificateholder", "Class A-1 Trust", "Class A-1 Trust Agreement",
"Class A-1 Trustee", "Class A-2 Certificate", "Class A-2 Certificateholder",
"Class A-2 Trust", "Class A-2 Trust Agreement", "Class A-2 Trustee", "Class B
Certificateholder", "Class B Trust", "Class C Certificate", "Class C
Certificateholder", "Class C Trust", "Class C Trustee", "Class D Certificate",
"Class D Certificateholder", "Class D Trust" and "Class D Trustee" shall have
the respective meanings assigned to such terms in the Intercreditor Agreement.
(b) This Section 4.01 supplements and, to the extent inconsistent with
any provision of Section 6.01(d) of the Basic Agreement, replaces the provisions
of Section 6.01(d) of the Basic Agreement. Notwithstanding anything to the
contrary set forth herein or in any Operative Agreement, the provisions of this
Section 4.01 may not be amended in any manner without the consent of each Class
A-1 Certificateholder, Class A-2 Certificateholder, Class C Certificateholder or
Class D Certificateholder, if any, that would be adversely affected thereby.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.01. Final Termination Date. The respective obligations and
responsibilities of the Company and the Trustee created hereby and the Class B
Trust created hereby shall terminate upon the distribution to all
Certificateholders of Class B Certificates and the Trustee of all amounts
required to be distributed to them pursuant to this Agreement and the
disposition of all property held as part of the Trust Property; provided,
however, that in no event shall the Trust created hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants of
Joseph P. Kennedy, Sr., the father of John F. Kennedy, former President of the
United States, living on the date of this Trust Supplement.
7
<PAGE> 9
Section 5.02. Basic Agreement Ratified. Except and so far as herein
expressly provided, all of the provisions, terms and conditions of the Basic
Agreement are in all respects ratified and confirmed; and the Basic Agreement
and this Trust Supplement shall be taken, read and construed as one and the same
instrument.
Section 5.03. Governing Law. THIS AGREEMENT HAS BEEN DELIVERED IN THE
STATE OF NEW YORK AND THIS AGREEMENT AND THE CLASS B CERTIFICATES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER AND THEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 5.04. Counterparts. This Trust Supplement may be executed in
any number of counterparts (and each of the parties shall not be required to
execute the same counterpart). Each counterpart of this Trust Supplement
including a signature page or pages executed by each of the parties hereto shall
be an original counterpart of this Trust Supplement, but all of such
counterparts together shall constitute one instrument.
Section 5.05. Intention of Parties. The parties hereto intend that the
Class B Trust be classified for United States federal income tax purposes as a
grantor trust under Part 1E of Chapter 1J of Subtitle A of the Internal Revenue
Code of 1986, as amended, and not as a trust or association taxable as a
corporation or as a partnership. Each Certificateholder of a Class B
Certificate, by its acceptance of its Class B Certificate or a beneficial
interest therein, agrees to treat the Class B Trust as a grantor trust for all
United States federal, state and local income tax purposes. The Trustee shall
not be authorized or empowered to do anything that would cause the Class B Trust
to fail to qualify as a grantor trust for such tax purposes (including as
subject to this restriction, acquiring any Aircraft by bidding the Equipment
Notes relating thereto or otherwise, or taking any action with respect to any
such Aircraft once acquired).
8
<PAGE> 10
IN WITNESS WHEREOF, the parties have caused this Trust Supplement to be
duly executed by their respective officers thereto duly authorized as of the
date first written above.
AMERICAN AIRLINES, INC.
By: /s/ JEFFREY C. CAMPBELL
---------------------------------------
Name: Jeffrey C. Campbell
Title: Vice President - Corporate
Development and Treasurer
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Trustee
By: /s/ JOHN G. CORREIA
---------------------------------------
Name: John G. Correia
Title: Assistant Secretary
9
<PAGE> 11
EXHIBIT A to
TRUST SUPPLEMENT NO. 1999-1B
FORM OF CERTIFICATE
*Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to Issuer or
its agent for registration of transfer, exchange or payment, and any Certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
AMERICAN AIRLINES, INC. PASS THROUGH TRUST 1999-1B
7.324% AMERICAN AIRLINES PASS THROUGH CERTIFICATE, SERIES 1999-1B
Final Expected Regular Distribution Date: October 15, 2009
evidencing a fractional undivided interest
in a trust, the property of which includes
or will include, among other things, certain
Equipment Notes each secured by an Aircraft
owned by American Airlines, Inc.
Certificate Cusip
No. ______ $____________ Fractional Undivided Interest representing No.____
0.001183082% of the Trust per $1,000 face amount
THIS CERTIFIES THAT ________, for value received, is the registered
owner of a $______ (______ dollars) Fractional Undivided Interest in the
American Airlines Pass Through Trust, Series 1999-1B (the "Trust") created by
State Street Bank and Trust Company of Connecticut, National Association, as
trustee (the "Trustee"), pursuant to a Pass Through Trust Agreement, dated as of
October 1, 1999 (the "Basic Agreement"), as supplemented by Trust Supplement No.
1999-1B thereto dated October 6, 1999 (collectively, the "Agreement"), between
the Trustee and American Airlines, Inc., a corporation
- --------
*This legend to appear on Book-Entry Certificates to be deposited with
The Depository Trust Company.
A-1
<PAGE> 12
incorporated under Delaware law (the "Company"), a summary of certain of the
pertinent provisions of which is set forth below. To the extent not otherwise
defined herein, the capitalized terms used herein have the meanings assigned to
them in the Agreement. This Certificate is one of the duly authorized
Certificates designated as "7.324% American Airlines Pass Through Certificates,
Series 1999-1B" (herein called the "Certificates"). This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement.
By virtue of its acceptance hereof, the Certificateholder of this Certificate
assents to and agrees to be bound by all of the provisions of the Agreement and
the Intercreditor Agreement, including the subordination provisions of Section
9.09 of the Intercreditor Agreement. The property of the Trust includes or will
include certain Equipment Notes and all rights of the Trust and the Trustee, on
behalf of the Trust, to receive any payments under the Intercreditor Agreement
or the Liquidity Facility (the "Trust Property"). Each issue of the Equipment
Notes is or will be secured by, among other things, a security interest in
Aircraft owned by the Company.
The Certificates represent Fractional Undivided Interests in the Trust
and the Trust Property, and will have no rights, benefits or interest in respect
of any other separate trust established pursuant to the terms of the Basic
Agreement for any other series of certificates issued pursuant thereto.
Subject to and in accordance with the terms of the Agreement and the
Intercreditor Agreement, from funds then available to the Trustee, there will be
distributed on each April 15 and October 15 (a "Regular Distribution Date"),
commencing on April 15, 2000, to the Person in whose name this Certificate is
registered at the close of business on the 15th day preceding the Regular
Distribution Date, an amount in respect of the Scheduled Payments on the
Equipment Notes due on such Regular Distribution Date, the receipt of which has
been confirmed by the Trustee, equal to the product of the percentage interest
in the Trust evidenced by this Certificate and an amount equal to the sum of
such Scheduled Payments. Subject to and in accordance with the terms of the
Agreement and the Intercreditor Agreement, in the event that Special Payments on
the Equipment Notes are received by the Trustee, from funds then available to
the Trustee, there shall be distributed on the applicable Special Distribution
Date, to the Person in whose name this Certificate is registered at the close of
business on the 15th day preceding the Special Distribution Date, an amount in
respect of such Special Payments on the Equipment Notes, the receipt of which
has been confirmed by the Trustee, equal to the product of the percentage
interest in the Trust evidenced by this Certificate and an amount equal to the
sum of such Special Payments so received. If a Regular Distribution Date or
Special Distribution Date is not a Business Day, distribution shall be made on
the immediately following Business Day with the same force and effect as if made
on such Regular Distribution Date or Special Distribution Date and no interest
shall accrue during the intervening period. The Trustee shall mail notice of
each Special Payment and the Special Distribution Date therefor to the
Certificateholder of this Certificate.
Distributions on this Certificate will be made by the Trustee by check
mailed to the Person entitled thereto, without the presentation or surrender of
this Certificate or the making of any notation hereon, except that with respect
to Certificates registered on the Record Date in the name of a Clearing Agency
(or its nominee), such distributions shall be made by wire transfer. Except as
otherwise provided in the Agreement and notwithstanding the above, the final
distribution on this Certificate will be made after
A-2
<PAGE> 13
notice mailed by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency of the
Trustee specified in such notice.
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company, the Trustee or any
Loan Trustee or any Affiliate thereof. The Certificates are limited in right of
payment, all as more specifically set forth on the face hereof and in the
Agreement. All payments or distributions made to Certificateholders under the
Agreement shall be made only from the Trust Property and only to the extent that
the Trustee shall have sufficient income or proceeds from the Trust Property to
make such payments in accordance with the terms of the Agreement. Each
Certificateholder of this Certificate, by its acceptance hereof, agrees that it
will look solely to the income and proceeds from the Trust Property to the
extent available for any payment or distribution to such Certificateholder
pursuant to the terms of the Agreement and that it will not have any recourse to
the Company, the Trustee or the Loan Trustees except as otherwise expressly
provided in the Agreement, in any Note Document or in the Intercreditor
Agreement. This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby.
A copy of the Agreement may be examined during normal business hours at the
principal office of the Trustee, and at such other places, if any, designated by
the Trustee, by any Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any time
by the Company and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the Trust. Any such consent by the
Certificateholder of this Certificate shall be conclusive and binding on such
Certificateholder and upon all future Certificateholders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Certificateholders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the Register
upon surrender of this Certificate for registration of transfer at the offices
or agencies maintained by the Trustee in its capacity as Registrar, or by any
successor Registrar duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Registrar, duly executed by
the Certificateholder hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided Interest in the
Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in minimum denominations of $1,000 Fractional Undivided Interest and
integral multiples thereof except that one Certificate may be issued in a
different denomination. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of authorized
A-3
<PAGE> 14
denominations evidencing the same aggregate Fractional Undivided Interest in the
Trust, as requested by the Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee shall require payment of a sum sufficient to cover any
tax or governmental charge payable in connection therewith.
The Company, the Trustee, the Registrar and any Paying Agent shall deem
and treat the person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Company, the Trustee, the Registrar or
any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
the Agreement and the disposition of all property held as part of the Trust
Property.
Any Person acquiring or accepting this Certificate or an interest
herein will, by such acquisition or acceptance, be deemed to represent and
warrant to the Company, the Loan Trustees and the Trustee that either: (i) no
assets of an employee benefit plan subject to Title I of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or of an employee benefit
plan or an individual retirement account subject to Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code"), or any trust established under
such plan or account, have been used to purchase this Certificate or an interest
herein or (ii) the purchase and holding of this Certificate or interest herein
by such Person are exempt from the prohibited transaction restrictions of ERISA
and the Code pursuant to one or more prohibited transaction statutory or
administrative exemptions.
THIS CERTIFICATE AND THE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES AND CERTIFICATEHOLDERS HEREUNDER AND THEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
A-4
<PAGE> 15
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
AMERICAN AIRLINES, INC. PASS THROUGH TRUST 1999-1B
By: STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Trustee
By: ___________________________
Title:__________________________
Dated:_________________________
FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Trustee
By:____________________________
Authorized Officer
A-5
<PAGE> 16
EXHIBIT B to
TRUST SUPPLEMENT NO. 1999-1B
[DTC Letter of Representations]
B-1
<PAGE> 17
SCHEDULE I to
TRUST SUPPLEMENT NO. 1999-1B
EQUIPMENT NOTES, PRINCIPAL AMOUNTS
AND MATURITIES
<TABLE>
<CAPTION>
Equipment Notes Principal Amount Maturity
- --------------- ---------------- --------
<S> <C> <C>
Series 1999-1B Equipment Note (N908AN) $ 3,885,280.00 October 15, 2009
Series 1999-1B Equipment Note (N909AN) 3,885,560.00 October 15, 2009
Series 1999-1B Equipment Note (N910AN) 3,885,560.00 October 15, 2009
Series 1999-1B Equipment Note (N912AN) 3,889,760.00 October 15, 2009
Series 1999-1B Equipment Note (N914AN) 4,068,815.60 October 15, 2009
Series 1999-1B Equipment Note (N915AN) 4,069,107.60 October 15, 2009
Series 1999-1B Equipment Note (N916AN) 4,071,735.60 October 15, 2009
Series 1999-1B Equipment Note (N917AN) 4,071,735.60 October 15, 2009
Series 1999-1B Equipment Note (N918AN) 4,074,363.60 October 15, 2009
Series 1999-1B Equipment Note (N919AN) 4,074,363.60 October 15, 2009
Series 1999-1B Equipment Note (N394AN) 7,153,942.27 October 15, 2009
Series 1999-1B Equipment Note (N398AN) 7,563,640.00 October 15, 2009
Series 1999-1B Equipment Note (N399AN) 7,572,040.00 October 15, 2009
Series 1999-1B Equipment Note (N778AN) 11,129,160.00 October 15, 2009
Series 1999-1B Equipment Note (N779AN) 11,129,936.13 October 15, 2009
-------------
Total $84,525,000.00
</TABLE>
I-1
<PAGE> 18
SCHEDULE II to
TRUST SUPPLEMENT NO. 1999-1B
<TABLE>
<CAPTION>
AIRCRAFT
Aircraft Type Registration
- ------------- Number
------------
<S> <C>
Boeing 737-823 N908AN
Boeing 737-823 N909AN
Boeing 737-823 N910AN
Boeing 737-823 N912AN
Boeing 737-823 N914AN
Boeing 737-823 N915AN
Boeing 737-823 N916AN
Boeing 737-823 N917AN
Boeing 737-823 N918AN
Boeing 737-823 N919AN
Boeing 767-323ER N394AN
Boeing 767-323ER N398AN
Boeing 767-323ER N399AN
Boeing 777-223 N778AN
Boeing 777-223 N779AN
</TABLE>
II-1
<PAGE> 19
SCHEDULE III to
TRUST SUPPLEMENT NO. 1999-1B
NOTE DOCUMENTS
<TABLE>
<CAPTION>
Aircraft
Registration
Aircraft Number Note Documents
- -------- ------------ --------------
<S> <C> <C>
Boeing 737-823 N908AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N909AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N910AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N912AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N914AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
</TABLE>
III-1
<PAGE> 20
SCHEDULE III to
TRUST SUPPLEMENT NO. 1999-1B
<TABLE>
<S> <C> <C>
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N915AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1 B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N916AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N917AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N918AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N919AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 767-323ER N394AN Participation Agreement
</TABLE>
III-2
<PAGE> 21
SCHEDULE III to
TRUST SUPPLEMENT NO. 1999-1B
<TABLE>
<S> <C> <C>
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 767-323ER N398AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 767-323ER N399AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 777-223 N778AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 777-223 N779AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
</TABLE>
III-3
<PAGE> 1
EXHIBIT 4(a)(8)
===============================================================================
TRUST SUPPLEMENT NO. 1999-1C
Dated as of October 6, 1999
between
AMERICAN AIRLINES, INC.
and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
as Trustee,
to
PASS THROUGH TRUST AGREEMENT
Dated as of October 1, 1999
American Airlines, Inc. Pass Through Trust 1999-1C
7.155% American Airlines
Pass Through Certificates,
Series 1999-1C
===============================================================================
<PAGE> 2
TRUST SUPPLEMENT NO. 1999-1C
This TRUST SUPPLEMENT NO. 1999-1C, dated as of October 6, 1999 (the
"Trust Supplement"), between American Airlines, Inc., a Delaware corporation,
and State Street Bank and Trust Company of Connecticut, National Association, a
national banking association, as Trustee, to the Pass Through Trust Agreement,
dated as of October 1,1999, between the Company (such term and other
capitalized terms used herein without definition being defined as provided in
Section 1.01) and the Trustee (the "Basic Agreement").
W I T N E S S E T H:
WHEREAS, the Basic Agreement, which is unlimited as to the aggregate
face amount of Certificates that may be issued and authenticated thereunder,
has heretofore or concurrently herewith been executed and delivered;
WHEREAS, the Company is the Owner of fifteen Boeing aircraft described
in Schedule III (collectively, the "Aircraft");
WHEREAS, pursuant to each Indenture, the Company will issue the
Equipment Notes, which Equipment Notes are to be secured by a security interest
in all right, title and interest of the Company in and to the Aircraft and
certain other property described therein;
WHEREAS, the Trustee shall hereby declare the creation of the Class C
Trust (as defined below) for the benefit of Holders of the Class C Certificates
(as defined below) to be issued in respect of such Class C Trust, and the
initial Holders of the Class C Certificates, as grantors of such Class C Trust,
by their respective acceptances of the Class C Certificates, shall join in the
creation of the Class C Trust with the Trustee;
WHEREAS, all Certificates to be issued by the Class C Trust will
evidence Fractional Undivided Interests in the Class C Trust and will have no
rights, benefits or interests in respect of any other separate Trust or the
property held therein;
WHEREAS, pursuant to the terms and conditions of the Basic Agreement,
as supplemented by this Trust Supplement, and the Note Purchase Agreements, the
Trustee on behalf of the Class C Trust shall purchase the Equipment Notes
issued by the Company pursuant to the Indentures relating to the Aircraft
having the identical interest rate as, and final maturity dates not later than
the final Regular Distribution Date of, the Class C Certificates issued
hereunder and shall hold such Equipment Notes in trust for the benefit of the
Class C Certificateholders;
1
<PAGE> 3
WHEREAS, pursuant to the terms and conditions of the Intercreditor
Agreement referred to in Section 3.01(h) hereof (the "Intercreditor
Agreement"), the Trustee and the other parties thereto will agree to the terms
of subordination set forth therein.
WHEREAS, all of the conditions and requirements necessary to make this
Trust Supplement, when duly executed and delivered, a valid, binding and legal
instrument in accordance with its terms and for the purposes herein expressed,
have been done, performed and fulfilled, and the execution and delivery of this
Trust Supplement in the form and with the terms hereof have been in all
respects duly authorized;
WHEREAS, this Trust Supplement is subject to the provisions of the
Trust Indenture Act and shall, to the extent applicable, be governed by such
provisions;
NOW THEREFORE, in consideration of the mutual agreements herein
contained, and of other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Unless otherwise specified herein or the
context otherwise requires, capitalized terms used but not defined herein shall
have the respective meanings set forth, and shall be construed and interpreted
in the manner described, in the Basic Agreement or, to the extent not defined
therein, in the Intercreditor Agreement.
ARTICLE II
DECLARATION OF TRUST
Section 2.01. Declaration of Trust. The Trustee hereby declares the
creation of a Trust, designated the "American Airlines Pass Through Trust
1999-1C" (the "Class C Trust"), for the benefit of the Holders of the Class C
Certificates to be issued in respect of such Class C Trust, and the initial
Holders of the Class C Certificates, as grantors of such Class C Trust, by
their respective acceptances of the Class C Certificates, join in the creation
of such Class C Trust with the Trustee. The Trustee, by the execution and
delivery of this Trust Supplement, acknowledges its acceptance of all right,
title and interest in and to the Trust Property to be acquired pursuant to
Section 2.02 of the Basic Agreement and the Note Purchase Agreements and the
Trustee will hold such right, title and interest for the benefit of all present
and future Holders of the Class C Certificates, upon the trusts set forth in
the Basic Agreement and this Trust Supplement.
2
<PAGE> 4
ARTICLE III
THE CERTIFICATES
Section 3.01. The Certificates. There is hereby created a series of
Certificates to be issued under this Agreement designated as "7.155% American
Airlines Pass Through Certificates, Series 1999-1C" (the "Class C
Certificates"). Each Class C Certificate represents a Fractional Undivided
Interest in the Class C Trust created hereby. The Class C Certificates shall be
the only instruments evidencing a Fractional Undivided Interest in the Class C
Trust.
The terms and conditions applicable to the Class C Certificates and
the Class C Trust are as follows:
(a) The aggregate face amount of the Class C Certificates that may be
authenticated and delivered under this Agreement (except for Class C
Certificates authenticated and delivered upon registration of transfer of, or
in exchange for, or in lieu of, other Class C Certificates pursuant to
Sections 3.03, 3.04, 3.05 and 3.06 of the Basic Agreement) is $47,617,000.
(b) The Cut-off Date is November 6, 1999.
(c) The Regular Distribution Dates with respect to any payment of
Scheduled Payments means April 15 and October 15 of each year, commencing on
April 15, 2000, until payment of all of the Scheduled Payments to be made under
the Equipment Notes has been made. The principal amount of the Equipment Notes
to be held by the Class C Trust is scheduled for payment on October 15, 2004.
(d) The Special Distribution Dates with respect to the Class C
Certificates means any Business Day on which a Special Payment is to be
distributed pursuant to this Agreement.
(e) The Class C Certificates shall be in the form attached hereto as
Exhibit A, shall be Book-Entry Certificates and shall be subject to the
conditions set forth in the Letter of Representations between the Company and
The Depository Trust Company, as initial Clearing Agency, attached hereto as
Exhibit B.
(f) The proceeds of the Class C Certificates issued by the Class C
Trust shall be used to acquire the Equipment Notes described in Schedule I,
such Equipment Notes to relate to the Aircraft described in Schedule II and the
Note Documents described in Schedule III.
(g) Any Person acquiring or accepting a Class C Certificate or an
interest therein will, by such acquisition or acceptance, be deemed to
represent and warrant to the Company, the Loan Trustees and the Trustee that
either (i) no assets of an employee benefit plan subject to Title I of ERISA,
or of an employee benefit plan or an individual retirement account subject to
Section 4975
3
<PAGE> 5
of the Internal Revenue Code of 1986, as amended (the "Code"), or any trust
established under such plan or account, have been used to purchase Class C
Certificates or an interest therein or (ii) the purchase and holding of Class C
Certificates or interests therein by such Person is exempt from the prohibited
transaction restrictions of ERISA and the Code pursuant to one or more
prohibited transaction statutory or administrative exemptions.
(h) The Class C Certificates will be subject to the following
Intercreditor Agreement (and to the extent the terms thereof (including the
definitions of defined terms) are inconsistent with the terms of this
Agreement, such Intercreditor Agreement shall control): that certain
Intercreditor Agreement, dated as of October 6, 1999, among State Street Bank
and Trust Company of Connecticut, National Association, as Trustee under each
Trust (as defined therein), Bayerische Landesbank Girozentrale, as Class A-1
Liquidity Provider, Class A-2 Liquidity Provider, Class B Liquidity Provider
and Class C Liquidity Provider, and State Street Bank and Trust Company of
Connecticut, National Association, as Subordination Agent thereunder. Potential
Purchasers shall have the rights upon the occurrence of a Triggering Event set
forth in Article IV hereof. The Trustee and, by acceptance of any Class C
Certificate, each Certificateholder thereof, agrees to be bound by all of the
provisions of the Intercreditor Agreement, including the subordination
provisions of Section 9.09 thereof.
(i) The Class C Certificates will have the benefit of the following
Liquidity Facility: that certain Revolving Credit Agreement, dated as of
October 6, 1999, between State Street Bank and Trust Company of Connecticut,
National Association, as Subordination Agent under the Intercreditor Agreement,
as agent and trustee for the Class C Trust, and Bayerische Landesbank
Girozentrale.
(j) Subject to Section 2.02(b) of the Basic Agreement, there will not
be any deposit agreement, escrow agreement or other similar arrangement prior
to delivery of the Aircraft.
(k) The Company may at any time purchase any of the Class C
Certificates at any price in the open market and may hold such Class C
Certificates to maturity.
(l) The Responsible Party is the Company.
(m) Section 9.02 of the Basic Agreement shall be amended with respect
to the Class C Trust by deleting from the second line of the proviso in the
first sentence thereof the word "adversely".
Section 3.02. Delivery of Documents. The Trustee is hereby directed
(i) to execute and deliver the Intercreditor Agreement referred to in Section
3.01(h) of this Trust Supplement in the form delivered to the Trustee by the
Company and (ii) subject to the respective terms thereof, to perform its
obligations thereunder.
4
<PAGE> 6
ARTICLE IV
DEFAULT
Section 4.01. Purchase Rights of Certificateholders. (a) By acceptance
of its Class C Certificate, each Class C Certificateholder agrees that at any
time after the occurrence and during the continuation of a Triggering Event,
(i) each Class C Certificateholder shall have the right (which shall
not expire upon any purchase of the Class A-2 Certificates pursuant to the
Class A-2 Trust Agreement, the Class A-2 Certificates pursuant to the Class A-1
Trust Agreement or the Class A-1 and Class A-2 Certificates pursuant to the
Class B Trust Agreement) to purchase, for the purchase price set forth in the
Class A-1 Trust Agreement, the Class A-2 Trust Agreement and the Class B Trust
Agreement, respectively, all, but not less than all, of the Class A-1
Certificates, the Class A-2 Certificates and the Class B Certificates upon ten
days' prior written notice to the Class A-1 Trustee, the Class A-2 Trustee, the
Class B Trustee and each other Class C Certificateholder, provided that (A) if
prior to the end of such ten-day period any other Class C Certificateholder
notifies such purchasing Class C Certificateholder that such other Class C
Certificateholder wants to participate in such purchase, then such other Class
C Certificateholder may join with the purchasing Class C Certificateholder to
purchase all, but not less than all, of the Class A-1 Certificates, the Class
A-2 Certificates and the Class B Certificates pro rata based on the Fractional
Undivided Interest in the Class C Trust held by each such Class C
Certificateholder and (B) if prior to the end of such ten-day period any other
Class C Certificateholder fails to notify the purchasing Class C
Certificateholder of such other Class C Certificateholder's desire to
participate in such a purchase, then such other Class C Certificateholder shall
lose its right to purchase the Class A-1 Certificates, the Class A-2
Certificates and the Class B Certificates pursuant to this Section 4.01(a)(i);
and
(ii) each Class D Certificateholder (if Class D Certificates are
issued) shall have the right (which shall not expire upon any purchase of the
Class A-1 Certificates pursuant to the Class A-2 Trust Agreement, the Class A-2
Certificates pursuant to the Class A-1 Trust Agreement, the Class A-1
Certificates and the Class A-2 Certificates pursuant to the Class B Trust
Agreement or the Class A-1 Certificates, the Class A-2 Certificates and the
Class B Certificates pursuant to clause (i) above) to purchase all, but not
less than all, of the Class A-1 Certificates, the Class A-2 Certificates, the
Class B Certificates and the Class C Certificates upon ten days' prior written
notice to the Class A-1 Trustee, the Class A-2 Trustee, the Class B Trustee,
the Trustee and each other Class D Certificateholder, provided that (A) if
prior to the end of such ten-day period any other Class D Certificateholder
notifies such purchasing Class D Certificateholder that such other Class D
Certificateholder wants to participate in such purchase, then such other Class
D Certificateholder may join with the purchasing Class D Certificateholder to
purchase all, but not less than all, of the Class A-1 Certificates, the Class
A-2 Certificates, the Class B Certificates and the Class C Certificates pro
rata based on the Fractional Undivided Interest in the Class D Trust held by
each such Class D Certificateholder and (B) if prior to the end of such ten-day
period any other Class D
5
<PAGE> 7
Certificateholder fails to notify the purchasing Class D Certificateholder of
such other Class D Certificateholder's desire to participate in such a
purchase, then such other Class D Certificateholder shall lose its right to
purchase the Class A-1 Certificates, the Class A-2 Certificates, the Class B
Certificates and the Class C Certificates pursuant to this Section 4.01(a)(ii).
The purchase price with respect to the Class C Certificates shall be
equal to the Pool Balance of the Class C Certificates, together with accrued
and unpaid interest in respect thereof to the date of such purchase, without
premium, but including any other amounts then due and payable to the Class C
Certificateholders under this Agreement, the Intercreditor Agreement or any
Note Document or on or in respect of the Class C Certificates; provided,
however, that if such purchase occurs after the Record Date relating to any
Distribution Date, such purchase price shall be reduced by the amount to be
distributed hereunder on such related Distribution Date (which deducted amounts
shall remain distributable to, and may be retained by, the Class C
Certificateholders as of such Record Date); provided, further that no such
purchase of Class C Certificates pursuant to this Section 4.01(a) shall be
effective unless the purchaser(s) shall certify to the Trustee that
contemporaneously with such purchase, such purchaser(s) is purchasing, pursuant
to the terms of this Agreement and the Intercreditor Agreement, all of the
Class A-1 Certificates, the Class A-2 Certificates, the Class B Certificates
and the Class C Certificates that are senior to the securities held by such
purchaser(s). Each payment of the purchase price of the Class C Certificates
referred to in the first sentence hereof shall be made to an account or
accounts designated by the Trustee and each such purchase shall be subject to
the terms of this Section 4.01(a). Each Class C Certificateholder agrees by its
acceptance of its Certificate that it will, upon payment from such Class D
Certificateholder(s), of the purchase price set forth in the first sentence of
this paragraph, forthwith sell, assign, transfer and convey to the purchaser(s)
thereof (without recourse, representation or warranty of any kind except as to
its own acts) all of the right, title, interest and obligation of such Class C
Certificateholder in this Agreement, the Intercreditor Agreement, the Liquidity
Facility, the Note Documents and all Class C Certificates held by such Class C
Certificateholder (excluding all right, title and interest under any of the
foregoing to the extent such right, title or interest is with respect to an
obligation not then due and payable as respects any action or inaction or state
of affairs occurring prior to such sale) and the purchaser(s) shall assume all
of such Class C Certificateholder's obligations under this Agreement, the
Intercreditor Agreement, the Liquidity Facility, the Note Documents and all
such Class C Certificates. The Class C Certificates will be deemed to be
purchased on the date payment of the purchase price is made notwithstanding the
failure of any Class C Certificateholder to deliver any Class C Certificate
and, upon such a purchase, (i) the only rights of the Class C
Certificateholders will be to deliver the Class C Certificates and (ii) if the
purchaser(s) shall so request, each such Class C Certificateholder will comply
with all the provisions of Section 3.04 of the Basic Agreement to enable new
Class C Certificates to be issued to the purchaser(s) in such denominations as
it shall request. All charges and expenses in connection with the issuance of
any such new Class C Certificates shall be borne by the purchaser(s) thereof.
As used in this Section 4.01(a), the terms "Class A-1 Certificate",
"Class A-1 Certificateholder","Class A-1 Trust", "Class A-1 Trust Agreement,
"Class A-1 Trustee", "Class A-2
6
<PAGE> 8
Certificate", "Class A-2 Certificateholder", "Class A-2 Trust", "Class A-2
Trust Agreement", "Class A-2 Trustee", "Class B Certificate", "Class B
Certificateholder", "Class B Trust", "Class B Trust Agreement","Class B
Trustee", "Class C Certificateholder", "Class C Trust", "Class D Certificate",
"Class D Certificateholder", "Class D Trust" and "Class D Trustee" shall have
the respective meanings assigned to such terms in the Intercreditor Agreement.
(b) This Section 4.01 supplements and, to the extent inconsistent with
any provision of Section 6.01(d) of the Basic Agreement, replaces the
provisions of Section 6.01(d) of the Basic Agreement. Notwithstanding anything
to the contrary set forth herein or in any Operative Agreement, the provisions
of this Section 4.01 may not be amended in any manner without the consent of
each Class A-1 Certificateholder, Class A-2 Certificateholder, Class B
Certificateholder, or Class D Certificateholder, if any, that would be
adversely affected thereby.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.01. Final Termination Date. The respective obligations and
responsibilities of the Company and the Trustee created hereby and the Class C
Trust created hereby shall terminate upon the distribution to all
Certificateholders of Class C Certificates and the Trustee of all amounts
required to be distributed to them pursuant to this Agreement and the
disposition of all property held as part of the Trust Property; provided,
however, that in no event shall the Trust created hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of Joseph P. Kennedy, Sr., the father of John F. Kennedy, former President of
the United States, living on the date of this Trust Supplement.
Section 5.02. Basic Agreement Ratified. Except and so far as herein
expressly provided, all of the provisions, terms and conditions of the Basic
Agreement are in all respects ratified and confirmed; and the Basic Agreement
and this Trust Supplement shall be taken, read and construed as one and the
same instrument.
Section 5.03. Governing Law. THIS AGREEMENT HAS BEEN DELIVERED IN THE
STATE OF NEW YORK AND THIS AGREEMENT AND THE CLASS C CERTIFICATES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER AND THEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 5.04. Counterparts. This Trust Supplement may be executed in
any number of counterparts (and each of the parties shall not be required to
execute the same counterpart). Each counterpart of this Trust Supplement
including a signature page or pages executed by each of the
7
<PAGE> 9
parties hereto shall be an original counterpart of this Trust Supplement, but
all of such counterparts together shall constitute one instrument.
Section 5.05. Intention of Parties. The parties hereto intend that the
Class C Trust be classified for United States federal income tax purposes as a
grantor trust under Part 1E of Chapter 1J of Subtitle A of the Internal Revenue
Code of 1986, as amended, and not as a trust or association taxable as a
corporation or as a partnership. Each Certificateholder of a Class C
Certificate, by its acceptance of its Class C Certificate or a beneficial
interest therein, agrees to treat the Class C Trust as a grantor trust for all
United States federal, state and local income tax purposes. The Trustee shall
not be authorized or empowered to do anything that would cause the Class C
Trust to fail to qualify as a grantor trust for such tax purposes (including as
subject to this restriction, acquiring any Aircraft by bidding the Equipment
Notes relating thereto or otherwise, or taking any action with respect to any
such Aircraft once acquired).
8
<PAGE> 10
IN WITNESS WHEREOF, the parties have caused this Trust Supplement to
be duly executed by their respective officers thereto duly authorized as of the
date first written above.
AMERICAN AIRLINES, INC.
By: /s/ JEFFREY C. CAMPBELL
--------------------------------------
Name: Jeffrey C. Campbell
Title: Vice President - Corporate
Development and Treasurer
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Trustee
By: /s/ JOHN G. CORREIA
--------------------------------------
Name: John G. Correia
Title: Assistant Secretary
9
<PAGE> 11
EXHIBIT A to
TRUST SUPPLEMENT NO. 1999-1C
FORM OF CERTIFICATE
*Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to Issuer or
its agent for registration of transfer, exchange or payment, and any
Certificate issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
AMERICAN AIRLINES, INC. PASS THROUGH TRUST 1999-1C
7.155% AMERICAN AIRLINES PASS THROUGH CERTIFICATE, SERIES 1999-1C
Final Expected Regular Distribution Date: October 15, 2004
evidencing a fractional undivided interest
in a trust, the property of which includes
or will include, among other things,
certain Equipment Notes each secured by an
Aircraft owned by American Airlines, Inc.
<TABLE>
<S> <C> <C>
Certificate Cusip
No. ______ No._______________ Fractional Undivided Interest representing No.______
0.002100090% of the Trust per $1,000 face amount
</TABLE>
THIS CERTIFIES THAT ________, for value received, is the registered
owner of a $______ (______ dollars) Fractional Undivided Interest in the
American Airlines Pass Through Trust, Series 1999- 1C (the "Trust") created by
State Street Bank and Trust Company of Connecticut, National Association, as
trustee (the "Trustee"), pursuant to a Pass Through Trust Agreement, dated as
of October 1, 1999 (the "Basic Agreement"), as supplemented by Trust Supplement
No. 1999-1C thereto dated October 6, 1999 (collectively, the "Agreement"),
between the Trustee and American Airlines, Inc., a corporation
- -------------
*This legend to appear on Book-Entry Certificates to be deposited with
The Depository Trust Company.
A-1
<PAGE> 12
incorporated under Delaware law (the "Company"), a summary of certain of the
pertinent provisions of which is set forth below. To the extent not otherwise
defined herein, the capitalized terms used herein have the meanings assigned to
them in the Agreement. This Certificate is one of the duly authorized
Certificates designated as "7.155% American Airlines Pass Through Certificates,
Series 1999-1C" (herein called the "Certificates"). This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement.
By virtue of its acceptance hereof, the Certificateholder of this Certificate
assents to and agrees to be bound by all of the provisions of the Agreement and
the Intercreditor Agreement, including the subordination provisions of Section
9.09 of the Intercreditor Agreement. The property of the Trust includes or will
include certain Equipment Notes and all rights of the Trust and the Trustee, on
behalf of the Trust, to receive any payments under the Intercreditor Agreement
or the Liquidity Facility (the "Trust Property"). Each issue of the Equipment
Notes is or will be secured by, among other things, a security interest in
Aircraft owned by the Company.
The Certificates represent Fractional Undivided Interests in the Trust
and the Trust Property, and will have no rights, benefits or interest in
respect of any other separate trust established pursuant to the terms of the
Basic Agreement for any other series of certificates issued pursuant thereto.
Subject to and in accordance with the terms of the Agreement and the
Intercreditor Agreement, from funds then available to the Trustee, there will
be distributed on each April 15 and October 15 (a "Regular Distribution Date"),
commencing on April 15, 2000, to the Person in whose name this Certificate is
registered at the close of business on the 15th day preceding the Regular
Distribution Date, an amount in respect of the Scheduled Payments on the
Equipment Notes due on such Regular Distribution Date, the receipt of which has
been confirmed by the Trustee, equal to the product of the percentage interest
in the Trust evidenced by this Certificate and an amount equal to the sum of
such Scheduled Payments. Subject to and in accordance with the terms of the
Agreement and the Intercreditor Agreement, in the event that Special Payments
on the Equipment Notes are received by the Trustee, from funds then available
to the Trustee, there shall be distributed on the applicable Special
Distribution Date, to the Person in whose name this Certificate is registered
at the close of business on the 15th day preceding the Special Distribution
Date, an amount in respect of such Special Payments on the Equipment Notes, the
receipt of which has been confirmed by the Trustee, equal to the product of the
percentage interest in the Trust evidenced by this Certificate and an amount
equal to the sum of such Special Payments so received. If a Regular
Distribution Date or Special Distribution Date is not a Business Day,
distribution shall be made on the immediately following Business Day with the
same force and effect as if made on such Regular Distribution Date or Special
Distribution Date and no interest shall accrue during the intervening period.
The Trustee shall mail notice of each Special Payment and the Special
Distribution Date therefor to the Certificateholder of this Certificate.
Distributions on this Certificate will be made by the Trustee by check
mailed to the Person entitled thereto, without the presentation or surrender of
this Certificate or the making of any notation hereon, except that with respect
to Certificates registered on the Record Date in the name of a Clearing Agency
(or its nominee), such distributions shall be made by wire transfer. Except as
otherwise provided in the Agreement and notwithstanding the above, the final
distribution on this Certificate will be made after
A-2
<PAGE> 13
notice mailed by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency of the
Trustee specified in such notice.
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company, the Trustee or any
Loan Trustee or any Affiliate thereof. The Certificates are limited in right of
payment, all as more specifically set forth on the face hereof and in the
Agreement. All payments or distributions made to Certificateholders under the
Agreement shall be made only from the Trust Property and only to the extent
that the Trustee shall have sufficient income or proceeds from the Trust
Property to make such payments in accordance with the terms of the Agreement.
Each Certificateholder of this Certificate, by its acceptance hereof, agrees
that it will look solely to the income and proceeds from the Trust Property to
the extent available for any payment or distribution to such Certificateholder
pursuant to the terms of the Agreement and that it will not have any recourse
to the Company, the Trustee or the Loan Trustees except as otherwise expressly
provided in the Agreement, in any Note Document or in the Intercreditor
Agreement. This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby.
A copy of the Agreement may be examined during normal business hours at the
principal office of the Trustee, and at such other places, if any, designated
by the Trustee, by any Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any
time by the Company and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the Trust. Any such consent by the
Certificateholder of this Certificate shall be conclusive and binding on such
Certificateholder and upon all future Certificateholders of this Certificate
and of any Certificate issued upon the transfer hereof or in exchange hereof or
in lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Certificateholders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the Register
upon surrender of this Certificate for registration of transfer at the offices
or agencies maintained by the Trustee in its capacity as Registrar, or by any
successor Registrar duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Registrar, duly executed
by the Certificateholder hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided Interest in
the Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in minimum denominations of $1,000 Fractional Undivided Interest and
integral multiples thereof except that one Certificate may be issued in a
different denomination. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of authorized
A-3
<PAGE> 14
denominations evidencing the same aggregate Fractional Undivided Interest in
the Trust, as requested by the Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee shall require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.
The Company, the Trustee, the Registrar and any Paying Agent shall
deem and treat the person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Company, the Trustee, the
Registrar or any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant
to the Agreement and the disposition of all property held as part of the Trust
Property.
Any Person acquiring or accepting this Certificate or an interest
herein will, by such acquisition or acceptance, be deemed to represent and
warrant to the Company, the Loan Trustees and the Trustee that either: (i) no
assets of an employee benefit plan subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or of an employee
benefit plan or an individual retirement account subject to Section 4975 of the
Internal Revenue Code of 1986, as amended (the "Code"), or any trust
established under such plan or account, have been used to purchase this
Certificate or an interest herein or (ii) the purchase and holding of this
Certificate or interest herein by such Person are exempt from the prohibited
transaction restrictions of ERISA and the Code pursuant to one or more
prohibited transaction statutory or administrative exemptions.
THIS CERTIFICATE AND THE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES AND CERTIFICATEHOLDERS HEREUNDER AND THEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
A-4
<PAGE> 15
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
AMERICAN AIRLINES, INC. PASS THROUGH TRUST 1999-1C
By: STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------------
Title:
---------------------------------
Dated:
---------------------------------
FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------------
Authorized Officer
A-5
<PAGE> 16
EXHIBIT B to
TRUST SUPPLEMENT NO. 1999-1C
[DTC Letter of Representations]
<PAGE> 17
SCHEDULE I to
TRUST SUPPLEMENT NO. 1999-1C
EQUIPMENT NOTES, PRINCIPAL AMOUNTS
AND MATURITIES
<TABLE>
<CAPTION>
Equipment Notes Principal Amount Maturity
- --------------- ---------------- --------
<S> <C> <C>
Series 1999-1C Equipment Note (N908AN) $ 2,191,886.68 October 15, 2004
Series 1999-1C Equipment Note (N909AN) 2,192,044.64 October 15, 2004
Series 1999-1C Equipment Note (N910AN) 2,192,044.64 October 15, 2004
Series 1999-1C Equipment Note (N912AN) 2,194,414.08 October 15, 2004
Series 1999-1C Equipment Note (N914AN) 2,278,781.62 October 15, 2004
Series 1999-1C Equipment Note (N915AN) 2,278,945.16 October 15, 2004
Series 1999-1C Equipment Note (N916AN) 2,280,417.00 October 15, 2004
Series 1999-1C Equipment Note (N917AN) 2,280,417.00 October 15, 2004
Series 1999-1C Equipment Note (N918AN) 2,281,888.84 October 15, 2004
Series 1999-1C Equipment Note (N919AN) 2,281,888.84 October 15, 2004
Series 1999-1C Equipment Note (N394AN) 4,067,797.92 October 15, 2004
Series 1999-1C Equipment Note (N398AN) 4,267,039.12 October 15, 2004
Series 1999-1C Equipment Note (N399AN) 4,271,777.99 October 15, 2004
Series 1999-1C Equipment Note (N778AN) 6,278,532.70 October 15, 2004
Series 1999-1C Equipment Note (N779AN) 6,279,123.77 October 15, 2004
--------------
Total: $47,617,000.00
</TABLE>
I-1
<PAGE> 18
SCHEDULE II to
TRUST SUPPLEMENT NO. 1999-1C
AIRCRAFT
<TABLE>
<CAPTION>
Aircraft Type Registration
- ------------- Number
------------
<S> <C>
Boeing 737-823 N908AN
Boeing 737-823 N909AN
Boeing 737-823 N910AN
Boeing 737-823 N912AN
Boeing 737-823 N914AN
Boeing 737-823 N915AN
Boeing 737-823 N916AN
Boeing 737-823 N917AN
Boeing 737-823 N918AN
Boeing 737-823 N919AN
Boeing 767-323ER N394AN
Boeing 767-323ER N398AN
Boeing 767-323ER N399AN
Boeing 777-223 N778AN
Boeing 777-223 N779AN
</TABLE>
II-1
<PAGE> 19
SCHEDULE III to
TRUST SUPPLEMENT NO. 1999-1C
NOTE DOCUMENTS
<TABLE>
<CAPTION>
Aircraft
Registration
Aircraft Number Note Documents
- -------- ------------ --------------
<S> <C> <C>
Boeing 737-823 N908AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N909AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N910AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N912AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N914AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
</TABLE>
III-1
<PAGE> 20
SCHEDULE III to
TRUST SUPPLEMENT NO. 1999-1C
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
<TABLE>
<S> <C> <C>
Boeing 737-823 N915AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N916AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N917AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N918AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 737-823 N919AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 767-323ER N394AN Participation Agreement
</TABLE>
IV-1
<PAGE> 21
SCHEDULE III to
TRUST SUPPLEMENT NO. 1999-1C
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
<TABLE>
<S> <C> <C>
Boeing 767-323ER N398AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 767-323ER N399AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 777-223 N778AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
Boeing 777-223 N779AN Participation Agreement
Indenture and Security Agreement
Series 1999-1A-1 Equipment Note
Series 1999-1A-2 Equipment Note
Series 1999-1B Equipment Note
Series 1999-1C Equipment Note
</TABLE>
IV-2
<PAGE> 1
EXHIBIT 4(b)1
================================================================================
INTERCREDITOR AGREEMENT
Dated as of October 6, 1999
among
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
as Trustee of the
American Airlines Pass Through Trust 1999-1A-1,
American Airlines Pass Through Trust 1999-1A-2,
American Airlines Pass Through Trust 1999-1B
and
American Airlines Pass Through Trust 1999-1C
BAYERISCHE LANDESBANK GIROZENTRALE,
as Class A-1 Liquidity Provider,
Class A-2 Liquidity Provider,
Class B Liquidity Provider,
and
Class C Liquidity Provider
and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
as Subordination Agent
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I
DEFINITIONS
Section 1.01 Definitions ......................................................................2
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
Section 2.01 Agreement to Terms of Subordination; Payments from Monies Received Only .........21
Section 2.02 Trust Accounts ..................................................................22
Section 2.03 Deposits to the Collection Account and Special Payments Account;
Certain Distributions .........................................................23
Section 2.04 Distributions of Special Payments ...............................................24
Section 2.05 Designated Representatives ......................................................26
Section 2.06 Controlling Party ...............................................................27
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED
Section 3.01 Written Notice of Distribution ..................................................28
Section 3.02 Distribution of Amounts on Deposit in the Collection Account ....................31
Section 3.03 Distribution of Amounts on Deposit Following a Triggering Event .................32
Section 3.04 Other Payments ..................................................................35
Section 3.05 Payments to the Trustees and the Liquidity Providers ............................35
Section 3.06 Liquidity Facilities ............................................................36
ARTICLE IV
EXERCISE OF REMEDIES
Section 4.01 Directions from the Controlling Party ...........................................44
Section 4.02 Remedies Cumulative .............................................................45
Section 4.03 Discontinuance of Proceedings ...................................................45
Section 4.04 Right of Certificateholders to Receive Payments Not to Be Impaired ..............45
</TABLE>
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ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF TRUSTEES, ETC.
Section 5.01 Notice of Indenture Default or Triggering Event .................................46
Section 5.02 Indemnification .................................................................46
Section 5.03 No Duties Except as Specified in Intercreditor Agreement ........................46
Section 5.04 Notice from the Liquidity Providers and Trustees ................................47
ARTICLE VI
THE SUBORDINATION AGENT
Section 6.01 Authorization; Acceptance of Trusts and Duties ..................................47
Section 6.02 Absence of Duties ...............................................................47
Section 6.03 No Representations or Warranties as to Documents ................................47
Section 6.04 No Segregation of Monies; No Interest ...........................................47
Section 6.05 Reliance; Agents; Advice of Counsel .............................................48
Section 6.06 Capacity in Which Acting ........................................................48
Section 6.07 Compensation ....................................................................48
Section 6.08 May Become Certificateholder ....................................................48
Section 6.09 Subordination Agent Required; Eligibility .......................................49
Section 6.10 Money to Be Held in Trust .......................................................49
ARTICLE VII
SUCCESSOR SUBORDINATION AGENT
Section 7.01 Replacement of Subordination Agent; Appointment of Successor.....................49
ARTICLE VIII
SUPPLEMENTS AND AMENDMENTS
Section 8.01 Amendments, Waivers, Etc. .......................................................51
Section 8.02 Subordination Agent Protected ...................................................53
Section 8.03 Effect of Supplemental Agreements ...............................................53
Section 8.04 Notice to Rating Agencies .......................................................53
</TABLE>
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ARTICLE IX
MISCELLANEOUS
Section 9.01 Termination of Intercreditor Agreement ........................................................53
Section 9.02 Intercreditor Agreement for Benefit of Trustee Liquidity Providers and Subordination Agent ....53
Section 9.03 Notices .......................................................................................54
Section 9.04 Severability ..................................................................................55
Section 9.05 No Oral Modifications or Continuing Waivers ...................................................55
Section 9.06 Successors and Assigns ........................................................................55
Section 9.07 Headings ......................................................................................55
Section 9.08 Counterparts ..................................................................................55
Section 9.09 Subordination .................................................................................56
Section 9.10 Governing Law .................................................................................57
Section 9.11 Submission to Jurisdiction; Waiver of Jury Trial; Waiver of Immunity ..........................57
</TABLE>
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<PAGE> 5
INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT, dated as of October 6, 1999, is made by and
among STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION,
a national banking association (in its individual capacity, together with its
successors and permitted assigns, "State Street"), not in its individual
capacity but solely as trustee of each Trust (such term and other capitalized
terms used herein without definition being defined as provided in Article I);
BAYERISCHE LANDESBANK GIROZENTRALE, a public law banking institution organized
under the laws of the Free State of Bavaria, Germany, as Class A-1 Liquidity
Provider, Class A-2 Liquidity Provider, Class B Liquidity Provider and Class C
Liquidity Provider, and STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION, not in its individual capacity except as expressly set
forth herein, but solely as Subordination Agent and trustee hereunder (in such
capacity, together with any successor appointed pursuant to Article VII, the
"Subordination Agent").
WHEREAS, pursuant to each Indenture with respect to an Aircraft, American
will issue on a recourse basis four (or five, under certain circumstances)
series of Equipment Notes secured by such Aircraft;
WHEREAS, pursuant to the Participation Agreements, each Trust will acquire
those Equipment Notes having an interest rate identical to the interest rate
applicable to the Certificates to be issued by such Trust;
WHEREAS, pursuant to each Trust Agreement, the Trust created thereby
proposes to issue a single class of Certificates (a "Class") bearing the
interest rate and having the final distribution date described in such Trust
Agreement on the terms and subject to the conditions set forth therein;
WHEREAS, pursuant to the Underwriting Agreement, the Underwriters propose
to purchase the Certificates issued by each Trust in the aggregate face amount
set forth opposite the name of such Trust on Schedule I thereto on the terms and
subject to the conditions set forth therein;
WHEREAS, the Liquidity Provider proposes to enter into four separate
revolving credit agreements with the Subordination Agent, as agent and trustee
for the Trustee of each of the Class A-1 Trust, the Class A-2 Trust, the Class B
Trust and the Class C Trust, respectively, for the benefit of the
Certificateholders of such Trust; and
WHEREAS, it is a condition precedent to the obligations of the Underwriters
under the Underwriting Agreement that the Subordination Agent, the Trustees and
the Liquidity Provider agree to the terms of subordination set forth in this
Agreement in respect of each Class of Certificates, and the Subordination Agent,
the Trustees and the Liquidity Provider, by entering into this Agreement,
<PAGE> 6
hereby acknowledge and agree to such terms of subordination and the other
provisions of this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements herein contained,
and of other good and valuable consideration the receipt and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. (a) The definitions stated herein apply equally
to the singular and the plural forms of the terms defined.
(b) All references in this Agreement to designated "Articles", "Sections"
and other subdivisions are to the designated Articles, Sections and other
subdivisions of this Agreement.
(c) The words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular Article,
Section or other subdivision.
(d) Unless the context otherwise requires, whenever the words "including",
"include" or "includes" are used herein, it shall be deemed to be followed by
the phrase "without limitation".
(e) For purposes of this Agreement, unless the context otherwise requires,
the following capitalized terms shall have the following meanings:
"Acceleration" means, with respect to the amounts payable in respect of the
Equipment Notes issued under any Indenture, such amounts becoming immediately
due and payable by declaration or otherwise. "Accelerate", "Accelerated" and
"Accelerating" have meanings correlative to the foregoing.
"Adjusted Expected Distributions" means, with respect to the Certificates
of any Trust on any Current Distribution Date, the sum of (x) accrued and unpaid
interest in respect of such Certificates and (y) the greater of:
(A) the difference between (x) the Pool Balance of such Certificates as of
the immediately preceding Distribution Date (or, if the Current Distribution
Date is the first Distribution Date, the original aggregate face amount of the
Certificates of such Trust) and (y) the Pool Balance of such Certificates as of
the Current Distribution Date calculated on the basis that (i) the principal of
the Non-Performing Equipment Notes held in such Trust has been paid in full and
such payments have been distributed to the holders of such Certificates, (ii)
the principal of the Performing Equipment
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<PAGE> 7
Notes held in such Trust has been paid when due (but without giving effect to
any Acceleration of Performing Equipment Notes) and such payments have been
distributed to the holders of such Certificates and (iii) the principal of any
Equipment Notes formerly held in such Trust that have been sold pursuant to the
terms hereof has been paid in full and such payments have been distributed to
the holders of such Certificates, and
(B) the amount of the excess, if any, of (i) the Pool Balance of such Class
of Certificates as of the immediately preceding Distribution Date (or, if the
Current Distribution Date is the first Distribution Date, the original aggregate
face amount of the Certificates of such Trust), over (ii) the Aggregate LTV
Collateral Amount for such Class of Certificates for the Current Distribution
Date;
provided that, until the date of the initial LTV Appraisals, clause (B) shall
not apply.
For purposes of calculating Adjusted Expected Distributions with respect to
the Certificates of any Trust, any premium paid on the Equipment Notes held in
such Trust that has not been distributed to the Certificateholders of such Trust
(other than such premium or a portion thereof applied to the distribution of
interest on the Certificates of such Trust or the reduction of the Pool Balance
of such Trust) shall be added to the amount of Adjusted Expected Distributions.
"Advance" means, with respect to any Liquidity Facility, any Advance as
defined in such Liquidity Facility.
"Affiliate" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by or under direct or indirect common control
with such Person. For the purposes of this definition, "control", when used with
respect to any specified Person, means the power, directly or indirectly, to
direct the management and policies of such Person, whether through the ownership
of voting securities or by contract or otherwise; and the terms "controlling"
and "controlled" have meanings correlative to the foregoing.
"Aggregate LTV Collateral Amount" for any Class of Certificates for any
Distribution Date means an amount, not less than zero, equal to the product of
(i) the sum of the applicable LTV Collateral Amounts for such Class of
Certificates for all Aircraft, minus the Pool Balance for each Class of
Certificates, if any, senior to such Class, after giving effect to any
distribution of principal on such Distribution Date with respect to such senior
Class or Classes multiplied by (ii) (a) in the case of the Class A-1
Certificates or Class A-2 Certificates, a fraction the numerator of which equals
the Pool Balance for the Class A-1 Certificates or the Class A-2 Certificates,
as the case may be, and the denominator of which equals the aggregate Pool
Balance for the Class A-1 Certificates and the Class A-2 Certificates, in each
case prior to giving effect to any distribution of principal on such
Distribution Date with respect to either such Class of Certificates, and (b) in
the case of the Class B Certificates and the Class C Certificates, 1.0.
"Aircraft" means, with respect to each Indenture, the "Aircraft" referred
to therein.
3
<PAGE> 8
"American" means American Airlines, Inc., a Delaware corporation, and its
successors and assigns.
"American Bankruptcy Event" means the occurrence and continuation of any of
the following:
(a) American shall consent to the appointment of or the taking of
possession by a receiver, trustee or liquidator of itself or of a substantial
part of its property, shall admit in writing its inability to pay its debts
generally as they come due or shall make a general assignment for the benefit of
creditors;
(b) American shall file a voluntary petition in bankruptcy or a voluntary
petition or an answer seeking reorganization, liquidation or other relief in a
case under any bankruptcy laws or insolvency laws (as in effect at such time) or
an answer admitting the material allegations of a petition filed against
American in any such case, or American shall seek relief by voluntary petition,
answer or consent, under the provisions of any other bankruptcy or other similar
law providing for the reorganization or winding-up of corporations (as in effect
at such time), or American shall seek an agreement, composition, extension or
adjustment with its creditors under such laws; or
(c) an order, judgment or decree shall be entered by any court of competent
jurisdiction appointing, without the consent of American, a receiver, trustee or
liquidator of American or of any substantial part of its property, or any
substantial part of its property shall be sequestered, or granting any other
relief in respect of American as a debtor under any bankruptcy laws or
insolvency laws (as in effect at such time), and any such order, judgment or
decree of appointment or sequestration shall remain in force undismissed,
unstayed and unvacated for a period of 90 days after the date of entry thereof;
or
(d) a petition against American in a case under the federal bankruptcy laws
or other insolvency laws (as in effect at such time) is filed and not withdrawn
or dismissed within 90 days thereafter, or if, under the provisions of any law
providing for reorganization or winding-up of corporations that may apply to
American, any court of competent jurisdiction assumes jurisdiction, custody or
control of American or of any substantial part of its property and such
jurisdiction, custody or control shall remain in force unrelinquished, unstayed
and unterminated for a period of 90 days.
"American Provisions" has the meaning specified in Section 8.01(a).
"Appraisal" means a current fair market value appraisal (which may be a
"desktop" appraisal) performed by any Appraiser or any other nationally
recognized appraiser on the basis of an arm's-length transaction between an
informed and willing purchaser under no compulsion to buy and an informed and
willing seller under no compulsion to sell and both having knowledge of all
relevant facts.
4
<PAGE> 9
"Appraised Current Market Value" of any Aircraft means the lower of the
average and the median of the three most recent LTV Appraisals of such Aircraft.
"Appraisers" means Aircraft Information Systems, Inc., Aviation Solutions,
Inc. and Morton Beyer & Agnew, Inc.
"Available Amount" means, with respect to any Liquidity Facility on any
drawing date, subject to the proviso contained in the first sentence of Section
3.06(g), an amount equal to (a) the Stated Amount of such Liquidity Facility at
such time, less (b) the aggregate amount of each Interest Drawing honored by the
Liquidity Provider under such Liquidity Facility on or prior to such date that
has not been reimbursed or reinstated as of such date; provided that, following
a Downgrade Drawing, a Non-Extension Drawing or a Final Drawing under such
Liquidity Facility, the Available Amount of such Liquidity Facility shall be
zero.
"Basic Agreement" means that certain Pass Through Trust Agreement, dated as
of October 1, 1999, between American and State Street, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
its terms, but does not include any Trust Supplement.
"Business Day" means, with respect to the Certificates of any Class, any
day other than a Saturday, a Sunday or a day on which commercial banks are
required or authorized to close in New York, New York, Dallas, Texas, or, so
long as any Certificate of such Class is outstanding, the city and state in
which the Trustee, the Subordination Agent or any related Loan Trustee maintains
its Corporate Trust Office or receives and disburses funds, and that, solely
with respect to draws under any Liquidity Facility, also is a "Business Day" as
defined in such Liquidity Facility.
"Cash Collateral Account" means the Class A-1 Cash Collateral Account, the
Class A-2 Cash Collateral Account, the Class B Cash Collateral Account or the
Class C Cash Collateral Account, as applicable.
"Certificate" means a Class A-1 Certificate, a Class A-2 Certificate, a
Class B Certificate or a Class C Certificate, as applicable.
"Certificateholder" means, with respect to any Class of Certificates, the
Person in whose name a Certificate is registered in the Register for the
Certificates of such Class.
"Citizen of the United States" has the meaning specified for such term in
Section 40102(a)(15) of Title 49 of the United States Code or any similar
legislation of the United States enacted in substitution or replacement
therefor.
"Class" has the meaning specified in the recitals to this Agreement.
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<PAGE> 10
"Class A-1 Cash Collateral Account" means an Eligible Deposit Account in
the name of the Subordination Agent maintained at an Eligible Institution, which
shall be the Subordination Agent if it shall so qualify, into which amounts
shall be deposited as referred to in Section 3.06(f).
"Class A-1 Certificateholder" means, at any time, any Certificateholder of
one or more Class A-1 Certificates.
"Class A-1 Certificates" means the certificates issued by the Class A-1
Trust, substantially in the form of Exhibit A to the Class A-1 Trust Agreement,
and authenticated by the Class A-1 Trustee, representing Fractional Undivided
Interests in the Class A-1 Trust, and any certificates issued in exchange
therefor or replacement thereof pursuant to the terms of the Class A-1 Trust
Agreement.
"Class A-1 Liquidity Facility" means, initially, the Revolving Credit
Agreement, dated as of the date hereof, between the Subordination Agent, as
agent and trustee for the Class A-1 Trustee, and Bayerische Landesbank
Girozentrale and, from and after the replacement of such agreement pursuant
hereto, the Replacement Liquidity Facility therefor, if any, in each case as
amended, supplemented or otherwise modified from time to time in accordance with
its terms.
"Class A-1 Liquidity Provider" means Bayerische Landesbank Girozentrale,
together with any Replacement Liquidity Provider that has issued a Replacement
Liquidity Facility to replace the Class A-1 Liquidity Facility pursuant to
Section 3.06(c) or 3.06(e).
"Class A-1 Trust" means the American Airlines Pass Through Trust 1999-1A-1
created and administered pursuant to the Class A-1 Trust Agreement.
"Class A-1 Trust Agreement" means the Basic Agreement, as supplemented by
Trust Supplement No. 1999-1A-1 thereto, dated as of the date hereof, governing
the creation and administration of the American Airlines Pass Through Trust
1999-1A-1 and the issuance of the Class A-1 Certificates, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
its terms.
"Class A-1 Trustee" means State Street Bank and Trust Company of
Connecticut, National Association, not in its individual capacity except as
expressly set forth in the Class A-1 Trust Agreement, but solely as trustee
under the Class A-1 Trust Agreement, together with any successor trustee
appointed pursuant thereto.
"Class A-2 Cash Collateral Account" means an Eligible Deposit Account in
the name of the Subordination Agent maintained at an Eligible Institution, which
shall be the Subordination Agent if it shall so qualify, into which amounts
shall be deposited as referred to in Section 3.06(f).
6
<PAGE> 11
"Class A-2 Certificateholder" means, at any time, any Certificateholder of
one or more Class A-2 Certificates.
"Class A-2 Certificates" means the certificates issued by the Class A-2
Trust, substantially in the form of Exhibit A to the Class A-2 Trust Agreement,
and authenticated by the Class A-2 Trustee, representing Fractional Undivided
Interests in the Class A-2 Trust, and any certificates issued in exchange
therefor or replacement thereof pursuant to the terms of the Class A-2 Trust
Agreement.
"Class A-2 Liquidity Facility" means, initially, the Revolving Credit
Agreement, dated as of the date hereof, between the Subordination Agent, as
agent and trustee for the Class A-2 Trustee, and Bayerische Landesbank
Girozentrale and, from and after the replacement of such agreement pursuant
hereto, the Replacement Liquidity Facility therefor, if any, in each case as
amended, supplemented or otherwise modified from time to time in accordance with
its terms.
"Class A-2 Liquidity Provider" means Bayerische Landesbank Girozentrale,
together with any Replacement Liquidity Provider that has issued a Replacement
Liquidity Facility to replace the Class A-2 Liquidity Facility pursuant to
Section 3.06(c) or 3.06(e).
"Class A-2 Trust" means the American Airlines Pass Through Trust 1999-1A-2
created and administered pursuant to the Class A-2 Trust Agreement.
"Class A-2 Trust Agreement" means the Basic Agreement, as supplemented by
Trust Supplement No. 1999-1A-2 thereto, dated as of the date hereof, governing
the creation and administration of the American Airlines Pass Through Trust
1999-1A-2 and the issuance of the Class A-2 Certificates, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
its terms.
"Class A-2 Trustee" means State Street Bank and Trust Company of
Connecticut, National Association, not in its individual capacity except as
expressly set forth in the Class A-2 Trust Agreement, but solely as trustee
under the Class A-2 Trust Agreement, together with any successor trustee
appointed pursuant thereto.
"Class B Cash Collateral Account" means an Eligible Deposit Account in the
name of the Subordination Agent maintained at an Eligible Institution, which
shall be the Subordination Agent if it shall so qualify, into which amounts
shall be deposited as referred to in Section 3.06(f).
"Class B Certificateholder" means, at any time, any Certificateholder of
one or more Class B Certificates.
"Class B Certificates" means the certificates issued by the Class B Trust,
substantially in the form of Exhibit A to the Class B Trust Agreement, and
authenticated by the Class B Trustee,
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<PAGE> 12
representing Fractional Undivided Interests in the Class B Trust, and any
certificates issued in exchange therefor or replacement thereof pursuant to the
terms of the Class B Trust Agreement.
"Class B Liquidity Facility" means, initially, the Revolving Credit
Agreement, dated as of the date hereof, between the Subordination Agent, as
agent and trustee for the Class B Trustee, and Bayerische Landesbank
Girozentrale, and, from and after the replacement of such agreement pursuant
hereto, the Replacement Liquidity Facility therefor, if any, in each case as
amended, supplemented or otherwise modified from time to time in accordance with
its terms.
"Class B Liquidity Provider" means Bayerische Landesbank Girozentrale,
together with any Replacement Liquidity Provider that has issued a Replacement
Liquidity Facility to replace the Class B Liquidity Facility pursuant to Section
3.06(c) or 3.06(e).
"Class B Trust" means the American Airlines Pass Through Trust 1999-1B
created and administered pursuant to the Class B Trust Agreement.
"Class B Trust Agreement" means the Basic Agreement, as supplemented by
Trust Supplement No. 1999-1B thereto, dated as of the date hereof, governing the
creation and administration of the American Airlines Pass Through Trust 1999-1B
and the issuance of the Class B Certificates, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Class B Trustee" means State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity except as expressly set
forth in the Class B Trust Agreement, but solely as trustee under the Class B
Trust Agreement, together with any successor trustee appointed pursuant thereto.
"Class C Cash Collateral Account" means an Eligible Deposit Account in the
name of the Subordination Agent maintained at an Eligible Institution, which
shall be the Subordination Agent if it shall so qualify, into which amounts
shall be deposited as referred to in Section 3.06(f).
"Class C Certificateholder" means, at any time, any Certificateholder of
one or more Class C Certificates.
"Class C Certificates" means the certificates issued by the Class C Trust,
substantially in the form of Exhibit A to the Class C Trust Agreement, and
authenticated by the Class C Trustee, representing Fractional Undivided
Interests in the Class C Trust, and any certificates issued in exchange therefor
or replacement thereof pursuant to the terms of the Class C Trust Agreement.
"Class C Liquidity Facility" means, initially, the Revolving Credit
Agreement, dated as of the date hereof, between the Subordination Agent, as
agent and trustee for the Class C Trustee, and Bayerische Landesbank
Girozentrale, and, from and after the replacement of such agreement
8
<PAGE> 13
pursuant hereto, the Replacement Liquidity Facility therefor, if any, in each
case as amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"Class C Liquidity Provider" means Bayerische Landesbank Girozentrale,
together with any Replacement Liquidity Provider that has issued a Replacement
Liquidity Facility to replace the Class C Liquidity Facility pursuant to Section
3.06(c) or 3.06(e).
"Class C Trust" means the American Airlines Pass Through Trust 1999-1C
created and administered pursuant to the Class C Trust Agreement.
"Class C Trust Agreement" means the Basic Agreement, as supplemented by
Trust Supplement No. 1999-1C thereto, dated as of the date hereof, governing the
creation and administration of the American Airlines Pass Through Trust 1999-1C
and the issuance of the Class C Certificates, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Class C Trustee" means State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity except as expressly set
forth in the Class C Trust Agreement, but solely as trustee under the Class C
Trust Agreement, together with any successor trustee appointed pursuant thereto.
"Class D Certificateholder" means, at any time, any Certificateholder of
one or more Class D Certificates, if and when issued.
"Class D Certificates" means any Certificates issued by the Class D Trust,
if and when created, representing Fractional Undivided Interests in the Class D
Trust.
"Class D Trust" means the American Airlines Pass Through Trust 1999-1D, if
and when created, administered pursuant to the Basic Agreement and a Trust
Supplement.
"Class D Trustee" means the trustee of the Class D Trust, if and when
created.
"Closing Date" means October 6, 1999.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
"Collateral" means, with respect to any Indenture, the "Collateral"
referred to therein.
"Collection Account" means the Eligible Deposit Account established by the
Subordination Agent pursuant to Section 2.02(a) in and from which the
Subordination Agent shall make deposits and withdrawals in accordance with this
Agreement.
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"Consent Notice" has the meaning specified in Section 3.06(d).
"Consent Period" has the meaning specified in Section 3.06(d).
"Controlling Party" means the Person entitled to act as such pursuant to
the terms of Section 2.06.
"Corporate Trust Office" means, with respect to any Trustee, the
Subordination Agent or any Loan Trustee, the office of such Person in the city
at which, at any particular time, its corporate trust business shall be
principally administered.
"Current Distribution Date" means a Distribution Date specified as a
reference date for calculating the Expected Distributions or the Adjusted
Expected Distributions with respect to the Certificates of any Trust as of such
Distribution Date.
"Designated Representatives" means the Subordination Agent Representatives,
the Trustee Representatives and the LP Representatives identified under Section
2.05.
"Distribution Date" means a Regular Distribution Date or a Special
Distribution Date.
"Dollars" means the lawful currency of the United States.
"Downgrade Drawing" has the meaning specified in Section 3.06(c).
"Downgraded Facility" has the meaning specified in Section 3.06(c).
"Drawing" means an Interest Drawing, a Final Drawing, a Non-Extension
Drawing or a Downgrade Drawing, as the case may be.
"Eligible Deposit Account" means either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate trust
department of a depository institution organized under the laws of the United
States or any one of the states thereof or the District of Columbia (or any
United States branch of a foreign bank), having corporate trust powers and
acting as trustee for funds deposited in such account, so long as any of the
securities of such depository institution has a long-term unsecured debt rating
of at least A3 or its equivalent by Moody's or at least A- or its equivalent by
S&P. An Eligible Deposit Account may be maintained with a Liquidity Provider so
long as such Liquidity Provider is an Eligible Institution; provided that such
Liquidity Provider shall have waived all rights of set-off and counterclaim with
respect to such account.
"Eligible Institution" means (a) the corporate trust department of the
Subordination Agent or any Trustee, as applicable, or (b) a depository
institution organized under the laws of the United States of America or any
state thereof or the District of Columbia (or any U.S. branch of a foreign
10
<PAGE> 15
bank), which has a long-term unsecured debt rating of at least A3 or its
equivalent by Moody's or at least A- or its equivalent by S&P.
"Eligible Investments" means investments in (a) obligations of the United
States government or agencies thereof, or obligations guaranteed by the United
States government, (b) open market commercial paper of any corporation
incorporated under the laws of the United States or any state thereof rated at
least P-1 or its equivalent by Moody's or at least A-1 or its equivalent by S&P,
(c) certificates of deposit issued by commercial banks organized under the laws
of the United States or of any political subdivision thereof (or any United
States branch of a foreign bank) having a combined capital and surplus in excess
of $500,000,000 which banks or their holding companies have a rating of A or its
equivalent by Moody's or A or its equivalent by S&P; provided, however, that the
aggregate amount at any one time invested in certificates of deposit issued by
any one bank shall not be in excess of 5% of such bank's capital and surplus,
(d) Dollar denominated offshore certificates of deposit issued by, or offshore
time deposits with, any commercial bank described in (c) or any subsidiary
thereof, and (e) repurchase agreements with any financial institution having
combined capital and surplus of at least $500,000,000 with any of the
obligations described in clauses (a) through (d) as collateral; provided
further, that if all of the above investments are unavailable, the entire
amounts to be invested may be used to purchase Federal funds from an entity
described in clause (c) above; and provided further, that all Eligible
Investments must be held in an Eligible Deposit Account. Any of the investments
described herein may be made through or with, as applicable, the bank acting as
Trustee or its Affiliates.
"Equipment Notes" means, at any time, the Series A-1 Equipment Notes, the
Series A-2 Equipment Notes, the Series B Equipment Notes and the Series C
Equipment Notes, collectively, and in each case, any Equipment Notes issued in
exchange therefor or replacement thereof pursuant to the terms of the
Indentures.
"Expected Distributions" means, with respect to the Certificates of any
Trust on any Current Distribution Date, the sum of (x) accrued and unpaid
interest in respect of such Certificates and (y) the difference between (A) the
Pool Balance of such Certificates as of the immediately preceding Distribution
Date (or, if the Current Distribution Date is the first Distribution Date, the
original aggregate face amount of the Certificates of such Trust) and (B) the
Pool Balance of such Certificates as of the Current Distribution Date calculated
on the basis that (i) the principal of the Equipment Notes held in such Trust
has been paid when due (whether at stated maturity or upon redemption,
prepayment, purchase or Acceleration or otherwise) and such payments have been
distributed to the holders of such Certificates and (ii) the principal of any
Equipment Notes formerly held in such Trust that have been sold pursuant to the
terms hereof has been paid in full and such payments have been distributed to
the holders of such Certificates.
For purposes of calculating Expected Distributions with respect to the
Certificates of any Trust, any premium paid on the Equipment Notes held in such
Trust which has not been distributed to the Certificateholders of such Trust
(other than such premium or a portion thereof applied to
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distributions of interest on the Certificates of such Trust or the reduction of
the Pool Balance of such Trust) shall be added to the amount of such Expected
Distributions.
"Expiry Date" with respect to any Liquidity Facility, shall have the
meaning specified in such Liquidity Facility.
"Fee Letter" means the Fee Letter among Bayerische Landesbank Girozentrale,
the Subordination Agent and American with respect to the Liquidity Facilities
and any fee letter entered into among the Subordination Agent, American and any
Replacement Liquidity Provider.
"Final Distributions" means, with respect to the Certificates of any Trust
on any Distribution Date, the sum of (x) the aggregate amount of all accrued and
unpaid interest in respect of such Certificates and (y) the Pool Balance of such
Certificates as of the immediately preceding Distribution Date. For purposes of
calculating Final Distributions with respect to the Certificates of any Trust,
any premium paid on the Equipment Notes held in such Trust which has not been
distributed to the Certificateholders of such Trust (other than such premium or
a portion thereof applied to distributions of interest on the Certificates of
such Trust or the reduction of the Pool Balance of such Trust) shall be added to
the amount of such Final Distributions.
"Final Drawing" has the meaning specified in Section 3.06(i).
"Final Legal Distribution Date" means (i) with respect to the Class A-1
Certificates, October 15, 2010, (ii) with respect to the Class A-2 Certificates,
April 15, 2011, (iii) with respect to the Class B Certificates, April 15, 2011
and (iv) with respect to the Class C Certificates, April 15, 2006.
"Fractional Undivided Interest" means the fractional undivided interest in
a Trust that is represented by a Certificate relating to such Trust.
"Indenture" means each of the Indenture and Security Agreements entered
into by the Loan Trustee and American pursuant to the Participation Agreements,
in each case as the same may be amended, supplemented or otherwise modified from
time to time in accordance with its terms.
"Indenture Event of Default" means, with respect to any Indenture, any
Event of Default (as such term is defined in such Indenture) thereunder.
"Interest Drawing" has the meaning specified in Section 3.06(a).
"Interest Payment Date" means, with respect to any Liquidity Facility, each
date on which interest is due and payable under Section 3.07(c), (d) or (e) of
such Liquidity Facility on a Downgrade Drawing, Non-Extension Drawing or Final
Drawing thereunder.
"Investment Earnings" means investment earnings on funds on deposit in the
Trust Accounts net of losses and the Subordination Agent's reasonable expenses
in making such investments.
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"Lending Office" has the meaning, with respect to any Liquidity Facility,
ascribed to such term in such Liquidity Facility.
"Lien" means any mortgage, pledge, lien, charge, claim, encumbrance, lease,
sublease or security interest of any kind.
"Liquidity Event of Default", with respect to any Liquidity Facility, has
the meaning specified in such Liquidity Facility.
"Liquidity Expenses" means all Liquidity Obligations other than (i) the
principal amount of any Drawings under the Liquidity Facilities and (ii) any
interest accrued on any Liquidity Obligations.
"Liquidity Facility" means, at any time, the Class A-1 Liquidity Facility,
the Class A-2 Liquidity Facility, the Class B Liquidity Facility or the Class C
Liquidity Facility, as applicable.
"Liquidity Obligations" means all principal, interest, fees and other
amounts owing to the Liquidity Providers under the Liquidity Facilities, Section
4.02 of the Participation Agreements or the Fee Letter.
"Liquidity Provider" means, at any time, the Class A-1 Liquidity Provider,
the Class A-2 Liquidity Provider, the Class B Liquidity Provider or the Class C
Liquidity Provider, as applicable.
"Loan Trustee" means, with respect to any Indenture, the bank, trust
company or other financial institution designated as loan trustee thereunder,
and any successor to such loan trustee.
"LP Incumbency Certificate" has the meaning specified in Section 2.05(c).
"LP Representatives" has the meaning specified in Section 2.05(c).
"LTV Appraisals" has the meaning specified in Section 4.01(a).
"LTV Collateral Amount" of any Aircraft for any Class of Certificates
means, as of any Distribution Date, the lesser of (i)(x) with respect to any
Aircraft other than an Aircraft referred to in the following clauses (y) and
(z), the LTV Ratio for such Class of Certificates multiplied by the Appraised
Current Market Value of such Aircraft or (y) with respect to any such Aircraft
that has suffered an Event of Loss under and as defined in the relevant
Indenture, the amount of the insurance proceeds paid to the related Loan Trustee
in respect thereof to the extent then held by such Loan Trustee (and/or on
deposit in the Special Payments Account) or payable to such Loan Trustee in
respect thereof or (z) with respect to any such Aircraft that has been released
from the applicable Indenture pursuant to the provisions of Section 10.01(b)
thereof, the amount of money and U.S. Government Obligations deposited with the
Loan Trustee pursuant thereto as of such Distribution Date and (ii) the
outstanding principal amount of the Equipment Notes secured by such Aircraft
after
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<PAGE> 18
giving effect to any principal payments of such Equipment Notes on or before
such Distribution Date.
"LTV Ratio" means (i) for the Class A-1 Certificates, 45.0%, (ii) for the
Class A-2 Certificates, 45.0%, (iii) for the Class B Certificates, 57.0%, and
(iv) for the Class C Certificates, 62.0%.
"Minimum Sale Price" means, with respect to any Aircraft or the Equipment
Notes issued in respect of such Aircraft, at any time, the lesser of (a) 75% of
the Appraised Current Market Value of such Aircraft and (b) the aggregate
outstanding principal amount of such Equipment Notes, plus accrued and unpaid
interest thereon.
"Moody's" means Moody's Investors Service, Inc.
"Non-Controlling Party" means, at any time, any Trustee or Liquidity
Provider which is not the Controlling Party at such time.
"Non-Extended Facility" has the meaning specified in Section 3.06(d).
"Non-Extension Drawing" has the meaning specified in Section 3.06(d).
"Non-Performing Equipment Note" means an Equipment Note issued pursuant to
an Indenture that is not a Performing Equipment Note.
"Officer's Certificate" of any Person means a certification signed by a
Responsible Officer of such Person.
"Operative Agreements" means this Agreement, the Liquidity Facilities, the
Fee Letter, the Indentures, the Trust Agreements, the Participation Agreements,
the Equipment Notes and the Certificates, together with all exhibits and
schedules included with any of the foregoing.
"Outstanding" means, when used with respect to each Class of Certificates,
as of the date of determination, all Certificates of such Class theretofore
authenticated and delivered under the related Trust Agreement, except:
(i) Certificates of such Class theretofore canceled by the Registrar (as
defined in such Trust Agreement) or delivered to the Trustee thereunder or such
Registrar for cancellation;
(ii) all of the Certificates of such Class if money in the full amount
required to make the final distribution with respect to such Class pursuant to
Section 11.01 of such Trust Agreement has been theretofore deposited with the
related Trustee in trust for the Certificateholders of the Certificates of such
Class as provided in Section 4.01 of such Trust Agreement, pending distribution
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<PAGE> 19
of such money to such Certificateholders pursuant to payment of such final
distribution payment; and
(iii) Certificates of such Class in exchange for or in lieu of which other
Certificates of such Class have been authenticated and delivered pursuant to
such Trust Agreement;
provided, however, that in determining whether the holders of the requisite
Fractional Undivided Interest of such Certificates have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, any
Certificates owned by American or any of its Affiliates shall be disregarded and
deemed not to be Outstanding. In determining whether such Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Certificates that such Trustee knows to be so
owned shall be so disregarded. Notwithstanding the foregoing, (x) if American
and its Affiliates own 100% of the Certificates of each Class, such Certificates
shall not be so disregarded and (y) if any amount of such Certificates owned by
American and its Affiliates have been pledged in good faith, such Certificates
shall not be disregarded if the pledgee establishes to the satisfaction of the
applicable Trustee the pledgee's right so to act with respect to such
Certificates and that the pledgee is not American or any of its Affiliates.
"Overdue Scheduled Payment" means any Scheduled Payment which is not in
fact received by the Subordination Agent within five days after the Scheduled
Payment Date relating thereto.
"Participation Agreement" means, with respect to each Indenture, the
"Participation Agreement" referred to therein.
"Payees" has the meaning specified in Section 2.03(c).
"Performing Equipment Note" means an Equipment Note issued pursuant to an
Indenture with respect to which no payment default has occurred and is
continuing (without giving effect to any Acceleration); provided, that in the
event of a bankruptcy proceeding involving American under Title 11 of the United
States Code (the "Bankruptcy Code"), (i) any payment default existing during the
60-day period under Section 1110(a)(1)(A) of the Bankruptcy Code (or such longer
period as may apply under Section 1110(b) of the Bankruptcy Code) (the "Section
1110 Period") shall not be taken into consideration, unless during the Section
1110 Period the trustee in such proceeding or American refuses to assume or
agree to perform its obligations under the Indenture related to such Equipment
Note and (ii) any payment default occurring after the date of the order of
relief in such proceeding shall not be taken into consideration if such payment
default is cured under Section 1110(a)(1)(B) of the Bankruptcy Code before the
later of 30 days after the date of such default or the expiration of the Section
1110 Period.
"Performing Note Deficiency" means any time that less than 65% of the then
aggregate outstanding principal amount of all Equipment Notes are Performing
Equipment Notes.
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"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust, trustee,
unincorporated organization or government or any agency or political subdivision
thereof.
"Pool Balance" means, with respect to the Certificates of any Class, as of
any date, (i) the original aggregate face amount of the Certificates of such
Class less (ii) the aggregate amount of all distributions made in respect of
such Certificates other than distributions made in respect of interest or
premium or reimbursement of any costs or expenses incurred in connection
therewith. The Pool Balance as of any Distribution Date with respect to each
Class shall be computed after giving effect to the payment of principal, if any,
on the Equipment Notes or other Trust Property held in the related Trust and the
distribution thereof to be made on such date.
"Proceeding" means any suit in equity, action at law or other judicial or
administrative proceeding.
"PTC Event of Default" means, with respect to each Trust Agreement, the
failure to distribute within 10 Business Days after the applicable Distribution
Date: (i) the outstanding Pool Balance of the applicable Class of Certificates
on the Final Legal Distribution Date for such Class or (ii) interest scheduled
for distribution on such Certificates on any Distribution Date (unless the
Subordination Agent shall have made an Interest Drawing, or a withdrawal from
the Cash Collateral Account, with respect thereto in an aggregate amount
sufficient to pay such interest and shall have distributed such amount to the
Trustee entitled thereto).
"Rating Agencies" means, collectively, at any time, each of two nationally
recognized rating agencies that have been requested to rate the Certificates and
that are then rating the Certificates. The initial Rating Agencies will be
Moody's and S&P.
"Ratings Confirmation" means, with respect to any action proposed to be
taken, a written confirmation from each of the Rating Agencies that such action
would not result in (i) a reduction of the rating for any Class of Certificates
below the then current rating for such Class of Certificates or (ii) a
withdrawal or suspension of the rating of any Class of Certificates.
"Register", with respect to any Trust, has the meaning ascribed to such
term in the Trust Agreement for such Trust.
"Regular Distribution Dates" means each April 15 and October 15, commencing
on April 15, 2000; provided, however, that, if any such day shall not be a
Business Day, the related distribution shall be made on the next succeeding
Business Day without additional interest.
"Replacement Liquidity Facility" means, for any Liquidity Facility, an
irrevocable revolving credit agreement (or agreements) in substantially the form
of the replaced Liquidity Facility, including reinstatement provisions, or in
such other form (which may include a letter of credit, surety bond, financial
insurance policy or guaranty) as shall permit the Rating Agencies to confirm in
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writing their respective ratings then in effect for the Certificates of the
Class with respect to which such Liquidity Facility was issued (before
downgrading of such ratings, if any, as a result of the downgrading, if any, of
the applicable Liquidity Provider), in a face amount (or in an aggregate face
amount) equal to the applicable Required Amount and issued by a Person (or
Persons) having short-term unsecured debt ratings issued by both Rating Agencies
that are equal to or higher than the Threshold Rating specified in clause (a) of
the definition of Threshold Rating or if such Person (or Persons) does not have
a short-term unsecured debt rating from a given Rating Agency, a long-term
unsecured debt rating issued by such Rating Agency that is equal to or higher
than the Threshold Rating specified in clause (b) of the definition of Threshold
Rating. Without limitation of the form that a Replacement Liquidity Facility
otherwise may have pursuant to the preceding sentence, a Replacement Liquidity
Facility for any Class of Certificates may have a stated expiration date earlier
than 15 days after the Final Legal Distribution Date of such Class of
Certificates so long as such Replacement Liquidity Facility provides for a
Non-Extension Drawing as contemplated by Section 3.06(d) hereof.
"Replacement Liquidity Provider" means a Person who issues a Replacement
Liquidity Facility.
"Required Amount" means, with respect to each Liquidity Facility, or the
Cash Collateral Account, for any Class, for any day, the sum of the aggregate
amount of interest, calculated at the rate per annum equal to the Stated
Interest Rate for the related Class of Certificates on the basis of a 360-day
year comprised of twelve 30-day months, that would be distributable on such
Class of Certificates on each of the three successive Regular Distribution Dates
immediately following such day or, if such day is a Regular Distribution Date,
on such day and the succeeding two Regular Distribution Dates, in each case
calculated on the basis of the Pool Balance of such Class of Certificates on
such date and without regard to expected future distributions of principal on
such Class of Certificates.
"Responsible Officer" means (i) with respect to the Subordination Agent and
each of the Trustees, any officer in the Corporate Trust Department or similar
department of the Subordination Agent or such Trustee, as the case may be, or
any other officer customarily performing functions similar to those performed by
the persons who at the time shall be such officers or to whom any corporate
trust matter is referred because of his knowledge of and familiarity with a
particular subject, and (ii) with respect to each Liquidity Provider, any
authorized officer of such Liquidity Provider.
"Scheduled Payment" means, with respect to any Equipment Note, (i) any
payment of principal or interest on such Equipment Note (other than an Overdue
Scheduled Payment) or (ii) any distribution in respect of interest on such
Equipment Note to the Certificateholders of Certificates of the corresponding
Class of Certificates with funds drawn under the Liquidity Facility for such
Class or withdrawn from the Cash Collateral Account for such Class, which
payment in the case of clause (i) or clause (ii) represents an installment of
principal on such Equipment Note at the stated maturity of such installment, or
the payment of regularly scheduled interest accrued on the unpaid
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principal amount of such Equipment Note, or both; provided, however, that any
payment of principal, premium, if any, or interest resulting from the redemption
or purchase of any Equipment Note shall not constitute a Scheduled Payment.
"Scheduled Payment Date" means, with respect to any Scheduled Payment, the
date on which such Scheduled Payment is scheduled to be made.
"Series A-1 Equipment Notes" means the Series A-1 Equipment Notes
issued pursuant to each Indenture by American and authenticated by the Loan
Trustee thereunder, and any such Equipment Notes issued in exchange therefor or
replacement thereof pursuant to the terms of such Indenture.
"Series A-2 Equipment Notes" means the Series A-2 Equipment Notes issued
pursuant to each Indenture by American and authenticated by the Loan Trustee
thereunder, and any such Equipment Notes issued in exchange therefor or
replacement thereof pursuant to the terms of such Indenture.
"Series B Equipment Notes" means the Series B Equipment Notes issued
pursuant to each Indenture by American and authenticated by the Loan Trustee
thereunder, and any such Equipment Notes issued in exchange therefor or
replacement thereof pursuant to the terms of such Indenture.
"Series C Equipment Notes" means the Series C Equipment Notes issued
pursuant to each Indenture by American and authenticated by the Loan Trustee
thereunder, and any such Equipment Notes issued in exchange therefor or
replacement thereof pursuant to the terms of such Indenture.
"Series D Equipment Notes" means the equipment notes, if any, issued
pursuant to any Indenture by American and authenticated by the Loan Trustee
thereunder, and designated "Series D Equipment Notes" thereunder, and any such
equipment notes issued in exchange therefor or replacement thereof pursuant to
the terms of such Indenture.
"Special Distribution Date" means, with respect to any Special Payment, the
Business Day chosen by the Subordination Agent pursuant to Section 2.04(a) for
the distribution of such Special Payment in accordance with this Agreement.
"Special Payment" means any payment (other than a Scheduled Payment or a
distribution referred to in Section 2.03(c)) in respect of, or any proceeds of,
any Equipment Note or Collateral (as defined in each Indenture).
"Special Payments Account" means the Eligible Deposit Account created
pursuant to Section 2.02(a) as a sub-account to the Collection Account.
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc.
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"State Street" has the meaning specified in the introductory paragraph to
this Agreement.
"Stated Amount" with respect to any Liquidity Facility, means the Maximum
Commitment (as defined in such Liquidity Facility) of the applicable Liquidity
Provider thereunder.
"Stated Expiration Date" has the meaning specified in Section 3.06(d).
"Stated Interest Rate" means (i) with respect to the Class A-1
Certificates, 6.855% per annum, (ii) with respect to the Class A-2 Certificates,
7.024% per annum, (iii), with respect to the Class B Certificates, 7.324% per
annum, and (iv) with respect to the Class C Certificates, 7.155% per annum.
"Subordination Agent" has the meaning specified in the introductory
paragraph to this Agreement.
"Subordination Agent Incumbency Certificate" has the meaning specified in
Section 2.05(a).
"Subordination Agent Representatives" has the meaning specified in Section
2.05(a).
"Tax" and "Taxes" means all governmental fees (including, without
limitation, license, filing and registration fees) and all taxes (including,
without limitation, franchise, excise, stamp, value added, income, gross
receipts, sales, use and property taxes), withholdings, assessments, levies,
imposts, duties or charges, of any nature whatsoever, together with any related
penalties, fines, additions to tax or interest thereon imposed, withheld, levied
or assessed by any country, taxing authority or governmental subdivision thereof
or therein or by any international authority, including any taxes imposed on any
Person as a result of such Person being required to collect and pay over
withholding taxes.
"Termination Notice" with respect to any Liquidity Facility has the meaning
specified in such Liquidity Facility.
"Threshold Rating" means (a) with respect to the Class A-1 Liquidity
Provider, the Class A-2 Liquidity Provider and the Class B Liquidity Provider, a
short-term unsecured debt rating of P-1 in the case of Moody's and A-1+ in the
case of S&P, and with respect to the Class C Liquidity Provider, a short-term
unsecured debt rating of P-1 in the case of Moody's and A-1 in the case of S&P
and (b) in the case of any Person who does not have a short-term unsecured debt
rating from either or both of such Rating Agencies, then in lieu of such
short-term unsecured debt rating from such Rating Agency or Rating Agencies,
with respect to the Class A-1 Liquidity Provider, the Class A-2 Liquidity
Provider and the Class B Liquidity Provider, a long-term unsecured debt rating
of A1 in the case of Moody's and AA- in the case of S&P, and with respect to the
Class C Liquidity Provider, a long-term unsecured debt rating of A1 in the case
of Moody's and A in the case of S&P.
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"Treasury Regulations" means regulations, including proposed or temporary
regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Triggering Event" means (x) the occurrence of an Indenture Event of
Default under all of the Indentures resulting in a PTC Event of Default with
respect to the most senior Class of Certificates then Outstanding, (y) the
Acceleration of all of the outstanding Equipment Notes or (z) the occurrence of
an American Bankruptcy Event.
"Trust" means any of the Class A-1 Trust, the Class A-2 Trust, the Class B
Trust or the Class C Trust.
"Trust Accounts" has the meaning specified in Section 2.02(a).
"Trust Agreement" means any of the Class A-1 Trust Agreement, the Class A-2
Trust Agreement, the Class B Trust Agreement or the Class C Trust Agreement.
"Trust Property", with respect to any Trust, has the meaning specified in
the Trust Agreement for such Trust.
"Trust Supplement" means an agreement supplemental to the Basic Agreement
pursuant to which (i) a separate trust is created for the benefit of the holders
of Certificates of a series, (ii) the issuance of the Certificates of a series
representing fractional undivided interests in such trust is authorized and
(iii) the terms of the Certificates of such series are established, as such
agreement may from time to time be supplemented, amended or otherwise modified.
"Trustee" means any of the Class A-1 Trustee, the Class A-2 Trustee, the
Class B Trustee or the Class C Trustee.
"Trustee Incumbency Certificate" has the meaning specified in Section
2.05(b).
"Trustee Representatives" has the meaning specified in Section 2.05(b).
"Underwriters" means the several underwriters listed as such in the
Underwriting Agreement.
"Underwriting Agreement" means the Underwriting Agreement, dated September
23, 1999, among the Underwriters and American, relating to the purchase of the
Certificates by the Underwriters, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with its terms.
"United States" means the United States of America.
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"Withdrawal Notice" has the meaning specified in Section 3.06(d).
"Written Notice" means, from the Subordination Agent, any Trustee or
Liquidity Provider, a written instrument executed by the Designated
Representative of such Person. An invoice delivered by a Liquidity Provider
pursuant to Section 3.01 in accordance with its normal invoicing procedures
shall constitute Written Notice under such Section.
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
Section 2.01. Agreement to Terms of Subordination; Payments from Monies
Received Only. (a) Each Trustee hereby acknowledges and agrees to the terms of
subordination set forth in this Agreement in respect of each Class of
Certificates and agrees to enforce such provisions and cause all payments in
respect of the Equipment Notes and the Liquidity Facilities to be applied in
accordance with the terms of this Agreement. In addition, each Trustee hereby
agrees to cause the Equipment Notes purchased by the related Trust to be
registered in the name of the Subordination Agent or its nominee, as agent and
trustee for such Trustee, to be held in trust by the Subordination Agent solely
for the purpose of facilitating the enforcement of the subordination and other
provisions of this Agreement.
(b) Except as otherwise expressly provided in the next succeeding sentence
of this Section 2.01(b), all payments to be made by the Subordination Agent
hereunder shall be made only from amounts received by it that constitute
Scheduled Payments, Special Payments and other payments under the Operative
Agreements, including payments under Section 4.02 of the Participation
Agreements and Section 2.14 of the Indentures, and only to the extent that the
Subordination Agent shall have received sufficient income or proceeds therefrom
to enable it to make such payments in accordance with the terms hereof. Each of
the Trustees and the Subordination Agent hereby agrees and each
Certificateholder, by its acceptance of a Certificate, and each Liquidity
Provider, by entering into the Liquidity Facility to which it is a party, has
agreed to look solely to such amounts to the extent available for distribution
to it as provided in this Agreement or the applicable Trust Agreement, as the
case may be, and that none of the Trustees, Loan Trustees or the Subordination
Agent is personally liable to any of them for any amounts payable or any
liability under this Agreement, any Trust Agreement, any Liquidity Facility or
such Certificate, except (in the case of the Subordination Agent) as expressly
provided herein or (in the case of the Trustees) as expressly provided herein
and in each Trust Agreement or (in the case of the Loan Trustees) as expressly
provided in any Operative Agreement.
Notwithstanding anything to the contrary in this Agreement and in the other
Operative Agreements, the Certificates do not represent indebtedness of the
related Trust, and references in this Agreement and the Operative Agreements to
accrued interest or principal amounts payable on the Certificates of any Class
are included only for computational purposes. For purposes of such
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computations, the Certificates of any Class shall be deemed to be comprised of
interest and principal components, with the principal component deemed to be the
Pool Balance, and the interest component deemed to equal interest accruing at
the Stated Interest Rate for such Class of Certificates from (i) the later of
(1) the date of the issuance thereof and (2) the most recent but preceding
Distribution Date to which such interest was distributed to (ii) the applicable
date of determination, such interest to be considered payable in arrears and to
be calculated on the basis of a 360-day year comprised of twelve 30-day months.
Section 2.02. Trust Accounts. (a) Upon the execution of this Agreement, the
Subordination Agent shall establish and maintain in its name (i) the Collection
Account as an Eligible Deposit Account, bearing a designation clearly indicating
that the funds deposited therein are held in trust for the benefit of the
Trustees, the Certificateholders and the Liquidity Providers, and (ii) as a
sub-account in the Collection Account, the Special Payments Account as an
Eligible Deposit Account, bearing a designation clearly indicating that the
funds deposited therein are held in trust for the benefit of the Trustees, the
Certificateholders and the Liquidity Providers. The Subordination Agent shall
establish and maintain the Cash Collateral Accounts pursuant to and under the
circumstances set forth in Section 3.06(f). Upon such establishment and
maintenance under Section 3.06(f), the Cash Collateral Accounts shall, together
with the Collection Account, constitute the "Trust Accounts" hereunder.
(b) Funds on deposit in the Trust Accounts shall be invested and reinvested
by the Subordination Agent in Eligible Investments selected by American or its
designated representative if such investments are reasonably available and have
maturities no later than the earlier of (i) 90 days following the date of such
investment and (ii) the Business Day immediately preceding the Regular
Distribution Date or the date of the related distribution pursuant to Section
2.04, as the case may be, next following the date of such investment; provided,
however, that, following the making of a Downgrade Drawing or a Non-Extension
Drawing under any Liquidity Facility, the Subordination Agent shall invest and
reinvest the amounts in the applicable Cash Collateral Account in Eligible
Investments pursuant to the written instructions of the Liquidity Provider
funding such Drawing, and provided further, however, that upon the occurrence
and during the continuation of a Triggering Event, the Subordination Agent shall
invest and reinvest such amounts (other than amounts in the Cash Collateral
Accounts as a result of a Downgrade Drawing or a Non-Extension Drawing, which
shall be governed by the foregoing proviso) in Eligible Investments in
accordance with the written instructions of the Controlling Party. Unless
otherwise expressly provided in this Agreement (including, without limitation,
with respect to Investment Earnings on amounts on deposit in the Cash Collateral
Accounts, Section 3.06(f)), any Investment Earnings shall be deposited in the
Collection Account when received by the Subordination Agent and shall be applied
by the Subordination Agent in the same manner as the other amounts on deposit in
the Collection Account are to be applied. The Subordination Agent's reasonable
fees and expenses in making such investments and any losses incurred in such
investments shall be charged against the principal amount invested. The
Subordination Agent shall not be liable for any loss resulting from any
investment, reinvestment or liquidation required to be made under this Agreement
other than by reason of its willful misconduct or negligence. Eligible
Investments and any other investment
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required to be made hereunder shall be held to their maturities except that any
such investment may be sold (without regard to its maturity) by the
Subordination Agent without instructions whenever such sale is necessary to make
a distribution required under this Agreement. Uninvested funds held hereunder
shall not earn or accrue interest.
(c) The Subordination Agent shall possess all right, title and interest in
all funds on deposit from time to time in the Trust Accounts and in all proceeds
thereof (including all income thereon, except as otherwise expressly provided
herein with respect to Investment Earnings). The Trust Accounts shall be held in
trust by the Subordination Agent under the sole dominion and control of the
Subordination Agent for the benefit of the Trustees, the Certificateholders and
the Liquidity Providers, as the case may be. If, at any time, any of the Trust
Accounts ceases to be an Eligible Deposit Account, the Subordination Agent shall
within 10 Business Days (or such longer period, not to exceed 30 calendar days,
to which each Rating Agency may consent) establish a new Collection Account,
Special Payments Account or Cash Collateral Account, as the case may be, as an
Eligible Deposit Account and shall transfer any cash and/or any investments to
such new Collection Account, Special Payments Account or Cash Collateral
Account, as the case may be. So long as the Subordination Agent is an Eligible
Institution, the Trust Accounts shall be maintained with it as Eligible Deposit
Accounts.
Section 2.03. Deposits to the Collection Account and Special Payments
Account; Certain Distributions. (a) The Subordination Agent shall, on each day
when one or more Scheduled Payments are made to the Subordination Agent as
holder of the Equipment Notes, deposit in the Collection Account the aggregate
amount of such Scheduled Payments.
(b) The Subordination Agent shall, on each day when one or more Special
Payments are made to the Subordination Agent as holder of the Equipment Notes,
deposit in the Special Payments Account the aggregate amount of such Special
Payments.
(c) In the event that a Loan Trustee distributes to the Subordination Agent
pursuant to Section 3.04 or clause "first" of Section 3.03 of any Indenture any
amounts payable under clauses (b), (c) or (d) of Section 2.14 of any Indenture,
the Subordination Agent shall promptly deposit such amounts in the Collection
Account. The Subordination Agent will distribute promptly upon receipt thereof
(or in the case of any such payment, compensation or reimbursement in respect of
the Subordination Agent, will retain) (i) any indemnity payment received by it
from American in respect of any Trustee, the Subordination Agent or any
Liquidity Provider (collectively, the "Payees") and (ii) any compensation or
reimbursement received by it from American or the Loan Trustee under any
Operative Agreement in respect of any Payee (including, without limitation, any
fees payable to any Liquidity Provider under Section 2.03 of any Liquidity
Facility or other amounts referred to in clauses (a), (e) or (f) of Section 2.14
of any Indenture), in any such case directly to the Payee entitled thereto,
provided that if such Payee has previously received from the Collection Account
such payment, compensation or reimbursement, then the Subordination Agent shall
deposit such amount in the Collection Account.
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Section 2.04. Distributions of Special Payments. (a) Notice of Special
Payment. Upon receipt by the Subordination Agent, as registered holder of the
Equipment Notes, of any notice of a Special Payment (or, in the absence of any
such notice, upon receipt by the Subordination Agent of a Special Payment), the
Subordination Agent shall promptly give notice thereof to each Trustee and the
Liquidity Providers. The Subordination Agent shall promptly calculate the amount
of the prepayment (including upon Acceleration), redemption or purchase of
Equipment Notes or the amount of any Overdue Scheduled Payment, as the case may
be, comprising such Special Payment under the applicable Indenture or Indentures
and shall promptly send to each Trustee a Written Notice of such amount and the
amount allocable to each Trust. Such Written Notice shall also set the
distribution date for such Special Payment (a "Special Distribution Date"),
which shall be the first Business Day that follows the later to occur of (x) the
15th day after the date of such Written Notice or (y) the date the Subordination
Agent has received or expects to receive such Special Payment. Amounts on
deposit in the Special Payments Account shall be distributed in accordance with
Sections 2.04(b) and 2.04(c) hereof, as applicable.
(b) Redemptions, Purchases and Prepayments of Equipment Notes. (i) So long
as no Triggering Event shall have occurred (whether or not continuing), the
Subordination Agent shall make distributions pursuant to this Section 2.04(b) of
amounts on deposit in the Special Payments Account on account of the redemption,
purchase (including, without limitation, a purchase resulting from a sale of the
Equipment Notes permitted by Article IV) or prepayment (including upon
Acceleration) of all of the Equipment Notes issued pursuant to an Indenture on
the Special Distribution Date for such Special Payment in the following order of
priority:
first, such amount as shall be required to pay (A) all accrued and unpaid
Liquidity Expenses then in arrears plus (B) the product of (x) the aggregate
amount of all accrued and unpaid Liquidity Expenses not in arrears to such
Special Distribution Date multiplied by (y) a fraction, the numerator of which
is the aggregate outstanding principal amount of Equipment Notes being redeemed,
purchased or prepaid on such Special Distribution Date and the denominator of
which is the aggregate outstanding principal amount of all Equipment Notes,
shall be distributed to the Liquidity Providers pro rata on the basis of the
amount of Liquidity Expenses owed to each Liquidity Provider;
second, such amount as shall be required to pay (A) all accrued and unpaid
interest (including interest accrued and unpaid on any Interest Drawing or any
Applied Provider Advance (as defined in any Liquidity Facility)) then in arrears
on all Liquidity Obligations plus (B) the product of (x) the aggregate amount of
all accrued and unpaid interest on all Liquidity Obligations not in arrears to
such Special Distribution Date (at the rate provided in the applicable Liquidity
Facility) multiplied by (y) a fraction, the numerator of which is the aggregate
outstanding principal amount of Equipment Notes being redeemed, purchased or
prepaid on such Special Distribution Date and the denominator of which is the
aggregate outstanding principal amount of all Equipment Notes, shall be
distributed to the Liquidity Providers pro rata on the basis of the amount of
accrued and unpaid interest owed to each Liquidity Provider;
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third, such amount as shall be required (A) if any Cash Collateral Account
has been previously funded as provided in Section 3.06(f), to fund such Cash
Collateral Account up to its Required Amount shall be deposited in such Cash
Collateral Account, (B) if any Liquidity Facility shall have become a Downgraded
Facility or a Non-Extended Facility at a time when unreimbursed Interest
Drawings under such Liquidity Facility have reduced the Available Amount
thereunder to zero, to deposit into the related Cash Collateral Account an
amount equal to such Cash Collateral Account's Required Amount shall be
deposited in such Cash Collateral Account, and (C) if, with respect to any
particular Liquidity Facility, neither subclause (A) nor subclause (B) of this
clause "third" is applicable, to pay or reimburse the Liquidity Provider in
respect of such Liquidity Facility in an amount equal to the amount of any
unreimbursed Interest Drawings under such Liquidity Facility shall be
distributed to such Liquidity Provider, in each case pro rata on the basis of
the amounts of the required deposits and/or unreimbursed Interest Drawings;
fourth, if, with respect to any particular Liquidity Facility, any amounts
are to be distributed pursuant to either subclause (A) or (B) of clause "third"
above, then the Liquidity Provider with respect to such Liquidity Facility shall
be paid the excess of (x) the aggregate outstanding amount of unreimbursed
Advances (whether or not then due) under such Liquidity Facility over (y) the
Required Amount for the relevant Class, pro rata on the basis of such amounts in
respect of each Liquidity Provider;
fifth, if any Class A-1 Certificates or Class A-2 Certificates are
Outstanding on such Special Distribution Date, such amount as shall be required
to pay in full Expected Distributions to the holders of Class A-1 Certificates
on such Special Distribution Date shall be distributed to the Class A-1 Trustee
and such amount as shall be required to pay in full Expected Distributions to
the holders of Class A-2 Certificates on such Special Distribution Date shall be
distributed to the Class A-2 Trustee, pro rata on the basis of such amounts in
respect of each such Class of Certificates;
sixth, if any Class B Certificates are Outstanding on such Special
Distribution Date, such amount as shall be required to pay in full Expected
Distributions to the holders of Class B Certificates on such Special
Distribution Date shall be distributed to the Class B Trustee;
seventh, if any Class C Certificates are Outstanding on such Special
Distribution Date, such amount as shall be required to pay in full Expected
Distributions to the holders of Class C Certificates on such Special
Distribution Date shall be distributed to the Class C Trustee;
eighth, if the Class D Certificates have been issued and any Class D
Certificates are Outstanding on such Special Distribution Date, such amount as
shall be required to pay in full Expected Distributions to holders of Class D
Certificates on such Special Distribution Date shall be distributed to the Class
D Trustee; and
ninth, the balance, if any, of such Special Payment shall be deposited in
the Collection Account.
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For the purposes of this Section 2.04(b), clause (x) of the definition of
"Expected Distributions" shall be deemed to read as follows: "(x) accrued, due
and unpaid interest in respect of such Certificates together with (without
duplication) accrued and unpaid interest in respect of a portion of such
Certificates equal to the outstanding principal amount of Equipment Notes being
redeemed, purchased or prepaid (immediately prior to such redemption, purchase
or prepayment)".
(ii) Upon the occurrence of a Triggering Event (whether or not continuing),
the Subordination Agent shall make distributions pursuant to this Section
2.04(b) of amounts on deposit in the Special Payments Account on account of the
redemption, purchase or prepayment of the Equipment Notes issued pursuant to an
Indenture on the Special Distribution Date for such Special Payment in
accordance with Section 3.03.
(c) Other Special Payments. Any amounts on deposit in the Special Payments
Account other than in respect of amounts to be distributed pursuant to Section
2.04(b) shall be distributed on the Special Distribution Date therefor in
accordance with Article III.
(d) Investment of Amounts in Special Payments Account. Any amounts on
deposit in the Special Payments Account prior to the distribution thereof
pursuant to Section 2.04(b) or 2.04(c) shall be invested in accordance with
Section 2.02(b). Investment Earnings on such investments shall be distributed in
accordance with Section 2.04(b) or 2.04(c), as the case may be.
Section 2.05. Designated Representatives. (a) With the delivery of this
Agreement, the Subordination Agent shall furnish to each Liquidity Provider and
each Trustee, and from time to time thereafter may furnish to each Liquidity
Provider and each Trustee, at the Subordination Agent's discretion, or upon any
Liquidity Provider's or Trustee's request (which request shall not be made more
than one time in any 12-month period), a certificate (a "Subordination Agent
Incumbency Certificate") of a Responsible Officer of the Subordination Agent
certifying as to the incumbency and specimen signatures of the officers of the
Subordination Agent and the attorney-in-fact and agents of the Subordination
Agent (the "Subordination Agent Representatives") authorized to give Written
Notices on behalf of the Subordination Agent hereunder. Until each Liquidity
Provider and Trustee receives a subsequent Subordination Agent Incumbency
Certificate, it shall be entitled to rely on the last Subordination Agent
Incumbency Certificate delivered to it hereunder.
(b) With the delivery of this Agreement, each Trustee shall furnish to the
Subordination Agent, and from time to time thereafter may furnish to the
Subordination Agent, at such Trustee's discretion, or upon the Subordination
Agent's request (which request shall not be made more than one time in any
12-month period), a certificate (with respect to each such Trustee, a "Trustee
Incumbency Certificate") of a Responsible Officer of such Trustee certifying as
to the incumbency and specimen signatures of the officers of such Trustee and
the attorney-in-fact and agents of such Trustee (with respect to each such
Trustee, the "Trustee Representatives") authorized to give Written Notices on
behalf of such Trustee hereunder. Until the Subordination Agent receives a
subsequent Trustee Incumbency Certificate from a Trustee, it shall be entitled
to rely on the last Trustee Incumbency Certificate with respect to such Trustee
delivered to it hereunder.
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(c) With the delivery of this Agreement, each Liquidity Provider shall
furnish to the Subordination Agent, and from time to time thereafter may furnish
to the Subordination Agent, at such Liquidity Provider's discretion, or upon the
Subordination Agent's request (which request shall not be made more than one
time in any 12-month period), a certificate (with respect to each such Liquidity
Provider, an "LP Incumbency Certificate") of a Responsible Officer of such
Liquidity Provider certifying as to the incumbency and specimen signatures of
the officers of such Liquidity Provider and the attorney-in-fact and agents of
such Liquidity Provider (with respect to each such Liquidity Provider, the "LP
Representatives" and, together with the Subordination Agent Representatives and
the Trustee Representatives, the "Designated Representatives") authorized to
give Written Notices on behalf of such Liquidity Provider hereunder. Until the
Subordination Agent receives a subsequent LP Incumbency Certificate from a
Liquidity Provider, it shall be entitled to rely on the last LP Incumbency
Certificate with respect to such Liquidity Provider delivered to it hereunder.
Section 2.06. Controlling Party. (a) The Trustees and the Liquidity
Providers hereby agree that, with respect to any Indenture at any given time,
the Loan Trustee thereunder will be directed (i) in taking, or refraining from
taking, any action under such Indenture or with respect to the Equipment Notes
issued thereunder, so long as no Indenture Event of Default has occurred and is
continuing thereunder, by the holders of at least a majority of the outstanding
principal amount of such Equipment Notes (provided that, for so long as the
Subordination Agent is the registered holder of such Equipment Notes, the
Subordination Agent shall act with respect to this clause (i) in accordance with
the directions of the Trustees of Trusts for which the related Trust Properties
include, in the aggregate, such a majority of outstanding principal amount of
such Equipment Notes), and (ii) after the occurrence and during the continuance
of an Indenture Event of Default thereunder, in taking, or refraining from
taking, any action under such Indenture or with respect to such Equipment Notes,
including exercising remedies thereunder (including Accelerating the Equipment
Notes issued thereunder or foreclosing the Lien created thereunder on the
Aircraft securing such Equipment Notes), by the Subordination Agent as directed
by the Controlling Party.
(b) The Person who shall be the "Controlling Party" with respect to any
Indenture shall be: (w) initially, the Class A-1 Trustee or the Class A-2
Trustee, whichever represents the Class with the larger Pool Balance of
Certificates Outstanding at the time such Indenture Event of Default occurs
(whether or not any other Indenture Event of Default shall thereafter occur so
long as such initial Indenture Event of Default shall continue); (x) upon
payment of Final Distributions to the holders of Certificates of such larger
Class, the other of the Class A-1 Trustee or the Class A-2 Trustee; (y) upon
payment of Final Distributions to the holders of Class A-1 Certificates and
Class A-2 Certificates, the Class B Trustee; and (z) upon payment of Final
Distributions to the holders of Class B Certificates, the Class C Trustee. For
purposes of giving effect to the foregoing, the Trustees (other than the
Controlling Party) irrevocably agree (and the Certificateholders (other than the
Certificateholders represented by the Controlling Party) shall be deemed to
agree by virtue of their purchase of Certificates) that the Subordination Agent,
as record holder of the Equipment Notes, shall exercise its voting rights in
respect of the Equipment Notes as directed by the Controlling Party and any vote
so exercised shall be binding upon the Trustees and all Certificateholders.
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The Subordination Agent shall give written notice to all of the other
parties to this Agreement promptly upon a change in the identity of the
Controlling Party. Each of the parties hereto agrees that it shall not exercise
any of the rights of the Controlling Party at such time as it is not the
Controlling Party hereunder; provided, however, that nothing herein contained
shall prevent or prohibit any Non-Controlling Party from exercising such rights
as shall be specifically granted to such Non-Controlling Party hereunder and
under the other Operative Agreements.
(c) Notwithstanding the foregoing, at any time after 18 months from the
earliest to occur of (i) the date on which the entire Available Amount under any
Liquidity Facility shall have been drawn (for any reason other than a Downgrade
Drawing or a Non-Extension Drawing) and remain unreimbursed, (ii) the date on
which the entire amount of any Downgrade Drawing or Non-Extension Drawing under
any Liquidity Facility shall have become and remain "Applied Downgrade Advances"
or "Applied Non-Extension Advances", as the case may be, under and as defined in
such Liquidity Facility and (iii) the date on which all Equipment Notes shall
have been Accelerated, the Liquidity Provider(s) with the greatest amount of
unreimbursed Liquidity Obligations shall have the right to elect, by Written
Notice to the Subordination Agent and each of the Trustees, to become the
Controlling Party hereunder with respect to any Indenture at any time from and
including the last day of such 18-month period.
(d) The exercise of remedies by the Controlling Party under this Agreement
shall be expressly limited by Section 4.01(a)(ii).
(e) The Controlling Party shall not be entitled to require or obligate any
Non-Controlling Party to provide funds necessary to exercise any right or remedy
hereunder.
(f) Notwithstanding anything contained herein, neither the Controlling
Party nor the Subordination Agent shall be authorized or empowered to do
anything that would cause any Trust to fail to qualify as a "grantor trust" for
federal income tax purposes.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED
Section 3.01. Written Notice of Distribution. (a) No later than 3:00 P.M.
(New York City time) on the Business Day immediately preceding each Regular
Distribution Date (or Special Distribution Date for purposes of Section 2.04(b),
as the case may be), each of the following Persons shall deliver to the
Subordination Agent a Written Notice setting forth the following information as
at the close of business on such Business Day:
(i) With respect to the Class A-1 Certificates and the Class A-2
Certificates, if any are then Outstanding, the Class A-1 Trustee and the Class
A-2 Trustee, respectively, shall separately set
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forth the amounts to be paid in accordance with clause "fifth" of Section 3.02
or 2.04(b), as the case may be (without giving effect to the pro rata sharing
therein);
(ii) With respect to the Class B Certificates, if any are then Outstanding,
the Class B Trustee shall separately set forth the amounts to be paid in
accordance with clause "sixth" of Section 3.02 or 2.04(b), as the case may be;
(iii) With respect to the Class C Certificates, if any are then
Outstanding, the Class C Trustee shall separately set forth the amounts to be
paid in accordance with clause "seventh" of Section 3.02 or 2.04(b), as the case
may be;
(iv) With respect to each Liquidity Facility, the Liquidity Provider
thereunder shall separately set forth the amounts to be paid in accordance with
clauses "first", "second", "third" and "fourth" of Section 3.02 or 2.04(b), as
the case may be; and
(v) Each Trustee shall set forth the amounts to be paid in accordance with
clause "ninth" of Section 3.02.
The notices required under this Section 3.01(a) may be in the form of a schedule
or similar document provided to the Subordination Agent by the parties
referenced therein or by any one of them, which schedule or similar document may
state that, unless there has been a redemption, purchase or prepayment of the
Equipment Notes, such schedule or similar document is to remain in effect until
any substitute notice or amendment shall be given to the Subordination Agent by
the party providing such notice.
(b) Following the occurrence of a Triggering Event, the Subordination Agent
shall request the following information from the following Persons, and may from
time to time thereafter again request such information from such Persons, and
each of the following Persons shall, within five Business Days of such request
of the Subordination Agent, deliver a Written Notice to the Subordination Agent
setting forth for such Person the following information:
(i) With respect to the Class A-1 Certificates and the Class A-2
Certificates, if any are then Outstanding, the Class A-1 Trustee and the Class
A-2 Trustee, respectively, shall separately set forth the amounts to be paid in
accordance with clauses "first" (to reimburse payments made by the Class A-1
Certificateholders and the Class A-2 Certificateholders, respectively, pursuant
to subclause (iii) of clause "first" of Section 3.03), "sixth" (to reimburse
payments made by the Class A-1 Certificateholders and the Class A-2
Certificateholders pursuant to subclause (iii) of clause "sixth" of Section
3.03) and "seventh" of Section 3.03 (without giving effect to the pro rata
sharing therein);
(ii) With respect to the Class B Certificates, if any are then Outstanding,
the Class B Trustee shall separately set forth the amounts to be paid in
accordance with clauses "first" (to reimburse payments made by the Class B
Certificateholders pursuant to subclause (iii) of clause
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"first" of Section 3.03), "sixth" (to reimburse payments made by the Class B
Certificateholders pursuant to subclause (iii) of clause "sixth" of Section
3.03) and "eighth" of Section 3.03;
(iii) With respect to the Class C Certificates, if any are then
Outstanding, the Class C Trustee shall separately set forth the amounts to be
paid in accordance with clauses "first" (to reimburse payments made by the Class
C Certificateholders pursuant to subclause (iii) of clause "first" of Section
3.03), "sixth" (to reimburse payments made by the Class C Certificateholders
pursuant to subclause (iii) of clause "sixth" of Section 3.03) and "ninth" of
Section 3.03;
(iv) With respect to each Liquidity Facility, the Liquidity Provider
thereunder shall separately set forth the amounts to be paid to it in accordance
with subclause (iii) of clause "first" of Section 3.03 and clauses "second",
"third", "fourth" and "fifth" of Section 3.03; and
(v) Each Trustee shall set forth the amounts to be paid in accordance with
subclause (ii) of clause "first" of Section 3.03 and subclause (ii) of clause
"sixth" of Section 3.03.
(c) At such time as a Trustee or a Liquidity Provider shall have received
all amounts owing to it (and, in the case of a Trustee, the Certificateholders
for which it is acting) pursuant to Section 2.04, 3.02 or 3.03, as applicable,
and, in the case of a Liquidity Provider, its commitment under the related
Liquidity Facility shall have terminated or expired, such Person shall, by a
Written Notice, so inform the Subordination Agent and each other party to this
Agreement.
(d) As provided in Section 6.05, the Subordination Agent shall be fully
protected in relying on any of the information set forth in a Written Notice
provided by any Trustee or any Liquidity Provider pursuant to Sections 3.01(a),
3.01(b) and 3.01(c) above and shall have no independent obligation to verify,
calculate or recalculate any amount set forth in any Written Notice delivered in
accordance with such paragraphs.
(e) Any Written Notice delivered by a Trustee or a Liquidity Provider, as
applicable, pursuant to Section 3.01(a), 3.01(b) or 3.01(c), if made prior to
10:00 A.M. (New York City time) on a given date that is a Business Day shall be
effective on the date delivered (or if delivered later on such date or on a day
that is not a Business Day shall be effective as of the next Business Day).
Subject to the terms of this Agreement, the Subordination Agent shall as
promptly as practicable comply with any such instructions; provided, however,
that any transfer of funds pursuant to any instruction received after 10:00 A.M.
(New York City time) on any Business Day may be made on the next succeeding
Business Day.
(f) In the event the Subordination Agent shall not receive from any Person
any information set forth in Section 3.01(a) or 3.01(b) that is required to
enable the Subordination Agent to make a distribution to such Person pursuant to
Section 2.04(b), 3.02 or 3.03, the Subordination Agent shall not make such
distribution(s) to such Person. In such event, the Subordination Agent shall
make distributions pursuant to clauses "first" through "ninth" of Section
2.04(b), clauses "first" through "tenth" of Section 3.02 and clauses "first"
through "eleventh" of Section 3.03 to the
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extent it shall have sufficient information to enable it to make such
distributions, and shall continue to hold any funds remaining, after making such
distributions, on the terms hereof (including Section 2.02(b)) until the
Subordination Agent shall receive all necessary information to enable it to
distribute any funds so withheld, and upon receipt of the information necessary
to distribute any funds so withheld, the Subordination Agent shall distribute
such funds.
(g) On such dates (but not more frequently than monthly) as any Liquidity
Provider or any Trustee shall request, but in any event automatically at the end
of each calendar quarter, the Subordination Agent shall send to such party a
written statement reflecting all amounts on deposit with the Subordination Agent
pursuant to Section 3.01(f).
Section 3.02. Distribution of Amounts on Deposit in the Collection Account.
Except as otherwise provided in Sections 2.04, 3.01(f), 3.03, 3.04 and 3.06(b),
amounts on deposit in the Collection Account (or, in the case of any amount
described in Section 2.04(c), on deposit in the Special Payments Account) shall
be promptly distributed on each Regular Distribution Date (or, in the case of
any amount described in Section 2.04(c), on the Special Distribution Date
thereof) in the following order of priority and in accordance with the
information provided to the Subordination Agent pursuant to Section 3.01(a):
first, such amount as shall be required to pay in full all accrued and
unpaid Liquidity Expenses owed shall be distributed to the Liquidity Providers
pro rata on the basis of the amount of Liquidity Expenses owed to each Liquidity
Provider;
second, such amount as shall be required to pay accrued and unpaid interest
on the Liquidity Obligations as provided in the applicable Liquidity Facility
shall be distributed to the Liquidity Providers pro rata on the basis of the
amount of such accrued and unpaid interest owed to each Liquidity Provider;
third, such amount as shall be required (A) if any Cash Collateral Account
has been previously funded as provided in Section 3.06(f), to fund such Cash
Collateral Account up to its Required Amount shall be deposited in such Cash
Collateral Account, (B) if any Liquidity Facility shall have become a Downgraded
Facility or a Non-Extended Facility at a time when unreimbursed Interest
Drawings under such Liquidity Facility have reduced the Available Amount
thereunder to zero, to deposit into the related Cash Collateral Account an
amount equal to such Cash Collateral Account's Required Amount shall be
deposited in such Cash Collateral Account, and (C) if, with respect to any
particular Liquidity Facility, neither subclause (A) nor subclause (B) of this
clause "third" is applicable, to pay or reimburse the Liquidity Provider in
respect of such Liquidity Facility in an amount equal to the amount of all
Liquidity Obligations then due under such Liquidity Facility (other than amounts
payable pursuant to clause "first" or "second" of this Section 3.02) shall be
distributed to such Liquidity Provider, in each case pro rata on the basis of
the amounts of the required deposits and/or unreimbursed Liquidity Obligations;
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fourth, if, with respect to any particular Liquidity Facility and the
related Cash Collateral Account, any amounts are to be distributed pursuant to
either subclause (A) or (B) of clause "third" above, then the Liquidity Provider
with respect to such Liquidity Facility shall be paid the excess of (x) the
aggregate outstanding amount of unreimbursed Advances (whether or not then due)
under such Liquidity Facility over (y) the Required Amount for the relevant
Class, pro rata on the basis of such amounts in respect of each Liquidity
Provider;
fifth, if any Class A-1 Certificates or Class A-2 Certificates are
Outstanding on such Distribution Date, such amount as shall be required to pay
in full Expected Distributions to the holders of the Class A-1 Certificates on
such Distribution Date shall be distributed to the Class A-1 Trustee and such
amount as shall be required to pay in full Expected Distributions to the holders
of the Class A-2 Certificates on such Distribution Date shall be distributed to
the Class A-2 Trustee, pro rata on the basis of such amounts in respect of each
such Class of Certificates;
sixth, if any Class B Certificates are Outstanding on such Distribution
Date, such amount as shall be required to pay in full Expected Distributions to
the holders of the Class B Certificates on such Distribution Date shall be
distributed to the Class B Trustee;
seventh, if any Class C Certificates are Outstanding on such Distribution
Date, such amount as shall be required to pay in full Expected Distributions to
the holders of the Class C Certificates on such Distribution Date shall be
distributed to the Class C Trustee;
eighth, if the Class D Certificates have been issued and any Class D
Certificates are outstanding on such Distribution Date, such amount as shall be
required to pay in full Expected Distributions to holders of Class D
Certificates on such Distribution Date shall be distributed to the Class D
Trustee; and
ninth, such amount as shall be required to pay in full (without duplication
of any amounts otherwise payable hereunder or under any Operative Agreement) the
aggregate unpaid amount of fees and expenses payable as of such Distribution
Date to the Subordination Agent and each Trustee pursuant to the terms of this
Agreement and the Trust Agreements, as the case may be, shall be distributed to
the Subordination Agent and such Trustee; and
tenth, the balance, if any, of any such amount remaining thereafter shall
be held in the Collection Account for later distribution in accordance with this
Article III.
Section 3.03. Distribution of Amounts on Deposit Following a Triggering
Event. Except as otherwise provided in Sections 3.01(f) and 3.06(b), upon the
occurrence of a Triggering Event and at all times thereafter, all funds in the
Collection Account or the Special Payments Account shall be promptly distributed
by the Subordination Agent in the following order of priority:
first, such amount as shall be required to reimburse (i) the Subordination
Agent for any out-of-pocket costs and expenses actually incurred by it (to the
extent not previously reimbursed)
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in the protection of, or the realization of the value of, the Equipment Notes or
any Collateral, shall be applied by the Subordination Agent in reimbursement of
such costs and expenses, (ii) each Trustee for any amounts of the nature
described in clause (i) above actually incurred by it under the applicable Trust
Agreement (to the extent not previously reimbursed), shall be distributed to
such Trustee, and (iii) any Liquidity Provider or Certificateholder for
payments, if any, made by it to the Subordination Agent or any Trustee in
respect of amounts described in clause (i) above, shall be distributed to such
Liquidity Provider or to the applicable Trustee for the account of such
Certificateholder, in each such case, pro rata on the basis of all amounts
described in clauses (i), (ii) and (iii) above;
second, such amount as shall be required to pay all accrued and unpaid
Liquidity Expenses shall be distributed to the Liquidity Providers pro rata on
the basis of the amount of Liquidity Expenses owed to each Liquidity Provider;
third, such amount as shall be required to pay accrued and unpaid interest
on the Liquidity Obligations as provided in the applicable Liquidity Facilities
shall be distributed to the Liquidity Providers pro rata on the basis of the
amount of such accrued and unpaid interest owed to each Liquidity Provider;
fourth, such amount as shall be required (A) if any Cash Collateral Account
has been previously funded as provided in Section 3.06(f), unless (i) a
Performing Note Deficiency exists and a Liquidity Event of Default shall have
occurred and be continuing with respect to the relevant Liquidity Facility or
(ii) a Final Drawing shall have occurred with respect to such Liquidity
Facility, to fund such Cash Collateral Account up to its Required Amount (less
the amount of any repayments of Interest Drawings under such Liquidity Facility
while subclause (A)(i) above is applicable) shall be deposited in such Cash
Collateral Account, (B) if any Liquidity Facility shall have become a Downgraded
Facility or a Non-Extended Facility at a time when unreimbursed Interest
Drawings under such Liquidity Facility have reduced the Available Amount
thereunder to zero, unless (i) a Performing Note Deficiency exists and a
Liquidity Event of Default shall have occurred and be continuing with respect to
the relevant Liquidity Facility or (ii) a Final Drawing shall have occurred with
respect to such Liquidity Facility, to deposit into the related Cash Collateral
Account an amount equal to such Cash Collateral Account's Required Amount (less
the amount of any repayments of Interest Drawings under such Liquidity Facility
while subclause (B)(i) above is applicable) shall be deposited in such Cash
Collateral Account, and (C) if, with respect to any particular Liquidity
Facility, neither subclause (A) nor subclause (B) of this clause "fourth" is
applicable, to pay in full the outstanding amount of all Liquidity Obligations
then due under such Liquidity Facility (other than amounts payable pursuant to
clause "second" or "third" of this Section 3.03) shall be distributed to such
Liquidity Provider, in each case pro rata on the basis of the amounts of the
required deposits and/or unreimbursed Liquidity Obligations;
fifth, if, with respect to any particular Liquidity Facility, any amounts
are to be distributed pursuant to either subclause (A) or (B) of clause "fourth"
above, then the Liquidity Provider with respect to such Liquidity Facility shall
be paid the excess of (x) the aggregate outstanding amount
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of unreimbursed Advances (whether or not then due) under such Liquidity Facility
over (y) the Required Amount for the relevant Class (less the amount of any
repayments of Interest Drawings under such Liquidity Facility while subclause
(A)(i) or (B)(i), as the case may be, of clause "fourth" above is applicable),
pro rata on the basis of such amounts in respect of each Liquidity Provider;
sixth, such amount as shall be required to reimburse or pay (i) the
Subordination Agent for any Tax (other than Taxes imposed on compensation paid
hereunder), expense, fee, charge or other loss incurred by, or any other amount
payable to, the Subordination Agent in connection with the transactions
contemplated hereby (to the extent not previously reimbursed), shall be applied
by the Subordination Agent in reimbursement of such amount, (ii) each Trustee
for any Tax (other than Taxes imposed on compensation paid under the applicable
Trust Agreement), expense, fee, charge or other loss incurred by, or any other
amount payable to, such Trustee under the applicable Trust Agreements (to the
extent not previously reimbursed), shall be distributed to such Trustee, and
(iii) each Certificateholder for payments, if any, made by it pursuant to
Section 5.02 in respect of amounts described in clause (i) above (without
duplication of any amounts distributed pursuant to subclause (iii) of clause
"first" of this Section 3.03), shall be distributed to the applicable Trustee
for the account of such Certificateholder, in each such case pro rata on the
basis of all amounts described in clauses (i), (ii) and (iii) above;
seventh, if any Class A-1 Certificates or Class A-2 Certificates are
Outstanding on such Distribution Date, such amount remaining as shall be
required to pay in full Adjusted Expected Distributions on the Class A-1
Certificates shall be distributed to the Class A-1 Trustee and such amount
remaining as shall be required to pay in full Adjusted Expected Distributions on
the Class A-2 Certificates shall be distributed to the Class A-2 Trustee, pro
rata on the basis of such amounts in respect of each such Class of Certificates;
eighth, if any Class B Certificates are Outstanding on such Distribution
Date, such amount remaining as shall be required to pay in full Adjusted
Expected Distributions on the Class B Certificates shall be distributed to the
Class B Trustee;
ninth, if any Class C Certificates are Outstanding on such Distribution
Date, such amount remaining as shall be required to pay in full Adjusted
Expected Distributions on the Class C Certificates shall be distributed to the
Class C Trustee;
tenth, if the Class D Certificates have been issued and any Class D
Certificates are Outstanding on such Distribution Date, such amount remaining as
shall be required to pay in full Adjusted Expected Distributions on the Class D
Certificates shall be distributed to the Class D Trustee; and
eleventh, (i) if any Class A-1 Certificates or Class A-2 Certificates are
Outstanding on such Distribution Date, such amount remaining as shall be
required to pay Final Distributions on the Class A-1 Certificates shall be
distributed to the Class A-1 Trustee and such amount remaining as shall be
required to pay Final Distributions on the Class A-2 Certificates shall be
distributed to the Class A-2
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Trustee, pro rata on the basis of the Pool Balance of each such Class of
Certificates after giving effect to the distributions made on such Distribution
Date pursuant to clause "seventh" of this Section 3.03(a); (ii) after giving
effect to clause (i) if any Class B Certificates are Outstanding on such
Distribution Date, such amount remaining as shall be required to pay Final
Distributions on the Class B Certificates shall be distributed to the Class B
Trustee; (iii) after giving effect to clauses (i) and (ii) if any Class C
Certificates are Outstanding on such Distribution Date, such amount remaining as
shall be required to pay Final Distributions on the Class C Certificates shall
be distributed to the Class C Trustee and (iv) after giving effect to clauses
(i), (ii) and (iii) if the Class D Certificates have been issued and any Class D
Certificates are Outstanding on such Distribution Date, such amount remaining as
shall be required to pay Final Distributions on the Class D Certificates shall
be distributed to the Class D Trustee.
Section 3.04. Other Payments. (a) Any payments received by the
Subordination Agent for which no provision as to the application thereof is made
in this Agreement shall be distributed by the Subordination Agent in the order
of priority specified in Section 3.03; provided, however, that to the extent any
such payments are received or realized at any time after the Final Distributions
for all Classes of Certificates have been made, such payments shall be
distributed in the following order of priority: first, in the manner provided in
clause "first" of Section 3.03 and second, in the manner provided in clause
"tenth" of Section 3.02.
(b) On any Interest Payment Date under each Liquidity Facility which is not
a Distribution Date, the Subordination Agent shall pay to the Liquidity Provider
under such Liquidity Facility from, and to the extent of, amounts on deposit in
the Collection Account, an amount equal to the amount of interest then due and
payable to such Liquidity Provider under such Liquidity Facility.
(c) Except as otherwise provided in Section 3.03 or Sections 3.06(a) and
3.06(b), if the Subordination Agent receives any Scheduled Payment after the
Scheduled Payment Date relating thereto, but prior to such payment becoming an
Overdue Scheduled Payment, then the Subordination Agent shall deposit such
Scheduled Payment in the Collection Account and promptly distribute such
Scheduled Payment in accordance with the priority of distributions set forth in
Section 3.02; provided that, for the purposes of this Section 3.04(c) only, each
reference in clause "ninth" of Section 3.02 to "Distribution Date" shall be
deemed to mean the actual date of payment of such Scheduled Payment and each
reference in clause "fifth", "sixth", "seventh" or "eighth" of Section 3.02 to
"Distribution Date" shall be deemed to refer to such Scheduled Payment Date.
Section 3.05. Payments to the Trustees and the Liquidity Providers. Any
amounts distributed hereunder to any Liquidity Provider shall be paid to such
Liquidity Provider by wire transfer of funds to the address such Liquidity
Provider shall provide to the Subordination Agent. The Subordination Agent shall
provide a Written Notice of any such transfer to the applicable Liquidity
Provider at the time of such transfer. Any amounts distributed hereunder by the
Subordination Agent to any Trustee that is not the same institution as the
Subordination Agent shall be paid to such Trustee by wire transfer of funds at
the address such Trustee shall provide to the Subordination Agent.
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Section 3.06. Liquidity Facilities. (a) Interest Drawings. If on any
Distribution Date, after giving effect to the subordination provisions of this
Agreement, the Subordination Agent shall not have sufficient funds for the
payment of any amounts due and owing in respect of accrued interest on the Class
A-1 Certificates, the Class A-2 Certificates, the Class B Certificates or the
Class C Certificates (at the Stated Interest Rate for such Class of
Certificates), then, prior to 1:00 p.m.(New York City time) on such Distribution
Date, the Subordination Agent shall request a drawing (each such drawing, an
"Interest Drawing") under the Liquidity Facility with respect to such Class of
Certificates in an amount equal to the lesser of (i) an amount sufficient to pay
the amount of such accrued interest (at the Stated Interest Rate for each such
Class of Certificates) and (ii) the Available Amount under such Liquidity
Facility, and shall upon receipt of such amount pay such amount to the Trustee
with respect to each such Class of Certificates in payment of such accrued
interest as provided in Section 3.06(b).
(b) Application of Interest Drawings. Notwithstanding anything to the
contrary contained in this Agreement, (i) all payments received by the
Subordination Agent in respect of an Interest Drawing under the Class A-1
Liquidity Facility and all amounts withdrawn by the Subordination Agent from the
Class A-1 Cash Collateral Account, and payable in each case to the Class A-1
Certificateholders, shall be promptly distributed to the Class A-1 Trustee, (ii)
all payments received by the Subordination Agent in respect of an Interest
Drawing under the Class A-2 Liquidity Facility and all amounts withdrawn by the
Subordination Agent from the Class A-2 Cash Collateral Account, and payable in
each case to the Class A-2 Certificateholders, shall be promptly distributed to
the Class A-2 Trustee, (iii) all payments received by the Subordination Agent in
respect of an Interest Drawing under the Class B Liquidity Facility and all
amounts withdrawn by the Subordination Agent from the Class B Cash Collateral
Account, and payable in each case to the Class B Certificateholders, shall be
promptly distributed to the Class B Trustee, and (iv) all payments received by
the Subordination Agent in respect of an Interest Drawing under the Class C
Liquidity Facility and all amounts withdrawn by the Subordination Agent from the
Class C Cash Collateral Account, and payable in each case to the Class C
Certificateholders, shall be promptly distributed to the Class C Trustee.
(c) Downgrade Drawings. The Liquidity Provider will promptly, but in any
event within ten days of its receipt of notice thereof, deliver notice of any
downgrading of its debt ratings to the Subordination Agent and American. If at
any time the short-term unsecured debt rating of any Liquidity Provider issued
by either Rating Agency (or, if such Liquidity Provider does not have a
short-term unsecured debt rating issued by a given Rating Agency, the long-term
unsecured debt rating of such Liquidity Provider issued by such Rating Agency)
is lower than the applicable Threshold Rating, within 30 days after such
Liquidity Provider receives notice of such downgrading (or within 45 days after
its receipt of such notice solely in the event of a downgrading of such
Liquidity Provider's short-term unsecured debt rating by S&P from A-1+ to A-1)
(but not later than the expiration date of the Liquidity Facility issued by the
downgraded Liquidity Provider (the "Downgraded Facility")), such Liquidity
Provider or American may arrange for a Replacement Liquidity Provider to issue
and deliver a Replacement Liquidity Facility to the Subordination Agent. If a
Downgraded Facility has not been replaced in accordance with the terms of this
paragraph, the
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Subordination Agent shall, on such 30th (or 45th) day (or if such 30th (or 45th)
day is not a Business Day, on the next succeeding Business Day) (or, if earlier,
on the expiration date of such Downgraded Facility), request a drawing in
accordance with and to the extent permitted by such Downgraded Facility (such
drawing, a "Downgrade Drawing") of all available and undrawn amounts thereunder.
Amounts drawn pursuant to a Downgrade Drawing shall be maintained and invested
as provided in Section 3.06(f). Subject to Section 3.06(e)(iii), the Liquidity
Provider may also arrange for a Replacement Liquidity Provider to issue and
deliver a Replacement Liquidity Facility at any time after such Downgrade
Drawing so long as such Downgrade Drawing has not been reimbursed in full to the
Liquidity Provider.
(d) Non-Extension Drawings. If any Liquidity Facility with respect to any
Class of Certificates is scheduled to expire on a date (the "Stated Expiration
Date") prior to the date that is 15 days after the Final Legal Distribution Date
for such Class of Certificates, then no earlier than the 60th day and no later
than the 40th day prior to the then applicable Stated Expiration Date, the
Subordination Agent shall request in writing that such Liquidity Provider extend
the Stated Expiration Date to the earlier of (i) the date that is 15 days after
the Final Legal Distribution Date for such Class of Certificates and (ii) the
date that is the day immediately preceding the 364th day after the last day of
the Consent Period (unless the obligations of such Liquidity Provider thereunder
are earlier terminated in accordance with such Liquidity Facility). The
Liquidity Provider shall by notice (the "Consent Notice") to the Subordination
Agent during the period commencing on the date that is 60 days prior to the then
effective Stated Expiration Date and ending on the date that is 25 days prior to
such Stated Expiration Date (the "Consent Period") advise the Subordination
Agent whether, in its sole discretion, it agrees to so extend the Stated
Expiration Date; provided, however, that such extension shall not be effective
with respect to such Liquidity Provider if, by notice (the "Withdrawal Notice")
to the Subordination Agent prior to the end of the Consent Period, the Liquidity
Provider revokes its Consent Notice. If the Liquidity Provider advises the
Subordination Agent in the Consent Notice that such Stated Expiration Date shall
not be so extended or gives a Withdrawal Notice to the Subordination Agent prior
to the end of the Consent Period, or fails to irrevocably and unconditionally
advise the Subordination Agent on or before the end of the Consent Period that
such Stated Expiration Date shall be so extended (and, in each case, if the
Liquidity Provider shall not have been replaced in accordance with Section
3.06(e)), the Subordination Agent shall, on the date on which the Consent Period
ends (or as soon as possible thereafter but prior to the Stated Expiration
Date), in accordance with and to the extent permitted by the terms of the
expiring Liquidity Facility (a "Non-Extended Facility"), request a drawing under
such expiring Liquidity Facility (such drawing, a "Non-Extension Drawing") of
all available and undrawn amounts thereunder. Amounts drawn pursuant to a
Non-Extension Drawing shall be maintained and invested in accordance with
Section 3.06(f). If any amounts shall be drawn pursuant to a Non-Extension
Drawing and, within 30 days thereafter, the Liquidity Provider shall not have
been replaced, then at any time following the 30th day after such Non-Extension
Drawing, the Liquidity Provider may, by written notice to the Subordination
Agent, agree to reinstate the Liquidity Facility on the terms of the existing
Liquidity Facility for a period ending on the 364th day after the end of the
Consent Period; provided, however, that in such event the Liquidity Provider
shall reimburse the Subordination Agent for any costs actually incurred by or on
behalf of the Subordination Agent in
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drawing pursuant to the Non-Extension Drawing and funding the Cash Collateral
Account or otherwise in connection with the Non-Extension Drawing.
(e) Issuance of Replacement Liquidity Facility. (i) Subject to Section
3.06(e)(iii), at any time, American may, at its option, with cause or without
cause, arrange for a Replacement Liquidity Facility to replace any Liquidity
Facility for any Class of Certificates (including any Replacement Liquidity
Facility provided pursuant to Section 3.06(e)(ii)); provided, however, that if
the initial Liquidity Provider is replaced it shall be replaced with respect to
all Liquidity Facilities under which it is a Liquidity Provider, and provided
further, however, that the initial Liquidity Provider shall not be replaced by
American as the Liquidity Provider with respect to any Class of Certificates
prior to the fifth anniversary of the Closing Date unless (A) there shall have
become due to the initial Liquidity Provider, or the initial Liquidity Provider
shall have demanded, amounts pursuant to Section 3.01 or 3.03 of any Liquidity
Facility and the replacement of the initial Liquidity Provider would reduce or
eliminate the obligation to pay such amounts or American determines in good
faith that there is a substantial likelihood that the initial Liquidity Provider
will have the right to claim any such amounts within 180 days after the date of
such determination (unless the initial Liquidity Provider waives, in writing,
any right it may have to claim such amounts), which determination shall be set
forth in a certificate delivered by American to the initial Liquidity Provider
accompanied by an opinion of outside counsel selected by American and reasonably
acceptable to such initial Liquidity Provider verifying the legal conclusions,
if any, of such certificate relating to such basis, provided that in the case of
any likely claim for amounts based upon any proposed, or proposed change in,
law, rule, regulation, interpretation, directive, requirement, request or
administrative practice, such opinion may assume the adoption or promulgation of
such proposed matter, (B) it shall become unlawful or impossible for the initial
Liquidity Provider to maintain or fund its LIBOR Advances as described in
Section 3.10 of any Liquidity Facility, (C) the short-term unsecured debt rating
of the initial Liquidity Provider is downgraded by S&P from A-1+ to A-1 and
there is a resulting downgrade in the rating by either Rating Agency of any
Class of Certificates, (D) any Liquidity Facility of such initial Liquidity
Provider shall become a Downgraded Facility or a Non-Extended Facility or a
Downgrade Drawing or a Non-Extension Drawing shall have occurred under any
Liquidity Facility or (E) the initial Liquidity Provider shall have breached any
of its payment (including, without limitation, funding) obligations under any
Liquidity Facility. If such Replacement Liquidity Facility is provided at any
time after a Downgrade Drawing or a Non-Extension Drawing has been made, all
funds on deposit in the relevant Cash Collateral Account resulting from such
Downgrade Drawing or Non-Extension Drawing will be returned to the Liquidity
Provider being replaced.
(ii) If any Liquidity Provider shall determine not to extend its Liquidity
Facility in accordance with Section 3.06(d), then such Liquidity Provider may,
at its option, arrange for a Replacement Liquidity Facility to replace such
Liquidity Facility during the period no earlier than 40 days and no later than
25 days prior to the then effective Stated Expiration Date of such Liquidity
Facility.
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(iii) No Replacement Liquidity Facility arranged by American or a Liquidity
Provider in accordance with Section 3.06(c) or clause (i) or (ii) of this
Section 3.06(e) shall become effective and no such Replacement Liquidity
Facility shall be deemed a "Liquidity Facility" under the Operative Agreements,
unless and until (A) each of the conditions referred to in Section 3.06(e)(iv)
below shall have been satisfied and (B) in the case of a Replacement Liquidity
Facility arranged by a Liquidity Provider under Section 3.06(c) or Section
3.06(e)(ii), such Replacement Liquidity Provider and such Replacement Liquidity
Facility (including the fees and compensation and interest payable thereunder to
the Replacement Liquidity Provider) are acceptable to American.
(iv) In connection with the issuance of each Replacement Liquidity
Facility, the Subordination Agent shall (x) prior to the issuance of such
Replacement Liquidity Facility, obtain written confirmation from each Rating
Agency that such Replacement Liquidity Facility will not cause a reduction of
any rating then in effect for any Class of Certificates by such Rating Agency
(without regard to any downgrading of any rating of any Liquidity Provider being
replaced pursuant to Section 3.06(c)), (y) pay all Liquidity Obligations then
owing to the replaced Liquidity Provider (which payment shall be made first from
available funds in the applicable Cash Collateral Account as described in
Section 3.06(f)(ix), and thereafter from any other available source, including,
without limitation, a drawing under the Replacement Liquidity Facility) and (z)
cause the issuer of the Replacement Liquidity Facility to deliver the
Replacement Liquidity Facility to the Subordination Agent, together with a legal
opinion addressed to the Subordination Agent, the Trustees and American opining
that such Replacement Liquidity Facility is an enforceable obligation of such
Replacement Liquidity Provider.
(v) Upon satisfaction of the conditions set forth in Sections 3.06(e)(iii)
and 3.06(e)(iv), (w) the replaced Liquidity Facility shall terminate, (x) the
Subordination Agent shall, if and to the extent so requested by American or the
Liquidity Provider being replaced, execute and deliver any certificate or other
instrument required in order to terminate the replaced Liquidity Facility, shall
surrender the replaced Liquidity Facility to the Liquidity Provider being
replaced and shall execute and deliver the Replacement Liquidity Facility and
any associated Fee Letter, (y) each of the parties hereto shall enter into any
amendments to this Agreement necessary to give effect to (1) the replacement of
the applicable Liquidity Provider with the applicable Replacement Liquidity
Provider and (2) the replacement of the applicable Liquidity Facility with the
applicable Replacement Liquidity Facility and (z) the applicable Replacement
Liquidity Provider shall be deemed to be a Liquidity Provider with the rights
and obligations of a Liquidity Provider hereunder and under the other Operative
Agreements and such Replacement Liquidity Facility shall be deemed to be a
Liquidity Facility hereunder and under the other Operative Agreements.
(f) Cash Collateral Accounts; Withdrawals; Investments. If the
Subordination Agent shall draw all available amounts under the Class A-1
Liquidity Facility, the Class A-2 Liquidity Facility, the Class B Liquidity
Facility or the Class C Liquidity Facility pursuant to Section 3.06(c), 3.06(d)
or 3.06(i), or in the event amounts are to be deposited in the Cash Collateral
Account pursuant to subclause (A) or (B) of clause "third" of Section 2.04(b),
subclause (A) or (B) of clause "third" of Section 3.02 or subclause (A) or (B)
of clause "fourth" of Section 3.03, amounts so drawn
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or to be deposited, as the case may be, shall be deposited by the Subordination
Agent in the Class A-1 Cash Collateral Account, the Class A-2 Cash Collateral
Account, the Class B Cash Collateral Account or the Class C Cash Collateral
Account, respectively. All amounts on deposit in each Cash Collateral Account
shall be invested and reinvested in Eligible Investments in accordance with
Section 2.02(b). On each Interest Payment Date (or, in the case of any Special
Distribution Date occurring prior to the occurrence of a Triggering Event, on
such Special Distribution Date), Investment Earnings on amounts on deposit in
each Cash Collateral Account (or in the case of any Special Distribution Date
occurring prior to the occurrence of a Triggering Event, an amount of such
Investment Earnings on amounts of deposits in each Cash Collateral Account equal
to the product of such Investment Earnings multiplied by a fraction, the
numerator of which is the aggregate outstanding principal amount of Equipment
Notes being redeemed, purchased or prepaid on such Special Distribution Date and
the denominator of which is the aggregate outstanding principal amount of all
Equipment Notes) shall be deposited in the Collection Account (or, in the case
of any Special Distribution Date occurring prior to the occurrence of a
Triggering Event, the Special Payments Account) and applied on such Interest
Payment Date (or Special Distribution Date, as the case may be) in accordance
with Section 2.04(b), 3.02, 3.03 or 3.04(b) (as applicable). The Subordination
Agent shall deliver a written statement to American and the Liquidity Provider
one day prior to each Interest Payment Date and Special Distribution Date
setting forth the aggregate amount of Investment Earnings held in the Cash
Collateral Accounts as of such date. In addition, from and after the date funds
are so deposited, the Subordination Agent shall make withdrawals from such
account as follows:
(i) on each Distribution Date, the Subordination Agent shall, to the extent
it shall not have received funds to pay accrued and unpaid interest due and
owing on the Class A-1 Certificates (at the Stated Interest Rate for the Class
A-1 Certificates) from any other source, withdraw from the Class A-1 Cash
Collateral Account, and pay to the Class A-1 Trustee, an amount equal to the
lesser of (x) an amount necessary to pay accrued and unpaid interest (at the
Stated Interest Rate for the Class A-1 Certificates) on such Class A-1
Certificates and (y) the amount on deposit in the Class A-1 Cash Collateral
Account;
(ii) on each Distribution Date, the Subordination Agent shall, to the
extent it shall not have received funds to pay accrued and unpaid interest due
and owing on the Class A-2 Certificates (at the Stated Interest Rate for the
Class A-2 Certificates) from any other source, withdraw from the Class A-2 Cash
Collateral Account, and pay to the Class A-2 Trustee, an amount equal to the
lesser of (x) an amount necessary to pay accrued and unpaid interest (at the
Stated Interest Rate for the Class A-2 Certificates) on such Class A-2
Certificates and (y) the amount on deposit in the Class A-2 Cash Collateral
Account;
(iii) on each Distribution Date, the Subordination Agent shall, to the
extent it shall not have received funds to pay accrued and unpaid interest due
and owing on the Class B Certificates (at the Stated Interest Rate for the Class
B Certificates) from any other source, withdraw from the Class B Cash Collateral
Account, and pay to the Class B Trustee, an amount equal to the lesser of (x) an
amount necessary to pay accrued and unpaid interest (at the Stated Interest Rate
for the
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Class B Certificates) on such Class B Certificates and (y) the amount on deposit
in the Class B Cash Collateral Account;
(iv) on each Distribution Date, the Subordination Agent shall, to the
extent it shall not have received funds to pay accrued and unpaid interest due
and owing on the Class C Certificates (at the Stated Interest Rate for the Class
C Certificates) from any other source, withdraw from the Class C Cash Collateral
Account, and pay to the Class C Trustee, an amount equal to the lesser of (x) an
amount necessary to pay accrued and unpaid interest (at the Stated Interest Rate
for the Class C Certificates) on such Class C Certificates and (y) the amount on
deposit in the Class C Cash Collateral Account;
(v) on each date on which the Pool Balance of the Class A-1 Trust shall
have been reduced by payments made to the Class A-1 Certificateholders pursuant
to Section 2.04(b), 3.02 or 3.03, the Subordination Agent shall withdraw from
the Class A-1 Cash Collateral Account such amount as is necessary so that, after
giving effect to the reduction of such Pool Balance on such date (including any
such reduction resulting from a prior withdrawal of amounts on deposit in the
Class A-1 Cash Collateral Account on such date) and any transfer of Investment
Earnings from such Class A-1 Cash Collateral Account to the Collection Account
or the Special Payments Account on such date, an amount equal to the sum of the
Required Amount (with respect to the Class A-1 Liquidity Facility) plus the
remaining Investment Earnings on deposit in such Class A-1 Cash Collateral
Account (if any) will be on deposit in the Class A-1 Cash Collateral Account and
shall, first, pay such withdrawn amount to the relevant Class A-1 Liquidity
Provider until the Liquidity Obligations (with respect to the Class A-1
Certificates) owing to such Class A-1 Liquidity Provider shall have been paid in
full and, second, deposit any remaining amount in the Collection Account;
(vi) on each date on which the Pool Balance of the Class A-2 Trust shall
have been reduced by payments made to the Class A-2 Certificateholders pursuant
to Section 2.04(b), 3.02 or 3.03, the Subordination Agent shall withdraw from
the Class A-2 Cash Collateral Account such amount as is necessary so that, after
giving effect to the reduction of such Pool Balance on such date (including any
such reduction resulting from a prior withdrawal of amounts on deposit in the
Class A-2 Cash Collateral Account on such date) and any transfer of Investment
Earnings from such Class A-2 Cash Collateral Account to the Collection Account
or the Special Payments Account on such date, an amount equal to the sum of the
Required Amount (with respect to the Class A-2 Liquidity Facility) plus the
remaining Investment Earnings on deposit in such Class A-2 Cash Collateral
Account (if any) will be on deposit in the Class A-2 Cash Collateral Account and
shall, first, pay such withdrawn amount to the relevant Class A-2 Liquidity
Provider until the Liquidity Obligations (with respect to the Class A-2
Certificates) owing to such Class A-2 Liquidity Provider shall have been paid in
full and, second, deposit any remaining amount in the Collection Account;
(vii) on each date on which the Pool Balance of the Class B Trust shall
have been reduced by payments made to the Class B Certificateholders pursuant to
Section 2.04(b), 3.02 or 3.03, the Subordination Agent shall withdraw from the
Class B Cash Collateral Account such amount as is necessary so that, after
giving effect to the reduction of such Pool Balance on such date (including
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any such reduction resulting from a prior withdrawal of amounts on deposit in
the Class B Cash Collateral Account on such date) and any transfer of Investment
Earnings from such Class B Cash Collateral Account to the Collection Account or
the Special Payments Account on such date, an amount equal to the sum of the
Required Amount (with respect to the Class B Liquidity Facility) plus the
remaining Investment Earnings on deposit in such Class B Cash Collateral Account
(if any) will be on deposit in the Class B Cash Collateral Account and shall,
first, pay such withdrawn amount to the relevant Class B Liquidity Provider
until the Liquidity Obligations (with respect to the Class B Certificates) owing
to such Class B Liquidity Provider shall have been paid in full and, second,
deposit any remaining amount in the Collection Account;
(viii) on each date on which the Pool Balance of the Class C Trust shall
have been reduced by payments made to the Class C Certificateholders pursuant to
Section 2.04(b), 3.02 or 3.03, the Subordination Agent shall withdraw from the
Class C Cash Collateral Account such amount as is necessary so that, after
giving effect to the reduction of such Pool Balance on such date (including any
such reduction resulting from a prior withdrawal of amounts on deposit in the
Class C Cash Collateral Account on such date) and any transfer of Investment
Earnings from such Class C Cash Collateral Account to the Collection Account or
the Special Payments Account on such date, an amount equal to the sum of the
Required Amount (with respect to the Class C Liquidity Facility) plus the
remaining Investment Earnings on deposit in such Class C Cash Collateral Account
(if any) will be on deposit in the Class C Cash Collateral Account and shall,
first, pay such withdrawn amount to the relevant Class C Liquidity Provider
until the Liquidity Obligations (with respect to the Class C Certificates) owing
to such Liquidity Provider shall have been paid in full and, second, deposit any
remaining amount in the Collection Account;
(ix) if a Replacement Liquidity Facility for any Class of Certificates
shall be delivered to the Subordination Agent following the date on which funds
have been deposited into the Cash Collateral Account for such Class of
Certificates, the Subordination Agent shall withdraw all amounts remaining on
deposit in such Cash Collateral Account and shall pay such amounts to the
replaced Liquidity Provider until all Liquidity Obligations owed to such Person
shall have been paid in full, and deposit any remaining amount in the Collection
Account; and
(x) following the payment of Final Distributions with respect to any Class
of Certificates, on the date on which the Subordination Agent shall have been
notified by the Liquidity Provider for such Class of Certificates that the
Liquidity Obligations owed to such Liquidity Provider have been paid in full,
the Subordination Agent shall withdraw all amounts on deposit in the Cash
Collateral Account in respect of such Class of Certificates and deposit such
amount in the Collection Account.
(g) Reinstatement. With respect to any Interest Drawing under the Liquidity
Facility for any Trust, upon the reimbursement of the applicable Liquidity
Provider for all or any part of the amount of such Interest Drawing, together
with any accrued interest thereon, the Available Amount of such Liquidity
Facility shall be reinstated by an amount equal to the amount of such Interest
Drawing so reimbursed to the applicable Liquidity Provider but not to exceed the
Stated Amount for such Liquidity Facility; provided, however, that the Available
Amount of such Liquidity Facility
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shall not be so reinstated in part or in full at any time if (x) both a
Performing Note Deficiency exists and a Liquidity Event of Default shall have
occurred and be continuing with respect to the relevant Liquidity Facility or
(y) a Final Drawing shall have occurred with respect to such Liquidity Facility.
In the event that, with respect to any particular Liquidity Facility, (i) funds
are withdrawn from any Cash Collateral Account pursuant to clause (i), (ii),
(iii) or (iv) of Section 3.06(f) or (ii) such Liquidity Facility shall become a
Downgraded Facility or a Non-Extended Facility at a time when unreimbursed
Interest Drawings under such Liquidity Facility have reduced the Available
Amount thereunder to zero, then funds received by the Subordination Agent at any
time, other than (x) any time when both a Performing Note Deficiency exists and
a Liquidity Event of Default shall have occurred and be continuing with respect
to such Liquidity Facility or (y) any time after a Final Drawing shall have
occurred with respect to such Liquidity Facility, shall be deposited in such
Cash Collateral Account as and to the extent provided in clause "third" of
Section 2.04(b), clause "third" of Section 3.02 or clause "fourth" of Section
3.03, as applicable, and applied in accordance with Section 3.06(f).
(h) Reimbursement. The amount of each drawing under the Liquidity
Facilities shall be due and payable, together with interest thereon, on the
dates and at the rates, respectively, provided in the Liquidity Facilities.
(i) Final Drawing. Upon receipt from a Liquidity Provider of a Termination
Notice with respect to any Liquidity Facility, the Subordination Agent shall,
not later than the date specified in such Termination Notice, in accordance with
and to the extent permitted by the terms of such Liquidity Facility, request a
drawing under such Liquidity Facility of all available and undrawn amounts
thereunder (a "Final Drawing"). Amounts drawn pursuant to a Final Drawing shall
be maintained and invested in accordance with Section 3.06(f).
(j) Reduction of Stated Amount. Promptly following each date on which the
Required Amount of the Liquidity Facility for a Class of Certificates is reduced
as a result of a reduction in the Pool Balance with respect to such
Certificates, the Subordination Agent shall, if any such Liquidity Facility
provides for reductions of the Stated Amount of such Liquidity Facility and if
such reductions are not automatic, request such Liquidity Provider for such
Class of Certificates to reduce such Stated Amount to an amount equal to the
Required Amount with respect to such Liquidity Facility (as calculated by the
Subordination Agent after giving effect to such payment). Each such request
shall be made in accordance with the provisions of the applicable Liquidity
Facility.
(k) Relation to Subordination Provisions. Interest Drawings under the
Liquidity Facilities and withdrawals from the Cash Collateral Accounts, in each
case, in respect of interest on the Certificates of any Class, will be
distributed to the Trustee for such Class of Certificates, notwithstanding
Sections 2.04(b), 3.02, 3.03 and 3.06.
(l) Assignment of Liquidity Facility. The Subordination Agent agrees not to
consent to the assignment by any Liquidity Provider of any of its rights or
obligations under any Liquidity
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Facility or any interest therein unless (i) American shall have consented to
such assignment and (ii) each Rating Agency shall have provided a Ratings
Confirmation in respect of such assignment.
ARTICLE IV
EXERCISE OF REMEDIES
Section 4.01. Directions from the Controlling Party. (a) (i) Following the
occurrence and during the continuation of an Indenture Event of Default under
any Indenture, the Controlling Party shall direct the Subordination Agent, which
in turn shall direct the Loan Trustee under such Indenture, in the exercise of
remedies available to the holders of the Equipment Notes issued pursuant to such
Indenture, including, without limitation, the ability to vote all such Equipment
Notes in favor of Accelerating such Equipment Notes in accordance with the
provisions of such Indenture. If the Equipment Notes issued pursuant to any
Indenture have been Accelerated following an Indenture Event of Default with
respect thereto, the Controlling Party may direct the Subordination Agent to
sell, assign, contract to sell or otherwise dispose of and deliver all (but not
less than all) of such Equipment Notes to any Person at public or private sale,
at any location at the option of the Controlling Party, all upon such terms and
conditions as it may reasonably deem advisable and in accordance with applicable
law.
(ii) So long as any Certificates remain Outstanding, during the period
ending on the date which is nine months after the earlier of (x) the
Acceleration of the Equipment Notes issued pursuant to any Indenture or (y) the
occurrence of an American Bankruptcy Event, without the consent of each Trustee,
no Aircraft subject to the Lien of such Indenture or such Equipment Notes may be
sold if the net proceeds from such sale would be less than the Minimum Sale
Price for such Aircraft or such Equipment Notes.
(iii) At the request of the Controlling Party, the Subordination Agent may
from time to time during the continuance of an Indenture Event of Default (and
before the occurrence of a Triggering Event) commission an LTV Appraisal with
respect to the Aircraft subject to such Indenture.
(iv) After a Triggering Event occurs and any Equipment Note becomes a
Non-Performing Equipment Note, the Subordination Agent shall obtain Appraisals
with respect to all of the Aircraft (the "LTV Appraisals") as soon as
practicable and additional LTV Appraisals on or prior to each anniversary of the
date of such initial LTV Appraisals; provided that, if the Controlling Party
reasonably objects to the appraised value of the Aircraft shown in such LTV
Appraisals, the Controlling Party shall have the right to obtain or cause to be
obtained substitute LTV Appraisals (including any LTV Appraisals based upon
physical inspection of the Aircraft).
(b) To the extent permitted by applicable law, the Subordination Agent, at
the direction of the Controlling Party, shall take such actions as it may
reasonably deem most effectual to complete the sale or other disposition of such
Aircraft or Equipment Notes. In addition, in lieu of
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any sale, assignment, contract to sell or other disposition, if the
Subordination Agent is so directed by the Controlling Party, the Subordination
Agent may maintain possession of such Equipment Notes and continue to apply
monies received in respect of such Equipment Notes in accordance with Section
2.04(b) and Article III. In addition, in lieu of such sale, assignment, contract
to sell or other disposition, or in lieu of such maintenance of possession, the
Controlling Party may direct the Subordination Agent to, subject to the terms
and conditions of the related Indenture, instruct the Loan Trustee under such
Indenture to foreclose on the Lien on the related Aircraft or take any other
remedial action permitted by such Indenture or applicable law.
Section 4.02. Remedies Cumulative. Each and every right, power and remedy
given to the Trustees, the Liquidity Providers, the Controlling Party or the
Subordination Agent specifically or otherwise in this Agreement shall be
cumulative and shall be in addition to every other right, power and remedy
herein specifically given or now or hereafter existing at law, in equity or by
statute, and each and every right, power and remedy whether specifically herein
given or otherwise existing may, subject always to the terms and conditions
hereof, be exercised from time to time and as often and in such order as may be
deemed expedient by any Trustee, any Liquidity Provider, the Controlling Party
or the Subordination Agent, as appropriate, and the exercise or the beginning of
the exercise of any right, power or remedy shall not be construed to be a waiver
of the right to exercise at the same time or thereafter any other right, power
or remedy. No delay or omission by any Trustee, any Liquidity Provider, the
Controlling Party or the Subordination Agent in the exercise of any right,
remedy or power or in the pursuit of any remedy shall impair any such right,
power or remedy or be construed to be a waiver of any default or to be an
acquiescence therein.
Section 4.03. Discontinuance of Proceedings. In case any party to this
Agreement (including the Controlling Party in such capacity) shall have
instituted any Proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, entry or otherwise, and such Proceeding shall have
been discontinued or abandoned for any reason or shall have been determined
adversely to the Person instituting such Proceeding, then and in every such case
each such party shall, subject to any determination in such Proceeding, be
restored to its former position and rights hereunder, and all rights, remedies
and powers of such party shall continue as if no such Proceeding had been
instituted.
Section 4.04. Right of Certificateholders to Receive Payments Not to Be
Impaired. Subject to the provisions of this Agreement and each Trust Agreement,
the right of any Certificateholder or any Liquidity Provider, respectively, to
receive payments hereunder (including, without limitation, pursuant to Section
2.04, 3.02 or 3.03) when due, or to institute suit for the enforcement of any
such payment on or after the applicable Distribution Date, shall not be impaired
or affected without the consent of such Certificateholder or such Liquidity
Provider, respectively.
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ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF TRUSTEES, ETC.
Section 5.01. Notice of Indenture Event of Default or Triggering Event. (a)
If the Subordination Agent shall have knowledge of an Indenture Event of Default
or a Triggering Event, the Subordination Agent shall promptly give notice
thereof to the Rating Agencies, American, the Liquidity Providers and the
Trustees by telegram, cable, facsimile or telephone (to be promptly confirmed in
writing), unless such Indenture Event of Default or Triggering Event shall have
been cured or waived. For all purposes of this Agreement, in the absence of
actual knowledge, the Subordination Agent shall not be deemed to have knowledge
of any Indenture Event of Default or Triggering Event unless notified in writing
by American, one or more Trustees, one or more Liquidity Providers or one or
more Certificateholders; and "actual knowledge" (as used in the foregoing
clause) of the Subordination Agent shall mean actual knowledge of an officer in
the Corporate Trust Office of the Subordination Agent.
(b) Other Notices. The Subordination Agent will furnish to each Liquidity
Provider and Trustee, promptly upon receipt thereof, duplicates or copies of all
reports, notices, requests, demands, certificates, financial statements and
other instruments furnished to the Subordination Agent as registered holder of
the Equipment Notes or otherwise in its capacity as Subordination Agent to the
extent the same shall not have been otherwise directly distributed to such
Liquidity Provider or Trustee, as applicable, pursuant to any other Operative
Agreement.
Section 5.02. Indemnification. The Subordination Agent shall not be
required to take any action or refrain from taking any action under Article IV
unless the Subordination Agent shall have received indemnification against any
risks incurred in connection therewith in form and substance reasonably
satisfactory to it, including, without limitation, adequate advances against
costs that may be incurred by it in connection therewith. The Subordination
Agent shall not be required to take any action under Article IV, nor shall any
other provision of this Agreement or any other Operative Agreement be deemed to
impose a duty on the Subordination Agent to take any action, if the
Subordination Agent shall have been advised by outside counsel that such action
is contrary to the terms hereof or is otherwise contrary to law.
Section 5.03. No Duties Except as Specified in Intercreditor Agreement. The
Subordination Agent shall not have any duty or obligation to take or refrain
from taking any action under, or in connection with, this Agreement, except as
expressly provided by the terms of this Agreement; and no implied duties or
obligations shall be read into this Agreement against the Subordination Agent.
The Subordination Agent agrees that it will, in its individual capacity and at
its own cost and expense (but without any right of indemnity in respect of any
such cost or expense) promptly take such action as may be necessary duly to
discharge all Liens on any of the Trust Accounts or any monies deposited therein
that are attributable to the Subordination Agent in its individual capacity and
that are unrelated to the transaction contemplated hereby and by the other
Operative Agreements.
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Section 5.04. Notice from the Liquidity Providers and Trustees. If any
Liquidity Provider or Trustee has notice of an Indenture Event of Default or a
Triggering Event, such Person shall promptly give notice thereof to all other
Liquidity Providers and Trustees and to the Subordination Agent; provided,
however, that no such Person shall have any liability hereunder as a result of
its failure to deliver any such notice.
ARTICLE VI
THE SUBORDINATION AGENT
Section 6.01. Authorization; Acceptance of Trusts and Duties. Each of the
Class A-1 Trustee, the Class A-2 Trustee, the Class B Trustee and the Class C
Trustee hereby designates and appoints the Subordination Agent as the agent and
trustee of such Trustee under the applicable Liquidity Facility and authorizes
the Subordination Agent to enter into the applicable Liquidity Facility as agent
and trustee for such Trustee. Each of the Liquidity Providers and the Trustees
hereby designates and appoints the Subordination Agent as the Subordination
Agent under this Agreement. State Street accepts the trusts and duties hereby
created and applicable to it and agrees to perform such duties, but only upon
the terms of this Agreement and agrees to receive, handle and disburse all
monies received by it in accordance with the terms hereof. The Subordination
Agent shall have no liability hereunder except (a) for its own willful
misconduct or negligence, (b) as provided in Section 2.02 and the last sentence
of Section 5.03, (c) for liabilities that may result from the inaccuracy of any
representation or warranty of the Subordination Agent made in its individual
capacity in any Operative Agreement and (d) as otherwise expressly provided
herein or in the other Operative Agreements.
Section 6.02. Absence of Duties. The Subordination Agent shall have no duty
to see to any recording or filing of this Agreement or any other document, or to
see to the maintenance of any such recording or filing.
Section 6.03. No Representations or Warranties as to Documents. The
Subordination Agent shall not be deemed to have made any representation or
warranty as to the validity, legality or enforceability of this Agreement or any
other Operative Agreement or as to the correctness of any statement contained
herein or therein (other than the representations and warranties of the
Subordination Agent made in its individual capacity under any Operative
Agreement), except that the Subordination Agent hereby represents and warrants
that each of said specified documents to which it is a party has been or will be
duly executed and delivered by one of its officers who is and will be duly
authorized to execute and deliver such document on its behalf. The
Certificateholders, the Trustees and the Liquidity Providers make no
representation or warranty hereunder whatsoever.
Section 6.04. No Segregation of Monies; No Interest. Any monies paid to or
retained by the Subordination Agent pursuant to any provision hereof and not
then required to be distributed to any Trustee or any Liquidity Provider as
provided in Articles II and III or deposited into one or more
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Trust Accounts need not be segregated in any manner except to the extent
required by such Articles II and III and by law, and the Subordination Agent
shall not (except as otherwise provided in Section 2.02) be liable for any
interest thereon; provided, however, that any payments received or applied
hereunder by the Subordination Agent shall be accounted for by the Subordination
Agent so that any portion thereof paid or applied pursuant hereto shall be
identifiable as to the source thereof.
Section 6.05. Reliance; Agents; Advice of Counsel. The Subordination Agent
shall not incur any liability to anyone in acting upon any signature,
instrument, notice, resolution, request, consent, order, certificate, report,
opinion, bond or other document or paper believed by it to be genuine and
believed by it to be signed by the proper party or parties. As to the Pool
Balance of any Trust as of any date, the Subordination Agent may for all
purposes hereof rely on a certificate signed by any Responsible Officer of the
applicable Trustee, and such certificate shall constitute full protection to the
Subordination Agent for any action taken or omitted to be taken by it in good
faith in reliance thereon. As to any fact or matter relating to the Liquidity
Providers or the Trustees the manner of ascertainment of which is not
specifically described herein, the Subordination Agent may for all purposes
hereof rely on a certificate, signed by any Responsible Officer of the
applicable Liquidity Provider or Trustee, as the case may be, as to such fact or
matter, and such certificate shall constitute full protection to the
Subordination Agent for any action taken or omitted to be taken by it in good
faith in reliance thereon. In the administration of the trusts hereunder, the
Subordination Agent may (a) execute any of the trusts or powers hereof and
perform its powers and duties hereunder directly or through agents or attorneys
and (b) consult with counsel, accountants and other skilled Persons to be
selected and retained by it. The Subordination Agent shall not be liable for
anything done, suffered or omitted in good faith by it in accordance with the
advice or opinion of any such counsel, accountants or other skilled Persons
acting within such counsel's, accountants' or Person's area of competence (so
long as the Subordination Agent shall have exercised reasonable care and
judgment in selecting such Persons).
Section 6.06. Capacity in Which Acting. The Subordination Agent acts
hereunder solely as agent and trustee herein and not in its individual capacity,
except as otherwise expressly provided in the Operative Agreements.
Section 6.07. Compensation. The Subordination Agent shall be entitled to
such compensation, including reasonable expenses and disbursements, for all
services rendered hereunder as American and the Subordination Agent may agree
from time to time in writing and shall have a priority claim to the extent set
forth in Article III on all monies collected hereunder for the payment of such
compensation, to the extent that such compensation shall not be paid by others.
The Subordination Agent agrees that it shall have no right against any Trustee
or Liquidity Provider for any fee as compensation for its services as agent
under this Agreement. The provisions of this Section 6.07 shall survive the
termination of this Agreement.
Section 6.08. May Become Certificateholder. The institution acting as
Subordination Agent hereunder may become a Certificateholder and have all rights
and benefits of a Certificateholder to the same extent as if it were not the
institution acting as the Subordination Agent.
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Section 6.09. Subordination Agent Required; Eligibility. There shall at all
times be a Subordination Agent hereunder that is a Citizen of the United States,
a bank, trust company or other financial institution organized and doing
business under the laws of the United States or any state thereof and eligible
to act as a trustee under Section 310(a) of the Trust Indenture Act of 1939, as
amended, and that has a combined capital and surplus of at least $75,000,000 (or
a combined capital and surplus in excess of $5,000,000 and the obligations of
which, whether now in existence or hereafter incurred, are fully and
unconditionally guaranteed by a corporation organized under the laws of the
United States or any State or territory thereof or the District of Columbia and
having a combined capital and surplus of at least $75,000,000). If such bank,
trust company or other financial institution or such corporation publishes
reports of conditions at least annually, pursuant to law or to the requirements
of federal, state, territorial or District of Columbia supervising or examining
authority, then for the purposes of this Section 6.09 the combined capital and
surplus of such bank, trust company or other financial institution or such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of conditions so published.
In case at any time the Subordination Agent shall cease to be eligible in
accordance with the provisions of this Section 6.09, the Subordination Agent
shall resign immediately in the manner and with the effect specified in Section
7.01.
Section 6.10. Money to Be Held in Trust. All Equipment Notes, monies and
other property deposited with or held by the Subordination Agent pursuant to
this Agreement shall be held in trust for the benefit of the parties entitled to
such Equipment Notes, monies and other property.
ARTICLE VII
SUCCESSOR SUBORDINATION AGENT
Section 7.01. Replacement of Subordination Agent; Appointment of Successor.
(a) The Subordination Agent or any successor thereto must resign if at any time
it fails to comply with Section 6.09 and may resign at any time without cause by
giving 60 days' prior written notice to American, the Trustees and the Liquidity
Providers. The Controlling Party (or the party that would be the Controlling
Party if an Indenture Event of Default had occurred) shall remove the
Subordination Agent if:
(1) the Subordination Agent fails to comply with Section 6.09;
(2) the Subordination Agent is adjudged bankrupt or insolvent;
(3) a receiver of the Subordination Agent shall be appointed or any public
officer shall take charge or control of the Subordination Agent or its property
or affairs for the purpose of rehabilitation, conservation or liquidation; or
(4) the Subordination Agent otherwise becomes incapable of acting.
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If the Subordination Agent resigns or is removed or if a vacancy exists in
the office of Subordination Agent for any reason (the Subordination Agent in
such event being referred to herein as the retiring Subordination Agent), the
Controlling Party (or the party that would be the Controlling Party if an
Indenture Event of Default had occurred) shall promptly appoint a successor
Subordination Agent. If a successor Subordination Agent shall not have been
appointed within 60 days after such notice of resignation or removal, the
retiring Subordination Agent, one or more of the Trustees or one or more of the
Liquidity Providers may petition any court of competent jurisdiction for the
appointment of a successor Subordination Agent to act until such time, if any,
as a successor shall have been appointed as provided above.
A successor Subordination Agent shall deliver (x) a written acceptance of
its appointment as Subordination Agent hereunder to the retiring Subordination
Agent and (y) a written assumption of its obligations hereunder and under each
Liquidity Facility to each party hereto, upon which the resignation or removal
of the retiring Subordination Agent shall become effective, and the successor
Subordination Agent shall have all the rights, powers and duties of the
Subordination Agent under this Agreement. The successor Subordination Agent
shall mail a notice of its succession to the Liquidity Providers and the
Trustees. The retiring Subordination Agent shall promptly transfer its rights
under each of the Liquidity Facilities and all of the property and all books and
records, or true, complete and correct copies thereof, held by it as
Subordination Agent to the successor Subordination Agent.
If the Subordination Agent fails to comply with Section 6.09 (to the extent
applicable), one or more of the Trustees or one or more of the Liquidity
Providers may petition a court of competent jurisdiction for the removal of the
Subordination Agent and the appointment of a successor Subordination Agent.
Notwithstanding the foregoing, no resignation or removal of the
Subordination Agent shall be effective unless and until a successor has been
appointed. No appointment of a successor Subordination Agent shall be effective
unless and until the Rating Agencies shall have delivered a Ratings
Confirmation.
(b) Any corporation into which the Subordination Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Subordination Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of the Subordination Agent, shall be the successor
of the Subordination Agent hereunder, provided that such corporation shall be
otherwise qualified and eligible under Section 6.09, without the execution or
filing of any paper or any further act on the part of any of the parties hereto.
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ARTICLE VIII
SUPPLEMENTS AND AMENDMENTS
Section 8.01. Amendments, Waivers, Etc. (a) This Agreement may not be
supplemented, amended or modified without the consent of each Trustee (acting,
except in the case of any amendment pursuant to Section 3.06(e)(v)(y) or any
amendment contemplated by the last sentence of this Section 8.01(a), with the
consent of holders of Certificates of the related Class evidencing Fractional
Undivided Interests in the related Trust aggregating not less than a majority in
interest in such Trust or as otherwise authorized pursuant to the relevant Trust
Agreement (including, without limitation, without the consent of the
Certificateholders to the extent permitted thereby, Section 9.01 of the Basic
Agreement)), the Subordination Agent and each Liquidity Provider; provided,
however, that this Agreement may be supplemented, amended or modified without
the consent of any Trustee in order (i) to cure any ambiguity or omission or to
correct any mistake, (ii) to correct or supplement any provision, or (iii) to
make any other provision in regard to matters or questions arising hereunder
that will not materially adversely affect the interests of any Trustee or the
holders of the related Class of Certificates, and without the consent of any
Liquidity Provider if such supplement, amendment or modification is in
accordance with Section 8.01(c); provided further, however, that, if such
supplement, amendment or modification (x) would directly or indirectly amend,
modify or supersede, or otherwise conflict with, Section 2.02(b), 3.06(c),
3.06(e), 3.06(f)(other than the last sentence thereof), 3.06(l), this proviso of
8.01(a), the last sentence of 8.01(a), 8.01(c) or 9.06 (collectively, the
"American Provisions"), (y) would otherwise affect the interests of a potential
Replacement Liquidity Provider or of American with respect to its ability to
replace any Liquidity Facility or with respect to its payment obligations under
any Operative Agreement or (z) is made pursuant to the last sentence of this
Section 8.01(a) or pursuant to Section 8.01(c), then such supplement, amendment
or modification shall not be effective without the additional written consent of
American. Notwithstanding the foregoing, without the consent of each
Certificateholder affected thereby and each Liquidity Provider, no supplement,
amendment or modification of this Agreement may (i) reduce the percentage of the
interest in any Trust evidenced by the Certificates issued by such Trust
necessary to consent to modify or amend any provision of this Agreement or to
waive compliance therewith or (ii), except as provided in the last sentence of
this Section 8.01(a), modify Section 2.04, 3.02 or 3.03 hereof relating to the
distribution of monies received by the Subordination Agent hereunder from the
Equipment Notes or pursuant to the Liquidity Facilities. Nothing contained in
this Section 8.01(a) shall require the consent of a Trustee at any time
following the payment of Final Distributions with respect to the related Class
of Certificates. If the Replacement Liquidity Facility for any Liquidity
Facility is to be comprised of more than one instrument as contemplated by the
definition of the term "Replacement Liquidity Facility", then each party hereto
agrees to amend this Agreement and the other Operative Agreements to incorporate
appropriate mechanics for multiple Liquidity Facilities for a single Trust.
(b) Subject to Section 2.06, if the Subordination Agent, as the registered
holder of any Equipment Notes, receives a request for its consent to any
amendment, modification, consent or waiver under such Equipment Notes, the
Indenture pursuant to which such Equipment Notes were
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issued or the related Participation Agreement or other related document, (i) if
no Indenture Event of Default shall have occurred and be continuing with respect
to such Indenture, the Subordination Agent shall request directions with respect
to each series of such Equipment Notes from the Trustee of the Trust which holds
such Equipment Notes and shall vote or consent in accordance with the directions
of such Trustee and (ii) if any Indenture Event of Default shall have occurred
and be continuing with respect to such Indenture, the Subordination Agent will
exercise its voting rights as directed by the Controlling Party, subject to
Section 4.01 and 4.04; provided that no such amendment, modification, consent or
waiver shall, without the consent of each Liquidity Provider, reduce the amount
of principal or interest payable by American under any Equipment Note.
(c) If Class D Certificates are issued, this Agreement shall be amended by
written agreement of the Subordination Agent and the Trustees to provide for the
subordination of such Class D Certificates to the Class A-1 Certificates, the
Class A-2 Certificates, the Class B Certificates and the Class C Certificates
substantially in the same manner as the Class C Certificates are subordinated
hereunder to the Class A-1 Certificates, the Class A-2 Certificates and the
Class B Certificates. No such amendment shall materially adversely affect any
Trustee. The amendment to this Agreement to give effect to the issuance of any
Class D Certificates shall, without limitation:
(i) add the Class D Trustee as a party to this Agreement;
(ii) revise the definitions of "Cash Collateral Account", "Certificate",
"Class", "Controlling Party", "Equipment Notes", "Final Legal Distribution
Date", "Liquidity Facility", "Liquidity Provider", "LTV Ratio", "Stated Interest
Rate", "Trust", "Trust Agreement" and "Trustee", as appropriate, to reflect the
issuance of the Class D Certificates (and the subordination thereof); and
(iii) revise the provisions of this Agreement governing payments with
respect to Certificates and related notices, including, without limitation,
Sections 2.04, 3.01, 3.02, 3.03 and 3.06, if necessary, to provide for
distributions on the Class D Certificates after payment of all relevant
distributions on the Class C Certificates.
If, with respect to any Aircraft, Series D Equipment Notes are issued to any
Person other than the Class D Trust, this Agreement shall be amended by written
agreement of the indenture trustees of the equipment notes held by the Class D
Trust, the Trustees and the Subordination Agent to (i) provide for each holder
of a Series D Equipment Note to be bound by the provisions of Section 2.06(a) so
that the Controlling Party, among other things, shall be entitled to direct the
Loan Trustee under the applicable Indenture as provided in such Section 2.06(a)
(and such Series D Equipment Notes shall make effective provision therefor so as
to bind each holder thereof to such provisions of Section 2.06(a)) and (ii) to
revise the definitions of "Controlling Party" and "Equipment Notes", as
appropriate, to reflect the issuance of the Series D Equipment Notes (and the
prior rights, as against the holders of such Series D Equipment Notes, of the
Class A-1 Trustee, the Class A-2 Trustee, the Class B Trustee and the Class C
Trustee to be such "Controlling Party"). No such amendment shall materially
adversely affect any Trustee.
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<PAGE> 57
Section 8.02. Subordination Agent Protected. If, in the reasonable opinion
of the institution acting as the Subordination Agent hereunder, any document
required to be executed by it pursuant to the terms of Section 8.01 adversely
affects any right, duty, immunity or indemnity with respect to such institution
under this Agreement or any Liquidity Facility, the Subordination Agent may in
its discretion decline to execute such document.
Section 8.03. Effect of Supplemental Agreements. Upon the execution of any
amendment, consent or supplement hereto pursuant to the provisions hereof, this
Agreement shall be and shall be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Agreement of the parties hereto and beneficiaries
hereof shall thereafter be determined, exercised and enforced hereunder subject
in all respects to such modifications and amendments, and all the terms and
conditions of any such supplemental agreement shall be and be deemed to be part
of the terms and conditions of this Agreement for any and all purposes. In
executing or accepting any supplemental agreement permitted by this Article
VIII, the Subordination Agent shall be entitled to receive, and shall be fully
protected in relying upon, an opinion of counsel stating that the execution of
such supplemental agreement is authorized or permitted by this Agreement.
Section 8.04. Notice to Rating Agencies. Promptly following its receipt of
each amendment, consent, modification, supplement or waiver contemplated by this
Article VIII, the Subordination Agent shall send a copy thereof to each Rating
Agency.
ARTICLE IX
MISCELLANEOUS
Section 9.01. Termination of Intercreditor Agreement. Upon (or at any time
after) payment of Final Distributions with respect to each Class of Certificates
and the payment in full of all Liquidity Obligations to the Liquidity Providers
and provided that there shall then be no other amounts due to the
Certificateholders, the Trustees, the Liquidity Providers and the Subordination
Agent hereunder or under the Trust Agreements, and that the commitment of the
Liquidity Providers under the Liquidity Facilities shall have expired or been
terminated, this Agreement shall terminate and shall be of no further force or
effect. Except as aforesaid or otherwise provided, this Agreement and the trusts
created hereby shall continue in full force and effect in accordance with the
terms hereof.
Section 9.02. Intercreditor Agreement for Benefit of Trustees, Liquidity
Providers and Subordination Agent. Subject to the second sentence of Section
9.06 and the provisions of Section 4.04, nothing in this Agreement, whether
express or implied, shall be construed to give to any Person other than the
Trustees, the Liquidity Providers and the Subordination Agent any legal or
equitable right, remedy or claim under or in respect of this Agreement.
53
<PAGE> 58
Section 9.03. Notices. Unless otherwise expressly specified or permitted by
the terms hereof, all notices required or permitted under the terms and
provisions of this Agreement shall be in English and in writing, and any such
notice may be given by United States mail, courier service or facsimile or any
other customary means of communication, and any such notice shall be effective
when delivered (or, if mailed, three Business Days after deposit, postage
prepaid, in the first class United States mail and, if delivered by facsimile,
upon completion of transmission and confirmation by the sender (by a telephone
call to a representative of the recipient or by machine confirmation) that such
transmission was received),
if to the Subordination Agent, to:
State Street Bank And Trust Company of Connecticut,
National Association
225 Asylum Street
Goodwin Square
Hartford, Connecticut 06103
Attention: Corporate Trust Division
Telephone: (860) 244-1844
Telecopy: (860) 244-1881
if to any Trustee, to:
State Street Bank and Trust Company of Connecticut,
National Association
225 Asylum Street
Goodwin Square
Hartford, Connecticut 06103
Attention: Corporate Trust Division
Telephone: (860) 244-1844
Telecopy: (860) 244-1881
if to the Liquidity Provider,
if by mail to:
Bayerische Landesbank Girozentrale
c/o Bayerische Landesbank Girozentrale, New York Branch
560 Lexington Avenue
New York, New York 10022
Attention: Patricia Sanchez
54
<PAGE> 59
(with a copy to the address of the Liquidity Provider set forth below)
and if by other means of communication to:
Bayerische Landesbank Girozentrale
Brienner Strasse 18
D-80333 Munich, Germany
Attention: Aircraft Finance Department, 7650
Telephone: 49-89-2171-2360
Telecopy: 49-89-2171-3763
Any party hereto, by notice to the others, may designate additional or
different addresses for subsequent notices or communications.
Section 9.04. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 9.05. No Oral Modifications or Continuing Waivers. No terms or
provisions of this Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party or other Person
against whom enforcement of the change, waiver, discharge or termination is
sought and any other party or other Person whose consent is required pursuant to
this Agreement and any waiver of the terms hereof shall be effective only in the
specific instance and for the specific purpose given.
Section 9.06. Successors and Assigns. All covenants and agreements
contained herein shall bind and inure to the benefit of, and be enforceable by,
each of the parties hereto and the successors and permitted assigns of each, all
as herein provided. In addition, the American Provisions shall inure to the
benefit of American and its successors and permitted assigns, and (without
limitation of the foregoing) American is hereby constituted, and agreed to be,
an express third party beneficiary of the American Provisions.
Section 9.07. Headings. The headings of the various Articles and Sections
herein and in the Table of Contents hereto are for convenience of reference only
and shall not define or limit any of the terms or provisions hereof.
Section 9.08. Counterparts. This Agreement may be executed in any number of
counterparts (and each party shall not be required to execute the same
counterpart). Each counterpart of this Agreement including a signature page or
pages executed by each of the parties hereto shall be an
55
<PAGE> 60
original counterpart of this Agreement, but all of such counterparts together
constitute one instrument.
Section 9.09. Subordination. (a) As among the Trustees, and as between the
Liquidity Providers, on the one hand, and the Trustees and the
Certificateholders, on the other hand, this Agreement shall be a subordination
agreement for purposes of Section 510 of the United States Bankruptcy Code, as
amended from time to time. In addition, as among the Trustees and the
Certificateholders of each Class, this Agreement shall be a subordination
agreement for purposes of such Section 510.
(b) Notwithstanding the provisions of this Agreement, if prior to the
payment in full to the Liquidity Providers of all Liquidity Obligations then due
and payable or prior to the distribution in full of any other amount
distributable hereunder, any party hereto shall have received any payment or
distribution in respect of Equipment Notes or any other amount under the
Indentures or other Operative Agreements which, had the subordination provisions
of this Agreement been properly applied to such payment, distribution or other
amount, would not have been distributed to such Person, then such payment,
distribution or other amount shall be received and held in trust by such Person
and paid over or delivered to the Subordination Agent for application as
provided herein.
(c) If any Trustee, any Liquidity Provider or the Subordination Agent
receives any payment in respect of any obligations owing or amounts
distributable hereunder (or, in the case of the Liquidity Providers, in respect
of the Liquidity Obligations), which is subsequently invalidated, declared
preferential, set aside and/or required to be repaid to a trustee, receiver or
other party, then, to the extent of such payment, such obligations or amounts
(or, in the case of the Liquidity Providers, such Liquidity Obligations)
intended to be satisfied shall be revived and continue in full force and effect
as if such payment had not been received.
(d) The Trustees (on behalf of themselves and the holders of Certificates),
the Liquidity Providers and the Subordination Agent expressly confirm and agree
that the payment priorities and subordination specified in Articles II and III
shall apply in all circumstances, notwithstanding (x) the fact that the
obligations owed to the Trustees are secured by certain assets and the Liquidity
Obligations are not so secured and (y) the occurrence of an American Bankruptcy
Event or any similar event or occurrence relating to any other Person (it being
expressly agreed that the payment priorities and subordination specified in
Articles II and III shall apply whether or not a claim for post-petition or
post-filing interest is allowed in the proceedings resulting from such American
Bankruptcy Event or other event or occurrence). The Trustees expressly agree (on
behalf of themselves and the holders of Certificates) not to assert priority
over the holders of Liquidity Obligations due to their status as secured
creditors in any bankruptcy, insolvency or other legal proceeding.
(e) Each of the Trustees (on behalf of themselves and the holders of
Certificates), the Liquidity Providers and the Subordination Agent may take any
of the following actions without impairing its rights under this Agreement:
56
<PAGE> 61
(i) obtain a Lien on any property to secure any amounts owing to it
hereunder, including, in the case of the Liquidity Providers, the Liquidity
Obligations;
(ii) obtain the primary or secondary obligation of any other obligor with
respect to any amounts owing to it hereunder, including, in the case of the
Liquidity Providers, any of the Liquidity Obligations;
(iii) renew, extend, increase, alter or exchange any amounts owing to it
hereunder, including, in the case of the Liquidity Providers, any of the
Liquidity Obligations, or release or compromise any obligation of any obligor
with respect thereto;
(iv) refrain from exercising any right or remedy, or delay in exercising
any right or remedy, which it may have; or
(v) take any other action which might discharge a subordinated party or a
surety under applicable law;
provided, however, that the taking of any such actions by any of the Trustees,
the Liquidity Providers or the Subordination Agent shall not prejudice the
rights or adversely affect the obligations of any other party under this
Agreement.
Section 9.10. Governing Law. THIS AGREEMENT HAS BEEN DELIVERED IN THE STATE
OF NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 9.11. Submission to Jurisdiction; Waiver of Jury Trial; Waiver of
Immunity.
(a) Each of the parties hereto, to the extent it may do so under applicable
law, for purposes hereof and of all other Operative Agreements hereby (a)
irrevocably submits itself to the non-exclusive jurisdiction of the courts of
the State of New York sitting in the City of New York and to the non-exclusive
jurisdiction of the United States District Court for the Southern District of
New York, for the purposes of any suit, action or other proceeding arising out
of this Agreement, the subject matter hereof or any of the transactions
contemplated hereby brought by any party or parties hereto or thereto, or their
successors or permitted assigns and (b) waives, and agrees not to assert, by way
of motion, as a defense, or otherwise, in any such suit, action or proceeding,
that the suit, action or proceeding is brought in an inconvenient forum, that
the venue of the suit, action or proceeding is improper or that this Agreement
or the subject matter hereof or any of the transactions contemplated hereby may
not be enforced in or by such courts.
57
<PAGE> 62
(b) EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF
THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING ESTABLISHED, including,
without limitation, contract claims, tort claims, breach of duty claims and all
other common law and statutory claims. Each of the parties warrants and
represents that it has reviewed this waiver with its legal counsel, and that it
knowingly and voluntarily waives its jury trial rights following consultation
with such legal counsel. THIS WAIVER IS IRREVOCABLE AND CANNOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
(c) Each Liquidity Provider hereby waives any immunity it may have from the
jurisdiction of the courts of the United States or of any state thereof and
waives any immunity any of its properties located in the United States may have
from attachment or execution upon a judgment entered by any such court under the
United States Foreign Sovereign Immunities Act of 1976 or any similar successor
legislation.
58
<PAGE> 63
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized, as of the
date first above written.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Trustee for each of the Trusts
By: /s/ JOHN G. CORREIA
-------------------------------------
Name: John G. Correia
Title: Assistant Secretary
BAYERISCHE LANDESBANK GIROZENTRALE,
as Class A-1 Liquidity Provider,
Class A-2 Liquidity Provider,
Class B Liquidity Provider and
Class C Liquidity Provider
By: /s/ BERND LONNER
-------------------------------------
Name: Bernd Lonner
Title: Vice President
By: /s/ RUDIGER FERN
-------------------------------------
Name: Rudiger Fern
Title: Senior Vice President
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Subordination Agent
By: /s/ JOHN G. CORREIA
-------------------------------------
Name: John G. Correia
Title: Assistant Secretary
59
<PAGE> 1
EXHIBIT 4(c)(1)
===============================================================================
REVOLVING CREDIT AGREEMENT
(1999-1A-1)
Dated as of October 6, 1999
between
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
as Subordination Agent,
as agent and trustee for the trustee of
American Airlines Pass Through Trust 1999-1A-1
as Borrower
and
BAYERISCHE LANDESBANK GIROZENTRALE,
as Liquidity Provider
===============================================================================
American Airlines Pass Through Trust 1999-1A-1
6.855% American Airlines
Pass Through Certificates,
Series 1999-1A-1
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.....................................................................................1
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01 The Advances....................................................................................8
Section 2.02 Making of Advances..............................................................................8
Section 2.03 Fees...........................................................................................10
Section 2.04 Reduction or Termination of the Maximum Commitment.............................................10
Section 2.05 Repayments of Interest Advances or the Final Advance...........................................11
Section 2.06 Repayments of Provider Advances................................................................11
Section 2.07 Payments to the Liquidity Provider Under the Intercreditor Agreement...........................12
Section 2.08 Book Entries...................................................................................13
Section 2.09 Payments from Available Funds Only.............................................................13
Section 2.10 Extension of the Expiry Date; Non-Extension Advance............................................13
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01 Increased Costs................................................................................14
Section 3.02 [Intentionally omitted]........................................................................15
Section 3.03 Withholding Taxes..............................................................................15
Section 3.04 Payments.......................................................................................16
Section 3.05 Computations...................................................................................16
Section 3.06 Payment on Non-Business Days...................................................................17
Section 3.07 Interest.......................................................................................17
Section 3.08 Replacement of Borrower........................................................................18
Section 3.09 Funding Loss Indemnification...................................................................18
Section 3.10 Illegality.....................................................................................19
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01 Conditions Precedent to Effectiveness of Section 2.01..........................................19
Section 4.02 Conditions Precedent to Borrowing..............................................................21
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
ARTICLE V
COVENANTS
Section 5.01 Affirmative Covenants of the Borrower..........................................................21
Section 5.02 Negative Covenants of the Borrower.............................................................21
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01 Liquidity Events of Default....................................................................22
ARTICLE VII
MISCELLANEOUS
Section 7.01 No Oral Modification or Continuing Waivers.....................................................22
Section 7.02 Notices, Etc...................................................................................22
Section 7.03 No Waiver; Remedies............................................................................24
Section 7.04 Further Assurances.............................................................................24
Section 7.05 Indemnification; Survival of Certain Provisions................................................24
Section 7.06 Liability of the Liquidity Provider............................................................24
Section 7.07 Certain Costs and Expenses.....................................................................25
Section 7.08 Binding Effect; Participations.................................................................25
Section 7.09 Severability...................................................................................26
Section 7.10 Governing Law..................................................................................27
Section 7.11 Submission to Jurisdiction; Waiver of Jury Trial; Waiver of Immunity...........................27
Section 7.12 Counterparts...................................................................................27
Section 7.13 Entirety.......................................................................................28
Section 7.14 Headings.......................................................................................28
Section 7.15 Liquidity Provider's Obligation to Make Advances...............................................28
</TABLE>
Annex I - Interest Advance Notice of Borrowing
Annex II - Non-Extension Advance Notice of Borrowing
Annex III - Downgrade Advance Notice of Borrowing
Annex IV - Final Advance Notice of Borrowing
Annex V - Notice of Termination
Annex VI - Notice of Replacement Subordination Agent
ii
<PAGE> 4
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT, dated as of October 6, 1999, is made
by and between STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, a national banking association, not in its individual capacity but
solely as Subordination Agent (such term and other capitalized terms used
herein without definition being defined as provided in Article I) under the
Intercreditor Agreement (as defined below), as agent and trustee for the Class
A-1 Trustee (in such capacity, together with its successors in such capacity,
the "Borrower"), and BAYERISCHE LANDESBANK GIROZENTRALE, a public law banking
institution organized under the laws of the Free State of Bavaria, Germany (the
"Liquidity Provider").
W I T N E S S E T H:
WHEREAS, pursuant to the Class A-1 Trust Agreement, the Class A-1
Trust is issuing the Class A-1 Certificates; and
WHEREAS, the Borrower, in order to support the timely payment of a
portion of the interest on the Class A-1 Certificates in accordance with their
terms, has requested the Liquidity Provider to enter into this Agreement,
providing in part for the Borrower to request in specified circumstances that
Advances be made hereunder;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and of other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. (a) The definitions stated herein apply
equally to both the singular and the plural forms of the terms defined.
(b) All references in this Agreement to designated
"Articles", "Sections", "Annexes" and other subdivisions are to the designated
Article, Section, Annex or other subdivision of this Agreement, unless
otherwise specifically stated.
(c) The words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to any
particular Article, Section, Annex or other subdivision.
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<PAGE> 5
(d) Unless the context otherwise requires, whenever the words
"including", "include" or "includes" are used herein, it shall be deemed to be
followed by the phrase "without limitation".
(e) For the purposes of this Agreement, unless the context
otherwise requires, the following capitalized terms shall have the following
meanings:
"Advance" means an Interest Advance, a Final Advance, a Provider
Advance, an Applied Provider Advance or an Unpaid Advance, as the case may be.
"Agreement" means this Agreement, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Applicable Liquidity Rate" has the meaning specified in Section
3.07(g).
"Applicable Margin" means with respect to any Unpaid Advance or
Applied Provider Advance, 1.75%.
"Applied Downgrade Advance" has the meaning specified in Section
2.06(a).
"Applied Non-Extension Advance" has the meaning specified in Section
2.06(a).
"Applied Provider Advance" means an Applied Downgrade Advance or an
Applied Non-Extension Advance.
"Base Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers, as published for
each day in the period for which the Base Rate is to be determined (or, if such
day is not a Business Day, for the preceding Business Day) by the Federal
Reserve Bank of New York, or if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day for such
transactions received by the Liquidity Provider from three Federal funds
brokers of recognized standing selected by it (and reasonably satisfactory to
American) plus one-quarter of one percent (0.25%).
"Base Rate Advance" means an Advance that bears interest at a rate
based upon the Base Rate.
"Borrower" has the meaning specified in the introductory paragraph to
this Agreement.
"Borrowing" means the making of Advances requested by delivery of a
Notice of Borrowing.
2
<PAGE> 6
"Business Day" means any day other than a Saturday, a Sunday or a day
on which commercial banks are required or authorized to close in New York, New
York, Dallas, Texas, or, so long as any Class A-1 Certificate is outstanding,
the city and state in which the Class A-1 Trustee, the Borrower or any related
Loan Trustee maintains its Corporate Trust Office or receives or disburses
funds, and, if the applicable Business Day relates to any Advance or other
amount bearing interest based on the LIBOR Rate, on which dealings are carried
on in the London interbank market.
"Consent Notice" has the meaning specified in Section 2.10.
"Consent Period" has the meaning specified in Section 2.10.
"Covered Taxes" means any Taxes imposed by the United States or any
political subdivision or taxing authority thereof or therein required by law to
be deducted or withheld from any amounts payable to the Liquidity Provider
under this Agreement other than (i) any Tax on, based on or measured by net
income, franchises or conduct of business, (ii) any Tax imposed, levied,
withheld or assessed as a result of any connection between the Liquidity
Provider and the United States or such political subdivision or taxing
authority, other than a connection arising solely from the Liquidity Provider's
having executed, delivered, performed its obligations or received a payment
under, or enforced, any Operative Agreement, (iii) any Tax attributable to the
inaccuracy in or breach by the Liquidity Provider of any of its
representations, warranties or covenants contained in any Operative Agreement
to which it is a party or the inaccuracy of any form or document furnished
pursuant thereto, (iv) any withholding Taxes imposed by the United States
except to the extent such withholding Taxes would not have been required to be
deducted or withheld from payments hereunder but for a change after the date
hereof in the income tax treaty between the United States and Germany or a
change in the Code that overrides the provisions of such treaty or (v) any
change in the Lending Office without the prior written consent of American
(such consent not to be unreasonably withheld).
"Downgrade Advance" means an Advance made pursuant to Section 2.02(c).
"Effective Date" has the meaning specified in Section 4.01. The
delivery of the certificate of the Liquidity Provider contemplated by Section
4.01(f) shall be conclusive evidence that the Effective Date has occurred.
"Expenses" means liabilities, losses, damages, costs and expenses
(including, without limitation, reasonable fees and disbursements of legal
counsel), provided that Expenses shall not include any Taxes other than sales,
use and V.A.T. taxes imposed on fees and expenses payable pursuant to Section
7.07.
"Expiry Date" means October 4, 2000, initially, or any date to which
the Expiry Date is extended pursuant to Section 2.10.
"Final Advance" means an Advance made pursuant to Section 2.02(d).
3
<PAGE> 7
"Increased Cost" has the meaning specified in Section 3.01.
"Intercreditor Agreement" means the Intercreditor Agreement, dated as
of the date hereof, among the Trustees, the Liquidity Provider, the liquidity
provider under each Liquidity Facility (other than this Agreement) and the
Subordination Agent, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Interest Advance" means an Advance made pursuant to Section 2.02(a).
"Interest Period" means, with respect to any LIBOR Advance, each of
the following periods:
(i) the period beginning on the third Business Day following
either (A) the Liquidity Provider's receipt of the Notice of Borrowing
for such LIBOR Advance or (B) the date of the withdrawal of funds from
the Class A-1 Cash Collateral Account for the purpose of paying
interest on the Class A-1 Certificates as contemplated by Section
2.06(a) hereof and, in each case, ending on the next Regular
Distribution Date; and
(ii) each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the next Regular
Distribution Date;
provided, however, that if (x) the Final Advance shall have been made pursuant
to Section 2.02(d) or (y) other outstanding Advances shall have been converted
into the Final Advance pursuant to Section 6.01, then the Interest Periods
shall be successive periods of one month beginning on the third Business Day
following the Liquidity Provider's receipt of the Notice of Borrowing for such
Final Advance (in the case of clause (x) above) or the Regular Distribution
Date following such conversion (in the case of clause (y) above).
"Lending Office" means the lending office of the Liquidity Provider
presently located at Munich, Germany, or such other lending office as the
Liquidity Provider from time to time shall notify the Borrower as its lending
office hereunder; provided that the Liquidity Provider shall not change its
Lending Office without the prior written consent of American (such consent not
to be unreasonably withheld).
"LIBOR Advance" means an Advance bearing interest at a rate based upon
the LIBOR Rate.
"LIBOR Rate" means, with respect to any Interest Period, (a) the
interest rate per annum equal to the rate per annum at which deposits in
Dollars are offered in the London interbank market as shown on Page 3750 of the
Telerate Systems Incorporated screen service (or such other page as may replace
Telerate Page 3750), or if such service is not available, Page LIBO of the
Reuters Money Service Monitor System (or such other page as may replace Reuters
Page LIBO) at approximately 11:00 a.m. (London time) on the day that is two
Business Days prior to the first day of such Interest Period, for a period
comparable to such Interest Period, or (b) if no such rate is published on
either such service or if neither of such services is then available, the
interest rate per
4
<PAGE> 8
annum equal to the average (rounded up, if necessary, to the nearest 1/100th of
1%) of the rates at which deposits in Dollars are offered by the Reference Banks
(or, if fewer than all of the Reference Banks are quoting a rate for deposits in
Dollars for the applicable period and amount, such fewer number of Reference
Banks) at approximately 11:00 a.m. (London time) on the day that is two Business
Days prior to the first day of such Interest Period to prime banks in the London
interbank market for a period comparable to such Interest Period and in an
amount approximately equal to the principal amount of the LIBOR Advance to be
outstanding during such Interest Period, or (c) if none of the Reference Banks
is quoting a rate for deposits in Dollars in the London interbank market for
such a period and amount, the interest rate per annum equal to the average
(rounded up, if necessary, to the nearest 1/100th of 1%) of the rates at which
deposits in Dollars are offered by the principal New York offices of the
Reference Banks (or, if fewer than all of the Reference Banks are quoting a rate
for deposits in Dollars in the New York interbank market for the applicable
period and amount, such fewer number of Reference Banks) at approximately 11:00
a.m. (New York time) on the day that is two Business Days prior to the first day
of such Interest Period to prime banks in the New York interbank market for a
period comparable to such Interest Period and in an amount approximately equal
to the principal amount of the LIBOR Advance to be outstanding during such
Interest Period, or (d) if none of the principal New York offices of the
Reference Banks is quoting a rate for deposits in Dollars in the New York
interbank market for the applicable period and amount, the Base Rate.
"Liquidity Event of Default" means the occurrence of either (a) the
Acceleration of all of the Equipment Notes or (b) an American Bankruptcy Event.
"Liquidity Indemnitee" means the Liquidity Provider, its directors,
officers, employees and agents, and its successors and permitted assigns.
"Liquidity Provider" has the meaning specified in the introductory
paragraph to this Agreement.
"Maximum Available Commitment" means, subject to the proviso contained
in the third sentence of Section 2.02(a), at any time of determination, (a) the
Maximum Commitment at such time less (b) the aggregate amount of each Interest
Advance outstanding at such time; provided that following a Provider Advance or
a Final Advance, the Maximum Available Commitment shall be zero.
"Maximum Commitment" means initially $15,773,747.00, as the same may
be reduced from time to time in accordance with Section 2.04(a).
"Non-Extension Advance" means an Advance made pursuant to Section
2.02(b).
"Notice of Borrowing" has the meaning specified in Section 2.02(e).
"Notice of Replacement Subordination Agent" has the meaning specified
in Section 3.08.
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"Participation" has the meaning specified in Section 7.08(b).
"Performing Note Deficiency" means any time that less than 65% of the
then aggregate outstanding principal amount of all Equipment Notes are
Performing Equipment Notes.
"Permitted Transferee" means any Person that:
(a) is not a commercial air carrier, American or any
affiliate of American; and
(b) is any one of:
(1) a commercial banking institution organized under
the laws of the United States or any state thereof or the
District of Columbia;
(2) a commercial banking institution that (x) is
organized under the laws of France, Germany, The Netherlands,
Switzerland or the United Kingdom, (y) is entitled on the
date it acquires any Participation to a complete exemption
from United States federal income taxes for all income
derived by it from the transactions contemplated by the
Operative Agreements under an income tax treaty, as in effect
on such date, between the United States and such jurisdiction
of its organization and (z) is engaged in the active conduct
of a banking business in such jurisdiction of its
organization, holds its Participation in connection with such
banking business in such jurisdiction and is regulated as a
commercial banking institution by the appropriate regulatory
authorities in such jurisdiction; or
(3) a commercial banking institution that (x) is
organized under the laws of Canada, France, Germany, Ireland,
Japan, Luxembourg, The Netherlands, Sweden, Switzerland or
the United Kingdom and (y) is entitled on the date it
acquires any Participation to a complete exemption from
withholding of United States federal income taxes for all
income derived by it from the transactions contemplated by
the Operative Agreements under laws as in effect on such date
by reason of such income being effectively connected with the
conduct of a trade or business within the United States.
"Prospectus Supplement" means the Prospectus Supplement dated
September 23, 1999, relating to the Certificates, as such Prospectus Supplement
may be amended or supplemented.
"Provider Advance" means a Downgrade Advance or a Non-Extension
Advance.
"Reference Banks" means the principal London offices of: National
Westminster Bank, plc; Morgan Guaranty Trust Company of New York; The Chase
Manhattan Bank; Citibank, N.A.; and such other or additional banking
institutions as may be designated from time to time by mutual agreement of
American and the Liquidity Provider.
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"Regulatory Change" means the enactment, adoption or promulgation,
after the date of this Agreement, of any law or regulation by a United States
federal or state government or by the government of the Liquidity Provider's
jurisdiction of organization, or any change, after the date of this Agreement,
in any such law or regulation, or in the interpretation thereof by any
governmental authority, central bank or comparable agency of the United States
or the Liquidity Provider's jurisdiction of organization charged with
responsibility for the administration or application thereof, that shall
impose, modify or deem applicable (a) any reserve, special deposit or similar
requirement against extensions of credit or other assets of, or deposits with
or other liabilities of, the Liquidity Provider including, or by reason of, the
Advances or (b) any capital adequacy requirement requiring the maintenance by
the Liquidity Provider of additional capital in respect of any Advances or the
Liquidity Provider's obligation to make any such Advances.
"Replenishment Amount" has the meaning specified in Section 2.06(b).
"Required Amount" means, for any day, the sum of the aggregate amount
of interest, calculated at the rate per annum equal to the Stated Interest Rate
for the Class A-1 Certificates on the basis of a 360-day year comprised of
twelve 30-day months, that would be payable on the Class A-1 Certificates on
each of the three successive semiannual Regular Distribution Dates immediately
following such day or, if such day is a Regular Distribution Date, on such day
and the succeeding two semiannual Regular Distribution Dates, in each case
calculated on the basis of the Pool Balance of the Class A-1 Certificates on
such day and without regard to expected future distributions of principal on
the Class A-1 Certificates.
"Termination Date" means the earliest to occur of the following: (i)
the Expiry Date; (ii) the date on which the Borrower delivers to the Liquidity
Provider a certificate, signed by a Responsible Officer of the Borrower,
certifying that all of the Class A-1 Certificates have been paid in full (or
provision has been made for such payment in accordance with the Intercreditor
Agreement and the Class A-1 Trust Agreement) or are otherwise no longer
entitled to the benefits of this Agreement; (iii) the date on which the
Borrower delivers to the Liquidity Provider a certificate, signed by a
Responsible Officer of the Borrower, certifying that a Replacement Liquidity
Facility has been substituted for this Agreement in full pursuant to Section
3.06(e) of the Intercreditor Agreement; (iv) the fifth Business Day following
the receipt by the Borrower of a Termination Notice from the Liquidity Provider
pursuant to Section 6.01; and (v) the date on which no Advance is or may
(including by reason of reinstatement as herein provided) become available for
a Borrowing hereunder.
"Termination Notice" means the Notice of Termination substantially in
the form of Annex V to this Agreement.
"Unapplied Provider Advance" means any Provider Advance other than an
Applied Provider Advance.
"Unpaid Advance" has the meaning specified in Section 2.05.
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"Withdrawal Notice" has the meaning specified in Section 2.10.
(e) For the purposes of this Agreement, the following terms shall have
the respective meanings specified in the Intercreditor Agreement:
"Acceleration", "American", "American Bankruptcy Event",
"Certificate", "Class A-1 Cash Collateral Account", "Class A-1 Certificates",
"Class A-1 Certificateholders", "Class A-1 Trust", "Class A-1 Trust Agreement",
"Class A-1 Trustee", "Class A-2 Certificates", "Class B Certificates", "Class C
Certificates", "Closing Date", "Collection Account", "Controlling Party",
"Corporate Trust Office", "Distribution Date", "Dollars", "Downgraded
Facility", "Equipment Notes", "Fee Letter", "Final Legal Distribution Date",
"Indenture", "Interest Payment Date", "Investment Earnings", "Liquidity
Facility", "Liquidity Obligations", "Loan Trustee", "Moody's", "Non-Extended
Facility", "Operative Agreements", "Participation Agreements", "Performing
Equipment Note", "Person", "Pool Balance", "Rating Agencies", "Ratings
Confirmation", "Regular Distribution Date", "Replacement Liquidity Facility",
"Responsible Officer", "Scheduled Payment", "Special Payment", "S&P", "Stated
Interest Rate", "Subordination Agent", "Taxes", "Threshold Rating", "Trust
Agreement", "Trustee", "Underwriters", "Underwriting Agreement", "United
States" and "Written Notice".
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. The Advances. The Liquidity Provider hereby irrevocably
agrees, on the terms and conditions hereinafter set forth, to make Advances to
the Borrower from time to time on any Business Day during the period from the
Effective Date until 12:00 noon (New York City time) on the Expiry Date (unless
the obligations of the Liquidity Provider shall be earlier terminated in
accordance with the terms of Section 2.04(b)) in an aggregate amount at any
time outstanding not to exceed the Maximum Commitment.
Section 2.02. Making of Advances. (a) Each Interest Advance shall be
made by the Liquidity Provider upon delivery to the Liquidity Provider of a
written and completed Notice of Borrowing in substantially the form of Annex I,
signed by a Responsible Officer of the Borrower, such Interest Advance to be in
an amount not exceeding the Maximum Available Commitment at such time and used
solely for the payment when due of interest with respect to the Class A-1
Certificates at the Stated Interest Rate therefor in accordance with Section
3.06(a) and 3.06(b) of the Intercreditor Agreement. Each Interest Advance made
hereunder shall automatically reduce the Maximum Available Commitment and the
amount available to be borrowed hereunder by subsequent Advances by the amount
of such Interest Advance (subject to reinstatement as provided in the next
sentence). Upon repayment to the Liquidity Provider in full or in part of the
amount of any Interest Advance made pursuant to this Section 2.02(a), together
with accrued interest thereon (as provided herein), the Maximum Available
Commitment shall be reinstated by an amount equal
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to the amount of such Interest Advance so repaid, but not to exceed the Maximum
Commitment; provided, however, that the Maximum Available Commitment shall not
be so reinstated at any time if (x) both a Performing Note Deficiency exists and
a Liquidity Event of Default shall have occurred and be continuing or (y) a
Final Drawing shall have occurred.
(b) Subject to Section 2.10, a Non-Extension Advance shall be made by
the Liquidity Provider if this Agreement is not extended in accordance with
Section 3.06(d) of the Intercreditor Agreement (unless a Replacement Liquidity
Facility to replace this Agreement shall have been delivered to the Borrower as
contemplated by said Section 3.06(d) within the time period specified in such
Section 3.06(d)) upon delivery to the Liquidity Provider of a written and
completed Notice of Borrowing in substantially the form of Annex II, signed by
a Responsible Officer of the Borrower, in an amount equal to the Maximum
Available Commitment at such time, and shall be used to fund the Class A-1 Cash
Collateral Account in accordance with Sections 3.06(d) and 3.06(f) of the
Intercreditor Agreement.
(c) A Downgrade Advance shall be made by the Liquidity Provider if at
any time the short-term unsecured debt rating of the Liquidity Provider issued
by either Rating Agency (or if the Liquidity Provider does not have a
short-term unsecured debt rating issued by a given Rating Agency, the long-term
unsecured debt rating of the Liquidity Provider issued by such Rating Agency)
is lower than the applicable Threshold Rating (as provided for in Section
3.06(c) of the Intercreditor Agreement) unless a Replacement Liquidity Facility
to replace this Agreement shall have been previously delivered to the Borrower
in accordance with said Section 3.06(c), upon delivery to the Liquidity
Provider of a written and completed Notice of Borrowing in substantially the
form of Annex III, signed by a Responsible Officer of the Borrower, in an
amount equal to the Maximum Available Commitment at such time, and shall be
used to fund the Class A-1 Cash Collateral Account in accordance with Sections
3.06(c) and 3.06(f) of the Intercreditor Agreement.
(d) A Final Advance shall be made by the Liquidity Provider following
the receipt by the Borrower of a Termination Notice from the Liquidity Provider
pursuant to Section 6.01 upon delivery to the Liquidity Provider of a written
and completed Notice of Borrowing in substantially the form of Annex IV, signed
by a Responsible Officer of the Borrower, in an amount equal to the Maximum
Available Commitment at such time, and shall be used to fund the Class A-1 Cash
Collateral Account (in accordance with Sections 3.06(f) and 3.06(i) of the
Intercreditor Agreement).
(e) Each Borrowing shall be made on notice in writing (a "Notice of
Borrowing") in substantially the form required by Section 2.02(a), 2.02(b),
2.02(c) or 2.02(d), as the case may be, given by the Borrower to the Liquidity
Provider. If a Notice of Borrowing is delivered by the Borrower in respect of
any Borrowing no later than 1:00 p.m. (New York City time) on a Business Day,
upon satisfaction of the conditions precedent set forth in Section 4.02 with
respect to a requested Borrowing, the Liquidity Provider shall make available
to the Borrower, in accordance with its payment instructions, the amount of
such Borrowing in Dollars and immediately available funds, before 4:00 p.m.
(New York City time) on such Business Day or before 1:00 p.m. (New York City
time) on such later Business Day specified in such Notice of Borrowing. If a
Notice of
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Borrowing is delivered by the Borrower in respect of any Borrowing after 1:00
p.m. (New York City time) on a Business Day, upon satisfaction of the conditions
precedent set forth in Section 4.02 with respect to a requested Borrowing, the
Liquidity Provider shall make available to the Borrower, in accordance with its
payment instructions, the amount of such Borrowing in Dollars and immediately
available funds, before 1:00 p.m. (New York City time) on the first Business Day
next following the day of receipt of such Notice of Borrowing or on such later
Business Day specified by the Borrower in such Notice of Borrowing. Payments of
proceeds of a Borrowing shall be made by wire transfer of immediately available
funds to the Borrower in accordance with such wire transfer instructions as the
Borrower shall furnish from time to time to the Liquidity Provider for such
purpose. Each Notice of Borrowing shall be irrevocable and binding on the
Borrower. Each Notice of Borrowing shall be effective upon delivery of a copy
thereof to the Liquidity Provider's New York branch at the address specified in
Section 7.02 hereof.
(f) Upon the making of any Advance requested pursuant to a Notice of
Borrowing in accordance with the Borrower's payment instructions, the Liquidity
Provider shall be fully discharged of its obligation hereunder with respect to
such Notice of Borrowing, and the Liquidity Provider shall not thereafter be
obligated to make any further Advances hereunder in respect of such Notice of
Borrowing to the Borrower or to any other Person (including the Trustee or any
Class A-1 Certificateholder). If the Liquidity Provider makes an Advance
requested pursuant to a Notice of Borrowing before 12:00 noon (New York City
time) on the second Business Day after the date of payment specified in said
Section 2.02(e), the Liquidity Provider shall have fully discharged its
obligations hereunder with respect to such Advance and an event of default
shall not have occurred hereunder. Following the making of any Advance pursuant
to Section 2.02(b), 2.02(c) or 2.02(d) to fund the Class A-1 Cash Collateral
Account, the Liquidity Provider shall have no interest in or rights to the
Class A-1 Cash Collateral Account, such Advance or any other amounts from time
to time on deposit in the Class A-1 Cash Collateral Account; provided that the
foregoing shall not affect or impair the obligations of the Subordination Agent
to make the distributions contemplated by Section 3.06(e) or 3.06(f) of the
Intercreditor Agreement and provided further, that the foregoing shall not
affect or impair the rights of the Liquidity Provider to provide written
instructions with respect to the investment and reinvestment of amounts in the
Class A-1 Cash Collateral Account to the extent provided in Section 2.02(b) of
the Intercreditor Agreement. By paying to the Borrower proceeds of Advances
requested by the Borrower in accordance with the provisions of this Agreement,
the Liquidity Provider makes no representation as to, and assumes no
responsibility for, the correctness or sufficiency for any purpose of the
amount of the Advances so made and requested.
Section 2.03. Fees. The Borrower agrees to pay to the Liquidity
Provider the fees set forth in the Fee Letter.
Section 2.04. Reduction or Termination of the Maximum Commitment. (a)
Automatic Reduction. Promptly following each date on which the Required Amount
is reduced as a result of a reduction in the Pool Balance of the Class A-1
Certificates or otherwise, the Maximum Commitment shall automatically be reduced
to an amount equal to such reduced Required Amount (as calculated by the
Borrower). The Borrower shall give notice of any such automatic reduction of
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the Maximum Commitment to the Liquidity Provider and American within two
Business Days thereof. The failure by the Borrower to furnish any such notice
shall not affect such automatic reduction of the Maximum Commitment.
(b) Termination. Upon the making of any Provider Advance or Final
Advance hereunder or the occurrence of the Termination Date, the obligation of
the Liquidity Provider to make further Advances hereunder shall automatically
and irrevocably terminate, and the Borrower shall not be entitled to request
any further Borrowing hereunder.
Section 2.05. Repayments of Interest Advances or the Final Advance.
Subject to Sections 2.06, 2.07 and 2.09 hereof, the Borrower hereby agrees,
without notice of an Advance or demand for repayment from the Liquidity
Provider (which notice and demand are hereby waived by the Borrower), to pay,
or to cause to be paid, to the Liquidity Provider (a) on each date on which the
Liquidity Provider shall make an Interest Advance or the Final Advance, an
amount equal to the amount of such Advance (any such Advance, until repaid, is
referred to herein as an "Unpaid Advance"), plus (b) interest on the amount of
each such Unpaid Advance in the amounts and on the dates determined as provided
in Section 3.07; provided that if (i) the Liquidity Provider shall make a
Provider Advance at any time after making one or more Interest Advances which
shall not have been repaid in accordance with this Section 2.05 or (ii) this
Liquidity Facility shall become a Downgraded Facility or Non-Extended Facility
at any time when unreimbursed Interest Advances have reduced the Maximum
Available Commitment to zero, then such Interest Advances shall cease to
constitute Unpaid Advances and shall be deemed to have been changed into an
Applied Downgrade Advance or an Applied Non-Extension Advance, as the case may
be, for all purposes of this Agreement (including, without limitation, for the
purpose of determining when such Interest Advance is required to be repaid to
the Liquidity Provider in accordance with Section 2.06 and for the purposes of
Section 2.06(b)). The Borrower and the Liquidity Provider agree that the
repayment in full of each Interest Advance and Final Advance on the date such
Advance is made is intended to be a contemporaneous exchange for new value
given to the Borrower by the Liquidity Provider. For the avoidance of doubt,
interest payable on an Interest Advance or the Final Advance shall not be
regarded as overdue unless such interest is not paid when due under Section
3.07.
Section 2.06. Repayments of Provider Advances. (a) Amounts advanced
hereunder in respect of a Provider Advance shall be deposited in the Class A-1
Cash Collateral Account and invested and withdrawn from the Class A-1 Cash
Collateral Account as set forth in Sections 3.06(c), 3.06(d), 3.06(e) and
3.06(f) of the Intercreditor Agreement. Subject to Sections 2.07 and 2.09, the
Borrower agrees to pay to the Liquidity Provider, on each Regular Distribution
Date, commencing on the first Regular Distribution Date after the making of a
Provider Advance, interest on the principal amount of any such Provider
Advance, in the amounts determined as provided in Section 3.07; provided,
however, that amounts in respect of a Provider Advance withdrawn from the Class
A-1 Cash Collateral Account for the purpose of paying interest on the Class A-1
Certificates in accordance with Section 3.06(f) of the Intercreditor Agreement
(the amount of any such withdrawal being (y) in the case of a Downgrade
Advance, an "Applied Downgrade Advance" and (z) in the case of a Non-Extension
Advance, an "Applied Non-Extension Advance" and, together with an Applied
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Downgrade Advance, an "Applied Provider Advance") shall thereafter (subject to
Section 2.06(b)) be treated as an Interest Advance under this Agreement for
purposes of determining the Applicable Liquidity Rate for interest payable
thereon and the dates on which such interest is payable; provided further,
however, that if, following the making of a Provider Advance, the Liquidity
Provider delivers a Termination Notice to the Borrower pursuant to Section
6.01, such Provider Advance shall thereafter be treated as a Final Advance
under this Agreement for purposes of determining the Applicable Liquidity Rate
for interest payable thereon and the dates on which such interest is payable.
Subject to Sections 2.07 and 2.09 hereof, immediately upon the withdrawal of
any amounts from the Class A-1 Cash Collateral Account on account of a
reduction in the Required Amount, the Borrower shall repay to the Liquidity
Provider a portion of the Provider Advances in a principal amount equal to such
reduction, plus interest on the principal amount prepaid as provided in Section
3.07.
(b) At any time when an Applied Provider Advance (or any portion
thereof) is outstanding, upon the deposit in the Class A-1 Cash Collateral
Account of any amount pursuant to clause "third" of Section 2.04(b) of the
Intercreditor Agreement, clause "third" of Section 3.02 of the Intercreditor
Agreement or clause "fourth" of Section 3.03 of the Intercreditor Agreement
(any such amount being a "Replenishment Amount") for the purpose of
replenishing or increasing the balance thereof up to the Required Amount at
such time, (i) the aggregate outstanding principal amount of all Applied
Provider Advances (and of Provider Advances treated as an Interest Advance for
purposes of determining the Applicable Liquidity Rate for interest payable
thereon) shall be automatically reduced by the amount of such Replenishment
Amount and (ii) the aggregate outstanding principal amount of all Unapplied
Provider Advances shall be automatically increased by the amount of such
Replenishment Amount.
(c) Upon the provision of a Replacement Liquidity Facility in
replacement of this Agreement in accordance with Section 3.06(e) of the
Intercreditor Agreement, as provided in Section 3.06(f) of the Intercreditor
Agreement, amounts remaining on deposit in the Class A-1 Cash Collateral
Account after giving effect to any Applied Provider Advance on the date of such
replacement shall be reimbursed to the Liquidity Provider, but only to the
extent such amounts are necessary to repay in full to the Liquidity Provider
all amounts owing to it hereunder.
Section 2.07. Payments to the Liquidity Provider Under the
Intercreditor Agreement. In order to provide for payment or repayment to the
Liquidity Provider of any amounts hereunder, the Intercreditor Agreement
provides that amounts available and referred to in Articles II and III of the
Intercreditor Agreement, to the extent payable to the Liquidity Provider
pursuant to the terms of the Intercreditor Agreement (including, without
limitation, Section 3.06(f) of the Intercreditor Agreement), shall be paid to
the Liquidity Provider in accordance with the terms thereof (but, for the
avoidance of doubt, without duplication of or increase in any amounts payable
hereunder). Amounts so paid to the Liquidity Provider shall be applied by the
Liquidity Provider in the order of priority required by the applicable
provisions of Articles II and III of the Intercreditor Agreement and shall
discharge in full the corresponding obligations of the Borrower hereunder.
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Section 2.08. Book Entries. The Liquidity Provider shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower resulting from Advances made from time to time and
the amounts of principal and interest payable hereunder and paid from time to
time in respect thereof; provided, however, that the failure by the Liquidity
Provider to maintain such account or accounts shall not affect the obligations
of the Borrower in respect of Advances.
Section 2.09. Payments from Available Funds Only. All payments to be
made by the Borrower under this Agreement shall be made only from the amounts
that constitute Scheduled Payments, Special Payments and other payments under
the Operative Agreements, including payment under Section 4.02 of the
Participation Agreements and payments under Section 2.14 of the Indentures, and
only to the extent that the Borrower shall have sufficient income or proceeds
therefrom to enable the Borrower to make payments in accordance with the terms
hereof after giving effect to the priority of payments provisions set forth in
the Intercreditor Agreement. The Liquidity Provider agrees that it will look
solely to such amounts to the extent available for distribution to it as
provided in the Intercreditor Agreement and this Agreement and that the
Borrower, in its individual capacity, is not personally liable to it for any
amounts payable or liability under this Agreement except as expressly provided
in this Agreement, the Intercreditor Agreement or any Participation Agreement.
Amounts on deposit in the Class A-1 Cash Collateral Account shall be available
to the Borrower to make payments under this Agreement only to the extent and
for the purposes expressly contemplated in Section 3.06(f) of the Intercreditor
Agreement.
Section 2.10. Extension of the Expiry Date; Non-Extension Advance. If
the Expiry Date is prior to the date that is 15 days after the Final Legal
Distribution Date for the Class A-1 Certificates, then no earlier than the 60th
day and no later than the 40th day prior to the then applicable Expiry Date,
the Borrower may request in writing that the Liquidity Provider extend the
Expiry Date to the earlier of (i) the date that is 15 days after the Final
Legal Distribution Date for the Class A-1 Certificates and (ii) the date that
is the day immediately preceding the 364th day after the last day of the
Consent Period (unless the obligations of the Liquidity Provider hereunder are
earlier terminated in accordance herewith). The Liquidity Provider shall by
notice (the "Consent Notice") to the Borrower during the period commencing on
the date that is 60 days prior to the then effective Expiry Date and ending on
the date that is 25 days prior to the then effective Expiry Date (the "Consent
Period") advise the Borrower whether, in its sole discretion, it agrees to so
extend the Expiry Date; provided, however, that such extension shall not be
effective with respect to the Liquidity Provider if, by notice (the "Withdrawal
Notice") to the Borrower prior to the end of the Consent Period, the Liquidity
Provider revokes its Consent Notice. If the Liquidity Provider advises the
Borrower in the Consent Notice that such Expiry Date shall not be so extended,
or gives a Withdrawal Notice to the Borrower prior to the end of the Consent
Period, or fails to irrevocably and unconditionally advise the Borrower on or
before the end of the Consent Period that such Expiry Date shall be so extended
(and, in each case, if the Liquidity Provider shall not have been replaced in
accordance with Section 3.06(e) of the Intercreditor Agreement), the Borrower
shall be entitled on and after the date on which the Consent Period ends (but
prior to the then effective Expiry Date) to request a Non-Extension Advance in
accordance with Section 2.02(b) hereof and Section 3.06(d) of the Intercreditor
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Agreement. If any amounts shall be drawn pursuant to a Non-Extension Advance
and, within 30 days thereafter, the Liquidity Provider shall not have been
replaced, then at any time following the 30th day after such Non-Extension
Advance, the Liquidity Provider may, by written notice to the Borrower, agree
to reinstate the Liquidity Facility on the terms of the existing Liquidity
Facility for a period ending on the 364th day after the end of the Consent
Period; provided, however, that in such event the Liquidity Provider shall
reimburse the Borrower for any costs actually incurred by or on behalf of the
Borrower in drawing pursuant to the Non-Extension Advance and funding the Class
A-1 Cash Collateral Account or otherwise in connection with the Non-Extension
Advance.
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. Increased Costs. If as a result of any Regulatory Change
there shall be any increase by an amount reasonably deemed by the Liquidity
Provider to be material in the actual cost to the Liquidity Provider of making,
funding or maintaining any Advances or its obligation to make any such Advances
or there shall be any reduction by an amount reasonably deemed by the Liquidity
Provider to be material in the amount receivable by the Liquidity Provider
under this Agreement or the Intercreditor Agreement in respect thereof, and in
case of either such an increase or reduction, such event does not arise from
the gross negligence or willful misconduct of the Liquidity Provider, from its
breach of any of its representations, warranties, covenants or agreements
contained herein or in the Intercreditor Agreement or from its failure to
comply with any such Regulatory Change (any such increase or reduction being
referred to herein as an "Increased Cost"), then the Borrower shall from time
to time pay to the Liquidity Provider an amount equal to such Increased Cost
within 15 Business Days after delivery to the Borrower and American of a
certificate of an officer of the Liquidity Provider describing in reasonable
detail the event by reason of which it claims such Increased Cost and the basis
for the determination of the amount of such Increased Cost; provided that, the
Borrower shall be obligated to pay amounts only with respect to any Increased
Costs accruing from the date 45 days prior to the date of delivery of such
certificate. Such certificate, in the absence of manifest error, shall be
considered prima facie evidence of the amount for purposes of this Agreement;
provided that any determinations and allocations by the Liquidity Provider of
the effect of any Regulatory Change on the costs of maintaining the Advances
are made on a reasonable basis. The Liquidity Provider shall not be entitled to
assert any claim under this Section 3.01 in respect of or attributable to
Taxes. The Liquidity Provider will notify the Borrower and American as promptly
as practicable of any event occurring after the date of this Agreement that
will entitle the Liquidity Provider to compensation under this Section 3.01.
The Liquidity Provider agrees to investigate all commercially reasonable
alternatives for reducing any Increased Costs and to use all commercially
reasonable efforts to avoid or minimize, to the greatest extent possible, any
claim in respect of Increased Costs, including, without limitation, by
designating a different Lending Office, if such designation or other action
would avoid the need for, or reduce the amount of, any such claim; provided
that the foregoing shall not obligate the Liquidity Provider to take any action
that would, in its reasonable judgment, cause the Liquidity Provider to incur
any material loss or cost, unless the Borrower or American agrees to reimburse
the Liquidity Provider therefor. If no such
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designation or other action is effected, or, if effected, fails to avoid the
need for any claim in respect of Increased Costs, American may arrange for a
Replacement Liquidity Facility in accordance with Section 3.06(e) of the
Intercreditor Agreement.
Notwithstanding the foregoing provisions, in no event shall the
Borrower be required to make payments under this Section 3.01: (a) in respect
of any Regulatory Change proposed by any applicable governmental authority
(including any branch of a legislature), central bank or comparable agency of
the United States or the Liquidity Provider's jurisdiction of organization and
pending as of the date of this Agreement (it being agreed that the consultative
paper issued by the Basel Committee on Banking Supervision entitled "A New
Capital Adequacy Framework" shall not be considered a Regulatory Change
proposed as of the date of this Agreement); (b) if a claim hereunder in respect
of an Increased Cost arises through circumstances peculiar to the Liquidity
Provider and that do not affect similarly organized commercial banking
institutions in the same jurisdiction generally that are in compliance with the
law, rule, regulation or interpretation giving rise to the Regulatory Change
relating to such Increased Cost; (c) if the Liquidity Provider shall fail to
comply with its obligations under this Section 3.01; or (d) if the Liquidity
Provider is not also seeking payment for similar increased costs in other
similarly situated transactions.
Section 3.02. [Intentionally omitted.]
Section 3.03. Withholding Taxes. (a) All payments made by the Borrower
under this Agreement shall be made without deduction or withholding for or on
account of any Taxes, unless such deduction or withholding is required by law.
If any Taxes are so required to be withheld or deducted from any amounts
payable to the Liquidity Provider under this Agreement, the Borrower shall pay
to the relevant authorities the full amount so required to be deducted or
withheld and, if such Taxes are Covered Taxes, pay to the Liquidity Provider
such additional amounts as shall be necessary to ensure that the net amount
actually received by the Liquidity Provider (after deduction or withholding of
all Covered Taxes) shall be equal to the full amount that would have been
received by the Liquidity Provider had no withholding or deduction of Covered
Taxes been required. The Liquidity Provider agrees to use reasonable efforts
(consistent with applicable legal and regulatory restrictions) to change the
jurisdiction of its Lending Office if making such change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of the Liquidity Provider, be
otherwise materially disadvantageous to the Liquidity Provider. If the
Liquidity Provider receives a refund of, or realizes a net Tax benefit not
otherwise available to it as a result of, any Taxes for which additional
amounts were paid by the Borrower pursuant to this Section 3.03, the Liquidity
Provider shall pay to the Borrower (for deposit into the Collection Account)
the amount of such refund (and any interest thereon) or net benefit.
The Liquidity Provider will (i) provide (on its behalf and on behalf
of any participant holding a Participation pursuant to Section 7.08) to the
Borrower (x) on or prior to the Effective Date two valid completed and executed
copies of Internal Revenue Service Form W8-BEN, including thereon a valid U.S.
taxpayer identification number (or, with respect to any such participant, such
other form or documentation as may be applicable) covering all amounts
receivable by it in connection with the
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transactions contemplated by the Operative Agreements and (y) thereafter from
time to time such additional forms or documentation as may be necessary to
establish an available exemption from withholding of United States Tax on
payments hereunder so that such forms or documentation are effective for all
periods during which it is the Liquidity Provider and (ii) provide timely
notice to the Borrower if any such form or documentation is or becomes
inaccurate. The Liquidity Provider shall deliver to the Borrower such other
forms or documents as may be reasonably requested by the Borrower or required
by applicable law to establish that payments hereunder are exempt from or
entitled to a reduced rate of Covered Taxes.
(b) All payments (including, without limitation, Advances) made by the
Liquidity Provider under this Agreement shall be made free and clear of, and
without reduction for or on account of, any Taxes. If any Taxes are required to
be withheld or deducted from any amounts payable to the Borrower under this
Agreement, the Liquidity Provider shall (i) within the time prescribed therefor
by applicable law pay to the appropriate governmental or taxing authority the
full amount of any such Taxes (and any additional Taxes in respect of the
additional amounts payable under clause (ii) hereof) and make such reports or
returns in connection therewith at the time or times and in the manner
prescribed by applicable law, and (ii) pay to the Borrower an additional amount
which (after deduction of all such Taxes) will be sufficient to yield to the
Borrower the full amount which would have been received by it had no such
withholding or deduction been made. Within 30 days after the date of each
payment hereunder, the Liquidity Provider shall furnish to the Borrower the
original or a certified copy of (or other documentary evidence of) the payment
of the Taxes applicable to such payment.
If any exemption from, or reduction in the rate of, any Taxes required
to be borne by the Liquidity Provider under this Section 3.03(b) is reasonably
available to the Borrower without providing any information regarding the
holders or beneficial owners of the Certificates, the Borrower shall deliver
the Liquidity Provider such form or forms and such other evidence of the
eligibility of the Borrower for such exemption or reductions (but without any
requirement to provide any information regarding the holders or beneficial
owners of the Certificates) as the Liquidity Provider may reasonably identify
to the Borrower as being required as a condition to exemption from, or
reduction in the rate of, such Taxes.
Section 3.04. Payments. The Borrower shall make or cause to be made
each payment to the Liquidity Provider under this Agreement so as to cause the
same to be received by the Liquidity Provider not later than 1:00 P.M. (New
York City time) on the day when due. The Borrower shall make all such payments
in Dollars, to the Liquidity Provider in immediately available funds, by wire
transfer to First Union Bank International, Swift/BIC - Code: PNBPUS3N NYC
(Fedwire 0260 0509 2/CHIPS/ABA 0509) in favor of account number 2000 193534
122, Bayerische Landesbank Girozentrale, Munich, Swift/BIC - Code: BYLADEMM,
Reference RCA American EETC 1999-1A- 1.
Section 3.05. Computations. All computations of interest based on the
Base Rate shall be made on the basis of a year of 365 or 366 days, as the case
may be, and all computations of interest
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based on the LIBOR Rate shall be made on the basis of a year of 360 days, in
each case for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such interest is payable.
Section 3.06. Payment on Non-Business Days. Whenever any payment to be
made hereunder shall be stated to be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day and no
additional interest shall be due as a result (and if so made, shall be deemed
to have been made when due). If any payment in respect of interest on an
Advance is so deferred to the next succeeding Business Day, such deferral shall
not delay the commencement of the next Interest Period for such Advance (if
such Advance is a LIBOR Advance) or reduce the number of days for which
interest will be payable on such Advance on the next interest payment date for
such Advance.
Section 3.07. Interest. (a) Subject to Sections 2.07 and 2.09, the
Borrower shall pay, or shall cause to be paid, without duplication, interest on
(i) the unpaid principal amount of each Advance from and including the date of
such Advance (or, in the case of an Applied Provider Advance, from and
including the date on which the amount thereof was withdrawn from the Class A-1
Cash Collateral Account to pay interest on the Class A-1 Certificates) to but
excluding the date such principal amount shall be paid in full (or, in the case
of an Applied Provider Advance, the date on which the Class A-1 Cash Collateral
Account is fully replenished in respect of such Advance) and (ii) any other
amount due hereunder (whether fees, commissions, expenses or other amounts or,
to the extent permitted by law, installments of interest on Advances or any
such other amount) that is not paid when due (whether at stated maturity, by
acceleration or otherwise) from and including the due date thereof to but
excluding the date such amount is paid in full, in each such case, at the
interest rate per annum for each day equal to the Applicable Liquidity Rate (as
defined below) for such Advance or such other amount, as the case may be, as in
effect for such day, but in no event at a rate per annum greater than the
maximum rate permitted by applicable law, provided, however, that, if at any
time the otherwise applicable interest rate as set forth in this Section 3.07
shall exceed the maximum rate permitted by applicable law, then to the maximum
extent permitted by applicable law any subsequent reduction in such interest
rate will not reduce the rate of interest payable pursuant to this Section 3.07
below the maximum rate permitted by applicable law until the total amount of
interest accrued equals the absolute amount of interest that would have accrued
(without additional interest thereon) if such otherwise applicable interest
rate as set forth in this Section 3.07 had at all relevant times been in
effect.
(b) Except as provided in Section 3.07(e), each Advance will be either
a Base Rate Advance or a LIBOR Advance as provided in this Section 3.07. Each
such Advance will be a Base Rate Advance for the period from the date of its
borrowing to (but excluding) the third Business Day following the Liquidity
Provider's receipt of the Notice of Borrowing for such Advance. Thereafter,
such Advance shall be a LIBOR Advance; provided that the Borrower (at the
direction of the Controlling Party, so long as the Liquidity Provider is not
the Controlling Party) may (x) convert the Final Advance into a Base Rate
Advance on the last day of an Interest Period for such Advance by giving the
Liquidity Provider no less than four Business Days' prior written notice of
such election
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or (y) elect to maintain the Final Advance as a Base Rate Advance by not
requesting a conversion of the Final Advance to a LIBOR Advance under Clause
(5) of the applicable Notice of Borrowing (or, if, pursuant to Section 2.06,
such Final Advance is deemed to have been made without delivery of a Notice of
Borrowing, by requesting, prior to 11:00 a.m. on the first Business Day
immediately following the Borrower's receipt of the applicable Termination
Notice, that such Final Advance not be converted from a Base Rate Advance to a
LIBOR Advance).
(c) Each LIBOR Advance shall bear interest during each Interest Period
at a rate per annum equal to the LIBOR Rate for such Interest Period plus the
Applicable Margin for such LIBOR Advance, payable in arrears on the last day of
such Interest Period and, in the event of the payment of principal of such
LIBOR Advance on a day other than such last day, on the date of such payment
(to the extent of interest accrued on the amount of principal repaid).
(d) Each Base Rate Advance shall bear interest at a rate per annum
equal to the Base Rate plus the Applicable Margin for such Base Rate Advance,
payable in arrears on each Regular Distribution Date and, in the event of the
payment of principal of such Base Rate Advance on a day other than a Regular
Distribution Date, on the date of such payment (to the extent of interest
accrued on the amount of principal repaid).
(e) Each outstanding Unapplied Provider Advance shall bear interest in
an amount equal to the Investment Earnings on amounts on deposit in the Class
A-1 Cash Collateral Account for such Unapplied Provider Advance on the amount
of such Unapplied Provider Advance from time to time, payable in arrears on
each Regular Distribution Date.
(f) Each amount not paid when due hereunder (whether fees,
commissions, expenses or other amounts or, to the extent permitted by
applicable law, installments of interest on Advances but excluding Advances)
shall bear interest at a rate per annum equal to the Base Rate plus 1.75% per
annum until paid.
(g) Each change in the Base Rate shall become effective immediately.
The rates of interest specified in this Section 3.07 with respect to any
Advance or other amount shall be referred to as the "Applicable Liquidity
Rate".
Section 3.08. Replacement of Borrower. Subject to Section 5.02, from
time to time and subject to the successor Borrower's meeting the eligibility
requirements set forth in Section 6.09 of the Intercreditor Agreement
applicable to the Subordination Agent, upon the effective date and time
specified in a written and completed Notice of Replacement Subordination Agent
in substantially the form of Annex VI (a "Notice of Replacement Subordination
Agent") delivered to the Liquidity Provider by the then Borrower, the successor
Borrower designated therein shall become the Borrower for all purposes
hereunder.
Section 3.09. Funding Loss Indemnification. The Borrower shall pay to
the Liquidity Provider, upon the request of the Liquidity Provider, such amount
or amounts as shall be sufficient
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(in the reasonable opinion of the Liquidity Provider) to compensate it for any
loss, cost or expense incurred by reason of the liquidation or redeployment of
deposits or other funds acquired by the Liquidity Provider to fund or maintain
any LIBOR Advance (but excluding loss of the Applicable Margin or anticipated
profits) incurred as a result of:
(1) Any repayment of a LIBOR Advance on a date other than the last day
of the Interest Period for such Advance; or
(2) Any failure by the Borrower to borrow a LIBOR Advance on the date
for borrowing specified in the relevant notice under Section 2.02.
Section 3.10. Illegality. Notwithstanding any other provision in this
Agreement, if any change in any law, rule or regulation applicable to or
binding on the Liquidity Provider, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by the Liquidity Provider with any request or directive (whether or
not having the force of law) of any such authority, central bank or comparable
agency shall make it unlawful or impossible for the Liquidity Provider to
maintain or fund its LIBOR Advances, then upon notice to the Borrower and
American by the Liquidity Provider, the outstanding principal amount of the
LIBOR Advances shall be converted to Base Rate Advances (a) immediately upon
demand of the Liquidity Provider, if such change or compliance with such
request, in the reasonable judgment of the Liquidity Provider, requires
immediate conversion; or (b) at the expiration of the last Interest Period to
expire before the effective date of any such change or request. The Liquidity
Provider will notify the Borrower and American as promptly as practicable of
any event that will lead to the conversion of LIBOR Advances to Base Rate
Advances under this Section 3.10. The Liquidity Provider agrees to investigate
all commercially reasonable alternatives for avoiding the need for such
conversion, including, without limitation, designating a different Lending
Office, if such designation or other action would avoid the need to convert
such LIBOR Advances to Base Rate Advances; provided, that the foregoing shall
not obligate the Liquidity Provider to take any action that would, in its
reasonable judgment, cause the Liquidity Provider to incur any material loss or
cost, unless the Borrower or American agrees to reimburse the Liquidity
Provider therefor. If no such designation or other action is effected, or, if
effected, fails to avoid the need for conversion of the LIBOR Advances to Base
Rate Advances, American may arrange for a Replacement Liquidity Facility in
accordance with Section 3.06(e) of the Intercreditor Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent to Effectiveness of Section 2.01.
Section 2.01 of this Agreement shall become effective on and as of the first
date (the "Effective Date") on which the following conditions precedent have
been satisfied (or waived by the appropriate party or parties):
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(a) The Liquidity Provider shall have received on or before the
Closing Date each of the following, and in the case of each document delivered
pursuant to paragraphs (i), (ii) and (iii), each in form and substance
satisfactory to the Liquidity Provider:
(i) This Agreement duly executed on behalf of the Borrower;
(ii) The Intercreditor Agreement duly executed on behalf of
each of the parties thereto (other than the Liquidity Provider);
(iii) Fully executed copies of each of the Operative
Agreements executed and delivered on or before the Closing Date (other
than this Agreement and the Intercreditor Agreement);
(iv) A copy of the Prospectus Supplement and specimen copies
of the Class A-1 Certificates;
(v) An executed copy of each document, instrument,
certificate and opinion delivered on or before the Closing Date
pursuant to the Class A-1 Trust Agreement, the Intercreditor Agreement
and the other Operative Agreements (in the case of each such opinion,
either addressed to the Liquidity Provider or accompanied by a letter
from the counsel rendering such opinion to the effect that the
Liquidity Provider is entitled to rely on such opinion as of its date
as if it were addressed to the Liquidity Provider); and
(vi) An agreement from American, pursuant to which (x)
American agrees to provide copies of quarterly financial statements
and audited annual financial statements to the Liquidity Provider and
(y) American agrees to allow the Liquidity Provider to discuss such
transactions with officers and employees of American.
(b) On and as of the Effective Date no event shall have occurred and
be continuing, or would result from the entering into of this Agreement or the
making of any Advance, which constitutes a Liquidity Event of Default.
(c) The filings referred to in Sections 3.01(d) and 3.01(f) of the
Participation Agreements shall have been filed (or shall be in the process of
being filed).
(d) The Liquidity Provider shall have received payment in full of the
fees and other sums required to be paid to or for the account of the Liquidity
Provider on or prior to the Effective Date pursuant to the Fee Letter.
(e) All conditions precedent to the issuance of the Certificates under
the Trust Agreement shall have been satisfied or waived, all conditions
precedent to the effectiveness of the other
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Liquidity Facilities shall have been satisfied or waived, and all conditions
precedent to the purchase of the Certificates by the Underwriters under the
Underwriting Agreement shall have been satisfied (unless any of such conditions
precedent under the Underwriting Agreement shall have been waived by the
Underwriters).
(f) The Borrower and American shall have received a certificate, dated
the Effective Date signed by a duly authorized representative of the Liquidity
Provider, certifying that all conditions precedent specified in this Section
4.01 have been satisfied or waived by the Liquidity Provider.
Section 4.02. Conditions Precedent to Borrowing. The obligation of the
Liquidity Provider to make an Advance on the occasion of each Borrowing shall
be subject to the conditions precedent that the Effective Date shall have
occurred and, prior to the time of such Borrowing, the Borrower shall have
delivered a Notice of Borrowing which conforms to the terms and conditions of
this Agreement.
ARTICLE V
COVENANTS
Section 5.01. Affirmative Covenants of the Borrower. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any
amount to the Liquidity Provider hereunder, the Borrower will, unless the
Liquidity Provider shall otherwise consent in writing:
(a) Performance of Agreements. Punctually pay or cause to be paid all
amounts payable by it under this Agreement and the Intercreditor Agreement and
observe and perform in all material respects the conditions, covenants and
requirements applicable to it contained in this Agreement and the Intercreditor
Agreement.
(b) Reporting Requirements. Furnish to the Liquidity Provider with
reasonable promptness, such other information and data with respect to the
transactions contemplated by the Operative Agreements as from time to time may
be reasonably requested by the Liquidity Provider; and permit the Liquidity
Provider, upon reasonable notice, to inspect the Borrower's books and records
with respect to such transactions and to meet with officers and employees of
the Borrower to discuss such transactions.
(c) Certain Operative Agreements. Furnish to the Liquidity Provider
with reasonable promptness, such Operative Agreements entered into after the
date hereof as from time to time may be reasonably requested by the Liquidity
Provider.
Section 5.02. Negative Covenants of the Borrower. Subject to the first
and second sentences and the fourth paragraph of Section 7.01(a) of the
Intercreditor Agreement and Section 7.01(b) of the Intercreditor Agreement, so
long as any Advance shall remain unpaid or the Liquidity
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Provider shall have any Maximum Commitment hereunder or the Borrower shall have
any obligation to pay any amount to the Liquidity Provider hereunder, the
Borrower will not appoint or permit or suffer to be appointed any successor
Borrower without the prior written consent of the Liquidity Provider, which
consent shall not be unreasonably withheld or delayed.
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. Liquidity Events of Default. If (a) any Liquidity Event
of Default has occurred and is continuing and (b) there is a Performing Note
Deficiency, the Liquidity Provider may, in its discretion, deliver to the
Borrower a Termination Notice, the effect of which shall be to cause (i) this
Agreement to expire at the close of business on the fifth Business Day after
the date on which such Termination Notice is received by the Borrower, (ii) the
Borrower to promptly request, and the Liquidity Provider to promptly make, a
Final Advance in accordance with Section 2.02(d) hereof and Section 3.06(i) of
the Intercreditor Agreement, (iii) all other outstanding Advances to be
automatically converted into Final Advances for purposes of determining the
Applicable Liquidity Rate for interest payable thereon and (iv) subject to
Sections 2.07 and 2.09, all Advances, any accrued interest thereon and any
other amounts outstanding hereunder to become immediately due and payable to
the Liquidity Provider.
ARTICLE VII
MISCELLANEOUS
Section 7.01. No Oral Modifications or Continuing Waivers. No terms or
provisions of this Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the Borrower and the
Liquidity Provider and any other Person whose consent is required pursuant to
this Agreement; provided that no such change or other action shall affect the
payment obligations of American Airlines without American's prior written
consent; and any waiver of the terms hereof shall be effective only in the
specific instance and for the specific purpose given.
Section 7.02. Notices. Unless otherwise expressly specified or
permitted by the terms hereof, all notices required or permitted under the
terms and provisions of this Agreement shall be in English and in writing, and
any such notice may be given by United States mail, courier service or
facsimile or any other customary means of communication, and any such notice
shall be effective when delivered (or, if mailed, three Business Days after
deposit, postage prepaid, in the first class U.S. mail and, if delivered by
facsimile, upon completion of transmission and confirmation by the sender (by a
telephone call to a representative of the recipient or by machine confirmation)
that the transmission was received),
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If to the Borrower, to:
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION
225 Asylum, Goodwin Square
Hartford, Connecticut 06103
Attention: Corporate Trust Division
Telephone: (860) 244-1844
Telecopy: (860) 244-1881
If to the Liquidity Provider,
If by mail to:
BAYERISCHE LANDESBANK GIROZENTRALE
c/o Bayerische Landesbank Girozentrale, New York Branch
560 Lexington Avenue
New York, New York 10022
Attention: Patricia Sanchez
Telephone: (212) 310-9810
Telecopy: (212) 310-9930
(With a copy to the address of the Liquidity Provider set forth below)
If by other means of communication to:
BAYERISCHE LANDESBANK GIROZENTRALE
Brienner Strasse 18
D-80333 Munich, Germany
Attention: Aircraft Finance Department, 7650
Telephone: 49-89-2171-2360
Telecopy: 49-89-2171-3763
With a copy of any Notice of Borrowing to:
BAYERISCHE LANDESBANK GIROZENTRALE
560 Lexington Avenue
New York, New York 10022
Attention: Patricia Sanchez
Telephone: (212) 310-9810
Telecopy: (212) 310-9930
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The Borrower or the Liquidity Provider, by notice to the other, may
designate additional or different addresses for subsequent notices or
communications.
Section 7.03. No Waiver; Remedies. No failure on the part of the
Liquidity Provider to exercise, and no delay in exercising, any right under
this Agreement shall operate as a waiver thereof; nor shall any single or
partial exercise of any right under this Agreement preclude any other or
further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
Section 7.04. Further Assurances. The Borrower agrees to do such
further acts and things and to execute and deliver to the Liquidity Provider
such additional assignments, agreements, powers and instruments as the
Liquidity Provider may reasonably require or deem advisable to carry into
effect the purposes of this Agreement and the other Operative Agreements or to
better assure and confirm unto the Liquidity Provider its rights, powers and
remedies hereunder and under the other Operative Agreements.
Section 7.05. Indemnification; Survival of Certain Provisions. The
Liquidity Provider shall be indemnified hereunder to the extent and in the
manner described in Section 4.02 of the Participation Agreements. In addition,
the Borrower agrees to indemnify, protect, defend and hold harmless each
Liquidity Indemnitee from and against all Expenses of any kind or nature
whatsoever (other than any Expenses of the nature described in Sections 3.01 or
7.07 or in the Fee Letter (regardless of whether indemnified against pursuant
to said Sections or in such Fee Letter)), that may be imposed on or incurred by
such Liquidity Indemnitee, in any way relating to, resulting from, or arising
out of or in connection with, any action, suit or proceeding by any third party
against such Liquidity Indemnitee and relating to this Agreement, the Fee
Letter, the Intercreditor Agreement or any Participation Agreement; provided,
however, that the Borrower shall not be required to indemnify, protect, defend
and hold harmless any Liquidity Indemnitee in respect of any Expense of such
Liquidity Indemnitee to the extent such Expense is (i) attributable to the
negligence or willful misconduct of such Liquidity Indemnitee or any other
Liquidity Indemnitee, (ii) an ordinary and usual operating overhead expense,
(iii) attributable to the failure by such Liquidity Indemnitee or any other
Liquidity Indemnitee to perform or observe any agreement, covenant or condition
on its part to be performed or observed in this Agreement, the Intercreditor
Agreement, the Fee Letter or any other Operative Agreement to which it is a
party or (iv) otherwise excluded from the indemnification provisions contained
in Section 4.02 of the Participation Agreements. The provisions of Sections
3.01, 3.03, 3.09, 7.05 and 7.07 and the indemnities contained in Section 4.02
of the Participation Agreements shall survive the termination of this
Agreement.
Section 7.06. Liability of the Liquidity Provider. (a) Neither the
Liquidity Provider nor any of its officers, employees or directors shall be
liable or responsible for: (i) the use which may be made of the Advances or any
acts or omissions of the Borrower or any beneficiary or transferee in
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connection therewith; (ii) the validity, sufficiency or genuineness of
documents, or of any endorsement thereon, even if such documents should prove
to be in any or all respects invalid, insufficient, fraudulent or forged; or
(iii) the making of Advances by the Liquidity Provider against delivery of a
Notice of Borrowing and other documents which do not comply with the terms
hereof; provided, however, that the Borrower shall have a claim against the
Liquidity Provider, and the Liquidity Provider shall be liable to the Borrower,
to the extent of any damages suffered by the Borrower that were the result of
(A) the Liquidity Provider's willful misconduct or gross negligence in
determining whether documents presented hereunder comply with the terms hereof
or (B) any breach by the Liquidity Provider of any of the terms of this
Agreement or the Intercreditor Agreement, including, but not limited to, the
Liquidity Provider's failure to make lawful payment hereunder after the
delivery to it by the Borrower of a Notice of Borrowing complying with the
terms and conditions hereof.
(b) Neither the Liquidity Provider nor any of its officers, employees
or directors or affiliates shall be liable or responsible in any respect for
(i) any error, omission, interruption or delay in transmission, dispatch or
delivery of any message or advice, however transmitted, in connection with this
Agreement or any Notice of Borrowing delivered hereunder or (ii) any action,
inaction or omission which may be taken by it in good faith, absent willful
misconduct or negligence (in which event the extent of the Liquidity Provider's
potential liability to the Borrower shall be limited as set forth in the
immediately preceding paragraph), in connection with this Agreement or any
Notice of Borrowing.
Section 7.07. Certain Costs and Expenses. The Borrower agrees promptly
to pay, or cause to be paid, (a) the reasonable fees, expenses and
disbursements of Winthrop, Stimson, Putnam & Roberts, special counsel for the
Liquidity Provider, and Schwarz Kurtze Schniewand Kelwing Wicke, special German
counsel to the Liquidity Provider, in connection with the preparation,
negotiation, execution, delivery, filing and recording of the Operative
Agreements, any waiver or consent thereunder or any amendment thereof and (b)
if a Liquidity Event of Default occurs, all out-of-pocket expenses incurred by
the Liquidity Provider, including reasonable fees and disbursements of counsel,
in connection with such Liquidity Event of Default and any collection,
bankruptcy, insolvency and other enforcement proceedings in connection
therewith. In addition, the Borrower shall pay any and all recording, stamp and
other similar taxes and fees payable or determined to be payable in the United
States in connection with the execution, delivery, filing and recording of this
Agreement, any other Operative Agreement and such other documents, and agrees
to save the Liquidity Provider harmless from and against any and all
liabilities with respect to or resulting from any delay in paying or omission
to pay such taxes or fees.
Section 7.08. Binding Effect; Participations. (a) This Agreement shall
be binding upon and inure to the benefit of the Borrower and the Liquidity
Provider and their respective successors and permitted assigns, except that
neither the Liquidity Provider (except as otherwise provided in this Section
7.08) nor (except as contemplated by Section 3.08) the Borrower shall have the
right to assign, pledge or otherwise transfer its rights or obligations
hereunder or any interest herein, subject to the Liquidity Provider's right to
grant Participations pursuant to Section 7.08(b).
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(b) The Liquidity Provider agrees that it will not grant any
participation (including, without limitation, a "risk participation") (any such
participation, a "Participation") in or to all or a portion of its rights and
obligations hereunder or under the other Operative Agreements, unless all of
the following conditions are satisfied: (i) such Participation is to a
Permitted Transferee, (ii) such Participation is made in accordance with all
applicable laws, including, without limitation, the Securities Act of 1933, as
amended, the Trust Indenture Act of 1939, as amended, and any other applicable
laws relating to the transfer of similar interests and (iii) such Participation
shall not be made under circumstances that require registration under the
Securities Act of 1933, as amended, or qualification of any indenture under the
Trust Indenture Act of 1939, as amended. Notwithstanding any such
Participation, the Liquidity Provider agrees that (1) the Liquidity Provider's
obligations under the Operative Agreements shall remain unchanged, and such
participant shall have no rights or benefits as against American or the
Borrower or under any Operative Agreement, (2) the Liquidity Provider shall
remain solely responsible to the other parties to the Operative Agreements for
the performance of such obligations, (3) the Liquidity Provider shall remain
the maker of any Advances, and the other parties to the Operative Agreements
shall continue to deal solely and directly with the Liquidity Provider in
connection with the Advances and the Liquidity Provider's rights and
obligations under the Operative Agreements, (4) the Liquidity Provider shall be
solely responsible for any withholding Taxes or any filing or reporting
requirements relating to such Participation and shall hold the Borrower and
American and their respective successors, permitted assigns, affiliates, agents
and servants harmless against the same and (5) neither American nor the
Borrower shall be required to pay to the Liquidity Provider any amount under
Section 3.01 or Section 3.03 greater than it would have been required to pay
had there not been any grant of a Participation by the Liquidity Provider. The
Liquidity Provider may, in connection with any Participation or proposed
Participation pursuant to this Section 7.08(b), disclose to the participant or
proposed participant any information relating to the Operative Agreements or to
the parties thereto furnished to the Liquidity Provider thereunder or in
connection therewith and permitted to be disclosed by the Liquidity Provider;
provided, however, that prior to any such disclosure, the participant or
proposed participant shall agree in writing for the express benefit of the
Borrower and American to preserve the confidentiality of any confidential
information included therein (subject to customary exceptions).
(c) Notwithstanding the other provisions of this Section 7.08, the
Liquidity Provider may assign and pledge all or any portion of the Advances
owing to it to any Federal Reserve Bank or the United States Treasury as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal
Reserve Bank, provided that any payment in respect of such assigned Advances
made by the Borrower to the Liquidity Provider in accordance with the terms of
this Agreement shall satisfy the Borrower's obligations hereunder in respect of
such assigned Advance to the extent of such payment. No such assignment shall
release the Liquidity Provider from its obligations hereunder.
Section 7.09. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such
26
<PAGE> 30
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 7.10. Governing Law. THIS AGREEMENT HAS BEEN DELIVERED IN THE
STATE OF NEW YORK AND THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
Section 7.11. Submission to Jurisdiction; Waiver of Jury Trial; Waiver
of Immunity. (a) Each of the parties hereto, to the extent it may do so under
applicable law, for purposes hereof hereby (i) irrevocably submits itself to
the non-exclusive jurisdiction of the courts of the State of New York sitting
in the City of New York and to the non-exclusive jurisdiction of the United
States District Court for the Southern District of New York, for the purposes
of any suit, action or other proceeding arising out of this Agreement, the
subject matter hereof or any of the transactions contemplated hereby brought by
any party or parties hereto or thereto, or their successors or permitted
assigns and (ii) waives, and agrees not to assert, by way of motion, as a
defense, or otherwise, in any such suit, action or proceeding, that the suit,
action or proceeding is brought in an inconvenient forum, that the venue of the
suit, action or proceeding is improper or that this Agreement or the subject
matter hereof or any of the transactions contemplated hereby may not be
enforced in or by such courts.
(b) THE BORROWER AND THE LIQUIDITY PROVIDER EACH HEREBY AGREE TO WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO
THE SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING
ESTABLISHED, including, without limitation, contract claims, tort claims,
breach of duty claims and all other common law and statutory claims. The
Borrower and the Liquidity Provider each warrant and represent that it has
reviewed this waiver with its legal counsel, and that it knowingly and
voluntarily waives its jury trial rights following consultation with such legal
counsel. THIS WAIVER IS IRREVOCABLE, AND CANNOT BE MODIFIED EITHER ORALLY OR IN
WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
(c) The Liquidity Provider hereby waives any immunity it may have from
the jurisdiction of the courts of the United States or of any state thereof and
waives any immunity any of its properties located in the United States may have
from attachment or execution upon a judgment entered by any such court under
the United States Foreign Sovereign Immunities Act of 1976 or any similar
successor legislation.
Section 7.12. Counterparts. This Agreement may be executed in any
number of counterparts (and each party shall not be required to execute the same
counterpart). Each counterpart of this
27
<PAGE> 31
Agreement including a signature page or pages executed by each of the parties
hereto shall be an original counterpart of this Agreement, but all of such
counterparts together shall constitute one instrument.
Section 7.13. Entirety. This Agreement and the Intercreditor Agreement
constitute the entire agreement of the parties hereto with respect to the
subject matter hereof and supersede all prior understandings and agreements of
such parties.
Section 7.14. Headings. The headings of the various Articles and
Sections herein and in the Table of Contents hereto are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
Section 7.15. Liquidity Provider's Obligation to Make Advances. EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE OBLIGATIONS OF THE LIQUIDITY
PROVIDER TO MAKE ADVANCES HEREUNDER, AND THE BORROWER'S RIGHTS TO DELIVER
NOTICES OF BORROWING REQUESTING THE MAKING OF ADVANCES HEREUNDER, SHALL BE
ABSOLUTE, UNCONDITIONAL AND IRREVOCABLE, AND SHALL BE PAID OR PERFORMED, IN EACH
CASE STRICTLY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.
28
<PAGE> 32
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized
as of the date first set forth above.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as
Subordination Agent, as agent and
trustee for the Class A-1 Trust, as
Borrower
By: /s/ JOHN G. CORREIA
--------------------------------
Name: John G. Correia
Title: Assistant Secretary
BAYERISCHE LANDESBANK GIROZENTRALE,
as Liquidity Provider
By: /s/ BERND LONNER
--------------------------------
Name: Bernd Lonner
Title: Vice President
By: /s/ RUDIGER FERN
--------------------------------
Name: Rudiger Fern
Title: Senior Vice President
29
<PAGE> 33
ANNEX I to
REVOLVING CREDIT AGREEMENT
INTEREST ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
borrower (the "Borrower"), hereby certifies to Bayerische Landesbank
Girozentrale (the "Liquidity Provider"), with reference to the Revolving Credit
Agreement (1999-1A-1), dated as of October 6, 1999, between the Borrower and
the Liquidity Provider (the "Liquidity Agreement"; the terms defined therein
and not otherwise defined herein being used herein as therein defined or
referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of an Interest Advance by the Liquidity Provider to be used for the payment of
the interest on the Class A-1 Certificates which is payable on ____________,
____ (the "Distribution Date") in accordance with the terms and provisions of
the Class A-1 Trust Agreement and the Class A-1 Certificates, which Advance is
requested to be made on ____________, ____. The Interest Advance should be
remitted to [insert wire and account details].
(3) The amount of the Interest Advance requested hereby (i) is
$_______________.__, to be applied in respect of the payment of the interest
which is due and payable on the Class A-1 Certificates on the Distribution
Date, (ii) does not include any amount with respect to the payment of principal
of, or premium on, the Class A-1 Certificates, the Class A-2 Certificates, the
Class B Certificates or the Class C Certificates, or interest on the Class A-2
Certificates, the Class B Certificates or the Class C Certificates, (iii) was
computed in accordance with the provisions of the Class A-1 Certificates, the
Class A-1 Trust Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), (iv) does not exceed the Maximum
Available Commitment on the date hereof and (v) has not been and is not the
subject of a prior or contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will apply the same in accordance with the
terms of Section 3.06(b) of the Intercreditor Agreement, (b) no portion of such
amount shall be applied by the Borrower for any other purpose and (c) no
portion of such amount until so applied shall be commingled with other funds
held by the Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, the making of the Interest Advance as requested by this Notice of
Borrowing shall automatically reduce, subject to reinstatement in accordance
with the terms of the Liquidity Agreement, the Maximum Available Commitment by
an amount equal to the amount of the Interest Advance requested to be made
hereby
I-1
<PAGE> 34
as set forth in clause (i) of paragraph (3) of this Certificate and such
reduction shall automatically result in corresponding reductions in the amounts
available to be borrowed pursuant to a subsequent Advance.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ____ day of _________, ____.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Subordination Agent, as Borrower
By:
----------------------------------------
Name:
Title:
I-2
<PAGE> 35
SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Interest Advance
Notice of Borrowing]
I-3
<PAGE> 36
ANNEX II to
REVOLVING CREDIT AGREEMENT
NON-EXTENSION ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "Borrower"), hereby certifies to Bayerische Landesbank
Girozentrale (the "Liquidity Provider"), with reference to the Revolving Credit
Agreement (1999-1A-1), dated as of October 6, 1999, between the Borrower and
the Liquidity Provider (the "Liquidity Agreement"; the terms defined therein
and not otherwise defined herein being used herein as therein defined or
referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Non-Extension Advance by the Liquidity Provider to be used for the
funding of the Class A-1 Cash Collateral Account in accordance with Section
3.06(d) of the Intercreditor Agreement, which Advance is requested to be made
on __________, ____. The Non-Extension Advance should be remitted to [insert
wire and account details].
(3) The amount of the Non-Extension Advance requested hereby (i) is
$_______________.__, which equals the Maximum Available Commitment on the date
hereof and is to be applied in respect of the funding of the Class A-1 Cash
Collateral Account in accordance with Sections 3.06(d) and 3.06(f) of the
Intercreditor Agreement, (ii) does not include any amount with respect to the
payment of the principal of, or premium on, the Class A-1 Certificates, or
principal of, or interest or premium on, the Class A-2 Certificates, the Class
B Certificates or the Class C Certificates, (iii) was computed in accordance
with the provisions of the Class A-1 Certificates, the Class A-1 Trust
Agreement and the Intercreditor Agreement (a copy of which computation is
attached hereto as Schedule I) and (iv) has not been and is not the subject of
a prior or contemporaneous Notice of Borrowing under the Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class A-1
Cash Collateral Account and apply the same in accordance with the terms of
Sections 3.06(d) and 3.06(f) of the Intercreditor Agreement, (b) no portion of
such amount shall be applied by the Borrower for any other purpose and (c) no
portion of such amount until so applied shall be commingled with other funds
held by the Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Non-Extension Advance as requested by this
Notice of Borrowing shall automatically and irrevocably terminate the
obligation of the Liquidity Provider to make further Advances under the
Liquidity Agreement and (B) following the making by the Liquidity Provider of
the Non-Extension
II-1
<PAGE> 37
Advance requested by this Notice of Borrowing, the Borrower shall not be
entitled to request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ____ day of _________, ____.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Subordination Agent, as Borrower
By:
-----------------------------------
Name:
Title:
II-2
<PAGE> 38
SCHEDULE I TO NON-EXTENSION ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with Non-Extension Advance
Notice of Borrowing]
II-3
<PAGE> 39
ANNEX III to
REVOLVING CREDIT AGREEMENT
DOWNGRADE ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "Borrower"), hereby certifies to Bayerische Landesbank
Girozentrale (the "Liquidity Provider"), with reference to the Revolving Credit
Agreement (1999-1A-1), dated as of October 6, 1999, between the Borrower and
the Liquidity Provider (the "Liquidity Agreement"; the terms defined therein
and not otherwise defined herein being used herein as therein defined or
referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Downgrade Advance by the Liquidity Provider to be used for the funding
of the Class A-1 Cash Collateral Account in accordance with Section 3.06(c) of
the Intercreditor Agreement by reason of the downgrading of the short-term
unsecured debt rating or long-term unsecured debt rating of the Liquidity
Provider issued by either Rating Agency below the Threshold Rating, which
Advance is requested to be made on __________, ____. The Downgrade Advance
should be remitted to [insert wire and account details].
(3) The amount of the Downgrade Advance requested hereby (i) is
$_______________.__, which equals the Maximum Available Commitment on the date
hereof and is to be applied in respect of the funding of the Class A-1 Cash
Collateral Account in accordance with Sections 3.06(c) and 3.06(f) of the
Intercreditor Agreement, (ii) does not include any amount with respect to the
payment of the principal of, or premium on, the Class A-1 Certificates, or
principal of, or interest or premium on, the Class A-2 Certificates, the Class
B Certificates or the Class C Certificates, (iii) was computed in accordance
with the provisions of the Class A-1 Certificates, the Class A-1 Trust
Agreement and the Intercreditor Agreement (a copy of which computation is
attached hereto as Schedule I) and (iv) has not been and is not the subject of
a prior or contemporaneous Notice of Borrowing under the Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class A-1
Cash Collateral Account and apply the same in accordance with the terms of
Sections 3.06(c) and 3.06(f) of the Intercreditor Agreement, (b) no portion of
such amount shall be applied by the Borrower for any other purpose and (c) no
portion of such amount until so applied shall be commingled with other funds
held by the Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Downgrade Advance as requested by this Notice
of Borrowing shall automatically and irrevocably terminate the obligation of
the Liquidity Provider to make further Advances under the
III-1
<PAGE> 40
Liquidity Agreement and (B) following the making by the Liquidity Provider of
the Downgrade Advance requested by this Notice of Borrowing, the Borrower shall
not be entitled to request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ____ day of _________, ____.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Subordination Agent, as Borrower
By:
-----------------------------------
Name:
Title:
III-2
<PAGE> 41
SCHEDULE I TO DOWNGRADE ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with Downgrade Advance
Notice of Borrowing]
III-3
<PAGE> 42
ANNEX IV to
REVOLVING CREDIT AGREEMENT
FINAL ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
borrower (the "Borrower"), hereby certifies to Bayerische Landesbank
Girozentrale (the "Liquidity Provider"), with reference to the Revolving Credit
Agreement (1999-1A-1), dated as of October 6, 1999, between the Borrower and
the Liquidity Provider (the "Liquidity Agreement"; the terms defined therein
and not otherwise defined herein being used herein as therein defined or
referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Final Advance by the Liquidity Provider to be used for the funding of
the Class A-1 Cash Collateral Account in accordance with Section 3.06(i) of the
Intercreditor Agreement by reason of the receipt by the Borrower of a
Termination Notice from the Liquidity Provider with respect to the Liquidity
Agreement, which Advance is requested to be made on ____________, ____. The
Final Advance should be remitted to [insert wire and account details].
(3) The amount of the Final Advance requested hereby (i) is
$_________________.__, which equals the Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the Class A-1
Cash Collateral Account in accordance with Sections 3.06(f) and 3.06(i) of the
Intercreditor Agreement, (ii) does not include any amount with respect to the
payment of principal of, or premium on, the Class A-1 Certificates, or
principal of, or interest or premium on, the Class A-2 Certificates, the Class
B Certificates or the Class C Certificates, (iii) was computed in accordance
with the provisions of the Class A-1 Certificates, the Class A-1 Trust
Agreement and the Intercreditor Agreement (a copy of which computation is
attached hereto as Schedule I) and (iv) has not been and is not the subject of
a prior or contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class A-1
Cash Collateral Account and apply the same in accordance with the terms of
Sections 3.06(f) and 3.06(i) of the Intercreditor Agreement, (b) no portion of
such amount shall be applied by the Borrower for any other purpose and (c) no
portion of such amount until so applied shall be commingled with other funds
held by the Borrower.
[(5) The Borrower hereby requests that the Advance requested hereby be
a Base Rate Advance [and that such Base Rate Advance be converted into a LIBOR
Advance on the third Business Day following your receipt of this notice]*.]
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Final Advance as requested by this Notice of
Borrowing shall automatically and irrevocably
IV-1
<PAGE> 43
terminate the obligation of the Liquidity Provider to make further Advances
under the Liquidity Agreement and (B) following the making by the Liquidity
Provider of the Final Advance requested by this Notice of Borrowing, the
Borrower shall not be entitled to request any further Advances under the
Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ____ day of _________, ____.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Subordination Agent, as Borrower
By:
----------------------------------
Name:
Title:
[* Bracketed language may be included at Borrower's option.]
IV-2
<PAGE> 44
SCHEDULE I TO FINAL ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Final Advance
Notice of Borrowing]
IV-3
<PAGE> 45
ANNEX V to
REVOLVING CREDIT AGREEMENT
NOTICE OF TERMINATION
[Date]
State Street Bank and Trust Company of Connecticut, National Association,
as Subordination Agent, as Borrower
225 Asylum Street, Goodwin Square
Hartford, Connecticut 06103
Attention: Corporate Trust Division
Re: Revolving Credit Agreement, dated as of October 6, 1999, between State
Street Bank and Trust Company of Connecticut, National Association, as
Subordination Agent, as agent and trustee for the American Airlines
Pass Through Trust 1999-1A-1, as Borrower, and Bayerische Landesbank
Girozentrale (the "Liquidity Agreement")
Ladies and Gentlemen:
You are hereby notified that pursuant to Section 6.01 of the Liquidity
Agreement, by reason of the occurrence and continuance of a Liquidity Event of
Default and the existence of a Performing Note Deficiency (each as defined
therein), we are giving this notice to you in order to cause (i) our
obligations to make Advances (as defined therein) under such Liquidity
Agreement to terminate at the close of business on the fifth Business Day after
the date on which you receive this notice and (ii) you to request a Final
Advance under the Liquidity Agreement pursuant to Section 3.06(i) of the
Intercreditor Agreement (as defined in the Liquidity Agreement) as a
consequence of your receipt of this notice.
THIS NOTICE IS THE "NOTICE OF TERMINATION" PROVIDED FOR UNDER THE
LIQUIDITY AGREEMENT. OUR OBLIGATIONS TO MAKE ADVANCES UNDER THE LIQUIDITY
AGREEMENT WILL TERMINATE AT THE CLOSE OF BUSINESS ON THE FIFTH BUSINESS DAY
AFTER THE DATE ON WHICH YOU RECEIVE THIS NOTICE.
Very truly yours,
Bayerische Landesbank Girozentrale,
as Liquidity Provider
By:
----------------------------------
Name:
Title:
cc: State Street Bank and Trust Company of Connecticut,
National Association, as Class A-1 Trustee
V-1
<PAGE> 46
ANNEX VI to
REVOLVING CREDIT AGREEMENT
NOTICE OF REPLACEMENT SUBORDINATION AGENT
[Date]
Attention:
Re: Revolving Credit Agreement, dated as of October 6, 1999, between State
Street Bank and Trust Company of Connecticut, National Association, as
Subordination Agent, as agent and trustee for the American Airlines
Pass Through Trust 1999-1A-1, as Borrower, and Bayerische Landesbank
Girozentrale (the "Liquidity Agreement")
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
-----------------------------------
[Name of Transferee]
-----------------------------------
[Address of Transferee]
all rights and obligations of the undersigned as Borrower under the Liquidity
Agreement referred to above. The transferee has succeeded the undersigned as
Subordination Agent under the Intercreditor Agreement referred to in the first
paragraph of the Liquidity Agreement, pursuant to the terms of Section 7.01 of
the Intercreditor Agreement.
By this transfer, all rights of the undersigned as Borrower under the
Liquidity Agreement are transferred to the transferee and the transferee shall
hereafter have the sole rights and obligations as Borrower thereunder. The
undersigned shall pay any costs and expenses of such transfer, including, but
not limited to, transfer taxes or governmental charges.
This transfer shall be effective as of [specify time and date].
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Subordination Agent, as Borrower
By:
-------------------------------------------
Name:
Title:
VI-1
<PAGE> 1
EXHIBIT 4(c)2
================================================================================
REVOLVING CREDIT AGREEMENT
(1999-1A-2)
Dated as of October 6, 1999
between
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
as Subordination Agent,
as agent and trustee for the trustee of
American Airlines Pass Through Trust 1999-1A-2
as Borrower
and
BAYERISCHE LANDESBANK GIROZENTRALE,
as Liquidity Provider
================================================================================
American Airlines Pass Through Trust 1999-1A-2
7.024% American Airlines
Pass Through Certificates,
Series 1999-1A-2
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.....................................................................................1
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01 The Advances....................................................................................8
Section 2.02 Making of Advances..............................................................................8
Section 2.03 Fees...........................................................................................11
Section 2.04 Reduction or Termination of the Maximum Commitment.............................................11
Section 2.05 Repayments of Interest Advances or the Final Advance...........................................11
Section 2.06 Repayments of Provider Advances................................................................12
Section 2.07 Payments to the Liquidity Provider Under the Intercreditor Agreement...........................13
Section 2.08 Book Entries...................................................................................13
Section 2.09 Payments from Available Funds Only.............................................................13
Section 2.10 Extension of the Expiry Date; Non-Extension Advance............................................13
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01 Increased Costs................................................................................14
Section 3.02 [Intentionally omitted]........................................................................15
Section 3.03 Withholding Taxes..............................................................................15
Section 3.04 Payments.......................................................................................17
Section 3.05 Computations...................................................................................17
Section 3.06 Payment on Non-Business Days...................................................................17
Section 3.07 Interest.......................................................................................17
Section 3.08 Replacement of Borrower........................................................................19
Section 3.09 Funding Loss Indemnification...................................................................19
Section 3.10 Illegality.....................................................................................19
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01 Conditions Precedent to Effectiveness of Section 2.01..........................................20
Section 4.02 Conditions Precedent to Borrowing..............................................................21
ARTICLE V
COVENANTS
Section 5.01 Affirmative Covenants of the Borrower..........................................................22
Section 5.02 Negative Covenants of the Borrower.............................................................22
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01 Liquidity Events of Default....................................................................22
ARTICLE VII
MISCELLANEOUS
Section 7.01 No Oral Modification or Continuing Waivers.....................................................23
Section 7.02 Notices, Etc...................................................................................23
Section 7.03 No Waiver; Remedies............................................................................24
Section 7.04 Further Assurances.............................................................................24
Section 7.05 Indemnification; Survival of Certain Provisions................................................25
Section 7.06 Liability of the Liquidity Provider............................................................25
Section 7.07 Certain Costs and Expenses.....................................................................26
Section 7.08 Binding Effect; Participations.................................................................26
Section 7.09 Severability...................................................................................27
Section 7.10 Governing Law..................................................................................27
Section 7.11 Submission to Jurisdiction; Waiver of Jury Trial; Waiver of Immunity...........................28
Section 7.12 Counterparts...................................................................................28
Section 7.13 Entirety.......................................................................................28
Section 7.14 Headings.......................................................................................29
Section 7.15 Liquidity Provider's Obligation to Make Advances...............................................29
</TABLE>
Annex I - Interest Advance Notice of Borrowing
Annex II - Non-Extension Advance Notice of Borrowing
Annex III - Downgrade Advance Notice of Borrowing
Annex IV - Final Advance Notice of Borrowing
Annex V - Notice of Termination
Annex VI - Notice of Replacement Subordination Agent
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REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT, dated as of October 6, 1999, is made
by and between STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, a national banking association, not in its individual capacity but
solely as Subordination Agent (such term and other capitalized terms used herein
without definition being defined as provided in Article I) under the
Intercreditor Agreement (as defined below), as agent and trustee for the Class
A-2 Trustee (in such capacity, together with its successors in such capacity,
the "Borrower"), and BAYERISCHE LANDESBANK GIROZENTRALE, a public law banking
institution organized under the laws of the Free State of Bavaria, Germany (the
"Liquidity Provider").
W I T N E S S E T H:
WHEREAS, pursuant to the Class A-2 Trust Agreement, the Class A-2 Trust
is issuing the Class A-2 Certificates; and
WHEREAS, the Borrower, in order to support the timely payment of a
portion of the interest on the Class A-2 Certificates in accordance with their
terms, has requested the Liquidity Provider to enter into this Agreement,
providing in part for the Borrower to request in specified circumstances that
Advances be made hereunder;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and of other good and valuable consideration the receipt and adequacy
of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. (a) The definitions stated herein apply
equally to both the singular and the plural forms of the terms defined.
(b) All references in this Agreement to designated "Articles",
"Sections", "Annexes" and other subdivisions are to the designated Article,
Section, Annex or other subdivision of this Agreement, unless otherwise
specifically stated.
(c) The words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to any
particular Article, Section, Annex or other subdivision.
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(d) Unless the context otherwise requires, whenever the words
"including", "include" or "includes" are used herein, it shall be deemed to be
followed by the phrase "without limitation".
(e) For the purposes of this Agreement, unless the context
otherwise requires, the following capitalized terms shall have the following
meanings:
"Advance" means an Interest Advance, a Final Advance, a Provider
Advance, an Applied Provider Advance or an Unpaid Advance, as the case may be.
"Agreement" means this Agreement, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Applicable Liquidity Rate" has the meaning specified in Section
3.07(g).
"Applicable Margin" means with respect to any Unpaid Advance or Applied
Provider Advance, 1.75 %.
"Applied Downgrade Advance" has the meaning specified in Section
2.06(a).
"Applied Non-Extension Advance" has the meaning specified in Section
2.06(a).
"Applied Provider Advance" means an Applied Downgrade Advance or an
Applied Non-Extension Advance.
"Base Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for each
day in the period for which the Base Rate is to be determined (or, if such day
is not a Business Day, for the preceding Business Day) by the Federal Reserve
Bank of New York, or if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day for such transactions
received by the Liquidity Provider from three Federal funds brokers of
recognized standing selected by it (and reasonably satisfactory to American)
plus one-quarter of one percent (0.25%).
"Base Rate Advance" means an Advance that bears interest at a rate
based upon the Base Rate.
"Borrower" has the meaning specified in the introductory paragraph to
this Agreement.
"Borrowing" means the making of Advances requested by delivery of a
Notice of Borrowing.
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"Business Day" means any day other than a Saturday, a Sunday or a day
on which commercial banks are required or authorized to close in New York, New
York, Dallas, Texas, or, so long as any Class A-2 Certificate is outstanding,
the city and state in which the Class A-2 Trustee, the Borrower or any related
Loan Trustee maintains its Corporate Trust Office or receives or disburses
funds, and, if the applicable Business Day relates to any Advance or other
amount bearing interest based on the LIBOR Rate, on which dealings are carried
on in the London interbank market.
"Consent Notice" has the meaning specified in Section 2.10.
"Consent Period" has the meaning specified in Section 2.10.
"Covered Taxes" means any Taxes imposed by the United States or any
political subdivision or taxing authority thereof or therein required by law to
be deducted or withheld from any amounts payable to the Liquidity Provider under
this Agreement other than (i) any Tax on, based on or measured by net income,
franchises or conduct of business, (ii) any Tax imposed, levied, withheld or
assessed as a result of any connection between the Liquidity Provider and the
United States or such political subdivision or taxing authority, other than a
connection arising solely from the Liquidity Provider's having executed,
delivered, performed its obligations or received a payment under, or enforced,
any Operative Agreement, (iii) any Tax attributable to the inaccuracy in or
breach by the Liquidity Provider of any of its representations, warranties or
covenants contained in any Operative Agreement to which it is a party or the
inaccuracy of any form or document furnished pursuant thereto, (iv) any
withholding Taxes imposed by the United States except to the extent such
withholding Taxes would not have been required to be deducted or withheld from
payments hereunder but for a change after the date hereof in the income tax
treaty between the United States and Germany or a change in the Code that
overrides the provisions of such treaty or (v) any change in the Lending Office
without the prior written consent of American (such consent not to be
unreasonably withheld).
"Downgrade Advance" means an Advance made pursuant to Section 2.02(c).
"Effective Date" has the meaning specified in Section 4.01. The
delivery of the certificate of the Liquidity Provider contemplated by Section
4.01(f) shall be conclusive evidence that the Effective Date has occurred.
"Expenses" means liabilities, losses, damages, costs and expenses
(including, without limitation, reasonable fees and disbursements of legal
counsel), provided that Expenses shall not include any Taxes other than sales,
use and V.A.T. taxes imposed on fees and expenses payable pursuant to Section
7.07.
"Expiry Date" means October 4, 2000, initially, or any date to which
the Expiry Date is extended pursuant to Section 2.10.
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"Final Advance" means an Advance made pursuant to Section 2.02(d).
"Increased Cost" has the meaning specified in Section 3.01.
"Intercreditor Agreement" means the Intercreditor Agreement, dated as
of the date hereof, among the Trustees, the Liquidity Provider, the liquidity
provider under each Liquidity Facility (other than this Agreement) and the
Subordination Agent, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Interest Advance" means an Advance made pursuant to Section 2.02(a).
"Interest Period" means, with respect to any LIBOR Advance, each of the
following periods:
(i) the period beginning on the third Business Day following
either (A) the Liquidity Provider's receipt of the Notice of Borrowing
for such LIBOR Advance or (B) the date of the withdrawal of funds from
the Class A-2 Cash Collateral Account for the purpose of paying
interest on the Class A-2 Certificates as contemplated by Section
2.06(a) hereof and, in each case, ending on the next Regular
Distribution Date; and
(ii) each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the next Regular
Distribution Date;
provided, however, that if (x) the Final Advance shall have been made pursuant
to Section 2.02(d) or (y) other outstanding Advances shall have been converted
into the Final Advance pursuant to Section 6.01, then the Interest Periods shall
be successive periods of one month beginning on the third Business Day following
the Liquidity Provider's receipt of the Notice of Borrowing for such Final
Advance (in the case of clause (x) above) or the Regular Distribution Date
following such conversion (in the case of clause (y) above).
"Lending Office" means the lending office of the Liquidity Provider
presently located at Munich, Germany, or such other lending office as the
Liquidity Provider from time to time shall notify the Borrower as its lending
office hereunder; provided that the Liquidity Provider shall not change its
Lending Office without the prior written consent of American (such consent not
to be unreasonably withheld).
"LIBOR Advance" means an Advance bearing interest at a rate based upon
the LIBOR Rate.
"LIBOR Rate" means, with respect to any Interest Period, (a) the
interest rate per annum equal to the rate per annum at which deposits in Dollars
are offered in the London interbank market as shown on Page 3750 of the Telerate
Systems Incorporated screen service (or such other page as may replace Telerate
Page 3750), or if such service is not available, Page LIBO of the Reuters Money
Service Monitor System (or such other page as may replace Reuters Page LIBO) at
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<PAGE> 8
approximately 11:00 a.m. (London time) on the day that is two Business Days
prior to the first day of such Interest Period, for a period comparable to such
Interest Period, or (b) if no such rate is published on either such service or
if neither of such services is then available, the interest rate per annum equal
to the average (rounded up, if necessary, to the nearest 1/100th of 1%) of the
rates at which deposits in Dollars are offered by the Reference Banks (or, if
fewer than all of the Reference Banks are quoting a rate for deposits in Dollars
for the applicable period and amount, such fewer number of Reference Banks) at
approximately 11:00 a.m. (London time) on the day that is two Business Days
prior to the first day of such Interest Period to prime banks in the London
interbank market for a period comparable to such Interest Period and in an
amount approximately equal to the principal amount of the LIBOR Advance to be
outstanding during such Interest Period, or (c) if none of the Reference Banks
is quoting a rate for deposits in Dollars in the London interbank market for
such a period and amount, the interest rate per annum equal to the average
(rounded up, if necessary, to the nearest 1/100th of 1%) of the rates at which
deposits in Dollars are offered by the principal New York offices of the
Reference Banks (or, if fewer than all of the Reference Banks are quoting a rate
for deposits in Dollars in the New York interbank market for the applicable
period and amount, such fewer number of Reference Banks) at approximately 11:00
a.m. (New York time) on the day that is two Business Days prior to the first day
of such Interest Period to prime banks in the New York interbank market for a
period comparable to such Interest Period and in an amount approximately equal
to the principal amount of the LIBOR Advance to be outstanding during such
Interest Period, or (d) if none of the principal New York offices of the
Reference Banks is quoting a rate for deposits in Dollars in the New York
interbank market for the applicable period and amount, the Base Rate.
"Liquidity Event of Default" means the occurrence of either (a) the
Acceleration of all of the Equipment Notes or (b) an American Bankruptcy Event.
"Liquidity Indemnitee" means the Liquidity Provider, its directors,
officers, employees and agents, and its successors and permitted assigns.
"Liquidity Provider" has the meaning specified in the introductory
paragraph to this Agreement.
"Maximum Available Commitment" means, subject to the proviso contained
in the third sentence of Section 2.02(a), at any time of determination, (a) the
Maximum Commitment at such time less (b) the aggregate amount of each Interest
Advance outstanding at such time; provided that following a Provider Advance or
a Final Advance, the Maximum Available Commitment shall be zero.
"Maximum Commitment" means initially $33,952,451.00, as the same may be
reduced from time to time in accordance with Section 2.04(a).
"Non-Extension Advance" means an Advance made pursuant to Section
2.02(b).
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"Notice of Borrowing" has the meaning specified in Section 2.02(e).
"Notice of Replacement Subordination Agent" has the meaning specified
in Section 3.08.
"Participation" has the meaning specified in Section 7.08(b).
"Performing Note Deficiency" means any time that less than 65% of the
then aggregate outstanding principal amount of all Equipment Notes are
Performing Equipment Notes.
"Permitted Transferee" means any Person that:
(a) is not a commercial air carrier, American or any
affiliate of American; and
(b) is any one of:
(1) a commercial banking institution organized under
the laws of the United States or any state thereof or the
District of Columbia;
(2) a commercial banking institution that (x) is
organized under the laws of France, Germany, The Netherlands,
Switzerland or the United Kingdom, (y) is entitled on the date
it acquires any Participation to a complete exemption from
United States federal income taxes for all income derived by
it from the transactions contemplated by the Operative
Agreements under an income tax treaty, as in effect on such
date, between the United States and such jurisdiction of its
organization and (z) is engaged in the active conduct of a
banking business in such jurisdiction of its organization,
holds its Participation in connection with such banking
business in such jurisdiction and is regulated as a commercial
banking institution by the appropriate regulatory authorities
in such jurisdiction; or
(3) a commercial banking institution that (x) is
organized under the laws of Canada, France, Germany, Ireland,
Japan, Luxembourg, The Netherlands, Sweden, Switzerland or the
United Kingdom and (y) is entitled on the date it acquires any
Participation to a complete exemption from withholding of
United States federal income taxes for all income derived by
it from the transactions contemplated by the Operative
Agreements under laws as in effect on such date by reason of
such income being effectively connected with the conduct of a
trade or business within the United States.
"Prospectus Supplement" means the Prospectus Supplement dated September
23, 1999, relating to the Certificates, as such Prospectus Supplement may be
amended or supplemented.
"Provider Advance" means a Downgrade Advance or a Non-Extension
Advance.
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"Reference Banks" means the principal London offices of: National
Westminster Bank, plc; Morgan Guaranty Trust Company of New York; The Chase
Manhattan Bank; Citibank, N.A.; and such other or additional banking
institutions as may be designated from time to time by mutual agreement of
American and the Liquidity Provider.
"Regulatory Change" means the enactment, adoption or promulgation,
after the date of this Agreement, of any law or regulation by a United States
federal or state government or by the government of the Liquidity Provider's
jurisdiction of organization, or any change, after the date of this Agreement,
in any such law or regulation, or in the interpretation thereof by any
governmental authority, central bank or comparable agency of the United States
or the Liquidity Provider's jurisdiction of organization charged with
responsibility for the administration or application thereof, that shall impose,
modify or deem applicable (a) any reserve, special deposit or similar
requirement against extensions of credit or other assets of, or deposits with or
other liabilities of, the Liquidity Provider including, or by reason of, the
Advances or (b) any capital adequacy requirement requiring the maintenance by
the Liquidity Provider of additional capital in respect of any Advances or the
Liquidity Provider's obligation to make any such Advances.
"Replenishment Amount" has the meaning specified in Section 2.06(b).
"Required Amount" means, for any day, the sum of the aggregate amount
of interest, calculated at the rate per annum equal to the Stated Interest Rate
for the Class A-2 Certificates on the basis of a 360-day year comprised of
twelve 30-day months, that would be payable on the Class A-2 Certificates on
each of the three successive semiannual Regular Distribution Dates immediately
following such day or, if such day is a Regular Distribution Date, on such day
and the succeeding two semiannual Regular Distribution Dates, in each case
calculated on the basis of the Pool Balance of the Class A-2 Certificates on
such day and without regard to expected future distributions of principal on the
Class A-2 Certificates.
"Termination Date" means the earliest to occur of the following: (i)
the Expiry Date; (ii) the date on which the Borrower delivers to the Liquidity
Provider a certificate, signed by a Responsible Officer of the Borrower,
certifying that all of the Class A-2 Certificates have been paid in full (or
provision has been made for such payment in accordance with the Intercreditor
Agreement and the Class A-2 Trust Agreement) or are otherwise no longer entitled
to the benefits of this Agreement; (iii) the date on which the Borrower delivers
to the Liquidity Provider a certificate, signed by a Responsible Officer of the
Borrower, certifying that a Replacement Liquidity Facility has been substituted
for this Agreement in full pursuant to Section 3.06(e) of the Intercreditor
Agreement; (iv) the fifth Business Day following the receipt by the Borrower of
a Termination Notice from the Liquidity Provider pursuant to Section 6.01; and
(v) the date on which no Advance is or may (including by reason of reinstatement
as herein provided) become available for a Borrowing hereunder.
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"Termination Notice" means the Notice of Termination substantially in
the form of Annex V to this Agreement.
"Unapplied Provider Advance" means any Provider Advance other than an
Applied Provider Advance.
"Unpaid Advance" has the meaning specified in Section 2.05.
"Withdrawal Notice" has the meaning specified in Section 2.10.
(e) For the purposes of this Agreement, the following terms shall have
the respective meanings specified in the Intercreditor Agreement:
"Acceleration", "American", "American Bankruptcy Event", "Certificate",
"Class A-1 Certificates", "Class A-2 Cash Collateral Account", "Class A-2
Certificates", "Class A-2 Certificateholders", "Class A-2 Trust", "Class A-2
Trust Agreement", "Class A-2 Trustee", "Class B Certificates", "Class C
Certificates", "Closing Date", "Collection Account", "Controlling Party",
"Corporate Trust Office", "Distribution Date", "Dollars", "Downgraded Facility",
"Equipment Notes", "Fee Letter", "Final Legal Distribution Date", "Indenture",
"Interest Payment Date", "Investment Earnings", "Liquidity Facility", "Liquidity
Obligations", "Loan Trustee", "Moody's", "Non-Extended Facility", "Operative
Agreements", "Participation Agreements", "Performing Equipment Note", "Person",
"Pool Balance", "Rating Agencies", "Ratings Confirmation", "Regular Distribution
Date", "Replacement Liquidity Facility", "Responsible Officer", "Scheduled
Payment", "Special Payment", "S&P", "Stated Interest Rate", "Subordination
Agent", "Taxes", "Threshold Rating", "Trust Agreement", "Trustee",
"Underwriters", "Underwriting Agreement", "United States" and "Written Notice".
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. The Advances. The Liquidity Provider hereby irrevocably
agrees, on the terms and conditions hereinafter set forth, to make Advances to
the Borrower from time to time on any Business Day during the period from the
Effective Date until 12:00 noon (New York City time) on the Expiry Date (unless
the obligations of the Liquidity Provider shall be earlier terminated in
accordance with the terms of Section 2.04(b)) in an aggregate amount at any time
outstanding not to exceed the Maximum Commitment.
Section 2.02. Making of Advances. (a) Each Interest Advance shall be
made by the Liquidity Provider upon delivery to the Liquidity Provider of a
written and completed Notice of Borrowing in substantially the form of Annex I,
signed by a Responsible Officer of the Borrower,
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such Interest Advance to be in an amount not exceeding the Maximum Available
Commitment at such time and used solely for the payment when due of interest
with respect to the Class A-2 Certificates at the Stated Interest Rate therefor
in accordance with Section 3.06(a) and 3.06(b) of the Intercreditor Agreement.
Each Interest Advance made hereunder shall automatically reduce the Maximum
Available Commitment and the amount available to be borrowed hereunder by
subsequent Advances by the amount of such Interest Advance (subject to
reinstatement as provided in the next sentence). Upon repayment to the Liquidity
Provider in full or in part of the amount of any Interest Advance made pursuant
to this Section 2.02(a), together with accrued interest thereon (as provided
herein), the Maximum Available Commitment shall be reinstated by an amount equal
to the amount of such Interest Advance so repaid, but not to exceed the Maximum
Commitment; provided, however, that the Maximum Available Commitment shall not
be so reinstated at any time if (x) both a Performing Note Deficiency exists and
a Liquidity Event of Default shall have occurred and be continuing or (y) a
Final Drawing shall have occurred.
(b) Subject to Section 2.10, a Non-Extension Advance shall be made by
the Liquidity Provider if this Agreement is not extended in accordance with
Section 3.06(d) of the Intercreditor Agreement (unless a Replacement Liquidity
Facility to replace this Agreement shall have been delivered to the Borrower as
contemplated by said Section 3.06(d) within the time period specified in such
Section 3.06(d)) upon delivery to the Liquidity Provider of a written and
completed Notice of Borrowing in substantially the form of Annex II, signed by a
Responsible Officer of the Borrower, in an amount equal to the Maximum Available
Commitment at such time, and shall be used to fund the Class A-2 Cash Collateral
Account in accordance with Sections 3.06(d) and 3.06(f) of the Intercreditor
Agreement.
(c) A Downgrade Advance shall be made by the Liquidity Provider if at
any time the short-term unsecured debt rating of the Liquidity Provider issued
by either Rating Agency (or if the Liquidity Provider does not have a short-term
unsecured debt rating issued by a given Rating Agency, the long-term unsecured
debt rating of the Liquidity Provider issued by such Rating Agency) is lower
than the applicable Threshold Rating (as provided for in Section 3.06(c) of the
Intercreditor Agreement) unless a Replacement Liquidity Facility to replace this
Agreement shall have been previously delivered to the Borrower in accordance
with said Section 3.06(c), upon delivery to the Liquidity Provider of a written
and completed Notice of Borrowing in substantially the form of Annex III, signed
by a Responsible Officer of the Borrower, in an amount equal to the Maximum
Available Commitment at such time, and shall be used to fund the Class A-2 Cash
Collateral Account in accordance with Sections 3.06(c) and 3.06(f) of the
Intercreditor Agreement.
(d) A Final Advance shall be made by the Liquidity Provider following
the receipt by the Borrower of a Termination Notice from the Liquidity Provider
pursuant to Section 6.01 upon delivery to the Liquidity Provider of a written
and completed Notice of Borrowing in substantially the form of Annex IV, signed
by a Responsible Officer of the Borrower, in an amount equal to the Maximum
Available Commitment at such time, and shall be used to fund the Class A-2 Cash
Collateral Account (in accordance with Sections 3.06(f) and 3.06(i) of the
Intercreditor Agreement).
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(e) Each Borrowing shall be made on notice in writing (a "Notice of
Borrowing") in substantially the form required by Section 2.02(a), 2.02(b),
2.02(c) or 2.02(d), as the case may be, given by the Borrower to the Liquidity
Provider. If a Notice of Borrowing is delivered by the Borrower in respect of
any Borrowing no later than 1:00 p.m. (New York City time) on a Business Day,
upon satisfaction of the conditions precedent set forth in Section 4.02 with
respect to a requested Borrowing, the Liquidity Provider shall make available to
the Borrower, in accordance with its payment instructions, the amount of such
Borrowing in Dollars and immediately available funds, before 4:00 p.m. (New York
City time) on such Business Day or before 1:00 p.m. (New York City time) on such
later Business Day specified in such Notice of Borrowing. If a Notice of
Borrowing is delivered by the Borrower in respect of any Borrowing after 1:00
p.m. (New York City time) on a Business Day, upon satisfaction of the conditions
precedent set forth in Section 4.02 with respect to a requested Borrowing, the
Liquidity Provider shall make available to the Borrower, in accordance with its
payment instructions, the amount of such Borrowing in Dollars and immediately
available funds, before 1:00 p.m. (New York City time) on the first Business Day
next following the day of receipt of such Notice of Borrowing or on such later
Business Day specified by the Borrower in such Notice of Borrowing. Payments of
proceeds of a Borrowing shall be made by wire transfer of immediately available
funds to the Borrower in accordance with such wire transfer instructions as the
Borrower shall furnish from time to time to the Liquidity Provider for such
purpose. Each Notice of Borrowing shall be irrevocable and binding on the
Borrower. Each Notice of Borrowing shall be effective upon delivery of a copy
thereof to the Liquidity Provider's New York branch at the address specified in
Section 7.02 hereof.
(f) Upon the making of any Advance requested pursuant to a Notice of
Borrowing in accordance with the Borrower's payment instructions, the Liquidity
Provider shall be fully discharged of its obligation hereunder with respect to
such Notice of Borrowing, and the Liquidity Provider shall not thereafter be
obligated to make any further Advances hereunder in respect of such Notice of
Borrowing to the Borrower or to any other Person (including the Trustee or any
Class A-2 Certificateholder). If the Liquidity Provider makes an Advance
requested pursuant to a Notice of Borrowing before 12:00 noon (New York City
time) on the second Business Day after the date of payment specified in said
Section 2.02(e), the Liquidity Provider shall have fully discharged its
obligations hereunder with respect to such Advance and an event of default shall
not have occurred hereunder. Following the making of any Advance pursuant to
Section 2.02(b), 2.02(c) or 2.02(d) to fund the Class A-2 Cash Collateral
Account, the Liquidity Provider shall have no interest in or rights to the Class
A-2 Cash Collateral Account, such Advance or any other amounts from time to time
on deposit in the Class A-2 Cash Collateral Account; provided that the foregoing
shall not affect or impair the obligations of the Subordination Agent to make
the distributions contemplated by Section 3.06(e) or 3.06(f) of the
Intercreditor Agreement and provided further, that the foregoing shall not
affect or impair the rights of the Liquidity Provider to provide written
instructions with respect to the investment and reinvestment of amounts in the
Class A-2 Cash Collateral Account to the extent provided in Section 2.02(b) of
the Intercreditor Agreement. By paying to the Borrower proceeds of Advances
requested by the Borrower in accordance with the provisions of this
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Agreement, the Liquidity Provider makes no representation as to, and assumes no
responsibility for, the correctness or sufficiency for any purpose of the amount
of the Advances so made and requested.
Section 2.03. Fees. The Borrower agrees to pay to the Liquidity
Provider the fees set forth in the Fee Letter.
Section 2.04. Reduction or Termination of the Maximum Commitment. (a)
Automatic Reduction. Promptly following each date on which the Required Amount
is reduced as a result of a reduction in the Pool Balance of the Class A-2
Certificates or otherwise, the Maximum Commitment shall automatically be reduced
to an amount equal to such reduced Required Amount (as calculated by the
Borrower). The Borrower shall give notice of any such automatic reduction of the
Maximum Commitment to the Liquidity Provider and American within two Business
Days thereof. The failure by the Borrower to furnish any such notice shall not
affect such automatic reduction of the Maximum Commitment.
(b) Termination. Upon the making of any Provider Advance or Final
Advance hereunder or the occurrence of the Termination Date, the obligation of
the Liquidity Provider to make further Advances hereunder shall automatically
and irrevocably terminate, and the Borrower shall not be entitled to request any
further Borrowing hereunder.
Section 2.05. Repayments of Interest Advances or the Final Advance.
Subject to Sections 2.06, 2.07 and 2.09 hereof, the Borrower hereby agrees,
without notice of an Advance or demand for repayment from the Liquidity Provider
(which notice and demand are hereby waived by the Borrower), to pay, or to cause
to be paid, to the Liquidity Provider (a) on each date on which the Liquidity
Provider shall make an Interest Advance or the Final Advance, an amount equal to
the amount of such Advance (any such Advance, until repaid, is referred to
herein as an "Unpaid Advance"), plus (b) interest on the amount of each such
Unpaid Advance in the amounts and on the dates determined as provided in Section
3.07; provided that if (i) the Liquidity Provider shall make a Provider Advance
at any time after making one or more Interest Advances which shall not have been
repaid in accordance with this Section 2.05 or (ii) this Liquidity Facility
shall become a Downgraded Facility or Non-Extended Facility at any time when
unreimbursed Interest Advances have reduced the Maximum Available Commitment to
zero, then such Interest Advances shall cease to constitute Unpaid Advances and
shall be deemed to have been changed into an Applied Downgrade Advance or an
Applied Non-Extension Advance, as the case may be, for all purposes of this
Agreement (including, without limitation, for the purpose of determining when
such Interest Advance is required to be repaid to the Liquidity Provider in
accordance with Section 2.06 and for the purposes of Section 2.06(b)). The
Borrower and the Liquidity Provider agree that the repayment in full of each
Interest Advance and Final Advance on the date such Advance is made is intended
to be a contemporaneous exchange for new value given to the Borrower by the
Liquidity Provider. For the avoidance of doubt, interest payable on an Interest
Advance or the Final Advance shall not be regarded as overdue unless such
interest is not paid when due under Section 3.07.
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Section 2.06. Repayments of Provider Advances. (a) Amounts advanced
hereunder in respect of a Provider Advance shall be deposited in the Class A-2
Cash Collateral Account and invested and withdrawn from the Class A-2 Cash
Collateral Account as set forth in Sections 3.06(c), 3.06(d), 3.06(e) and
3.06(f) of the Intercreditor Agreement. Subject to Sections 2.07 and 2.09, the
Borrower agrees to pay to the Liquidity Provider, on each Regular Distribution
Date, commencing on the first Regular Distribution Date after the making of a
Provider Advance, interest on the principal amount of any such Provider Advance,
in the amounts determined as provided in Section 3.07; provided, however, that
amounts in respect of a Provider Advance withdrawn from the Class A-2 Cash
Collateral Account for the purpose of paying interest on the Class A-2
Certificates in accordance with Section 3.06(f) of the Intercreditor Agreement
(the amount of any such withdrawal being (y) in the case of a Downgrade Advance,
an "Applied Downgrade Advance" and (z) in the case of a Non-Extension Advance,
an "Applied Non-Extension Advance" and, together with an Applied Downgrade
Advance, an "Applied Provider Advance") shall thereafter (subject to Section
2.06(b)) be treated as an Interest Advance under this Agreement for purposes of
determining the Applicable Liquidity Rate for interest payable thereon and the
dates on which such interest is payable; provided further, however, that if,
following the making of a Provider Advance, the Liquidity Provider delivers a
Termination Notice to the Borrower pursuant to Section 6.01, such Provider
Advance shall thereafter be treated as a Final Advance under this Agreement for
purposes of determining the Applicable Liquidity Rate for interest payable
thereon and the dates on which such interest is payable. Subject to Sections
2.07 and 2.09 hereof, immediately upon the withdrawal of any amounts from the
Class A-2 Cash Collateral Account on account of a reduction in the Required
Amount, the Borrower shall repay to the Liquidity Provider a portion of the
Provider Advances in a principal amount equal to such reduction, plus interest
on the principal amount prepaid as provided in Section 3.07.
(b) At any time when an Applied Provider Advance (or any portion
thereof) is outstanding, upon the deposit in the Class A-2 Cash Collateral
Account of any amount pursuant to clause "third" of Section 2.04(b) of the
Intercreditor Agreement, clause "third" of Section 3.02 of the Intercreditor
Agreement or clause "fourth" of Section 3.03 of the Intercreditor Agreement (any
such amount being a "Replenishment Amount") for the purpose of replenishing or
increasing the balance thereof up to the Required Amount at such time, (i) the
aggregate outstanding principal amount of all Applied Provider Advances (and of
Provider Advances treated as an Interest Advance for purposes of determining the
Applicable Liquidity Rate for interest payable thereon) shall be automatically
reduced by the amount of such Replenishment Amount and (ii) the aggregate
outstanding principal amount of all Unapplied Provider Advances shall be
automatically increased by the amount of such Replenishment Amount.
(c) Upon the provision of a Replacement Liquidity Facility in
replacement of this Agreement in accordance with Section 3.06(e) of the
Intercreditor Agreement, as provided in Section 3.06(f) of the Intercreditor
Agreement, amounts remaining on deposit in the Class A-2 Cash Collateral Account
after giving effect to any Applied Provider Advance on the date of such
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replacement shall be reimbursed to the Liquidity Provider, but only to the
extent such amounts are necessary to repay in full to the Liquidity Provider all
amounts owing to it hereunder.
Section 2.07. Payments to the Liquidity Provider Under the
Intercreditor Agreement. In order to provide for payment or repayment to the
Liquidity Provider of any amounts hereunder, the Intercreditor Agreement
provides that amounts available and referred to in Articles II and III of the
Intercreditor Agreement, to the extent payable to the Liquidity Provider
pursuant to the terms of the Intercreditor Agreement (including, without
limitation, Section 3.06(f) of the Intercreditor Agreement), shall be paid to
the Liquidity Provider in accordance with the terms thereof (but, for the
avoidance of doubt, without duplication of or increase in any amounts payable
hereunder). Amounts so paid to the Liquidity Provider shall be applied by the
Liquidity Provider in the order of priority required by the applicable
provisions of Articles II and III of the Intercreditor Agreement and shall
discharge in full the corresponding obligations of the Borrower hereunder.
Section 2.08. Book Entries. The Liquidity Provider shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower resulting from Advances made from time to time and
the amounts of principal and interest payable hereunder and paid from time to
time in respect thereof; provided, however, that the failure by the Liquidity
Provider to maintain such account or accounts shall not affect the obligations
of the Borrower in respect of Advances.
Section 2.09. Payments from Available Funds Only. All payments to be
made by the Borrower under this Agreement shall be made only from the amounts
that constitute Scheduled Payments, Special Payments and other payments under
the Operative Agreements, including payment under Section 4.02 of the
Participation Agreements and payments under Section 2.14 of the Indentures, and
only to the extent that the Borrower shall have sufficient income or proceeds
therefrom to enable the Borrower to make payments in accordance with the terms
hereof after giving effect to the priority of payments provisions set forth in
the Intercreditor Agreement. The Liquidity Provider agrees that it will look
solely to such amounts to the extent available for distribution to it as
provided in the Intercreditor Agreement and this Agreement and that the
Borrower, in its individual capacity, is not personally liable to it for any
amounts payable or liability under this Agreement except as expressly provided
in this Agreement, the Intercreditor Agreement or any Participation Agreement.
Amounts on deposit in the Class A-2 Cash Collateral Account shall be available
to the Borrower to make payments under this Agreement only to the extent and for
the purposes expressly contemplated in Section 3.06(f) of the Intercreditor
Agreement.
Section 2.10. Extension of the Expiry Date; Non-Extension Advance. If
the Expiry Date is prior to the date that is 15 days after the Final Legal
Distribution Date for the Class A-2 Certificates, then no earlier than the 60th
day and no later than the 40th day prior to the then applicable Expiry Date, the
Borrower may request in writing that the Liquidity Provider extend the Expiry
Date to the earlier of (i) the date that is 15 days after the Final Legal
Distribution Date for the Class A-2 Certificates and (ii) the date that is the
day immediately preceding the 364th day after the last day of
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the Consent Period (unless the obligations of the Liquidity Provider hereunder
are earlier terminated in accordance herewith). The Liquidity Provider shall by
notice (the "Consent Notice") to the Borrower during the period commencing on
the date that is 60 days prior to the then effective Expiry Date and ending on
the date that is 25 days prior to the then effective Expiry Date (the "Consent
Period") advise the Borrower whether, in its sole discretion, it agrees to so
extend the Expiry Date; provided, however, that such extension shall not be
effective with respect to the Liquidity Provider if, by notice (the "Withdrawal
Notice") to the Borrower prior to the end of the Consent Period, the Liquidity
Provider revokes its Consent Notice. If the Liquidity Provider advises the
Borrower in the Consent Notice that such Expiry Date shall not be so extended,
or gives a Withdrawal Notice to the Borrower prior to the end of the Consent
Period, or fails to irrevocably and unconditionally advise the Borrower on or
before the end of the Consent Period that such Expiry Date shall be so extended
(and, in each case, if the Liquidity Provider shall not have been replaced in
accordance with Section 3.06(e) of the Intercreditor Agreement), the Borrower
shall be entitled on and after the date on which the Consent Period ends (but
prior to the then effective Expiry Date) to request a Non-Extension Advance in
accordance with Section 2.02(b) hereof and Section 3.06(d) of the Intercreditor
Agreement. If any amounts shall be drawn pursuant to a Non-Extension Advance
and, within 30 days thereafter, the Liquidity Provider shall not have been
replaced, then at any time following the 30th day after such Non-Extension
Advance, the Liquidity Provider may, by written notice to the Borrower, agree to
reinstate the Liquidity Facility on the terms of the existing Liquidity Facility
for a period ending on the 364th day after the end of the Consent Period;
provided, however, that in such event the Liquidity Provider shall reimburse the
Borrower for any costs actually incurred by or on behalf of the Borrower in
drawing pursuant to the Non-Extension Advance and funding the Class A-2 Cash
Collateral Account or otherwise in connection with the Non-Extension Advance.
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. Increased Costs. If as a result of any Regulatory Change
there shall be any increase by an amount reasonably deemed by the Liquidity
Provider to be material in the actual cost to the Liquidity Provider of making,
funding or maintaining any Advances or its obligation to make any such Advances
or there shall be any reduction by an amount reasonably deemed by the Liquidity
Provider to be material in the amount receivable by the Liquidity Provider under
this Agreement or the Intercreditor Agreement in respect thereof, and in case of
either such an increase or reduction, such event does not arise from the gross
negligence or willful misconduct of the Liquidity Provider, from its breach of
any of its representations, warranties, covenants or agreements contained herein
or in the Intercreditor Agreement or from its failure to comply with any such
Regulatory Change (any such increase or reduction being referred to herein as an
"Increased Cost"), then the Borrower shall from time to time pay to the
Liquidity Provider an amount equal to such Increased Cost within 15 Business
Days after delivery to the Borrower and American of a certificate of an officer
of the Liquidity Provider describing in reasonable detail the event by reason of
which it claims such Increased Cost and the basis for the determination of the
amount of such Increased Cost; provided
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that, the Borrower shall be obligated to pay amounts only with respect to any
Increased Costs accruing from the date 45 days prior to the date of delivery of
such certificate. Such certificate, in the absence of manifest error, shall be
considered prima facie evidence of the amount for purposes of this Agreement;
provided that any determinations and allocations by the Liquidity Provider of
the effect of any Regulatory Change on the costs of maintaining the Advances are
made on a reasonable basis. The Liquidity Provider shall not be entitled to
assert any claim under this Section 3.01 in respect of or attributable to Taxes.
The Liquidity Provider will notify the Borrower and American as promptly as
practicable of any event occurring after the date of this Agreement that will
entitle the Liquidity Provider to compensation under this Section 3.01. The
Liquidity Provider agrees to investigate all commercially reasonable
alternatives for reducing any Increased Costs and to use all commercially
reasonable efforts to avoid or minimize, to the greatest extent possible, any
claim in respect of Increased Costs, including, without limitation, by
designating a different Lending Office, if such designation or other action
would avoid the need for, or reduce the amount of, any such claim; provided that
the foregoing shall not obligate the Liquidity Provider to take any action that
would, in its reasonable judgment, cause the Liquidity Provider to incur any
material loss or cost, unless the Borrower or American agrees to reimburse the
Liquidity Provider therefor. If no such designation or other action is effected,
or, if effected, fails to avoid the need for any claim in respect of Increased
Costs, American may arrange for a Replacement Liquidity Facility in accordance
with Section 3.06(e) of the Intercreditor Agreement.
Notwithstanding the foregoing provisions, in no event shall the
Borrower be required to make payments under this Section 3.01: (a) in respect of
any Regulatory Change proposed by any applicable governmental authority
(including any branch of a legislature), central bank or comparable agency of
the United States or the Liquidity Provider's jurisdiction of organization and
pending as of the date of this Agreement (it being agreed that the consultative
paper issued by the Basel Committee on Banking Supervision entitled "A New
Capital Adequacy Framework" shall not be considered a Regulatory Change proposed
as of the date of this Agreement); (b) if a claim hereunder in respect of an
Increased Cost arises through circumstances peculiar to the Liquidity Provider
and that do not affect similarly organized commercial banking institutions in
the same jurisdiction generally that are in compliance with the law, rule,
regulation or interpretation giving rise to the Regulatory Change relating to
such Increased Cost; (c) if the Liquidity Provider shall fail to comply with its
obligations under this Section 3.01; or (d) if the Liquidity Provider is not
also seeking payment for similar increased costs in other similarly situated
transactions.
Section 3.02. [Intentionally omitted.]
Section 3.03. Withholding Taxes. (a) All payments made by the Borrower
under this Agreement shall be made without deduction or withholding for or on
account of any Taxes, unless such deduction or withholding is required by law.
If any Taxes are so required to be withheld or deducted from any amounts payable
to the Liquidity Provider under this Agreement, the Borrower shall pay to the
relevant authorities the full amount so required to be deducted or withheld and,
if such Taxes are Covered Taxes, pay to the Liquidity Provider such additional
amounts as shall be
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necessary to ensure that the net amount actually received by the Liquidity
Provider (after deduction or withholding of all Covered Taxes) shall be equal to
the full amount that would have been received by the Liquidity Provider had no
withholding or deduction of Covered Taxes been required. The Liquidity Provider
agrees to use reasonable efforts (consistent with applicable legal and
regulatory restrictions) to change the jurisdiction of its Lending Office if
making such change would avoid the need for, or reduce the amount of, any such
additional amounts that may thereafter accrue and would not, in the reasonable
judgment of the Liquidity Provider, be otherwise materially disadvantageous to
the Liquidity Provider. If the Liquidity Provider receives a refund of, or
realizes a net Tax benefit not otherwise available to it as a result of, any
Taxes for which additional amounts were paid by the Borrower pursuant to this
Section 3.03, the Liquidity Provider shall pay to the Borrower (for deposit into
the Collection Account) the amount of such refund (and any interest thereon) or
net benefit.
The Liquidity Provider will (i) provide (on its behalf and on behalf of
any participant holding a Participation pursuant to Section 7.08) to the
Borrower (x) on or prior to the Effective Date two valid completed and executed
copies of Internal Revenue Service Form W8-BEN, including thereon a valid U.S.
taxpayer identification number (or, with respect to any such participant, such
other form or documentation as may be applicable) covering all amounts
receivable by it in connection with the transactions contemplated by the
Operative Agreements and (y) thereafter from time to time such additional forms
or documentation as may be necessary to establish an available exemption from
withholding of United States Tax on payments hereunder so that such forms or
documentation are effective for all periods during which it is the Liquidity
Provider and (ii) provide timely notice to the Borrower if any such form or
documentation is or becomes inaccurate. The Liquidity Provider shall deliver to
the Borrower such other forms or documents as may be reasonably requested by the
Borrower or required by applicable law to establish that payments hereunder are
exempt from or entitled to a reduced rate of Covered Taxes.
(b) All payments (including, without limitation, Advances) made by the
Liquidity Provider under this Agreement shall be made free and clear of, and
without reduction for or on account of, any Taxes. If any Taxes are required to
be withheld or deducted from any amounts payable to the Borrower under this
Agreement, the Liquidity Provider shall (i) within the time prescribed therefor
by applicable law pay to the appropriate governmental or taxing authority the
full amount of any such Taxes (and any additional Taxes in respect of the
additional amounts payable under clause (ii) hereof) and make such reports or
returns in connection therewith at the time or times and in the manner
prescribed by applicable law, and (ii) pay to the Borrower an additional amount
which (after deduction of all such Taxes) will be sufficient to yield to the
Borrower the full amount which would have been received by it had no such
withholding or deduction been made. Within 30 days after the date of each
payment hereunder, the Liquidity Provider shall furnish to the Borrower the
original or a certified copy of (or other documentary evidence of) the payment
of the Taxes applicable to such payment.
If any exemption from, or reduction in the rate of, any Taxes required
to be borne by the Liquidity Provider under this Section 3.03(b) is reasonably
available to the Borrower without
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providing any information regarding the holders or beneficial owners of the
Certificates, the Borrower shall deliver the Liquidity Provider such form or
forms and such other evidence of the eligibility of the Borrower for such
exemption or reductions (but without any requirement to provide any information
regarding the holders or beneficial owners of the Certificates) as the Liquidity
Provider may reasonably identify to the Borrower as being required as a
condition to exemption from, or reduction in the rate of, such Taxes.
Section 3.04. Payments. The Borrower shall make or cause to be made
each payment to the Liquidity Provider under this Agreement so as to cause the
same to be received by the Liquidity Provider not later than 1:00 P.M. (New York
City time) on the day when due. The Borrower shall make all such payments in
Dollars, to the Liquidity Provider in immediately available funds, by wire
transfer to First Union Bank International, Swift/BIC - Code: PNBPUS3N NYC
(Fedwire 0260 0509 2/CHIPS/ABA 0509) in favor of account number 2000 193534 122,
Bayerische Landesbank Girozentrale, Munich, Swift/BIC - Code: BYLADEMM,
Reference RCA American EETC 1999-1A-2.
Section 3.05. Computations. All computations of interest based on the
Base Rate shall be made on the basis of a year of 365 or 366 days, as the case
may be, and all computations of interest based on the LIBOR Rate shall be made
on the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest is payable.
Section 3.06. Payment on Non-Business Days. Whenever any payment to be
made hereunder shall be stated to be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day and no additional
interest shall be due as a result (and if so made, shall be deemed to have been
made when due). If any payment in respect of interest on an Advance is so
deferred to the next succeeding Business Day, such deferral shall not delay the
commencement of the next Interest Period for such Advance (if such Advance is a
LIBOR Advance) or reduce the number of days for which interest will be payable
on such Advance on the next interest payment date for such Advance.
Section 3.07. Interest. (a) Subject to Sections 2.07 and 2.09, the
Borrower shall pay, or shall cause to be paid, without duplication, interest on
(i) the unpaid principal amount of each Advance from and including the date of
such Advance (or, in the case of an Applied Provider Advance, from and including
the date on which the amount thereof was withdrawn from the Class A-2 Cash
Collateral Account to pay interest on the Class A-2 Certificates) to but
excluding the date such principal amount shall be paid in full (or, in the case
of an Applied Provider Advance, the date on which the Class A-2 Cash Collateral
Account is fully replenished in respect of such Advance) and (ii) any other
amount due hereunder (whether fees, commissions, expenses or other amounts or,
to the extent permitted by law, installments of interest on Advances or any such
other amount) that is not paid when due (whether at stated maturity, by
acceleration or otherwise) from and including the due date thereof to but
excluding the date such amount is paid in full, in each such case, at the
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interest rate per annum for each day equal to the Applicable Liquidity Rate (as
defined below) for such Advance or such other amount, as the case may be, as in
effect for such day, but in no event at a rate per annum greater than the
maximum rate permitted by applicable law, provided, however, that, if at any
time the otherwise applicable interest rate as set forth in this Section 3.07
shall exceed the maximum rate permitted by applicable law, then to the maximum
extent permitted by applicable law any subsequent reduction in such interest
rate will not reduce the rate of interest payable pursuant to this Section 3.07
below the maximum rate permitted by applicable law until the total amount of
interest accrued equals the absolute amount of interest that would have accrued
(without additional interest thereon) if such otherwise applicable interest rate
as set forth in this Section 3.07 had at all relevant times been in effect.
(b) Except as provided in Section 3.07(e), each Advance will be either
a Base Rate Advance or a LIBOR Advance as provided in this Section 3.07. Each
such Advance will be a Base Rate Advance for the period from the date of its
borrowing to (but excluding) the third Business Day following the Liquidity
Provider's receipt of the Notice of Borrowing for such Advance. Thereafter, such
Advance shall be a LIBOR Advance; provided that the Borrower (at the direction
of the Controlling Party, so long as the Liquidity Provider is not the
Controlling Party) may (x) convert the Final Advance into a Base Rate Advance on
the last day of an Interest Period for such Advance by giving the Liquidity
Provider no less than four Business Days' prior written notice of such election
or (y) elect to maintain the Final Advance as a Base Rate Advance by not
requesting a conversion of the Final Advance to a LIBOR Advance under Clause (5)
of the applicable Notice of Borrowing (or, if, pursuant to Section 2.06, such
Final Advance is deemed to have been made without delivery of a Notice of
Borrowing, by requesting, prior to 11:00 a.m. on the first Business Day
immediately following the Borrower's receipt of the applicable Termination
Notice, that such Final Advance not be converted from a Base Rate Advance to a
LIBOR Advance).
(c) Each LIBOR Advance shall bear interest during each Interest Period
at a rate per annum equal to the LIBOR Rate for such Interest Period plus the
Applicable Margin for such LIBOR Advance, payable in arrears on the last day of
such Interest Period and, in the event of the payment of principal of such LIBOR
Advance on a day other than such last day, on the date of such payment (to the
extent of interest accrued on the amount of principal repaid).
(d) Each Base Rate Advance shall bear interest at a rate per annum
equal to the Base Rate plus the Applicable Margin for such Base Rate Advance,
payable in arrears on each Regular Distribution Date and, in the event of the
payment of principal of such Base Rate Advance on a day other than a Regular
Distribution Date, on the date of such payment (to the extent of interest
accrued on the amount of principal repaid).
(e) Each outstanding Unapplied Provider Advance shall bear interest in
an amount equal to the Investment Earnings on amounts on deposit in the Class
A-2 Cash Collateral Account for such Unapplied Provider Advance on the amount of
such Unapplied Provider Advance from time to time, payable in arrears on each
Regular Distribution Date.
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(f) Each amount not paid when due hereunder (whether fees, commissions,
expenses or other amounts or, to the extent permitted by applicable law,
installments of interest on Advances but excluding Advances) shall bear interest
at a rate per annum equal to the Base Rate plus 1.75% per annum until paid.
(g) Each change in the Base Rate shall become effective immediately.
The rates of interest specified in this Section 3.07 with respect to any Advance
or other amount shall be referred to as the "Applicable Liquidity Rate".
Section 3.08. Replacement of Borrower. Subject to Section 5.02, from
time to time and subject to the successor Borrower's meeting the eligibility
requirements set forth in Section 6.09 of the Intercreditor Agreement applicable
to the Subordination Agent, upon the effective date and time specified in a
written and completed Notice of Replacement Subordination Agent in substantially
the form of Annex VI (a "Notice of Replacement Subordination Agent") delivered
to the Liquidity Provider by the then Borrower, the successor Borrower
designated therein shall become the Borrower for all purposes hereunder.
Section 3.09. Funding Loss Indemnification. The Borrower shall pay to
the Liquidity Provider, upon the request of the Liquidity Provider, such amount
or amounts as shall be sufficient (in the reasonable opinion of the Liquidity
Provider) to compensate it for any loss, cost or expense incurred by reason of
the liquidation or redeployment of deposits or other funds acquired by the
Liquidity Provider to fund or maintain any LIBOR Advance (but excluding loss of
the Applicable Margin or anticipated profits) incurred as a result of:
(1) Any repayment of a LIBOR Advance on a date other than the last day
of the Interest Period for such Advance; or
(2) Any failure by the Borrower to borrow a LIBOR Advance on the date
for borrowing specified in the relevant notice under Section 2.02.
Section 3.10. Illegality. Notwithstanding any other provision in this
Agreement, if any change in any law, rule or regulation applicable to or binding
on the Liquidity Provider, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by the
Liquidity Provider with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency shall
make it unlawful or impossible for the Liquidity Provider to maintain or fund
its LIBOR Advances, then upon notice to the Borrower and American by the
Liquidity Provider, the outstanding principal amount of the LIBOR Advances shall
be converted to Base Rate Advances (a) immediately upon demand of the Liquidity
Provider, if such change or compliance with such request, in the reasonable
judgment of the Liquidity Provider, requires immediate conversion; or (b) at the
expiration of the last Interest Period to expire before the
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effective date of any such change or request. The Liquidity Provider will notify
the Borrower and American as promptly as practicable of any event that will lead
to the conversion of LIBOR Advances to Base Rate Advances under this Section
3.10. The Liquidity Provider agrees to investigate all commercially reasonable
alternatives for avoiding the need for such conversion, including, without
limitation, designating a different Lending Office, if such designation or other
action would avoid the need to convert such LIBOR Advances to Base Rate
Advances; provided, that the foregoing shall not obligate the Liquidity Provider
to take any action that would, in its reasonable judgment, cause the Liquidity
Provider to incur any material loss or cost, unless the Borrower or American
agrees to reimburse the Liquidity Provider therefor. If no such designation or
other action is effected, or, if effected, fails to avoid the need for
conversion of the LIBOR Advances to Base Rate Advances, American may arrange for
a Replacement Liquidity Facility in accordance with Section 3.06(e) of the
Intercreditor Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent to Effectiveness of Section 2.01.
Section 2.01 of this Agreement shall become effective on and as of the first
date (the "Effective Date") on which the following conditions precedent have
been satisfied (or waived by the appropriate party or parties):
(a) The Liquidity Provider shall have received on or before the Closing
Date each of the following, and in the case of each document delivered pursuant
to paragraphs (i), (ii) and (iii), each in form and substance satisfactory to
the Liquidity Provider:
(i) This Agreement duly executed on behalf of the Borrower;
(ii) The Intercreditor Agreement duly executed on behalf of
each of the parties thereto (other than the Liquidity Provider);
(iii) Fully executed copies of each of the Operative
Agreements executed and delivered on or before the Closing Date (other
than this Agreement and the Intercreditor Agreement);
(iv) A copy of the Prospectus Supplement and specimen copies
of the Class A-2 Certificates;
(v) An executed copy of each document, instrument, certificate
and opinion delivered on or before the Closing Date pursuant to the
Class A-2 Trust Agreement, the Intercreditor Agreement and the other
Operative Agreements (in the case of each such opinion, either
addressed to the Liquidity Provider or accompanied
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by a letter from the counsel rendering such opinion to the effect that
the Liquidity Provider is entitled to rely on such opinion as of its
date as if it were addressed to the Liquidity Provider); and
(vi) An agreement from American, pursuant to which (x)
American agrees to provide copies of quarterly financial statements and
audited annual financial statements to the Liquidity Provider and (y)
American agrees to allow the Liquidity Provider to discuss such
transactions with officers and employees of American.
(b) On and as of the Effective Date no event shall have occurred and be
continuing, or would result from the entering into of this Agreement or the
making of any Advance, which constitutes a Liquidity Event of Default.
(c) The filings referred to in Sections 3.01(d) and 3.01(f) of the
Participation Agreements shall have been filed (or shall be in the process of
being filed).
(d) The Liquidity Provider shall have received payment in full of the
fees and other sums required to be paid to or for the account of the Liquidity
Provider on or prior to the Effective Date pursuant to the Fee Letter.
(e) All conditions precedent to the issuance of the Certificates under
the Trust Agreement shall have been satisfied or waived, all conditions
precedent to the effectiveness of the other Liquidity Facilities shall have been
satisfied or waived, and all conditions precedent to the purchase of the
Certificates by the Underwriters under the Underwriting Agreement shall have
been satisfied (unless any of such conditions precedent under the Underwriting
Agreement shall have been waived by the Underwriters).
(f) The Borrower and American shall have received a certificate, dated
the Effective Date signed by a duly authorized representative of the Liquidity
Provider, certifying that all conditions precedent specified in this Section
4.01 have been satisfied or waived by the Liquidity Provider.
Section 4.02. Conditions Precedent to Borrowing. The obligation of the
Liquidity Provider to make an Advance on the occasion of each Borrowing shall be
subject to the conditions precedent that the Effective Date shall have occurred
and, prior to the time of such Borrowing, the Borrower shall have delivered a
Notice of Borrowing which conforms to the terms and conditions of this
Agreement.
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ARTICLE V
COVENANTS
Section 5.01. Affirmative Covenants of the Borrower. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity Provider hereunder, the Borrower will, unless the Liquidity
Provider shall otherwise consent in writing:
(a) Performance of Agreements. Punctually pay or cause to be paid all
amounts payable by it under this Agreement and the Intercreditor Agreement and
observe and perform in all material respects the conditions, covenants and
requirements applicable to it contained in this Agreement and the Intercreditor
Agreement.
(b) Reporting Requirements. Furnish to the Liquidity Provider with
reasonable promptness, such other information and data with respect to the
transactions contemplated by the Operative Agreements as from time to time may
be reasonably requested by the Liquidity Provider; and permit the Liquidity
Provider, upon reasonable notice, to inspect the Borrower's books and records
with respect to such transactions and to meet with officers and employees of the
Borrower to discuss such transactions.
(c) Certain Operative Agreements. Furnish to the Liquidity Provider
with reasonable promptness, such Operative Agreements entered into after the
date hereof as from time to time may be reasonably requested by the Liquidity
Provider.
Section 5.02. Negative Covenants of the Borrower. Subject to the first
and second sentences and the fourth paragraph of Section 7.01(a) of the
Intercreditor Agreement and Section 7.01(b) of the Intercreditor Agreement, so
long as any Advance shall remain unpaid or the Liquidity Provider shall have any
Maximum Commitment hereunder or the Borrower shall have any obligation to pay
any amount to the Liquidity Provider hereunder, the Borrower will not appoint or
permit or suffer to be appointed any successor Borrower without the prior
written consent of the Liquidity Provider, which consent shall not be
unreasonably withheld or delayed.
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. Liquidity Events of Default. If (a) any Liquidity Event
of Default has occurred and is continuing and (b) there is a Performing Note
Deficiency, the Liquidity Provider may, in its discretion, deliver to the
Borrower a Termination Notice, the effect of which shall be to cause (i) this
Agreement to expire at the close of business on the fifth Business Day after the
date on which such Termination Notice is received by the Borrower, (ii) the
Borrower to promptly request, and the
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<PAGE> 26
Liquidity Provider to promptly make, a Final Advance in accordance with Section
2.02(d) hereof and Section 3.06(i) of the Intercreditor Agreement, (iii) all
other outstanding Advances to be automatically converted into Final Advances for
purposes of determining the Applicable Liquidity Rate for interest payable
thereon and (iv) subject to Sections 2.07 and 2.09, all Advances, any accrued
interest thereon and any other amounts outstanding hereunder to become
immediately due and payable to the Liquidity Provider.
ARTICLE VII
MISCELLANEOUS
Section 7.01. No Oral Modifications or Continuing Waivers. No terms or
provisions of this Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the Borrower and the
Liquidity Provider and any other Person whose consent is required pursuant to
this Agreement; provided that no such change or other action shall affect the
payment obligations of American Airlines without American's prior written
consent; and any waiver of the terms hereof shall be effective only in the
specific instance and for the specific purpose given.
Section 7.02. Notices. Unless otherwise expressly specified or
permitted by the terms hereof, all notices required or permitted under the terms
and provisions of this Agreement shall be in English and in writing, and any
such notice may be given by United States mail, courier service or facsimile or
any other customary means of communication, and any such notice shall be
effective when delivered (or, if mailed, three Business Days after deposit,
postage prepaid, in the first class U.S. mail and, if delivered by facsimile,
upon completion of transmission and confirmation by the sender (by a telephone
call to a representative of the recipient or by machine confirmation) that the
transmission was received),
If to the Borrower, to:
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION
225 Asylum, Goodwin Square
Hartford, Connecticut 06103
Attention: Corporate Trust Division
Telephone: (860) 244-1844
Telecopy: (860) 244-1881
If to the Liquidity Provider,
If by mail to:
23
<PAGE> 27
BAYERISCHE LANDESBANK GIROZENTRALE
c/o Bayerische Landesbank Girozentrale, New York Branch
560 Lexington Avenue
New York, New York 10022
Attention: Patricia Sanchez
Telephone: (212) 310-9810
Telecopy: (212) 310-9930
(With a copy to the address of the Liquidity Provider set forth below)
If by other means of communication to:
BAYERISCHE LANDESBANK GIROZENTRALE
Brienner Strasse 18
D-80333 Munich, Germany
Attention: Aircraft Finance Department, 7650
Telephone: 49-89-2171-2360
Telecopy: 49-89-2171-3763
With a copy of any Notice of Borrowing to:
BAYERISCHE LANDESBANK GIROZENTRALE
560 Lexington Avenue
New York, New York 10022
Attention: Patricia Sanchez
Telephone: (212) 310-9810
Telecopy: (212) 310-9930
The Borrower or the Liquidity Provider, by notice to the other, may
designate additional or different addresses for subsequent notices or
communications.
Section 7.03. No Waiver; Remedies. No failure on the part of the
Liquidity Provider to exercise, and no delay in exercising, any right under this
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any right under this Agreement preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 7.04. Further Assurances. The Borrower agrees to do such
further acts and things and to execute and deliver to the Liquidity Provider
such additional assignments, agreements, powers
24
<PAGE> 28
and instruments as the Liquidity Provider may reasonably require or deem
advisable to carry into effect the purposes of this Agreement and the other
Operative Agreements or to better assure and confirm unto the Liquidity Provider
its rights, powers and remedies hereunder and under the other Operative
Agreements.
Section 7.05. Indemnification; Survival of Certain Provisions. The
Liquidity Provider shall be indemnified hereunder to the extent and in the
manner described in Section 4.02 of the Participation Agreements. In addition,
the Borrower agrees to indemnify, protect, defend and hold harmless each
Liquidity Indemnitee from and against all Expenses of any kind or nature
whatsoever (other than any Expenses of the nature described in Sections 3.01 or
7.07 or in the Fee Letter (regardless of whether indemnified against pursuant to
said Sections or in such Fee Letter)), that may be imposed on or incurred by
such Liquidity Indemnitee, in any way relating to, resulting from, or arising
out of or in connection with, any action, suit or proceeding by any third party
against such Liquidity Indemnitee and relating to this Agreement, the Fee
Letter, the Intercreditor Agreement or any Participation Agreement; provided,
however, that the Borrower shall not be required to indemnify, protect, defend
and hold harmless any Liquidity Indemnitee in respect of any Expense of such
Liquidity Indemnitee to the extent such Expense is (i) attributable to the
negligence or willful misconduct of such Liquidity Indemnitee or any other
Liquidity Indemnitee, (ii) an ordinary and usual operating overhead expense,
(iii) attributable to the failure by such Liquidity Indemnitee or any other
Liquidity Indemnitee to perform or observe any agreement, covenant or condition
on its part to be performed or observed in this Agreement, the Intercreditor
Agreement, the Fee Letter or any other Operative Agreement to which it is a
party or (iv) otherwise excluded from the indemnification provisions contained
in Section 4.02 of the Participation Agreements. The provisions of Sections
3.01, 3.03, 3.09, 7.05 and 7.07 and the indemnities contained in Section 4.02 of
the Participation Agreements shall survive the termination of this Agreement.
Section 7.06. Liability of the Liquidity Provider. (a) Neither the
Liquidity Provider nor any of its officers, employees or directors shall be
liable or responsible for: (i) the use which may be made of the Advances or any
acts or omissions of the Borrower or any beneficiary or transferee in connection
therewith; (ii) the validity, sufficiency or genuineness of documents, or of any
endorsement thereon, even if such documents should prove to be in any or all
respects invalid, insufficient, fraudulent or forged; or (iii) the making of
Advances by the Liquidity Provider against delivery of a Notice of Borrowing and
other documents which do not comply with the terms hereof; provided, however,
that the Borrower shall have a claim against the Liquidity Provider, and the
Liquidity Provider shall be liable to the Borrower, to the extent of any damages
suffered by the Borrower that were the result of (A) the Liquidity Provider's
willful misconduct or gross negligence in determining whether documents
presented hereunder comply with the terms hereof or (B) any breach by the
Liquidity Provider of any of the terms of this Agreement or the Intercreditor
Agreement, including, but not limited to, the Liquidity Provider's failure to
make lawful payment hereunder after the delivery to it by the Borrower of a
Notice of Borrowing complying with the terms and conditions hereof.
25
<PAGE> 29
(b) Neither the Liquidity Provider nor any of its officers, employees
or directors or affiliates shall be liable or responsible in any respect for (i)
any error, omission, interruption or delay in transmission, dispatch or delivery
of any message or advice, however transmitted, in connection with this Agreement
or any Notice of Borrowing delivered hereunder or (ii) any action, inaction or
omission which may be taken by it in good faith, absent willful misconduct or
negligence (in which event the extent of the Liquidity Provider's potential
liability to the Borrower shall be limited as set forth in the immediately
preceding paragraph), in connection with this Agreement or any Notice of
Borrowing.
Section 7.07. Certain Costs and Expenses. The Borrower agrees promptly
to pay, or cause to be paid, (a) the reasonable fees, expenses and disbursements
of Winthrop, Stimson, Putnam & Roberts, special counsel for the Liquidity
Provider, and Schwarz Kurtze Schniewand Kelwing Wicke, special German counsel to
the Liquidity Provider, in connection with the preparation, negotiation,
execution, delivery, filing and recording of the Operative Agreements, any
waiver or consent thereunder or any amendment thereof and (b) if a Liquidity
Event of Default occurs, all out-of-pocket expenses incurred by the Liquidity
Provider, including reasonable fees and disbursements of counsel, in connection
with such Liquidity Event of Default and any collection, bankruptcy, insolvency
and other enforcement proceedings in connection therewith. In addition, the
Borrower shall pay any and all recording, stamp and other similar taxes and fees
payable or determined to be payable in the United States in connection with the
execution, delivery, filing and recording of this Agreement, any other Operative
Agreement and such other documents, and agrees to save the Liquidity Provider
harmless from and against any and all liabilities with respect to or resulting
from any delay in paying or omission to pay such taxes or fees.
Section 7.08. Binding Effect; Participations. (a) This Agreement shall
be binding upon and inure to the benefit of the Borrower and the Liquidity
Provider and their respective successors and permitted assigns, except that
neither the Liquidity Provider (except as otherwise provided in this Section
7.08) nor (except as contemplated by Section 3.08) the Borrower shall have the
right to assign, pledge or otherwise transfer its rights or obligations
hereunder or any interest herein, subject to the Liquidity Provider's right to
grant Participations pursuant to Section 7.08(b).
(b) The Liquidity Provider agrees that it will not grant any
participation (including, without limitation, a "risk participation") (any such
participation, a "Participation") in or to all or a portion of its rights and
obligations hereunder or under the other Operative Agreements, unless all of the
following conditions are satisfied: (i) such Participation is to a Permitted
Transferee, (ii) such Participation is made in accordance with all applicable
laws, including, without limitation, the Securities Act of 1933, as amended, the
Trust Indenture Act of 1939, as amended, and any other applicable laws relating
to the transfer of similar interests and (iii) such Participation shall not be
made under circumstances that require registration under the Securities Act of
1933, as amended, or qualification of any indenture under the Trust Indenture
Act of 1939, as amended. Notwithstanding any such Participation, the Liquidity
Provider agrees that (1) the Liquidity Provider's obligations under the
Operative Agreements shall remain unchanged, and such participant
26
<PAGE> 30
shall have no rights or benefits as against American or the Borrower or under
any Operative Agreement, (2) the Liquidity Provider shall remain solely
responsible to the other parties to the Operative Agreements for the performance
of such obligations, (3) the Liquidity Provider shall remain the maker of any
Advances, and the other parties to the Operative Agreements shall continue to
deal solely and directly with the Liquidity Provider in connection with the
Advances and the Liquidity Provider's rights and obligations under the Operative
Agreements, (4) the Liquidity Provider shall be solely responsible for any
withholding Taxes or any filing or reporting requirements relating to such
Participation and shall hold the Borrower and American and their respective
successors, permitted assigns, affiliates, agents and servants harmless against
the same and (5) neither American nor the Borrower shall be required to pay to
the Liquidity Provider any amount under Section 3.01 or Section 3.03 greater
than it would have been required to pay had there not been any grant of a
Participation by the Liquidity Provider. The Liquidity Provider may, in
connection with any Participation or proposed Participation pursuant to this
Section 7.08(b), disclose to the participant or proposed participant any
information relating to the Operative Agreements or to the parties thereto
furnished to the Liquidity Provider thereunder or in connection therewith and
permitted to be disclosed by the Liquidity Provider; provided, however, that
prior to any such disclosure, the participant or proposed participant shall
agree in writing for the express benefit of the Borrower and American to
preserve the confidentiality of any confidential information included therein
(subject to customary exceptions).
(c) Notwithstanding the other provisions of this Section 7.08, the
Liquidity Provider may assign and pledge all or any portion of the Advances
owing to it to any Federal Reserve Bank or the United States Treasury as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve
Bank, provided that any payment in respect of such assigned Advances made by the
Borrower to the Liquidity Provider in accordance with the terms of this
Agreement shall satisfy the Borrower's obligations hereunder in respect of such
assigned Advance to the extent of such payment. No such assignment shall release
the Liquidity Provider from its obligations hereunder.
Section 7.09. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 7.10. Governing Law. THIS AGREEMENT HAS BEEN DELIVERED IN THE
STATE OF NEW YORK AND THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
27
<PAGE> 31
Section 7.11. Submission to Jurisdiction; Waiver of Jury Trial; Waiver
of Immunity. (a) Each of the parties hereto, to the extent it may do so under
applicable law, for purposes hereof hereby (i) irrevocably submits itself to the
non-exclusive jurisdiction of the courts of the State of New York sitting in the
City of New York and to the non-exclusive jurisdiction of the United States
District Court for the Southern District of New York, for the purposes of any
suit, action or other proceeding arising out of this Agreement, the subject
matter hereof or any of the transactions contemplated hereby brought by any
party or parties hereto or thereto, or their successors or permitted assigns and
(ii) waives, and agrees not to assert, by way of motion, as a defense, or
otherwise, in any such suit, action or proceeding, that the suit, action or
proceeding is brought in an inconvenient forum, that the venue of the suit,
action or proceeding is improper or that this Agreement or the subject matter
hereof or any of the transactions contemplated hereby may not be enforced in or
by such courts.
(b) THE BORROWER AND THE LIQUIDITY PROVIDER EACH HEREBY AGREE TO WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO
THE SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING
ESTABLISHED, including, without limitation, contract claims, tort claims, breach
of duty claims and all other common law and statutory claims. The Borrower and
the Liquidity Provider each warrant and represent that it has reviewed this
waiver with its legal counsel, and that it knowingly and voluntarily waives its
jury trial rights following consultation with such legal counsel. THIS WAIVER IS
IRREVOCABLE, AND CANNOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS AGREEMENT.
(c) The Liquidity Provider hereby waives any immunity it may have from
the jurisdiction of the courts of the United States or of any state thereof and
waives any immunity any of its properties located in the United States may have
from attachment or execution upon a judgment entered by any such court under the
United States Foreign Sovereign Immunities Act of 1976 or any similar successor
legislation.
Section 7.12. Counterparts. This Agreement may be executed in any
number of counterparts (and each party shall not be required to execute the same
counterpart). Each counterpart of this Agreement including a signature page or
pages executed by each of the parties hereto shall be an original counterpart of
this Agreement, but all of such counterparts together shall constitute one
instrument.
Section 7.13. Entirety. This Agreement and the Intercreditor Agreement
constitute the entire agreement of the parties hereto with respect to the
subject matter hereof and supersede all prior understandings and agreements of
such parties.
28
<PAGE> 32
Section 7.14. Headings. The headings of the various Articles and
Sections herein and in the Table of Contents hereto are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
Section 7.15. Liquidity Provider's Obligation to Make Advances. EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE OBLIGATIONS OF THE LIQUIDITY
PROVIDER TO MAKE ADVANCES HEREUNDER, AND THE BORROWER'S RIGHTS TO DELIVER
NOTICES OF BORROWING REQUESTING THE MAKING OF ADVANCES HEREUNDER, SHALL BE
ABSOLUTE, UNCONDITIONAL AND IRREVOCABLE, AND SHALL BE PAID OR PERFORMED, IN EACH
CASE STRICTLY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.
29
<PAGE> 33
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first set forth above.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Subordination
Agent, as agent and trustee for the
Class A-2 Trust, as Borrower
By: /s/ JOHN G. CORREIA
--------------------------------
Name: John G. Correia
Title: Assistant Secretary
BAYERISCHE LANDESBANK GIROZENTRALE,
as Liquidity Provider
By: /s/ BERND LONNER
--------------------------------
Name: Bernd Lonner
Title: Vice President
By: /s/ RUDIGER FERN
--------------------------------
Name: Rudiger Fern
Title: Senior Vice President
30
<PAGE> 34
ANNEX I to
REVOLVING CREDIT AGREEMENT
INTEREST ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
borrower (the "Borrower"), hereby certifies to Bayerische Landesbank
Girozentrale (the "Liquidity Provider"), with reference to the Revolving Credit
Agreement (1999-1A-2), dated as of October 6, 1999, between the Borrower and the
Liquidity Provider (the "Liquidity Agreement"; the terms defined therein and not
otherwise defined herein being used herein as therein defined or referenced),
that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of an Interest Advance by the Liquidity Provider to be used for the payment of
the interest on the Class A-2 Certificates which is payable on ____________,
____ (the "Distribution Date") in accordance with the terms and provisions of
the Class A-2 Trust Agreement and the Class A-2 Certificates, which Advance is
requested to be made on ____________, ____. The Interest Advance should be
remitted to [insert wire and account details].
(3) The amount of the Interest Advance requested hereby (i) is
$_______________.__, to be applied in respect of the payment of the interest
which is due and payable on the Class A-2 Certificates on the Distribution Date,
(ii) does not include any amount with respect to the payment of principal of, or
premium on, the Class A-1 Certificates, the Class A-2 Certificates, the Class B
Certificates or the Class C Certificates, or interest on the Class A-1
Certificates, the Class B Certificates or the Class C Certificates, (iii) was
computed in accordance with the provisions of the Class A-2 Certificates, the
Class A-2 Trust Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), (iv) does not exceed the Maximum
Available Commitment on the date hereof and (v) has not been and is not the
subject of a prior or contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will apply the same in accordance with the
terms of Section 3.06(b) of the Intercreditor Agreement, (b) no portion of such
amount shall be applied by the Borrower for any other purpose and (c) no portion
of such amount until so applied shall be commingled with other funds held by the
Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, the making of the Interest Advance as requested by this Notice of
Borrowing shall automatically reduce, subject to reinstatement in accordance
with the terms of the Liquidity Agreement, the Maximum Available
I-1
<PAGE> 35
Commitment by an amount equal to the amount of the Interest Advance requested to
be made hereby as set forth in clause (i) of paragraph (3) of this Certificate
and such reduction shall automatically result in corresponding reductions in the
amounts available to be borrowed pursuant to a subsequent Advance.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of _________, ____.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Subordination Agent, as Borrower
By:
------------------------------------
Name:
Title:
I-2
<PAGE> 36
SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Interest Advance
Notice of Borrowing]
I-3
<PAGE> 37
ANNEX II to
REVOLVING CREDIT AGREEMENT
NON-EXTENSION ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "Borrower"), hereby certifies to Bayerische Landesbank
Girozentrale (the "Liquidity Provider"), with reference to the Revolving Credit
Agreement (1999-1A-2), dated as of October 6, 1999, between the Borrower and the
Liquidity Provider (the "Liquidity Agreement"; the terms defined therein and not
otherwise defined herein being used herein as therein defined or referenced),
that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Non-Extension Advance by the Liquidity Provider to be used for the
funding of the Class A-2 Cash Collateral Account in accordance with Section
3.06(d) of the Intercreditor Agreement, which Advance is requested to be made on
__________, ____. The Non-Extension Advance should be remitted to [insert wire
and account details].
(3) The amount of the Non-Extension Advance requested hereby (i) is
$_______________.__, which equals the Maximum Available Commitment on the date
hereof and is to be applied in respect of the funding of the Class A-2 Cash
Collateral Account in accordance with Sections 3.06(d) and 3.06(f) of the
Intercreditor Agreement, (ii) does not include any amount with respect to the
payment of the principal of, or premium on, the Class A-2 Certificates, or
principal of, or interest or premium on, the Class A-1 Certificates, the Class B
Certificates or the Class C Certificates, (iii) was computed in accordance with
the provisions of the Class A-2 Certificates, the Class A-2 Trust Agreement and
the Intercreditor Agreement (a copy of which computation is attached hereto as
Schedule I) and (iv) has not been and is not the subject of a prior or
contemporaneous Notice of Borrowing under the Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class A-2
Cash Collateral Account and apply the same in accordance with the terms of
Sections 3.06(d) and 3.06(f) of the Intercreditor Agreement, (b) no portion of
such amount shall be applied by the Borrower for any other purpose and (c) no
portion of such amount until so applied shall be commingled with other funds
held by the Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Non-Extension Advance as requested by this
Notice of Borrowing shall automatically and irrevocably terminate the obligation
of the Liquidity Provider to make further Advances under the Liquidity Agreement
and (B) following the making by the Liquidity Provider of the Non-Extension
II-1
<PAGE> 38
Advance requested by this Notice of Borrowing, the Borrower shall not be
entitled to request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of _________, ____.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Subordination Agent, as Borrower
By:
-----------------------------------
Name:
Title:
II-2
<PAGE> 39
SCHEDULE I TO NON-EXTENSION ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with Non-Extension
Advance Notice of Borrowing]
II-3
<PAGE> 40
ANNEX III to
REVOLVING CREDIT AGREEMENT
DOWNGRADE ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "Borrower"), hereby certifies to Bayerische Landesbank
Girozentrale (the "Liquidity Provider"), with reference to the Revolving Credit
Agreement (1999-1A-2), dated as of October 6, 1999, between the Borrower and the
Liquidity Provider (the "Liquidity Agreement"; the terms defined therein and not
otherwise defined herein being used herein as therein defined or referenced),
that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Downgrade Advance by the Liquidity Provider to be used for the funding of
the Class A-2 Cash Collateral Account in accordance with Section 3.06(c) of the
Intercreditor Agreement by reason of the downgrading of the short-term unsecured
debt rating or long-term unsecured debt rating of the Liquidity Provider issued
by either Rating Agency below the Threshold Rating, which Advance is requested
to be made on __________, ____. The Downgrade Advance should be remitted to
[insert wire and account details].
(3) The amount of the Downgrade Advance requested hereby (i) is
$_______________.__, which equals the Maximum Available Commitment on the date
hereof and is to be applied in respect of the funding of the Class A-2 Cash
Collateral Account in accordance with Sections 3.06(c) and 3.06(f) of the
Intercreditor Agreement, (ii) does not include any amount with respect to the
payment of the principal of, or premium on, the Class A-2 Certificates, or
principal of, or interest or premium on, the Class A-1 Certificates, the Class B
Certificates or the Class C Certificates, (iii) was computed in accordance with
the provisions of the Class A-2 Certificates, the Class A-2 Trust Agreement and
the Intercreditor Agreement (a copy of which computation is attached hereto as
Schedule I) and (iv) has not been and is not the subject of a prior or
contemporaneous Notice of Borrowing under the Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class A-2
Cash Collateral Account and apply the same in accordance with the terms of
Sections 3.06(c) and 3.06(f) of the Intercreditor Agreement, (b) no portion of
such amount shall be applied by the Borrower for any other purpose and (c) no
portion of such amount until so applied shall be commingled with other funds
held by the Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Downgrade Advance as requested by this Notice
of Borrowing shall automatically and irrevocably terminate the obligation of the
Liquidity Provider to make further Advances under the
III-1
<PAGE> 41
Liquidity Agreement and (B) following the making by the Liquidity Provider of
the Downgrade Advance requested by this Notice of Borrowing, the Borrower shall
not be entitled to request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of _________, ____.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Subordination Agent, as Borrower
By:
-----------------------------------
Name:
Title:
III-2
<PAGE> 42
SCHEDULE I TO DOWNGRADE ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with Downgrade
Advance Notice of Borrowing]
III-3
<PAGE> 43
ANNEX IV to
REVOLVING CREDIT AGREEMENT
FINAL ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
borrower (the "Borrower"), hereby certifies to Bayerische Landesbank
Girozentrale (the "Liquidity Provider"), with reference to the Revolving Credit
Agreement (1999-1A-2), dated as of October 6, 1999, between the Borrower and the
Liquidity Provider (the "Liquidity Agreement"; the terms defined therein and not
otherwise defined herein being used herein as therein defined or referenced),
that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Final Advance by the Liquidity Provider to be used for the funding of the
Class A-2 Cash Collateral Account in accordance with Section 3.06(i) of the
Intercreditor Agreement by reason of the receipt by the Borrower of a
Termination Notice from the Liquidity Provider with respect to the Liquidity
Agreement, which Advance is requested to be made on ____________, ____. The
Final Advance should be remitted to [insert wire and account details].
(3) The amount of the Final Advance requested hereby (i) is
$_________________.__, which equals the Maximum Available Commitment on the date
hereof and is to be applied in respect of the funding of the Class A-2 Cash
Collateral Account in accordance with Sections 3.06(f) and 3.06(i) of the
Intercreditor Agreement, (ii) does not include any amount with respect to the
payment of principal of, or premium on, the Class A-2 Certificates, or principal
of, or interest or premium on, the Class A-1 Certificates, the Class B
Certificates or the Class C Certificates, (iii) was computed in accordance with
the provisions of the Class A-2 Certificates, the Class A-2 Trust Agreement and
the Intercreditor Agreement (a copy of which computation is attached hereto as
Schedule I) and (iv) has not been and is not the subject of a prior or
contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class A-2
Cash Collateral Account and apply the same in accordance with the terms of
Sections 3.06(f) and 3.06(i) of the Intercreditor Agreement, (b) no portion of
such amount shall be applied by the Borrower for any other purpose and (c) no
portion of such amount until so applied shall be commingled with other funds
held by the Borrower.
[(5) The Borrower hereby requests that the Advance requested hereby be
a Base Rate Advance [and that such Base Rate Advance be converted into a LIBOR
Advance on the third Business Day following your receipt of this notice]*.]
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Final Advance as requested by this Notice of
Borrowing shall automatically and irrevocably
IV-1
<PAGE> 44
terminate the obligation of the Liquidity Provider to make further Advances
under the Liquidity Agreement and (B) following the making by the Liquidity
Provider of the Final Advance requested by this Notice of Borrowing, the
Borrower shall not be entitled to request any further Advances under the
Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of _________, ____.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Subordination Agent, as Borrower
By:
-----------------------------------
Name:
Title:
[* Bracketed language may be included at Borrower's option.]
IV-2
<PAGE> 45
SCHEDULE I TO FINAL ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Final
Advance Notice of Borrowing]
IV-3
<PAGE> 46
ANNEX V to
REVOLVING CREDIT AGREEMENT
NOTICE OF TERMINATION
[Date]
State Street Bank and Trust Company of Connecticut, National Association,
as Subordination Agent, as Borrower
225 Asylum Street, Goodwin Square
Hartford, Connecticut 06103
Attention: Corporate Trust Division
Re: Revolving Credit Agreement, dated as of October 6, 1999, between State
Street Bank and Trust Company of Connecticut, National Association, as
Subordination Agent, as agent and trustee for the American Airlines
Pass Through Trust 1999-1A-2, as Borrower, and Bayerische Landesbank
Girozentrale (the "Liquidity Agreement")
Ladies and Gentlemen:
You are hereby notified that pursuant to Section 6.01 of the Liquidity
Agreement, by reason of the occurrence and continuance of a Liquidity Event of
Default and the existence of a Performing Note Deficiency (each as defined
therein), we are giving this notice to you in order to cause (i) our obligations
to make Advances (as defined therein) under such Liquidity Agreement to
terminate at the close of business on the fifth Business Day after the date on
which you receive this notice and (ii) you to request a Final Advance under the
Liquidity Agreement pursuant to Section 3.06(i) of the Intercreditor Agreement
(as defined in the Liquidity Agreement) as a consequence of your receipt of this
notice.
THIS NOTICE IS THE "NOTICE OF TERMINATION" PROVIDED FOR UNDER THE
LIQUIDITY AGREEMENT. OUR OBLIGATIONS TO MAKE ADVANCES UNDER THE LIQUIDITY
AGREEMENT WILL TERMINATE AT THE CLOSE OF BUSINESS ON THE FIFTH BUSINESS DAY
AFTER THE DATE ON WHICH YOU RECEIVE THIS NOTICE.
Very truly yours,
Bayerische Landesbank Girozentrale,
as Liquidity Provider
By:
---------------------------------
Name:
Title:
cc: State Street Bank and Trust Company of Connecticut,
National Association, as Class A-2 Trustee
V-1
<PAGE> 47
ANNEX VI to
REVOLVING CREDIT AGREEMENT
NOTICE OF REPLACEMENT SUBORDINATION AGENT
[Date]
Attention:
Re: Revolving Credit Agreement, dated as of October 6, 1999, between State
Street Bank and Trust Company of Connecticut, National Association, as
Subordination Agent, as agent and trustee for the American Airlines
Pass Through Trust 1999-1A-2, as Borrower, and Bayerische Landesbank
Girozentrale (the "Liquidity Agreement")
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
------------------------------
[Name of Transferee]
------------------------------
[Address of Transferee]
all rights and obligations of the undersigned as Borrower under the Liquidity
Agreement referred to above. The transferee has succeeded the undersigned as
Subordination Agent under the Intercreditor Agreement referred to in the first
paragraph of the Liquidity Agreement, pursuant to the terms of Section 7.01 of
the Intercreditor Agreement.
By this transfer, all rights of the undersigned as Borrower under the
Liquidity Agreement are transferred to the transferee and the transferee shall
hereafter have the sole rights and obligations as Borrower thereunder. The
undersigned shall pay any costs and expenses of such transfer, including, but
not limited to, transfer taxes or governmental charges.
This transfer shall be effective as of [specify time and date].
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Subordination Agent, as Borrower
By:
-----------------------------------
Name:
Title:
VI-1
<PAGE> 1
EXHIBIT 4(c)3
================================================================================
REVOLVING CREDIT AGREEMENT
(1999-1B)
Dated as of October 6, 1999
between
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
as Subordination Agent,
as agent and trustee for the trustee of
American Airlines Pass Through Trust 1999-1B
as Borrower
and
BAYERISCHE LANDESBANK GIROZENTRALE,
as Liquidity Provider
================================================================================
American Airlines Pass Through Trust 1999-1B
7.324% American Airlines
Pass Through Certificates,
Series 1999-1B
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
DEFINITIONS
Section 1.01 Definitions ............................................................ 1
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01 The Advances ........................................................... 8
Section 2.02 Making of Advances ..................................................... 8
Section 2.03 Fees ................................................................... 10
Section 2.04 Reduction or Termination of the Maximum Commitment ..................... 10
Section 2.05 Repayments of Interest Advances or the Final Advance.................... 11
Section 2.06 Repayments of Provider Advances ........................................ 11
Section 2.07 Payments to the Liquidity Provider Under the Intercreditor Agreement ... 12
Section 2.08 Book Entries ........................................................... 13
Section 2.09 Payments from Available Funds Only...................................... 13
Section 2.10 Extension of the Expiry Date; Non-Extension Advance .................... 13
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01 Increased Costs ........................................................ 14
Section 3.02 [Intentionally omitted] ................................................ 15
Section 3.03 Withholding Taxes....................................................... 15
Section 3.04 Payments................................................................ 16
Section 3.05 Computations ........................................................... 16
Section 3.06 Payment on Non-Business Days ........................................... 17
Section 3.07 Interest................................................................ 17
Section 3.08 Replacement of Borrower ................................................ 18
Section 3.09 Funding Loss Indemnification ........................................... 18
Section 3.10 Illegality ............................................................. 19
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01 Conditions Precedent to Effectiveness of Section 2.01 .................. 19
Section 4.02 Conditions Precedent to Borrowing ...................................... 21
ARTICLE V
COVENANTS
Section 5.01 Affirmative Covenants of the Borrower .................................. 21
Section 5.02 Negative Covenants of the Borrower...................................... 21
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01 Liquidity Events of Default ............................................ 22
ARTICLE VII
MISCELLANEOUS
Section 7.01 No Oral Modification or Continuing Waivers.............................. 22
Section 7.02 Notices, Etc ........................................................... 22
Section 7.03 No Waiver; Remedies .................................................... 24
Section 7.04 Further Assurances ..................................................... 24
Section 7.05 Indemnification; Survival of Certain Provisions ........................ 24
Section 7.06 Liability of the Liquidity Provider..................................... 24
Section 7.07 Certain Costs and Expenses.............................................. 25
Section 7.08 Binding Effect; Participations ......................................... 25
Section 7.09 Severability ........................................................... 26
Section 7.10 Governing Law .......................................................... 27
Section 7.11 Submission to Jurisdiction; Waiver of Jury Trial; Waiver of Immunity ... 27
Section 7.12 Counterparts ........................................................... 27
Section 7.13 Entirety................................................................ 28
Section 7.14 Headings................................................................ 28
Section 7.15 Liquidity Provider's Obligation to Make Advances ....................... 28
</TABLE>
Annex I - Interest Advance Notice of Borrowing
Annex II - Non-Extension Advance Notice of Borrowing
Annex III - Downgrade Advance Notice of Borrowing
Annex IV - Final Advance Notice of Borrowing
Annex V - Notice of Termination
Annex VI - Notice of Replacement Subordination Agent
ii
<PAGE> 4
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT, dated as of October 6, 1999, is made
by and between STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, a national banking association, not in its individual capacity but
solely as Subordination Agent (such term and other capitalized terms used herein
without definition being defined as provided in Article I) under the
Intercreditor Agreement (as defined below), as agent and trustee for the Class B
Trustee (in such capacity, together with its successors in such capacity, the
"Borrower"), and BAYERISCHE LANDESBANK GIROZENTRALE, a public law banking
institution organized under the laws of the Free State of Bavaria, Germany (the
"Liquidity Provider").
WITNESSETH:
WHEREAS, pursuant to the Class B Trust Agreement, the Class B Trust is
issuing the Class B Certificates; and
WHEREAS, the Borrower, in order to support the timely payment of a
portion of the interest on the Class B Certificates in accordance with their
terms, has requested the Liquidity Provider to enter into this Agreement,
providing in part for the Borrower to request in specified circumstances that
Advances be made hereunder;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and of other good and valuable consideration the receipt and adequacy
of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. (a) The definitions stated herein apply
equally to both the singular and the plural forms of the terms defined.
(b) All references in this Agreement to designated "Articles",
"Sections", "Annexes" and other subdivisions are to the designated Article,
Section, Annex or other subdivision of this Agreement, unless otherwise
specifically stated.
(c) The words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to any
particular Article, Section, Annex or other subdivision.
1
<PAGE> 5
(d) Unless the context otherwise requires, whenever the words
"including", "include" or "includes" are used herein, it shall be deemed to be
followed by the phrase "without limitation".
(e) For the purposes of this Agreement, unless the context
otherwise requires, the following capitalized terms shall have the following
meanings:
"Advance" means an Interest Advance, a Final Advance, a Provider
Advance, an Applied Provider Advance or an Unpaid Advance, as the case may be.
"Agreement" means this Agreement, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Applicable Liquidity Rate" has the meaning specified in Section
3.07(g).
"Applicable Margin" means with respect to any Unpaid Advance or Applied
Provider Advance, 1.75 %.
"Applied Downgrade Advance" has the meaning specified in Section
2.06(a).
"Applied Non-Extension Advance" has the meaning specified in Section
2.06(a).
"Applied Provider Advance" means an Applied Downgrade Advance or an
Applied Non-Extension Advance.
"Base Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for each
day in the period for which the Base Rate is to be determined (or, if such day
is not a Business Day, for the preceding Business Day) by the Federal Reserve
Bank of New York, or if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day for such transactions
received by the Liquidity Provider from three Federal funds brokers of
recognized standing selected by it (and reasonably satisfactory to American)
plus one-quarter of one percent (0.25%).
"Base Rate Advance" means an Advance that bears interest at a rate
based upon the Base Rate.
"Borrower" has the meaning specified in the introductory paragraph to
this Agreement.
"Borrowing" means the making of Advances requested by delivery of a
Notice of Borrowing.
2
<PAGE> 6
"Business Day" means any day other than a Saturday, a Sunday or a day
on which commercial banks are required or authorized to close in New York, New
York, Dallas, Texas, or, so long as any Class B Certificate is outstanding, the
city and state in which the Class B Trustee, the Borrower or any related Loan
Trustee maintains its Corporate Trust Office or receives or disburses funds,
and, if the applicable Business Day relates to any Advance or other amount
bearing interest based on the LIBOR Rate, on which dealings are carried on in
the London interbank market.
"Consent Notice" has the meaning specified in Section 2.10.
"Consent Period" has the meaning specified in Section 2.10.
"Covered Taxes" means any Taxes imposed by the United States or any
political subdivision or taxing authority thereof or therein required by law to
be deducted or withheld from any amounts payable to the Liquidity Provider under
this Agreement other than (i) any Tax on, based on or measured by net income,
franchises or conduct of business, (ii) any Tax imposed, levied, withheld or
assessed as a result of any connection between the Liquidity Provider and the
United States or such political subdivision or taxing authority, other than a
connection arising solely from the Liquidity Provider's having executed,
delivered, performed its obligations or received a payment under, or enforced,
any Operative Agreement, (iii) any Tax attributable to the inaccuracy in or
breach by the Liquidity Provider of any of its representations, warranties or
covenants contained in any Operative Agreement to which it is a party or the
inaccuracy of any form or document furnished pursuant thereto, (iv) any
withholding Taxes imposed by the United States except to the extent such
withholding Taxes would not have been required to be deducted or withheld from
payments hereunder but for a change after the date hereof in the income tax
treaty between the United States and Germany or a change in the Code that
overrides the provisions of such treaty or (v) any change in the Lending Office
without the prior written consent of American (such consent not to be
unreasonably withheld).
"Downgrade Advance" means an Advance made pursuant to Section 2.02(c).
"Effective Date" has the meaning specified in Section 4.01. The
delivery of the certificate of the Liquidity Provider contemplated by Section
4.01(f) shall be conclusive evidence that the Effective Date has occurred.
"Expenses" means liabilities, losses, damages, costs and expenses
(including, without limitation, reasonable fees and disbursements of legal
counsel), provided that Expenses shall not include any Taxes other than sales,
use and V.A.T. taxes imposed on fees and expenses payable pursuant to Section
7.07.
"Expiry Date" means October 4, 2000, initially, or any date to which
the Expiry Date is extended pursuant to Section 2.10.
"Final Advance" means an Advance made pursuant to Section 2.02(d).
3
<PAGE> 7
"Increased Cost" has the meaning specified in Section 3.01.
"Intercreditor Agreement" means the Intercreditor Agreement, dated as
of the date hereof, among the Trustees, the Liquidity Provider, the liquidity
provider under each Liquidity Facility (other than this Agreement) and the
Subordination Agent, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Interest Advance" means an Advance made pursuant to Section 2.02(a).
"Interest Period" means, with respect to any LIBOR Advance, each of the
following periods:
(i) the period beginning on the third Business Day following
either (A) the Liquidity Provider's receipt of the Notice of Borrowing
for such LIBOR Advance or (B) the date of the withdrawal of funds from
the Class B Cash Collateral Account for the purpose of paying interest
on the Class B Certificates as contemplated by Section 2.06(a) hereof
and, in each case, ending on the next Regular Distribution Date; and
(ii) each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the next Regular
Distribution Date;
provided, however, that if (x) the Final Advance shall have been made pursuant
to Section 2.02(d) or (y) other outstanding Advances shall have been converted
into the Final Advance pursuant to Section 6.01, then the Interest Periods shall
be successive periods of one month beginning on the third Business Day following
the Liquidity Provider's receipt of the Notice of Borrowing for such Final
Advance (in the case of clause (x) above) or the Regular Distribution Date
following such conversion (in the case of clause (y) above).
"Lending Office" means the lending office of the Liquidity Provider
presently located at Munich, Germany, or such other lending office as the
Liquidity Provider from time to time shall notify the Borrower as its lending
office hereunder; provided that the Liquidity Provider shall not change its
Lending Office without the prior written consent of American (such consent not
to be unreasonably withheld).
"LIBOR Advance" means an Advance bearing interest at a rate based upon
the LIBOR Rate.
"LIBOR Rate" means, with respect to any Interest Period, (a) the
interest rate per annum equal to the rate per annum at which deposits in Dollars
are offered in the London interbank market as shown on Page 3750 of the Telerate
Systems Incorporated screen service (or such other page as may replace Telerate
Page 3750), or if such service is not available, Page LIBO of the Reuters Money
Service Monitor System (or such other page as may replace Reuters Page LIBO) at
approximately 11:00 a.m. (London time) on the day that is two Business Days
prior to the first day of such Interest Period, for a period comparable to such
Interest Period, or (b) if no such rate is published on either such service or
if neither of such services is then available, the interest rate per
4
<PAGE> 8
annum equal to the average (rounded up, if necessary, to the nearest 1/100th of
1%) of the rates at which deposits in Dollars are offered by the Reference Banks
(or, if fewer than all of the Reference Banks are quoting a rate for deposits in
Dollars for the applicable period and amount, such fewer number of Reference
Banks) at approximately 11:00 a.m. (London time) on the day that is two Business
Days prior to the first day of such Interest Period to prime banks in the London
interbank market for a period comparable to such Interest Period and in an
amount approximately equal to the principal amount of the LIBOR Advance to be
outstanding during such Interest Period, or (c) if none of the Reference Banks
is quoting a rate for deposits in Dollars in the London interbank market for
such a period and amount, the interest rate per annum equal to the average
(rounded up, if necessary, to the nearest 1/100th of 1%) of the rates at which
deposits in Dollars are offered by the principal New York offices of the
Reference Banks (or, if fewer than all of the Reference Banks are quoting a rate
for deposits in Dollars in the New York interbank market for the applicable
period and amount, such fewer number of Reference Banks) at approximately 11:00
a.m. (New York time) on the day that is two Business Days prior to the first day
of such Interest Period to prime banks in the New York interbank market for a
period comparable to such Interest Period and in an amount approximately equal
to the principal amount of the LIBOR Advance to be outstanding during such
Interest Period, or (d) if none of the principal New York offices of the
Reference Banks is quoting a rate for deposits in Dollars in the New York
interbank market for the applicable period and amount, the Base Rate.
"Liquidity Event of Default" means the occurrence of either (a) the
Acceleration of all of the Equipment Notes or (b) an American Bankruptcy Event.
"Liquidity Indemnitee" means the Liquidity Provider, its directors,
officers, employees and agents, and its successors and permitted assigns.
"Liquidity Provider" has the meaning specified in the introductory
paragraph to this Agreement.
"Maximum Available Commitment" means, subject to the proviso contained
in the third sentence of Section 2.02(a), at any time of determination, (a) the
Maximum Commitment at such time less (b) the aggregate amount of each Interest
Advance outstanding at such time; provided that following a Provider Advance or
a Final Advance, the Maximum Available Commitment shall be zero.
"Maximum Commitment" means initially $9,440,682.00, as the same may be
reduced from time to time in accordance with Section 2.04(a).
"Non-Extension Advance" means an Advance made pursuant to Section
2.02(b).
"Notice of Borrowing" has the meaning specified in Section 2.02(e).
"Notice of Replacement Subordination Agent" has the meaning specified
in Section 3.08.
5
<PAGE> 9
"Participation" has the meaning specified in Section 7.08(b).
"Performing Note Deficiency" means any time that less than 65% of the
then aggregate outstanding principal amount of all Equipment Notes are
Performing Equipment Notes.
"Permitted Transferee" means any Person that:
(a) is not a commercial air carrier, American or any affiliate of
American; and
(b) is any one of:
(1) a commercial banking institution organized under the
laws of the United States or any state thereof or the District of
Columbia;
(2) a commercial banking institution that (x) is organized
under the laws of France, Germany, The Netherlands, Switzerland
or the United Kingdom, (y) is entitled on the date it acquires
any Participation to a complete exemption from United States
federal income taxes for all income derived by it from the
transactions contemplated by the Operative Agreements under an
income tax treaty, as in effect on such date, between the United
States and such jurisdiction of its organization and (z) is
engaged in the active conduct of a banking business in such
jurisdiction of its organization, holds its Participation in
connection with such banking business in such jurisdiction and is
regulated as a commercial banking institution by the appropriate
regulatory authorities in such jurisdiction; or
(3) a commercial banking institution that (x) is organized
under the laws of Canada, France, Germany, Ireland, Japan,
Luxembourg, The Netherlands, Sweden, Switzerland or the United
Kingdom and (y) is entitled on the date it acquires any
Participation to a complete exemption from withholding of United
States federal income taxes for all income derived by it from the
transactions contemplated by the Operative Agreements under laws
as in effect on such date by reason of such income being
effectively connected with the conduct of a trade or business
within the United States.
"Prospectus Supplement" means the Prospectus Supplement dated September
23, 1999, relating to the Certificates, as such Prospectus Supplement may be
amended or supplemented.
"Provider Advance" means a Downgrade Advance or a Non-Extension
Advance.
"Reference Banks" means the principal London offices of: National
Westminster Bank, plc; Morgan Guaranty Trust Company of New York; The Chase
Manhattan Bank; Citibank, N.A.; and such other or additional banking
institutions as may be designated from time to time by mutual agreement of
American and the Liquidity Provider.
6
<PAGE> 10
"Regulatory Change" means the enactment, adoption or promulgation,
after the date of this Agreement, of any law or regulation by a United States
federal or state government or by the government of the Liquidity Provider's
jurisdiction of organization, or any change, after the date of this Agreement,
in any such law or regulation, or in the interpretation thereof by any
governmental authority, central bank or comparable agency of the United States
or the Liquidity Provider's jurisdiction of organization charged with
responsibility for the administration or application thereof, that shall impose,
modify or deem applicable (a) any reserve, special deposit or similar
requirement against extensions of credit or other assets of, or deposits with or
other liabilities of, the Liquidity Provider including, or by reason of, the
Advances or (b) any capital adequacy requirement requiring the maintenance by
the Liquidity Provider of additional capital in respect of any Advances or the
Liquidity Provider's obligation to make any such Advances.
"Replenishment Amount" has the meaning specified in Section 2.06(b).
"Required Amount" means, for any day, the sum of the aggregate amount
of interest, calculated at the rate per annum equal to the Stated Interest Rate
for the Class B Certificates on the basis of a 360-day year comprised of twelve
30-day months, that would be payable on the Class B Certificates on each of the
three successive semiannual Regular Distribution Dates immediately following
such day or, if such day is a Regular Distribution Date, on such day and the
succeeding two semiannual Regular Distribution Dates, in each case calculated on
the basis of the Pool Balance of the Class B Certificates on such day and
without regard to expected future distributions of principal on the Class B
Certificates.
"Termination Date" means the earliest to occur of the following: (i)
the Expiry Date; (ii) the date on which the Borrower delivers to the Liquidity
Provider a certificate, signed by a Responsible Officer of the Borrower,
certifying that all of the Class B Certificates have been paid in full (or
provision has been made for such payment in accordance with the Intercreditor
Agreement and the Class B Trust Agreement) or are otherwise no longer entitled
to the benefits of this Agreement; (iii) the date on which the Borrower delivers
to the Liquidity Provider a certificate, signed by a Responsible Officer of the
Borrower, certifying that a Replacement Liquidity Facility has been substituted
for this Agreement in full pursuant to Section 3.06(e) of the Intercreditor
Agreement; (iv) the fifth Business Day following the receipt by the Borrower of
a Termination Notice from the Liquidity Provider pursuant to Section 6.01; and
(v) the date on which no Advance is or may (including by reason of reinstatement
as herein provided) become available for a Borrowing hereunder.
"Termination Notice" means the Notice of Termination substantially in
the form of Annex V to this Agreement.
"Unapplied Provider Advance" means any Provider Advance other than an
Applied Provider Advance.
"Unpaid Advance" has the meaning specified in Section 2.05.
7
<PAGE> 11
"Withdrawal Notice" has the meaning specified in Section 2.10.
(e) For the purposes of this Agreement, the following terms shall have
the respective meanings specified in the Intercreditor Agreement:
"Acceleration", "American", "American Bankruptcy Event", "Certificate",
"Class A-1 Certificates", "Class A-2 Certificates", "Class B Certificates",
"Class B Cash Collateral Account", "Class B Certificates", "Class B
Certificateholders", "Class B Trust", "Class B Trust Agreement", "Class B
Trustee", "Class C Certificates", "Closing Date", "Collection Account",
"Controlling Party", "Corporate Trust Office", "Distribution Date", "Dollars",
"Downgraded Facility", "Equipment Notes", "Fee Letter", "Final Legal
Distribution Date", "Indenture", "Interest Payment Date", "Investment Earnings",
"Liquidity Facility", "Liquidity Obligations", "Loan Trustee", "Moody's",
"Non-Extended Facility", "Operative Agreements", "Participation Agreements",
"Performing Equipment Note", "Person", "Pool Balance", "Rating Agencies",
"Ratings Confirmation", "Regular Distribution Date", "Replacement Liquidity
Facility", "Responsible Officer", "Scheduled Payment", "Special Payment", "S&P",
"Stated Interest Rate", "Subordination Agent", "Taxes", "Threshold Rating",
"Trust Agreement", "Trustee", "Underwriters", "Underwriting Agreement", "United
States" and "Written Notice".
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. The Advances. The Liquidity Provider hereby irrevocably
agrees, on the terms and conditions hereinafter set forth, to make Advances to
the Borrower from time to time on any Business Day during the period from the
Effective Date until 12:00 noon (New York City time) on the Expiry Date (unless
the obligations of the Liquidity Provider shall be earlier terminated in
accordance with the terms of Section 2.04(b)) in an aggregate amount at any time
outstanding not to exceed the Maximum Commitment.
Section 2.02. Making of Advances. (a) Each Interest Advance shall be
made by the Liquidity Provider upon delivery to the Liquidity Provider of a
written and completed Notice of Borrowing in substantially the form of Annex I,
signed by a Responsible Officer of the Borrower, such Interest Advance to be in
an amount not exceeding the Maximum Available Commitment at such time and used
solely for the payment when due of interest with respect to the Class B
Certificates at the Stated Interest Rate therefor in accordance with Section
3.06(a) and 3.06(b) of the Intercreditor Agreement. Each Interest Advance made
hereunder shall automatically reduce the Maximum Available Commitment and the
amount available to be borrowed hereunder by subsequent Advances by the amount
of such Interest Advance (subject to reinstatement as provided in the next
sentence). Upon repayment to the Liquidity Provider in full or in part of the
amount of any Interest Advance made pursuant to this Section 2.02(a), together
with accrued interest thereon (as provided herein), the Maximum Available
Commitment shall be reinstated by an amount equal
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to the amount of such Interest Advance so repaid, but not to exceed the Maximum
Commitment; provided, however, that the Maximum Available Commitment shall not
be so reinstated at any time if (x) both a Performing Note Deficiency exists and
a Liquidity Event of Default shall have occurred and be continuing or (y) a
Final Drawing shall have occurred.
(b) Subject to Section 2.10, a Non-Extension Advance shall be made by
the Liquidity Provider if this Agreement is not extended in accordance with
Section 3.06(d) of the Intercreditor Agreement (unless a Replacement Liquidity
Facility to replace this Agreement shall have been delivered to the Borrower as
contemplated by said Section 3.06(d) within the time period specified in such
Section 3.06(d)) upon delivery to the Liquidity Provider of a written and
completed Notice of Borrowing in substantially the form of Annex II, signed by a
Responsible Officer of the Borrower, in an amount equal to the Maximum Available
Commitment at such time, and shall be used to fund the Class B Cash Collateral
Account in accordance with Sections 3.06(d) and 3.06(f) of the Intercreditor
Agreement.
(c) A Downgrade Advance shall be made by the Liquidity Provider if at
any time the short-term unsecured debt rating of the Liquidity Provider issued
by either Rating Agency (or if the Liquidity Provider does not have a short-term
unsecured debt rating issued by a given Rating Agency, the long-term unsecured
debt rating of the Liquidity Provider issued by such Rating Agency) is lower
than the applicable Threshold Rating (as provided for in Section 3.06(c) of the
Intercreditor Agreement) unless a Replacement Liquidity Facility to replace this
Agreement shall have been previously delivered to the Borrower in accordance
with said Section 3.06(c), upon delivery to the Liquidity Provider of a written
and completed Notice of Borrowing in substantially the form of Annex III, signed
by a Responsible Officer of the Borrower, in an amount equal to the Maximum
Available Commitment at such time, and shall be used to fund the Class B Cash
Collateral Account in accordance with Sections 3.06(c) and 3.06(f) of the
Intercreditor Agreement.
(d) A Final Advance shall be made by the Liquidity Provider following
the receipt by the Borrower of a Termination Notice from the Liquidity Provider
pursuant to Section 6.01 upon delivery to the Liquidity Provider of a written
and completed Notice of Borrowing in substantially the form of Annex IV, signed
by a Responsible Officer of the Borrower, in an amount equal to the Maximum
Available Commitment at such time, and shall be used to fund the Class B Cash
Collateral Account (in accordance with Sections 3.06(f) and 3.06(i) of the
Intercreditor Agreement).
(e) Each Borrowing shall be made on notice in writing (a "Notice of
Borrowing") in substantially the form required by Section 2.02(a), 2.02(b),
2.02(c) or 2.02(d), as the case may be, given by the Borrower to the Liquidity
Provider. If a Notice of Borrowing is delivered by the Borrower in respect of
any Borrowing no later than 1:00 p.m. (New York City time) on a Business Day,
upon satisfaction of the conditions precedent set forth in Section 4.02 with
respect to a requested Borrowing, the Liquidity Provider shall make available to
the Borrower, in accordance with its payment instructions, the amount of such
Borrowing in Dollars and immediately available funds, before 4:00 p.m. (New York
City time) on such Business Day or before 1:00 p.m. (New York City time) on such
later Business Day specified in such Notice of Borrowing. If a Notice of
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Borrowing is delivered by the Borrower in respect of any Borrowing after 1:00
p.m. (New York City time) on a Business Day, upon satisfaction of the conditions
precedent set forth in Section 4.02 with respect to a requested Borrowing, the
Liquidity Provider shall make available to the Borrower, in accordance with its
payment instructions, the amount of such Borrowing in Dollars and immediately
available funds, before 1:00 p.m. (New York City time) on the first Business Day
next following the day of receipt of such Notice of Borrowing or on such later
Business Day specified by the Borrower in such Notice of Borrowing. Payments of
proceeds of a Borrowing shall be made by wire transfer of immediately available
funds to the Borrower in accordance with such wire transfer instructions as the
Borrower shall furnish from time to time to the Liquidity Provider for such
purpose. Each Notice of Borrowing shall be irrevocable and binding on the
Borrower. Each Notice of Borrowing shall be effective upon delivery of a copy
thereof to the Liquidity Provider's New York branch at the address specified in
Section 7.02 hereof.
(f) Upon the making of any Advance requested pursuant to a Notice of
Borrowing in accordance with the Borrower's payment instructions, the Liquidity
Provider shall be fully discharged of its obligation hereunder with respect to
such Notice of Borrowing, and the Liquidity Provider shall not thereafter be
obligated to make any further Advances hereunder in respect of such Notice of
Borrowing to the Borrower or to any other Person (including the Trustee or any
Class B Certificateholder). If the Liquidity Provider makes an Advance requested
pursuant to a Notice of Borrowing before 12:00 noon (New York City time) on the
second Business Day after the date of payment specified in said Section 2.02(e),
the Liquidity Provider shall have fully discharged its obligations hereunder
with respect to such Advance and an event of default shall not have occurred
hereunder. Following the making of any Advance pursuant to Section 2.02(b),
2.02(c) or 2.02(d) to fund the Class B Cash Collateral Account, the Liquidity
Provider shall have no interest in or rights to the Class B Cash Collateral
Account, such Advance or any other amounts from time to time on deposit in the
Class B Cash Collateral Account; provided that the foregoing shall not affect or
impair the obligations of the Subordination Agent to make the distributions
contemplated by Section 3.06(e) or 3.06(f) of the Intercreditor Agreement and
provided further, that the foregoing shall not affect or impair the rights of
the Liquidity Provider to provide written instructions with respect to the
investment and reinvestment of amounts in the Class B Cash Collateral Account to
the extent provided in Section 2.02(b) of the Intercreditor Agreement. By paying
to the Borrower proceeds of Advances requested by the Borrower in accordance
with the provisions of this Agreement, the Liquidity Provider makes no
representation as to, and assumes no responsibility for, the correctness or
sufficiency for any purpose of the amount of the Advances so made and requested.
Section 2.03. Fees. The Borrower agrees to pay to the Liquidity
Provider the fees set forth in the Fee Letter.
Section 2.04. Reduction or Termination of the Maximum Commitment. (a)
Automatic Reduction. Promptly following each date on which the Required Amount
is reduced as a result of a reduction in the Pool Balance of the Class B
Certificates or otherwise, the Maximum Commitment shall automatically be reduced
to an amount equal to such reduced Required Amount (as calculated by the
Borrower). The Borrower shall give notice of any such automatic reduction of the
Maximum
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Commitment to the Liquidity Provider and American within two Business Days
thereof. The failure by the Borrower to furnish any such notice shall not affect
such automatic reduction of the Maximum Commitment.
(b) Termination. Upon the making of any Provider Advance or Final
Advance hereunder or the occurrence of the Termination Date, the obligation of
the Liquidity Provider to make further Advances hereunder shall automatically
and irrevocably terminate, and the Borrower shall not be entitled to request any
further Borrowing hereunder.
Section 2.05. Repayments of Interest Advances or the Final Advance.
Subject to Sections 2.06, 2.07 and 2.09 hereof, the Borrower hereby agrees,
without notice of an Advance or demand for repayment from the Liquidity Provider
(which notice and demand are hereby waived by the Borrower), to pay, or to cause
to be paid, to the Liquidity Provider (a) on each date on which the Liquidity
Provider shall make an Interest Advance or the Final Advance, an amount equal to
the amount of such Advance (any such Advance, until repaid, is referred to
herein as an "Unpaid Advance"), plus (b) interest on the amount of each such
Unpaid Advance in the amounts and on the dates determined as provided in Section
3.07; provided that if (i) the Liquidity Provider shall make a Provider Advance
at any time after making one or more Interest Advances which shall not have been
repaid in accordance with this Section 2.05 or (ii) this Liquidity Facility
shall become a Downgraded Facility or Non-Extended Facility at any time when
unreimbursed Interest Advances have reduced the Maximum Available Commitment to
zero, then such Interest Advances shall cease to constitute Unpaid Advances and
shall be deemed to have been changed into an Applied Downgrade Advance or an
Applied Non-Extension Advance, as the case may be, for all purposes of this
Agreement (including, without limitation, for the purpose of determining when
such Interest Advance is required to be repaid to the Liquidity Provider in
accordance with Section 2.06 and for the purposes of Section 2.06(b)). The
Borrower and the Liquidity Provider agree that the repayment in full of each
Interest Advance and Final Advance on the date such Advance is made is intended
to be a contemporaneous exchange for new value given to the Borrower by the
Liquidity Provider. For the avoidance of doubt, interest payable on an Interest
Advance or the Final Advance shall not be regarded as overdue unless such
interest is not paid when due under Section 3.07.
Section 2.06. Repayments of Provider Advances. (a) Amounts advanced
hereunder in respect of a Provider Advance shall be deposited in the Class B
Cash Collateral Account and invested and withdrawn from the Class B Cash
Collateral Account as set forth in Sections 3.06(c), 3.06(d), 3.06(e) and
3.06(f) of the Intercreditor Agreement. Subject to Sections 2.07 and 2.09, the
Borrower agrees to pay to the Liquidity Provider, on each Regular Distribution
Date, commencing on the first Regular Distribution Date after the making of a
Provider Advance, interest on the principal amount of any such Provider Advance,
in the amounts determined as provided in Section 3.07; provided, however, that
amounts in respect of a Provider Advance withdrawn from the Class B Cash
Collateral Account for the purpose of paying interest on the Class B
Certificates in accordance with Section 3.06(f) of the Intercreditor Agreement
(the amount of any such withdrawal being (y) in the case of a Downgrade Advance,
an "Applied Downgrade Advance" and (z) in the case of a Non-Extension Advance,
an "Applied Non-Extension Advance" and, together with an Applied
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<PAGE> 15
Downgrade Advance, an "Applied Provider Advance") shall thereafter (subject to
Section 2.06(b)) be treated as an Interest Advance under this Agreement for
purposes of determining the Applicable Liquidity Rate for interest payable
thereon and the dates on which such interest is payable; provided further,
however, that if, following the making of a Provider Advance, the Liquidity
Provider delivers a Termination Notice to the Borrower pursuant to Section 6.01,
such Provider Advance shall thereafter be treated as a Final Advance under this
Agreement for purposes of determining the Applicable Liquidity Rate for interest
payable thereon and the dates on which such interest is payable. Subject to
Sections 2.07 and 2.09 hereof, immediately upon the withdrawal of any amounts
from the Class B Cash Collateral Account on account of a reduction in the
Required Amount, the Borrower shall repay to the Liquidity Provider a portion of
the Provider Advances in a principal amount equal to such reduction, plus
interest on the principal amount prepaid as provided in Section 3.07.
(b) At any time when an Applied Provider Advance (or any portion
thereof) is outstanding, upon the deposit in the Class B Cash Collateral Account
of any amount pursuant to clause "third" of Section 2.04(b) of the Intercreditor
Agreement, clause "third" of Section 3.02 of the Intercreditor Agreement or
clause "fourth" of Section 3.03 of the Intercreditor Agreement (any such amount
being a "Replenishment Amount") for the purpose of replenishing or increasing
the balance thereof up to the Required Amount at such time, (i) the aggregate
outstanding principal amount of all Applied Provider Advances (and of Provider
Advances treated as an Interest Advance for purposes of determining the
Applicable Liquidity Rate for interest payable thereon) shall be automatically
reduced by the amount of such Replenishment Amount and (ii) the aggregate
outstanding principal amount of all Unapplied Provider Advances shall be
automatically increased by the amount of such Replenishment Amount.
(c) Upon the provision of a Replacement Liquidity Facility in
replacement of this Agreement in accordance with Section 3.06(e) of the
Intercreditor Agreement, as provided in Section 3.06(f) of the Intercreditor
Agreement, amounts remaining on deposit in the Class B Cash Collateral Account
after giving effect to any Applied Provider Advance on the date of such
replacement shall be reimbursed to the Liquidity Provider, but only to the
extent such amounts are necessary to repay in full to the Liquidity Provider all
amounts owing to it hereunder.
Section 2.07. Payments to the Liquidity Provider Under the
Intercreditor Agreement. In order to provide for payment or repayment to the
Liquidity Provider of any amounts hereunder, the Intercreditor Agreement
provides that amounts available and referred to in Articles II and III of the
Intercreditor Agreement, to the extent payable to the Liquidity Provider
pursuant to the terms of the Intercreditor Agreement (including, without
limitation, Section 3.06(f) of the Intercreditor Agreement), shall be paid to
the Liquidity Provider in accordance with the terms thereof (but, for the
avoidance of doubt, without duplication of or increase in any amounts payable
hereunder). Amounts so paid to the Liquidity Provider shall be applied by the
Liquidity Provider in the order of priority required by the applicable
provisions of Articles II and III of the Intercreditor Agreement and shall
discharge in full the corresponding obligations of the Borrower hereunder.
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Section 2.08. Book Entries. The Liquidity Provider shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower resulting from Advances made from time to time and
the amounts of principal and interest payable hereunder and paid from time to
time in respect thereof; provided, however, that the failure by the Liquidity
Provider to maintain such account or accounts shall not affect the obligations
of the Borrower in respect of Advances.
Section 2.09. Payments from Available Funds Only. All payments to be
made by the Borrower under this Agreement shall be made only from the amounts
that constitute Scheduled Payments, Special Payments and other payments under
the Operative Agreements, including payment under Section 4.02 of the
Participation Agreements and payments under Section 2.14 of the Indentures, and
only to the extent that the Borrower shall have sufficient income or proceeds
therefrom to enable the Borrower to make payments in accordance with the terms
hereof after giving effect to the priority of payments provisions set forth in
the Intercreditor Agreement. The Liquidity Provider agrees that it will look
solely to such amounts to the extent available for distribution to it as
provided in the Intercreditor Agreement and this Agreement and that the
Borrower, in its individual capacity, is not personally liable to it for any
amounts payable or liability under this Agreement except as expressly provided
in this Agreement, the Intercreditor Agreement or any Participation Agreement.
Amounts on deposit in the Class B Cash Collateral Account shall be available to
the Borrower to make payments under this Agreement only to the extent and for
the purposes expressly contemplated in Section 3.06(f) of the Intercreditor
Agreement.
Section 2.10. Extension of the Expiry Date; Non-Extension Advance. If
the Expiry Date is prior to the date that is 15 days after the Final Legal
Distribution Date for the Class B Certificates, then no earlier than the 60th
day and no later than the 40th day prior to the then applicable Expiry Date, the
Borrower may request in writing that the Liquidity Provider extend the Expiry
Date to the earlier of (i) the date that is 15 days after the Final Legal
Distribution Date for the Class B Certificates and (ii) the date that is the day
immediately preceding the 364th day after the last day of the Consent Period
(unless the obligations of the Liquidity Provider hereunder are earlier
terminated in accordance herewith). The Liquidity Provider shall by notice (the
"Consent Notice") to the Borrower during the period commencing on the date that
is 60 days prior to the then effective Expiry Date and ending on the date that
is 25 days prior to the then effective Expiry Date (the "Consent Period") advise
the Borrower whether, in its sole discretion, it agrees to so extend the Expiry
Date; provided, however, that such extension shall not be effective with respect
to the Liquidity Provider if, by notice (the "Withdrawal Notice") to the
Borrower prior to the end of the Consent Period, the Liquidity Provider revokes
its Consent Notice. If the Liquidity Provider advises the Borrower in the
Consent Notice that such Expiry Date shall not be so extended, or gives a
Withdrawal Notice to the Borrower prior to the end of the Consent Period, or
fails to irrevocably and unconditionally advise the Borrower on or before the
end of the Consent Period that such Expiry Date shall be so extended (and, in
each case, if the Liquidity Provider shall not have been replaced in accordance
with Section 3.06(e) of the Intercreditor Agreement), the Borrower shall be
entitled on and after the date on which the Consent Period ends (but prior to
the then effective Expiry Date) to request a Non-Extension Advance in accordance
with Section 2.02(b) hereof and Section 3.06(d) of the Intercreditor
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Agreement. If any amounts shall be drawn pursuant to a Non-Extension Advance
and, within 30 days thereafter, the Liquidity Provider shall not have been
replaced, then at any time following the 30th day after such Non-Extension
Advance, the Liquidity Provider may, by written notice to the Borrower, agree to
reinstate the Liquidity Facility on the terms of the existing Liquidity Facility
for a period ending on the 364th day after the end of the Consent Period;
provided, however, that in such event the Liquidity Provider shall reimburse the
Borrower for any costs actually incurred by or on behalf of the Borrower in
drawing pursuant to the Non-Extension Advance and funding the Class B Cash
Collateral Account or otherwise in connection with the Non-Extension Advance.
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. Increased Costs. If as a result of any Regulatory Change
there shall be any increase by an amount reasonably deemed by the Liquidity
Provider to be material in the actual cost to the Liquidity Provider of making,
funding or maintaining any Advances or its obligation to make any such Advances
or there shall be any reduction by an amount reasonably deemed by the Liquidity
Provider to be material in the amount receivable by the Liquidity Provider under
this Agreement or the Intercreditor Agreement in respect thereof, and in case of
either such an increase or reduction, such event does not arise from the gross
negligence or willful misconduct of the Liquidity Provider, from its breach of
any of its representations, warranties, covenants or agreements contained herein
or in the Intercreditor Agreement or from its failure to comply with any such
Regulatory Change (any such increase or reduction being referred to herein as an
"Increased Cost"), then the Borrower shall from time to time pay to the
Liquidity Provider an amount equal to such Increased Cost within 15 Business
Days after delivery to the Borrower and American of a certificate of an officer
of the Liquidity Provider describing in reasonable detail the event by reason of
which it claims such Increased Cost and the basis for the determination of the
amount of such Increased Cost; provided that, the Borrower shall be obligated to
pay amounts only with respect to any Increased Costs accruing from the date 45
days prior to the date of delivery of such certificate. Such certificate, in the
absence of manifest error, shall be considered prima facie evidence of the
amount for purposes of this Agreement; provided that any determinations and
allocations by the Liquidity Provider of the effect of any Regulatory Change on
the costs of maintaining the Advances are made on a reasonable basis. The
Liquidity Provider shall not be entitled to assert any claim under this Section
3.01 in respect of or attributable to Taxes. The Liquidity Provider will notify
the Borrower and American as promptly as practicable of any event occurring
after the date of this Agreement that will entitle the Liquidity Provider to
compensation under this Section 3.01. The Liquidity Provider agrees to
investigate all commercially reasonable alternatives for reducing any Increased
Costs and to use all commercially reasonable efforts to avoid or minimize, to
the greatest extent possible, any claim in respect of Increased Costs,
including, without limitation, by designating a different Lending Office, if
such designation or other action would avoid the need for, or reduce the amount
of, any such claim; provided that the foregoing shall not obligate the Liquidity
Provider to take any action that would, in its reasonable judgment, cause the
Liquidity Provider to incur any material loss or cost, unless the Borrower or
American agrees to reimburse the Liquidity Provider therefor. If no such
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designation or other action is effected, or, if effected, fails to avoid the
need for any claim in respect of Increased Costs, American may arrange for a
Replacement Liquidity Facility in accordance with Section 3.06(e) of the
Intercreditor Agreement.
Notwithstanding the foregoing provisions, in no event shall the
Borrower be required to make payments under this Section 3.01: (a) in respect of
any Regulatory Change proposed by any applicable governmental authority
(including any branch of a legislature), central bank or comparable agency of
the United States or the Liquidity Provider's jurisdiction of organization and
pending as of the date of this Agreement (it being agreed that the consultative
paper issued by the Basel Committee on Banking Supervision entitled "A New
Capital Adequacy Framework" shall not be considered a Regulatory Change proposed
as of the date of this Agreement); (b) if a claim hereunder in respect of an
Increased Cost arises through circumstances peculiar to the Liquidity Provider
and that do not affect similarly organized commercial banking institutions in
the same jurisdiction generally that are in compliance with the law, rule,
regulation or interpretation giving rise to the Regulatory Change relating to
such Increased Cost; (c) if the Liquidity Provider shall fail to comply with its
obligations under this Section 3.01; or (d) if the Liquidity Provider is not
also seeking payment for similar increased costs in other similarly situated
transactions.
Section 3.02. [Intentionally omitted.]
Section 3.03. Withholding Taxes. (a) All payments made by the Borrower
under this Agreement shall be made without deduction or withholding for or on
account of any Taxes, unless such deduction or withholding is required by law.
If any Taxes are so required to be withheld or deducted from any amounts payable
to the Liquidity Provider under this Agreement, the Borrower shall pay to the
relevant authorities the full amount so required to be deducted or withheld and,
if such Taxes are Covered Taxes, pay to the Liquidity Provider such additional
amounts as shall be necessary to ensure that the net amount actually received by
the Liquidity Provider (after deduction or withholding of all Covered Taxes)
shall be equal to the full amount that would have been received by the Liquidity
Provider had no withholding or deduction of Covered Taxes been required. The
Liquidity Provider agrees to use reasonable efforts (consistent with applicable
legal and regulatory restrictions) to change the jurisdiction of its Lending
Office if making such change would avoid the need for, or reduce the amount of,
any such additional amounts that may thereafter accrue and would not, in the
reasonable judgment of the Liquidity Provider, be otherwise materially
disadvantageous to the Liquidity Provider. If the Liquidity Provider receives a
refund of, or realizes a net Tax benefit not otherwise available to it as a
result of, any Taxes for which additional amounts were paid by the Borrower
pursuant to this Section 3.03, the Liquidity Provider shall pay to the Borrower
(for deposit into the Collection Account) the amount of such refund (and any
interest thereon) or net benefit.
The Liquidity Provider will (i) provide (on its behalf and on behalf of
any participant holding a Participation pursuant to Section 7.08) to the
Borrower (x) on or prior to the Effective Date two valid completed and executed
copies of Internal Revenue Service Form W8-BEN, including thereon a valid U.S.
taxpayer identification number (or, with respect to any such participant, such
other form or documentation as may be applicable) covering all amounts
receivable by it in connection with the
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transactions contemplated by the Operative Agreements and (y) thereafter from
time to time such additional forms or documentation as may be necessary to
establish an available exemption from withholding of United States Tax on
payments hereunder so that such forms or documentation are effective for all
periods during which it is the Liquidity Provider and (ii) provide timely notice
to the Borrower if any such form or documentation is or becomes inaccurate. The
Liquidity Provider shall deliver to the Borrower such other forms or documents
as may be reasonably requested by the Borrower or required by applicable law to
establish that payments hereunder are exempt from or entitled to a reduced rate
of Covered Taxes.
(b) All payments (including, without limitation, Advances) made by the
Liquidity Provider under this Agreement shall be made free and clear of, and
without reduction for or on account of, any Taxes. If any Taxes are required to
be withheld or deducted from any amounts payable to the Borrower under this
Agreement, the Liquidity Provider shall (i) within the time prescribed therefor
by applicable law pay to the appropriate governmental or taxing authority the
full amount of any such Taxes (and any additional Taxes in respect of the
additional amounts payable under clause (ii) hereof) and make such reports or
returns in connection therewith at the time or times and in the manner
prescribed by applicable law, and (ii) pay to the Borrower an additional amount
which (after deduction of all such Taxes) will be sufficient to yield to the
Borrower the full amount which would have been received by it had no such
withholding or deduction been made. Within 30 days after the date of each
payment hereunder, the Liquidity Provider shall furnish to the Borrower the
original or a certified copy of (or other documentary evidence of) the payment
of the Taxes applicable to such payment.
If any exemption from, or reduction in the rate of, any Taxes required
to be borne by the Liquidity Provider under this Section 3.03(b) is reasonably
available to the Borrower without providing any information regarding the
holders or beneficial owners of the Certificates, the Borrower shall deliver the
Liquidity Provider such form or forms and such other evidence of the eligibility
of the Borrower for such exemption or reductions (but without any requirement to
provide any information regarding the holders or beneficial owners of the
Certificates) as the Liquidity Provider may reasonably identify to the Borrower
as being required as a condition to exemption from, or reduction in the rate of,
such Taxes.
Section 3.04. Payments. The Borrower shall make or cause to be made
each payment to the Liquidity Provider under this Agreement so as to cause the
same to be received by the Liquidity Provider not later than 1:00 P.M. (New York
City time) on the day when due. The Borrower shall make all such payments in
Dollars, to the Liquidity Provider in immediately available funds, by wire
transfer to First Union Bank International, Swift/BIC - Code: PNBPUS3N NYC
(Fedwire 0260 0509 2/CHIPS/ABA 0509) in favor of account number 2000 193534 122,
Bayerische Landesbank Girozentrale, Munich, Swift/BIC - Code: BYLADEMM,
Reference RCA American EETC 1999-1B.
Section 3.05. Computations. All computations of interest based on the
Base Rate shall be made on the basis of a year of 365 or 366 days, as the case
may be, and all computations of interest based on the LIBOR Rate shall be made
on the basis of a year of 360 days, in each case for the actual
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number of days (including the first day but excluding the last day) occurring in
the period for which such interest is payable.
Section 3.06. Payment on Non-Business Days. Whenever any payment to be
made hereunder shall be stated to be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day and no additional
interest shall be due as a result (and if so made, shall be deemed to have been
made when due). If any payment in respect of interest on an Advance is so
deferred to the next succeeding Business Day, such deferral shall not delay the
commencement of the next Interest Period for such Advance (if such Advance is a
LIBOR Advance) or reduce the number of days for which interest will be payable
on such Advance on the next interest payment date for such Advance.
Section 3.07. Interest. (a) Subject to Sections 2.07 and 2.09, the
Borrower shall pay, or shall cause to be paid, without duplication, interest on
(i) the unpaid principal amount of each Advance from and including the date of
such Advance (or, in the case of an Applied Provider Advance, from and including
the date on which the amount thereof was withdrawn from the Class B Cash
Collateral Account to pay interest on the Class B Certificates) to but excluding
the date such principal amount shall be paid in full (or, in the case of an
Applied Provider Advance, the date on which the Class B Cash Collateral Account
is fully replenished in respect of such Advance) and (ii) any other amount due
hereunder (whether fees, commissions, expenses or other amounts or, to the
extent permitted by law, installments of interest on Advances or any such other
amount) that is not paid when due (whether at stated maturity, by acceleration
or otherwise) from and including the due date thereof to but excluding the date
such amount is paid in full, in each such case, at the interest rate per annum
for each day equal to the Applicable Liquidity Rate (as defined below) for such
Advance or such other amount, as the case may be, as in effect for such day, but
in no event at a rate per annum greater than the maximum rate permitted by
applicable law, provided, however, that, if at any time the otherwise applicable
interest rate as set forth in this Section 3.07 shall exceed the maximum rate
permitted by applicable law, then to the maximum extent permitted by applicable
law any subsequent reduction in such interest rate will not reduce the rate of
interest payable pursuant to this Section 3.07 below the maximum rate permitted
by applicable law until the total amount of interest accrued equals the absolute
amount of interest that would have accrued (without additional interest thereon)
if such otherwise applicable interest rate as set forth in this Section 3.07 had
at all relevant times been in effect.
(b) Except as provided in Section 3.07(e), each Advance will be either
a Base Rate Advance or a LIBOR Advance as provided in this Section 3.07. Each
such Advance will be a Base Rate Advance for the period from the date of its
borrowing to (but excluding) the third Business Day following the Liquidity
Provider's receipt of the Notice of Borrowing for such Advance. Thereafter, such
Advance shall be a LIBOR Advance; provided that the Borrower (at the direction
of the Controlling Party, so long as the Liquidity Provider is not the
Controlling Party) may (x) convert the Final Advance into a Base Rate Advance on
the last day of an Interest Period for such Advance by giving the Liquidity
Provider no less than four Business Days' prior written notice of such election
or (y) elect to maintain the Final Advance as a Base Rate Advance by not
requesting a conversion
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of the Final Advance to a LIBOR Advance under Clause (5) of the applicable
Notice of Borrowing (or, if, pursuant to Section 2.06, such Final Advance is
deemed to have been made without delivery of a Notice of Borrowing, by
requesting, prior to 11:00 a.m. on the first Business Day immediately following
the Borrower's receipt of the applicable Termination Notice, that such Final
Advance not be converted from a Base Rate Advance to a LIBOR Advance).
(c) Each LIBOR Advance shall bear interest during each Interest Period
at a rate per annum equal to the LIBOR Rate for such Interest Period plus the
Applicable Margin for such LIBOR Advance, payable in arrears on the last day of
such Interest Period and, in the event of the payment of principal of such LIBOR
Advance on a day other than such last day, on the date of such payment (to the
extent of interest accrued on the amount of principal repaid).
(d) Each Base Rate Advance shall bear interest at a rate per annum
equal to the Base Rate plus the Applicable Margin for such Base Rate Advance,
payable in arrears on each Regular Distribution Date and, in the event of the
payment of principal of such Base Rate Advance on a day other than a Regular
Distribution Date, on the date of such payment (to the extent of interest
accrued on the amount of principal repaid).
(e) Each outstanding Unapplied Provider Advance shall bear interest in
an amount equal to the Investment Earnings on amounts on deposit in the Class B
Cash Collateral Account for such Unapplied Provider Advance on the amount of
such Unapplied Provider Advance from time to time, payable in arrears on each
Regular Distribution Date.
(f) Each amount not paid when due hereunder (whether fees, commissions,
expenses or other amounts or, to the extent permitted by applicable law,
installments of interest on Advances but excluding Advances) shall bear interest
at a rate per annum equal to the Base Rate plus 1.75% per annum until paid.
(g) Each change in the Base Rate shall become effective immediately.
The rates of interest specified in this Section 3.07 with respect to any Advance
or other amount shall be referred to as the "Applicable Liquidity Rate".
Section 3.08. Replacement of Borrower. Subject to Section 5.02, from
time to time and subject to the successor Borrower's meeting the eligibility
requirements set forth in Section 6.09 of the Intercreditor Agreement applicable
to the Subordination Agent, upon the effective date and time specified in a
written and completed Notice of Replacement Subordination Agent in substantially
the form of Annex VI (a "Notice of Replacement Subordination Agent") delivered
to the Liquidity Provider by the then Borrower, the successor Borrower
designated therein shall become the Borrower for all purposes hereunder.
Section 3.09. Funding Loss Indemnification. The Borrower shall pay to
the Liquidity Provider, upon the request of the Liquidity Provider, such amount
or amounts as shall be sufficient (in the reasonable opinion of the Liquidity
Provider) to compensate it for any loss, cost or expense
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<PAGE> 22
incurred by reason of the liquidation or redeployment of deposits or other funds
acquired by the Liquidity Provider to fund or maintain any LIBOR Advance (but
excluding loss of the Applicable Margin or anticipated profits) incurred as a
result of:
(1) Any repayment of a LIBOR Advance on a date other than the last day
of the Interest Period for such Advance; or
(2) Any failure by the Borrower to borrow a LIBOR Advance on the date
for borrowing specified in the relevant notice under Section 2.02.
Section 3.10. Illegality. Notwithstanding any other provision in this
Agreement, if any change in any law, rule or regulation applicable to or binding
on the Liquidity Provider, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by the
Liquidity Provider with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency shall
make it unlawful or impossible for the Liquidity Provider to maintain or fund
its LIBOR Advances, then upon notice to the Borrower and American by the
Liquidity Provider, the outstanding principal amount of the LIBOR Advances shall
be converted to Base Rate Advances (a) immediately upon demand of the Liquidity
Provider, if such change or compliance with such request, in the reasonable
judgment of the Liquidity Provider, requires immediate conversion; or (b) at the
expiration of the last Interest Period to expire before the effective date of
any such change or request. The Liquidity Provider will notify the Borrower and
American as promptly as practicable of any event that will lead to the
conversion of LIBOR Advances to Base Rate Advances under this Section 3.10. The
Liquidity Provider agrees to investigate all commercially reasonable
alternatives for avoiding the need for such conversion, including, without
limitation, designating a different Lending Office, if such designation or other
action would avoid the need to convert such LIBOR Advances to Base Rate
Advances; provided, that the foregoing shall not obligate the Liquidity Provider
to take any action that would, in its reasonable judgment, cause the Liquidity
Provider to incur any material loss or cost, unless the Borrower or American
agrees to reimburse the Liquidity Provider therefor. If no such designation or
other action is effected, or, if effected, fails to avoid the need for
conversion of the LIBOR Advances to Base Rate Advances, American may arrange for
a Replacement Liquidity Facility in accordance with Section 3.06(e) of the
Intercreditor Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent to Effectiveness of Section 2.01.
Section 2.01 of this Agreement shall become effective on and as of the first
date (the "Effective Date") on which the following conditions precedent have
been satisfied (or waived by the appropriate party or parties):
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(a) The Liquidity Provider shall have received on or before the Closing
Date each of the following, and in the case of each document delivered pursuant
to paragraphs (i), (ii) and (iii), each in form and substance satisfactory to
the Liquidity Provider:
(i) This Agreement duly executed on behalf of the Borrower;
(ii) The Intercreditor Agreement duly executed on behalf of
each of the parties thereto (other than the Liquidity Provider);
(iii) Fully executed copies of each of the Operative
Agreements executed and delivered on or before the Closing Date (other
than this Agreement and the Intercreditor Agreement);
(iv) A copy of the Prospectus Supplement and specimen copies
of the Class B Certificates;
(v) An executed copy of each document, instrument, certificate
and opinion delivered on or before the Closing Date pursuant to the
Class B Trust Agreement, the Intercreditor Agreement and the other
Operative Agreements (in the case of each such opinion, either
addressed to the Liquidity Provider or accompanied by a letter from the
counsel rendering such opinion to the effect that the Liquidity
Provider is entitled to rely on such opinion as of its date as if it
were addressed to the Liquidity Provider); and
(vi) An agreement from American, pursuant to which (x)
American agrees to provide copies of quarterly financial statements and
audited annual financial statements to the Liquidity Provider and (y)
American agrees to allow the Liquidity Provider to discuss such
transactions with officers and employees of American.
(b) On and as of the Effective Date no event shall have occurred and be
continuing, or would result from the entering into of this Agreement or the
making of any Advance, which constitutes a Liquidity Event of Default.
(c) The filings referred to in Sections 3.01(d) and 3.01(f) of the
Participation Agreements shall have been filed (or shall be in the process of
being filed).
(d) The Liquidity Provider shall have received payment in full of the
fees and other sums required to be paid to or for the account of the Liquidity
Provider on or prior to the Effective Date pursuant to the Fee Letter.
(e) All conditions precedent to the issuance of the Certificates under
the Trust Agreement shall have been satisfied or waived, all conditions
precedent to the effectiveness of the other Liquidity Facilities shall have been
satisfied or waived, and all conditions precedent to the purchase
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<PAGE> 24
of the Certificates by the Underwriters under the Underwriting Agreement shall
have been satisfied (unless any of such conditions precedent under the
Underwriting Agreement shall have been waived by the Underwriters).
(f) The Borrower and American shall have received a certificate, dated
the Effective Date signed by a duly authorized representative of the Liquidity
Provider, certifying that all conditions precedent specified in this Section
4.01 have been satisfied or waived by the Liquidity Provider.
Section 4.02. Conditions Precedent to Borrowing. The obligation of the
Liquidity Provider to make an Advance on the occasion of each Borrowing shall be
subject to the conditions precedent that the Effective Date shall have occurred
and, prior to the time of such Borrowing, the Borrower shall have delivered a
Notice of Borrowing which conforms to the terms and conditions of this
Agreement.
ARTICLE V
COVENANTS
Section 5.01. Affirmative Covenants of the Borrower. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity Provider hereunder, the Borrower will, unless the Liquidity
Provider shall otherwise consent in writing:
(a) Performance of Agreements. Punctually pay or cause to be paid all
amounts payable by it under this Agreement and the Intercreditor Agreement and
observe and perform in all material respects the conditions, covenants and
requirements applicable to it contained in this Agreement and the Intercreditor
Agreement.
(b) Reporting Requirements. Furnish to the Liquidity Provider with
reasonable promptness, such other information and data with respect to the
transactions contemplated by the Operative Agreements as from time to time may
be reasonably requested by the Liquidity Provider; and permit the Liquidity
Provider, upon reasonable notice, to inspect the Borrower's books and records
with respect to such transactions and to meet with officers and employees of the
Borrower to discuss such transactions.
(c) Certain Operative Agreements. Furnish to the Liquidity Provider
with reasonable promptness, such Operative Agreements entered into after the
date hereof as from time to time may be reasonably requested by the Liquidity
Provider.
Section 5.02. Negative Covenants of the Borrower. Subject to the first
and second sentences and the fourth paragraph of Section 7.01(a) of the
Intercreditor Agreement and Section 7.01(b) of the Intercreditor Agreement, so
long as any Advance shall remain unpaid or the Liquidity Provider shall have any
Maximum Commitment hereunder or the Borrower shall have any obligation
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<PAGE> 25
to pay any amount to the Liquidity Provider hereunder, the Borrower will not
appoint or permit or suffer to be appointed any successor Borrower without the
prior written consent of the Liquidity Provider, which consent shall not be
unreasonably withheld or delayed.
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. Liquidity Events of Default. If (a) any Liquidity Event
of Default has occurred and is continuing and (b) there is a Performing Note
Deficiency, the Liquidity Provider may, in its discretion, deliver to the
Borrower a Termination Notice, the effect of which shall be to cause (i) this
Agreement to expire at the close of business on the fifth Business Day after the
date on which such Termination Notice is received by the Borrower, (ii) the
Borrower to promptly request, and the Liquidity Provider to promptly make, a
Final Advance in accordance with Section 2.02(d) hereof and Section 3.06(i) of
the Intercreditor Agreement, (iii) all other outstanding Advances to be
automatically converted into Final Advances for purposes of determining the
Applicable Liquidity Rate for interest payable thereon and (iv) subject to
Sections 2.07 and 2.09, all Advances, any accrued interest thereon and any other
amounts outstanding hereunder to become immediately due and payable to the
Liquidity Provider.
ARTICLE VII
MISCELLANEOUS
Section 7.01. No Oral Modifications or Continuing Waivers. No terms or
provisions of this Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the Borrower and the
Liquidity Provider and any other Person whose consent is required pursuant to
this Agreement; provided that no such change or other action shall affect the
payment obligations of American Airlines without American's prior written
consent; and any waiver of the terms hereof shall be effective only in the
specific instance and for the specific purpose given.
Section 7.02. Notices. Unless otherwise expressly specified or
permitted by the terms hereof, all notices required or permitted under the terms
and provisions of this Agreement shall be in English and in writing, and any
such notice may be given by United States mail, courier service or facsimile or
any other customary means of communication, and any such notice shall be
effective when delivered (or, if mailed, three Business Days after deposit,
postage prepaid, in the first class U.S. mail and, if delivered by facsimile,
upon completion of transmission and confirmation by the sender (by a telephone
call to a representative of the recipient or by machine confirmation) that the
transmission was received),
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If to the Borrower, to:
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION
225 Asylum, Goodwin Square
Hartford, Connecticut 06103
Attention: Corporate Trust Division
Telephone: (860) 244-1844
Telecopy: (860) 244-1881
If to the Liquidity Provider,
If by mail to:
BAYERISCHE LANDESBANK GIROZENTRALE
c/o Bayerische Landesbank Girozentrale, New York Branch
560 Lexington Avenue
New York, New York 10022
Attention: Patricia Sanchez
Telephone: (212) 310-9810
Telecopy: (212) 310-9930
(With a copy to the address of the Liquidity Provider set forth below)
If by other means of communication to:
BAYERISCHE LANDESBANK GIROZENTRALE
Brienner Strasse 18
D-80333 Munich, Germany
Attention: Aircraft Finance Department, 7650
Telephone: 49-89-2171-2360
Telecopy: 49-89-2171-3763
With a copy of any Notice of Borrowing to:
BAYERISCHE LANDESBANK GIROZENTRALE
560 Lexington Avenue
New York, New York 10022
Attention: Patricia Sanchez
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Telephone: (212) 310-9810
Telecopy: (212) 310-9930
The Borrower or the Liquidity Provider, by notice to the other, may
designate additional or different addresses for subsequent notices or
communications.
Section 7.03. No Waiver; Remedies. No failure on the part of the
Liquidity Provider to exercise, and no delay in exercising, any right under this
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any right under this Agreement preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 7.04. Further Assurances. The Borrower agrees to do such
further acts and things and to execute and deliver to the Liquidity Provider
such additional assignments, agreements, powers and instruments as the Liquidity
Provider may reasonably require or deem advisable to carry into effect the
purposes of this Agreement and the other Operative Agreements or to better
assure and confirm unto the Liquidity Provider its rights, powers and remedies
hereunder and under the other Operative Agreements.
Section 7.05. Indemnification; Survival of Certain Provisions. The
Liquidity Provider shall be indemnified hereunder to the extent and in the
manner described in Section 4.02 of the Participation Agreements. In addition,
the Borrower agrees to indemnify, protect, defend and hold harmless each
Liquidity Indemnitee from and against all Expenses of any kind or nature
whatsoever (other than any Expenses of the nature described in Sections 3.01 or
7.07 or in the Fee Letter (regardless of whether indemnified against pursuant to
said Sections or in such Fee Letter)), that may be imposed on or incurred by
such Liquidity Indemnitee, in any way relating to, resulting from, or arising
out of or in connection with, any action, suit or proceeding by any third party
against such Liquidity Indemnitee and relating to this Agreement, the Fee
Letter, the Intercreditor Agreement or any Participation Agreement; provided,
however, that the Borrower shall not be required to indemnify, protect, defend
and hold harmless any Liquidity Indemnitee in respect of any Expense of such
Liquidity Indemnitee to the extent such Expense is (i) attributable to the
negligence or willful misconduct of such Liquidity Indemnitee or any other
Liquidity Indemnitee, (ii) an ordinary and usual operating overhead expense,
(iii) attributable to the failure by such Liquidity Indemnitee or any other
Liquidity Indemnitee to perform or observe any agreement, covenant or condition
on its part to be performed or observed in this Agreement, the Intercreditor
Agreement, the Fee Letter or any other Operative Agreement to which it is a
party or (iv) otherwise excluded from the indemnification provisions contained
in Section 4.02 of the Participation Agreements. The provisions of Sections
3.01, 3.03, 3.09, 7.05 and 7.07 and the indemnities contained in Section 4.02 of
the Participation Agreements shall survive the termination of this Agreement.
Section 7.06. Liability of the Liquidity Provider. (a) Neither the
Liquidity Provider nor any of its officers, employees or directors shall be
liable or responsible for: (i) the use which may be made of the Advances or any
acts or omissions of the Borrower or any beneficiary or transferee in
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connection therewith; (ii) the validity, sufficiency or genuineness of
documents, or of any endorsement thereon, even if such documents should prove to
be in any or all respects invalid, insufficient, fraudulent or forged; or (iii)
the making of Advances by the Liquidity Provider against delivery of a Notice of
Borrowing and other documents which do not comply with the terms hereof;
provided, however, that the Borrower shall have a claim against the Liquidity
Provider, and the Liquidity Provider shall be liable to the Borrower, to the
extent of any damages suffered by the Borrower that were the result of (A) the
Liquidity Provider's willful misconduct or gross negligence in determining
whether documents presented hereunder comply with the terms hereof or (B) any
breach by the Liquidity Provider of any of the terms of this Agreement or the
Intercreditor Agreement, including, but not limited to, the Liquidity Provider's
failure to make lawful payment hereunder after the delivery to it by the
Borrower of a Notice of Borrowing complying with the terms and conditions
hereof.
(b) Neither the Liquidity Provider nor any of its officers, employees
or directors or affiliates shall be liable or responsible in any respect for (i)
any error, omission, interruption or delay in transmission, dispatch or delivery
of any message or advice, however transmitted, in connection with this Agreement
or any Notice of Borrowing delivered hereunder or (ii) any action, inaction or
omission which may be taken by it in good faith, absent willful misconduct or
negligence (in which event the extent of the Liquidity Provider's potential
liability to the Borrower shall be limited as set forth in the immediately
preceding paragraph), in connection with this Agreement or any Notice of
Borrowing.
Section 7.07. Certain Costs and Expenses. The Borrower agrees promptly
to pay, or cause to be paid, (a) the reasonable fees, expenses and disbursements
of Winthrop, Stimson, Putnam & Roberts, special counsel for the Liquidity
Provider, and Schwarz Kurtze Schniewand Kelwing Wicke, special German counsel to
the Liquidity Provider, in connection with the preparation, negotiation,
execution, delivery, filing and recording of the Operative Agreements, any
waiver or consent thereunder or any amendment thereof and (b) if a Liquidity
Event of Default occurs, all out-of-pocket expenses incurred by the Liquidity
Provider, including reasonable fees and disbursements of counsel, in connection
with such Liquidity Event of Default and any collection, bankruptcy, insolvency
and other enforcement proceedings in connection therewith. In addition, the
Borrower shall pay any and all recording, stamp and other similar taxes and fees
payable or determined to be payable in the United States in connection with the
execution, delivery, filing and recording of this Agreement, any other Operative
Agreement and such other documents, and agrees to save the Liquidity Provider
harmless from and against any and all liabilities with respect to or resulting
from any delay in paying or omission to pay such taxes or fees.
Section 7.08. Binding Effect; Participations. (a) This Agreement shall
be binding upon and inure to the benefit of the Borrower and the Liquidity
Provider and their respective successors and permitted assigns, except that
neither the Liquidity Provider (except as otherwise provided in this Section
7.08) nor (except as contemplated by Section 3.08) the Borrower shall have the
right to assign, pledge or otherwise transfer its rights or obligations
hereunder or any interest herein, subject to the Liquidity Provider's right to
grant Participations pursuant to Section 7.08(b).
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(b) The Liquidity Provider agrees that it will not grant any
participation (including, without limitation, a "risk participation") (any such
participation, a "Participation") in or to all or a portion of its rights and
obligations hereunder or under the other Operative Agreements, unless all of the
following conditions are satisfied: (i) such Participation is to a Permitted
Transferee, (ii) such Participation is made in accordance with all applicable
laws, including, without limitation, the Securities Act of 1933, as amended, the
Trust Indenture Act of 1939, as amended, and any other applicable laws relating
to the transfer of similar interests and (iii) such Participation shall not be
made under circumstances that require registration under the Securities Act of
1933, as amended, or qualification of any indenture under the Trust Indenture
Act of 1939, as amended. Notwithstanding any such Participation, the Liquidity
Provider agrees that (1) the Liquidity Provider's obligations under the
Operative Agreements shall remain unchanged, and such participant shall have no
rights or benefits as against American or the Borrower or under any Operative
Agreement, (2) the Liquidity Provider shall remain solely responsible to the
other parties to the Operative Agreements for the performance of such
obligations, (3) the Liquidity Provider shall remain the maker of any Advances,
and the other parties to the Operative Agreements shall continue to deal solely
and directly with the Liquidity Provider in connection with the Advances and the
Liquidity Provider's rights and obligations under the Operative Agreements, (4)
the Liquidity Provider shall be solely responsible for any withholding Taxes or
any filing or reporting requirements relating to such Participation and shall
hold the Borrower and American and their respective successors, permitted
assigns, affiliates, agents and servants harmless against the same and (5)
neither American nor the Borrower shall be required to pay to the Liquidity
Provider any amount under Section 3.01 or Section 3.03 greater than it would
have been required to pay had there not been any grant of a Participation by the
Liquidity Provider. The Liquidity Provider may, in connection with any
Participation or proposed Participation pursuant to this Section 7.08(b),
disclose to the participant or proposed participant any information relating to
the Operative Agreements or to the parties thereto furnished to the Liquidity
Provider thereunder or in connection therewith and permitted to be disclosed by
the Liquidity Provider; provided, however, that prior to any such disclosure,
the participant or proposed participant shall agree in writing for the express
benefit of the Borrower and American to preserve the confidentiality of any
confidential information included therein (subject to customary exceptions).
(c) Notwithstanding the other provisions of this Section 7.08, the
Liquidity Provider may assign and pledge all or any portion of the Advances
owing to it to any Federal Reserve Bank or the United States Treasury as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve
Bank, provided that any payment in respect of such assigned Advances made by the
Borrower to the Liquidity Provider in accordance with the terms of this
Agreement shall satisfy the Borrower's obligations hereunder in respect of such
assigned Advance to the extent of such payment. No such assignment shall release
the Liquidity Provider from its obligations hereunder.
Section 7.09. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such
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prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 7.10. Governing Law. THIS AGREEMENT HAS BEEN DELIVERED IN THE
STATE OF NEW YORK AND THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 7.11. Submission to Jurisdiction; Waiver of Jury Trial; Waiver
of Immunity. (a) Each of the parties hereto, to the extent it may do so under
applicable law, for purposes hereof hereby (i) irrevocably submits itself to the
non-exclusive jurisdiction of the courts of the State of New York sitting in the
City of New York and to the non-exclusive jurisdiction of the United States
District Court for the Southern District of New York, for the purposes of any
suit, action or other proceeding arising out of this Agreement, the subject
matter hereof or any of the transactions contemplated hereby brought by any
party or parties hereto or thereto, or their successors or permitted assigns and
(ii) waives, and agrees not to assert, by way of motion, as a defense, or
otherwise, in any such suit, action or proceeding, that the suit, action or
proceeding is brought in an inconvenient forum, that the venue of the suit,
action or proceeding is improper or that this Agreement or the subject matter
hereof or any of the transactions contemplated hereby may not be enforced in or
by such courts.
(b) THE BORROWER AND THE LIQUIDITY PROVIDER EACH HEREBY AGREE TO WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO
THE SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING
ESTABLISHED, including, without limitation, contract claims, tort claims, breach
of duty claims and all other common law and statutory claims. The Borrower and
the Liquidity Provider each warrant and represent that it has reviewed this
waiver with its legal counsel, and that it knowingly and voluntarily waives its
jury trial rights following consultation with such legal counsel. THIS WAIVER IS
IRREVOCABLE, AND CANNOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS AGREEMENT.
(c) The Liquidity Provider hereby waives any immunity it may have from
the jurisdiction of the courts of the United States or of any state thereof and
waives any immunity any of its properties located in the United States may have
from attachment or execution upon a judgment entered by any such court under the
United States Foreign Sovereign Immunities Act of 1976 or any similar successor
legislation.
Section 7.12. Counterparts. This Agreement may be executed in any
number of counterparts (and each party shall not be required to execute the same
counterpart). Each counterpart of this
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Agreement including a signature page or pages executed by each of the parties
hereto shall be an original counterpart of this Agreement, but all of such
counterparts together shall constitute one instrument.
Section 7.13. Entirety. This Agreement and the Intercreditor Agreement
constitute the entire agreement of the parties hereto with respect to the
subject matter hereof and supersede all prior understandings and agreements of
such parties.
Section 7.14. Headings. The headings of the various Articles and
Sections herein and in the Table of Contents hereto are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
Section 7.15. Liquidity Provider's Obligation to Make Advances. EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE OBLIGATIONS OF THE LIQUIDITY
PROVIDER TO MAKE ADVANCES HEREUNDER, AND THE BORROWER'S RIGHTS TO DELIVER
NOTICES OF BORROWING REQUESTING THE MAKING OF ADVANCES HEREUNDER, SHALL BE
ABSOLUTE, UNCONDITIONAL AND IRREVOCABLE, AND SHALL BE PAID OR PERFORMED, IN EACH
CASE STRICTLY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first set forth above.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Subordination
Agent, as agent and trustee for the
Class B Trust, as Borrower
By: /s/ JOHN G. CORREIA
-------------------------------------
Name: John G. Correia
Title: Assistant Secretary
BAYERISCHE LANDESBANK GIROZENTRALE,
as Liquidity Provider
By: /s/ BERND LONNER
-------------------------------------
Name: Bernd Lonner
Title: Vice President
By: /s/ RUDIGER FERN
-------------------------------------
Name: Rudiger Fern
Title: Senior Vice President
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ANNEX I to
REVOLVING CREDIT AGREEMENT
INTEREST ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
borrower (the "Borrower"), hereby certifies to Bayerische Landesbank
Girozentrale (the "Liquidity Provider"), with reference to the Revolving Credit
Agreement (1999-1B), dated as of October 6, 1999, between the Borrower and the
Liquidity Provider (the "Liquidity Agreement"; the terms defined therein and not
otherwise defined herein being used herein as therein defined or referenced),
that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of an Interest Advance by the Liquidity Provider to be used for the payment of
the interest on the Class B Certificates which is payable on ____________, ____
(the "Distribution Date") in accordance with the terms and provisions of the
Class B Trust Agreement and the Class B Certificates, which Advance is requested
to be made on ____________, ____. The Interest Advance should be remitted to
[insert wire and account details].
(3) The amount of the Interest Advance requested hereby (i) is
$_______________.__, to be applied in respect of the payment of the interest
which is due and payable on the Class B Certificates on the Distribution Date,
(ii) does not include any amount with respect to the payment of principal of, or
premium on, the Class A-1 Certificates, the Class A-2 Certificates, the Class B
Certificates or the Class C Certificates, or interest on the Class A-1
Certificates, the Class A-2 Certificates, or the Class C Certificates, (iii) was
computed in accordance with the provisions of the Class B Certificates, the
Class B Trust Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), (iv) does not exceed the Maximum
Available Commitment on the date hereof and (v) has not been and is not the
subject of a prior or contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will apply the same in accordance with the
terms of Section 3.06(b) of the Intercreditor Agreement, (b) no portion of such
amount shall be applied by the Borrower for any other purpose and (c) no portion
of such amount until so applied shall be commingled with other funds held by the
Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, the making of the Interest Advance as requested by this Notice of
Borrowing shall automatically reduce, subject to reinstatement in accordance
with the terms of the Liquidity Agreement, the Maximum Available Commitment by
an amount equal to the amount of the Interest Advance requested to be made
hereby
I-1
<PAGE> 34
as set forth in clause (i) of paragraph (3) of this Certificate and such
reduction shall automatically result in corresponding reductions in the amounts
available to be borrowed pursuant to a subsequent Advance.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of _________, ____.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Subordination Agent, as Borrower
By:
--------------------------------
Name:
Title:
I-2
<PAGE> 35
SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Interest Advance
Notice of Borrowing]
I-3
<PAGE> 36
ANNEX II to
REVOLVING CREDIT AGREEMENT
NON-EXTENSION ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "Borrower"), hereby certifies to Bayerische Landesbank
Girozentrale (the "Liquidity Provider"), with reference to the Revolving Credit
Agreement (1999-1B), dated as of October 6, 1999, between the Borrower and the
Liquidity Provider (the "Liquidity Agreement"; the terms defined therein and not
otherwise defined herein being used herein as therein defined or referenced),
that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Non-Extension Advance by the Liquidity Provider to be used for the
funding of the Class B Cash Collateral Account in accordance with Section
3.06(d) of the Intercreditor Agreement, which Advance is requested to be made on
__________, ____. The Non-Extension Advance should be remitted to [insert wire
and account details].
(3) The amount of the Non-Extension Advance requested hereby (i) is
$_______________.__, which equals the Maximum Available Commitment on the date
hereof and is to be applied in respect of the funding of the Class B Cash
Collateral Account in accordance with Sections 3.06(d) and 3.06(f) of the
Intercreditor Agreement, (ii) does not include any amount with respect to the
payment of the principal of, or premium on, the Class B Certificates, or
principal of, or interest or premium on, the Class A-1 Certificates, the Class
A-2 Certificates or the Class C Certificates, (iii) was computed in accordance
with the provisions of the Class B Certificates, the Class B Trust Agreement and
the Intercreditor Agreement (a copy of which computation is attached hereto as
Schedule I) and (iv) has not been and is not the subject of a prior or
contemporaneous Notice of Borrowing under the Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class B Cash
Collateral Account and apply the same in accordance with the terms of Sections
3.06(d) and 3.06(f) of the Intercreditor Agreement, (b) no portion of such
amount shall be applied by the Borrower for any other purpose and (c) no portion
of such amount until so applied shall be commingled with other funds held by the
Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Non-Extension Advance as requested by this
Notice of Borrowing shall automatically and irrevocably terminate the obligation
of the Liquidity Provider to make further Advances under the Liquidity Agreement
and (B) following the making by the Liquidity Provider of the Non-Extension
II-1
<PAGE> 37
Advance requested by this Notice of Borrowing, the Borrower shall not be
entitled to request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of _________, ____.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Subordination Agent, as Borrower
By:
--------------------------------
Name:
Title:
II-2
<PAGE> 38
SCHEDULE I TO NON-EXTENSION ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with Non-Extension
Advance Notice of Borrowing]
II-3
<PAGE> 39
ANNEX III to
REVOLVING CREDIT AGREEMENT
DOWNGRADE ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "Borrower"), hereby certifies to Bayerische Landesbank
Girozentrale (the "Liquidity Provider"), with reference to the Revolving Credit
Agreement (1999-1B), dated as of October 6, 1999, between the Borrower and the
Liquidity Provider (the "Liquidity Agreement"; the terms defined therein and not
otherwise defined herein being used herein as therein defined or referenced),
that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Downgrade Advance by the Liquidity Provider to be used for the funding of
the Class B Cash Collateral Account in accordance with Section 3.06(c) of the
Intercreditor Agreement by reason of the downgrading of the short-term unsecured
debt rating or long-term unsecured debt rating of the Liquidity Provider issued
by either Rating Agency below the Threshold Rating, which Advance is requested
to be made on __________, ____. The Downgrade Advance should be remitted to
[insert wire and account details].
(3) The amount of the Downgrade Advance requested hereby (i) is
$_______________.__, which equals the Maximum Available Commitment on the date
hereof and is to be applied in respect of the funding of the Class B Cash
Collateral Account in accordance with Sections 3.06(c) and 3.06(f) of the
Intercreditor Agreement, (ii) does not include any amount with respect to the
payment of the principal of, or premium on, the Class B Certificates, or
principal of, or interest or premium on, the Class A-1 Certificates, the Class
A-2 Certificates or the Class C Certificates, (iii) was computed in accordance
with the provisions of the Class B Certificates, the Class B Trust Agreement and
the Intercreditor Agreement (a copy of which computation is attached hereto as
Schedule I) and (iv) has not been and is not the subject of a prior or
contemporaneous Notice of Borrowing under the Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class B Cash
Collateral Account and apply the same in accordance with the terms of Sections
3.06(c) and 3.06(f) of the Intercreditor Agreement, (b) no portion of such
amount shall be applied by the Borrower for any other purpose and (c) no portion
of such amount until so applied shall be commingled with other funds held by the
Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Downgrade Advance as requested by this Notice
of Borrowing shall automatically and irrevocably terminate the obligation of the
Liquidity Provider to make further Advances under the
III-1
<PAGE> 40
Liquidity Agreement and (B) following the making by the Liquidity Provider of
the Downgrade Advance requested by this Notice of Borrowing, the Borrower shall
not be entitled to request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of _________, ____.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Subordination Agent, as Borrower
By:
------------------------------------
Name:
Title:
III-2
<PAGE> 41
SCHEDULE I TO DOWNGRADE ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with Downgrade
Advance Notice of Borrowing]
III-3
<PAGE> 42
ANNEX IV to
REVOLVING CREDIT AGREEMENT
FINAL ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
borrower (the "Borrower"), hereby certifies to Bayerische Landesbank
Girozentrale (the "Liquidity Provider"), with reference to the Revolving Credit
Agreement (1999-1B), dated as of October 6, 1999, between the Borrower and the
Liquidity Provider (the "Liquidity Agreement"; the terms defined therein and not
otherwise defined herein being used herein as therein defined or referenced),
that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Final Advance by the Liquidity Provider to be used for the funding of the
Class B Cash Collateral Account in accordance with Section 3.06(i) of the
Intercreditor Agreement by reason of the receipt by the Borrower of a
Termination Notice from the Liquidity Provider with respect to the Liquidity
Agreement, which Advance is requested to be made on ____________, ____. The
Final Advance should be remitted to [insert wire and account details].
(3) The amount of the Final Advance requested hereby (i) is
$_________________.__, which equals the Maximum Available Commitment on the date
hereof and is to be applied in respect of the funding of the Class B Cash
Collateral Account in accordance with Sections 3.06(f) and 3.06(i) of the
Intercreditor Agreement, (ii) does not include any amount with respect to the
payment of principal of, or premium on, the Class B Certificates, or principal
of, or interest or premium on, the Class A-1 Certificates, the Class A-2
Certificates or the Class C Certificates, (iii) was computed in accordance with
the provisions of the Class B Certificates, the Class B Trust Agreement and the
Intercreditor Agreement (a copy of which computation is attached hereto as
Schedule I) and (iv) has not been and is not the subject of a prior or
contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class B Cash
Collateral Account and apply the same in accordance with the terms of Sections
3.06(f) and 3.06(i) of the Intercreditor Agreement, (b) no portion of such
amount shall be applied by the Borrower for any other purpose and (c) no portion
of such amount until so applied shall be commingled with other funds held by the
Borrower.
[(5) The Borrower hereby requests that the Advance requested hereby be
a Base Rate Advance [and that such Base Rate Advance be converted into a LIBOR
Advance on the third Business Day following your receipt of this notice]*.]
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Final Advance as requested by this Notice of
Borrowing shall automatically and irrevocably
IV-1
<PAGE> 43
terminate the obligation of the Liquidity Provider to make further Advances
under the Liquidity Agreement and (B) following the making by the Liquidity
Provider of the Final Advance requested by this Notice of Borrowing, the
Borrower shall not be entitled to request any further Advances under the
Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of _________, ____.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Subordination Agent, as Borrower
By:
-----------------------------------
Name:
Title:
[* Bracketed language may be included at Borrower's option.]
IV-2
<PAGE> 44
SCHEDULE I TO FINAL ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Final
Advance Notice of Borrowing]
IV-3
<PAGE> 45
ANNEX V to
REVOLVING CREDIT AGREEMENT
NOTICE OF TERMINATION
[Date]
State Street Bank and Trust Company of Connecticut, National Association,
as Subordination Agent, as Borrower
225 Asylum Street, Goodwin Square
Hartford, Connecticut 06103
Attention: Corporate Trust Division
Re: Revolving Credit Agreement, dated as of October 6, 1999, between State
Street Bank and Trust Company of Connecticut, National Association, as
Subordination Agent, as agent and trustee for the American Airlines Pass
Through Trust 1999-1B, as Borrower, and Bayerische Landesbank Girozentrale
(the "Liquidity Agreement")
Ladies and Gentlemen:
You are hereby notified that pursuant to Section 6.01 of the Liquidity
Agreement, by reason of the occurrence and continuance of a Liquidity Event of
Default and the existence of a Performing Note Deficiency (each as defined
therein), we are giving this notice to you in order to cause (i) our obligations
to make Advances (as defined therein) under such Liquidity Agreement to
terminate at the close of business on the fifth Business Day after the date on
which you receive this notice and (ii) you to request a Final Advance under the
Liquidity Agreement pursuant to Section 3.06(i) of the Intercreditor Agreement
(as defined in the Liquidity Agreement) as a consequence of your receipt of this
notice.
THIS NOTICE IS THE "NOTICE OF TERMINATION" PROVIDED FOR UNDER THE
LIQUIDITY AGREEMENT. OUR OBLIGATIONS TO MAKE ADVANCES UNDER THE LIQUIDITY
AGREEMENT WILL TERMINATE AT THE CLOSE OF BUSINESS ON THE FIFTH BUSINESS DAY
AFTER THE DATE ON WHICH YOU RECEIVE THIS NOTICE.
Very truly yours,
Bayerische Landesbank Girozentrale,
as Liquidity Provider
By:
-----------------------------------
Name:
Title:
cc: State Street Bank and Trust Company of Connecticut,
National Association, as Class B Trustee
V-1
<PAGE> 46
ANNEX VI to
REVOLVING CREDIT AGREEMENT
NOTICE OF REPLACEMENT SUBORDINATION AGENT
[Date]
Attention:
Re: Revolving Credit Agreement, dated as of October 6, 1999, between State
Street Bank and Trust Company of Connecticut, National Association, as
Subordination Agent, as agent and trustee for the American Airlines Pass
Through Trust 1999-1B, as Borrower, and Bayerische Landesbank Girozentrale
(the "Liquidity Agreement")
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
------------------------------
[Name of Transferee]
------------------------------
[Address of Transferee]
all rights and obligations of the undersigned as Borrower under the Liquidity
Agreement referred to above. The transferee has succeeded the undersigned as
Subordination Agent under the Intercreditor Agreement referred to in the first
paragraph of the Liquidity Agreement, pursuant to the terms of Section 7.01 of
the Intercreditor Agreement.
By this transfer, all rights of the undersigned as Borrower under the
Liquidity Agreement are transferred to the transferee and the transferee shall
hereafter have the sole rights and obligations as Borrower thereunder. The
undersigned shall pay any costs and expenses of such transfer, including, but
not limited to, transfer taxes or governmental charges.
This transfer shall be effective as of [specify time and date].
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Subordination Agent, as Borrower
By:
-----------------------------------
Name:
Title:
VI-1
<PAGE> 1
EXHIBIT 4(c)4
================================================================================
REVOLVING CREDIT AGREEMENT
(1999-1C)
Dated as of October 6, 1999
between
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
as Subordination Agent,
as agent and trustee for the trustee of
American Airlines Pass Through Trust 1999-1C
as Borrower
and
BAYERISCHE LANDESBANK GIROZENTRALE,
as Liquidity Provider
================================================================================
American Airlines Pass Through Trust 1999-1C
7.155% American Airlines
Pass Through Certificates,
Series 1999-1C
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.....................................................................................1
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01 The Advances....................................................................................8
Section 2.02 Making of Advances..............................................................................8
Section 2.03 Fees...........................................................................................10
Section 2.04 Reduction or Termination of the Maximum Commitment.............................................10
Section 2.05 Repayments of Interest Advances or the Final Advance...........................................11
Section 2.06 Repayments of Provider Advances................................................................11
Section 2.07 Payments to the Liquidity Provider Under the Intercreditor Agreement...........................12
Section 2.08 Book Entries...................................................................................13
Section 2.09 Payments from Available Funds Only.............................................................13
Section 2.10 Extension of the Expiry Date; Non-Extension Advance............................................13
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01 Increased Costs................................................................................14
Section 3.02 [Intentionally omitted]........................................................................15
Section 3.03 Withholding Taxes..............................................................................15
Section 3.04 Payments.......................................................................................16
Section 3.05 Computations...................................................................................16
Section 3.06 Payment on Non-Business Days...................................................................17
Section 3.07 Interest.......................................................................................17
Section 3.08 Replacement of Borrower........................................................................18
Section 3.09 Funding Loss Indemnification...................................................................18
Section 3.10 Illegality.....................................................................................19
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01 Conditions Precedent to Effectiveness of Section 2.01..........................................19
Section 4.02 Conditions Precedent to Borrowing..............................................................21
ARTICLE V
COVENANTS
Section 5.01 Affirmative Covenants of the Borrower..........................................................21
Section 5.02 Negative Covenants of the Borrower.............................................................21
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01 Liquidity Events of Default....................................................................22
ARTICLE VII
MISCELLANEOUS
Section 7.01 No Oral Modification or Continuing Waivers.....................................................22
Section 7.02 Notices, Etc...................................................................................22
Section 7.03 No Waiver; Remedies............................................................................24
Section 7.04 Further Assurances.............................................................................24
Section 7.05 Indemnification; Survival of Certain Provisions................................................24
Section 7.06 Liability of the Liquidity Provider............................................................24
Section 7.07 Certain Costs and Expenses.....................................................................25
Section 7.08 Binding Effect; Participations.................................................................25
Section 7.09 Severability...................................................................................26
Section 7.10 Governing Law..................................................................................27
Section 7.11 Submission to Jurisdiction; Waiver of Jury Trial; Waiver of Immunity...........................27
Section 7.12 Counterparts...................................................................................27
Section 7.13 Entirety.......................................................................................28
Section 7.14 Headings.......................................................................................28
Section 7.15 Liquidity Provider's Obligation to Make Advances...............................................28
</TABLE>
Annex I - Interest Advance Notice of Borrowing
Annex II - Non-Extension Advance Notice of Borrowing
Annex III - Downgrade Advance Notice of Borrowing
Annex IV - Final Advance Notice of Borrowing
Annex V - Notice of Termination
Annex VI - Notice of Replacement Subordination Agent
ii
<PAGE> 4
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT, dated as of October 6, 1999, is made
by and between STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, a national banking association, not in its individual capacity but
solely as Subordination Agent (such term and other capitalized terms used herein
without definition being defined as provided in Article I) under the
Intercreditor Agreement (as defined below), as agent and trustee for the Class C
Trustee (in such capacity, together with its successors in such capacity, the
"Borrower"), and BAYERISCHE LANDESBANK GIROZENTRALE, a public law banking
institution organized under the laws of the Free State of Bavaria, Germany (the
"Liquidity Provider").
W I T N E S S E T H:
WHEREAS, pursuant to the Class C Trust Agreement, the Class C Trust is
issuing the Class C Certificates; and
WHEREAS, the Borrower, in order to support the timely payment of a
portion of the interest on the Class C Certificates in accordance with their
terms, has requested the Liquidity Provider to enter into this Agreement,
providing in part for the Borrower to request in specified circumstances that
Advances be made hereunder;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and of other good and valuable consideration the receipt and adequacy
of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. (a) The definitions stated herein apply
equally to both the singular and the plural forms of the terms defined.
(b) All references in this Agreement to designated "Articles",
"Sections", "Annexes" and other subdivisions are to the designated Article,
Section, Annex or other subdivision of this Agreement, unless otherwise
specifically stated.
(c) The words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to any
particular Article, Section, Annex or other subdivision.
1
<PAGE> 5
(d) Unless the context otherwise requires, whenever the words
"including", "include" or "includes" are used herein, it shall be deemed to be
followed by the phrase "without limitation".
(e) For the purposes of this Agreement, unless the context
otherwise requires, the following capitalized terms shall have the following
meanings:
"Advance" means an Interest Advance, a Final Advance, a Provider
Advance, an Applied Provider Advance or an Unpaid Advance, as the case may be.
"Agreement" means this Agreement, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Applicable Liquidity Rate" has the meaning specified in Section
3.07(g).
"Applicable Margin" means with respect to any Unpaid Advance or Applied
Provider Advance, 1.75%.
"Applied Downgrade Advance" has the meaning specified in Section
2.06(a).
"Applied Non-Extension Advance" has the meaning specified in Section
2.06(a).
"Applied Provider Advance" means an Applied Downgrade Advance or an
Applied Non-Extension Advance.
"Base Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for each
day in the period for which the Base Rate is to be determined (or, if such day
is not a Business Day, for the preceding Business Day) by the Federal Reserve
Bank of New York, or if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day for such transactions
received by the Liquidity Provider from three Federal funds brokers of
recognized standing selected by it (and reasonably satisfactory to American)
plus one-quarter of one percent (0.25%).
"Base Rate Advance" means an Advance that bears interest at a rate
based upon the Base Rate.
"Borrower" has the meaning specified in the introductory paragraph to
this Agreement.
"Borrowing" means the making of Advances requested by delivery of a
Notice of Borrowing.
2
<PAGE> 6
"Business Day" means any day other than a Saturday, a Sunday or a day
on which commercial banks are required or authorized to close in New York, New
York, Dallas, Texas, or, so long as any Class C Certificate is outstanding, the
city and state in which the Class C Trustee, the Borrower or any related Loan
Trustee maintains its Corporate Trust Office or receives or disburses funds,
and, if the applicable Business Day relates to any Advance or other amount
bearing interest based on the LIBOR Rate, on which dealings are carried on in
the London interbank market.
"Consent Notice" has the meaning specified in Section 2.10.
"Consent Period" has the meaning specified in Section 2.10.
"Covered Taxes" means any Taxes imposed by the United States or any
political subdivision or taxing authority thereof or therein required by law to
be deducted or withheld from any amounts payable to the Liquidity Provider under
this Agreement other than (i) any Tax on, based on or measured by net income,
franchises or conduct of business, (ii) any Tax imposed, levied, withheld or
assessed as a result of any connection between the Liquidity Provider and the
United States or such political subdivision or taxing authority, other than a
connection arising solely from the Liquidity Provider's having executed,
delivered, performed its obligations or received a payment under, or enforced,
any Operative Agreement, (iii) any Tax attributable to the inaccuracy in or
breach by the Liquidity Provider of any of its representations, warranties or
covenants contained in any Operative Agreement to which it is a party or the
inaccuracy of any form or document furnished pursuant thereto, (iv) any
withholding Taxes imposed by the United States except to the extent such
withholding Taxes would not have been required to be deducted or withheld from
payments hereunder but for a change after the date hereof in the income tax
treaty between the United States and Germany or a change in the Code that
overrides the provisions of such treaty or (v) any change in the Lending Office
without the prior written consent of American (such consent not to be
unreasonably withheld).
"Downgrade Advance" means an Advance made pursuant to Section 2.02(c).
"Effective Date" has the meaning specified in Section 4.01. The
delivery of the certificate of the Liquidity Provider contemplated by Section
4.01(f) shall be conclusive evidence that the Effective Date has occurred.
"Expenses" means liabilities, losses, damages, costs and expenses
(including, without limitation, reasonable fees and disbursements of legal
counsel), provided that Expenses shall not include any Taxes other than sales,
use and V.A.T. taxes imposed on fees and expenses payable pursuant to Section
7.07.
"Expiry Date" means October 4, 2000, initially, or any date to which
the Expiry Date is extended pursuant to Section 2.10.
"Final Advance" means an Advance made pursuant to Section 2.02(d).
3
<PAGE> 7
"Increased Cost" has the meaning specified in Section 3.01.
"Intercreditor Agreement" means the Intercreditor Agreement, dated as
of the date hereof, among the Trustees, the Liquidity Provider, the liquidity
provider under each Liquidity Facility (other than this Agreement) and the
Subordination Agent, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Interest Advance" means an Advance made pursuant to Section 2.02(a).
"Interest Period" means, with respect to any LIBOR Advance, each of the
following periods:
(i) the period beginning on the third Business Day following
either (A) the Liquidity Provider's receipt of the Notice of Borrowing
for such LIBOR Advance or (B) the date of the withdrawal of funds from
the Class C Cash Collateral Account for the purpose of paying interest
on the Class C Certificates as contemplated by Section 2.06(a) hereof
and, in each case, ending on the next Regular Distribution Date; and
(ii) each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the next Regular
Distribution Date;
provided, however, that if (x) the Final Advance shall have been made pursuant
to Section 2.02(d) or (y) other outstanding Advances shall have been converted
into the Final Advance pursuant to Section 6.01, then the Interest Periods shall
be successive periods of one month beginning on the third Business Day following
the Liquidity Provider's receipt of the Notice of Borrowing for such Final
Advance (in the case of clause (x) above) or the Regular Distribution Date
following such conversion (in the case of clause (y) above).
"Lending Office" means the lending office of the Liquidity Provider
presently located at Munich, Germany, or such other lending office as the
Liquidity Provider from time to time shall notify the Borrower as its lending
office hereunder; provided that the Liquidity Provider shall not change its
Lending Office without the prior written consent of American (such consent not
to be unreasonably withheld).
"LIBOR Advance" means an Advance bearing interest at a rate based upon
the LIBOR Rate.
"LIBOR Rate" means, with respect to any Interest Period, (a) the
interest rate per annum equal to the rate per annum at which deposits in Dollars
are offered in the London interbank market as shown on Page 3750 of the Telerate
Systems Incorporated screen service (or such other page as may replace Telerate
Page 3750), or if such service is not available, Page LIBO of the Reuters Money
Service Monitor System (or such other page as may replace Reuters Page LIBO) at
approximately 11:00 a.m. (London time) on the day that is two Business Days
prior to the first day of such Interest Period, for a period comparable to such
Interest Period, or (b) if no such rate is published on either such service or
if neither of such services is then available, the interest rate per
4
<PAGE> 8
annum equal to the average (rounded up, if necessary, to the nearest 1/100th of
1%) of the rates at which deposits in Dollars are offered by the Reference Banks
(or, if fewer than all of the Reference Banks are quoting a rate for deposits in
Dollars for the applicable period and amount, such fewer number of Reference
Banks) at approximately 11:00 a.m. (London time) on the day that is two Business
Days prior to the first day of such Interest Period to prime banks in the London
interbank market for a period comparable to such Interest Period and in an
amount approximately equal to the principal amount of the LIBOR Advance to be
outstanding during such Interest Period, or (c) if none of the Reference Banks
is quoting a rate for deposits in Dollars in the London interbank market for
such a period and amount, the interest rate per annum equal to the average
(rounded up, if necessary, to the nearest 1/100th of 1%) of the rates at which
deposits in Dollars are offered by the principal New York offices of the
Reference Banks (or, if fewer than all of the Reference Banks are quoting a rate
for deposits in Dollars in the New York interbank market for the applicable
period and amount, such fewer number of Reference Banks) at approximately 11:00
a.m. (New York time) on the day that is two Business Days prior to the first day
of such Interest Period to prime banks in the New York interbank market for a
period comparable to such Interest Period and in an amount approximately equal
to the principal amount of the LIBOR Advance to be outstanding during such
Interest Period, or (d) if none of the principal New York offices of the
Reference Banks is quoting a rate for deposits in Dollars in the New York
interbank market for the applicable period and amount, the Base Rate.
"Liquidity Event of Default" means the occurrence of either (a) the
Acceleration of all of the Equipment Notes or (b) an American Bankruptcy Event.
"Liquidity Indemnitee" means the Liquidity Provider, its directors,
officers, employees and agents, and its successors and permitted assigns.
"Liquidity Provider" has the meaning specified in the introductory
paragraph to this Agreement.
"Maximum Available Commitment" means, subject to the proviso contained
in the third sentence of Section 2.02(a), at any time of determination, (a) the
Maximum Commitment at such time less (b) the aggregate amount of each Interest
Advance outstanding at such time; provided that following a Provider Advance or
a Final Advance, the Maximum Available Commitment shall be zero.
"Maximum Commitment" means initially $5,195,669.00, as the same may be
reduced from time to time in accordance with Section 2.04(a).
"Non-Extension Advance" means an Advance made pursuant to Section
2.02(b).
"Notice of Borrowing" has the meaning specified in Section 2.02(e).
"Notice of Replacement Subordination Agent" has the meaning specified
in Section 3.08.
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"Participation" has the meaning specified in Section 7.08(b).
"Performing Note Deficiency" means any time that less than 65% of the
then aggregate outstanding principal amount of all Equipment Notes are
Performing Equipment Notes.
"Permitted Transferee" means any Person that:
(a) is not a commercial air carrier, American or any affiliate
of American; and
(b) is any one of:
(1) a commercial banking institution organized under
the laws of the United States or any state thereof or the
District of Columbia;
(2) a commercial banking institution that (x) is
organized under the laws of France, Germany, The Netherlands,
Switzerland or the United Kingdom, (y) is entitled on the date
it acquires any Participation to a complete exemption from
United States federal income taxes for all income derived by
it from the transactions contemplated by the Operative
Agreements under an income tax treaty, as in effect on such
date, between the United States and such jurisdiction of its
organization and (z) is engaged in the active conduct of a
banking business in such jurisdiction of its organization,
holds its Participation in connection with such banking
business in such jurisdiction and is regulated as a commercial
banking institution by the appropriate regulatory authorities
in such jurisdiction; or
(3) a commercial banking institution that (x) is
organized under the laws of Canada, France, Germany, Ireland,
Japan, Luxembourg, The Netherlands, Sweden, Switzerland or the
United Kingdom and (y) is entitled on the date it acquires any
Participation to a complete exemption from withholding of
United States federal income taxes for all income derived by
it from the transactions contemplated by the Operative
Agreements under laws as in effect on such date by reason of
such income being effectively connected with the conduct of a
trade or business within the United States.
"Prospectus Supplement" means the Prospectus Supplement dated September
23, 1999, relating to the Certificates, as such Prospectus Supplement may be
amended or supplemented.
"Provider Advance" means a Downgrade Advance or a Non-Extension
Advance.
"Reference Banks" means the principal London offices of: National
Westminster Bank, plc; Morgan Guaranty Trust Company of New York; The Chase
Manhattan Bank; Citibank, N.A.; and such other or additional banking
institutions as may be designated from time to time by mutual agreement of
American and the Liquidity Provider.
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"Regulatory Change" means the enactment, adoption or promulgation,
after the date of this Agreement, of any law or regulation by a United States
federal or state government or by the government of the Liquidity Provider's
jurisdiction of organization, or any change, after the date of this Agreement,
in any such law or regulation, or in the interpretation thereof by any
governmental authority, central bank or comparable agency of the United States
or the Liquidity Provider's jurisdiction of organization charged with
responsibility for the administration or application thereof, that shall impose,
modify or deem applicable (a) any reserve, special deposit or similar
requirement against extensions of credit or other assets of, or deposits with or
other liabilities of, the Liquidity Provider including, or by reason of, the
Advances or (b) any capital adequacy requirement requiring the maintenance by
the Liquidity Provider of additional capital in respect of any Advances or the
Liquidity Provider's obligation to make any such Advances.
"Replenishment Amount" has the meaning specified in Section 2.06(b).
"Required Amount" means, for any day, the sum of the aggregate amount
of interest, calculated at the rate per annum equal to the Stated Interest Rate
for the Class C Certificates on the basis of a 360-day year comprised of twelve
30-day months, that would be payable on the Class C Certificates on each of the
three successive semiannual Regular Distribution Dates immediately following
such day or, if such day is a Regular Distribution Date, on such day and the
succeeding two semiannual Regular Distribution Dates, in each case calculated on
the basis of the Pool Balance of the Class C Certificates on such day and
without regard to expected future distributions of principal on the Class C
Certificates.
"Termination Date" means the earliest to occur of the following: (i)
the Expiry Date; (ii) the date on which the Borrower delivers to the Liquidity
Provider a certificate, signed by a Responsible Officer of the Borrower,
certifying that all of the Class C Certificates have been paid in full (or
provision has been made for such payment in accordance with the Intercreditor
Agreement and the Class C Trust Agreement) or are otherwise no longer entitled
to the benefits of this Agreement; (iii) the date on which the Borrower delivers
to the Liquidity Provider a certificate, signed by a Responsible Officer of the
Borrower, certifying that a Replacement Liquidity Facility has been substituted
for this Agreement in full pursuant to Section 3.06(e) of the Intercreditor
Agreement; (iv) the fifth Business Day following the receipt by the Borrower of
a Termination Notice from the Liquidity Provider pursuant to Section 6.01; and
(v) the date on which no Advance is or may (including by reason of reinstatement
as herein provided) become available for a Borrowing hereunder.
"Termination Notice" means the Notice of Termination substantially in
the form of Annex V to this Agreement.
"Unapplied Provider Advance" means any Provider Advance other than an
Applied Provider Advance.
"Unpaid Advance" has the meaning specified in Section 2.05.
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"Withdrawal Notice" has the meaning specified in Section 2.10.
(e) For the purposes of this Agreement, the following terms shall have
the respective meanings specified in the Intercreditor Agreement:
"Acceleration", "American", "American Bankruptcy Event", "Certificate",
"Class A-1 Certificates", "Class A-2 Certificates", "Class B Certificates",
"Class C Cash Collateral Account", "Class C Certificates", "Class C
Certificateholders", "Class C Trust", "Class C Trust Agreement", "Class C
Trustee", "Closing Date", "Collection Account", "Controlling Party", "Corporate
Trust Office", "Distribution Date", "Dollars", "Downgraded Facility", "Equipment
Notes", "Fee Letter", "Final Legal Distribution Date", "Indenture", "Interest
Payment Date", "Investment Earnings", "Liquidity Facility", "Liquidity
Obligations", "Loan Trustee", "Moody's", "Non-Extended Facility", "Operative
Agreements", "Participation Agreements", "Performing Equipment Note", "Person",
"Pool Balance", "Rating Agencies", "Ratings Confirmation", "Regular Distribution
Date", "Replacement Liquidity Facility", "Responsible Officer", "Scheduled
Payment", "Special Payment", "S&P", "Stated Interest Rate", "Subordination
Agent", "Taxes", "Threshold Rating", "Trust Agreement", "Trustee",
"Underwriters", "Underwriting Agreement", "United States" and "Written Notice".
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. The Advances. The Liquidity Provider hereby irrevocably
agrees, on the terms and conditions hereinafter set forth, to make Advances to
the Borrower from time to time on any Business Day during the period from the
Effective Date until 12:00 noon (New York City time) on the Expiry Date (unless
the obligations of the Liquidity Provider shall be earlier terminated in
accordance with the terms of Section 2.04(b)) in an aggregate amount at any time
outstanding not to exceed the Maximum Commitment.
Section 2.02. Making of Advances. (a) Each Interest Advance shall be
made by the Liquidity Provider upon delivery to the Liquidity Provider of a
written and completed Notice of Borrowing in substantially the form of Annex I,
signed by a Responsible Officer of the Borrower, such Interest Advance to be in
an amount not exceeding the Maximum Available Commitment at such time and used
solely for the payment when due of interest with respect to the Class C
Certificates at the Stated Interest Rate therefor in accordance with Section
3.06(a) and 3.06(b) of the Intercreditor Agreement. Each Interest Advance made
hereunder shall automatically reduce the Maximum Available Commitment and the
amount available to be borrowed hereunder by subsequent Advances by the amount
of such Interest Advance (subject to reinstatement as provided in the next
sentence). Upon repayment to the Liquidity Provider in full or in part of the
amount of any Interest Advance made pursuant to this Section 2.02(a), together
with accrued interest thereon (as provided herein), the Maximum Available
Commitment shall be reinstated by an amount equal
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to the amount of such Interest Advance so repaid, but not to exceed the Maximum
Commitment; provided, however, that the Maximum Available Commitment shall not
be so reinstated at any time if (x) both a Performing Note Deficiency exists and
a Liquidity Event of Default shall have occurred and be continuing or (y) a
Final Drawing shall have occurred.
(b) Subject to Section 2.10, a Non-Extension Advance shall be made by
the Liquidity Provider if this Agreement is not extended in accordance with
Section 3.06(d) of the Intercreditor Agreement (unless a Replacement Liquidity
Facility to replace this Agreement shall have been delivered to the Borrower as
contemplated by said Section 3.06(d) within the time period specified in such
Section 3.06(d)) upon delivery to the Liquidity Provider of a written and
completed Notice of Borrowing in substantially the form of Annex II, signed by a
Responsible Officer of the Borrower, in an amount equal to the Maximum Available
Commitment at such time, and shall be used to fund the Class C Cash Collateral
Account in accordance with Sections 3.06(d) and 3.06(f) of the Intercreditor
Agreement.
(c) A Downgrade Advance shall be made by the Liquidity Provider if at
any time the short-term unsecured debt rating of the Liquidity Provider issued
by either Rating Agency (or if the Liquidity Provider does not have a short-term
unsecured debt rating issued by a given Rating Agency, the long-term unsecured
debt rating of the Liquidity Provider issued by such Rating Agency) is lower
than the applicable Threshold Rating (as provided for in Section 3.06(c) of the
Intercreditor Agreement) unless a Replacement Liquidity Facility to replace this
Agreement shall have been previously delivered to the Borrower in accordance
with said Section 3.06(c), upon delivery to the Liquidity Provider of a written
and completed Notice of Borrowing in substantially the form of Annex III, signed
by a Responsible Officer of the Borrower, in an amount equal to the Maximum
Available Commitment at such time, and shall be used to fund the Class C Cash
Collateral Account in accordance with Sections 3.06(c) and 3.06(f) of the
Intercreditor Agreement.
(d) A Final Advance shall be made by the Liquidity Provider following
the receipt by the Borrower of a Termination Notice from the Liquidity Provider
pursuant to Section 6.01 upon delivery to the Liquidity Provider of a written
and completed Notice of Borrowing in substantially the form of Annex IV, signed
by a Responsible Officer of the Borrower, in an amount equal to the Maximum
Available Commitment at such time, and shall be used to fund the Class C Cash
Collateral Account (in accordance with Sections 3.06(f) and 3.06(i) of the
Intercreditor Agreement).
(e) Each Borrowing shall be made on notice in writing (a "Notice of
Borrowing") in substantially the form required by Section 2.02(a), 2.02(b),
2.02(c) or 2.02(d), as the case may be, given by the Borrower to the Liquidity
Provider. If a Notice of Borrowing is delivered by the Borrower in respect of
any Borrowing no later than 1:00 p.m. (New York City time) on a Business Day,
upon satisfaction of the conditions precedent set forth in Section 4.02 with
respect to a requested Borrowing, the Liquidity Provider shall make available to
the Borrower, in accordance with its payment instructions, the amount of such
Borrowing in Dollars and immediately available funds, before 4:00 p.m. (New York
City time) on such Business Day or before 1:00 p.m. (New York City time) on such
later Business Day specified in such Notice of Borrowing. If a Notice of
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Borrowing is delivered by the Borrower in respect of any Borrowing after 1:00
p.m. (New York City time) on a Business Day, upon satisfaction of the conditions
precedent set forth in Section 4.02 with respect to a requested Borrowing, the
Liquidity Provider shall make available to the Borrower, in accordance with its
payment instructions, the amount of such Borrowing in Dollars and immediately
available funds, before 1:00 p.m. (New York City time) on the first Business Day
next following the day of receipt of such Notice of Borrowing or on such later
Business Day specified by the Borrower in such Notice of Borrowing. Payments of
proceeds of a Borrowing shall be made by wire transfer of immediately available
funds to the Borrower in accordance with such wire transfer instructions as the
Borrower shall furnish from time to time to the Liquidity Provider for such
purpose. Each Notice of Borrowing shall be irrevocable and binding on the
Borrower. Each Notice of Borrowing shall be effective upon delivery of a copy
thereof to the Liquidity Provider's New York branch at the address specified in
Section 7.02 hereof.
(f) Upon the making of any Advance requested pursuant to a Notice of
Borrowing in accordance with the Borrower's payment instructions, the Liquidity
Provider shall be fully discharged of its obligation hereunder with respect to
such Notice of Borrowing, and the Liquidity Provider shall not thereafter be
obligated to make any further Advances hereunder in respect of such Notice of
Borrowing to the Borrower or to any other Person (including the Trustee or any
Class C Certificateholder). If the Liquidity Provider makes an Advance requested
pursuant to a Notice of Borrowing before 12:00 noon (New York City time) on the
second Business Day after the date of payment specified in said Section 2.02(e),
the Liquidity Provider shall have fully discharged its obligations hereunder
with respect to such Advance and an event of default shall not have occurred
hereunder. Following the making of any Advance pursuant to Section 2.02(b),
2.02(c) or 2.02(d) to fund the Class C Cash Collateral Account, the Liquidity
Provider shall have no interest in or rights to the Class C Cash Collateral
Account, such Advance or any other amounts from time to time on deposit in the
Class C Cash Collateral Account; provided that the foregoing shall not affect or
impair the obligations of the Subordination Agent to make the distributions
contemplated by Section 3.06(e) or 3.06(f) of the Intercreditor Agreement and
provided further, that the foregoing shall not affect or impair the rights of
the Liquidity Provider to provide written instructions with respect to the
investment and reinvestment of amounts in the Class C Cash Collateral Account to
the extent provided in Section 2.02(b) of the Intercreditor Agreement. By paying
to the Borrower proceeds of Advances requested by the Borrower in accordance
with the provisions of this Agreement, the Liquidity Provider makes no
representation as to, and assumes no responsibility for, the correctness or
sufficiency for any purpose of the amount of the Advances so made and requested.
Section 2.03. Fees. The Borrower agrees to pay to the Liquidity
Provider the fees set forth in the Fee Letter.
Section 2.04. Reduction or Termination of the Maximum Commitment. (a)
Automatic Reduction. Promptly following each date on which the Required Amount
is reduced as a result of a reduction in the Pool Balance of the Class C
Certificates or otherwise, the Maximum Commitment shall automatically be reduced
to an amount equal to such reduced Required Amount (as calculated by the
Borrower). The Borrower shall give notice of any such automatic reduction of the
Maximum
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<PAGE> 14
Commitment to the Liquidity Provider and American within two Business Days
thereof. The failure by the Borrower to furnish any such notice shall not affect
such automatic reduction of the Maximum Commitment.
(b) Termination. Upon the making of any Provider Advance or Final
Advance hereunder or the occurrence of the Termination Date, the obligation of
the Liquidity Provider to make further Advances hereunder shall automatically
and irrevocably terminate, and the Borrower shall not be entitled to request any
further Borrowing hereunder.
Section 2.05. Repayments of Interest Advances or the Final Advance.
Subject to Sections 2.06, 2.07 and 2.09 hereof, the Borrower hereby agrees,
without notice of an Advance or demand for repayment from the Liquidity Provider
(which notice and demand are hereby waived by the Borrower), to pay, or to cause
to be paid, to the Liquidity Provider (a) on each date on which the Liquidity
Provider shall make an Interest Advance or the Final Advance, an amount equal to
the amount of such Advance (any such Advance, until repaid, is referred to
herein as an "Unpaid Advance"), plus (b) interest on the amount of each such
Unpaid Advance in the amounts and on the dates determined as provided in Section
3.07; provided that if (i) the Liquidity Provider shall make a Provider Advance
at any time after making one or more Interest Advances which shall not have been
repaid in accordance with this Section 2.05 or (ii) this Liquidity Facility
shall become a Downgraded Facility or Non-Extended Facility at any time when
unreimbursed Interest Advances have reduced the Maximum Available Commitment to
zero, then such Interest Advances shall cease to constitute Unpaid Advances and
shall be deemed to have been changed into an Applied Downgrade Advance or an
Applied Non-Extension Advance, as the case may be, for all purposes of this
Agreement (including, without limitation, for the purpose of determining when
such Interest Advance is required to be repaid to the Liquidity Provider in
accordance with Section 2.06 and for the purposes of Section 2.06(b)). The
Borrower and the Liquidity Provider agree that the repayment in full of each
Interest Advance and Final Advance on the date such Advance is made is intended
to be a contemporaneous exchange for new value given to the Borrower by the
Liquidity Provider. For the avoidance of doubt, interest payable on an Interest
Advance or the Final Advance shall not be regarded as overdue unless such
interest is not paid when due under Section 3.07.
Section 2.06. Repayments of Provider Advances. (a) Amounts advanced
hereunder in respect of a Provider Advance shall be deposited in the Class C
Cash Collateral Account and invested and withdrawn from the Class C Cash
Collateral Account as set forth in Sections 3.06(c), 3.06(d), 3.06(e) and
3.06(f) of the Intercreditor Agreement. Subject to Sections 2.07 and 2.09, the
Borrower agrees to pay to the Liquidity Provider, on each Regular Distribution
Date, commencing on the first Regular Distribution Date after the making of a
Provider Advance, interest on the principal amount of any such Provider Advance,
in the amounts determined as provided in Section 3.07; provided, however, that
amounts in respect of a Provider Advance withdrawn from the Class C Cash
Collateral Account for the purpose of paying interest on the Class C
Certificates in accordance with Section 3.06(f) of the Intercreditor Agreement
(the amount of any such withdrawal being (y) in the case of a Downgrade Advance,
an "Applied Downgrade Advance" and (z) in the case of a Non-Extension Advance,
an "Applied Non-Extension Advance" and, together with an Applied
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Downgrade Advance, an "Applied Provider Advance") shall thereafter (subject to
Section 2.06(b)) be treated as an Interest Advance under this Agreement for
purposes of determining the Applicable Liquidity Rate for interest payable
thereon and the dates on which such interest is payable; provided further,
however, that if, following the making of a Provider Advance, the Liquidity
Provider delivers a Termination Notice to the Borrower pursuant to Section 6.01,
such Provider Advance shall thereafter be treated as a Final Advance under this
Agreement for purposes of determining the Applicable Liquidity Rate for interest
payable thereon and the dates on which such interest is payable. Subject to
Sections 2.07 and 2.09 hereof, immediately upon the withdrawal of any amounts
from the Class C Cash Collateral Account on account of a reduction in the
Required Amount, the Borrower shall repay to the Liquidity Provider a portion of
the Provider Advances in a principal amount equal to such reduction, plus
interest on the principal amount prepaid as provided in Section 3.07.
(b) At any time when an Applied Provider Advance (or any portion
thereof) is outstanding, upon the deposit in the Class C Cash Collateral Account
of any amount pursuant to clause "third" of Section 2.04(b) of the Intercreditor
Agreement, clause "third" of Section 3.02 of the Intercreditor Agreement or
clause "fourth" of Section 3.03 of the Intercreditor Agreement (any such amount
being a "Replenishment Amount") for the purpose of replenishing or increasing
the balance thereof up to the Required Amount at such time, (i) the aggregate
outstanding principal amount of all Applied Provider Advances (and of Provider
Advances treated as an Interest Advance for purposes of determining the
Applicable Liquidity Rate for interest payable thereon) shall be automatically
reduced by the amount of such Replenishment Amount and (ii) the aggregate
outstanding principal amount of all Unapplied Provider Advances shall be
automatically increased by the amount of such Replenishment Amount.
(c) Upon the provision of a Replacement Liquidity Facility in
replacement of this Agreement in accordance with Section 3.06(e) of the
Intercreditor Agreement, as provided in Section 3.06(f) of the Intercreditor
Agreement, amounts remaining on deposit in the Class C Cash Collateral Account
after giving effect to any Applied Provider Advance on the date of such
replacement shall be reimbursed to the Liquidity Provider, but only to the
extent such amounts are necessary to repay in full to the Liquidity Provider all
amounts owing to it hereunder.
Section 2.07. Payments to the Liquidity Provider Under the
Intercreditor Agreement. In order to provide for payment or repayment to the
Liquidity Provider of any amounts hereunder, the Intercreditor Agreement
provides that amounts available and referred to in Articles II and III of the
Intercreditor Agreement, to the extent payable to the Liquidity Provider
pursuant to the terms of the Intercreditor Agreement (including, without
limitation, Section 3.06(f) of the Intercreditor Agreement), shall be paid to
the Liquidity Provider in accordance with the terms thereof (but, for the
avoidance of doubt, without duplication of or increase in any amounts payable
hereunder). Amounts so paid to the Liquidity Provider shall be applied by the
Liquidity Provider in the order of priority required by the applicable
provisions of Articles II and III of the Intercreditor Agreement and shall
discharge in full the corresponding obligations of the Borrower hereunder.
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Section 2.08. Book Entries. The Liquidity Provider shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower resulting from Advances made from time to time and
the amounts of principal and interest payable hereunder and paid from time to
time in respect thereof; provided, however, that the failure by the Liquidity
Provider to maintain such account or accounts shall not affect the obligations
of the Borrower in respect of Advances.
Section 2.09. Payments from Available Funds Only. All payments to be
made by the Borrower under this Agreement shall be made only from the amounts
that constitute Scheduled Payments, Special Payments and other payments under
the Operative Agreements, including payment under Section 4.02 of the
Participation Agreements and payments under Section 2.14 of the Indentures, and
only to the extent that the Borrower shall have sufficient income or proceeds
therefrom to enable the Borrower to make payments in accordance with the terms
hereof after giving effect to the priority of payments provisions set forth in
the Intercreditor Agreement. The Liquidity Provider agrees that it will look
solely to such amounts to the extent available for distribution to it as
provided in the Intercreditor Agreement and this Agreement and that the
Borrower, in its individual capacity, is not personally liable to it for any
amounts payable or liability under this Agreement except as expressly provided
in this Agreement, the Intercreditor Agreement or any Participation Agreement.
Amounts on deposit in the Class C Cash Collateral Account shall be available to
the Borrower to make payments under this Agreement only to the extent and for
the purposes expressly contemplated in Section 3.06(f) of the Intercreditor
Agreement.
Section 2.10. Extension of the Expiry Date; Non-Extension Advance. If
the Expiry Date is prior to the date that is 15 days after the Final Legal
Distribution Date for the Class C Certificates, then no earlier than the 60th
day and no later than the 40th day prior to the then applicable Expiry Date, the
Borrower may request in writing that the Liquidity Provider extend the Expiry
Date to the earlier of (i) the date that is 15 days after the Final Legal
Distribution Date for the Class C Certificates and (ii) the date that is the day
immediately preceding the 364th day after the last day of the Consent Period
(unless the obligations of the Liquidity Provider hereunder are earlier
terminated in accordance herewith). The Liquidity Provider shall by notice (the
"Consent Notice") to the Borrower during the period commencing on the date that
is 60 days prior to the then effective Expiry Date and ending on the date that
is 25 days prior to the then effective Expiry Date (the "Consent Period") advise
the Borrower whether, in its sole discretion, it agrees to so extend the Expiry
Date; provided, however, that such extension shall not be effective with respect
to the Liquidity Provider if, by notice (the "Withdrawal Notice") to the
Borrower prior to the end of the Consent Period, the Liquidity Provider revokes
its Consent Notice. If the Liquidity Provider advises the Borrower in the
Consent Notice that such Expiry Date shall not be so extended, or gives a
Withdrawal Notice to the Borrower prior to the end of the Consent Period, or
fails to irrevocably and unconditionally advise the Borrower on or before the
end of the Consent Period that such Expiry Date shall be so extended (and, in
each case, if the Liquidity Provider shall not have been replaced in accordance
with Section 3.06(e) of the Intercreditor Agreement), the Borrower shall be
entitled on and after the date on which the Consent Period ends (but prior to
the then effective Expiry Date) to request a Non-Extension Advance in accordance
with Section 2.02(b) hereof and Section 3.06(d) of the Intercreditor
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Agreement. If any amounts shall be drawn pursuant to a Non-Extension Advance
and, within 30 days thereafter, the Liquidity Provider shall not have been
replaced, then at any time following the 30th day after such Non-Extension
Advance, the Liquidity Provider may, by written notice to the Borrower, agree to
reinstate the Liquidity Facility on the terms of the existing Liquidity Facility
for a period ending on the 364th day after the end of the Consent Period;
provided, however, that in such event the Liquidity Provider shall reimburse the
Borrower for any costs actually incurred by or on behalf of the Borrower in
drawing pursuant to the Non-Extension Advance and funding the Class C Cash
Collateral Account or otherwise in connection with the Non-Extension Advance.
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. Increased Costs. If as a result of any Regulatory Change
there shall be any increase by an amount reasonably deemed by the Liquidity
Provider to be material in the actual cost to the Liquidity Provider of making,
funding or maintaining any Advances or its obligation to make any such Advances
or there shall be any reduction by an amount reasonably deemed by the Liquidity
Provider to be material in the amount receivable by the Liquidity Provider under
this Agreement or the Intercreditor Agreement in respect thereof, and in case of
either such an increase or reduction, such event does not arise from the gross
negligence or willful misconduct of the Liquidity Provider, from its breach of
any of its representations, warranties, covenants or agreements contained herein
or in the Intercreditor Agreement or from its failure to comply with any such
Regulatory Change (any such increase or reduction being referred to herein as an
"Increased Cost"), then the Borrower shall from time to time pay to the
Liquidity Provider an amount equal to such Increased Cost within 15 Business
Days after delivery to the Borrower and American of a certificate of an officer
of the Liquidity Provider describing in reasonable detail the event by reason of
which it claims such Increased Cost and the basis for the determination of the
amount of such Increased Cost; provided that, the Borrower shall be obligated to
pay amounts only with respect to any Increased Costs accruing from the date 45
days prior to the date of delivery of such certificate. Such certificate, in the
absence of manifest error, shall be considered prima facie evidence of the
amount for purposes of this Agreement; provided that any determinations and
allocations by the Liquidity Provider of the effect of any Regulatory Change on
the costs of maintaining the Advances are made on a reasonable basis. The
Liquidity Provider shall not be entitled to assert any claim under this Section
3.01 in respect of or attributable to Taxes. The Liquidity Provider will notify
the Borrower and American as promptly as practicable of any event occurring
after the date of this Agreement that will entitle the Liquidity Provider to
compensation under this Section 3.01. The Liquidity Provider agrees to
investigate all commercially reasonable alternatives for reducing any Increased
Costs and to use all commercially reasonable efforts to avoid or minimize, to
the greatest extent possible, any claim in respect of Increased Costs,
including, without limitation, by designating a different Lending Office, if
such designation or other action would avoid the need for, or reduce the amount
of, any such claim; provided that the foregoing shall not obligate the Liquidity
Provider to take any action that would, in its reasonable judgment, cause the
Liquidity Provider to incur any material loss or cost, unless the Borrower or
American agrees to reimburse the Liquidity Provider therefor. If no such
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designation or other action is effected, or, if effected, fails to avoid the
need for any claim in respect of Increased Costs, American may arrange for a
Replacement Liquidity Facility in accordance with Section 3.06(e) of the
Intercreditor Agreement.
Notwithstanding the foregoing provisions, in no event shall the
Borrower be required to make payments under this Section 3.01: (a) in respect of
any Regulatory Change proposed by any applicable governmental authority
(including any branch of a legislature), central bank or comparable agency of
the United States or the Liquidity Provider's jurisdiction of organization and
pending as of the date of this Agreement (it being agreed that the consultative
paper issued by the Basel Committee on Banking Supervision entitled "A New
Capital Adequacy Framework" shall not be considered a Regulatory Change proposed
as of the date of this Agreement); (b) if a claim hereunder in respect of an
Increased Cost arises through circumstances peculiar to the Liquidity Provider
and that do not affect similarly organized commercial banking institutions in
the same jurisdiction generally that are in compliance with the law, rule,
regulation or interpretation giving rise to the Regulatory Change relating to
such Increased Cost; (c) if the Liquidity Provider shall fail to comply with its
obligations under this Section 3.01; or (d) if the Liquidity Provider is not
also seeking payment for similar increased costs in other similarly situated
transactions.
Section 3.02. [Intentionally omitted.]
Section 3.03. Withholding Taxes. (a) All payments made by the Borrower
under this Agreement shall be made without deduction or withholding for or on
account of any Taxes, unless such deduction or withholding is required by law.
If any Taxes are so required to be withheld or deducted from any amounts payable
to the Liquidity Provider under this Agreement, the Borrower shall pay to the
relevant authorities the full amount so required to be deducted or withheld and,
if such Taxes are Covered Taxes, pay to the Liquidity Provider such additional
amounts as shall be necessary to ensure that the net amount actually received by
the Liquidity Provider (after deduction or withholding of all Covered Taxes)
shall be equal to the full amount that would have been received by the Liquidity
Provider had no withholding or deduction of Covered Taxes been required. The
Liquidity Provider agrees to use reasonable efforts (consistent with applicable
legal and regulatory restrictions) to change the jurisdiction of its Lending
Office if making such change would avoid the need for, or reduce the amount of,
any such additional amounts that may thereafter accrue and would not, in the
reasonable judgment of the Liquidity Provider, be otherwise materially
disadvantageous to the Liquidity Provider. If the Liquidity Provider receives a
refund of, or realizes a net Tax benefit not otherwise available to it as a
result of, any Taxes for which additional amounts were paid by the Borrower
pursuant to this Section 3.03, the Liquidity Provider shall pay to the Borrower
(for deposit into the Collection Account) the amount of such refund (and any
interest thereon) or net benefit.
The Liquidity Provider will (i) provide (on its behalf and on behalf of
any participant holding a Participation pursuant to Section 7.08) to the
Borrower (x) on or prior to the Effective Date two valid completed and executed
copies of Internal Revenue Service Form W8-BEN, including thereon a valid U.S.
taxpayer identification number (or, with respect to any such participant, such
other form or documentation as may be applicable) covering all amounts
receivable by it in connection with the
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transactions contemplated by the Operative Agreements and (y) thereafter from
time to time such additional forms or documentation as may be necessary to
establish an available exemption from withholding of United States Tax on
payments hereunder so that such forms or documentation are effective for all
periods during which it is the Liquidity Provider and (ii) provide timely notice
to the Borrower if any such form or documentation is or becomes inaccurate. The
Liquidity Provider shall deliver to the Borrower such other forms or documents
as may be reasonably requested by the Borrower or required by applicable law to
establish that payments hereunder are exempt from or entitled to a reduced rate
of Covered Taxes.
(b) All payments (including, without limitation, Advances) made by the
Liquidity Provider under this Agreement shall be made free and clear of, and
without reduction for or on account of, any Taxes. If any Taxes are required to
be withheld or deducted from any amounts payable to the Borrower under this
Agreement, the Liquidity Provider shall (i) within the time prescribed therefor
by applicable law pay to the appropriate governmental or taxing authority the
full amount of any such Taxes (and any additional Taxes in respect of the
additional amounts payable under clause (ii) hereof) and make such reports or
returns in connection therewith at the time or times and in the manner
prescribed by applicable law, and (ii) pay to the Borrower an additional amount
which (after deduction of all such Taxes) will be sufficient to yield to the
Borrower the full amount which would have been received by it had no such
withholding or deduction been made. Within 30 days after the date of each
payment hereunder, the Liquidity Provider shall furnish to the Borrower the
original or a certified copy of (or other documentary evidence of) the payment
of the Taxes applicable to such payment.
If any exemption from, or reduction in the rate of, any Taxes required
to be borne by the Liquidity Provider under this Section 3.03(b) is reasonably
available to the Borrower without providing any information regarding the
holders or beneficial owners of the Certificates, the Borrower shall deliver the
Liquidity Provider such form or forms and such other evidence of the eligibility
of the Borrower for such exemption or reductions (but without any requirement to
provide any information regarding the holders or beneficial owners of the
Certificates) as the Liquidity Provider may reasonably identify to the Borrower
as being required as a condition to exemption from, or reduction in the rate of,
such Taxes.
Section 3.04. Payments. The Borrower shall make or cause to be made
each payment to the Liquidity Provider under this Agreement so as to cause the
same to be received by the Liquidity Provider not later than 1:00 P.M. (New York
City time) on the day when due. The Borrower shall make all such payments in
Dollars, to the Liquidity Provider in immediately available funds, by wire
transfer to First Union Bank International, Swift/BIC - Code: PNBPUS3N NYC
(Fedwire 0260 0509 2/CHIPS/ABA 0509) in favor of account number 2000 193534 122,
Bayerische Landesbank Girozentrale, Munich, Swift/BIC - Code: BYLADEMM,
Reference RCA American EETC 1999-1B.
Section 3.05. Computations. All computations of interest based on the
Base Rate shall be made on the basis of a year of 365 or 366 days, as the case
may be, and all computations of interest based on the LIBOR Rate shall be made
on the basis of a year of 360 days, in each case for the actual
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number of days (including the first day but excluding the last day) occurring in
the period for which such interest is payable.
Section 3.06. Payment on Non-Business Days. Whenever any payment to be
made hereunder shall be stated to be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day and no additional
interest shall be due as a result (and if so made, shall be deemed to have been
made when due). If any payment in respect of interest on an Advance is so
deferred to the next succeeding Business Day, such deferral shall not delay the
commencement of the next Interest Period for such Advance (if such Advance is a
LIBOR Advance) or reduce the number of days for which interest will be payable
on such Advance on the next interest payment date for such Advance.
Section 3.07. Interest. (a) Subject to Sections 2.07 and 2.09, the
Borrower shall pay, or shall cause to be paid, without duplication, interest on
(i) the unpaid principal amount of each Advance from and including the date of
such Advance (or, in the case of an Applied Provider Advance, from and including
the date on which the amount thereof was withdrawn from the Class C Cash
Collateral Account to pay interest on the Class C Certificates) to but excluding
the date such principal amount shall be paid in full (or, in the case of an
Applied Provider Advance, the date on which the Class C Cash Collateral Account
is fully replenished in respect of such Advance) and (ii) any other amount due
hereunder (whether fees, commissions, expenses or other amounts or, to the
extent permitted by law, installments of interest on Advances or any such other
amount) that is not paid when due (whether at stated maturity, by acceleration
or otherwise) from and including the due date thereof to but excluding the date
such amount is paid in full, in each such case, at the interest rate per annum
for each day equal to the Applicable Liquidity Rate (as defined below) for such
Advance or such other amount, as the case may be, as in effect for such day, but
in no event at a rate per annum greater than the maximum rate permitted by
applicable law, provided, however, that, if at any time the otherwise applicable
interest rate as set forth in this Section 3.07 shall exceed the maximum rate
permitted by applicable law, then to the maximum extent permitted by applicable
law any subsequent reduction in such interest rate will not reduce the rate of
interest payable pursuant to this Section 3.07 below the maximum rate permitted
by applicable law until the total amount of interest accrued equals the absolute
amount of interest that would have accrued (without additional interest thereon)
if such otherwise applicable interest rate as set forth in this Section 3.07 had
at all relevant times been in effect.
(b) Except as provided in Section 3.07(e), each Advance will be either
a Base Rate Advance or a LIBOR Advance as provided in this Section 3.07. Each
such Advance will be a Base Rate Advance for the period from the date of its
borrowing to (but excluding) the third Business Day following the Liquidity
Provider's receipt of the Notice of Borrowing for such Advance. Thereafter, such
Advance shall be a LIBOR Advance; provided that the Borrower (at the direction
of the Controlling Party, so long as the Liquidity Provider is not the
Controlling Party) may (x) convert the Final Advance into a Base Rate Advance on
the last day of an Interest Period for such Advance by giving the Liquidity
Provider no less than four Business Days' prior written notice of such election
or (y) elect to maintain the Final Advance as a Base Rate Advance by not
requesting a conversion
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of the Final Advance to a LIBOR Advance under Clause (5) of the applicable
Notice of Borrowing (or, if, pursuant to Section 2.06, such Final Advance is
deemed to have been made without delivery of a Notice of Borrowing, by
requesting, prior to 11:00 a.m. on the first Business Day immediately following
the Borrower's receipt of the applicable Termination Notice, that such Final
Advance not be converted from a Base Rate Advance to a LIBOR Advance).
(c) Each LIBOR Advance shall bear interest during each Interest Period
at a rate per annum equal to the LIBOR Rate for such Interest Period plus the
Applicable Margin for such LIBOR Advance, payable in arrears on the last day of
such Interest Period and, in the event of the payment of principal of such LIBOR
Advance on a day other than such last day, on the date of such payment (to the
extent of interest accrued on the amount of principal repaid).
(d) Each Base Rate Advance shall bear interest at a rate per annum
equal to the Base Rate plus the Applicable Margin for such Base Rate Advance,
payable in arrears on each Regular Distribution Date and, in the event of the
payment of principal of such Base Rate Advance on a day other than a Regular
Distribution Date, on the date of such payment (to the extent of interest
accrued on the amount of principal repaid).
(e) Each outstanding Unapplied Provider Advance shall bear interest in
an amount equal to the Investment Earnings on amounts on deposit in the Class C
Cash Collateral Account for such Unapplied Provider Advance on the amount of
such Unapplied Provider Advance from time to time, payable in arrears on each
Regular Distribution Date.
(f) Each amount not paid when due hereunder (whether fees, commissions,
expenses or other amounts or, to the extent permitted by applicable law,
installments of interest on Advances but excluding Advances) shall bear interest
at a rate per annum equal to the Base Rate plus 1.75% per annum until paid.
(g) Each change in the Base Rate shall become effective immediately.
The rates of interest specified in this Section 3.07 with respect to any Advance
or other amount shall be referred to as the "Applicable Liquidity Rate".
Section 3.08. Replacement of Borrower. Subject to Section 5.02, from
time to time and subject to the successor Borrower's meeting the eligibility
requirements set forth in Section 6.09 of the Intercreditor Agreement applicable
to the Subordination Agent, upon the effective date and time specified in a
written and completed Notice of Replacement Subordination Agent in substantially
the form of Annex VI (a "Notice of Replacement Subordination Agent") delivered
to the Liquidity Provider by the then Borrower, the successor Borrower
designated therein shall become the Borrower for all purposes hereunder.
Section 3.09. Funding Loss Indemnification. The Borrower shall pay to
the Liquidity Provider, upon the request of the Liquidity Provider, such amount
or amounts as shall be sufficient (in the reasonable opinion of the Liquidity
Provider) to compensate it for any loss, cost or expense
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incurred by reason of the liquidation or redeployment of deposits or other funds
acquired by the Liquidity Provider to fund or maintain any LIBOR Advance (but
excluding loss of the Applicable Margin or anticipated profits) incurred as a
result of:
(1) Any repayment of a LIBOR Advance on a date other than the last day
of the Interest Period for such Advance; or
(2) Any failure by the Borrower to borrow a LIBOR Advance on the date
for borrowing specified in the relevant notice under Section 2.02.
Section 3.10. Illegality. Notwithstanding any other provision in this
Agreement, if any change in any law, rule or regulation applicable to or binding
on the Liquidity Provider, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by the
Liquidity Provider with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency shall
make it unlawful or impossible for the Liquidity Provider to maintain or fund
its LIBOR Advances, then upon notice to the Borrower and American by the
Liquidity Provider, the outstanding principal amount of the LIBOR Advances shall
be converted to Base Rate Advances (a) immediately upon demand of the Liquidity
Provider, if such change or compliance with such request, in the reasonable
judgment of the Liquidity Provider, requires immediate conversion; or (b) at the
expiration of the last Interest Period to expire before the effective date of
any such change or request. The Liquidity Provider will notify the Borrower and
American as promptly as practicable of any event that will lead to the
conversion of LIBOR Advances to Base Rate Advances under this Section 3.10. The
Liquidity Provider agrees to investigate all commercially reasonable
alternatives for avoiding the need for such conversion, including, without
limitation, designating a different Lending Office, if such designation or other
action would avoid the need to convert such LIBOR Advances to Base Rate
Advances; provided, that the foregoing shall not obligate the Liquidity Provider
to take any action that would, in its reasonable judgment, cause the Liquidity
Provider to incur any material loss or cost, unless the Borrower or American
agrees to reimburse the Liquidity Provider therefor. If no such designation or
other action is effected, or, if effected, fails to avoid the need for
conversion of the LIBOR Advances to Base Rate Advances, American may arrange for
a Replacement Liquidity Facility in accordance with Section 3.06(e) of the
Intercreditor Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent to Effectiveness of Section 2.01.
Section 2.01 of this Agreement shall become effective on and as of the first
date (the "Effective Date") on which the following conditions precedent have
been satisfied (or waived by the appropriate party or parties):
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(a) The Liquidity Provider shall have received on or before the Closing
Date each of the following, and in the case of each document delivered pursuant
to paragraphs (i), (ii) and (iii), each in form and substance satisfactory to
the Liquidity Provider:
(i) This Agreement duly executed on behalf of the Borrower;
(ii) The Intercreditor Agreement duly executed on behalf of
each of the parties thereto (other than the Liquidity Provider);
(iii) Fully executed copies of each of the Operative
Agreements executed and delivered on or before the Closing Date (other
than this Agreement and the Intercreditor Agreement);
(iv) A copy of the Prospectus Supplement and specimen copies
of the Class C Certificates;
(v) An executed copy of each document, instrument, certificate
and opinion delivered on or before the Closing Date pursuant to the
Class C Trust Agreement, the Intercreditor Agreement and the other
Operative Agreements (in the case of each such opinion, either
addressed to the Liquidity Provider or accompanied by a letter from the
counsel rendering such opinion to the effect that the Liquidity
Provider is entitled to rely on such opinion as of its date as if it
were addressed to the Liquidity Provider); and
(vi) An agreement from American, pursuant to which (x)
American agrees to provide copies of quarterly financial statements and
audited annual financial statements to the Liquidity Provider and (y)
American agrees to allow the Liquidity Provider to discuss such
transactions with officers and employees of American.
(b) On and as of the Effective Date no event shall have occurred and be
continuing, or would result from the entering into of this Agreement or the
making of any Advance, which constitutes a Liquidity Event of Default.
(c) The filings referred to in Sections 3.01(d) and 3.01(f) of the
Participation Agreements shall have been filed (or shall be in the process of
being filed).
(d) The Liquidity Provider shall have received payment in full of the
fees and other sums required to be paid to or for the account of the Liquidity
Provider on or prior to the Effective Date pursuant to the Fee Letter.
(e) All conditions precedent to the issuance of the Certificates under
the Trust Agreement shall have been satisfied or waived, all conditions
precedent to the effectiveness of the other Liquidity Facilities shall have been
satisfied or waived, and all conditions precedent to the purchase
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<PAGE> 24
of the Certificates by the Underwriters under the Underwriting Agreement shall
have been satisfied (unless any of such conditions precedent under the
Underwriting Agreement shall have been waived by the Underwriters).
(f) The Borrower and American shall have received a certificate, dated
the Effective Date signed by a duly authorized representative of the Liquidity
Provider, certifying that all conditions precedent specified in this Section
4.01 have been satisfied or waived by the Liquidity Provider.
Section 4.02. Conditions Precedent to Borrowing. The obligation of the
Liquidity Provider to make an Advance on the occasion of each Borrowing shall be
subject to the conditions precedent that the Effective Date shall have occurred
and, prior to the time of such Borrowing, the Borrower shall have delivered a
Notice of Borrowing which conforms to the terms and conditions of this
Agreement.
ARTICLE V
COVENANTS
Section 5.01. Affirmative Covenants of the Borrower. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity Provider hereunder, the Borrower will, unless the Liquidity
Provider shall otherwise consent in writing:
(a) Performance of Agreements. Punctually pay or cause to be paid all
amounts payable by it under this Agreement and the Intercreditor Agreement and
observe and perform in all material respects the conditions, covenants and
requirements applicable to it contained in this Agreement and the Intercreditor
Agreement.
(b) Reporting Requirements. Furnish to the Liquidity Provider with
reasonable promptness, such other information and data with respect to the
transactions contemplated by the Operative Agreements as from time to time may
be reasonably requested by the Liquidity Provider; and permit the Liquidity
Provider, upon reasonable notice, to inspect the Borrower's books and records
with respect to such transactions and to meet with officers and employees of the
Borrower to discuss such transactions.
(c) Certain Operative Agreements. Furnish to the Liquidity Provider
with reasonable promptness, such Operative Agreements entered into after the
date hereof as from time to time may be reasonably requested by the Liquidity
Provider.
Section 5.02. Negative Covenants of the Borrower. Subject to the first
and second sentences and the fourth paragraph of Section 7.01(a) of the
Intercreditor Agreement and Section 7.01(b) of the Intercreditor Agreement, so
long as any Advance shall remain unpaid or the Liquidity Provider shall have any
Maximum Commitment hereunder or the Borrower shall have any obligation
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to pay any amount to the Liquidity Provider hereunder, the Borrower will not
appoint or permit or suffer to be appointed any successor Borrower without the
prior written consent of the Liquidity Provider, which consent shall not be
unreasonably withheld or delayed.
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. Liquidity Events of Default. If (a) any Liquidity Event
of Default has occurred and is continuing and (b) there is a Performing Note
Deficiency, the Liquidity Provider may, in its discretion, deliver to the
Borrower a Termination Notice, the effect of which shall be to cause (i) this
Agreement to expire at the close of business on the fifth Business Day after the
date on which such Termination Notice is received by the Borrower, (ii) the
Borrower to promptly request, and the Liquidity Provider to promptly make, a
Final Advance in accordance with Section 2.02(d) hereof and Section 3.06(i) of
the Intercreditor Agreement, (iii) all other outstanding Advances to be
automatically converted into Final Advances for purposes of determining the
Applicable Liquidity Rate for interest payable thereon and (iv) subject to
Sections 2.07 and 2.09, all Advances, any accrued interest thereon and any other
amounts outstanding hereunder to become immediately due and payable to the
Liquidity Provider.
ARTICLE VII
MISCELLANEOUS
Section 7.01. No Oral Modifications or Continuing Waivers. No terms or
provisions of this Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the Borrower and the
Liquidity Provider and any other Person whose consent is required pursuant to
this Agreement; provided that no such change or other action shall affect the
payment obligations of American Airlines without American's prior written
consent; and any waiver of the terms hereof shall be effective only in the
specific instance and for the specific purpose given.
Section 7.02. Notices. Unless otherwise expressly specified or
permitted by the terms hereof, all notices required or permitted under the terms
and provisions of this Agreement shall be in English and in writing, and any
such notice may be given by United States mail, courier service or facsimile or
any other customary means of communication, and any such notice shall be
effective when delivered (or, if mailed, three Business Days after deposit,
postage prepaid, in the first class U.S. mail and, if delivered by facsimile,
upon completion of transmission and confirmation by the sender (by a telephone
call to a representative of the recipient or by machine confirmation) that the
transmission was received),
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If to the Borrower, to:
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION
225 Asylum, Goodwin Square
Hartford, Connecticut 06103
Attention: Corporate Trust Division
Telephone: (860) 244-1844
Telecopy: (860) 244-1881
If to the Liquidity Provider,
If by mail to:
BAYERISCHE LANDESBANK GIROZENTRALE
c/o Bayerische Landesbank Girozentrale, New York Branch
560 Lexington Avenue
New York, New York 10022
Attention: Patricia Sanchez
Telephone: (212) 310-9810
Telecopy: (212) 310-9930
(With a copy to the address of the Liquidity Provider set forth below)
If by other means of communication to:
BAYERISCHE LANDESBANK GIROZENTRALE
Brienner Strasse 18
D-80333 Munich, Germany
Attention: Aircraft Finance Department, 7650
Telephone: 49-89-2171-2360
Telecopy: 49-89-2171-3763
With a copy of any Notice of Borrowing to:
BAYERISCHE LANDESBANK GIROZENTRALE
560 Lexington Avenue
New York, New York 10022
Attention: Patricia Sanchez
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Telephone: (212) 310-9810
Telecopy: (212) 310-9930
The Borrower or the Liquidity Provider, by notice to the other, may
designate additional or different addresses for subsequent notices or
communications.
Section 7.03. No Waiver; Remedies. No failure on the part of the
Liquidity Provider to exercise, and no delay in exercising, any right under this
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any right under this Agreement preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 7.04. Further Assurances. The Borrower agrees to do such
further acts and things and to execute and deliver to the Liquidity Provider
such additional assignments, agreements, powers and instruments as the Liquidity
Provider may reasonably require or deem advisable to carry into effect the
purposes of this Agreement and the other Operative Agreements or to better
assure and confirm unto the Liquidity Provider its rights, powers and remedies
hereunder and under the other Operative Agreements.
Section 7.05. Indemnification; Survival of Certain Provisions. The
Liquidity Provider shall be indemnified hereunder to the extent and in the
manner described in Section 4.02 of the Participation Agreements. In addition,
the Borrower agrees to indemnify, protect, defend and hold harmless each
Liquidity Indemnitee from and against all Expenses of any kind or nature
whatsoever (other than any Expenses of the nature described in Sections 3.01 or
7.07 or in the Fee Letter (regardless of whether indemnified against pursuant to
said Sections or in such Fee Letter)), that may be imposed on or incurred by
such Liquidity Indemnitee, in any way relating to, resulting from, or arising
out of or in connection with, any action, suit or proceeding by any third party
against such Liquidity Indemnitee and relating to this Agreement, the Fee
Letter, the Intercreditor Agreement or any Participation Agreement; provided,
however, that the Borrower shall not be required to indemnify, protect, defend
and hold harmless any Liquidity Indemnitee in respect of any Expense of such
Liquidity Indemnitee to the extent such Expense is (i) attributable to the
negligence or willful misconduct of such Liquidity Indemnitee or any other
Liquidity Indemnitee, (ii) an ordinary and usual operating overhead expense,
(iii) attributable to the failure by such Liquidity Indemnitee or any other
Liquidity Indemnitee to perform or observe any agreement, covenant or condition
on its part to be performed or observed in this Agreement, the Intercreditor
Agreement, the Fee Letter or any other Operative Agreement to which it is a
party or (iv) otherwise excluded from the indemnification provisions contained
in Section 4.02 of the Participation Agreements. The provisions of Sections
3.01, 3.03, 3.09, 7.05 and 7.07 and the indemnities contained in Section 4.02 of
the Participation Agreements shall survive the termination of this Agreement.
Section 7.06. Liability of the Liquidity Provider. (a) Neither the
Liquidity Provider nor any of its officers, employees or directors shall be
liable or responsible for: (i) the use which may be made of the Advances or any
acts or omissions of the Borrower or any beneficiary or transferee in
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connection therewith; (ii) the validity, sufficiency or genuineness of
documents, or of any endorsement thereon, even if such documents should prove to
be in any or all respects invalid, insufficient, fraudulent or forged; or (iii)
the making of Advances by the Liquidity Provider against delivery of a Notice of
Borrowing and other documents which do not comply with the terms hereof;
provided, however, that the Borrower shall have a claim against the Liquidity
Provider, and the Liquidity Provider shall be liable to the Borrower, to the
extent of any damages suffered by the Borrower that were the result of (A) the
Liquidity Provider's willful misconduct or gross negligence in determining
whether documents presented hereunder comply with the terms hereof or (B) any
breach by the Liquidity Provider of any of the terms of this Agreement or the
Intercreditor Agreement, including, but not limited to, the Liquidity Provider's
failure to make lawful payment hereunder after the delivery to it by the
Borrower of a Notice of Borrowing complying with the terms and conditions
hereof.
(b) Neither the Liquidity Provider nor any of its officers, employees
or directors or affiliates shall be liable or responsible in any respect for (i)
any error, omission, interruption or delay in transmission, dispatch or delivery
of any message or advice, however transmitted, in connection with this Agreement
or any Notice of Borrowing delivered hereunder or (ii) any action, inaction or
omission which may be taken by it in good faith, absent willful misconduct or
negligence (in which event the extent of the Liquidity Provider's potential
liability to the Borrower shall be limited as set forth in the immediately
preceding paragraph), in connection with this Agreement or any Notice of
Borrowing.
Section 7.07. Certain Costs and Expenses. The Borrower agrees promptly
to pay, or cause to be paid, (a) the reasonable fees, expenses and disbursements
of Winthrop, Stimson, Putnam & Roberts, special counsel for the Liquidity
Provider, and Schwarz Kurtze Schniewand Kelwing Wicke, special German counsel to
the Liquidity Provider, in connection with the preparation, negotiation,
execution, delivery, filing and recording of the Operative Agreements, any
waiver or consent thereunder or any amendment thereof and (b) if a Liquidity
Event of Default occurs, all out-of-pocket expenses incurred by the Liquidity
Provider, including reasonable fees and disbursements of counsel, in connection
with such Liquidity Event of Default and any collection, bankruptcy, insolvency
and other enforcement proceedings in connection therewith. In addition, the
Borrower shall pay any and all recording, stamp and other similar taxes and fees
payable or determined to be payable in the United States in connection with the
execution, delivery, filing and recording of this Agreement, any other Operative
Agreement and such other documents, and agrees to save the Liquidity Provider
harmless from and against any and all liabilities with respect to or resulting
from any delay in paying or omission to pay such taxes or fees.
Section 7.08. Binding Effect; Participations. (a) This Agreement shall
be binding upon and inure to the benefit of the Borrower and the Liquidity
Provider and their respective successors and permitted assigns, except that
neither the Liquidity Provider (except as otherwise provided in this Section
7.08) nor (except as contemplated by Section 3.08) the Borrower shall have the
right to assign, pledge or otherwise transfer its rights or obligations
hereunder or any interest herein, subject to the Liquidity Provider's right to
grant Participations pursuant to Section 7.08(b).
25
<PAGE> 29
(b) The Liquidity Provider agrees that it will not grant any
participation (including, without limitation, a "risk participation") (any such
participation, a "Participation") in or to all or a portion of its rights and
obligations hereunder or under the other Operative Agreements, unless all of the
following conditions are satisfied: (i) such Participation is to a Permitted
Transferee, (ii) such Participation is made in accordance with all applicable
laws, including, without limitation, the Securities Act of 1933, as amended, the
Trust Indenture Act of 1939, as amended, and any other applicable laws relating
to the transfer of similar interests and (iii) such Participation shall not be
made under circumstances that require registration under the Securities Act of
1933, as amended, or qualification of any indenture under the Trust Indenture
Act of 1939, as amended. Notwithstanding any such Participation, the Liquidity
Provider agrees that (1) the Liquidity Provider's obligations under the
Operative Agreements shall remain unchanged, and such participant shall have no
rights or benefits as against American or the Borrower or under any Operative
Agreement, (2) the Liquidity Provider shall remain solely responsible to the
other parties to the Operative Agreements for the performance of such
obligations, (3) the Liquidity Provider shall remain the maker of any Advances,
and the other parties to the Operative Agreements shall continue to deal solely
and directly with the Liquidity Provider in connection with the Advances and the
Liquidity Provider's rights and obligations under the Operative Agreements, (4)
the Liquidity Provider shall be solely responsible for any withholding Taxes or
any filing or reporting requirements relating to such Participation and shall
hold the Borrower and American and their respective successors, permitted
assigns, affiliates, agents and servants harmless against the same and (5)
neither American nor the Borrower shall be required to pay to the Liquidity
Provider any amount under Section 3.01 or Section 3.03 greater than it would
have been required to pay had there not been any grant of a Participation by the
Liquidity Provider. The Liquidity Provider may, in connection with any
Participation or proposed Participation pursuant to this Section 7.08(b),
disclose to the participant or proposed participant any information relating to
the Operative Agreements or to the parties thereto furnished to the Liquidity
Provider thereunder or in connection therewith and permitted to be disclosed by
the Liquidity Provider; provided, however, that prior to any such disclosure,
the participant or proposed participant shall agree in writing for the express
benefit of the Borrower and American to preserve the confidentiality of any
confidential information included therein (subject to customary exceptions).
(c) Notwithstanding the other provisions of this Section 7.08, the
Liquidity Provider may assign and pledge all or any portion of the Advances
owing to it to any Federal Reserve Bank or the United States Treasury as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve
Bank, provided that any payment in respect of such assigned Advances made by the
Borrower to the Liquidity Provider in accordance with the terms of this
Agreement shall satisfy the Borrower's obligations hereunder in respect of such
assigned Advance to the extent of such payment. No such assignment shall release
the Liquidity Provider from its obligations hereunder.
Section 7.09. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such
26
<PAGE> 30
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 7.10. Governing Law. THIS AGREEMENT HAS BEEN DELIVERED IN THE
STATE OF NEW YORK AND THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 7.11. Submission to Jurisdiction; Waiver of Jury Trial; Waiver
of Immunity. (a) Each of the parties hereto, to the extent it may do so under
applicable law, for purposes hereof hereby (i) irrevocably submits itself to the
non-exclusive jurisdiction of the courts of the State of New York sitting in the
City of New York and to the non-exclusive jurisdiction of the United States
District Court for the Southern District of New York, for the purposes of any
suit, action or other proceeding arising out of this Agreement, the subject
matter hereof or any of the transactions contemplated hereby brought by any
party or parties hereto or thereto, or their successors or permitted assigns and
(ii) waives, and agrees not to assert, by way of motion, as a defense, or
otherwise, in any such suit, action or proceeding, that the suit, action or
proceeding is brought in an inconvenient forum, that the venue of the suit,
action or proceeding is improper or that this Agreement or the subject matter
hereof or any of the transactions contemplated hereby may not be enforced in or
by such courts.
(b) THE BORROWER AND THE LIQUIDITY PROVIDER EACH HEREBY AGREE TO WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO
THE SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING
ESTABLISHED, including, without limitation, contract claims, tort claims, breach
of duty claims and all other common law and statutory claims. The Borrower and
the Liquidity Provider each warrant and represent that it has reviewed this
waiver with its legal counsel, and that it knowingly and voluntarily waives its
jury trial rights following consultation with such legal counsel. THIS WAIVER IS
IRREVOCABLE, AND CANNOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS AGREEMENT.
(c) The Liquidity Provider hereby waives any immunity it may have from
the jurisdiction of the courts of the United States or of any state thereof and
waives any immunity any of its properties located in the United States may have
from attachment or execution upon a judgment entered by any such court under the
United States Foreign Sovereign Immunities Act of 1976 or any similar successor
legislation.
Section 7.12. Counterparts. This Agreement may be executed in any
number of counterparts (and each party shall not be required to execute the same
counterpart). Each counterpart of this
27
<PAGE> 31
Agreement including a signature page or pages executed by each of the parties
hereto shall be an original counterpart of this Agreement, but all of such
counterparts together shall constitute one instrument.
Section 7.13. Entirety. This Agreement and the Intercreditor Agreement
constitute the entire agreement of the parties hereto with respect to the
subject matter hereof and supersede all prior understandings and agreements of
such parties.
Section 7.14. Headings. The headings of the various Articles and
Sections herein and in the Table of Contents hereto are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
Section 7.15. Liquidity Provider's Obligation to Make Advances. EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE OBLIGATIONS OF THE LIQUIDITY
PROVIDER TO MAKE ADVANCES HEREUNDER, AND THE BORROWER'S RIGHTS TO DELIVER
NOTICES OF BORROWING REQUESTING THE MAKING OF ADVANCES HEREUNDER, SHALL BE
ABSOLUTE, UNCONDITIONAL AND IRREVOCABLE, AND SHALL BE PAID OR PERFORMED, IN EACH
CASE STRICTLY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.
28
<PAGE> 32
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first set forth above.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Subordination
Agent, as agent and trustee for the
Class C Trust, as Borrower
By: /s/ JOHN G. CORREIA
-------------------------------------
Name: John G. Correia
Title: Assistant Secretary
BAYERISCHE LANDESBANK GIROZENTRALE,
as Liquidity Provider
By: /s/ BERND LONNER
-------------------------------------
Name: Bernd Lonner
Title: Vice President
By: /s/ RUDIGER FERN
-------------------------------------
Name: Rudiger Fern
Title: Senior Vice President
29
<PAGE> 33
ANNEX I to
REVOLVING CREDIT AGREEMENT
INTEREST ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
borrower (the "Borrower"), hereby certifies to Bayerische Landesbank
Girozentrale (the "Liquidity Provider"), with reference to the Revolving Credit
Agreement (1999-1C), dated as of October 6, 1999, between the Borrower and the
Liquidity Provider (the "Liquidity Agreement"; the terms defined therein and not
otherwise defined herein being used herein as therein defined or referenced),
that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of an Interest Advance by the Liquidity Provider to be used for the payment of
the interest on the Class C Certificates which is payable on ____________, ____
(the "Distribution Date") in accordance with the terms and provisions of the
Class C Trust Agreement and the Class C Certificates, which Advance is requested
to be made on ____________, ____. The Interest Advance should be remitted to
[insert wire and account details].
(3) The amount of the Interest Advance requested hereby (i) is
$_______________.__, to be applied in respect of the payment of the interest
which is due and payable on the Class C Certificates on the Distribution Date,
(ii) does not include any amount with respect to the payment of principal of, or
premium on, the Class A-1 Certificates, the Class A-2 Certificates, the Class B
Certificates or the Class C Certificates, or interest on the Class A-1
Certificates, the Class A-2 Certificates or the Class B Certificates, (iii) was
computed in accordance with the provisions of the Class C Certificates, the
Class C Trust Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), (iv) does not exceed the Maximum
Available Commitment on the date hereof and (v) has not been and is not the
subject of a prior or contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will apply the same in accordance with the
terms of Section 3.06(b) of the Intercreditor Agreement, (b) no portion of such
amount shall be applied by the Borrower for any other purpose and (c) no portion
of such amount until so applied shall be commingled with other funds held by the
Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, the making of the Interest Advance as requested by this Notice of
Borrowing shall automatically reduce, subject to reinstatement in accordance
with the terms of the Liquidity Agreement, the Maximum Available Commitment by
an amount equal to the amount of the Interest Advance requested to be made
hereby
I-1
<PAGE> 34
as set forth in clause (i) of paragraph (3) of this Certificate and such
reduction shall automatically result in corresponding reductions in the amounts
available to be borrowed pursuant to a subsequent Advance.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of _________, ____.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Subordination Agent, as Borrower
By:
--------------------------------------
Name:
Title:
I-2
<PAGE> 35
SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with
Interest Advance Notice of Borrowing]
I-3
<PAGE> 36
ANNEX II to
REVOLVING CREDIT AGREEMENT
NON-EXTENSION ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "Borrower"), hereby certifies to Bayerische Landesbank
Girozentrale (the "Liquidity Provider"), with reference to the Revolving Credit
Agreement (1999-1C), dated as of October 6, 1999, between the Borrower and the
Liquidity Provider (the "Liquidity Agreement"; the terms defined therein and not
otherwise defined herein being used herein as therein defined or referenced),
that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Non-Extension Advance by the Liquidity Provider to be used for the
funding of the Class C Cash Collateral Account in accordance with Section
3.06(d) of the Intercreditor Agreement, which Advance is requested to be made on
__________, ____. The Non-Extension Advance should be remitted to [insert wire
and account details].
(3) The amount of the Non-Extension Advance requested hereby (i) is
$_______________.__, which equals the Maximum Available Commitment on the date
hereof and is to be applied in respect of the funding of the Class C Cash
Collateral Account in accordance with Sections 3.06(d) and 3.06(f) of the
Intercreditor Agreement, (ii) does not include any amount with respect to the
payment of the principal of, or premium on, the Class C Certificates, or
principal of, or interest or premium on, the Class A-1 Certificates, the Class
A-2 Certificates or the Class B Certificates, (iii) was computed in accordance
with the provisions of the Class C Certificates, the Class C Trust Agreement and
the Intercreditor Agreement (a copy of which computation is attached hereto as
Schedule I) and (iv) has not been and is not the subject of a prior or
contemporaneous Notice of Borrowing under the Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class C Cash
Collateral Account and apply the same in accordance with the terms of Sections
3.06(d) and 3.06(f) of the Intercreditor Agreement, (b) no portion of such
amount shall be applied by the Borrower for any other purpose and (c) no portion
of such amount until so applied shall be commingled with other funds held by the
Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Non-Extension Advance as requested by this
Notice of Borrowing shall automatically and irrevocably terminate the obligation
of the Liquidity Provider to make further Advances under the Liquidity Agreement
and (B) following the making by the Liquidity Provider of the Non-Extension
II-1
<PAGE> 37
Advance requested by this Notice of Borrowing, the Borrower shall not be
entitled to request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of _________, ____.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Subordination Agent, as Borrower
By:
---------------------------------------
Name:
Title:
II-2
<PAGE> 38
SCHEDULE I TO NON-EXTENSION ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with
Non-Extension Advance Notice of Borrowing]
II-3
<PAGE> 39
ANNEX III to
REVOLVING CREDIT AGREEMENT
DOWNGRADE ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "Borrower"), hereby certifies to Bayerische Landesbank
Girozentrale (the "Liquidity Provider"), with reference to the Revolving Credit
Agreement (1999-1C), dated as of October 6, 1999, between the Borrower and the
Liquidity Provider (the "Liquidity Agreement"; the terms defined therein and not
otherwise defined herein being used herein as therein defined or referenced),
that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Downgrade Advance by the Liquidity Provider to be used for the funding of
the Class C Cash Collateral Account in accordance with Section 3.06(c) of the
Intercreditor Agreement by reason of the downgrading of the short-term unsecured
debt rating or long-term unsecured debt rating of the Liquidity Provider issued
by either Rating Agency below the Threshold Rating, which Advance is requested
to be made on __________, ____. The Downgrade Advance should be remitted to
[insert wire and account details].
(3) The amount of the Downgrade Advance requested hereby (i) is
$_______________.__, which equals the Maximum Available Commitment on the date
hereof and is to be applied in respect of the funding of the Class C Cash
Collateral Account in accordance with Sections 3.06(c) and 3.06(f) of the
Intercreditor Agreement, (ii) does not include any amount with respect to the
payment of the principal of, or premium on, the Class C Certificates, or
principal of, or interest or premium on, the Class A-1 Certificates, the Class
A-2 Certificates or the Class B Certificates, (iii) was computed in accordance
with the provisions of the Class C Certificates, the Class C Trust Agreement and
the Intercreditor Agreement (a copy of which computation is attached hereto as
Schedule I) and (iv) has not been and is not the subject of a prior or
contemporaneous Notice of Borrowing under the Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class C Cash
Collateral Account and apply the same in accordance with the terms of Sections
3.06(c) and 3.06(f) of the Intercreditor Agreement, (b) no portion of such
amount shall be applied by the Borrower for any other purpose and (c) no portion
of such amount until so applied shall be commingled with other funds held by the
Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Downgrade Advance as requested by this Notice
of Borrowing shall automatically and irrevocably terminate the obligation of the
Liquidity Provider to make further Advances under the
III-1
<PAGE> 40
Liquidity Agreement and (B) following the making by the Liquidity Provider of
the Downgrade Advance requested by this Notice of Borrowing, the Borrower shall
not be entitled to request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of _________, ____.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Subordination Agent, as Borrower
By:
-----------------------------------------
Name:
Title:
III-2
<PAGE> 41
SCHEDULE I TO DOWNGRADE ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with
Downgrade Advance Notice of Borrowing]
III-3
<PAGE> 42
ANNEX IV to
REVOLVING CREDIT AGREEMENT
FINAL ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
borrower (the "Borrower"), hereby certifies to Bayerische Landesbank
Girozentrale (the "Liquidity Provider"), with reference to the Revolving Credit
Agreement (1999-1C), dated as of October 6, 1999, between the Borrower and the
Liquidity Provider (the "Liquidity Agreement"; the terms defined therein and not
otherwise defined herein being used herein as therein defined or referenced),
that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Final Advance by the Liquidity Provider to be used for the funding of the
Class C Cash Collateral Account in accordance with Section 3.06(i) of the
Intercreditor Agreement by reason of the receipt by the Borrower of a
Termination Notice from the Liquidity Provider with respect to the Liquidity
Agreement, which Advance is requested to be made on ____________, ____. The
Final Advance should be remitted to [insert wire and account details].
(3) The amount of the Final Advance requested hereby (i) is
$_________________.__, which equals the Maximum Available Commitment on the date
hereof and is to be applied in respect of the funding of the Class C Cash
Collateral Account in accordance with Sections 3.06(f) and 3.06(i) of the
Intercreditor Agreement, (ii) does not include any amount with respect to the
payment of principal of, or premium on, the Class C Certificates, or principal
of, or interest or premium on, the Class A-1 Certificates, the Class A-2
Certificates or the Class B Certificates, (iii) was computed in accordance with
the provisions of the Class C Certificates, the Class C Trust Agreement and the
Intercreditor Agreement (a copy of which computation is attached hereto as
Schedule I) and (iv) has not been and is not the subject of a prior or
contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class C Cash
Collateral Account and apply the same in accordance with the terms of Sections
3.06(f) and 3.06(i) of the Intercreditor Agreement, (b) no portion of such
amount shall be applied by the Borrower for any other purpose and (c) no portion
of such amount until so applied shall be commingled with other funds held by the
Borrower.
[(5) The Borrower hereby requests that the Advance requested hereby be
a Base Rate Advance [and that such Base Rate Advance be converted into a LIBOR
Advance on the third Business Day following your receipt of this notice]*.]
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Final Advance as requested by this Notice of
Borrowing shall automatically and irrevocably
IV-1
<PAGE> 43
terminate the obligation of the Liquidity Provider to make further Advances
under the Liquidity Agreement and (B) following the making by the Liquidity
Provider of the Final Advance requested by this Notice of Borrowing, the
Borrower shall not be entitled to request any further Advances under the
Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of _________, ____.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Subordination Agent, as Borrower
By:
---------------------------------------
Name:
Title:
[* Bracketed language may be included at Borrower's option.]
IV-2
<PAGE> 44
SCHEDULE I TO FINAL ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance
with Final Advance Notice of Borrowing]
IV-3
<PAGE> 45
ANNEX V to
REVOLVING CREDIT AGREEMENT
NOTICE OF TERMINATION
[Date]
State Street Bank and Trust Company of Connecticut, National Association,
as Subordination Agent, as Borrower
225 Asylum Street, Goodwin Square
Hartford, Connecticut 06103
Attention: Corporate Trust Division
Re: Revolving Credit Agreement, dated as of October 6, 1999, between State
Street Bank and Trust Company of Connecticut, National Association, as
Subordination Agent, as agent and trustee for the American Airlines
Pass Through Trust 1999-1C, as Borrower, and Bayerische Landesbank
Girozentrale (the "Liquidity Agreement")
Ladies and Gentlemen:
You are hereby notified that pursuant to Section 6.01 of the Liquidity
Agreement, by reason of the occurrence and continuance of a Liquidity Event of
Default and the existence of a Performing Note Deficiency (each as defined
therein), we are giving this notice to you in order to cause (i) our obligations
to make Advances (as defined therein) under such Liquidity Agreement to
terminate at the close of business on the fifth Business Day after the date on
which you receive this notice and (ii) you to request a Final Advance under the
Liquidity Agreement pursuant to Section 3.06(i) of the Intercreditor Agreement
(as defined in the Liquidity Agreement) as a consequence of your receipt of this
notice.
THIS NOTICE IS THE "NOTICE OF TERMINATION" PROVIDED FOR UNDER THE
LIQUIDITY AGREEMENT. OUR OBLIGATIONS TO MAKE ADVANCES UNDER THE LIQUIDITY
AGREEMENT WILL TERMINATE AT THE CLOSE OF BUSINESS ON THE FIFTH BUSINESS DAY
AFTER THE DATE ON WHICH YOU RECEIVE THIS NOTICE.
Very truly yours,
Bayerische Landesbank Girozentrale,
as Liquidity Provider
By:
--------------------------------
Name:
Title:
cc: State Street Bank and Trust Company of Connecticut,
National Association, as Class C Trustee
V-1
<PAGE> 46
ANNEX VI to
REVOLVING CREDIT AGREEMENT
NOTICE OF REPLACEMENT SUBORDINATION AGENT
[Date]
Attention:
Re: Revolving Credit Agreement, dated as of October 6, 1999, between State
Street Bank and Trust Company of Connecticut, National Association, as
Subordination Agent, as agent and trustee for the American Airlines
Pass Through Trust 1999-1C, as Borrower, and Bayerische Landesbank
Girozentrale (the "Liquidity Agreement")
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
------------------------------
[Name of Transferee]
------------------------------
[Address of Transferee]
all rights and obligations of the undersigned as Borrower under the Liquidity
Agreement referred to above. The transferee has succeeded the undersigned as
Subordination Agent under the Intercreditor Agreement referred to in the first
paragraph of the Liquidity Agreement, pursuant to the terms of Section 7.01 of
the Intercreditor Agreement.
By this transfer, all rights of the undersigned as Borrower under the
Liquidity Agreement are transferred to the transferee and the transferee shall
hereafter have the sole rights and obligations as Borrower thereunder. The
undersigned shall pay any costs and expenses of such transfer, including, but
not limited to, transfer taxes or governmental charges.
This transfer shall be effective as of [specify time and date].
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Subordination Agent, as Borrower
By:
------------------------------------
Name:
Title:
VI-1
<PAGE> 1
EXHIBIT 4(d)(1)
===============================================================================
PARTICIPATION AGREEMENT
(N908AN)
Dated as of October 6, 1999
among
AMERICAN AIRLINES, INC.
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
as Pass Through Trustee under each of the
Pass Through Trust Agreements
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
as Subordination Agent
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
as Loan Trustee
and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
in its individual capacity as set forth herein
---------------
One Boeing 737-823 Aircraft
U.S. Registration No. N908AN
===============================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE I
DEFINITIONS
<S> <C>
Section 1.01 Definitions.................................................................................2
Section 1.02 Other Definitional Provisions...............................................................2
ARTICLE II
THE LOANS
Section 2.01 The Loans...................................................................................2
Section 2.02 Issuance of Equipment Notes.................................................................3
Section 2.03 The Closing.................................................................................3
ARTICLE III
CONDITIONS PRECEDENT
Section 3.01 Conditions Precedent to Obligations of the Pass Through Trustees............................3
Section 3.02 Conditions Precedent to Obligations of the Company..........................................7
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND INDEMNITIES OF THE COMPANY
Section 4.01 Representations and Warranties of the Company...............................................8
Section 4.02 General Indemnity..........................................................................10
ARTICLE V
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF STATE STREET
Section 5.01 Representations, Warranties and Covenants of State Street..................................15
ARTICLE VI
OTHER COVENANTS AND AGREEMENTS
Section 6.01 Other Agreements...........................................................................17
Section 6.02 Certain Covenants of the Company...........................................................18
</TABLE>
i
<PAGE> 3
ARTICLE VII
MISCELLANEOUS
<TABLE>
<S> <C>
Section 7.01 Notices.........................................................................................20
Section 7.02 Survival of Representations, Warranties, Indemnities,
Covenants and Agreements........................................................................21
Section 7.03 Governing Law...................................................................................21
Section 7.04 Severability....................................................................................21
Section 7.05 No Oral Modifications or Continuing Waivers; Consents...........................................21
Section 7.06 Effect of Headings and Table of Contents........................................................22
Section 7.07 Successors and Assigns..........................................................................22
Section 7.08 Benefits of Agreement...........................................................................22
Section 7.09 Counterparts....................................................................................22
Section 7.10 Submission to Jurisdiction......................................................................22
</TABLE>
<TABLE>
<S> <C>
Schedule I - Equipment Notes, Purchasers and Original Principal Amounts
Schedule II - Trust Supplements
Exhibit A - Form of Opinion of Counsel for the Company
Exhibit B - Form of Opinion of Special Counsel for the Loan Trustee, the
Subordination Agent and State Street
Exhibit C - Form of Opinion of Special FAA Counsel
Exhibit D-1 - Form of Opinion of Counsel for the Liquidity Provider
Exhibit D-2 - Form of Opinion of German Counsel for the Liquidity Provider
Exhibit E - Form of Manufacturer's Consent
Exhibit F - Form of Opinion of Special Counsel for the Pass Through Trustee
Annex A - Definitions
</TABLE>
ii
<PAGE> 4
PARTICIPATION AGREEMENT
(N908AN)
This PARTICIPATION AGREEMENT (N908AN), dated as of October 6,
1999, is made by and among AMERICAN AIRLINES, INC., a Delaware corporation
(together with its successors and permitted assigns, the "Company"), STATE
STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national
banking association (in its individual capacity, together with its successors
and permitted assigns, "State Street"), not in its individual capacity except
as otherwise expressly provided in any of the Operative Documents or the Pass
Through Documents, but solely as trustee (in such capacity together with any
successor or other trustee in such capacity, the "Pass Through Trustee") under
each of the Pass Through Trust Agreements (such term and other capitalized
terms used herein without definition being defined as provided in Section
1.01), STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, a national banking association, as subordination agent and trustee
(in such capacity, together with any successor trustee in such capacity, the
"Subordination Agent") under the Intercreditor Agreement, and STATE STREET BANK
AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, as loan trustee (in
such capacity, together with any successor trustee in such capacity, the "Loan
Trustee") under the Indenture.
W I T N E S S E T H:
WHEREAS, the Company is the owner of that certain Boeing
Model 737-823 aircraft more particularly described in the Indenture Supplement
originally executed and delivered under the Indenture;
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Company and the Loan Trustee are entering into the Indenture,
pursuant to which, among other things, the Company will issue four (and in
certain circumstances five) series of Equipment Notes, which Equipment Notes
are to be secured by a security interest in all right, title and interest of
the Company in and to the Aircraft and certain other property described in the
Indenture;
WHEREAS, pursuant to the Basic Pass Through Trust Agreement
and each of the Trust Supplements set forth in Schedule II hereto, concurrently
with the execution and delivery of this Agreement, separate Pass Through Trusts
are being created to facilitate certain of the transactions contemplated
hereby, including, without limitation, the issuance and sale of Pass Through
Certificates;
WHEREAS, pursuant to the Intercreditor Agreement, the
Subordination Agent will hold the Equipment Notes on behalf of the Pass Through
Trusts;
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NOW, THEREFORE, in consideration of the foregoing premises
and the mutual agreements herein contained, and of other good and valuable
consideration the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. For the purposes of this
Agreement, unless the context otherwise requires, capitalized terms used but
not defined herein shall have the respective meanings set forth or incorporated
by reference in Annex A.
Section 1.02 Other Definitional Provisions. (a) The
definitions stated herein and in Annex A apply equally to both the singular and
the plural forms of the terms defined.
(b) All references in this Agreement to designated
"Articles", "Sections", "Subsections", "Schedules", "Exhibits", "Annexes" and
other subdivisions are to the designated Article, Section, Subsection,
Schedule, Exhibit, Annex or other subdivision of this Agreement, unless
otherwise specifically stated.
(c) The words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to any
particular Article, Section, Subsection, Schedule, Exhibit, Annex or other
subdivision.
(d) All references in this Agreement to a "government" are to
such government and any instrumentality or agency thereof.
(e) Unless the context otherwise requires, whenever the words
"including", "include" or "includes" are used herein, they shall be deemed to
be followed by the phrase "without limitation".
ARTICLE II
THE LOANS
Section 2.01. The Loans. Subject to the terms and conditions
of this Agreement and the Indenture, on the Closing Date the Pass Through
Trustee for each Pass Through Trust shall make a loan to the Company by paying
to the Company the aggregate original principal amounts of the Equipment Notes
being issued to such Pass Through Trust as set forth on Schedule I opposite
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the name of such Pass Through Trust. The Pass Through Trustees, on behalf of
the Pass Through Trusts, shall make such loans to the Company no later than
10:00 a.m. (New York City time) on the Closing Date by transferring such amount
in immediately available funds to the Company at its account at The Chase
Manhattan Bank (ABA No. 021000021), Account Number 910-1-019884, Attention:
Tina DoCampo.
Section 2.02. Issuance of Equipment Notes. Upon the
occurrence of the above payments by the Pass Through Trustee for each Pass
Through Trust to the Company, the Company shall issue, pursuant to and in
accordance with Article II of the Indenture, to the Subordination Agent as
agent and trustee for the Pass Through Trustee for each Pass Through Trust, one
or more Equipment Notes of the maturity and aggregate principal amount and
bearing the interest rate set forth in Schedule I opposite the name of such
Pass Through Trust. Each such Equipment Note shall be duly authenticated by the
Loan Trustee pursuant to the Indenture, registered in the name of the
Subordination Agent and dated the Closing Date and shall be delivered by the
Loan Trustee to the Subordination Agent.
Section 2.03. The Closing. The closing (the "Closing") of the
transactions contemplated hereby shall take place at the offices of Debevoise &
Plimpton, 875 Third Avenue, New York, New York at 9:30 a.m. (New York City
time) on October 6, 1999, or at such other time or place as the parties shall
agree.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.01. Conditions Precedent to Obligations of the Pass
Through Trustees. The obligation of each Pass Through Trustee to make the loan
contemplated by Article II is subject to the fulfillment (or the waiver by such
Pass Through Trustee) prior to or on the Closing Date of the following
conditions precedent:
(a) The Company shall have tendered the Equipment Notes to
the Loan Trustee for authentication, and the Loan Trustee shall have
authenticated such Equipment Notes and shall have tendered the Equipment Notes
to the Subordination Agent on behalf of the applicable Pass Through Trustee in
accordance with Section 2.02.
(b) No change shall have occurred after the date of this
Agreement in applicable law or regulations thereunder or interpretations
thereof by appropriate regulatory authorities or any court that would make it a
violation of law or governmental regulations for the Pass Through Trustees to
make the loans contemplated by Section 2.01 or to acquire the Equipment Notes.
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(c) This Agreement and the following documents shall have
been duly authorized, executed and delivered by the respective party or parties
thereto (other than the Pass Through Trustees or the Loan Trustee), shall be in
full force and effect and executed counterparts (or copies thereof where
indicated) thereof shall have been delivered to each Pass Through Trustee:
(i) the Intercreditor Agreement;
(ii) the Liquidity Facilities;
(iii) the Pass Through Trust Agreements;
(iv) the Indenture and the Indenture Supplement covering the
Aircraft and dated the Closing Date;
(v) the Manufacturer's Consent;
(vi) a copy of the FAA Bill of Sale; and
(vii) a copy of the Warranty Bill of Sale.
(d) A Uniform Commercial Code financing statement or
statements covering the security interest created by the Indenture shall have
been executed and delivered by the Company, as debtor, and by the Loan Trustee,
as secured party, and such financing statement or statements shall have been
duly filed in all places necessary or desirable within the State of Texas.
(e) Each Pass Through Trustee shall have received the
following:
(i) a certificate dated the Closing Date of the Secretary or
an Assistant Secretary of the Company, certifying as to (A) a copy of
the resolutions of the Board of Directors of the Company or the
executive committee thereof duly authorizing the transactions
contemplated hereby and the execution, delivery and performance by the
Company of this Agreement and the Indenture and each other document
required to be executed and delivered by the Company in accordance
with the provisions hereof or thereof and (B) a copy of the
certificate of incorporation and by-laws of the Company, as in effect
on the Closing Date;
(ii) a certificate or other evidence from the Secretary of
State of the State of Delaware, dated as of a date reasonably near the
Closing Date, as to the due incorporation and good standing of the
Company in such state;
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(iii) an incumbency certificate of the Company as to the
person or persons authorized to execute and deliver this Agreement,
the Indenture and each other document to be executed by the Company in
connection with the transactions contemplated hereby and thereby, and
the specimen signatures of such person or persons; and
(iv) one or more certificates of the Loan Trustee and the
Subordination Agent certifying to the reasonable satisfaction of the
Pass Through Trustees as to the due authorization, execution, delivery
and performance by the Loan Trustee and the Subordination Agent of
each of the Operative Documents to which the Loan Trustee or the
Subordination Agent is or will be a party and any other documents to
be executed by or on behalf of the Loan Trustee or Subordination Agent
in connection with the transactions contemplated hereby or thereby.
(f) On the Closing Date, the following statements shall be
correct: (i) the representations and warranties herein of the Company are
correct in all material respects as though made on and as of such date, except
to the extent that such representations and warranties relate solely to an
earlier date (in which case such representations and warranties are correct on
and as of such earlier date) and (ii) no event has occurred and is continuing
that constitutes an Event of Default or an Event of Loss or would constitute an
Event of Default or Event of Loss but for the requirement that notices be given
or time elapse or both.
(g) Each Pass Through Trustee and the Loan Trustee shall have
received an opinion addressed to it from Anne H. McNamara, Esq., Senior Vice
President and General Counsel of the Company (or such other internal counsel to
the Company as shall be reasonably satisfactory to the Pass Through Trustees)
substantially in the form set forth in Exhibit A.
(h) Each Pass Through Trustee and the Loan Trustee shall have
received an opinion addressed to it from Bingham Dana LLP, special counsel for
State Street, the Loan Trustee and the Subordination Agent, substantially in
the form set forth in Exhibit B.
(i) Each Pass Through Trustee and the Loan Trustee shall have
received an opinion addressed to it from Crowe & Dunlevy, P.C., special FAA
counsel in Oklahoma City, Oklahoma, substantially in the form set forth in
Exhibit C.
(j) Each Pass Through Trustee and the Loan Trustee shall have
received a certificate or certificates signed by the chief financial or
accounting officer, any Senior Vice President, the Treasurer, any Vice
President or any Assistant Treasurer (or any other Responsible Officer) of the
Company, dated the Closing Date, certifying as to the correctness of each of
the matters stated in Section 3.01(f).
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(k) Each Pass Through Trustee shall have received a
certificate from State Street in its individual capacity and as Loan Trustee
and Subordination Agent, as applicable, dated the Closing Date, signed by an
authorized officer of State Street in its individual capacity and as Loan
Trustee and Subordination Agent, as applicable, certifying for each such entity
that no Loan Trustee Liens or Other Party Liens attributable to it, as
applicable, exist, and further certifying as to the correctness of each of the
matters stated in Section 5.01.
(l) [intentionally left blank]
(m) Each Pass Through Trustee shall have received opinions
addressed to it from Winthrop, Stimpson, Putnam & Roberts, counsel for the
Liquidity Provider, substantially in the form set forth in Exhibit D-1, and
from Schwarz Kurtze Shniewind Kelwig Wicke, German counsel for the Liquidity
Provider, substantially in the form set forth in Exhibit D-2.
.
(n) The Loan Trustee shall have received an insurance report
of an independent insurance broker and the related certificates of insurance,
each in form and substance reasonably satisfactory to the Loan Trustee, as to
the compliance with the terms of Section 7.06 of the Indenture relating to
insurance with respect to the Aircraft.
(o) No action or proceeding shall have been instituted nor
shall governmental action be threatened before any court or governmental
agency, nor shall any order, judgment or decree have been issued or proposed to
be issued by any court or governmental agency at the time of the Closing to set
aside, restrain, enjoin or prevent the completion and consummation of this
Agreement or the transactions contemplated hereby.
(p) The Company shall have entered into the Underwriting
Agreement, the Pass Through Certificates shall have been issued and sold
pursuant to the Underwriting Agreement and the Underwriters shall have
transferred to the Pass Through Trustees in immediately available funds an
amount at least equal to the aggregate purchase price of the Equipment Notes to
be purchased from the Company.
(q) The Loan Trustee shall have received an executed copy of
the Manufacturer's Consent substantially in the form set forth in Exhibit E.
Promptly upon the recording of the Indenture (with the
Indenture Supplement attached) pursuant to the Transportation Code, the Company
will cause Crowe & Dunlevy, P.C., special FAA counsel in Oklahoma City,
Oklahoma to deliver to the Subordination Agent on behalf of the Pass Through
Trustees, to the Loan Trustee and to the Company an opinion as to the due
recording of such instrument and the lack of filing of any intervening
documents with respect to the Aircraft.
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Section 3.02. Conditions Precedent to Obligations of the
Company. The obligation of the Company to issue and sell the Equipment Notes is
subject to the fulfillment (or waiver by the Company) prior to or on the
Closing Date of the following conditions precedent:
(a) No change shall have occurred after the date of this
Agreement in applicable law or regulations thereunder or interpretations
thereof by appropriate regulatory authorities or any court that would make it a
violation of law or governmental regulations for the Company to enter into any
transaction contemplated by the Operative Documents or the Pass Through Trust
Agreements.
(b) The documents referred to in Section 3.01(c) shall have
been duly authorized, executed and delivered by the respective party or parties
thereto (other than the Company), shall be in full force and effect and
executed counterparts (or copies thereof where indicated) thereof shall have
been delivered to the Company, and the Company shall have received such
documents and evidence with respect to State Street, the Liquidity Provider,
the Loan Trustee, the Subordination Agent and each Pass Through Trustee as the
Company may reasonably request in order to establish the consummation of the
transactions contemplated by this Agreement, the taking of all corporate and
other proceedings in connection therewith and compliance with the conditions
herein set forth.
(c) The Indenture (with the Indenture Supplement covering the
Aircraft attached) shall have been duly filed for recordation (or shall be in
the process of being so duly filed for recordation) with the FAA pursuant to
the Transportation Code.
(d) On the Closing Date, the representations and warranties
herein of State Street, the Loan Trustee, the Subordination Agent and the Pass
Through Trustees shall be correct as though made on and as of such date, except
to the extent that such representations and warranties relate solely to an
earlier date (in which case such representations and warranties shall have been
correct on and as of such earlier date), and, insofar as such representations
and warranties concern State Street, the Loan Trustee, the Subordination Agent
or any Pass Through Trustee, such party shall have so certified to the Company.
(e) The Company shall have received each opinion referred to
in Subsections 3.01(h), 3.01(i) and 3.01(m), each such opinion (other than
3.01(m)) addressed to the Company or accompanied by a letter from the counsel
rendering such opinion authorizing the Company to rely on such opinion as if it
were addressed to the Company, and the certificates referred to in Subsections
3.01(e)(iv) and 3.01(k).
(f) The Company shall have received an opinion addressed to
it from Bingham Dana LLP, special counsel for the Pass Through Trustees,
substantially in the form set forth in Exhibit F.
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(g) No action or proceeding shall have been instituted nor
shall governmental action be threatened before any court or governmental
agency, nor shall any order, judgment or decree have been issued or proposed to
be issued by any court or governmental agency at the time of the Closing to set
aside, restrain, enjoin or prevent the completion and consummation of this
Agreement or the transactions contemplated hereby.
(h) The Company shall have received a certificate from State
Street dated the Closing Date, signed by an authorized officer of State Street,
certifying for each Pass Through Trustee that no Other Party Liens attributable
to it exist and further certifying as to the correctness of each of the matters
stated in Section 5.01.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND INDEMNITIES
OF THE COMPANY
Section 4.01. Representations and Warranties of the Company.
The Company represents and warrants that:
(a) The Company is a corporation duly incorporated and
validly existing in good standing under the laws of the State of Delaware, is a
Certificated Air Carrier, is a Citizen of the United States, has the corporate
power and authority to own or hold under lease its properties and to enter into
and perform its obligations under the Operative Documents to which it is a
party and is duly qualified to do business as a foreign corporation in good
standing in each state in which it has intrastate routes or has a principal
office or a major overhaul facility (other than states where the failure to so
qualify would not have a material adverse effect on the consolidated financial
condition of the Company and its subsidiaries, considered as a whole), and its
chief executive office (as such term is used in Article 9 of the Uniform
Commercial Code as in effect in the State of Texas) is located in Fort Worth,
Texas.
(b) The execution, delivery and performance by the Company of
this Agreement and the other Operative Documents to which the Company is a
party have been duly authorized by all necessary corporate action on the part
of the Company, do not require any stockholder approval or approval or consent
of any trustee or holder of any indebtedness or obligations of the Company,
except such as have been duly obtained and are in full force and effect, and do
not contravene any law, governmental rule, regulation, judgment or order
binding on the Company or the certificate of incorporation or by-laws of the
Company or contravene or result in a breach of, or constitute a default under,
or result in the creation of any Lien (other than as permitted under the
Indenture) upon the property of the Company under, any material indenture,
mortgage, contract or other
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agreement to which the Company is a party or by which it or any of its
properties may be bound or affected .
(c) Neither the execution and delivery by the Company of this
Agreement and the other Operative Documents to which it is a party, nor the
consummation by the Company of any of the transactions contemplated hereby or
thereby, requires the authorization, consent or approval of, the giving of
notice to, the filing or registration with or the taking of any other action in
respect of, the Department of Transportation, the FAA or any other federal or
state governmental authority or agency, except for (i) the registration of the
Pass Through Certificates under the Securities Act of 1933, as amended, and
under the securities laws of any state in which the Pass Through Certificates
may be offered for sale if the laws of such state require such action, (ii) the
qualification of the Pass Through Trust Agreements under the Trust Indenture
Act of 1939, as amended, (iii) the filings referred to in Section 4.01(e) and
(iv) consents, approvals, notices, registrations and other actions required to
be obtained, given, made or taken only after the date hereof.
(d) This Agreement and each other Operative Document to which
the Company is a party have been duly executed and delivered by the Company and
constitute the legal, valid and binding obligations of the Company enforceable
against the Company in accordance with their terms, except as the same may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the rights of creditors generally and by general principles of
equity and except, in the case of the Indenture, as limited by applicable laws
that may affect the remedies provided in the Indenture, which laws, however, do
not make the remedies provided in the Indenture inadequate for the practical
realization of the rights and benefits intended to be provided thereby.
(e) Except for (i) the filing for recordation pursuant to the
Transportation Code of the Indenture (with the Indenture Supplement covering
the Aircraft attached) and (ii) with respect to the security interests created
by such documents, the filing of financing statements (and continuation
statements at periodic intervals) under the Uniform Commercial Code of Texas,
no further filing or recording of any document is necessary or advisable under
the laws of the United States or any state thereof as of the Closing Date in
order to establish and perfect the security interest in the Aircraft created
under the Indenture in favor of the Loan Trustee as against the Company and any
third parties in any applicable jurisdiction in the United States.
(f) The Company is not an investment company or a company
controlled by an investment company within the meaning of the Investment
Company Act of 1940, as amended.
(g) As of the Closing Date, (i) the Company has good title to
the Aircraft, free and clear of Liens other than Permitted Liens, (ii) the
Aircraft has been duly certified by the FAA as to type and airworthiness in
accordance with the terms of the Indenture, (iii) the Indenture (with
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the Indenture Supplement covering the Aircraft attached) has been duly filed
for recordation (or shall be in the process of being so duly filed for
recordation) with the FAA pursuant to the Transportation Code and (iv) the
Aircraft is duly registered with the FAA in the name of the Company.
Section 4.02. General Indemnity. (a) Claims Defined. For the
purposes of this Section 4.02, "Claims" shall mean any and all liabilities,
obligations, losses, damages, penalties, claims, actions, suits, costs or
expenses of whatsoever kind and nature (whether or not on the basis of
negligence, strict or absolute liability or liability in tort) that may be
imposed on, incurred by, suffered by or asserted against an Indemnitee, as
defined herein, and, except as otherwise expressly provided in this Section
4.02, shall include all reasonable out-of-pocket costs, disbursements and
expenses (including reasonable out-of-pocket legal fees and expenses) of an
Indemnitee in connection therewith or related thereto.
(b) Indemnitee Defined. For the purposes of this Section
4.02, "Indemnitee" means (i) State Street and the Loan Trustee, (ii) so long as
it holds any Equipment Notes as agent and trustee of any Pass Through Trustee,
the Subordination Agent, (iii) so long as it is the holder of any Equipment
Notes, each Pass Through Trustee, (iv) the Liquidity Provider and (v) each of
their respective successors and permitted assigns in such capacities, agents,
servants, officers, employees and directors (the respective agents, servants,
officers, employees and directors of each of the foregoing Indemnitees, as
applicable, together with such Indemnitee, being referred to herein
collectively as the "Related Indemnitee Group" of such Indemnitee); provided
that such Persons shall, to the extent they are not signatories to this
Agreement, have expressly agreed in writing to be bound by the terms of this
Section 4.02 prior to, or concurrently with, the making of a Claim hereunder.
If an Indemnitee fails to comply with any duty or obligation under this Section
4.02 with respect to any Claim, such Indemnitee shall not, to the extent such
failure was prejudicial to the Company, be entitled to any indemnity with
respect to such Claim under this Section 4.02. No holder of a Pass Through
Certificate in its capacity as such holder shall be an Indemnitee for purposes
hereof.
(c) Claims Indemnified. Subject to the exclusions stated in
Subsection 4.02(d), the Company agrees to indemnify, protect, defend and hold
harmless on an after-Tax basis each Indemnitee against Claims resulting from or
arising out of the sale, purchase, acceptance, non-acceptance or rejection of
the Aircraft under the Purchase Agreement or the ownership, possession, use,
non-use, substitution, airworthiness, control, maintenance, repair, operation,
registration, re- registration, condition, sale, lease, sublease, storage,
modification, alteration, return, transfer or other disposition of the
Aircraft, the Airframe, any Engine or any Part (including, without limitation,
latent or other defects, whether or not discoverable, and any claim for patent,
trademark or copyright infringement) by the Company, any Permitted Lessee or
any other Person. Without limiting the foregoing and subject to, and without
duplication of, the provisions of Section 6.01(a), the Company agrees to pay
the reasonable ongoing fees, and the reasonable out-of-pocket costs and
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expenses (including, without limitation, reasonable attorney's fees and
disbursements and, to the extent payable as provided in the Indenture,
reasonable compensation and expenses of the Loan Trustee's agents), of the Loan
Trustee in connection with the transactions contemplated hereby.
(d) Claims Excluded. The following are excluded from the
Company's agreement to indemnify an Indemnitee under this Section 4.02:
(i) any Claim to the extent such Claim is attributable to
acts or events occurring after (x) the Equipment Notes shall have been
paid in full or (y) the transfer of possession of the Aircraft
pursuant to Article IV of the Indenture unless such Claim is
attributable to acts occurring in connection with the exercise of
remedies pursuant to Section 4.02 of the Indenture following the
occurrence and continuance of an Event of Default;
(ii) any Claim to the extent such Claim is, or is
attributable to, a Tax;
(iii) any Claim to the extent such Claim is attributable to
the negligence or willful misconduct of such Indemnitee or such
Indemnitee's Related Indemnitee Group;
(iv) any Claim to the extent such Claim is attributable to
the noncompliance by such Indemnitee or such Indemnitee's Related
Indemnitee Group with any of the terms of, or any misrepresentation by
an Indemnitee or its Related Indemnitee Group contained in, this
Agreement, any other Operative Document or any Pass Through Document
to which such Indemnitee or any of such Related Indemnitee Group is a
party or any agreement relating hereto or thereto;
(v) any Claim to the extent such Claim constitutes a
Permitted Lien attributable to such Indemnitee;
(vi) any Claim to the extent such Claim is attributable to
the offer, sale, assignment, transfer, participation or other
disposition (whether voluntary or involuntary) by or on behalf of such
Indemnitee or its Related Indemnitee Group other than during the
occurrence and continuance of an Event of Default (provided that any
such offer, sale, assignment, transfer, participation or other
disposition during the occurrence and continuation of an Event of
Default shall not be subject to indemnification unless it is made in
accordance with the Indenture and applicable law) of any Equipment
Note or Pass Through Certificate, all or any part of such Indemnitee's
interest in the Operative Documents or the Pass Through Documents or
any interest in the Collateral or any similar security;
(vii) any Claim to the extent such Claim is attributable to
(A) a failure on the part of the Loan Trustee to distribute in
accordance with this Agreement or the Indenture any
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amounts received and distributable by it hereunder or thereunder, (B)
a failure on the part of the Subordination Agent to distribute in
accordance with the Intercreditor Agreement any amounts received and
distributable by it thereunder or (C) a failure on the part of any
Pass Through Trustee to distribute in accordance with the Pass Through
Trust Agreement to which it is a party any amounts received and
distributable by it thereunder;
(viii) any Claim to the extent such Claim is attributable to
the authorization or giving or withholding of any future amendments,
supplements, waivers or consents with respect to any Operative
Document or any Pass Through Document, other than such as have been
requested by the Company or that occur as the result of an Event of
Default, or such as are expressly required or contemplated by the
provisions of the Operative Documents or the Pass Through Documents;
(ix) any Claim to the extent such Claim is payable or borne
by (a) the Company pursuant to any indemnification, compensation or
reimbursement provision of any other Operative Document or any Pass
Through Document or (b) a Person other than the Company pursuant to
any provision of any Operative Document or any Pass Through Document;
(x) any Claim to the extent such Claim is an ordinary and
usual operating or overhead expense;
(xi) any Claim to the extent such Claim is incurred by or
asserted as a result of any "prohibited transaction" within the
meaning of Section 406 of ERISA or Section 4975 of the Code; and
(xii) any Claim to the extent such Claim is attributable to
one or more of the other aircraft financed through the offering of
Pass Through Certificates (in the event of doubt, any Claim shall be
allocated between the Aircraft and such other aircraft in the same
proportion that the then outstanding Equipment Notes bear to the then
outstanding equipment notes issued with respect to the other aircraft
and held by the Pass Through Trustees).
(e) Insured Claims. In the case of any Claim indemnified by
the Company hereunder that is covered by a policy of insurance maintained by
the Company, each Indemnitee agrees to cooperate, at the Company's expense,
with the insurers in the exercise of their rights to investigate, defend or
compromise such Claim.
(f) Claims Procedure. An Indemnitee shall promptly notify the
Company of any Claim as to which indemnification is sought; provided that the
failure to provide such prompt notice shall not release the Company from any of
its obligations to indemnify hereunder, except to
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the extent that the Company is prejudiced by such failure or the Company's
indemnification obligations are increased as a result of such failure. Such
Indemnitee shall promptly submit to the Company all additional information in
such Indemnitee's possession to substantiate such request for payment to the
Company as the Company shall reasonably request. Subject to the rights of
insurers under policies of insurance maintained by the Company, the Company
shall have the right, at its sole cost and expense, to investigate, and the
right in its sole discretion to defend or compromise, any Claim for which
indemnification is sought under this Section 4.02, and, at the Company's
expense, the Indemnitee shall cooperate with all reasonable requests of the
Company in connection therewith. Such Indemnitee shall not enter into a
settlement or other compromise with respect to any Claim without the prior
written consent of the Company, which consent shall not be unreasonably
withheld or delayed, unless such Indemnitee waives its right to be indemnified
with respect to such Claim under this Section 4.02. Where the Company or the
insurers under a policy of insurance maintained by the Company undertake the
defense of an Indemnitee with respect to a Claim, no additional legal fees or
expenses of such Indemnitee in connection with the defense of such Claim shall
be indemnified hereunder unless such fees or expenses were incurred at the
written request of the Company or such insurers. Subject to the requirements of
any policy of insurance, an Indemnitee may participate at its own expense in
any judicial proceeding controlled by the Company pursuant to the preceding
provisions; provided that such party's participation does not, in the opinion
of the counsel appointed by the Company or its insurers to conduct such
proceedings, interfere with such control; and such participation shall not
constitute a waiver of the indemnification provided in this Section 4.02.
Notwithstanding anything to the contrary contained herein, the Company shall
not under any circumstances be liable for the fees and expenses of more than
one counsel for all Indemnitees.
(g) Subrogation. To the extent that a Claim indemnified by
the Company under this Section 4.02 is in fact paid in full by the Company or
an insurer under a policy of insurance maintained by the Company, the Company
or such insurer, as the case may be, shall, without any further action, be
subrogated to the rights and remedies of the Indemnitee on whose behalf such
Claim was paid with respect to the transaction or event giving rise to such
Claim. Such Indemnitee shall give such further assurances or agreements and
shall cooperate with the Company or such insurer, as the case may be, to permit
the Company or such insurer to pursue such rights and remedies, if any, to the
extent reasonably requested by the Company. So long as no Event of Default
shall have occurred and be continuing, if an Indemnitee receives any payment
from any party other than the Company or its insurers, in whole or in part,
with respect to any Claim paid by the Company or its insurers hereunder, it
shall promptly pay over to the Company the amount received (but not an amount
in excess of the amount the Company or any of its insurers has paid in respect
of such Claim). Any amount referred to in the preceding sentence that is
payable to the Company shall not be paid to the Company, or, if it has been
previously paid directly to the Company, shall not be retained by the Company,
if at the time of such payment an Event of Default shall have occurred and be
continuing, but shall be paid to and held by the Loan Trustee as security for
the obligations of the Company under this Agreement, the Indenture and the
other Operative
13
<PAGE> 17
Documents, and, if the Company agrees, shall be applied against the Company's
obligations hereunder and thereunder when and as they become due and payable
and, at such time as there shall not be continuing any such Event of Default,
such amount, to the extent not previously so applied against the Company's
obligations, shall be paid to the Company; provided that if any such amount has
been so held by the Loan Trustee as security for more than 90 days after any
such Event of Default shall have occurred, during which period (i) the Loan
Trustee shall not have been limited by operation of law or otherwise from
exercising remedies under the Indenture and (ii) the Loan Trustee shall not
have exercised any remedy available to it under Section 4.02 of the Indenture,
then such amount, to the extent not previously so applied against the Company's
payment obligations, shall be paid to the Company.
(h) No Guaranty. Nothing set forth in this Section 4.02 shall
constitute a guarantee by the Company that the Aircraft shall at any time have
any particular value, useful life or residual value.
(i) Payments; Interest. Any amount payable to any Indemnitee
pursuant to this Section 4.02 shall be paid within 30 days after receipt of a
written demand therefor from such Indemnitee accompanied by a written statement
describing in reasonable detail the Claims that are the subject of and basis
for such indemnity and the computation of the amount payable. Any payments made
pursuant to this Section 4.02 directly to an Indemnitee or to the Company, as
the case may be, shall be made in immediately available funds at such bank or
to such account as is specified by the payee in written directions to the payor
or, if no such directions shall have been given, by check of the payor payable
to the order of the payee and mailed to the payee by certified mail, return
receipt requested, postage prepaid to its address referred to in Section 7.01.
To the extent permitted by applicable law, interest at the Past Due Rate shall
be paid, on demand, on any amount or indemnity not paid when due pursuant to
this Section 4.02 until the same shall be paid. Such interest shall be paid in
the same manner as the unpaid amount in respect of which such interest is due.
ARTICLE V
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF STATE STREET
Section 5.01. Representations, Warranties and Covenants of
State Street. State Street, generally, and each of the Loan Trustee, the
Subordination Agent and the Pass Through Trustee as it relates to it,
represents, warrants and covenants that:
(a) State Street is a national banking association duly
organized and validly existing in good standing under the laws of the United
States, is eligible to be the Loan Trustee
14
<PAGE> 18
under Section 8.01(a) of the Indenture, will promptly comply with Section
8.01(a) of the Indenture and has full power, authority and legal right to enter
into and perform its obligations under each of the Operative Documents and the
Pass Through Documents to which State Street, the Loan Trustee, the
Subordination Agent or any Pass Through Trustee is a party and, in its capacity
as Loan Trustee and Pass Through Trustee, respectively, to authenticate the
Equipment Notes and the Pass Through Certificates, respectively. State Street
is qualified to act as Loan Trustee under Section 8.01(c) of the Indenture.
(b) The execution, delivery and performance by State Street,
individually or in its capacity as Loan Trustee, Subordination Agent or Pass
Through Trustee, as the case may be, of this Agreement, each of the other
Operative Documents and each of the Pass Through Documents to which State
Street, the Loan Trustee, the Subordination Agent or any Pass Through Trustee
is a party, and the authentication of the Equipment Notes and the Pass Through
Certificates, respectively, to be delivered on the Closing Date, have been duly
authorized by all necessary action on the part of State Street, the Loan
Trustee, the Subordination Agent and each Pass Through Trustee, as the case may
be, and do not violate any law or regulation of the United States or of the
state of the United States in which State Street is located and which governs
the banking and trust powers of State Street or any order, writ, judgment or
decree of any court, arbitrator or governmental authority applicable to State
Street, the Loan Trustee, the Subordination Agent or any Pass Through Trustee
or any of their assets, will not violate any provision of the articles of
association or by-laws of State Street and will not violate any provision of,
or constitute a default under, any mortgage, indenture, contract, agreement or
undertaking to which any of State Street, the Loan Trustee, the Subordination
Agent or any Pass Through Trustee is a party or by which any of them or their
respective properties may be bound or affected.
(c) Neither the execution and delivery by State Street,
individually or in its capacity as Loan Trustee, Subordination Agent or Pass
Through Trustee, as the case may be, of this Agreement, any other Operative
Document or any Pass Through Document to which State Street, the Loan Trustee,
the Subordination Agent or any Pass Through Trustee is a party, nor the
consummation by State Street, the Loan Trustee, the Subordination Agent or any
Pass Through Trustee of any of the transactions contemplated hereby or thereby,
requires the authorization, consent or approval of, the giving of notice to,
the filing or registration with, or the taking of any other action in respect
of, any governmental authority or agency of the United States or the state of
the United States where State Street is located and regulating the banking and
trust powers of State Street.
(d) This Agreement, each other Operative Document and each
Pass Through Document to which State Street, the Loan Trustee, the
Subordination Agent or any Pass Through Trustee is a party have been duly
executed and delivered by State Street, individually and in its capacity as
Loan Trustee, Subordination Agent or Pass Through Trustee, as the case may be,
and constitute the legal, valid and binding obligations of State Street, the
Loan Trustee, the
15
<PAGE> 19
Subordination Agent and such Pass Through Trustee, as it shall be a party
thereto, enforceable against it in accordance with its terms, except as the
same may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the rights of creditors generally and by general
principles of equity.
(e) It unconditionally agrees with and for the benefit of the
parties to this Agreement that it will not directly or indirectly create,
incur, assume or suffer to exist any Loan Trustee Lien or Other Party Lien
attributable to it, and it agrees that it will, at its own cost and expense,
promptly take such action as may be necessary to discharge and satisfy in full
any such Lien; and it shall indemnify, protect, defend and hold harmless each
Indemnitee and the Company against Claims in any way resulting from or arising
out of a breach by it of its obligations under this Section 5.01(e).
(f) The Equipment Notes to be issued to the Subordination
Agent pursuant hereto are being acquired by it to be held under the
Intercreditor Agreement.
(g) Each of State Street, the Loan Trustee, the Subordination
Agent and each Pass Through Trustee agrees that it will not impose any lifting
charge, cable charge, remittance charge or any other charge or fee on any
transfer by the Company of funds to, through or by State Street, the Loan
Trustee, the Subordination Agent or such Pass Through Trustee pursuant to this
Agreement, any other Operative Document or any Pass Through Document, except as
may be otherwise agreed to in writing by the Company.
(h) Each of State Street, the Loan Trustee, the Subordination
Agent and any Pass Through Trustee agrees to be bound by the terms of Section
10.16 of the Indenture.
(i) There are no Taxes payable by State Street, the Loan
Trustee, the Subordination Agent or any Pass Through Trustee imposed by the
State of Connecticut or any political subdivision or taxing authority thereof
in connection with the execution, delivery or performance by State Street, the
Loan Trustee, the Subordination Agent or any Pass Through Trustee of any
Operative Document or any Pass Through Document (other than franchise or other
taxes based on or measured by any fees or compensation received by any such
Person for services rendered in connection with the transactions contemplated
by the Operative Documents or the Pass Through Documents), and there are no
Taxes payable by any Pass Through Trustee imposed by the State of Connecticut
or any political subdivision thereof in connection with the acquisition,
possession or ownership by such Pass Through Trustee of any of the Equipment
Notes (other than franchise or other taxes based on or measured by any fees or
compensation received by such Pass Through Trustee for services rendered in
connection with the transactions contemplated by the Operative Documents or the
Pass Through Documents) and, assuming that the Pass Through Trusts will not be
taxable for Federal income tax purposes as corporations, but, rather, will be
characterized for such purposes as grantor trusts or partnerships, the Pass
Through Trusts will not be subject to any Taxes imposed by the State of
Connecticut or any political subdivision thereof.
(j) Except with the consent of the Company, which shall not
be unreasonably withheld, State Street will act as Pass Through Trustee solely
through its offices within the State of
16
<PAGE> 20
Connecticut, except for such services that may be performed for it by various
agents, but not directly by it, in other states.
(k) There are no pending or, to its knowledge, threatened
actions or proceedings against the State Street, the Loan Trustee, the
Subordination Agent or any Pass Through Trustee before any court or
administrative agency which individually or in the aggregate, if determined
adversely to it, would materially adversely affect the ability of State Street,
the Loan Trustee, the Subordination Agent or any Pass Through Trustee to
perform its obligations under any Operative Document or any Pass Through
Document.
(l) The representations and warranties contained in Section
7.15 of each Pass Through Trust Agreement are true, complete and correct as of
the Closing Date.
ARTICLE VI
OTHER COVENANTS AND AGREEMENTS
Section 6.01. Other Agreements. (a) The Company agrees
promptly to pay (without duplication of any other obligation the Company may
have to pay such amounts) (A) the initial and annual fees and (to the extent
the Loan Trustee is entitled to be reimbursed for its reasonable expenses) the
reasonable expenses of the Loan Trustee in connection with the transactions
contemplated hereby and (B) the following expenses incurred by the Loan
Trustee, the Subordination Agent and the Pass Through Trustees in connection
with the negotiation, preparation, execution and delivery of this Agreement,
the other Operative Documents and the other documents or instruments referred
to herein or therein:
(i) the reasonable fees, expenses and disbursements of (x)
Bingham Dana LLP, special counsel for the Loan Trustee, the
Subordination Agent and the Pass Through Trustees and (y) Crowe &
Dunlevy, P.C., special FAA counsel in Oklahoma City, Oklahoma; and
(ii) all reasonable expenses incurred in connection with
printing and document production or reproduction expenses, the filing
of Uniform Commercial Code financing statements.
(b) The Loan Trustee, the Noteholders, the Subordination
Agent and each Pass Through Trustee agree to execute and deliver, at the
Company's expense, all such documents as the Company may reasonably request for
the purpose of continuing the registration of the Aircraft at the FAA in the
Company's name. In addition, each of the Loan Trustee, the Subordination Agent,
each Pass Through Trustee and any other Noteholder agrees, for the benefit of
the Company, to cooperate with the Company in effecting any foreign
registration of the Aircraft pursuant to Section 7.02(e) of the Indenture;
provided that prior to any such change in the country of registry of the
Aircraft the conditions set forth in Section 7.02(e) of the Indenture are met
to the reasonable satisfaction of, or waived by, the Loan Trustee.
(c) Each of State Street, the Loan Trustee, the Subordination
Agent, each Pass Through Trustee and any other Noteholder, and, by entering
into the Liquidity Facilities, the Liquidity
17
<PAGE> 21
Provider, agrees that, unless an Event of Default shall have occurred and be
continuing (and then only in accordance with the Indenture), it shall not take
any action contrary to, or otherwise in any way interfere with or disturb, the
quiet enjoyment of the use and possession of the Aircraft, the Airframe, any
Engine or any Part by the Company or any transferee of any interest in any
thereof permitted under the Indenture.
(d) Each Noteholder, including, without limitation, the
Subordination Agent and each Pass Through Trustee, unconditionally agrees with
and for the benefit of the parties to this Agreement that it will not directly
or indirectly create, incur, assume or suffer to exist any Noteholder Liens,
and such Noteholder agrees that it will, at its own cost and expense, promptly
take such action as may be necessary to discharge and satisfy in full any such
Noteholder Lien; and each Noteholder hereby agrees to indemnify, protect,
defend and hold harmless each Indemnitee and the Company against Claims in any
way resulting from or arising out of a breach by it of its obligations under
this Section 6.01(d).
(e) By its acceptance of its Equipment Notes, each Noteholder
unconditionally agrees for the benefit of the Company and the Loan Trustee to
be bound by and to perform and comply with all of the terms of such Equipment
Notes, the Indenture and this Agreement applicable to such Noteholder.
Section 6.02. Certain Covenants of the Company. The Company
covenants and agrees with the Loan Trustee as follows:
(a) On and after the Closing, the Company will cause to be
done, executed, acknowledged and delivered such further acts, conveyances and
assurances as the Loan Trustee shall reasonably request for accomplishing the
purposes of this Agreement and the other Operative Documents; provided that any
instrument or other document so executed by the Company will not expand any
obligations or limit any rights of the Company in respect of the transactions
contemplated by the Operative Documents.
(b) The Company will cause the Indenture (with the Indenture
Supplement covering the Aircraft attached) to be promptly filed and recorded,
or filed for recording, with the FAA to the extent permitted under the
Transportation Code and the rules and regulations of the FAA thereunder.
(c) The Company, at its expense, will take, or cause to be
taken, such action with respect to the recording, filing, re-recording and
refiling of the Indenture and any financing statements or other instruments as
are necessary to maintain, so long as the Indenture is in effect, the
perfection of the security interests created by the Indenture or will furnish
the Loan Trustee timely notice of the necessity of such action, together with
such instruments, in execution form, and such other information as may be
required to enable the Loan Trustee to take such action. In addition, the
Company will pay any and all recording, stamp and other similar taxes payable
in the United States, and in any other jurisdiction where the Aircraft is
registered, in connection with the execution, delivery, recording, filing,
re-recording and refiling of the Indenture or any such financing statements or
other instruments. The Company will notify the Loan Trustee of any change in
the location of its chief executive office (as such term is used in Article 9
of the Uniform Commercial Code as in effect in the State of Texas) promptly
after making such change or in any event within the period of time
18
<PAGE> 22
necessary under applicable law to prevent the lapse of perfection (absent
refiling) of financing statements filed under the Operative Documents.
(d) The Company shall at all times maintain its corporate
existence except as permitted by Section 6.02(e).
(e) The Company shall not consolidate with or merge into any
other Person or convey, transfer or lease substantially all of its assets as an
entirety to any Person, unless:
(i) the Person formed by such consolidation or into which the
Company is merged or the Person that acquires by conveyance, transfer
or lease substantially all of the assets of the Company as an entirety
shall, if and to the extent required under Section 1110 in order that
the Loan Trustee shall continue to be entitled to any benefits of
Section 1110 with respect to the Aircraft, be a Citizen of the United
States and a Certificated Air Carrier and shall execute and deliver to
the Loan Trustee an agreement containing the assumption by such
successor Person of the due and punctual performance and observance of
each covenant and condition of the Operative Documents to which the
Company is a party to be performed or observed by the Company;
(ii) immediately after giving effect to such transaction, no
Event of Default shall have occurred and be continuing; and
(iii) the Company shall have delivered to the Loan Trustee a
certificate signed by a Responsible Officer of the Company, and an
opinion of counsel (which may be the Company's General Counsel or such
other internal counsel to the Company as shall be reasonably
satisfactory to the Loan Trustee), each stating that such
consolidation, merger, conveyance, transfer or lease and the
assumption agreement mentioned in clause (i) above comply with this
Section 6.02(e) and that all conditions precedent herein provided
relating to such transaction have been complied with (except that such
opinion need not cover the matters referred to in clause (ii) above
and may rely, as to factual matters, on a certificate of an officer of
the Company) and, in the case of such opinion, that such assumption
agreement has been duly authorized, executed and delivered by such
successor Person and is enforceable against such successor Person in
accordance with its terms, except as the same may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the rights of creditors generally and by general
principles of equity.
Upon any consolidation or merger, or any conveyance, transfer
or lease of substantially all of the assets of the Company as an entirety in
accordance with this Section 6.02(e), the successor Person formed by such
consolidation or into which the Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Agreement and the
other Operative Documents with the same effect as if such successor Person had
been named as the Company herein.
(f) The Company shall, for as long as and to the extent
required under Section 1110 in order that the Loan Trustee shall be entitled to
any of the benefits of Section 1110 with respect to the Aircraft, remain a
Certificated Air Carrier.
19
<PAGE> 23
ARTICLE VII
MISCELLANEOUS
Section 7.01. Notices. Unless otherwise expressly specified
or permitted by the terms hereof, all notices required or permitted under the
terms and provisions of this Agreement shall be in English and in writing, and
any such notice may be given by United States mail, courier service or
facsimile or any other customary means of communication, and any such notice
shall be effective when delivered (or, if mailed three Business Days after
deposit, postage prepaid in the first class United States mail and, if
delivered by facsimile, upon completion of transmission and confirmation by the
sender (by a telephone call to a representative of the recipient or by machine
confirmation) that such transmission was received),
if to the Company, to:
American Airlines, Inc.
4333 Amon Carter Blvd.
Maildrop 5662
Fort Worth, Texas 76155
Attention: Treasurer
Telephone: (817) 963-1234
Facsimile: (817) 967-4318
if to State Street, the Loan Trustee, the Subordination Agent or any Pass
Through Trustee, to:
State Street Bank And Trust Company of Connecticut,
National Association
225 Asylum Street
Goodwin Square
Hartford, Connecticut 06103
Attention: Corporate Trust Division
Telephone: (860) 244-1844
Facsimile: (860) 244-1881
or if to any subsequent Noteholder, addressed to such Noteholder at its address
set forth in the Equipment Note Register maintained pursuant to Section 2.07 of
the Indenture.
Any party, by notice to the other parties hereto, may
designate additional or different addresses for subsequent notices or
communications.
Section 7.02. Survival of Representations, Warranties,
Indemnities, Covenants and Agreements. Except as otherwise provided for herein,
the representations, warranties, indemnities, covenants and agreements of the
Company, State Street, the Loan Trustee, the Subordination Agent, each Pass
Through Trustee and the Noteholders provided for in this Agreement, and each of
their
20
<PAGE> 24
obligations hereunder, shall survive the making of the loans and the expiration
or termination (to the extent arising out of acts or events occurring prior to
such expiration) of any Operative Documents.
Section 7.03. Governing Law. THIS AGREEMENT HAS BEEN
DELIVERED IN THE STATE OF NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
Section 7.04. Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
Section 7.05. No Oral Modifications or Continuing Waivers;
Consents. Subject to Section 9.03 of the Indenture, no terms or provisions of
this Agreement may be changed, waived, discharged or terminated orally, but
only by an instrument in writing signed by the party against which the
enforcement of the change, waiver, discharge or termination is sought; provided
that no such change, waiver, discharge or termination shall be effective unless
a signed copy thereof is delivered to the Loan Trustee. Each Pass Through
Trustee and, by its acceptance of an Equipment Note, each subsequent Noteholder
covenants and agrees that it shall not unreasonably withhold its consent to any
consent of the Loan Trustee requested by the Company under the terms of the
Indenture.
Section 7.06. Effect of Headings and Table of Contents. The
headings of the various Articles and Sections herein and in the Table of
Contents are for convenience of reference only and shall not define or limit
any of the terms or provisions hereof.
Section 7.07. Successors and Assigns. All covenants,
agreements, representations and warranties in this Agreement by the Company, by
State Street, individually or as Loan Trustee, Subordination Agent or Pass
Through Trustee, or by any Noteholder, shall bind and inure to the benefit of
and be enforceable by the Company, and subject to the terms of Section 6.02(e),
its successors and permitted assigns, each Pass Through Trustee and any
successor or other trustee under the Pass Through Trust Agreement to which it
is a party, the Subordination Agent and its successor under the Intercreditor
Agreement and the Loan Trustee and its successor under the Indenture, whether
so expressed or not.
Section 7.08. Benefits of Agreement. Nothing in this
Agreement, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, any benefit or any legal or equitable
right, remedy or claim under this Agreement, except as provided expressly
herein.
Section 7.09. Counterparts. This Agreement may be executed in
any number of counterparts (and each of the parties hereto shall not be
required to execute the same counterpart). Each counterpart of this Agreement
including a signature page or pages executed by each of the
21
<PAGE> 25
parties hereto shall be an original counterpart of this Agreement, but all of
such counterparts shall together constitute one instrument.
Section 7.10. Submission to Jurisdiction. Each of the parties
hereto, to the extent it may do so under applicable law, for purposes hereof
and of all other Operative Documents hereby (a) irrevocably submits itself to
the non-exclusive jurisdiction of the courts of the State of New York sitting
in the City of New York and to the non-exclusive jurisdiction of the United
States District Court for the Southern District of New York, for the purposes
of any suit, action or other proceeding arising out of this Agreement, the
subject matter hereof or any of the transactions contemplated hereby brought by
any party or parties hereto, or their successors or permitted assigns and (b)
waives, and agrees not to assert, by way of motion, as a defense, or otherwise,
in any such suit, action or proceeding, that the suit, action or proceeding is
brought in an inconvenient forum, that the venue of the suit, action or
proceeding is improper or that this Agreement or the subject matter hereof or
any of the transactions contemplated hereby may not be enforced in or by such
courts.
22
<PAGE> 26
IN WITNESS WHEREOF, the parties hereto have caused this
Participation Agreement to be duly executed by their respective officers
thereunto duly authorized as of the date first above written.
AMERICAN AIRLINES, INC.
By: /s/ JEFFREY C. CAMPBELL
------------------------------
Name: Jeffrey C. Campbell
Title: Vice President - Corporate
Development and Treasurer
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Pass Through Trustee under each of the Pass
Through Trust Agreements
By: /s/ JOHN G. CORREIA
------------------------------
Name: John G. Correia
Title: Assistant Secretary
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Subordination Agent
By: /s/ JOHN G. CORREIA
------------------------------
Name: John G. Correia
Title: Assistant Secretary
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Loan Trustee
By: /s/ ALISON DELLA BELLA
------------------------------
Name: Alison Della Bella
Title:
23
<PAGE> 27
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
in its individual capacity as set forth herein
By: /s/ JOHN G. CORREIA
------------------------------
Name: John G. Correia
Title: Assistant Secretary:
24
<PAGE> 28
SCHEDULE I to
PARTICIPATION AGREEMENT
EQUIPMENT NOTES,
PURCHASERS AND ORIGINAL PRINCIPAL AMOUNTS
<TABLE>
<CAPTION>
Original
Description of Interest Principal
Purchaser Equipment Notes Maturity Rate Amount
--------- --------------- -------- -------- ---------
<S> <C> <C> <C> <C>
American Airlines Series 1999-1A-1 April 15, 6.855% $7,169,266.67
Pass Through Trust Equipment Note 2009
1999-1A-1 EN-1A1-001
American Airlines Series 1999-1A-2 October 7.024% $14,569,800.00
Pass Through Trust Equipment Note 15, 2009
1999-1A-2 EN-1A2-001
American Airlines Series 1999-1B October 7.324% $3,885,280.00
Pass Through Trust Equipment Note 15, 2009
1999-1B EN-1B-001
American Airlines Series 1999-1C October 7.155% $2,191,886.68
Pass Through Trust Equipment Note 15, 2004
1999-1C EN-1C-001
</TABLE>
I-1
<PAGE> 29
SCHEDULE II to
PARTICIPATION AGREEMENT
TRUST SUPPLEMENTS
Trust Supplement No. 1999-1A-1, dated as of October 6, 1999, between
the Company and the Pass Through Trustee in respect of American Airlines Pass
Through Trust 1999-1A-1.
Trust Supplement No. 1999-1A-2, dated as of October 6, 1999, between
the Company and the Pass Through Trustee in respect of American Airlines Pass
Through Trust 1999-1A-2.
Trust Supplement No. 1999-1B, dated as of October 6, 1999, between the
Company and the Pass Through Trustee in respect of American Airlines Pass
Through Trust 1999-1B.
Trust Supplement No. 1999-1C, dated as of October 6, 1999, between the
Company and the Pass Through Trustee in respect of American Airlines Pass
Through Trust 1999-1C.
II-1
<PAGE> 30
EXHIBIT A to
PARTICIPATION AGREEMENT
FORM OF OPINION OF
COUNSEL FOR THE COMPANY
A-1
<PAGE> 31
EXHIBIT B to
PARTICIPATION AGREEMENT
FORM OF OPINION OF
SPECIAL COUNSEL FOR THE LOAN TRUSTEE, THE SUBORDINATION AGENT
AND STATE STREET
B-1
<PAGE> 32
EXHIBIT C to
PARTICIPATION AGREEMENT
FORM OF OPINION OF
SPECIAL FAA COUNSEL
C-1
<PAGE> 33
EXHIBIT D-1 to
PARTICIPATION AGREEMENT
FORM OF OPINION OF COUNSEL FOR THE LIQUIDITY PROVIDER
D-1
<PAGE> 34
EXHIBIT D-2 to
PARTICIPATION AGREEMENT
FORM OF OPINION OF GERMAN COUNSEL FOR THE LIQUIDITY PROVIDER
D-2
<PAGE> 35
EXHIBIT E to
PARTICIPATION AGREEMENT
FORM OF MANUFACTURER'S CONSENT
E-1
<PAGE> 36
EXHIBIT F TO
PARTICIPATION AGREEMENT
FORM OF OPINION
SPECIAL COUNSEL FOR THE PASS THROUGH TRUSTEES
F-1
<PAGE> 1
EXHIBIT 4(d)2
================================================================================
INDENTURE AND SECURITY AGREEMENT
(N908AN)
Dated as of October 6, 1999
between
AMERICAN AIRLINES, INC.,
and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
as Loan Trustee
---------------------
One Boeing 737-823 Aircraft
U.S. Registration No. N908AN
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.....................................................................................4
Section 1.02 Other Definitional Provisions...................................................................5
ARTICLE II
THE EQUIPMENT NOTES
Section 2.01 Form of Equipment Notes.........................................................................5
Section 2.02 Issuance and Terms of Equipment Notes..........................................................10
Section 2.03 Method of Payment..............................................................................12
Section 2.04 Withholding Taxes..............................................................................13
Section 2.05 Application of Payments........................................................................13
Section 2.06 Termination of Interest in Collateral..........................................................13
Section 2.07 Registration, Transfer and Exchange of Equipment Notes.........................................14
Section 2.08 Mutilated, Destroyed, Lost or Stolen Equipment Notes...........................................15
Section 2.09 Payment of Expenses on Transfer; Cancellation..................................................15
Section 2.10 Mandatory Redemption of Equipment Notes........................................................15
Section 2.11 Voluntary Redemption of Equipment Notes........................................................16
Section 2.12 Redemptions; Notice of Redemptions; Repurchases................................................16
Section 2.13 Subordination..................................................................................17
Section 2.14 Certain Payments...............................................................................17
Section 2.15 Repayment of Monies for Equipment Note Payments
held by the Indenture Trustee.........................................................19
Section 2.16 Directions by Subordination Agent..............................................................19
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION
OF INCOME FROM THE COLLATERAL
Section 3.01 Basic Distributions............................................................................20
Section 3.02 Event of Loss; Optional Redemption.............................................................21
Section 3.03 Payments after Event of Default................................................................22
Section 3.04 Certain Payments...............................................................................24
Section 3.05 Payments to the Company........................................................................25
</TABLE>
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<PAGE> 3
<TABLE>
<S> <C>
ARTICLE IV
EVENTS OF DEFAULT; REMEDIES OF LOAN TRUSTEE
Section 4.01 Events of Default..............................................................................25
Section 4.02 Remedies.......................................................................................27
Section 4.03 Remedies Cumulative............................................................................30
Section 4.04 Discontinuance of Proceedings..................................................................30
Section 4.05 Waiver of Past Defaults........................................................................31
Section 4.06 Noteholders May Not Bring Suit Except Under Certain Conditions.................................31
ARTICLE V
DUTIES OF THE LOAN TRUSTEE
Section 5.01 Notice of Event of Default.....................................................................32
Section 5.02 Action upon Instructions; Certain Rights and Limitations.......................................33
Section 5.03 Indemnification................................................................................33
Section 5.04 No Duties Except as Specified in Indenture or Instructions.....................................33
Section 5.05 No Action Except under Indenture or Instructions...............................................33
Section 5.06 Investment of Amounts Held by the Loan Trustee.................................................33
ARTICLE VI
THE LOAN TRUSTEE
Section 6.01 Acceptance of Trusts and Duties................................................................35
Section 6.02 Absence of Certain Duties......................................................................35
Section 6.03 No Representations or Warranties as to the Documents...........................................35
Section 6.04 No Segregation of Monies; No Interest..........................................................35
Section 6.05 Reliance; Agents; Advice of Counsel............................................................36
Section 6.06 Instructions from Noteholders..................................................................36
ARTICLE VII
OPERATING COVENANTS OF THE COMPANY
Section 7.01 Liens..........................................................................................36
Section 7.02 Possession, Operation and Use, Maintenance and Registration....................................38
Section 7.03 Inspection; Financial Information..............................................................43
Section 7.04 Replacement and Pooling of Parts; Alterations, Modifications
and Additions; Substitution of Engines.........................................................45
Section 7.05 Loss, Destruction or Requisition...............................................................47
Section 7.06 Aircraft Liability Insurance...................................................................51
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE VIII
SUCCESSOR TRUSTEES
Section 8.01 Resignation or Removal; Appointment of Successor...............................................56
Section 8.02 Appointment of Additional and Separate Trustees................................................58
ARTICLE IX
AMENDMENTS AND WAIVERS
Section 9.01 Amendments to this Indenture without Consent of Holders........................................60
Section 9.02 Amendments to this Indenture with Consent of Holders...........................................60
Section 9.03 Amendments, Waivers, Etc. of the Participation Agreement.......................................61
Section 9.04 Revocation and Effect of Consents..............................................................62
Section 9.05 Notation on or Exchange of Equipment Notes.....................................................62
Section 9.06 Trustee Protected..............................................................................62
ARTICLE X
MISCELLANEOUS
Section 10.01 Termination of Indenture.......................................................................62
Section 10.02 No Legal Title to Collateral in Noteholders....................................................64
Section 10.03 Sale of Aircraft by Loan Trustee is Binding....................................................64
Section 10.04 Indenture for Benefit of the Company, Loan Trustee and Noteholders.............................65
Section 10.05 Notices........................................................................................65
Section 10.06 Severability...................................................................................66
Section 10.07 No Oral Modification or Continuing Waivers.....................................................66
Section 10.08 Successors and Assigns.........................................................................66
Section 10.09 Headings.......................................................................................66
Section 10.10 Normal Commercial Relations....................................................................66
Section 10.11 Voting by Noteholders..........................................................................66
Section 10.12 Section 1110...................................................................................66
Section 10.13 The Company's Performance and Rights...........................................................67
Section 10.14 Counterparts...................................................................................67
Section 10.15 Governing Law..................................................................................67
Section 10.16 Confidential Information.......................................................................67
Section 10.17 Submission to Jurisdiction.....................................................................68
Exhibit A - Form of Indenture Supplement
Exhibit B - List of Permitted Countries
Schedule I - Description of Equipment Notes
Schedule II - Pass Through Trust Agreement and Pass Through Trust Supplements
Annex A - Definitions
</TABLE>
iii
<PAGE> 5
INDENTURE AND SECURITY AGREEMENT
(N908AN)
This INDENTURE AND SECURITY AGREEMENT (N908AN), dated as of October 6,
1999, is made by and between AMERICAN AIRLINES, INC., a Delaware corporation
(together with its successors and permitted assigns, the "Company"), and STATE
STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national
banking association, as Loan Trustee hereunder (together with its permitted
successors hereunder, the "Loan Trustee").
W I T N E S S E T H:
WHEREAS, the parties desire by this Indenture (such term and other
capitalized terms used herein without definition being defined as provided in
Article I), among other things, to provide for (i) the issuance by the Company
of the Equipment Notes and (ii) the assignment, mortgage and pledge by the
Company to the Loan Trustee, as part of the Collateral hereunder, among other
things, of all of the Company's estate, right, title and interest in and to the
Aircraft, as security for, among other things, the Company's obligations to the
Loan Trustee, for the ratable benefit and security of the Noteholders, subject
to Section 2.13 and Article III;
WHEREAS, all things have been done to make the Equipment Notes, when
executed by the Company and authenticated and delivered by the Loan Trustee
hereunder, the valid, binding and enforceable obligations of the Company; and
WHEREAS, all things necessary to make this Indenture a legal, valid and
binding obligation of the Company for the uses and purposes herein set forth, in
accordance with its terms, have been done and performed and have occurred;
GRANTING CLAUSE
NOW, THEREFORE, to secure the prompt and complete payment (whether at
stated maturity, by acceleration or otherwise) of principal of, Make-Whole
Amount, if any, and interest on, the Equipment Notes and all other amounts
payable by the Company under the Operative Documents and the performance and
observance by the Company of all the agreements and covenants to be performed or
observed by the Company for the benefit of the Noteholders and the Indenture
Indemnitees contained in the Operative Documents, and in consideration of the
premises and of the covenants contained in the Operative Documents, and for
other good and valuable consideration given by the Loan Trustee, the Noteholders
and the Indenture Indemnitees to the Company at or before the Closing Date, the
receipt of which is hereby acknowledged, the Company does hereby grant, bargain,
sell, convey, transfer, mortgage, assign, pledge and confirm unto the Loan
Trustee and its successors in trust and permitted assigns, for the security and
benefit of the Loan Trustee, the Noteholders and the Indenture Indemnitees, a
first priority security interest
<PAGE> 6
in, and mortgage lien on, all estate, right, title and interest of the Company
in, to and under, all and singular, the following described properties, rights,
interests and privileges whether now or hereafter acquired (hereinafter
sometimes referred to as the "Collateral"):
(1) the Aircraft, including the Airframe and the Engines, whether or
not any such Engine may from time to time be installed on the Airframe or
any other airframe or any other aircraft, and any and all Parts relating
thereto, and, to the extent provided herein, all substitutions and
replacements of, and additions, improvements, accessions and accumulations
to, the Aircraft, including the Airframe, the Engines and any and all Parts
(in each case other than any substitutions, replacements, additions,
improvements, accessions and accumulations that constitute items excluded
from the definition of Parts by clauses (b), (c) and (d) thereof) relating
thereto (such Airframe and Engines as more particularly described in the
Indenture Supplement executed and delivered with respect to the Aircraft on
the Closing Date or with respect to any substitutions or replacements
therefor), and together with all flight records, logs, manuals, maintenance
data and inspection, modification and overhaul records and other documents
at any time required to be maintained with respect to the foregoing, in
accordance with the rules and regulations of the FAA if the Aircraft is
registered under the laws of the United States or the rules and regulations
of the government of the country of registry if the Aircraft is registered
under the laws of a jurisdiction other than the United States;
(2) the Warranty Rights, together with all rights, powers, privileges,
options and other benefits of the Company under the same;
(3) all requisition proceeds with respect to the Aircraft or any Part
thereof, and all insurance proceeds with respect to the Aircraft or any
Part thereof, but excluding all proceeds of, and rights under, any
insurance maintained by the Company and not required under Section 7.06(b);
(4) all moneys and securities now or hereafter paid or deposited or
required to be paid or deposited to or with the Loan Trustee by or for the
account of the Company pursuant to any term of any Operative Document and
held or required to be held by the Loan Trustee hereunder or thereunder;
and
(5) all proceeds of the foregoing;
PROVIDED, HOWEVER, that notwithstanding any of the foregoing
provisions, so long as no Event of Default shall have occurred and be
continuing, the Company shall have the right, to the exclusion of the Loan
Trustee, (i) to quiet enjoyment of the Aircraft, the Airframe, the Parts and the
Engines, and to possess, use, retain and control the Aircraft, the Airframe, the
Parts and the Engines and all revenues, income and profits derived therefrom and
(ii) with respect to the Warranty Rights, to exercise in the Company's name all
rights and powers of the Buyer (as defined
2
<PAGE> 7
in the Purchase Agreement) under the Warranty Rights and to retain any recovery
or benefit resulting from the enforcement of any warranty or indemnity or other
obligation under the Warranty Rights; provided, further, that notwithstanding
the occurrence and continuation of an Event of Default, the Loan Trustee shall
not enter into any amendment or modification of the Purchase Agreement that
would alter the rights, benefits or obligations of the Company thereunder;
TO HAVE AND TO HOLD all and singular the aforesaid property unto the Loan
Trustee, and its successors and permitted assigns, in trust for the ratable
benefit and security of the Noteholders and the Indenture Indemnitees, except as
otherwise provided in this Indenture, including Section 2.13 and Article III,
without any preference, distinction or priority of any one Equipment Note over
any other by reason of priority of time of issue, sale, negotiation, date of
maturity thereof or otherwise for any reason whatsoever, and for the uses and
purposes and in all cases and as to all property specified in paragraphs (1)
through (5) inclusive above, subject to the terms and provisions set forth in
this Indenture.
It is expressly agreed that notwithstanding anything herein to the
contrary, the Company shall remain liable under the Purchase Agreement to
perform all of its obligations thereunder, and, except to the extent expressly
provided in any Operative Document, none of the Loan Trustee, any Noteholders or
any Indenture Indemnitee shall be required or obligated in any manner to perform
or fulfill any obligations of the Company under or pursuant to any thereof, or
to make any inquiry as to the nature or sufficiency of any payment received by
it, or present or file any claim or take any action to collect or enforce the
payment of any amount that may have been assigned to it or to which it may be
entitled at any time or times.
Notwithstanding anything herein to the contrary (but without in any way
releasing the Company from any of its duties or obligations under the Purchase
Agreement), the Loan Trustee, the Noteholders and the Indenture Indemnitees
confirm for the benefit of the Manufacturer that in exercising any rights under
the Warranty Rights, or in making any claim with respect to the Aircraft or
other goods and services delivered or to be delivered pursuant to the Purchase
Agreement, the terms and conditions of the Purchase Agreement relating to the
Warranty Rights, including, without limitation, the warranty disclaimer
provisions for the benefit of the Manufacturer, shall apply to and be binding
upon the Loan Trustee, the Noteholders and the Indenture Indemnitees to the same
extent as the Company. The Company hereby directs the Manufacturer, so long as
an Event of Default shall have occurred and be continuing, to pay all amounts,
if any, payable to the Company pursuant to the Warranty Rights directly to the
Loan Trustee to be held and applied as provided herein. Nothing contained herein
shall subject the Manufacturer to any liability to which it would not otherwise
be subject under the Purchase Agreement or modify in any respect the contract
rights of the Manufacturer thereunder except as provided in the Manufacturer's
Consent.
The Company does hereby constitute the Loan Trustee the true and lawful
attorney of the Company (which appointment is coupled with an interest) with
full power (in the name of
3
<PAGE> 8
the Company or otherwise) to ask, require, demand and receive any and all monies
and claims for monies (in each case including insurance and requisition
proceeds) due and to become due to the Company under or arising out of the
Purchase Agreement (to the extent assigned hereby), and all other property which
now or hereafter constitutes part of the Collateral, to endorse any checks or
other instruments or orders in connection therewith and to file any claims or to
take any action or to institute any proceedings which the Loan Trustee may deem
to be necessary or advisable in the premises; provided that the Loan Trustee
shall not exercise any such rights except during the continuance of an Event of
Default. The Company agrees that promptly upon receipt thereof, to the extent
required by the Operative Documents, it will transfer to the Loan Trustee any
and all monies from time to time received by the Company constituting part of
the Collateral, for distribution by the Loan Trustee pursuant to this Indenture.
The Company does hereby warrant and represent that it has not sold,
assigned or pledged, and hereby covenants and agrees that it will not sell,
assign or pledge, so long as this Indenture shall remain in effect and the Lien
hereof shall not have been released pursuant to the provisions hereof, any of
its estate, right, title or interest hereby assigned, to any Person other than
the Loan Trustee, except as otherwise provided in or permitted by any Operative
Document.
The Company agrees that at any time and from time to time, upon the written
request of the Loan Trustee, the Company shall promptly and duly execute and
deliver or cause to be duly executed and delivered any and all such further
instruments and documents as the Loan Trustee may reasonably deem necessary to
perfect, preserve or protect the mortgage, security interests and assignments
created or intended to be created hereby or to obtain for the Loan Trustee the
full benefit of the assignment hereunder and of the rights and powers herein
granted, provided that any instrument or other document so executed by the
Company will not expand any obligations or limit any rights of the Company in
respect of the transactions contemplated by the Operative Documents.
IT IS HEREBY COVENANTED AND AGREED by and between the parties hereto as
follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. For all purposes of this Indenture, unless the
context otherwise requires, capitalized terms used but not defined herein shall
have the respective meanings set forth or incorporated by reference in Annex A.
Section 1.02 Other Definitional Provisions. (a) The definitions stated
herein and in Annex A apply equally to both the singular and the plural forms of
the terms defined.
4
<PAGE> 9
(b) All references in this Indenture to designated "Articles", "Sections",
"Subsections", "Schedules", "Exhibits", "Annexes" and other subdivisions are to
the designated Article, Section, Subsection, Schedule, Exhibit, Annex or other
subdivision of this Indenture, unless otherwise specifically stated.
(c) The words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section, Subsection, Schedule, Exhibit, Annex or other subdivision.
(d) Unless the context otherwise, requires, whenever the words "including",
"include" or "includes" are used herein, it shall be deemed to be followed by
the phrase "without" limitation".
(e) All references in this Indenture to a "government" are to such
government and any instrumentality or agency thereof.
ARTICLE II
THE EQUIPMENT NOTES
Section 2.01. Form of Equipment Notes. The Equipment Notes shall be
substantially in the form set forth below:
THIS EQUIPMENT NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), OR PURSUANT TO THE SECURITIES LAWS OF ANY
STATE OR OTHER JURISDICTION. ACCORDINGLY, THIS EQUIPMENT NOTE MAY NOT BE
OFFERED FOR SALE OR SOLD UNLESS EITHER REGISTERED UNDER THE ACT AND SUCH
APPLICABLE STATE OR OTHER LAWS OR EXEMPTIONS FROM SUCH REGISTRATION
REQUIREMENTS ARE AVAILABLE.
AMERICAN AIRLINES, INC.
SERIES 1999 [___] EQUIPMENT NOTE DUE [___]
ISSUED IN CONNECTION WITH THE BOEING [______] AIRCRAFT
BEARING UNITED STATES REGISTRATION NUMBER N[_____]AN
No.____ Date: [______,__] $________________
INTEREST RATE MATURITY DATE
[____] [___________,_____]
5
<PAGE> 10
AMERICAN AIRLINES, INC. (together with its successors and permitted
assigns, the "Company") hereby promises to pay to ___________, or the
registered assignee thereof, the principal amount of ________________
Dollars ($_________) [on __________](1) [in installments on the Payment
Dates set forth in Schedule I hereto, each such installment to be in an
amount computed by multiplying the original principal amount of this
Equipment Note by the percentage set forth in Schedule I hereto opposite
the Payment Date on which such installment is due,](2) and to pay interest
in arrears on each Payment Date at the Debt Rate on the principal amount
remaining unpaid from time to time (calculated on the basis of a year of
360 days comprised of twelve 30-day months) from the date hereof until paid
in full. [Notwithstanding the foregoing, the final payment made on this
Equipment Note shall be in an amount sufficient to discharge in full the
unpaid principal amount and all accrued and unpaid interest on, and any
other amounts due under, this Equipment Note.](2) Notwithstanding anything
to the contrary contained herein, if any date on which a payment under this
Equipment Note becomes due and payable is not a Business Day, then such
payment shall not be made on such scheduled date but shall be made on the
next succeeding Business Day with the same force and effect as if made on
such scheduled date, and if such payment is made on such next succeeding
Business Day, no interest shall accrue on the amount of such payment from
and after such scheduled date.
For purposes hereof, the term "Indenture" means the Indenture and
Security Agreement (N___AN), dated as of October 6, 1999, between the
Company and State Street Bank and Trust Company of Connecticut, National
Association, as Loan Trustee (the "Loan Trustee"), as the same may be
amended, supplemented or otherwise modified from time to time in accordance
with its terms. All capitalized terms used in this Equipment Note and not
defined herein, unless the context otherwise requires, shall have the
respective meanings set forth or incorporated by reference, and shall be
construed and interpreted in the manner described, in the Indenture.
This Equipment Note shall bear interest, payable on demand, at the
Past Due Rate (and not the Debt Rate) (calculated on the basis of a year of
360 days comprised of twelve 30-day months) on any principal amount and (to
the extent permitted by applicable law) Make-Whole Amount, if any, interest
and any other amounts payable hereunder not paid when due for any period
during which the
- -------------------------
1 To be inserted in non-installment Equipment Notes.
2 To be inserted in installment Equipment Notes.
6
<PAGE> 11
same shall be overdue, in each case for the period the same is overdue.
Amounts shall be overdue if not paid in the manner provided herein or in
the Indenture when due (whether at stated maturity, by acceleration or
otherwise).
There shall be maintained an Equipment Note Register for the purpose
of registering transfers and exchanges of Equipment Notes at the Corporate
Trust Office of the Loan Trustee, or at the office of any successor
trustee, in the manner provided in Section 2.07 of the Indenture.
The principal amount and interest and other amounts due hereunder
shall be payable in Dollars in immediately available funds at the Corporate
Trust Office of the Loan Trustee, or as otherwise provided in the
Indenture. The Company shall not have any responsibility for the
distribution of any such payment to the Noteholder of this Equipment Note.
Each such payment shall be made on the date such payment is due and without
any presentment or surrender of this Equipment Note, except that in the
case of any final payment with respect to this Equipment Note, the
Equipment Note shall be surrendered to the Loan Trustee for cancellation.
The holder hereof, by its acceptance of this Equipment Note, agrees
that, except as provided in the Indenture, including the subordination
provisions referred to below, each payment of an installment of principal
amount, Make-Whole Amount, if any, and interest received by it hereunder
shall be applied: first, to the payment of accrued interest on this
Equipment Note (as well as any interest on any overdue principal amount,
and, to the extent permitted by law, any overdue Make-Whole Amount, if any,
any overdue interest and other overdue amounts hereunder) to the date of
such payment; second, to the payment of Make-Whole Amount, if any, and
third, to the payment of the principal amount of this Equipment Note (or
portion hereof) then due.
This Equipment Note is one of the Equipment Notes referred to in the
Indenture which have been or are to be issued by the Company pursuant to
the terms of the Indenture. The Collateral is held by the Loan Trustee as
security, in part, for the Equipment Notes. The provisions of this
Equipment Note are subject to the Indenture and the Participation
Agreement. Reference is hereby made to the Indenture and the Participation
Agreement for a complete statement of the rights and obligations of the
holder of, and the nature and extent of the security for, this Equipment
Note and the rights and obligations of the holders of, and the nature and
extent of the security for, any other Equipment Notes executed and
delivered under the Indenture, to all of which terms and conditions in the
Indenture and the Participation Agreement each holder hereof agrees by its
acceptance of this Equipment Note.
7
<PAGE> 12
As provided in the Indenture and subject to certain limitations
therein set forth, this Equipment Note is exchangeable for a like aggregate
principal amount of Equipment Notes of the same Series of different
authorized denominations, as requested by the holder surrendering the same.
Prior to the due presentment for registration of transfer of this Equipment
Note, the Company and the Loan Trustee shall deem and treat the Person in
whose name this Equipment Note is registered on the Equipment Note Register
as the absolute owner and holder hereof for the purpose of receiving all
amounts payable with respect to this Equipment Note and for all purposes,
and neither of the Company nor the Loan Trustee shall be affected by notice
to the contrary.
This Equipment Note is subject to redemption as provided in Sections
2.10 and 2.11 of the Indenture but not otherwise.
The indebtedness evidenced by this Equipment Note [shall rank in right
of payment equally with all Series A-2 Equipment Notes and all other Series
A-1 Equipment Notes.](1) [shall rank in right of payment equally with all
Series A-1 Equipment Notes and all other Series A-2 Equipment Notes.](2)
[is, to the extent and in the manner provided in the Indenture, subordinate
and subject in right of payment to the prior payment in full of the Secured
Obligations (as defined in the Indenture) in respect of [Series A-1
Equipment Notes and Series A-2 Equipment Notes](3) [Series A-1 Equipment
Notes, Series A-2 Equipment Notes and Series B Equipment Notes](4) [Series
A-1 Equipment Notes, Series A-2 Equipment Notes, Series B Equipment Notes
and Series C Equipment Notes](5), and this Equipment Note is issued subject
to such provisions. The Noteholder of this Equipment Note, by accepting the
same, (a) agrees to and shall be bound by such provisions, (b) authorizes
and directs the Loan Trustee on such Noteholder's behalf to take such
action as may be necessary or appropriate to effectuate the subordination
as provided in the Indenture and (c) appoints the Loan Trustee such
Noteholder's attorney-in-fact for such purpose.
- ------------------------
1 To be inserted in the case of a Series A-1 Equipment Note.
2 To be inserted in the case of a Series A-2 Equipment Note.
3 To be inserted in the case of a Series B Equipment Note.
4 To be inserted in the case of a Series C Equipment Note.
5 To be inserted in the case of a Series D Equipment Note.
8
<PAGE> 13
Without limiting the foregoing, the](1) [The](2) Noteholder of this
Equipment Note, by accepting the same, agrees that if such Noteholder, in
its capacity as a Noteholder, shall receive any payment or distribution on
any Secured Obligation in respect of this Equipment Note that it is not
entitled to receive under Section 2.13 or Article III of the Indenture, it
shall hold any amount so received in trust for the Loan Trustee and
forthwith turn over such amount to the Loan Trustee in the form received to
be applied as provided in Article III of the Indenture.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Loan Trustee by manual signature, this Equipment Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
THIS EQUIPMENT NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE.
IN WITNESS WHEREOF, the Company has caused this Equipment Note to be
executed in its corporate name by its officer thereunto duly authorized on
the date hereof.
AMERICAN AIRLINES, INC.
By:
-------------------------------------
Name:
Title:
LOAN TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Equipment Notes referred to in the
within-mentioned Indenture.
- --------
1 To be inserted in the case of a Series B Equipment Note, a Series C
Equipment Note or a Series D Equipment Note.
2 To be inserted in the case of a Series A-1 Equipment Note or a Series A-2
Equipment Note.
9
<PAGE> 14
[_________________________________]
not in its individual capacity but
solely as Loan Trustee
By:
--------------------------------
Name:
Title:
SCHEDULE I(1)
EQUIPMENT NOTE AMORTIZATION
<TABLE>
<CAPTION>
Percentage of Original
Principal Amount
Payment Date to be Paid
------------ ----------
<S> <C>
</TABLE>
[SEE "EQUIPMENT NOTES AMORTIZATION" ON SCHEDULE I TO
INDENTURE WHICH IS TO BE INSERTED UPON ISSUANCE]
* * *
Section 2.02. Issuance and Terms of Equipment Notes. The Equipment
Notes shall be dated the date of issuance thereof, shall be issued in (a) four
(or if the Series D Equipment Notes are issued, five) separate series consisting
of Series A-1 Equipment Notes, Series A-2 Equipment Notes, Series B Equipment
Notes, Series C Equipment Notes and, if issued, Series D Equipment Notes and (b)
the maturities and principal amounts and shall bear interest at the applicable
Debt Rates specified in Schedule I (or, in the case of a Series D Equipment Note
issued after the Closing Date, as specified in an amendment to this Indenture).
On the Closing Date, each Series A-1 Equipment Note, Series A-2 Equipment Note,
Series B Equipment Note and Series C Equipment Note shall be issued to the
Subordination Agent on behalf of each of the Pass Through Trustees for the Pass
Through Trusts created under the Pass Through Trust Agreements referred to in
Schedule II. The Company shall have the option to issue Series D Equipment Notes
at or after the Closing Date. The Equipment Notes shall be issued in registered
form only. The Equipment Notes shall be issued in denominations of $1,000 and
integral multiples thereof, except that one Equipment Note of each Series may be
in an amount that is not an integral multiple of $1,000.
- --------
1 To be inserted on installment Equipment Notes.
10
<PAGE> 15
Each Equipment Note shall bear interest at the Debt Rate (calculated on
the basis of a year of 360 days comprised of twelve 30-day months), payable in
arrears on each Payment Date on the unpaid principal amount thereof from time to
time outstanding until such principal amount is paid in full, as further
provided in the form of Equipment Note set forth in Section 2.01. The principal
amount of each Series A-1 Equipment Note shall be payable in installments on the
Payment Dates set forth in Schedule I to such Equipment Note, each such
installment to be in an amount computed by multiplying the original principal
amount of such Equipment Note by the percentage set forth in Schedule I hereto,
the applicable portion of which shall be attached as Schedule I to such
Equipment Note, opposite the Payment Date on which such installment is due. The
principal amount of each Series A-2 Equipment Note and Series B Equipment Note
shall be due in a single payment on October 15, 2009. The principal amount of
each Series C Equipment Note shall be due in a single payment on October 15,
2004. Each Series D Equipment Note shall be payable in installments or in a
single payment as set forth in an amendment to this Indenture, and if payable in
installments, such installments shall be calculated as set forth in the third
preceding sentence. Notwithstanding the foregoing, the final payment made under
each Series A-1 Equipment Note shall be in an amount sufficient to discharge in
full the unpaid principal amount and all accrued and unpaid interest on, and any
other amounts due under, such Equipment Note. Each Equipment Note shall bear
interest, payable on demand, at the Past Due Rate (and not at the Debt Rate)
(calculated on the basis of a year of 360 days comprised of twelve 30-day
months) on any principal amount and (to the extent permitted by applicable law)
Make-Whole Amount, if any, interest and any other amounts payable thereunder not
paid when due for any period during which the same shall be overdue, in each
case for the period the same is overdue. Amounts shall be overdue under an
Equipment Note if not paid in the manner provided therein or in this Indenture
when due (whether at stated maturity, by acceleration or otherwise).
Notwithstanding anything to the contrary contained herein, if any date on which
a payment hereunder or under any Equipment Note becomes due and payable is not a
Business Day, then such payment shall not be made on such scheduled date but
shall be made on the next succeeding Business Day with the same force and effect
as if made on such scheduled date, and if such payment is made on such next
succeeding Business Day, no interest shall accrue on the amount of such payment
from and after such scheduled date.
The Equipment Notes shall be executed on behalf of the Company by the
manual or facsimile signature of one of its authorized officers. Equipment Notes
bearing the signatures of individuals who were at the time of execution the
proper officers of the Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Equipment Notes or did not hold such offices
at the respective dates of such Equipment Notes. No Equipment Note shall be
secured by or entitled to any benefit under this Indenture or be valid or
obligatory for any purposes unless there appears on such Equipment Note a
certificate of authentication in the form provided herein executed by the Loan
Trustee by the manual signature of one of its authorized officers, and such
certificate upon any Equipment Notes shall be conclusive evidence, and the only
evidence, that such Equipment Note has been duly authenticated and delivered
hereunder.
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Section 2.03. Method of Payment. The principal amount of, interest on,
Make-Whole Amount, if any, and, except to the extent expressly provided herein,
all other amounts due to any Noteholder under each Equipment Note or otherwise
payable hereunder shall be payable by the Company in Dollars by wire transfer of
immediately available funds not later than 10:00 a.m. (New York City time) on
the due date of payment to the Loan Trustee at the Corporate Trust Office for
distribution among the Noteholders in the manner provided herein. The Company
shall not have any responsibility for the distribution of such payment to any
Noteholder. Notwithstanding the foregoing or any provision in any Equipment Note
to the contrary, the Loan Trustee will use reasonable efforts to pay or cause to
be paid, if so directed in writing by any Noteholder (with a copy to the
Company), all amounts paid by the Company hereunder and under such Noteholder's
Equipment Note or Equipment Notes to such Noteholder or a nominee therefor
(including all amounts distributed pursuant to Article III) by transferring, or
causing to be transferred, by wire transfer of immediately available funds in
Dollars, prior to 12:00 p.m. (New York City time) on the due date of payment, to
an account maintained by such Noteholder with a bank located in the continental
United States the amount to be distributed to such Noteholder, for credit to the
account of such Noteholder maintained at such bank; provided that, in the event
the Equipment Notes are not held by the Subordination Agent on behalf of the
Pass Through Trustees, the Loan Trustee may at its option pay such amounts by
check mailed to the Noteholder's address as it appears on the Equipment Note
Register. If, after its receipt of funds at the place and prior to the time
specified above in the immediately preceding sentence, the Loan Trustee shall
fail (other than as a result of a failure of the Noteholder to provide it with
wire transfer instructions) to make any such payment required to be paid by wire
transfer as provided in the immediately preceding sentence on the Business Day
it receives such funds, the Loan Trustee, in its individual capacity and not as
trustee, agrees to compensate such Noteholders for loss of use of funds at the
Federal Funds Rate until such payment is made and the Loan Trustee shall be
entitled to any interest earned on such funds until such payment is made. Any
payment made hereunder shall be made without any presentment or surrender of any
Equipment Note, except that, in the case of the final payment in respect of any
Equipment Note, such Equipment Note shall be surrendered to the Loan Trustee for
cancellation. Notwithstanding any other provision of this Indenture to the
contrary, the Loan Trustee shall not be required to make, or cause to be made,
wire transfers as aforesaid prior to the first Business Day on which it is
practicable for the Loan Trustee to do so in view of the time of day when the
funds to be so transferred were received by it if such funds were received after
1:00 p.m. (New York City time) at the place of payment.
Section 2.04. Withholding Taxes. The Loan Trustee shall exclude and
withhold at the appropriate rate from each payment of principal amount of,
interest on, Make-Whole Amount, if any, and other amounts due hereunder or under
each Equipment Note (which exclusion and withholding shall constitute payment of
such amounts payable hereunder or in respect of such Equipment Notes, as
applicable) any and all withholding taxes applicable thereto as required by law.
The Loan Trustee agrees to act as such withholding agent and, in connection
therewith, whenever any present or future taxes or similar charges are required
to be withheld with respect to any amounts payable hereunder or in respect of
the Equipment Notes, to withhold such amounts
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(which withholding shall constitute payment of such amounts payable hereunder or
in respect of such Equipment Notes, as applicable) and timely pay the same to
the appropriate authority in the name of and on behalf of the Noteholders, that
it will file any necessary withholding tax returns or statements when due, and
that as promptly as possible after the payment thereof it will deliver to each
Noteholder (with a copy to the Company) appropriate documentation showing the
payment thereof, together with such additional documentary evidence as any such
Noteholder may reasonably request from time to time. The Loan Trustee agrees to
file any other information reports as it may be required to file under United
States law.
Section 2.05. Application of Payments. Subject always to Section 2.13
and except as otherwise provided in Article III, in the case of each Equipment
Note, each payment of an installment of principal amount, Make-Whole Amount, if
any, and interest paid thereon shall be applied:
first, to the payment of accrued interest on such Equipment Note (as
well as any interest on any overdue principal amount and (to the extent
permitted by law) any overdue Make-Whole Amount, if any, any overdue
interest and any other overdue amounts thereunder) to the date of such
payment;
second, to the payment of Make-Whole Amount, if any; and
third, to the payment of principal amount of such Equipment Note (or
portion thereof) then due thereunder.
Section 2.06. Termination of Interest in Collateral. No Noteholder or
Indenture Indemnitee shall, as such, have any further interest in, or other
right with respect to, the Collateral when and if the principal amount of,
Make-Whole Amount, if any, and interest (including interest on any overdue
amounts) on and all other amounts due under all Equipment Notes held by such
Noteholder and all other sums then payable to such Noteholder or Indenture
Indemnitee, as the case may be, hereunder and under the Participation Agreement
by the Company (collectively, "Secured Obligations") shall have been paid in
full.
Section 2.07. Registration, Transfer and Exchange of Equipment Notes.
The Loan Trustee shall keep a register or registers (the "Equipment Note
Register") in which the Loan Trustee shall provide for the registration of
Equipment Notes and the registration of transfers of Equipment Notes. No such
transfer shall be given effect unless and until registration hereunder shall
have occurred. The Equipment Note Register shall be kept at the Corporate Trust
Office of the Loan Trustee. The Loan Trustee is hereby appointed "Equipment Note
Registrar" for the purpose of registering Equipment Notes and transfers of
Equipment Notes as herein provided. A holder of any Equipment Note intending to
exchange or transfer such Equipment Note shall surrender such Equipment Note to
the Loan Trustee at the Corporate Trust Office, together with a written request
from the registered holder thereof for the issuance of a new Equipment Note of
the
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same Series, specifying, in the case of a surrender for transfer, the name and
address of the new holder or holders. Upon surrender for registration of
transfer of any Equipment Note and subject to satisfaction of Section 2.09, the
Company shall execute, and the Loan Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new Equipment
Notes of a like aggregate principal amount and of the same Series. At the option
of the Noteholder, Equipment Notes may be exchanged for other Equipment Notes of
the same Series of any authorized denominations of a like aggregate principal
amount, upon surrender of the Equipment Notes to be exchanged to the Loan
Trustee at the Corporate Trust Office. Whenever any Equipment Notes are so
surrendered for exchange, the Company shall execute, and the Loan Trustee shall
authenticate and deliver, the Equipment Notes which the Noteholder making the
exchange is entitled to receive. All Equipment Notes issued upon any
registration of transfer or exchange of Equipment Notes (whether under this
Section 2.07 or under Section 2.08 or otherwise under this Indenture) shall be
the valid obligations of the Company evidencing the same respective obligations,
and entitled to the same security and benefits under this Indenture, as the
Equipment Notes surrendered upon such registration of transfer or exchange.
Every Equipment Note presented or surrendered for registration of transfer,
shall be duly endorsed, or be accompanied by a written instrument of transfer in
form satisfactory to the Loan Trustee, duly executed by the Noteholder or such
Noteholder's attorney duly authorized in writing, and the Loan Trustee shall
require evidence satisfactory to it as to the compliance of any such transfer
with the Securities Act of 1933, as amended, and the securities laws of any
applicable state or jurisdiction. The Loan Trustee shall make a notation on each
new Equipment Note of the amount of all payments of principal amount previously
made on the old Equipment Note or Equipment Notes with respect to which such new
Equipment Note is issued and the date to which interest on such old Equipment
Note or Equipment Notes has been paid. Principal, interest and all other amounts
shall be deemed to have been paid on such new Equipment Note to the date on
which such amounts shall have been paid on such old Equipment Note. The Company
shall not be required to exchange any surrendered Equipment Notes as provided
above (a) during the ten-day period preceding the due date of any payment on
such Equipment Note or (b) that has been called for redemption. The Company and
the Loan Trustee shall in all cases deem and treat the Person in whose name any
Equipment Note shall have been issued and registered on the Equipment Note
Register as the absolute owner and Noteholder of such Equipment Note for the
purpose of receiving payment of all amounts payable with respect to such
Equipment Note and for all other purposes, and neither the Company nor the Loan
Trustee shall be affected by any notice to the contrary. The Loan Trustee will
promptly notify the Company of each registration of a transfer of an Equipment
Note. Any such transferee of an Equipment Note, by its acceptance of an
Equipment Note, agrees to the provisions of the Operative Documents applicable
to Noteholders, and shall be deemed to have represented, warranted and
covenanted to the parties to the Participation Agreement as to the matters
represented, warranted and covenanted by the Noteholders, including the Pass
Through Trustees, in the Participation Agreement. Subject to compliance by the
Noteholder and its transferee (if any) of the requirements set forth in this
Section 2.07 and in Section 2.09, the Loan Trustee and the Company shall use all
reasonable efforts to issue new Equipment Notes upon
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transfer or exchange within ten Business Days of the date an Equipment Note is
surrendered for transfer or exchange.
Section 2.08. Mutilated, Destroyed, Lost or Stolen Equipment Notes. If
any Equipment Note becomes mutilated, destroyed, lost or stolen, the Company
shall, upon the written request of the holder of such Equipment Note and subject
to satisfaction of this Section 2.08 and of Section 2.09, execute and the Loan
Trustee shall authenticate and deliver in replacement thereof a new Equipment
Note of the same Series, payable in the same principal amount, dated the same
date and captioned as issued in connection with the Aircraft. If the Equipment
Note being replaced has become mutilated, such Equipment Note shall be
surrendered to the Loan Trustee, and a photocopy thereof shall be furnished to
the Company. If the Equipment Note being replaced has been destroyed, lost or
stolen, the holder of such Equipment Note shall furnish to the Company and the
Loan Trustee such security or indemnity as may be required by them to save the
Company and the Loan Trustee harmless and evidence satisfactory to the Company
and the Loan Trustee of the destruction, loss or theft of such Equipment Note
and of the ownership thereof.
Section 2.09. Payment of Expenses on Transfer; Cancellation. (a) No
service charge shall be made to a Noteholder for any registration of transfer or
exchange of Equipment Notes, but the Loan Trustee, as Equipment Note Registrar,
may require payment of a sum sufficient to cover any Tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Equipment Notes.
(b) The Loan Trustee shall cancel all Equipment Notes surrendered for
replacement, redemption, transfer, exchange, payment or cancellation and shall
destroy the canceled Equipment Notes.
Section 2.10. Mandatory Redemption of Equipment Notes. The Company
shall redeem the Equipment Notes in whole in connection with an Event of Loss in
respect of the Airframe or the Airframe and the Engines installed thereon
(unless the Company shall have performed the option set forth in Section
7.05(a)(i) with respect thereto) on or before the Loss Payment Date at a
redemption price equal to 100% of the unpaid principal amount thereof, together
with all accrued interest thereon to (but excluding) the date of redemption, but
without any Make-Whole Amount.
Section 2.11. Voluntary Redemption of Equipment Notes. All, but not
less than all, of the Equipment Notes may be redeemed in whole by the Company
upon at least 20 days' revocable prior written notice to the Loan Trustee at a
redemption price equal to 100% of the unpaid principal amount of the Equipment
Notes being redeemed, together with accrued interest thereon to (but excluding)
the date of redemption and all other amounts payable hereunder or under the
Participation Agreement to the Noteholders plus the Make-Whole Amount, if any.
Any notice shall become irrevocable three days before the redemption date if not
previously revoked.
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Section 2.12. Redemptions; Notice of Redemptions; Repurchases. (a) No
redemption of any Equipment Note may be made except to the extent and in the
manner expressly permitted by this Indenture. At such time as no Pass Through
Certificates are outstanding, the Company may at any time repurchase any of the
Equipment Notes at any price in the open market and may hold, resell or
surrender such Equipment Notes to the Loan Trustee for cancellation.
(b) Notice of redemption with respect to the Equipment Notes shall be
given by the Loan Trustee by first-class mail, postage prepaid, mailed not less
than 15 nor more than 60 days prior to the applicable redemption date, to each
Noteholder at such Noteholder's address appearing in the Equipment Note
Register. All notices of redemption shall state: (1) the redemption date, (2)
the applicable basis for determining the redemption price, (3) that on the
redemption date, the redemption price will become due and payable upon each such
Equipment Note, and that, if any such Equipment Notes are then outstanding,
interest on such Equipment Notes shall cease to accrue on and after such
redemption date and (4) the place or places where such Equipment Notes are to be
surrendered for payment of the redemption price.
(c) On or before the redemption date, the Company (or any person on
behalf of the Company) shall, to the extent an amount equal to the redemption
price for the Equipment Notes to be redeemed on the redemption date shall not
then be held in the Collateral, deposit or cause to be deposited with the Loan
Trustee by 11:00 a.m. (New York City time) on the redemption date in immediately
available funds the redemption price of the Equipment Notes to be redeemed.
(d) Notice of redemption having been given as aforesaid (and not
revoked as permitted by Section 2.11), the Equipment Notes to be redeemed shall,
on the redemption date, become due and payable at the Corporate Trust Office of
the Loan Trustee, and from and after such redemption date (unless there shall be
a default in the deposit of the redemption price pursuant to Section 2.12(c))
any such Equipment Notes then outstanding shall cease to bear interest. Upon
surrender of any such Equipment Note for redemption in accordance with said
notice, such Equipment Note shall be redeemed at the redemption price.
Section 2.13. Subordination. (a) The indebtedness evidenced by the
Series A-1 Equipment Notes and Series A-2 Equipment Notes shall rank in right of
payment equally with all other Series A-1 Equipment Notes and Series A-2
Equipment Notes. The indebtedness evidenced by the Series B Equipment Notes is,
to the extent and in the manner provided in this Indenture, subordinate and
subject in right of payment to the prior payment in full of the Secured
Obligations in respect of the Series A-1 Equipment Notes and Series A-2
Equipment Notes, and the Series B Equipment Notes are issued subject to such
provisions. The indebtedness evidenced by the Series C Equipment Notes is, to
the extent and in the manner provided in this Indenture, subordinate and subject
in right of payment to the prior payment in full of the Secured Obligations in
respect of the Series A-1 Equipment Notes, the Series A-2 Equipment Notes and
the Series B Equipment Notes, and the Series C Equipment Notes are issued
subject to such provisions. The indebtedness evidenced by the Series D Equipment
Notes, if issued, shall be, to the extent and in the manner
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provided in this Indenture, subordinate and subject in right of payment to the
prior payment in full of the Secured Obligations in respect of the Series A-1
Equipment Notes, the Series A-2 Equipment Notes, the Series B Equipment Notes
and the Series C Equipment Notes, and the Series D Equipment Notes, if issued,
shall be issued subject to such provisions. By acceptance of its Equipment Notes
of any Series, each Noteholder of such Series (a) agrees to and shall be bound
by such provisions, (b) authorizes and directs the Loan Trustee on such
Noteholder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Indenture and (c) appoints the
Loan Trustee as such Noteholder's attorney-in-fact for such purpose.
(b) The Company, the Loan Trustee and, by acceptance of its Equipment
Notes of any Series, each Noteholder of such Series, hereby agree that no
payment or distribution shall be made on or in respect of the Secured
Obligations owed to such Noteholder of such Series, including any payment or
distribution of cash, property or securities, after the occurrence of any of the
events referred to in Section 4.01(f) or after the commencement of any
proceedings of the type referred to in Sections 4.01(g), (h) or (i), except as
expressly provided in Article III.
(c) By the acceptance of its Equipment Notes of any Series, each
Noteholder of such Series agrees that if such Noteholder, in its capacity as a
Noteholder, shall receive any payment or distribution on any Secured Obligations
in respect of such Series that it is not entitled to receive under this Section
2.13 or Article III hereof, it will hold any amount so received in trust for the
Loan Trustee and forthwith turn over such amount to the Loan Trustee in the form
received to be applied as provided in Article III.
Section 2.14. Certain Payments. The Company agrees to pay to the Loan
Trustee for distribution in accordance with Section 3.04:
(a) an amount or amounts equal to the fees payable to the Liquidity
Provider under Section 2.03 of each Liquidity Facility and the related Fee
Letter (as defined in the Intercreditor Agreement), multiplied by a fraction,
the numerator of which shall be the sum of the then outstanding aggregate
principal amount of the Series A-1 Equipment Notes, Series A-2 Equipment Notes,
Series B Equipment Notes and Series C Equipment Notes and the denominator of
which shall be the sum of the then outstanding aggregate principal amount of all
"Series A-1 Equipment Notes," "Series A-2 Equipment Notes," "Series B Equipment
Notes" and "Series C Equipment Notes" (in each case as defined in the
Intercreditor Agreement);
(b) the amount equal to interest on any Downgrade Advance (other than
any Applied Downgrade Advance) payable under Section 3.07 of each Liquidity
Facility minus Investment Earnings from such Downgrade Advance, multiplied by
the fraction specified in the foregoing clause (a);
(c) the amount equal to interest on any Non-Extension Advance (other
than any Applied Non-Extension Advance) payable under Section 3.07 of each
Liquidity Facility minus
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Investment Earnings from such Non-Extension Advance, multiplied by the fraction
specified in the foregoing clause (a);
(d) if any payment default shall have occurred and be continuing with
respect to interest on any Series A-1 Equipment Notes, Series A-2 Equipment
Note, Series B Equipment Note or Series C Equipment Note, (x) the excess, if
any, of (1) the amount equal to the sum of interest on any Unpaid Advance or
Applied Provider Advance payable under Section 3.07 of each Liquidity Facility
plus any other amounts payable in respect of such Unpaid Advance or Applied
Provider Advance under Section 3.01, 3.03 or 3.09 of the Liquidity Facility
under which such Unpaid Advance or Applied Provider Advance was made over (2)
the sum of Investment Earnings from any Final Advance plus any amount of
interest at the Past Due Rate actually payable (whether or not in fact paid) by
the Company in respect of the overdue scheduled interest on the Equipment Notes
in respect of which such Unpaid Advance or Applied Provider Advance was made,
multiplied by (y) a fraction, the numerator of which shall be the then aggregate
overdue amounts of interest on the Series A-1 Equipment Notes, Series A-2
Equipment Notes, Series B Equipment Notes and Series C Equipment Notes (other
than interest becoming due and payable solely as a result of acceleration of any
such Equipment Notes) and the denominator of which shall be the then aggregate
overdue amounts of interest on all "Series A-1 Equipment Notes", "Series A- 2
Equipment Notes", "Series B Equipment Notes" and "Series C Equipment Notes" (in
each case as defined in the Intercreditor Agreement) (other than interest
becoming due and payable solely as a result of acceleration of any such
"Equipment Notes");
(e) any amounts owed to the Liquidity Provider by the Subordination
Agent as borrower under Section 3.01 (other than in respect of an Unpaid Advance
or Applied Provider Advance), 3.03 (other than in respect of an Unpaid Advance
or Applied Provider Advance), 7.05 and 7.07 of each Liquidity Facility (or
similar provisions of any Replacement Liquidity Facility) multiplied by the
fraction specified in the foregoing clause (a); and
(f) an amount or amounts equal to the compensation, including
reasonable expenses and disbursements, payable to the Subordination Agent under
Section 6.07 of the Intercreditor Agreement, multiplied by the fraction
specified in the foregoing clause (a) (but in any event without duplication of
any amount or amounts payable by the Company in respect of such compensation
under any other Operative Document or Pass Through Document).
For purposes of this paragraph, the terms "Advance", "Applied Downgrade
Advance", "Applied Non-Extension Advance", "Applied Provider Advance", "Cash
Collateral Account", "Downgrade Advance", "Final Advance", "Investment
Earnings", "Non-Extension Advance", "Replacement Liquidity Facility" and "Unpaid
Advance" shall have the meanings specified in each Liquidity Facility or the
Intercreditor Agreement.
Section 2.15. Repayment of Monies for Equipment Note Payments Held by
the Loan Trustee. Any money held by the Loan Trustee in trust for any payment of
the principal of,
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Make-Whole Amount, if any, or interest or any other amounts due on, any
Equipment Note, including, without limitation, any money deposited pursuant to
Section 2.12(c) or Section 10.01, and remaining unclaimed for two years after
the due date for such payment (or such lesser time as the Loan Trustee shall be
satisfied, after 60 days' notice from the Company, is one month prior to the
escheat period provided under applicable state law) shall be paid to the
Company. The Noteholders of any outstanding Equipment Notes shall thereafter, as
unsecured general creditors, look only to the Company for payment thereof, and
all liability of the Loan Trustee with respect to such trust money shall
thereupon cease; provided that the Loan Trustee, before being required to make
any such repayment, may at the expense of the Company cause to be mailed to each
such Noteholder notice that such money remains unclaimed and that, after a date
specified therein which shall not be less than 30 days from the date of mailing,
any unclaimed balance of such money then remaining will be repaid to the Company
as provided herein.
Section 2.16. Directions by Subordination Agent. So long as the
Subordination Agent is a Noteholder, notwithstanding anything contained herein
or in any other Operative Document to the contrary, in exercising its right to
vote the Equipment Notes held by it, or in giving or taking any direction,
consent, request, demand, instruction, authorization, notice, waiver or other
action provided by this Indenture or in respect of the Equipment Notes to be
given or taken by a Noteholder (each such vote or other action, a "Direction")
in respect of such Equipment Notes, the Subordination Agent may act in
accordance with any votes, directions, consents, requests, demands,
instructions, authorizations, notices, waivers or other actions given or taken
by any applicable Pass Through Trustee or the Controlling Party pursuant to the
Intercreditor Agreement, including without limitation pursuant to Section 2.06,
Article IV or Section 8.01(b) thereof. The Subordination Agent shall be
permitted (x) to give a Direction with respect to less than the entire principal
amount of any single Equipment Note held by it, and (y) to give different
Directions with respect to different portions of the principal amount of any
single Equipment Note held by it. Any Direction given by the Subordination Agent
at any time with respect to more than a majority in aggregate unpaid principal
amount of all of the Equipment Notes issued and then outstanding hereunder shall
be deemed to have been given by a Majority in Interest of Noteholders.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE COLLATERAL
Section 3.01. Basic Distributions. Except as otherwise provided in
Sections 3.02, 3.03 and 3.04, each periodic payment by the Company of regularly
scheduled installments of principal or interest on the Equipment Notes received
by the Loan Trustee shall be promptly distributed in the following order of
priority:
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first, so much of such payment as shall be required to pay in full the
aggregate amount of the payment or payments of principal amount and
interest (as well as any interest on any overdue principal amount and, to
the extent permitted by applicable law, on any overdue interest and any
other overdue amounts) then due under all Series A-1 Equipment Notes and
Series A-2 Equipment Notes shall be distributed to the Noteholders of
Series A- 1 Equipment Notes and Series A-2 Equipment Notes ratably, without
priority of one over the other, in the proportion that the amount of such
payment or payments then due under each Series A-1 Equipment Note or Series
A-2 Equipment Note bears to the aggregate amount of the payments then due
under all Series A-1 Equipment Notes and Series A-2 Equipment Notes;
second, after giving effect to clause "first" above, so much of such
payment remaining as shall be required to pay in full the aggregate amount
of the payment or payments of principal amount and interest (as well as any
interest on any overdue principal amount and, to the extent permitted by
applicable law, on any overdue interest and other overdue amounts) then due
under all Series B Equipment Notes shall be distributed to the Noteholders
of Series B Equipment Notes ratably, without priority of one over the
other, in the proportion that the amount of such payment or payments then
due under each Series B Equipment Note bears to the aggregate amount of the
payments then due under all Series B Equipment Notes;
third, after giving effect to clause "second" above, so much of such
payment remaining as shall be required to pay in full the aggregate amount
of the payment or payments of principal amount and interest (as well as any
interest on any overdue principal amount and, to the extent permitted by
applicable law, on any overdue interest and any other overdue amounts) then
due under all Series C Equipment Notes shall be distributed to the
Noteholders of Series C Equipment Notes ratably, without priority of one
over the other, in the proportion that the amount of such payment or
payments then due under each Series C Equipment Note bears to the aggregate
amount of the payments then due under all Series C Equipment Notes;
fourth, after giving effect to clause "third" above, so much of such
payment remaining as shall be required to pay in full the aggregate amount
of the payment or payments of principal amount and interest (as well as any
interest on any overdue principal amount and, to the extent permitted by
applicable law, on any overdue interest and any other overdue amounts) then
due under all Series D Equipment Notes shall be distributed to the
Noteholders of Series D Equipment Notes ratably, without priority of one
over the other, in the proportion that the amount of such payment or
payments then due under each Series D Equipment Note bears to the aggregate
amount of the payments then due under all Series D Equipment Notes; and
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fifth, the balance, if any, of such installment remaining thereafter
shall be distributed to the Company.
Section 3.02. Event of Loss; Optional Redemption. Except as otherwise
provided in Sections 3.03 and 3.04 and subject to the following proviso, any
payments received by the Loan Trustee with respect to the Aircraft as the result
of (a) an Event of Loss (including amounts paid by the Company pursuant to
Section 2.10) or (b) an optional redemption of the Equipment Notes pursuant to
Section 2.11 shall be applied to redemption of the Equipment Notes pursuant to
Section 2.10 or Section 2.11, as applicable, and to payment of all other Secured
Obligations by applying such funds in the following order of priority:
first, (i) to reimburse the Loan Trustee and the Noteholders for any
reasonable costs or expenses incurred in connection with such redemption
for which they are entitled to reimbursement, or indemnity by the Company,
under the Operative Documents; and then (ii) to pay any other amounts then
due (except as provided in clause "second" below) to the Loan Trustee, the
Noteholders and the Indenture Indemnitees under this Indenture, the
Participation Agreement or the Equipment Notes;
second, (i) to pay the amounts specified in subclause (i) of clause
"third" of Section 3.03 plus Make-Whole Amount, if any, then due and
payable in respect of the Series A-1 Equipment Notes and the Series A-2
Equipment Notes; (ii) after giving effect to subclause (i) above, to pay
the amounts specified in subclause (ii) of clause "third" of Section 3.03
plus Make-Whole Amount, if any, then due and payable in respect of the
Series B Equipment Notes; (iii) after giving effect to subclause (ii)
above, to pay the amounts specified in subclause (iii) of clause "third" of
Section 3.03 plus Make-Whole Amount, if any, then due and payable in
respect of the Series C Equipment Notes; and (iv) after giving effect to
subclause (iii) above, to pay the amounts specified in subclause (iv) of
clause "third" of Section 3.03 plus Make-Whole Amount, if any, then due and
payable in respect of the Series D Equipment Notes; and
third, the balance, if any, of such payments shall be distributed to
the Company.
provided, however, that any insurance, condemnation or similar proceeds
resulting from an Event of Loss that are received by the Loan Trustee shall be
held or disbursed by the Loan Trustee as provided by Sections 7.05(c) and
7.06(d) (provided that such money held by the Loan Trustee shall be invested as
provided in Section 5.06).
No Make-Whole Amount shall be payable on the Equipment Notes in connection
with their redemption as a result of an Event of Loss in respect of the
Airframe.
Section 3.03. Payments after Event of Default. Except as otherwise
provided in Section 3.04, all payments received and amounts held or realized by
the Loan Trustee (including
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any amounts realized by the Loan Trustee from the exercise of any remedies
pursuant to Article IV) after both an Event of Default shall have occurred and
be continuing and the Equipment Notes shall have become due and payable pursuant
to Section 4.02(a), as well as all payments or amounts then held by the Loan
Trustee as part of the Collateral, shall be promptly distributed by the Loan
Trustee in the following order of priority:
first, so much of such payments or amounts as shall be required to (i)
reimburse the Loan Trustee, to the extent the Loan Trustee is entitled to
be reimbursed or indemnified under the Operative Documents, for any Tax,
expense or other loss (including, without limitation, all amounts to be
expended at the expense of, or charged upon the tolls, rents, revenues,
issues, products and profits of, the Collateral and every part thereof
pursuant to Section 4.02(a)) incurred by the Loan Trustee (to the extent
not previously reimbursed), the expenses of any sale, taking or other
proceeding, reasonable attorneys' fees and expenses, court costs and any
other expenditures incurred or expenditures or advances made by the Loan
Trustee or the Noteholders in the protection, exercise or enforcement of
any right, power or remedy or any damages sustained by the Loan Trustee or
any Noteholder, liquidated or otherwise, upon such Event of Default shall
be applied by the Loan Trustee as between itself and the Noteholders in
reimbursement of such expenses and any other expenses for which the Loan
Trustee or the Noteholders are entitled to reimbursement under any
Operative Document, and (ii) to pay all amounts payable (except as provided
in clauses "second" and "third" below) to the other Indenture Indemnitees
hereunder and under the Participation Agreement; and in case the aggregate
amount so to be distributed is insufficient to pay as aforesaid, then
ratably, without priority of one over the other, in proportion to the
amounts owed each hereunder;
second, so much of such payments or amounts remaining as shall be
required to reimburse the then existing or prior Noteholders for payments
made pursuant to Section 5.03 (to the extent not previously reimbursed)
shall be distributed to such then existing or prior Noteholders ratably,
without priority of one over the other, in accordance with the amount of
the payment or payments made by each such then existing or prior Noteholder
pursuant to Section 5.03;
third, (i) so much of such payments or amounts remaining as shall be
required to pay in full the aggregate unpaid principal amount of all Series
A-1 Equipment Notes and Series A-2 Equipment Notes and the accrued but
unpaid interest and all other Secured Obligations in respect of the Series
A-1 Equipment Notes and Series A-2 Equipment Notes to the date of
distribution shall be distributed to the Noteholders of Series A-1
Equipment Notes and Series A-2 Equipment Notes ratably, without priority of
one over the other, in the proportion that the aggregate unpaid principal
amount of all Series A-1 Equipment Notes and Series A-2 Equipment Notes
held by each Noteholder plus the accrued but unpaid interest and other
amounts due hereunder or thereunder to the date of distribution bears to
the aggregate unpaid principal amount of all Series A-1 Equipment Notes and
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Series A-2 Equipment Notes held by all such Noteholders plus the accrued
but unpaid interest and other amounts due thereon to the date of
distribution; (ii) after giving effect to subclause (i) above, so much of
such payments or amounts remaining as shall be required to pay in full the
aggregate unpaid principal amount of all Series B Equipment Notes and the
accrued but unpaid interest and all other Secured Obligations in respect of
the Series B Equipment Notes to the date of distribution shall be
distributed to the Noteholders of Series B Equipment Notes ratably, without
priority of one over the other, in the proportion that the aggregate unpaid
principal amount of all Series B Equipment Notes held by each Noteholder
plus the accrued but unpaid interest and other amounts due hereunder or
thereunder to the date of distribution bears to the aggregate unpaid
principal amount of all Series B Equipment Notes held by all such
Noteholders plus the accrued but unpaid interest and other amounts due
thereon to the date of distribution; (iii) after giving effect to subclause
(ii) above, so much of such payments or amounts remaining as shall be
required to pay in full the aggregate unpaid principal amount of all Series
C Equipment Notes and the accrued but unpaid interest and all other Secured
Obligations in respect of the Series C Equipment Notes to the date of
distribution shall be distributed to the Noteholders of Series C Equipment
Notes ratably, without priority of one over the other, in the proportion
that the aggregate unpaid principal amount of all Series C Equipment Notes
held by each Noteholder plus the accrued but unpaid interest and other
amounts due hereunder or thereunder to the date of distribution bears to
the aggregate unpaid principal amount of all Series C Equipment Notes held
by all such Noteholders plus the accrued but unpaid interest and other
amounts due thereon to the date of distribution; and (iv) after giving
effect to subclause (iii) above, so much of such payments or amounts
remaining as shall be required to pay in full the aggregate unpaid
principal amount of all Series D Equipment Notes and the accrued but unpaid
interest and all other Secured Obligations in respect of the Series D
Equipment Notes to the date of distribution shall be distributed to the
Noteholders of Series D Equipment Notes, ratably, without priority of one
over the other, in the proportion that the aggregate unpaid principal
amount of all Series D Equipment Notes held by each Noteholder plus the
accrued but unpaid interest and other amounts due hereunder or thereunder
to the date of distribution bears to the aggregate unpaid principal amount
of all Series D Equipment Notes held by all such Noteholders plus the
accrued but unpaid interest and other amounts due thereon to the date of
distribution; and
fourth, the balance, if any, of such payments or amounts shall be
distributed to the Company.
No Make-Whole Amount shall be payable on the Equipment Notes as a
consequence of or in connection with an Event of Default or the acceleration of
the Equipment Notes.
Section 3.04. Certain Payments. (a) Any payments received by the Loan
Trustee for which provision as to the application thereof is made in this
Indenture other than in this
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Article III shall be applied as provided in those provisions. Without limiting
the foregoing, any payments received by the Loan Trustee which are payable to
the Company pursuant to any of the provisions of this Indenture other than those
set forth in this Article III (including Sections 5.06, 7.05 and 7.06 hereof)
shall be so paid to the Company. Any payments received by the Loan Trustee for
which no provision as to the application thereof is made in this Indenture and
for which such provision is made in any other Operative Document shall be
applied forthwith to the purpose for which such payment was made in accordance
with the terms of such other Operative Document.
(b) The Loan Trustee will distribute promptly upon receipt any
indemnity payment received by it from the Company pursuant to Section 4.02 of
the Participation Agreement in respect of (i) State Street and the Loan Trustee,
(ii) the Subordination Agent, (iii) the Pass Through Trustees and (iv) the
Liquidity Provider, in each case, directly to the Person entitled thereto. Any
payment received by the Loan Trustee from the Company under Section 2.14 shall
be distributed to the Subordination Agent to be distributed in accordance with
Section 2.03(c) of the Intercreditor Agreement.
(c) Any payments received by the Loan Trustee not constituting part of
the Collateral or otherwise for which no provision as to the application thereof
is made in any Operative Document shall be distributed by the Loan Trustee to
the Company. Further, and except as otherwise provided in Sections 3.02, 3.03
and 3.04, all payments received and amounts realized by the Loan Trustee with
respect to the Aircraft, to the extent received or realized at any time after
payment in full of all Secured Obligations or after the conditions set forth in
Section 10.01(a)(ii) for the defeasance of this Indenture have been satisfied,
as well as any amounts remaining as part of the Collateral after the occurrence
of such payment in full or defeasance, shall be distributed by the Loan Trustee
to the Company.
Section 3.05. Payments to the Company. Any amounts distributed
hereunder by the Loan Trustee to the Company shall be paid to the Company
(within the time limits contemplated by Section 2.03(a)) by wire transfer of
funds of the type received by the Loan Trustee at such office and to such
account or accounts of such entity or entities as shall be designated by notice
from the Company to the Loan Trustee from time to time.
ARTICLE IV
EVENTS OF DEFAULT; REMEDIES OF LOAN TRUSTEE
Section 4.01. Events of Default. Each of the following events shall
constitute an "Event of Default" whether such event shall be voluntary or
involuntary or come about or be effected by operation of law or pursuant to or
in compliance with any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body and each
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such Event of Default shall be deemed to exist and continue so long as, but only
as long as, it shall not have been remedied:
(a) the Company shall fail to make any payment within 15 days after the
same shall have become due of principal amount of, Make-Whole Amount, if any, or
interest on, any Equipment Note;
(b) the Company shall fail to make payment when the same shall become due
of any amount (other than amounts referred to in Section 4.01(a)) due hereunder,
under any Equipment Note or under any other Operative Document, and such failure
shall continue unremedied for 30 days after the receipt by the Company of
written notice thereof from the Loan Trustee or any Noteholder;
(c) the Company shall fail to carry and maintain insurance or indemnity on
or with respect to the Aircraft in accordance with the provisions of Section
7.06; provided that no such failure to carry and maintain insurance shall
constitute an Event of Default until the earlier of (i) the date such failure
shall have continued unremedied for a period of 30 days after receipt by the
Loan Trustee of the notice of cancellation or lapse referred to in Section 7.06
or (ii) the date such insurance is not in effect as to the Loan Trustee;
(d) the Company shall fail to perform or observe any other covenant,
condition or agreement to be performed or observed by it under any Operative
Document, and such failure shall continue unremedied for a period of 60 days
after receipt by the Company of written notice thereof from the Loan Trustee or
any Noteholder; provided that, if such failure is capable of being remedied, no
such failure shall constitute an Event of Default for a period of one year after
such notice is received by the Company so long as the Company is diligently
proceeding to remedy such failure;
(e) any representation or warranty made by the Company in any Operative
Document shall prove to have been incorrect in any material respect at the time
made, and such incorrectness shall continue to be material to the transactions
contemplated hereby and continue unremedied for a period of 60 days after
receipt by the Company of written notice thereof from the Loan Trustee or any
Noteholder; provided that, if such incorrectness is capable of being remedied,
no such incorrectness shall constitute an Event of Default for a period of one
year after such notice is received by the Company so long as the Company is
diligently proceeding to remedy such incorrectness;
(f) the Company shall consent to the appointment of or the taking of
possession by a receiver, trustee or liquidator of itself or of a substantial
part of its property, shall admit in writing its inability to pay its debts
generally as they come due or shall make a general assignment for the benefit of
creditors;
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(g) the Company shall file a voluntary petition in bankruptcy or a
voluntary petition or an answer seeking reorganization, liquidation or other
relief in a case under any bankruptcy laws or insolvency laws (as in effect at
such time) or an answer admitting the material allegations of a petition filed
against the Company in any such case, or the Company shall seek relief by
voluntary petition, answer or consent, under the provisions of any other
bankruptcy or other similar law providing for the reorganization or winding-up
of corporations (as in effect at such time), or the Company shall seek an
agreement, composition, extension or adjustment with its creditors under such
laws;
(h) an order, judgment or decree shall be entered by any court of competent
jurisdiction appointing, without the consent of the Company, a receiver, trustee
or liquidator of the Company or of any substantial part of its property, or any
substantial part of its property shall be sequestered, or granting any other
relief in respect of the Company as a debtor under any bankruptcy laws or
insolvency laws (as in effect at such time), and any such order, judgment or
decree of appointment or sequestration shall remain in force undismissed,
unstayed or unvacated for a period of 90 days after the date of entry thereof;
or
(i) a petition against the Company in a case under the federal bankruptcy
laws or other insolvency laws (as in effect at such time) is filed and not
withdrawn or dismissed within 90 days thereafter, or if, under the provisions of
any law providing for reorganization or winding-up of corporations that may
apply to the Company, any court of competent jurisdiction assumes jurisdiction,
custody or control of the Company or of any substantial part of its property and
such jurisdiction, custody or control shall remain in force unrelinquished,
unstayed or unterminated for a period of 90 days;
provided, however, that notwithstanding anything to the contrary contained
in this Section 4.01, any failure of the Company to perform or observe any
covenant, condition or agreement shall not constitute an Event of Default if
such failure arises by reason of an event referred to in the definition of
"Event of Loss" so long as the Company is continuing to comply with all of the
terms of Section 7.05.
Section 4.02. Remedies. (a) If an Event of Default shall have occurred
and be continuing and so long as the same shall continue unremedied, then and in
every such case the Loan Trustee may, and upon the written instructions of a
Majority in Interest of Noteholders, the Loan Trustee shall, do one or more of
the following to the extent permitted by, and subject to compliance with the
requirements of, applicable law then in effect (provided, however, that during
any period the Aircraft is subject to the CRAF Program and is in possession of
or being operated under the direction of the United States government or an
agency or instrumentality of the United States, the Loan Trustee shall not, on
account of any Event of Default, be entitled to exercise or pursue any of the
powers, rights or remedies described in this Section 4.02 in such manner as to
limit the Company's control under this Indenture (or any Permitted Lessee's
control under any Lease) of the Airframe or any Engines installed thereon,
unless at least 60 days' (or such lesser
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period as may then be applicable under the Military Airlift Command Program of
the United States government) prior written notice of default hereunder shall
have been given by the Loan Trustee by registered or certified mail to the
Company (and any such Permitted Lessee) with a copy addressed to the Contracting
Office Representative or other appropriate person for the Military Airlift
Command of the United States Air Force under any contract with the Company
relating to the Aircraft):
(i) declare by written notice to the Company all the Equipment Notes
to be due and payable, whereupon the aggregate unpaid principal amount of
all Equipment Notes then outstanding, together with accrued but unpaid
interest thereon and other amounts due thereunder (but for the avoidance of
doubt, without Make-Whole Amount), shall immediately become due and payable
without presentment, demand, protest or notice, all of which are hereby
waived; provided that if an Event of Default referred to in Subsections
4.01(f), (g), (h) or (i) shall have occurred and be continuing, then and in
every such case the unpaid principal amount then outstanding, together with
accrued but unpaid interest and all other amounts due thereunder (but for
the avoidance of doubt, without Make-Whole Amount) shall immediately and
without further act become due and payable without presentment, demand,
protest or notice, all of which are hereby waived; and, following such
declaration or deemed declaration:
(ii) (A) cause the Company, upon the written demand of the Loan
Trustee, at the Company's expense, to deliver promptly, and the Company
shall deliver promptly, all or such part of the Airframe or any Engine as
the Loan Trustee may so demand to the Loan Trustee or its order, or, if the
Company shall have failed to so deliver the Airframe or any Engine after
such demand, the Loan Trustee, at its option, may enter upon the premises
where all or any part of the Airframe or any Engine are located and take
immediate possession of and remove the same together with any engine which
is not an Engine but which is installed on the Airframe, subject to all of
the rights of the owner, lessor, lienor or secured party of such engine;
provided that the Airframe with an engine (which is not an Engine)
installed thereon may be flown or returned only to a location within the
continental United States, and such engine shall be held for the account of
any such owner, lessor, lienor, secured party or, if such engine is owned
by the Company, may at the option of the Company with the consent of the
Loan Trustee (which will not be unreasonably withheld) or at the option of
the Loan Trustee with the consent of the Company (which will not be
unreasonably withheld), be exchanged with the Company for an Engine in
accordance with the provisions of Section 7.05(b); (B) sell all or any part
of the Airframe and any Engine at public or private sale, whether or not
the Loan Trustee shall at the time have possession thereof, as the Loan
Trustee may determine, or otherwise dispose of, hold, use, operate, lease
to others or keep idle all or any part of the Airframe or such Engine as
the Loan Trustee, in its sole discretion, may determine, all free and clear
of any rights or claims of the Company, and the proceeds of such sale or
disposition shall be
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applied as set forth in Section 3.03; or (C) exercise any other remedy of a
secured party under the Uniform Commercial Code of the State of New York
(whether or not in effect in the jurisdiction in which enforcement is
sought).
Upon every such taking of possession of Collateral under this Section
4.02, the Loan Trustee may, from time to time, at the expense of the Collateral,
make all such expenditures for maintenance, insurance, repairs, alterations,
additions and improvements to and of the Collateral as it may deem proper. In
each such case, the Loan Trustee shall have the right to maintain, use, operate,
store, lease, control or manage the Collateral and to exercise all rights and
powers of the Company relating to the Collateral as the Loan Trustee shall
reasonably deem best, including the right to enter into any and all such
agreements with respect to the maintenance, use, operation, storage, leasing,
control, management or disposition of the Collateral or any part thereof as the
Loan Trustee may reasonably determine; and the Loan Trustee shall be entitled to
collect and receive directly all tolls, rents, revenues, issues, income,
products and profits of the Collateral and every part thereof. Such tolls,
rents, revenues, issues, income, products and profits shall be applied to pay
the expenses of the use, operation, storage, leasing, control, management or
disposition of the Collateral, and of all maintenance, repairs, replacements,
alterations, additions and improvements, and to make all payments that the Loan
Trustee may be required or may elect to make, if any, for Taxes, insurance or
other proper charges assessed against or otherwise imposed upon the Collateral
or any part thereof, and all other payments which the Loan Trustee may be
required or expressly authorized to make under any provision of this Indenture,
as well as just and reasonable compensation for the services of the Loan
Trustee, and shall otherwise be applied in accordance with Article III.
If an Event of Default shall have occurred and be continuing and the
Equipment Notes shall either have been accelerated pursuant to this Section 4.02
or have become due at maturity and the Loan Trustee shall be entitled to
exercise rights hereunder, at the request of the Loan Trustee, the Company shall
promptly execute and deliver to the Loan Trustee such instruments of title and
other documents as the Loan Trustee may reasonably deem necessary or advisable
to enable the Loan Trustee or an agent or representative designated by the Loan
Trustee, at such time or times and place or places as the Loan Trustee may
specify, to obtain possession of all or any part of the Collateral to which the
Loan Trustee shall at the time be entitled hereunder. If the Company shall for
any reason fail to execute and deliver such instruments and documents after such
request by the Loan Trustee, the Loan Trustee may obtain a judgment conferring
on the Loan Trustee the right to immediate possession and requiring the Company
to execute and deliver such instruments and documents to the Loan Trustee, to
the entry of which judgment the Company hereby specifically consents to the
fullest extent it may lawfully do so.
(b) The Loan Trustee shall give the Company at least 30 days' prior
written notice of any public sale or of the date on or after which any private
sale will be held, which notice the Company hereby agrees to the extent
permitted by applicable law is reasonable notice. Any Noteholder or Noteholders
shall be entitled to bid for and become the purchaser of any Collateral
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offered for sale pursuant to this Section 4.02 and to credit against the
purchase price bid at such sale by such Noteholders all or any part of the
unpaid amounts owing to such Noteholders under the Operative Documents and
secured by the Lien of this Indenture (but only to the extent that such purchase
price would have been paid to such Noteholders pursuant to Article III if such
purchase price were paid in cash and the foregoing provision of this Section
4.02(b) were not given effect). The Loan Trustee may exercise such right without
possession or production of the Equipment Notes or proof of ownership thereof,
and as a representative of the Noteholders may exercise such right without
notice to the Noteholders as parties to any suit or proceeding relating to the
foreclosure of any Collateral. The Company shall also be entitled to bid for and
become the purchaser of any Collateral offered for sale pursuant to this Section
4.02.
(c) To the extent permitted by applicable law, the Company irrevocably
appoints, while an Event of Default has occurred and is continuing, the Loan
Trustee the true and lawful attorney-in-fact of the Company (which appointment
is coupled with an interest) in its name and stead and on its behalf, for the
purpose of effectuating any sale, assignment, transfer or delivery for the
enforcement of the Lien of this Indenture, whether pursuant to foreclosure or
power of sale, or otherwise, to execute and deliver all such bills of sale,
assignments and other instruments as may be necessary or appropriate, with full
power of substitution, the Company hereby ratifying and confirming all that such
attorney or any substitute shall do by virtue hereof in accordance with
applicable law; provided that if so requested by the Loan Trustee or any
purchaser, the Company shall ratify and confirm any such sale, assignment or
transfer of delivery, by executing and delivering to the Loan Trustee or such
purchaser all bills of sale, assignments, releases and other proper instruments
to effect such ratification and confirmation as may be designated in any such
request.
(d) At any time after the Loan Trustee has declared the unpaid
principal amount of all Equipment Notes then outstanding to be due and payable
and prior to the sale of any part of the Collateral pursuant to this Article IV,
a Majority in Interest of Noteholders, by written notice to the Company and the
Loan Trustee, may rescind and annul such declaration and its consequences if:
(i) there has been paid to or deposited with the Loan Trustee an amount
sufficient to pay all overdue installments of principal amount of, and interest
on, the Equipment Notes, and all other amounts owing under the Operative
Documents, that have become due otherwise than by such declaration of
acceleration and (ii) all other Events of Default, other than nonpayment of
principal amount or interest on the Equipment Notes that have become due solely
because of such acceleration, have been cured or waived.
(e) Notwithstanding anything contained herein, so long as the Pass
Through Trustee under any Pass Through Trust Agreement or the Subordination
Agent on its behalf is a Noteholder, the Loan Trustee will not be authorized or
empowered to acquire title to any Collateral or take any action with respect to
any Collateral so acquired by it if such acquisition or action would cause any
Pass Through Trust to fail to qualify as a "grantor trust" for federal income
tax purposes.
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Section 4.03. Remedies Cumulative. To the extent permitted under
applicable law, each and every right, power and remedy specifically given to the
Loan Trustee herein or otherwise in this Indenture shall be cumulative and shall
be in addition to every other right, power and remedy specifically given herein
or now or hereafter existing at law, in equity or by statute, and each and every
right, power and remedy whether specifically given herein or otherwise existing
may be exercised from time to time and as often and in such order as may be
deemed expedient by the Loan Trustee, and the exercise or the beginning of the
exercise of any power or remedy shall not be construed to be a waiver of the
right to exercise at the same time or thereafter any other right, power or
remedy. No delay or omission by the Loan Trustee in the exercise of any right,
remedy or power or in the pursuance of any remedy shall, to the extent permitted
by applicable law, impair any such right, power or remedy or be construed to be
a waiver of any default on the part of the Company or to be an acquiescence
therein.
Section 4.04. Discontinuance of Proceedings. In case the Loan Trustee
shall have instituted any proceedings to enforce any right, power or remedy
under this Indenture by foreclosure, entry or otherwise, and such proceedings
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to the Loan Trustee, then and in every such case the
Company and the Loan Trustee shall, subject to any determination in such
proceedings, be restored to their former positions and rights hereunder with
respect to the Collateral, and all rights, remedies and powers of the Loan
Trustee shall continue as if no such proceedings had been undertaken (but
otherwise without prejudice).
Section 4.05. Waiver of Past Defaults. Upon written instruction from a
Majority in Interest of Noteholders, the Loan Trustee shall waive any past
default hereunder and its consequences, and upon any such waiver such default
shall cease to exist and any Event of Default arising therefrom shall be deemed
to have been cured for every purpose of the Operative Documents, but no such
waiver shall extend to any subsequent or other default or impair any right
consequent thereon; provided, however, that in the absence of written
instructions from each of the affected Noteholders, the Loan Trustee shall not
waive any default (i) in the payment of the principal amount, Make-Whole Amount,
if any, or interest due under any Equipment Note then outstanding (other than
with the consent of the holder thereof), or (ii) in respect of a covenant or
provision hereof which, under Article IX, cannot be modified or amended without
the consent of each such affected Noteholder.
Section 4.06. Noteholders May Not Bring Suit Except Under Certain
Conditions. A Noteholder of any Series shall not have the right to institute any
suit, action or proceeding at law or in equity or otherwise with respect to this
Indenture for the appointment of a receiver or for the enforcement of any other
remedy under this Indenture, unless:
(1) such Noteholder previously shall have given written notice to the Loan
Trustee of a continuing Event of Default;
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(2) A Majority in Interest of Noteholders shall have requested the Loan
Trustee in writing to institute such action, suit or proceeding and
shall have offered to the Loan Trustee indemnity as provided in Section
5.03;
(3) the Loan Trustee shall have refused or neglected to institute any such
action, suit or proceeding for 60 days after receipt of such notice,
request and offer of indemnity; and
(4) no direction inconsistent with such written request shall have been
given to the Loan Trustee during such 60-day period by a Majority in
Interest of Noteholders.
Except to the extent provided in the Intercreditor Agreement or in any
Indenture Supplement, it is understood and intended that no one or more of the
Noteholders of any Series shall have any right in any manner whatsoever
hereunder or under the Indenture Supplement or under the Equipment Notes of such
Series to (i) surrender, impair, waive, affect, disturb or prejudice any
Collateral, or the Lien of the Indenture on any Collateral, or the rights of the
Noteholders of such Series, (ii) obtain or seek to obtain priority over or
preference with respect to any other such Noteholder of such Series or (iii)
enforce any right under this Indenture, except in the manner provided in this
Indenture and for the equal, ratable and common benefit of all the Noteholders
of such Series subject to the provisions of this Indenture.
ARTICLE V
DUTIES OF THE LOAN TRUSTEE
Section 5.01. Notice of Event of Default. If the Loan Trustee shall
have knowledge of an Event of Default or of a default arising from a failure by
the Company to pay when due any payment of principal amount, interest or
Make-Whole Amount, if any, due and payable under any Equipment Note, the Loan
Trustee shall promptly give notice thereof to the Company and each Noteholder by
telegram, cable, facsimile or telephone (to be promptly confirmed in writing);
provided, however, that except in the case of a default in the payment of the
principal amount, interest or Make-Whole Amount, if any, due and payable under
any Equipment Note, the Loan Trustee shall be protected in withholding the
notice to the Noteholders required in the foregoing part of this sentence if and
so long as the executive committee or trust committee of directors of the Loan
Trustee and/or trust officers thereof in good faith determine that withholding
such notice is in the interest of the Noteholders. Subject to the terms of
Sections 4.02, 4.05, 5.02 and 5.03, the Loan Trustee shall take such action, or
refrain from taking such action, with respect to such Event of Default
(including with respect to the exercise of any rights or remedies hereunder) as
the Loan Trustee shall be instructed in writing by a Majority in Interest of
Noteholders. Subject to the provisions of Section 5.03, if the Loan Trustee
shall not have received instructions as above
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provided within 20 Business Days after giving notice of such Event of Default to
the Noteholders, the Loan Trustee may, subject to instructions thereafter
received pursuant to the preceding provisions of this Section 5.01, take such
action, or refrain from taking such action, but shall be under no duty to take
or refrain from taking any action, with respect to such Event of Default as it
shall reasonably determine to be advisable in the best interests of the
Noteholders and shall use the same degree of care and skill in connection
therewith as a prudent person would use under the circumstances in the conduct
of his or her own affairs; provided that the Loan Trustee may not sell the
Airframe or any Engine without the consent of a Majority in Interest of
Noteholders.
For all purposes of this Indenture, in the absence of actual knowledge,
the Loan Trustee shall not be deemed to have knowledge of a default or an Event
of Default unless notified in writing by the Company or one or more Noteholders;
and "actual knowledge" (as used in the foregoing clause) of the Loan Trustee
shall mean actual knowledge of an officer in the Corporate Trust Division of the
Loan Trustee; provided, however, that the Loan Trustee shall be deemed to have
actual knowledge of (i) the failure of the Company to pay any principal amount
of, or interest on, the Equipment Notes directly to the Loan Trustee when the
same shall become due or (ii) the failure of the Company to maintain insurance
as required under Section 7.06 if the Loan Trustee receives written notice
thereof from an insurer or insurance broker.
Section 5.02. Action upon Instructions; Certain Rights and Limitations.
Subject to the terms of Article IV and this Article V, upon the written
instructions at any time of a Majority in Interest of Noteholders, the Loan
Trustee shall promptly (i) give such notice, direction, consent, waiver or
approval or exercise such right, remedy or power hereunder in respect of all or
any part of the Collateral or (ii) take such other action, as shall be specified
in such instructions.
The Loan Trustee will cooperate with the Company in connection with the
recording, filing, re-recording and refiling of the Indenture and any
supplements to it and any financing statements or other documents as is
necessary to maintain the perfection hereof or otherwise protect the security
interests created hereby. The Loan Trustee shall furnish to the Company upon
request such information and copies of such documents as the Loan Trustee may
have and as are necessary for the Company to perform its duties under Article II
hereof.
Section 5.03. Indemnification. The Loan Trustee shall not be required
to take any action or refrain from taking any action under Sections 5.01 (other
than the first sentence thereof) or 5.02 or Article IV unless it shall have
received indemnification against any risks incurred in connection therewith in
form and substance reasonably satisfactory to it, including, without limitation,
adequate advances against costs that may be incurred by it in connection
therewith. The Loan Trustee shall not be required to take any action under
Section 5.01 (other than the first sentence thereof) or 5.02 or Article IV, nor
shall any other provision of any Operative Document be deemed to impose a duty
on the Loan Trustee to take any action, if the Loan Trustee shall have been
advised by outside counsel that such action is contrary to the terms hereof or
is otherwise contrary to law.
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Section 5.04. No Duties Except as Specified in Indenture or
Instructions. The Loan Trustee shall not have any duty or obligation to manage,
control, lease, use, sell, operate, store, dispose of or otherwise deal with the
Aircraft or any other part of the Collateral, or to otherwise take or refrain
from taking any action under, or in connection with, this Indenture, except as
expressly provided by the terms of this Indenture or the Participation Agreement
or as expressly provided in written instructions received pursuant to the terms
of Section 5.01 or 5.02; and no implied duties or obligations shall be read into
this Indenture against the Loan Trustee.
Section 5.05. No Action Except under Indenture or Instructions. The
Loan Trustee agrees that it will not manage, control, use, sell, lease, operate,
store, dispose of or otherwise deal with the Aircraft or any other part of the
Collateral except in accordance with the powers granted to, or the authority
conferred upon, the Loan Trustee pursuant to this Indenture and in accordance
with the express terms hereof.
Section 5.06. Investment of Amounts Held by the Loan Trustee. Any
monies (including for the purpose of this Section 5.06 any cash deposited with
the Loan Trustee by the Company, any cash received by the Loan Trustee pursuant
to Sections 7.05(c) or 7.06(d) or otherwise) or Permitted Investments purchased
by the use of such cash pursuant to this Section 5.06 or any cash constituting
the proceeds of the maturity, sale or other disposition of any Permitted
Investments) held by the Loan Trustee hereunder as part of the Collateral, until
paid out by the Loan Trustee as herein provided, (i) subject to clause (ii)
below, may be carried by the Loan Trustee on deposit with itself or on deposit
to its account with any bank, trust company or national banking association
incorporated or doing business under the laws of the United States or one of the
states thereof having combined capital and surplus and retained earnings of a
least $75,000,000, and the Loan Trustee shall not have any liability for
interest upon any such monies except as otherwise agreed in writing with the
Company, or (ii) at any time and from time to time, so long as no Event of
Default shall have occurred and be continuing, at the request of the Company,
shall be invested and reinvested in Permitted Investments as specified in such
request (if such investments are reasonably available for purchase) and sold, in
any case at such prices, including accrued interest or its equivalent, as are
set forth in such request, and such Permitted Investments shall be held by the
Loan Trustee in trust as part of the Collateral until so sold; provided that the
Company shall upon demand pay to the Loan Trustee the amount of any loss
realized upon maturity, sale or other disposition of any such Permitted
Investment and, so long as no Event of Default or Payment Default shall have
occurred and be continuing, the Company shall be entitled to receive from the
Loan Trustee, and the Loan Trustee shall promptly pay to the Company, any
profit, income, interest, dividend or gain realized upon maturity, sale or other
disposition of any Permitted Investment. If an Event of Default or Payment
Default shall have occurred and be continuing, any net income, profit, interest,
dividend or gain realized upon maturity, sale or other disposition of any
Permitted Investment shall be held as part of the Collateral and shall be
applied by the Loan Trustee at the same time, on the same conditions and in the
same manner as the amounts in respect of which such income, profit, interest,
dividend or gain was realized are required to be distributed in accordance with
the provisions hereof pursuant to
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which such amounts were required to be held. The Loan Trustee shall not be
responsible for any losses on any investments or sales of Permitted Investments
made pursuant to the procedure specified in this Section 5.06 other than by
reason of its willful misconduct or negligence. If any moneys or investments are
held by the Loan Trustee solely because an Event of Default has occurred and is
continuing and such moneys or investments have been held for a period of 90
consecutive days during which such Event of Default is continuing without any
remedial action being taken by the Loan Trustee in respect of such Event of
Default pursuant to Section 4.02 hereof, and provided that there is no stay,
moratorium or injunction in effect preventing the taking of such action, then,
notwithstanding any other provision of the Operative Documents, all such moneys
and investments held by the Loan Trustee shall be released to the Company on
such 90th day, or as soon thereafter as practicable.
ARTICLE VI
THE LOAN TRUSTEE
Section 6.01. Acceptance of Trusts and Duties. State Street accepts the
trusts and duties hereby created and applicable to it and agrees to perform such
duties, but only upon the terms of this Indenture and agrees to receive, handle
and disburse all monies received by it as Loan Trustee constituting part of the
Collateral in accordance with the terms hereof. State Street shall have no
liability hereunder except (a) for its own willful misconduct or negligence, (b)
as provided in the fourth sentence of Section 2.03(a) and the penultimate
sentence of Section 5.06, (c) for liabilities that may result from the
inaccuracy of any representation or warranty of State Street in the
Participation Agreement or expressly made hereunder and (d) as otherwise
expressly provided in the Operative Documents.
Section 6.02. Absence of Certain Duties. Except in accordance with
written instructions furnished pursuant to Sections 5.01, 5.02 or 6.06, and
except as provided in, and without limiting the generality of, Sections 5.02,
5.03 and 5.04, the Loan Trustee, shall have no duty (a) to see to any
registration of the Aircraft or any recording or filing of this Indenture or any
other document, or to see to the maintenance of any such registration, recording
or filing, (b) to see to any insurance on the Aircraft or to effect or maintain
any such insurance, whether or not the Company shall be in default with respect
thereto, (c) to confirm, verify or inquire into the failure to receive any
financial statements of the Company or (d) to inspect the Aircraft at any time
or ascertain or inquire as to the performance or observance of any of the
Company's covenants hereunder with respect to the Aircraft.
Section 6.03. No Representations or Warranties as to the Documents.
Except as provided in Article V of the Participation Agreement, the Loan Trustee
shall not be deemed to have made any representation or warranty as to the
validity, legality or enforceability of any Operative Document or any other
document or instrument, or as to the correctness of any statement (other
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than a statement by the Loan Trustee) contained herein or therein, except that
the Loan Trustee hereby represents and warrants that each of said specified
documents to which it is a party has been or will be duly executed and delivered
by one of its officers who is and will be duly authorized to execute and deliver
such document on its behalf.
Section 6.04. No Segregation of Monies; No Interest. Subject to Section
5.06 hereof, all moneys received by the Loan Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the extent
required by mandatory provisions of law, and neither the Loan Trustee nor any
agent of the Loan Trustee shall be under any liability for interest on any
moneys received by it hereunder; provided, however, that any payments received,
or applied hereunder, by the Loan Trustee shall be accounted for by the Loan
Trustee so that any portion thereof paid or applied pursuant hereto shall be
identifiable as to the source thereof.
Section 6.05. Reliance; Agents; Advice of Counsel. The Loan Trustee
shall not incur any liability to anyone in acting upon any signature,
instrument, notice, resolution, request, consent, order, certificate, report,
opinion, bond or other document or paper reasonably believed by it to be genuine
and reasonably believed by it to be signed by the proper party or parties. The
Loan Trustee may accept a copy of a resolution of the Board of Directors of any
party to the Participation Agreement, certified by the Secretary or an Assistant
Secretary of such party as duly adopted and in full force and effect, as
conclusive evidence that such resolution has been duly adopted and that the same
is in full force and effect. As to any fact or matter the manner of
ascertainment of which is not specifically described herein, the Loan Trustee
may for all purposes hereof rely on a certificate, signed by a duly authorized
officer of the Company, as to such fact or matter, and such certificate shall
constitute full protection to the Loan Trustee for any action taken or omitted
to be taken by it in good faith in reliance thereon. In the administration of
the trusts hereunder, the Loan Trustee may, with the consent of the Company
(such consent not to be unreasonably withheld), (a) execute any of the trusts or
powers hereof and perform its powers and duties hereunder directly or through
agents (including paying agents or registrars) or attorneys, and (b) at the
expense of the Collateral, consult with counsel, accountants and other skilled
Persons to be selected and retained by it. The Loan Trustee shall not be liable
for anything done, suffered or omitted in good faith by it in accordance with
the advice or opinion of any such counsel, accountants or other skilled Persons
acting within such counsel's, accountants' or Person's area of competence (so
long as the Loan Trustee shall have exercised reasonable care and judgment in
selecting such Persons).
Section 6.06. Instructions from Noteholders. In the administration of
the trusts created hereunder, the Loan Trustee shall have the right to seek
instructions from a Majority in Interest of Noteholders should any provision of
this Indenture appear to conflict with any other provision herein or any other
Operative Document or Pass Through Document or should the Loan Trustee's duties
or obligations hereunder be unclear, and the Loan Trustee shall incur no
liability in refraining from acting until it receives such instructions. The
Loan Trustee shall be fully protected for acting in accordance with any
instructions received under this Section 6.06.
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ARTICLE VII
OPERATING COVENANTS OF THE COMPANY
Section 7.01. Liens. The Company will not directly or indirectly
create, incur, assume or suffer to exist any Lien on or with respect to the
Aircraft, its title thereto or any of its interest therein, except:
(a) the respective rights of the Loan Trustee and the Company as
provided in the Operative Documents, the Lien of this Indenture, the rights
of any Permitted Lessee under a Lease permitted hereunder and the rights of
any Person existing pursuant to the Operative Documents or the Pass Through
Documents;
(b) the rights of others under agreements or arrangements to the extent
expressly permitted by this Indenture;
(c) Loan Trustee Liens, Noteholder Liens and Other Party Liens;
(d) Liens for Taxes either not yet due or payable or being contested in
good faith by appropriate proceedings so long as such proceedings do not
involve any material risk of the sale, forfeiture or loss of the Airframe
or any Engine or the Loan Trustee's interest therein or materially impair
the Lien of this Indenture;
(e) materialmen's, mechanics', workers', repairmen's, employees' or
other like Liens arising in the ordinary course of business (including
those arising under maintenance agreements entered into in the ordinary
course of business) securing obligations that either are not yet overdue
for a period of more than 60 days or are being contested in good faith by
appropriate proceedings so long as such proceedings do not involve any
material risk of the sale, forfeiture or loss of the Airframe or any Engine
or the Loan Trustee's interest therein or materially impair the Lien of
this Indenture;
(f) Liens arising out of any judgment or award, so long as such
judgment shall, within 60 days after the entry thereof, have been
discharged, vacated or reversed, or execution thereof stayed pending appeal
or other judicial review or shall have been discharged, vacated or reversed
within 60 days after the expiration of such stay;
(g) any other Lien with respect to which the Company shall have
provided a bond, cash collateral or other security adequate in the
reasonable opinion of the Loan Trustee;
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(h) salvage or similar rights of insurers under insurance policies
maintained by the Company; and
(i) Liens approved in writing by the Loan Trustee with the consent of a
Majority in Interest of the Noteholders.
Liens described in clauses (a) through (i) above are referred to herein as
"Permitted Liens". The Company shall promptly, at its own expense, take (or
cause to be taken) such action as may be necessary duly to discharge (by bonding
or otherwise) any Lien other than a Permitted Lien arising at any time with
respect to the Aircraft, its title thereto or any of its interest therein.
Section 7.02. Possession, Operation and Use, Maintenance and
Registration. (a) Possession. The Company shall not, without the prior written
consent of the Loan Trustee, lease or otherwise in any manner deliver, transfer
or relinquish possession of the Airframe or any Engine or install any Engine, or
permit any Engine to be installed, on any airframe other than the Airframe;
provided that, so long as the Company shall comply with the provisions of
Section 7.06, the Company may without the prior written consent of the Loan
Trustee:
(i) subject the Airframe to interchange agreements or subject
any Engine to interchange or pooling agreements or arrangements, in each
case customary in the airline industry and entered into by the Company in
the ordinary course of its business; provided that (A) no such agreement or
arrangement contemplates or requires the transfer of title to the Airframe
and (B) if the Company's title to any such Engine shall be divested under
any such agreement or arrangement, such divestiture shall be deemed to be
an Event of Loss with respect to such Engine, and the Company shall comply
with Section 7.05(b) in respect thereof;
(ii) deliver possession of the Airframe or any Engine to any
Person for testing, service, repair, maintenance, overhaul work or other
similar purposes or for alterations, modifications or additions to the
Airframe or such Engine to the extent required or permitted by the terms
hereof;
(iii) transfer or permit the transfer of possession of the
Airframe or any Engine to any Government pursuant to a lease, contract or
other instrument;
(iv) subject the Airframe or any Engine to the CRAF Program or
transfer possession of the Airframe or any Engine to the United States
government in accordance with applicable laws, rulings, regulations or
orders (including, without limitation, any transfer of possession pursuant
to the CRAF Program); provided, that the Company (A) shall promptly notify
the Loan Trustee upon transferring possession of the Airframe or any Engine
pursuant to this clause (iv) and (B) in the case of a transfer of
possession pursuant to the CRAF Program, shall notify the Loan Trustee of
the name and address of the responsible
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Contracting Office Representative for the Military Airlift Command of the
United States Air Force or other appropriate Person to whom notices must be
given and to whom requests or claims must be made to the extent applicable
under the CRAF Program;
(v) install an Engine on an airframe owned by the Company (or
any Permitted Lessee) free and clear of all Liens, except (A) Permitted
Liens and Liens that apply only to the engines (other than Engines),
appliances, parts, instruments, appurtenances, accessories, furnishings and
other equipment (other than Parts) installed on such airframe (but not to
the airframe as an entirety) and (B) the rights of third parties under
interchange agreements or pooling or similar arrangements that would be
permitted under clause (i) above;
(vi) install an Engine on an airframe leased to the Company
(or any Permitted Lessee) or purchased or owned by the Company (or any
Permitted Lessee) subject to a conditional sale or other security
agreement; provided that (A) such airframe is free and clear of all Liens
except (1) the rights of the parties to the lease or conditional sale or
other security agreement covering such airframe, or their successors and
assigns, and (2) Liens of the type permitted by clause (v) of this Section
7.02(a) and (B) either (1) the Company shall have obtained from the lessor
or secured party of such airframe a written agreement (which may be the
lease, conditional sale or other security agreement covering such
airframe), in form and substance satisfactory to the Loan Trustee (it being
understood that an agreement from such lessor or secured party
substantially in the form of the final sentence of the penultimate
paragraph of this Section 7.02(a) shall be deemed to be satisfactory to the
Loan Trustee), whereby such lessor or secured party expressly agrees that
neither it nor its successors or assigns will acquire or claim any right,
title or interest in any Engine by reason of such Engine being installed on
such airframe at any time while such Engine is subject to the Lien of this
Indenture or (2) such lease, conditional sale or other security agreement
provides that such Engine shall not become subject to the Lien of such
lease, conditional sale or other security agreement at any time while such
Engine is subject to the Lien of this Indenture, notwithstanding the
installation thereof on such airframe;
(vii) install an Engine on an airframe owned by the Company
(or any Permitted Lessee), leased to the Company (or any Permitted Lessee)
or purchased by the Company (or any Permitted Lessee) subject to a
conditional sale or other security agreement under circumstances where
neither clause (v) nor clause (vi) of this Section 7.02(a) is applicable;
provided that such installation shall be deemed an Event of Loss with
respect to such Engine, and the Company shall comply with Section 7.05(b)
in respect thereof, if such installation shall adversely affect the Loan
Trustee's security interest in such Engine, the Loan Trustee not intending
hereby to waive any right or interest it may have to or in such Engine
under applicable law until compliance by the Company with Section 7.05(b);
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(viii) lease any Engine or the Airframe and Engines to any
United States air carrier as to which there is in force a certificate
issued pursuant to the Transportation Code (49 U.S.C. Sections 41101-41112)
or successor provision that gives like authority; and
(ix) lease any Engine or the Airframe and Engines to (A) any
foreign air carrier other than those set forth in clause (B), (B) any
foreign air carrier that is at the inception of the lease based in and a
domiciliary of a country listed in Exhibit B hereto and (C) any foreign air
carrier consented to in writing by the Loan Trustee with the consent of a
Majority in Interest of Noteholders; provided that (x) in the case of a
lease to a foreign air carrier under clause (A) above, the Loan Trustee
receives at the time of such lease (1) written confirmation from each of
the Rating Agencies that such lease would not result in a reduction of the
rating for any class of Pass Through Certificates below the then current
rating for such class of Pass Through Certificates or a withdrawal or
suspension of the rating of any class of Pass Through Certificates and (2)
an opinion of counsel to the Company (such counsel to be reasonably
satisfactory to the Loan Trustee) to the effect that there exist no
possessory rights in favor of the lessee under the laws of such lessee's
country which would, upon bankruptcy or insolvency of or other default by
the Company and assuming at such time such lessee is not insolvent or
bankrupt, prevent the taking of possession of any such Engine or the
Airframe and any such Engine by the Loan Trustee in accordance with and
when permitted by the terms of Section 4.02 upon the exercise by the Loan
Trustee of its remedies under Section 4.02, (y) in the case of a lease to
any foreign air carrier (other than a foreign air carrier principally based
in Taiwan), the United States maintains diplomatic relations with the
country in which such foreign air carrier is based at the time such lease
is entered into and (z) in the case of any lease to a foreign air carrier,
such carrier is not then subject to any bankruptcy, insolvency,
liquidation, reorganization, dissolution or similar proceeding and shall
not have substantially all of its property in the possession of any
liquidator, trustee, receiver or similar person;
provided that the rights of any lessee or other transferee who receives
possession of the Aircraft, the Airframe or any Engine by reason of a transfer
permitted by this Section 7.02(a) (other than the transfer of an Engine which is
deemed an Event of Loss) shall be subject and subordinate to, and any permitted
lease shall be made expressly subject and subordinate to, all the terms of this
Indenture, including the Loan Trustee's rights to repossess pursuant to Section
4.02 and to avoid such lease upon such repossession, and the Company shall
remain primarily liable hereunder for the performance and observance of all of
the terms and conditions of this Indenture to the same extent as if such lease
or transfer had not occurred, any such lease shall include appropriate
provisions for the maintenance and insurance of the Aircraft, the Airframe or
such Engine, and no lease or transfer or possession otherwise in compliance with
this Section shall (x) result in any registration or re-registration of the
Aircraft except to the extent permitted in Section 7.02(e) or the maintenance,
operation or use thereof that does not comply with Section 7.02(b) and (c) or
(y) permit any action not permitted to be taken by the Company with respect to
the Aircraft hereunder. The Company
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shall promptly notify the Loan Trustee and the Rating Agencies of the existence
of any such lease with a term in excess of one year.
The Loan Trustee, and each Noteholder by acceptance of an Equipment
Note, agrees, for the benefit of the lessor or secured party of any airframe or
engine leased to the Company (or any Permitted Lessee) or purchased or owned by
the Company (or any Permitted Lessee) subject to a conditional sale or other
security agreement, that the Loan Trustee and the Noteholders will not acquire
or claim, as against such lessor or secured party, any right, title or interest
in (A) any engine or engines owned by the lessor under such lease or subject to
a security interest in favor of the secured party under such conditional sale or
other security agreement as the result of such engine or engines being installed
on the Airframe at any time while such engine or engines are subject to such
lease or conditional sale or other security agreement or (B) any airframe owned
by the lessor under such lease or subject to a security interest in favor of the
secured party under such conditional sale or other security agreement as the
result of any Engine being installed on such airframe at any time while such
airframe is subject to such lease or conditional sale or other security
agreement.
The Loan Trustee acknowledges that any "wet lease" or other similar
arrangement under which the Company maintains operational control of the
Aircraft shall not constitute a delivery, transfer or relinquishment of
possession for purposes of this Section 7.02(a).
(b) Operation and Use. The Company agrees that the Aircraft will not be
maintained, used or operated in violation of any law, rule or regulation of any
government of any country having jurisdiction over the Aircraft or in violation
of any airworthiness certificate, license or registration relating to the
Aircraft issued by any such government, except to the extent the Company is
contesting in good faith the validity or application of any such law, rule or
regulation in any manner that does not involve any material risk of sale,
forfeiture or loss of the Aircraft or materially impair the Lien of this
Indenture; and provided, that the Company shall not be in default under, or
required to take any action set forth in, this sentence if it is not possible
for it to comply with the laws of a jurisdiction other than the United States
(or other than any jurisdiction in which the Aircraft is then registered)
because of a conflict with the applicable laws of the United States (or such
jurisdiction in which the Aircraft is then registered). The Company will not
operate the Aircraft, or permit the Aircraft to be operated or located, (i) in
any area excluded from coverage by any insurance required by the terms of
Section 7.06 or (ii) in any war zone or recognized or, in the Company's
judgment, threatened areas of hostilities unless covered by war risk insurance
in accordance with Section 7.06, unless in the case of either clause (i) or
(ii), (x) indemnification complying with Section 7.06 (a) and (b) has been
provided or (y) the Aircraft is only temporarily located in such area as a
result of an isolated occurrence or isolated series of occurrences attributable
to a hijacking, medical emergency, equipment malfunction, weather conditions,
navigational error or other similar unforseen circumstances and the Company is
using its good faith efforts to remove the Aircraft from such area as promptly
as practicable.
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(c) Maintenance. The Company shall maintain, service, repair and
overhaul the Aircraft (or cause the same to be done) so as to keep the Aircraft
in good operating condition, ordinary wear and tear excepted, and in such
condition as may be necessary to enable the airworthiness certification of the
Aircraft to be maintained in good standing at all times (other than during
temporary periods of storage, during maintenance or modification permitted
hereunder, or during periods of grounding by applicable governmental
authorities) under the Transportation Code, during such periods in which the
Aircraft is registered under the laws of the United States, or, if the Aircraft
is registered under the laws of any other jurisdiction, the applicable laws of
such jurisdiction. In any case the Aircraft will be maintained in accordance
with the maintenance standards required by or substantially equivalent to those
required by the FAA or the central aviation authority of Australia, Austria,
Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, the
Netherlands, New Zealand, Norway, Spain, Sweden, Switzerland or the United
Kingdom. The Company shall maintain or cause to be maintained all records, logs
and other documents required to be maintained in respect of the Aircraft by
appropriate authorities in the jurisdiction in which the Aircraft is registered.
(d) Identification of Loan Trustee's Interest. The Company agrees to
affix as promptly as practicable after the Closing Date and thereafter to
maintain in the cockpit of the Aircraft, in a clearly visible location, and (if
not prevented by applicable law or regulations or by any government) on each
Engine, a nameplate bearing the inscription "MORTGAGED TO STATE STREET BANK AND
TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, AS LOAN TRUSTEE" (such
nameplate to be replaced, if necessary, with a nameplate reflecting the name of
any successor Loan Trustee).
(e) Registration. The Company shall cause the Aircraft to remain duly
registered, under the laws of the United States, in the name of the Company
except as otherwise required by the Transportation Code; provided that the Loan
Trustee shall, at the Company's expense, execute and deliver all such documents
as the Company may reasonably request for the purpose of continuing such
registration. Notwithstanding the preceding sentence, the Company, at its own
expense, may cause or allow the Aircraft to be duly registered under the laws of
any foreign jurisdiction in which a Permitted Lessee could be principally based,
in the name of the Company or of any nominee of the Company, or, if required by
applicable law, in the name of any other Person (and, following any such foreign
registration, may cause the Aircraft to be re-registered under the laws of the
United States); provided, that in the case of jurisdictions other than those
approved by the Loan Trustee with the consent of a Majority in Interest of the
Noteholders (i) if such jurisdiction is at the time of registration listed on
Exhibit B, the Loan Trustee shall have received at the time of such registration
an opinion of counsel to the Company to the effect that (A) this Indenture and
the Loan Trustee's right to repossession thereunder is valid and enforceable
under the laws of such country, (B) after giving effect to such change in
registration, the Lien of this Indenture shall continue as a valid Lien and
shall be duly perfected in the new jurisdiction of registration and that all
filing, recording or other action necessary to perfect and protect the Lien of
this Indenture has been accomplished (or if such opinion cannot be given at such
time, (x) the opinion shall detail
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what filing, recording or other action is necessary and (y) the Loan Trustee
shall have received a certificate from a Responsible Officer of the Company that
all possible preparations to accomplish such filing, recording and other action
shall have been done, and such filing, recording and other action shall be
accomplished and a supplemental opinion to that effect shall be promptly
delivered to the Loan Trustee subsequent to the effective date of such change in
registration), (C) the obligations of the Company under this Indenture shall
remain valid, binding and (subject to customary bankruptcy and equitable
remedies exceptions and to other exceptions customary in foreign opinions
generally) enforceable under the laws of such jurisdiction (or the laws of the
jurisdiction to which the laws of such jurisdiction would refer as the
applicable governing law) and (D) all approvals or consents of any government in
such jurisdiction having jurisdiction required for such change in registration
shall have been duly obtained and shall be in full force and effect, and (ii) if
such jurisdiction is at the time of registration not listed on Exhibit B, the
Loan Trustee shall have received (in addition to the opinions set forth in
clause (i) above) at the time of such registration an opinion of counsel to the
Company to the effect that (A) the terms of this Indenture are legal, valid,
binding and enforceable in such jurisdiction (subject to exceptions customary in
such jurisdiction, provided, that, subject to bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of creditors
generally, and to general principles of equity, any applicable laws limiting the
remedies provided in Section 4.02 do not in the opinion of such counsel make the
remedies provided in Section 4.02 inadequate for the practical realization of
the rights and benefits provided thereby), (B) that it is not necessary for the
Loan Trustee to register or qualify to do business in such jurisdiction, (C)
that there is no tort liability of the lender of an aircraft not in possession
thereof under the laws of such jurisdiction other than tort liability that might
have been imposed on such lender under the laws of the United States or any
state thereof (it being understood that such opinion shall be waived if
insurance reasonably satisfactory to the Loan Trustee is provided, at the
Company's expense, to cover such risk) and (D) (unless the Company shall have
agreed to provide insurance covering the risk of requisition of use or title of
the Aircraft by the government of such jurisdiction so long as the Aircraft is
registered under the laws of such jurisdiction) that the laws of such
jurisdiction require fair compensation by the government of such jurisdiction
payable in currency freely convertible into Dollars for the loss of use or title
of the Aircraft in the event of requisition by such government of such use or
title. The Loan Trustee will cooperate with the Company in effecting such
foreign registration. Notwithstanding the foregoing, prior to any such change in
the country of registry of the Aircraft, the following conditions shall be met
(or waived as provided in Section 6.01(b) of the Participation Agreement):
(i) no Event of Default shall have occurred and be continuing
at the effective date of the change in registration; provided, that it
shall not be necessary to comply with this condition if the change in
registration results in the registration of the Aircraft under the laws of
the United States or if a Majority in Interest of Noteholders consents to
such change in registration;
(ii) the Loan Trustee shall have received evidence of
compliance with the insurance provisions contained herein after giving
effect to such change in registration; and
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(iii) the Company shall have paid or made provision reasonably
satisfactory to the Loan Trustee for the payment of all reasonable expenses
(including reasonable attorneys' fees) of the Loan Trustee and the
Noteholders in connection with such change in registration.
Section 7.03. Inspection; Financial Information. (a) Inspection. At all
reasonable times, but upon at least 15 Business Days' prior written notice to
the Company, the Loan Trustee or its authorized representative may, subject to
the other conditions of this Section 7.03(a), inspect the Aircraft and may
inspect the books and records of the Company required to be maintained by the
FAA or the government of another jurisdiction in which the Aircraft is then
registered relating to the maintenance of the Aircraft; provided that (i) such
Loan Trustee or its representative, as the case may be, shall be fully insured
at no cost to the Company in a manner satisfactory to the Company with respect
to any risks incurred in connection with any such inspection or shall provide to
the Company a written release satisfactory to the Company with respect to such
risks, (ii) any such inspection shall be subject to the safety, security and
workplace rules applicable at the location where such inspection is conducted
and any applicable governmental rules or regulations, (iii) any such inspection
of the Aircraft shall be a visual, walk-around inspection of the interior and
exterior of the Aircraft and shall not include opening any panels, bays or the
like without the Company's express consent, which consent the Company may in its
sole discretion withhold, and (iv) no exercise of such inspection right shall
interfere with the use, operation or maintenance of the Aircraft by, or the
business of, the Company and the Company shall not be required to undertake or
incur any additional liabilities in connection therewith. All information
obtained in connection with any such inspection of the Aircraft and of such
books and records shall be Confidential Information and shall be treated by the
Loan Trustee and its representatives in accordance with the provisions of
Section 10.16. Any inspection pursuant to this Section 7.03(a) shall be at the
sole risk (including, without limitation, any risk of personal injury or death)
and expense of the Loan Trustee (or its representative) making such inspection.
Except during the continuance of an Event of Default, all inspections by the
Loan Trustee and its representatives provided for under this Section 7.03(a)
shall be limited to one inspection of any kind contemplated by this Section
7.03(a) during any calendar year.
(b) Financial Information. So long as any of the Equipment Notes remain
unpaid, the Company agrees to furnish to the Loan Trustee and the Liquidity
Provider: (i) within 60 days after the end of each of the first three quarterly
periods in each fiscal year of the Company, either (x) a consolidated balance
sheet of the Company and its consolidated subsidiaries prepared by it as of the
close of such period, together with the related consolidated statements of
income for such period or (y) a report of the Company on Form 10-Q in respect of
such period in the form filed with the Securities and Exchange Commission and
(ii) within 120 days after the close of each fiscal year of the Company, either
(x) a consolidated balance sheet of the Company and its consolidated
subsidiaries as of the close of such fiscal year, together with the related
consolidated statements of income for such fiscal year, certified by independent
public accountants, or (y) a report of the
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Company on Form 10-K in respect of such year in the form filed with the
Securities and Exchange Commission.
(c) Annual Opinion. The Company will furnish to the Loan Trustee
annually (but not later than March 15th of each year) after the execution hereof
until such time as the principal of, and interest on, and all other amounts with
respect to, the Equipment Notes shall have been paid in full, commencing with
the year 2000, an opinion of Crowe & Dunlevy, P.C., or other counsel reasonably
acceptable to the Loan Trustee, stating either (i) that in the opinion of such
counsel such action has been taken with respect to the recording, filing,
re-recording and refiling of this Indenture and any supplements thereto,
including any financing or continuation statements, and such other filings and
recordings as are necessary to maintain, for the 15-month period succeeding the
date of such opinion, the perfection of the security interests created thereby
and reciting the details of such action or (ii) that in the opinion of such
counsel no such action is necessary to maintain, for the 15-month period
succeeding the date of such opinion, the perfection of such security interests.
Section 7.04. Replacement and Pooling of Parts; Alterations,
Modifications and Additions; Substitution of Engines. (a) Replacement of Parts.
The Company shall promptly replace all Parts that may from time to time be
incorporated or installed in or attached to the Airframe or any Engine and that
may from time to time become worn out, lost, stolen, destroyed, seized,
confiscated, damaged beyond repair or rendered permanently unfit for use for any
reason whatsoever, except as otherwise provided in Section 7.04(c) or if the
Airframe or an Engine to which a Part relates has suffered an Event of Loss. In
addition, the Company may remove in the ordinary course of maintenance, service,
repair, overhaul or testing, any Parts, whether or not worn out, lost, stolen,
destroyed, seized, confiscated, damaged beyond repair or rendered permanently
unfit for use; provided that the Company, except as otherwise provided in
Section 7.04(c), will replace such Parts as promptly as practicable. All
replacement Parts shall be free and clear of all Liens (except for Permitted
Liens and except in the case of replacement property temporarily installed on an
emergency basis) and shall have a value and utility at least equal to the Parts
replaced, assuming such replaced Parts were in the condition and repair required
to be maintained by the terms hereof. Except as otherwise provided in Section
7.04(c), all Parts at any time removed from the Airframe or any Engine shall
remain subject to the Lien of this Indenture no matter where located until such
time as such Parts shall be replaced by parts that have been incorporated or
installed in or attached to the Airframe or such Engine and that meet the
requirements for replacement Parts specified above. Immediately upon any
replacement Part becoming incorporated or installed in or attached to the
Airframe or any Engine as above provided (except in the case of replacement
property temporarily installed on an emergency basis), without further act, (i)
the replaced Part shall thereupon be free and clear of all rights of the Loan
Trustee and of the Lien of this Indenture and shall no longer be deemed a Part
hereunder and (ii) such replacement Part shall become subject to the Lien of
this Indenture and be deemed a Part of the Airframe or such Engine for all
purposes to the same extent as the Parts originally incorporated or installed in
or attached to the Airframe or such Engine. Upon request of the Company from
time to time, the Loan Trustee
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shall execute and deliver to the Company an appropriate instrument confirming
the release of any such replaced Part from the Lien of this Indenture.
(b) Pooling of Parts. Any Part removed from the Airframe or any Engine
as provided in Section 7.04(a) may be subjected by the Company or a Person
permitted to be in possession of the Aircraft to a pooling arrangement customary
in the airline industry entered into in the ordinary course of the Company's or
such Person's business; provided that the part replacing such removed Part shall
be incorporated or installed in or attached to the Airframe or such Engine in
accordance with Section 7.04(a) as promptly as practicable after the removal of
such removed Part. In addition, any replacement Part when incorporated or
installed in or attached to the Airframe or any Engine may be owned by any third
party subject to such a pooling arrangement; provided that the Company, at its
expense, as promptly thereafter as practicable, either (i) causes title to such
replacement Part to vest in the Company free and clear of all Liens (except
Permitted Liens), or (ii) replaces such replacement Part by incorporating or
installing in or attaching to the Airframe or such Engine a further replacement
Part in the manner contemplated by Section 7.04(a).
(c) Alterations, Modifications and Additions. The Company will make
such alterations and modifications in and additions to the Airframe and the
Engines as may be required from time to time to meet the applicable requirements
of the FAA or any applicable government of any other jurisdiction in which the
Aircraft may then be registered; provided, however, that the Company may, in
good faith, contest the validity or application of any such requirement in any
manner that does not involve any material risk of sale, loss or forfeiture of
the Aircraft and does not materially adversely affect the Loan Trustee's
interest in the Aircraft. In addition, the Company, at its own expense, may from
time to time add further parts or accessories and make or cause to be made such
alterations and modifications in and additions to the Airframe or any Engine as
the Company may deem desirable in the proper conduct of its business, including,
without limitation, removal (without replacement) of Parts, provided that no
such alteration, modification or addition shall materially diminish the value or
utility of the Airframe or such Engine below its value or utility, immediately
prior to such alteration, modification or addition, assuming that the Airframe
or such Engine was then in the condition required to be maintained by the terms
of this Indenture, except that the value (but not the utility) of the Airframe
or any Engine may be reduced by the value of any such Parts that shall have been
removed that the Company deems obsolete or no longer suitable or appropriate for
use on the Airframe or any Engine. All Parts incorporated or installed in or
attached or added to the Airframe or any Engine as the result of such
alteration, modification or addition shall, without further act, be subject to
the Lien of this Indenture. Notwithstanding the foregoing, the Company may, at
any time, remove any Part from the Airframe or any Engine if such Part: (i) is
in addition to, and not in replacement of or substitution for, any Part
originally incorporated or installed in or attached to the Airframe or such
Engine at the time of delivery thereof to the Company or any Part in replacement
of, or substitution for, any such Part, (ii) is not required to be incorporated
or installed in or attached or added to the Airframe or such Engine pursuant to
the first sentence of this Section 7.04(c) or (iii) can be removed from the
Airframe or
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such Engine without materially diminishing the value or utility required to be
maintained by the terms of this Indenture that the Airframe or such Engine would
have had at such time had such removal not occurred. Upon the removal by the
Company of any Part as permitted by this Section 7.04(c), such removed Part
shall, without further act, be free and clear of all rights and interests of the
Loan Trustee and the Lien of this Indenture and shall no longer be deemed a Part
hereunder. Upon request of the Company from time to time, the Loan Trustee shall
execute and deliver to the Company an appropriate instrument confirming the
release of any such removed Part from the Lien of this Indenture.
(d) Substitution of Engines. The Company shall have the right at its
option at any time, on at least 30 days' prior written notice to the Loan
Trustee, to substitute a Replacement Engine for any Engine. In such event, and
prior to the date of such substitution, the Company shall replace such Engine
hereunder by complying with the terms of Section 7.05(b) to the same extent as
if an Event of Loss had occurred with respect to such Engine.
Section 7.05. Loss, Destruction or Requisition. (a) Event of Loss with
Respect to the Airframe. Upon the occurrence of an Event of Loss with respect to
the Airframe or the Airframe and the Engines then installed thereon, the Company
shall forthwith (and, in any event, within 15 days after such occurrence) give
the Loan Trustee written notice of such Event of Loss, and, within 90 days after
such Event of Loss, the Company shall give the Loan Trustee written notice of
its election to perform one of the following options (it being agreed that if
the Company shall not have given such notice of election within such 90-day
period, the Company shall be deemed to have elected to perform the option set
forth in the following clause (ii)). The Company may elect either to:
(i) on or before the Loss Payment Date (as defined below) substitute,
as replacement for the Airframe or Airframe and Engines with respect to
which an Event of Loss has occurred, a Replacement Airframe (together with
a number of Replacement Engines equal to the number of Engines, if any,
with respect to which the Event of Loss occurred), such Replacement
Airframe and Replacement Engines to be owned by the Company free and clear
of all Liens (other than Permitted Liens); provided that if the Company
shall not perform its obligation to effect such substitution under this
clause (i) on or prior to the Loss Payment Date, then the Company shall on
the Loss Payment Date prepay the Equipment Notes in full in accordance with
Section 2.10; or
(ii) on or before the Loss Payment Date, redeem the Equipment Notes in
full in accordance with Section 2.10. The Company shall give the Loan
Trustee 20 days prior written notice if it elects to redeem the Equipment
Notes on any day prior to the Loss Payment Date.
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The "Loss Payment Date" with respect to an Event of Loss means the
Business Day next succeeding the 120th day following the date of occurrence of
such Event of Loss.
If the Company elects to substitute a Replacement Airframe (or a
Replacement Airframe and one or more Replacement Engines, as the case may be)
the Company shall, at its sole expense, not later than the Loss Payment Date,
(A) cause an Indenture Supplement for such Replacement Airframe and Replacement
Engines, if any, to be delivered to the Loan Trustee for execution and, upon
such execution, to be filed for recordation pursuant to the Transportation Code
or the applicable laws of such other jurisdiction in which the Aircraft may then
be registered, (B) cause a financing statement or statements with respect to the
Replacement Airframe and Replacement Engines, if any, or other requisite
documents or instruments to be filed in such place or places as necessary in
order to perfect the Loan Trustee's interest therein in the United States, or in
any other jurisdiction in which the Aircraft may then be registered, (C) furnish
the Loan Trustee with an opinion of the Company's counsel (which may be the
Company's General Counsel or such other internal counsel of the Company as shall
be reasonably satisfactory to the Loan Trustee) addressed to the Loan Trustee to
the effect that upon such replacement, such Replacement Airframe and Replacement
Engines, if any, will be subject to the Lien of this Indenture and addressing
the matters set forth in clauses (A) and (B), (D) furnish the Loan Trustee with
a certificate of an independent aircraft engineer or appraiser, certifying that
the Replacement Airframe and Replacement Engines, if any, have a value and
utility at least equal to the Airframe and Engines, if any, so replaced,
assuming the Airframe and such Engines were in the condition and repair required
by the terms hereof immediately prior to the occurrence of such Event of Loss,
(E) furnish the Loan Trustee with evidence of compliance with the insurance
provisions of Section 7.06 with respect to such Replacement Airframe and
Replacement Engines, if any, and (F) furnish the Loan Trustee with an opinion of
the Company's counsel (which may be the Company's General Counsel or such other
internal counsel of the Company as shall be reasonably satisfactory to the Loan
Trustee) to the effect that the Loan Trustee will be entitled to the benefits of
Section 1110 with respect to the Replacement Airframe, provided that (i) such
opinion need not be delivered to the extent that the benefits of Section 1110
were not, by reason of a change in law or governmental or judicial
interpretation thereof, available to the Loan Trustee with respect to the
Aircraft immediately prior to such substitution and (ii) such opinion may
contain qualifications and assumptions of the tenor contained in the opinion of
the Company's counsel delivered pursuant to Section 3.01 of the Participation
Agreement on the Closing Date and such other qualifications and assumptions as
shall at the time be customary in opinions rendered in comparable circumstances.
In the case of each Replacement Airframe or Replacement Airframe and one or
more Replacement Engines subjected to the Lien of this Indenture under this
Section 7.05(a), promptly upon the recordation of the Indenture Supplement
covering such Replacement Airframe and Replacement Engines, if any, pursuant to
the Transportation Code (or pursuant to the applicable law of such other
jurisdiction in which such Replacement Airframe and Replacement Engines, if any,
are registered), the Company will cause to be delivered to the Loan Trustee a
favorable opinion of the Company's counsel (which may be the Company's General
Counsel or such other internal
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counsel to the Company as shall be reasonably satisfactory to the Loan Trustee)
addressed to the Loan Trustee as to the due registration of such Replacement
Aircraft and the due recordation of such Indenture Supplement or such other
requisite documents or instruments and the validity and perfection of the
security interest in the Replacement Aircraft granted to the Loan Trustee under
this Indenture.
For all purposes hereof, upon the attachment of the Lien of this
Indenture thereto, the Replacement Aircraft and Replacement Engines, if any,
shall become part of the Collateral, the Replacement Airframe shall be deemed an
"Airframe" as defined herein, and each such Replacement Engine shall be deemed
an "Engine" as defined herein. Upon compliance with clauses (A) through (F) of
the second preceding paragraph, the Loan Trustee shall execute and deliver to
the Company an appropriate instrument releasing such replaced Airframe and
Engines (if any) installed thereon at the time such Event of Loss occurred, all
proceeds (including, without limitation, insurance proceeds), the Warranty
Rights in respect of such replaced Airframe and Engines (if any) and all rights
relating to the foregoing, from the Lien of this Indenture and assigning to the
Company all claims against third Persons for damage to or loss of the Airframe
and Engines arising from the Event of Loss.
In the event that, after an Event of Loss, the Company performs the
option set forth in clause (ii) of the first paragraph of this Section 7.05(a),
the Loan Trustee shall execute and deliver to the Company an appropriate
instrument releasing the Aircraft, all proceeds (including, without limitation,
insurance proceeds), the Warranty Rights in respect of the Aircraft and all
rights relating to the foregoing from the Lien of this Indenture and assigning
to the Company all claims against third Persons for damage to or loss of the
Aircraft arising from the Event of Loss.
(b) Event of Loss with Respect to an Engine. Upon the occurrence of an
Event of Loss with respect to an Engine under circumstances in which there has
not occurred an Event of Loss with respect to the Airframe, the Company shall
give the Loan Trustee prompt written notice thereof and shall, within 120 days
after the occurrence of such Event of Loss, cause to be subjected to the Lien of
this Indenture, as replacement for the Engine with respect to which such Event
of Loss occurred, a Replacement Engine free and clear of all Liens (other than
Permitted Liens).
Prior to or at the time of any replacement under this Section 7.05(b),
the Company will (i) cause an Indenture Supplement covering such Replacement
Engine to be delivered to the Loan Trustee for execution and, upon such
execution, to be filed for recordation pursuant to the Transportation Code or
the applicable laws of any other jurisdiction in which the Aircraft may be
registered, (ii) cause a financing statement or statements with respect to such
Replacement Engine or other requisite documents or instruments to be filed in
such place or places as necessary in order to perfect the Loan Trustee's
interest therein in the United States, or in such other jurisdiction in which
the Engine may then be registered, (iii) furnish the Loan Trustee with an
opinion of the Company's counsel (which may be the Company's General Counsel or
such other internal counsel to the Company as shall be reasonably satisfactory
to the Loan Trustee) addressed to the Loan
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Trustee to the effect that, upon such replacement, the Replacement Engine will
be subject to the Lien of this Indenture, (iv) furnish the Loan Trustee with a
certificate of an aircraft engineer or appraiser (who may be an employee of the
Company) certifying that such Replacement Engine has a value and utility at
least equal to the Engine so replaced assuming such Engine was in the condition
and repair required by the terms hereof immediately prior to the occurrence of
such Event of Loss and (v) furnish the Loan Trustee with evidence of compliance
with the insurance provisions of Section 7.06 with respect to such Replacement
Engine. In the case of each Replacement Engine subjected to the Lien of this
Indenture under this Section 7.05(b), promptly upon the recordation of the
Indenture Supplement covering such Replacement Engine pursuant to the
Transportation Code (or pursuant to the applicable law of such other
jurisdiction in which the Aircraft is registered), the Company will cause to be
delivered to the Loan Trustee an opinion of counsel to the Company (which may be
the Company's General Counsel or such other internal counsel of the Company as
shall be reasonably satisfactory to the Loan Trustee) addressed to the Loan
Trustee as to the due recordation of such Indenture Supplement or such other
requisite documents or instruments and the validity and perfection of the
security interest in the Replacement Engine granted to the Loan Trustee under
this Indenture. For all purposes hereof, upon the attachment of the Lien of this
Indenture thereto, the Replacement Engine shall become part of the Collateral
and shall be deemed an "Engine" as defined herein. Upon compliance with clauses
(i) through (v) of this paragraph, the Loan Trustee shall execute and deliver to
the Company an appropriate instrument releasing such replaced Engine, any
proceeds (including, without limitation, insurance proceeds), the Warranty
Rights in respect of such replaced Engine and all rights relating to any of the
foregoing from the Lien of this Indenture and assigning to the Company all
claims against third Persons for damage to or loss of such Engine arising from
the Event of Loss.
(c) Application of Payments for Event of Loss from Requisition of Title
or Use. Any payments (other than insurance proceeds the application of which is
provided for in Section 7.06) received at any time by the Company or by the Loan
Trustee from any government or other Person with respect to an Event of Loss to
the Airframe or any Engine, will be applied as follows:
(i) if such payments are received with respect to the Airframe or the
Airframe and the Engines installed on the Airframe that has been or is
being replaced by the Company pursuant to Section 7.05(a), such payments
shall be paid over to, or retained by, the Loan Trustee and upon completion
of such replacement shall be paid over to, or retained by, the Company;
(ii) if such payments are received with respect to the Airframe or the
Airframe and the Engines installed on the Airframe that has not been and
will not be replaced pursuant to Section 7.05(a), so much of such payments
remaining after reimbursement of the Loan Trustee for costs and expenses
that shall not exceed the amounts required to be paid to the Noteholders
pursuant to Section 2.10 shall be applied in reduction of the Company's
obligation to pay such amounts, if not already paid by the Company, or, if
already paid by the Company, shall be applied to reimburse the Company for
its payment of such amount
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and the balance, if any, of such payment remaining thereafter will be paid
over to, or retained by, the Company; and
(iii) if such payments are received with respect to an Engine with
regard to which an Event of Loss has occurred as contemplated by Section
7.05(b), so much of such payments remaining after reimbursement of the Loan
Trustee for costs and expenses shall be paid over to, or retained by, the
Company; provided that the Company shall have fully performed the terms of
Section 7.05(b) with respect to the Event of Loss for which such payments
are made.
(d) Requisition for Use by the Government of the Airframe and the
Engines Installed Thereon. In the event of the requisition for use by any
government, including, without limitation, pursuant to the CRAF Program, of the
Airframe and the Engines or engines installed on the Airframe that does not
constitute an Event of Loss, all of the Company's rights and obligations under
this Indenture with respect to the Airframe and such Engines shall continue to
the same extent as if such requisition had not occurred; provided that,
notwithstanding the foregoing, the Company's obligations other than payment
obligations shall only continue to the extent feasible. All payments received by
the Company or the Loan Trustee from such government for such use of the
Airframe and Engines or engines shall be paid over to, or retained by, the
Company.
(e) Requisition for Use by the Government of an Engine not Installed on
the Airframe. In the event of the requisition for use by any government of any
Engine not then installed on the Airframe, the Company will replace such Engine
by complying with the terms of Section 7.05(b) to the same extent as if an Event
of Loss had occurred with respect to such Engine. Upon such replacement, any
payments received by the Company or the Loan Trustee from such government with
respect to such requisition shall be paid over to, or retained by, the Company.
(f) Application of Payments During Existence of Event of Default. Any
amount referred to in Section 7.05 that is payable to or retainable by the
Company shall not be paid to or retained by the Company if at the time of such
payment or retention an Event of Default or Payment Default shall have occurred
and be continuing, but shall be held by or paid over to the Loan Trustee as
security for the obligations of the Company under this Indenture. At such time
as there shall not be continuing any such Event of Default or Payment Default,
such amount shall be paid to the Company.
Section 7.06. Insurance. (a) Aircraft Liability Insurance. (i) Except
as provided in clause (ii) of this subsection (a), and subject to the rights of
the Company to establish and maintain self-insurance in the manner and to the
extent specified in Section 7.06(c), the Company will carry, or cause to be
carried, at no expense to the Loan Trustee, aircraft liability insurance
(including, but not limited to, bodily injury, personal injury and property
damage liability, exclusive of manufacturer's product liability insurance) and
contractual liability insurance with respect to the Aircraft (A) in amounts that
are not less than the aircraft liability insurance applicable to similar
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aircraft and engines in the Company's fleet on which the Company carries
insurance; provided that such liability insurance shall not be less than the
amount certified in the insurance report delivered to the Loan Trustee on the
Closing Date, (B) of the type usually carried by corporations engaged in the
same or similar business, similarly situated with the Company and owning or
operating similar aircraft and engines and covering risks of the kind
customarily insured against by the Company, and (C) that is maintained in effect
with insurers of recognized responsibility. Any policies of insurance carried in
accordance with this Section 7.06(a) and any policies taken out in substitution
or replacement for any of such policies shall (A) name the Loan Trustee, the
Subordination Agent, each Pass Through Trustee and the Liquidity Provider as
their Interests (as defined below in this Section 7.06) may appear, as
additional insured (the "Additional Insureds"), (B) subject to the condition of
clause (C) below, provide that, in respect of the interest of the Additional
Insureds in such policies, the insurance shall not be invalidated by any action
or inaction of the Company and shall insure the Additional Insureds' Interests
as they appear, regardless of any breach or violation of any warranty,
declaration or condition contained in such policies by the Company, (C) provide
that, if such insurance is canceled for any reason whatever, or if any change is
made in the policy that materially reduces the amount of insurance or the
coverage certified in the insurance report delivered on the Closing Date to the
Loan Trustee and the Liquidity Provider, or if such insurance is allowed to
lapse for nonpayment of premium, such cancellation, change or lapse shall not be
effective as to any Additional Insured for 30 days (seven days, or such other
period as is customarily available in the industry, in the case of any war risk
or allied perils coverage) after receipt by such Additional Insured of written
notice from such insurers of such cancellation, change or lapse, (D) provide
that the Additional Insureds shall have no obligation or liability for premiums,
commissions, assessments or calls in connection with such insurance, (E) provide
that the insurers shall waive any rights of (1) set-off, counterclaim or any
other deduction, whether by attachment or otherwise, in respect of any liability
of the Additional Insureds to the extent of any moneys due to the Additional
Insureds and (2) subrogation against the Additional Insureds to the extent that
the Company has waived its rights by its agreements to indemnify the Additional
Insureds pursuant to the Operative Documents, (F) be primary without right of
contribution from any other insurance that may be carried by each Additional
Insured with respect to its interests as such in the Aircraft and (G) expressly
provide that all of the provisions thereof, except the limits of liability,
shall operate in the same manner as if there were a separate policy covering
each insured. "Interests" as used in this Section 7.06(a) and in Section 7.06(b)
with respect to any Person means the interests of such Person in the
transactions contemplated by the Operative Documents. In the case of a lease or
contract with any government in respect of the Aircraft or any Engine, or in the
case of any requisition for use of the Aircraft or any Engine by any government,
a valid agreement by such government to indemnify the Company, or an insurance
policy issued by such government, against any of the risks that the Company is
required hereunder to insure against shall be considered adequate insurance for
purposes of this Section 7.06(a) to the extent of the risks (and in the amounts)
that are the subject of such indemnification or insurance.
(ii) During any period that the Airframe or an Engine, as the case may
be, is on the ground and not in operation, the Company may carry or cause to be
carried as to such
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non-operating Airframe or Engine, in lieu of the insurance required by clause
(i) above, and subject to self-insurance to the extent permitted by Subsection
7.06(c), insurance otherwise conforming with the provisions of said clause (i)
except that: (A) the amounts of coverage shall not be required to exceed the
amounts of airline liability insurance from time to time applicable to airframes
or engines owned or leased by the Company of the same type as such non-operating
Airframe or Engine and that are on the ground and not in operation and (B) the
scope of the risks covered and the type of insurance shall be the same as from
time to time shall be applicable to airframes or engines owned or leased by the
Company of the same type as such non-operating Airframe or Engine and that are
on the ground and not in operation.
(b) Insurance Against Loss or Damage to Aircraft. (i) Except as
provided in clause (ii) of this subsection (b), and subject to the rights of the
Company to establish and maintain self-insurance in the manner and to the extent
specified in Section 7.06(c), the Company shall maintain, or cause to be
maintained, in effect with insurers of recognized responsibility, at no expense
to the Loan Trustee, all-risk aircraft hull insurance covering the Aircraft and
all-risk coverage with respect to any Engines or Parts while removed from the
Aircraft (including, without limitation, war risk insurance if and to the extent
the same is maintained by the Company or any Permitted Lessee with respect to
other aircraft owned or operated by the Company or such Permitted Lessee, as the
case may be, on the same routes) that is of the type and in substantially the
amount usually carried by corporations engaged in the same or similar business
and similarly situated with the Company; provided that (A) such insurance
(including the permitted self-insurance) shall at all times while the Aircraft
is subject to this Indenture be for an amount not less than 110% of the
aggregate outstanding principal amount of the Equipment Notes from time to time,
(B) such insurance need not cover an Engine while attached to an airframe not
owned, leased or operated by the Company and (C) such insurance covering Engines
and Parts removed from an Airframe or an airframe or (in the case of Parts) an
Engine need be obtained only to the extent available at reasonable cost (as
reasonably determined by the Company). Any policies carried in accordance with
this Section 7.06(b) and any policies taken out in substitution or replacement
for any such policies shall (A) provide that any insurance proceeds up to an
amount equal to the outstanding principal amount of the Equipment Notes,
together with accrued but unpaid interest thereon, plus an amount equal to the
interest that would accrue on the outstanding principal amount of the Equipment
Notes at the Debt Rate in effect on the date of payment of such insurance
proceeds to the Loan Trustee (as provided for in this sentence) during the
period commencing on the day following the date of such payment to the Loan
Trustee and ending on the Loss Payment Date (the "Loan Amount"), payable for any
loss or damage constituting an Event of Loss with respect to the Aircraft and
any insurance proceeds in excess of the amount set forth on Exhibit C up to the
amount of the Loan Amount for any loss or damage to the Aircraft (or Engines)
not constituting an Event of Loss with respect to the Aircraft (or Engines),
shall be paid to the Loan Trustee as long as the Indenture shall not have been
discharged, and that all other amounts shall be payable to the Company, unless
the insurer shall have received notice that an Event of Default exists, in which
case all insurance proceeds for any loss or damage to the Aircraft (or Engines)
up to the Loan Amount shall be payable to the Loan Trustee, (B) subject to the
conditions of clause (C)
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below, provide that, in respect of the interests of the Additional Insureds in
such policies, the insurance shall not be invalidated by any action or inaction
of the Company and shall insure the Additional Insureds' Interests as they
appear, regardless of any breach or violation of any warranty, declaration or
condition contained in such policies by the Company, (C) provide that if such
insurance is canceled for any reason whatsoever, or if any change is made in the
policy that materially reduces the amount of insurance or the coverage certified
in the insurance report delivered on the Closing Date to the Loan Trustee and
the Liquidity Provider or if such insurance is allowed to lapse for nonpayment
of premium, such cancellation, change or lapse shall not be effective as to the
Additional Insureds for 30 days (seven days, or such other period as is
customarily available in the industry, in the case of war risk or allied perils
coverage) after receipt by the Additional Insureds of written notice from such
insurers of such cancellation, change or lapse, (D) provide that the Additional
Insureds shall have no obligation or liability for premiums, commissions,
assessments or calls in connection with such insurance, (E) provide that the
insurers shall waive rights of (1) setoff, counterclaim or any other deduction,
whether by attachment or otherwise, in respect of any liability of the
Additional Insureds to the extent of any moneys due to the Additional Insureds
and (2) subrogation against the Additional Insureds to the extent the Company
has waived its rights by its agreement to indemnify the Additional Insureds
pursuant to the Operative Documents and (F) be primary without right of
contribution from any other insurance that may be carried by any Additional
Insured with respect to its Interests as such in the Aircraft. In the case of a
lease or contract with any government in respect of the Aircraft or any Engine,
or in the case of any requisition for use of the Aircraft or any Engine by any
government, a valid agreement by such government to indemnify the Company, or an
insurance policy issued by such government, against any risks which the Company
is required hereunder to insure against shall be considered adequate insurance
for purposes of this Section 7.06(b) to the extent of the risks (and in the
amounts) that are the subject of such indemnification or insurance.
(ii) During any period that the Airframe or an Engine is on the ground
and not in operation, the Company may carry or cause to be carried as to such
non-operating Airframe or Engine, in lieu of the insurance required by clause
(i) above, and subject to self-insurance to the extent permitted by Subsection
7.06(c), insurance otherwise conforming with the provisions of said clause (i)
except that the scope of the risks covered and the type of insurance shall be
the same as from time to time applicable to airframes and engines owned or
leased by the Company (or, if a lease is then in effect, by the Permitted
Lessee) of the same type as such non-operating Airframe or Engine and that are
on the ground and not in operation; provided that, subject to self-insurance to
the extent permitted by Subsection 7.06(c), the Company shall maintain insurance
against risk of loss or damage to such non-operating Airframe or Engine in an
amount at least equal to 110% of the aggregate outstanding principal amount of
the Equipment Notes during such period that such Airframe or Engine is on the
ground and not in operation.
(c) Self-Insurance. The Company may from time-to-time self-insure, by
way of deductible, self-insured retention, premium adjustment or franchise or
otherwise (including, with respect to insurance maintained pursuant to
Subsections 7.06(a) or 7.06(b), insuring for a maximum
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amount that is less than the amounts set forth in Sections 7.06(a) and 7.06(b)),
the risks required to be insured against pursuant to Sections 7.06(a) and
7.06(b), but in no case shall the self-insurance with respect to all of the
aircraft and engines in the Company's fleet (including, without limitation, the
Aircraft) exceed for any 12-month policy year 1% of the average aggregate
insurable value (for the preceding policy year) of all aircraft (including,
without limitation, the Aircraft) on which the Company carries insurance, unless
an insurance broker of national standing shall certify that the standard among
all other major United States airlines is a higher level of self-insurance, in
which case the Company may self-insure the Aircraft to such higher level. In
addition to the foregoing right to self-insure, the Company may self-insure to
the extent of (1) any deductible per occurrence that, in the case of the
Aircraft, is not in excess of the amount customarily allowed as a deductible in
the industry or is required to facilitate claims handling or (2) any applicable
mandatory minimum per aircraft (or if applicable per annum or other period) hull
or liability insurance deductibles imposed by the aircraft or hull liability
insurers.
(d) Application of Insurance Payments. All losses will be adjusted by
the Company with the insurers. As between the Loan Trustee and the Company it is
agreed that all insurance payments received under policies required to be
maintained by the Company hereunder, exclusive of any payments received in
excess of the Loan Amount for the Aircraft from such policies, as the result of
the occurrence of an Event of Loss with respect to the Airframe or an Engine
will be applied as follows:
(i) if such payments are received with respect to the Airframe or the
Airframe and any Engines installed on the Airframe that has been or is
being replaced by the Company pursuant to Section 7.05(a), such payments
shall be paid over to, or retained by, the Loan Trustee and upon completion
of such replacement shall be paid over to, or retained by, the Company.
(ii) if such payments are received with respect to the Airframe or the
Airframe and any Engines installed on the Airframe that has not been and
will not be replaced as contemplated by Section 7.05(a), so much of such
payments remaining after reimbursement of the Loan Trustee for its costs
and expenses as shall not exceed the amounts required to be paid by the
Company pursuant to Section 2.10 shall be applied in reduction of the
Company's obligation to pay such amounts, if not already paid by the
Company, or, if already paid by the Company, shall be applied to reimburse
the Company for its payment of such amounts and the balance, if any, of
such payment remaining thereafter will be paid over to, or retained by, the
Company; and
(iii) if such payments are received with respect to an Engine with
regard to which an Event of Loss contemplated by Section 7.05(b) has
occurred, so much of such payments remaining after reimbursement of the
Loan Trustee for its costs and expenses shall be paid over to, or retained
by, the Company; provided that the Company shall have fully performed
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the terms of Section 7.05(b) with respect to the Event of Loss for which
such payments are made.
In all events, the insurance payment of any property damage loss received
under policies maintained by the Company in excess of the Loan Amount for the
Aircraft shall be paid to the Company.
The insurance payments for any loss or damage to the Airframe or an
Engine not constituting an Event of Loss with respect to the Airframe or such
Engine will be applied in payment (or to reimburse the Company) for repairs or
for replacement property in accordance with the terms of Sections 7.02 and 7.04,
and any balance remaining after compliance with such Sections with respect to
such loss or damage shall be paid to the Company. Any amount referred to in the
preceding sentence or in clause (i), (ii) or (iii) of the second preceding
paragraph that is payable to the Company shall not be paid to the Company (or,
if it has been previously paid directly to the Company, shall not be retained by
the Company) if at the time of such payment an Event of Default or Payment
Default shall have occurred and be continuing, but shall be paid to and held by
the Loan Trustee as security for the obligations of the Company under this
Indenture, and at such time as there shall not be continuing any such Event of
Default or Payment Default, such amount shall, to the extent not theretofore
applied as provided herein, be paid to the Company.
(e) Reports, Etc. On or before the Closing Date and annually upon
renewal of the Company's insurance coverage, the Company will furnish to the
Loan Trustee and the Liquidity Provider a report signed by a firm of independent
aircraft insurance brokers appointed by the Company (which brokers may be in the
regular employ of the Company), stating the opinion of such firm that the
insurance then carried and maintained on the Aircraft complies with the terms
hereof; provided that all information contained in such report shall be
Confidential Information and shall be treated by the Loan Trustee and the
Liquidity Provider and each of their affiliates and officers, directors, agents
and employees in accordance with the provisions of Section 10.16. The Company
will cause such firm to advise the Loan Trustee and the Liquidity Provider in
writing of any act or omission on the part of the Company of which such firm has
knowledge that might invalidate or render unenforceable, in whole or in part,
any insurance on the Aircraft. The Company will also cause such firm to advise
the Loan Trustee and the Liquidity Provider in writing as promptly as
practicable after such firm acquires knowledge that an interruption of any
insurance carried and maintained on the Aircraft pursuant to this Section 7.06
will occur. Such information may only be provided to other Persons in accordance
with Section 10.16.
(f) Salvage Rights; Other. All salvage rights to the Airframe and each
Engine shall remain with the Company's insurers at all times, and any insurance
policies of the Loan Trustee insuring the Airframe or any Engine shall provide
for a release to the Company of any and all salvage rights in and to the
Airframe or any Engine. Neither the Loan Trustee nor any Noteholder may,
directly or indirectly, obtain insurance for its own account with respect to the
Airframe or any Engine if such insurance would limit or otherwise adversely
affect the coverage or
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amounts payable under, or increase the premiums for, any insurance required to
be maintained pursuant to this Section 7.06 or any other insurance maintained
with respect to the Aircraft of any other aircraft in the Company's fleet.
ARTICLE VIII
SUCCESSOR AND ADDITIONAL TRUSTEES
Section 8.01 Resignation or Removal; Appointment of Successor. (a) The
resignation or removal of the Loan Trustee and the appointment of a successor
Loan Trustee shall become effective only upon the successor Loan Trustee's
acceptance of appointment as provided in this Section 8.01. The Loan Trustee or
any successor thereto must resign if at any time it ceases to be eligible in
accordance with the provisions of Section 8.01(c) and may resign at any time
without cause by giving at least 60 days' prior written notice to the Company
and each Noteholder. In addition, either the Company (so long as no Event of
Default or Payment Default shall have occurred and be continuing) or a Majority
in Interest of Noteholders (but only with the consent of the Company so long as
no Event of Default or Payment Default shall have occurred and be continuing),
may at any time remove the Loan Trustee without cause by an instrument in
writing delivered to the Loan Trustee and each Noteholder, and, in case of a
removal by a Majority in Interest of Noteholders, to the Company.
In the case of the resignation or removal of the Loan Trustee, the
Company shall promptly appoint a successor Loan Trustee. If a successor Loan
Trustee shall not have been appointed within 60 days after such notice of
resignation or removal, the Loan Trustee, the Company or any Noteholder may
apply to any court of competent jurisdiction to appoint a successor Loan Trustee
to act until such time, if any, as a successor shall have been appointed as
above provided. The successor Loan Trustee so appointed by such court shall
immediately and without further act be superseded by any successor Loan Trustee
appointed as above provided.
(b) Any successor Loan Trustee, however appointed, shall execute and
deliver to the predecessor Loan Trustee and the Company an instrument accepting
such appointment and assuming the obligations of the Loan Trustee arising from
and after the time of such appointment, and thereupon such successor Loan
Trustee, without further act, shall become vested with all the estates,
properties, rights, powers and duties of the predecessor Loan Trustee hereunder
in the trust hereunder applicable to it with like effect as if originally named
the Loan Trustee herein; but nevertheless upon the written request of such
successor Loan Trustee, such predecessor Loan Trustee shall execute and deliver
an instrument transferring to such successor Loan Trustee all the estates,
properties, rights and powers of such predecessor Loan Trustee, and such
predecessor Loan Trustee shall duly assign, transfer, deliver and pay over to
such successor Loan Trustee all monies or other property and all other books and
records, or true, correct and complete copies thereof, then held by such
predecessor Loan Trustee hereunder.
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(c) This Indenture shall at all times have a Loan Trustee, however
appointed, that is a Citizen of the United States (without the use of a voting
trust) and a bank or trust company having a combined capital and surplus of at
least $75,000,000 (or a combined capital and surplus in excess of $5,000,000 and
the obligations of which, whether now in existence or hereafter incurred, are
fully and unconditionally guaranteed by a corporation organized and doing
business under the laws of the United States or any state or territory thereof
or the District of Columbia and having a combined capital and surplus of at
least $75,000,000) or a corporation with a net worth of at least $75,000,000, if
there be such an institution willing, able and legally qualified to perform the
duties of the Loan Trustee hereunder upon reasonable or customary terms. If such
bank, trust company or corporation publishes reports of conditions at least
annually, pursuant to law or to the requirements of federal, state, territorial
or District of Columbia supervising or examining authority, then for the
purposes of this Section 8.01(c) the combined capital and surplus of such bank,
trust company or corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of conditions so published. In
case at any time the Loan Trustee shall cease to be eligible in accordance with
the provisions of this Section 8.01(c), the Loan Trustee shall resign
immediately in the manner and with the effect specified in Section 8.01(a).
(d) Any corporation into which the Loan Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Loan Trustee shall be
a party, or any corporation to which substantially all the corporate trust
business of the Loan Trustee may be transferred, shall, subject to the terms of
Section 8.01(c), be a successor Loan Trustee under this Indenture without
further act.
Section 8.02. Appointment of Additional and Separate Trustees. (a)
Whenever (i) the Loan Trustee shall deem it necessary or desirable in order to
conform to any law of any jurisdiction in which all or any part of the
Collateral shall be situated or to make any claim or bring any suit with respect
to or in connection with the Collateral, any Operative Document or any of the
transactions contemplated by the Operative Documents, (ii) the Loan Trustee
shall be advised by counsel satisfactory to it that it is necessary or prudent
in the interests of the Noteholders (and the Loan Trustee shall so advise the
Company) or (iii) the Loan Trustee shall have been requested to do so by a
Majority in Interest of Noteholders, then in any such case, the Loan Trustee
and, upon the written request of the Loan Trustee, the Company, shall execute
and deliver an indenture supplemental hereto and such other instruments as may
from time to time be necessary or advisable either (1) to constitute one or more
banks or trust companies or corporations meeting the requirements of Section
8.01(c) and approved by the Loan Trustee, either to act jointly with the Loan
Trustee as additional trustee or trustees of all or any part of the Collateral
or to act as separate trustee or trustees of all or any part of the Collateral,
in each case with such rights, powers, duties and obligations consistent with
this Indenture as may be provided in such supplemental indenture or other
instruments as the Loan Trustee or a Majority in Interest of Noteholders may
deem necessary or advisable, or (2) to clarify, add to or subtract from the
rights, powers, duties and obligations theretofore granted any such additional
or separate trustee, subject in each case to the remaining provisions of this
Section 8.02. If no Event of Default has occurred and is continuing, no
additional
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or supplemental trustee shall be appointed without the Company's consent. If an
Event of Default shall have occurred and be continuing, the Loan Trustee may act
under the foregoing provisions of this Section 8.02(a) without the concurrence
of the Company, and the Company hereby irrevocably appoints (which appointment
is coupled with an interest) the Loan Trustee as its agent and attorney-in-fact
to act for it under the foregoing provisions of this Section 8.02(a). The Loan
Trustee may, in such capacity, execute, deliver and perform any such
supplemental indenture, or any such instrument, as may be required for the
appointment of any such additional or separate trustee or for the clarification
of, addition to or subtraction from the rights, powers, duties or obligations
theretofore granted to any such additional or separate trustee, subject in each
case to the remaining provisions of this Section 8.02. In case any additional or
separate trustee appointed under this Section 8.02(a) shall become incapable of
acting, resign or be removed, all the assets, property, rights, powers, trusts,
duties and obligations of such additional or separate trustee shall revert to
the Loan Trustee until a successor additional or separate trustee is appointed
as provided in this Section 8.02(a).
(b) No additional or separate trustee shall be entitled to exercise any
of the rights, powers, duties and obligations conferred upon the Loan Trustee in
respect of the custody, investment and payment of monies and all monies received
by any such additional or separate trustee from or constituting part of the
Collateral or otherwise payable under any Operative Documents to the Loan
Trustee shall be promptly paid over by it to the Loan Trustee. All other rights,
powers, duties and obligations conferred or imposed upon any additional or
separate trustee shall be exercised or performed by the Loan Trustee and such
additional or separate trustee jointly except to the extent that applicable law
of any jurisdiction in which any particular act is to be performed renders the
Loan Trustee incompetent or unqualified to perform such act, in which event such
rights, powers, duties and obligations (including the holding of title to all or
part of the Collateral in any such jurisdiction) shall be exercised and
performed by such additional or separate trustee. No additional or separate
trustee shall take any discretionary action except on the instructions of the
Loan Trustee or a Majority in Interest of Noteholders. No trustee hereunder
shall be personally liable by reason of any act or omission of any other trustee
hereunder, except that the Loan Trustee shall be liable for the consequences of
its lack of reasonable care in selecting, and the Loan Trustee's own actions in
acting with, any additional or separate trustee. Each additional or separate
trustee appointed pursuant to this Section 8.02 shall be subject to, and shall
have the benefit of Articles IV, V, VI, VIII, IX and X hereof insofar as they
apply to the Loan Trustee. The powers of any additional or separate trustee
appointed pursuant to this Section 8.02 shall not in any case exceed those of
the Loan Trustee hereunder.
(c) If at any time the Loan Trustee shall deem it no longer necessary
or desirable or in the event that the Loan Trustee shall have been requested to
do so in writing by a Majority in Interest of Noteholders, the Loan Trustee and,
upon the written request of the Loan Trustee, the Company, shall execute and
deliver an indenture supplemental hereto and all other instruments and
agreements necessary or proper to remove any additional or separate trustee. The
Loan Trustee may act on behalf of the Company under this Section 8.02(c) when
and to the extent it could so act under Section 8.02(a) hereof. In any case, the
Company may remove an additional or separate trustee in the manner set forth in
Section 8.01.
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ARTICLE IX
AMENDMENTS AND WAIVERS
Section 9.01. Amendments to this Indenture without Consent of Holders.
At any time after the date hereof, the Company and the Loan Trustee may enter
into one or more agreements supplemental hereto without notice to or consent of
any Noteholder for any of the following purposes: (i) to evidence the succession
of another Person to the Company and the assumption by any such successor of the
covenants of the Company contained in any Operative Documents pursuant to
Section 6.02(e) of the Participation Agreement; (ii) to cure any defect or
inconsistency herein or in the Equipment Notes; (iii) to cure any ambiguity or
correct any mistake; (iv) to evidence the succession of a new trustee hereunder
pursuant hereto or the removal of the trustee hereunder or to provide for or
facilitate the appointment of an additional or separate trustee pursuant to
Section 8.02 hereof; (v) to convey, transfer, assign, mortgage or pledge any
property to or with the Loan Trustee; (vi) to make any other provisions or
amendments with respect to matters or questions arising hereunder or under the
Equipment Notes, or to amend, modify or supplement any provision hereof or
thereof, so long as such action shall not adversely affect the interests of the
Noteholders or the Liquidity Provider; (vii) to correct or amplify the
description of any property at any time subject to the Lien of this Indenture,
or better to assure, convey and confirm unto the Loan Trustee any property
subject or required to be subject to the Lien of this Indenture or to subject to
the Lien of this Indenture the Airframe or Engines or any Replacement Airframe
or Replacement Engine; (viii) to add to the covenants of the Company for the
benefit of the Noteholders, or to surrender any rights or power herein conferred
upon the Company; (ix) to add to the rights of the Noteholders; (x) to include
on the Equipment Notes any legend as may be required by law or as may otherwise
be necessary or advisable; (xi) to comply with any applicable requirements of
the Trust Indenture Act of 1939, as amended, or any other requirements of
applicable law or of any regulatory body and (xii) to provide for the issuance
of Series D Equipment Notes and/or Pass Through Certificates issued by the Class
D Pass Through Trust and to make changes relating thereto, provided that (A) the
Company shall have obtained written confirmation from each Rating Agency that
the issuance of the Series D Equipment Notes would not result in a reduction of
the rating for any class of Pass Through Certificates below the then current
rating for such class of Pass Through Certificates or a withdrawal or suspension
of the rating of any class of Pass Through Certificates and (B) (1) if the
Series D Equipment Notes are issued to a Class D Pass Through Trust, the Pass
Through Trustee thereof shall become a party to the Intercreditor Agreement or
(2) if Series D Equipment Notes are issued to any person other than a Class D
Pass Through Trust, the Series D Equipment Notes will be subject to the
provisions of the Intercreditor Agreement that allow the "Controlling Party" (as
defined in the Intercreditor Agreement), during the continuance of an "Indenture
Event of Default" (as defined in the Intercreditor Agreement) to direct the Loan
Trustee in taking action under this Indenture.
Section 9.02. Amendments to this Indenture with Consent of Holders. (a)
With the written consent of a Majority in Interest of Noteholders, the Company
may, and the Loan Trustee
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shall, subject to Section 9.06, at any time and from time to time, enter into
such supplemental agreements to add any provisions to or to change or eliminate
any provisions of this Indenture or of any such supplemental agreements or to
modify in any manner the rights and obligations of the Company, the Loan Trustee
and of the Noteholders under this Indenture; provided, however, that without the
consent of each Noteholder affected thereby, an amendment under this Section
9.02 may not:
(1) reduce the principal amount of, Make-Whole Amount, if any, or
interest on, any Equipment Note;
(2) change the date on which any principal amount of, Make-Whole
Amount, if any, or interest on any Equipment Note, is due or payable;
(3) create any Lien with respect to the Collateral prior to or pari
passu with the Lien thereon under this Indenture except such as are
permitted by this Indenture, or deprive any Noteholder of the benefit of
the Lien on the Collateral created by this Indenture;
(4) reduce the percentage of the outstanding principal amount of the
Equipment Notes the consent of whose holders is required for any such
supplemental agreement, or the consent of whose holders is required for any
waiver of compliance with certain provisions of this Indenture or of
certain defaults hereunder or their consequences provided for in this
Indenture; or
(5) make any change in Section 4.05 or this Section 9.02, except to
provide that certain other provisions of this Indenture cannot be modified
or waived without the consent of each Noteholder affected thereby.
(b) It is not necessary under this Section 9.02 for the Noteholders to
consent to the particular form of any proposed supplemental agreement, but it is
sufficient if they consent to the substance thereof.
(c) Promptly after the execution by the Company and the Loan Trustee of
any supplemental agreement pursuant to the provisions of this Section 9.02, the
Loan Trustee shall transmit by first-class mail a notice, setting forth in
general terms the substance of such supplemental agreement, to all Noteholders,
as the names and addresses of such Noteholders appear on the Equipment Note
Register. Any failure of the Loan Trustee to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such supplemental agreement.
Section 9.03. Amendments, Waivers, Etc. of the Participation Agreement.
Without the consent of a Majority in Interest of Noteholders, the respective
parties to the Participation Agreement may not modify, amend or supplement such
agreement, or give any consent, waiver,
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authorization or approval thereunder, for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions thereof or of
modifying in any manner the rights of the respective parties thereunder;
provided, however, that, without the consent of the Loan Trustee or any
Noteholder, the Participation Agreement may be modified, amended or supplemented
in order (i) to cure any defect or inconsistency therein or to cure any
ambiguity or correct any mistake, (ii) to amend, modify or supplement any
provision thereof or make any other provision with respect to matters or
questions arising thereunder or under this Indenture, provided that the making
of any such other provision shall not materially adversely affect the interests
of the Noteholders or (iii) to make any other change, or reflect any other
matter, of the kind referred to in clauses (i) through (xi) of Section 9.01.
Notwithstanding the foregoing, without the consent of the Liquidity Provider,
the Company shall not enter into any amendment, waiver or modification of or
supplement or consent to the Participation Agreement which shall reduce, modify
or amend any indemnities in favor of the Liquidity Provider contained therein.
Section 9.04. Revocation and Effect of Consents. Until an amendment or
waiver becomes effective, a consent to it by a Noteholder is a continuing
consent by the Noteholder and every subsequent Noteholder, even if notation of
the consent is not made on any Equipment Note. Section 9.05. Notation on or
Exchange of Equipment Notes. The Loan Trustee may place an appropriate notation
about an amendment or waiver on any Equipment Note thereafter executed. The Loan
Trustee in exchange for such Equipment Notes may execute new Equipment Notes
that reflect the amendment or waiver.
Section 9.06. Trustee Protected. If, in the reasonable opinion of the
institution acting as Loan Trustee hereunder, any document required to be
executed by it pursuant to the terms of Section 9.01 or 9.02 adversely affects
any right, duty, immunity or indemnity with respect to such institution under
this Indenture, such institution may in its discretion decline to execute such
document.
ARTICLE X
MISCELLANEOUS
Section 10.01. Termination of Indenture. (a) Upon (or at any time
after):
(i) payment in full of the principal amount, Make-Whole Amount, if any,
and interest on and all other amounts due under all Equipment Notes and provided
that there shall then be no other Secured Obligations due to the Noteholders,
the Indenture Indemnitees and the Loan Trustee hereunder or under the
Participation Agreement;
(ii) the 91st day after there has been irrevocably deposited (except as
provided in Section 2.15 or 10.01(d)) with the Loan Trustee as funds in trust,
specifically pledged as security
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for, and dedicated solely to, the benefit of the Noteholders, (A) money in an
amount, (B) U.S. Government Obligations that, through the payment of interest
and principal in respect thereof in accordance with their terms, will provide
(not later than one Business Day before the due date of any payment referred to
below in this paragraph) money in an amount, or (C) a combination of money and
U.S. Government Obligations referred to in the foregoing clause (B), sufficient,
in the opinion of a nationally recognized firm of independent certified public
accountants expressed in a written certification thereof delivered to the Loan
Trustee, to pay in full the outstanding principal amount of and interest on all
the Equipment Notes on the dates such amounts are due; provided, however, that
(1) if any Equipment Note will become due more than one year after the
deposit of such funds, the Company has delivered to the Loan Trustee an
officer's certificate and an opinion of counsel to the effect that there
has been a change in tax law since September 23, 1999 or has been published
by the Internal Revenue Service a ruling to the effect that Noteholders and
the holders of the Pass Through Certificates will not recognize income,
gain or loss for United States Federal income tax purposes as a result of
the exercise by the Company of its option under this subsection (ii) and
will be subject to United States Federal income tax on the same amounts and
in the same manner and at the same times, as would have been the case if
such option had not been exercised;
(2) all other amounts then due and payable hereunder have been paid;
(3) the Company has delivered to the Loan Trustee an officer's
certificate and an opinion of counsel, each stating that all conditions
precedent provided for relating to the satisfaction and discharge of this
Indenture contemplated by this Section 10.01 have been complied with;
(4) such deposit will not result in a breach or violation of, or
constitute an Event of Default under, this Indenture or a default or event
of default under any other agreement or instrument to which the Company is
a party or by which it is bound; and
(5) no Event of Default set forth in Sections 4.01(f), (g), (h) or (i)
shall have occurred and be continuing on the date of such deposit or at any
time during the period ending on the 91st day after the date of such
deposit;
the Company and the Loan Trustee shall be deemed to have been released and
discharged from their respective obligations hereunder and under the Equipment
Notes, and the Loan Trustee shall, upon the written request of the Company,
execute and deliver to, or as directed in writing by, the Company an appropriate
instrument (in due form for recording) releasing the Aircraft and the balance of
the Collateral from the Lien of this Indenture, and, in such event, this
Indenture and the
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trusts created hereby shall terminate and this Indenture shall be of no further
force or effect; provided, however, that this Indenture and the trusts created
hereby shall earlier terminate and this Indenture shall be of no further force
or effect upon any sale or other final disposition by the Loan Trustee of all
property constituting part of the Collateral and the final distribution by the
Loan Trustee of all monies or other property or proceeds constituting part of
the Collateral in accordance with the terms hereof. Except as otherwise provided
above, this Indenture and the trusts created hereby shall continue in full force
and effect in accordance with the terms hereof. Upon making of the deposit of
the defeasance funds as described above, the right of the Company to cause
redemption of the Equipment Notes shall cease.
(b) Notwithstanding the provisions of Section 10.01(a)(ii), the
obligations of the Loan Trustee contained in Sections 2.01, 2.02, 2.03, 2.04,
2.05, 2.07, 2.08, 2.09, 2.13, 2.15, 2.16, 3.01, 10.01(c) and 10.01(d) of this
Section 10.01, and the other rights, duties, immunities and privileges hereunder
of the Loan Trustee, shall survive.
(c) All monies and U.S. Government Obligations deposited with the Loan
Trustee pursuant to Section 10.01(a)(ii) shall be held in trust and applied by
it, in accordance with the provisions of the Equipment Notes and this Indenture,
to the payment to the Noteholders of all sums due and to become due thereon for
principal and interest, but such money need not be segregated from other funds
except to the extent required by law.
(d) The Loan Trustee shall promptly pay or return to the Company upon
request of the Company any money or U.S. Government Obligations held by it at
any time that are not required for the payment of the amounts described above in
Section 10.01(c) on the Equipment Notes for which money or U.S. Government
Obligations have been deposited pursuant to Section 10.01(a)(ii).
Section 10.02. No Legal Title to Collateral in Noteholders. No
Noteholder shall have legal title to any part of the Collateral. No transfer, by
operation of law or otherwise, of any Equipment Note or other right, title and
interest of any Noteholder in and to the Collateral or hereunder shall operate
to terminate this Indenture or entitle such Noteholder or any successor or
transferee of such holder to an accounting or to the transfer to it of any legal
title to any part of the Collateral.
Section 10.03. Sale of Aircraft by Loan Trustee is Binding. Any sale or
other conveyance of the Aircraft, the Airframe, any Engine or any interest
therein by the Loan Trustee made pursuant to the terms of this Indenture shall
bind the Noteholders and the Company and shall be effective to transfer or
convey all right, title and interest of the Loan Trustee, the Company and such
Noteholders in and to such Aircraft, Airframe, Engine or interest therein. No
purchaser or other grantee shall be required to inquire as to the authorization,
necessity, expediency or regularity of such sale or conveyance or as to the
application of any sale or other proceeds with respect thereto by the
Noteholders.
63
<PAGE> 68
Section 10.04. Indenture for Benefit of the Company, Loan Trustee and
Noteholders. Nothing in this Indenture, whether express or implied, shall be
construed to give any Person other than the Company, the Loan Trustee, the
Noteholders or the other Indenture Indemnitees any legal or equitable right,
remedy or claim under or in respect of this Indenture.
Section 10.05. Notices. Unless otherwise expressly specified or
permitted by the terms hereof, all notices, requests, demands, authorizations,
directions, consents, waivers or documents required or permitted under the terms
and provisions of this Indenture shall be in English and in writing, and may be
given by United States mail, courier service or any other customary means of
communication, and any notices shall be effective when delivered (or, if mailed,
three Business Days after deposit, postage prepaid in the first class United
States mail and, if delivered by facsimile, upon completion of transmission and
confirmation by the sender (by a telephone call to a representative of the
recipient or by machine confirmation) that such transmission was received)
addressed as follows:
(i) if to the Company, addressed to:
American Airlines, Inc.
4333 Amon Carter Blvd.
Maildrop 5662
Fort Worth, Texas 76155
Attention: Treasurer
Telephone: (817) 963-1234
Facsimile: (817) 967-4318
if to the Loan Trustee, to:
State Street Bank And Trust Company of Connecticut,
National Association
225 Asylum Street
Goodwin Square
Hartford, Connecticut 06103
Attention: Corporate Trust Division
Telephone: (860) 244-1844
Facsimile: (860) 244-1881
or if to any Noteholder, addressed to such Noteholder at its address set forth
in the Equipment Note Register maintained pursuant to Section 2.07 hereof.
64
<PAGE> 69
Any party, by notice to the other parties hereto, may designate
additional or different addresses for subsequent notices or communications.
Section 10.06. Severability. Any provision of this Indenture that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 10.07. No Oral Modification or Continuing Waivers. No terms or
provisions of this Indenture or of the Equipment Notes may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the Company and the Loan Trustee, in compliance with Article IX. Any waiver of
the terms hereof or of any Equipment Note shall be effective only in the
specific instance and for the specific purpose given.
Section 10.08. Successors and Assigns. All covenants and agreements
contained herein shall bind and inure to the benefit of, and be enforceable by,
each of the parties hereto and the successors and permitted assigns of each, all
as herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by any Noteholder shall bind the successors and permitted
assigns of such Noteholder. Each Noteholder by its acceptance of an Equipment
Note agrees to be bound by this Indenture and all provisions of the
Participation Agreement applicable to a Noteholder.
Section 10.09. Headings. The headings of the various Articles and
Sections herein and in the Table of Contents hereto are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
Section 10.10. Normal Commercial Relations. Anything contained in this
Indenture to the contrary notwithstanding, the Loan Trustee, any Noteholder or
any other party to any of the Operative Documents or the Pass Through Documents
or any of their affiliates may conduct any banking or other financial
transactions, and have banking or other commercial relationships, with the
Company, fully to the same extent as if this Indenture were not in effect,
including without limitation the making of loans or other extensions of credit
to the Company for any purpose whatsoever, whether related to any of the
transactions contemplated hereby or otherwise.
Section 10.11. Voting by Noteholders. All votes of the Noteholders
shall be governed by a vote of a Majority in Interest of Noteholders, except as
otherwise provided herein.
Section 10.12. Section 1110. It is the intention of the parties hereto
that the security interest created hereby, to the fullest extent available under
applicable law, entitles the Loan Trustee, on behalf of the Noteholders, to all
of the benefits of Section 1110 with respect to the Aircraft.
65
<PAGE> 70
Section 10.13. The Company's Performance and Rights. Any obligation
imposed on the Company herein shall require only that the Company perform or
cause to be performed such obligation, even if stated as a direct obligation,
and the performance of any such obligation by any permitted assignee, lessee or
transferee under an assignment, lease or transfer agreement then in effect and
in accordance with the provisions of the Operative Documents shall constitute
performance by the Company and, to the extent of such performance, discharge
such obligation by the Company. Except as otherwise expressly provided herein,
any right granted to the Company in this Indenture shall grant the Company the
right to permit such right to be exercised by any such assignee, lessee or
transferee. The inclusion of specific references to obligations or rights of any
such assignee, lessee or transferee in certain provisions of this Indenture
shall not in any way prevent or diminish the application of the provisions of
the two sentences immediately preceding with respect to obligations or rights in
respect of which specific reference to any such assignee, lessee or transferee
has not been made in this Indenture.
Section 10.14. Counterparts. This Indenture may be executed in any
number of counterparts (and each of the parties hereto shall not be required to
execute the same counterpart). Each counterpart of this Indenture including a
signature page or pages executed by each of the parties hereto shall be an
original counterpart of this Indenture, but all of such counterparts together
shall constitute one instrument.
Section 10.15. Governing Law. THIS INDENTURE HAS BEEN DELIVERED IN THE
STATE OF NEW YORK AND THIS INDENTURE, ANY INDENTURE SUPPLEMENT AND THE EQUIPMENT
NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE
OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.16. Confidential Information. The term "Confidential
Information" means: (a) the existence and terms of any lease of the Airframe or
Engines pursuant to Section 7.02(a) and the identity of the Permitted Lessee
thereunder; (b) all information obtained in connection with any inspection
conducted by the Loan Trustee or its representative pursuant to Section 7.03(a);
(c) each certification furnished to the Loan Trustee pursuant to Sections
7.06(a) and 7.06(b); (d) all information contained in each report furnished to
the Loan Trustee pursuant to Section 7.06(e); and (e) all information regarding
the Warranty Rights. All Confidential Information shall be held confidential by
the Loan Trustee and each Noteholder and each affiliate, agent, officer,
director, or employee of any thereof and shall not be furnished or disclosed by
any of them to anyone other than (i) the Loan Trustee or any Noteholder and (ii)
their respective bank examiners, auditors, accountants, agents and legal
counsel, and except as may be required by an order of any court or
administrative agency or by any statute, rule, regulation or order of any
governmental authority.
66
<PAGE> 71
Section 10.17. Submission to Jurisdiction. Each of the parties hereto,
and by acceptance of Equipment Notes, each Noteholder, to the extent it may do
so under applicable law, for purposes hereof and of all other Operative
Agreements hereby (a) irrevocably submits itself to the non-exclusive
jurisdiction of the courts of the State of New York sitting in the City of New
York and to the non-exclusive jurisdiction of the United States District Court
for the Southern District of New York, for the purposes of any suit, action or
other proceeding arising out of this Indenture, the subject matter hereof or any
of the transactions contemplated hereby brought by any party or parties hereto
or thereto, or their successors or permitted assigns and (b) waives, and agrees
not to assert, by way of motion, as a defense, or otherwise, in any such suit,
action or proceeding, that the suit, action or proceeding is brought in an
inconvenient forum, that the venue of the suit, action or proceeding is improper
or that this Indenture or the Equipment Notes or the subject matter hereof or
any of the transactions contemplated hereby may not be enforced in or by such
courts.
67
<PAGE> 72
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed by their respective officers thereof duly authorized, as of the
date first above written.
AMERICAN AIRLINES, INC.
By: /s/ JEFFREY C. CAMPBELL
----------------------------------
Name: Jeffrey C. Campbell
Title: Vice President - Corporate
Development and Treasurer
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Loan Trustee
By: /s/ ALISON DELLA BELLA
-------------------------------------
Name: Alison Della Bella
Title:
<PAGE> 73
EXHIBIT A to
INDENTURE AND SECURITY AGREEMENT
INDENTURE SUPPLEMENT NO. ___
INDENTURE SUPPLEMENT NO. __ , dated _____________, ____ ("Indenture
Supplement"), between AMERICAN AIRLINES, INC. (the "Company") and STATE STREET
BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, not in its
individual capacity but solely as Loan Trustee under the Indenture (each as
hereinafter defined).
W I T N E S S E T H:
WHEREAS, the Indenture and Security Agreement (N___AN), dated as of
October 6, 1999 (the "Indenture"; capitalized terms used herein without
definition shall have the meanings specified therefor in Annex A to the
Indenture), between the Company and State Street Bank and Trust Company of
Connecticut, National Association, as Loan Trustee (the "Loan Trustee"),
provides for the execution and delivery of supplements thereto substantially in
the form hereof which shall particularly describe the Aircraft, and shall
specifically grant a security interest in the Aircraft to the Loan Trustee; and
[WHEREAS, the Indenture relates to the Airframe and Engines described
in Annex A attached hereto and made a part hereof, and a counterpart of the
Indenture is attached to and made a part of this Indenture Supplement;]*
[WHEREAS, the Company has, as provided in the Indenture, heretofore
executed and delivered to the Loan Trustee Indenture Supplement(s) for the
purpose of specifically subjecting to the Lien of the Indenture certain
airframes and/or engines therein described, which Indenture Supplement(s) is/are
dated and has/have been duly recorded with the FAA as set forth below, to wit:
<TABLE>
<CAPTION>
Date Recordation Date FAA Document Number]**
- ---- ---------------- ----------------------
<S> <C> <C>
</TABLE>
NOW, THEREFORE, to secure the prompt and complete payment (whether at
stated maturity, by acceleration or otherwise) of principal of, Make-Whole
Amount, if any, and interest on, the Equipment Notes and all other amounts
payable by the Company under the Operative
- --------
* Use for Indenture Supplement No. 1 only.
** Use for all Indenture Supplements other than Indenture Supplement No. 1.
A-1
<PAGE> 74
Documents and the performance and observance by the Company of all the
agreements and covenants to be performed or observed by the Company for the
benefit of the Noteholders and the Indenture Indemnitees contained in the
Operative Documents, and in consideration of the premises and of the covenants
contained in the Operative Documents, and for other good and valuable
consideration given by the Loan Trustee, the Noteholders and the Indenture
Indemnitees to the Company at or before the Closing Date, the receipt of which
is hereby acknowledged, the Company does hereby grant, bargain, sell, convey,
transfer, mortgage, assign, pledge and confirm unto the Loan Trustee and its
successors in trust and permitted assigns, for the security and benefit of the
Loan Trustee, the Noteholders and the Indenture Indemnitees, a first priority
security interest in, and mortgage lien on, all estate, right, title and
interest of the Company in, to and under the Aircraft, including the Airframe
and Engines described in Annex A attached hereto, whether or not any such Engine
may from time to time be installed on the Airframe or any other airframe or any
other aircraft, and any and all Parts relating thereto, and, to the extent
provided in the Indenture, all substitutions and replacements of, and additions,
improvements, accessions and accumulations to, the Aircraft, including the
Airframe, the Engines and any and all Parts (in each case other than any
substitutions, replacements, additions, improvements, accessions and
accumulations that constitute items excluded from the definition of Parts by
clauses (b), (c) and (d) thereof) relating thereto;
To have and to hold all and singular the aforesaid property unto the
Loan Trustee, and its successors and assigns, in trust for the ratable benefit
and security of the Noteholders and the Indenture Indemnitees, except as
otherwise provided in the Indenture, including Section 2.13 and Article III of
the Indenture, without any preference, distinction or priority of any one
Equipment Note over any other by reason of priority of time of issue, sale,
negotiation, date of maturity thereof or otherwise for any reason whatsoever,
and for the uses and purposes and subject to the terms and provisions set forth
in the Indenture.
This Indenture Supplement shall be construed as supplemental to the
Indenture and shall form a part thereof, and the Indenture is hereby
incorporated by reference herein and is hereby ratified, approved and confirmed.
THIS INDENTURE SUPPLEMENT HAS BEEN DELIVERED IN THE STATE OF NEW YORK
AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
A-2
<PAGE> 75
IN WITNESS WHEREOF, the undersigned have caused this Indenture
Supplement No. __ to be duly executed by their respective duly authorized
officers, on the date first above written.
AMERICAN AIRLINES, INC.
By:
-------------------------------------
Name:
Title:
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Loan Trustee
By:
-------------------------------------
Name:
Title:
A-3
<PAGE> 76
Annex A to
Indenture Supplement No. __
DESCRIPTION OF AIRFRAME AND ENGINES
AIRFRAME
<TABLE>
<CAPTION>
FAA Regis- Manufacturer's
Manufacturer Model tration No. Serial No.
- ------------ ----- ----------- ----------
<S> <C> <C> <C>
</TABLE>
ENGINES
<TABLE>
<CAPTION>
Manufacturer's
Manufacturer Model Serial No.
<S> <C> <C> <C>
</TABLE>
Each Engine is of 750 or more "rated take-off horsepower" or the equivalent of
such horsepower.
A-4
<PAGE> 77
EXHIBIT B to
INDENTURE AND SECURITY AGREEMENT
LIST OF PERMITTED COUNTRIES
Argentina Kuwait
Australia Liechtenstein
Austria Luxembourg
Bahamas Malaysia
Barbados Malta
Belgium Mexico
Bermuda Islands Monaco
Brazil Morocco
British Virgin Islands the Netherlands
Canada Netherlands Antilles
Cayman Islands New Zealand
Chile Norway
Czech Republic Paraguay
Denmark Peoples' Republic of China
Ecuador Philippines
Egypt Poland
Finland Portugal
France Republic of China (Taiwan)
Germany Singapore
Greece South Africa
Grenada South Korea
Guatemala Spain
Hong Kong Sweden
Hungary Switzerland
Iceland Thailand
India Trinidad and Tobago
Indonesia United Kingdom
Ireland Uruguay
Italy Venezuela
Jamaica
Japan
B-1
<PAGE> 78
EXHIBIT C to
INDENTURE AND SECURITY AGREEMENT
AIRCRAFT TYPE VALUES FOR SECTION 7.06(b)
Boeing 737 - $8,000,000
C-1
<PAGE> 79
SCHEDULE I to
INDENTURE AND SECURITY AGREEMENT
DESCRIPTION OF EQUIPMENT NOTES
<TABLE>
<CAPTION>
Original
Principal Amount Interest Rate Maturity Date
---------------- ------------- -------------
<S> <C> <C> <C>
Series A-1
Equipment Notes:
Series A-2
Equipment Notes:
Series B
Equipment Notes:
Series C
Equipment Notes:
</TABLE>
EQUIPMENT NOTES AMORTIZATION
SERIES A-1 EQUIPMENT NOTES
<TABLE>
<CAPTION>
Percentage of
Original Principal Amount
Payment Date to be Paid
------------ -------------------------
<S> <C>
</TABLE>
I-1
<PAGE> 80
SCHEDULE II to
INDENTURE AND SECURITY AGREEMENT
PASS THROUGH TRUST AGREEMENT AND
PASS THROUGH TRUST SUPPLEMENTS
Pass Through Trust Agreement, dated as of October 1, 1999, between American
Airlines, Inc. and State Street Bank and Trust Company of Connecticut, National
Association, as trustee, as supplemented by Trust Supplement No. 1999-1A-1,
dated as of October 6, 1999, Trust Supplement No. 1999-1A-2, dated as of October
6, 1999, Trust Supplement No. 1999-1B, dated as of October 6, 1999, and Trust
Supplement No.1999-1C, dated as of October 6, 1999.
II-1
<PAGE> 1
EXHIBIT 23(a)
[AIRCRAFT INFORMATION SERVICES, INC. LETTERHEAD]
22 September 1999
Mr. David Holtschlag, Principal
American Airlines, Inc.
4333 Amon Carter Boulevard
Mail Drop 5662
Fort Worth, TX 76155
RE: American Airlines, Inc. ("American")
Ten B737-823, Three B767-323ER and Two B777-223IGW Aircraft.
Ladies and Gentlemen:
We consent to the use of the report prepared by us with respect to the aircraft
referred to in American's Preliminary Prospectus Supplement dated 22 September
1999 (the Preliminary Prospectus Supplement) to the Prospectus included in
American's Registration Statement Form S-3 (Reg. No. 333-74937), to the summary
of such report in the Preliminary Prospectus under the headings "Prospectus
Supplement Summary--Equipment Notes and the Aircraft", "Risk Factors--Appraisals
and Realizable Value of Aircraft" and "Description of the Aircraft and the
Appraisals--The Appraisals" and to references to the reference to our Firm under
the headings "Description of the Aircraft and the Appraisals--The Appraisals"
and "Experts". We also consent to such use, summary and references in the Final
Prospectus Supplement relating to the offering described in the Preliminary
Prospectus Supplement, to the extent such use, summary and references are
unchanged.
Aircraft Information Services, Inc.
By: /s/ JOHN D. MCNICOL
-----------------------------------------
John D. McNicol
Vice President - Appraisals & Forecasts
<PAGE> 1
EXHIBIT 23(b)
[AVSOLUTIONS, INC. LETTERHEAD]
September 22, 1999
Mr. David Holtschlag, Principal
American Airlines, Inc.
4333 Amon Carter Boulevard
Mail Drop 5662
Fort Worth, Texas 76155
RE: American Airlines, Inc. ("American")
Ten B737-823, Three B767-323ER and Two B777-223IGW Aircraft
Ladies and Gentlemen:
We consent to the use of the report prepared by us with respect to the
aircraft referred to in American's Preliminary Prospectus Supplement dated
September 22, 1999 (the Preliminary Prospectus Supplement) to the Prospectus
included in American's Registration Statement on Form S-3 (Reg. No. 333-74937),
to the summary of such report in the Preliminary Prospectus under the headings
"Prospectus Supplement Summary - Equipment Notes and the Aircraft", "Risk
Factors - Appraisals and Realizable Value of Aircraft", "Description of the
Aircraft and the Appraisals - The Appraisals", and to references to the
reference to our firm under the headings "Description of the Aircraft and the
Appraisals - the Appraisals" and "Experts". We also consent to such use,
summary and reference in the final Prospectus Supplement relating to the
offering described in the Preliminary Prospectus Supplement.
Sincerely,
/s/ BRYANT LYNCH
Bryant Lynch
Manager, Commercial Appraisals
<PAGE> 1
EXHIBIT 23(c)
[MORTEN BEYER & AGNEW LETTERHEAD]
September 22, 1999
Mr. David Holtschlag, Principal
American Airlines, Inc.
4333 Amon Carter Boulevard
Mail Drop 5662
Fort Worth, TX 76155
RE: American Airlines, Inc ("American")
10 Boeing 737-823, 3 Boeing 767-323 and 2 Boeing 777-223IGW Aircraft
Ladies and Gentlemen:
We consent to the use of the report prepared by us with respect to the aircraft
referred to in American's Preliminary Prospectus Supplement dated 22 September
1999 (the Preliminary Prospectus Supplement) to the Prospectus included in
American's Registration Settlement on Form S-3 (Reg. No. 333-74937), to the
summary of such report in the Preliminary Prospectus under the headings
"Prospectus Supplement Summary of Equipment Notes and the Aircraft," "Risk
Factors, Appraisals and Realizable Value of Aircraft," "Description of the
Aircraft and the Appraisals - The Appraisals," and to references to the
reference of our firm under the headings "Description of the Aircraft and the
Appraisals - The Appraisals," and "Experts." We also consent to such use,
summary and references in the Final Prospectus supplement relating to the
offering described in the Preliminary Prospectus Supplement.
MORTEN BEYER & AGNEW INC.
By:/s/ BRYSON P. MONTELEONE
------------------------------------
Bryson P. Monteleone
Director of Operations
<PAGE> 1
Exhibit 99(a)
SCHEDULE I
The following documents relating to one Boeing 737-823 aircraft bearing
United States registration number N908AN (hereinafter collectively referred to
as the "N908AN Documents" ) have been provided in this filing: (a) Participation
Agreement (N908AN), dated as of October 6, 1999, among American Airlines,
Airlines, Inc. (the "Company"), State Street Bank and Trust Company of
Connecticut, National Association, as Pass Through Trustee under each of four
Pass Through Trust Agreements (the "Pass Through Trustee"), State Street Bank
and Trust Company of Connecticut, as Subordination Agent under the Intercreditor
Agreement (the Subordination Agent"), State Street Bank and Trust Company of
Connecticut, National Association, as loan trustee (the "Loan Trustee"), and
State Street Bank and Trust Company of Connecticut, National Association, in its
individual capacity as set forth therein ("State Street"); and (b) Indenture and
Security Agreement (N908AN), dated as of October 6, 1999, between the Company
and the Loan Trustee.
The corresponding documents listed below are substantially identical
in all material respects to the N908AN Documents, with the following
exceptions: (1) conforming changes have been made to reflect the appropriate
United States registration number of each aircraft (i.e., N909AN, N910AN,
N912AN, etc.), the appropriate model of each aircraft (i.e., 737-823,
767-323ER, 777-223) and the appropriate manufacturer's serial number of each
aircraft; (2) the description and original principal amount of the equipment
notes set forth on Schedule I to each Participation Agreement differ; (2) the
dollar amount set forth on Exhibit C to each Indenture and Security Agreement
differs according to the model of each aircraft; (3) conforming changes have
been made to reflect the appropriate engines relating to each aircraft (i.e.,
CFM International, Inc.CFM56-7B26, General Electric CF6- 80C2B6, Rolls Royce
RB211-TRENT-892-17); and (4) the definitions of "FAA Bill of Sale" and
"Warranty Bill of Sale" set forth in Annex A to each Participation Agreement
and Indenture and Security Agreement differ.
(1)(a) Participation Agreement (N909AN), dated as of October 6,
1999, among the Company, the Pass Through Trustee, the
Subordination Agent and State Street Bank and Trust Company
of Connecticut, National Association, as loan trustee, and
State Street Bank.
(1)(b) Indenture and Security Agreement (N909AN), dated as of
October 6, 1999, between the Company and the Loan Trustee.
(2)(a) Participation Agreement (N910AN), dated as of October 6,
1999, among the Company, the Pass Through Trustee, the
Subordination Agent and State Street Bank and Trust Company
of Connecticut, National Association, as loan trustee, and
State Street Bank.
<PAGE> 2
(2)(b) Indenture and Security Agreement (N910AN), dated as of
October 6, 1999, between the Company and the Loan Trustee.
(3)(a) Participation Agreement (N912AN), dated as of October 6,
1999, among the Company, the Pass Through Trustee, the
Subordination Agent and State Street Bank and Trust Company
of Connecticut, National Association, as loan trustee, and
State Street Bank.
(3)(b) Indenture and Security Agreement (N912AN), dated as of
October 6, 1999, between the Company and the Loan Trustee.
(4)(a) Participation Agreement (N914AN), dated as of October 6,
1999, among the Company, the Pass Through Trustee, the
Subordination Agent and State Street Bank and Trust Company
of Connecticut, National Association, as loan trustee, and
State Street Bank.
(4)(b) Indenture and Security Agreement (N914AN), dated as of
October 6, 1999, between the Company and the Loan Trustee.
(5)(a) Participation Agreement (N915AN), dated as of October 6,
1999, among the Company, the Pass Through Trustee, the
Subordination Agent and State Street Bank and Trust Company
of Connecticut, National Association, as loan trustee, and
State Street Bank.
(5)(b) Indenture and Security Agreement (N915AN), dated as of
October 6, 1999, between the Company and the Loan Trustee.
(6)(a) Participation Agreement (N916AN), dated as of October 6,
1999, among the Company, the Pass Through Trustee, the
Subordination Agent and State Street Bank and Trust Company
of Connecticut, National Association, as loan trustee, and
State Street Bank.
(6)(b) Indenture and Security Agreement (N916AN), dated as of
October 6, 1999, between the Company and the Loan Trustee.
(7)(a) Participation Agreement (N917AN), dated as of October 6,
1999, among the Company, the Pass Through Trustee, the
Subordination Agent and State Street Bank and Trust Company
of Connecticut, National Association, as loan trustee, and
State Street Bank.
(7)(b) Indenture and Security Agreement (N917AN), dated as of
October 6, 1999, between the Company and the Loan Trustee.
<PAGE> 3
(8)(a) Participation Agreement (N918AN), dated as of October 6,
1999, among the Company, the Pass Through Trustee, the
Subordination Agent and State Street Bank and Trust Company
of Connecticut, National Association, as loan trustee, and
State Street Bank.
(8)(b) Indenture and Security Agreement (N918AN), dated as of
October 6, 1999, between the Company and the Loan Trustee.
(9)(a) Participation Agreement (N919AN), dated as of October 6,
1999, among the Company, the Pass Through Trustee, the
Subordination Agent and State Street Bank and Trust Company
of Connecticut, National Association, as loan trustee, and
State Street Bank.
(9)(b) Indenture and Security Agreement (N919AN), dated as of
October 6, 1999, between the Company and the Loan Trustee.
(10)(a) Participation Agreement (N394AN), dated as of October 6,
1999, among the Company, the Pass Through Trustee, the
Subordination Agent and State Street Bank and Trust Company
of Connecticut, National Association, as loan trustee, and
State Street Bank.
(10)(b) Indenture and Security Agreement (N394AN), dated as of
October 6, 1999, between the Company and the Loan Trustee.
(11)(a) Participation Agreement (N398AN), dated as of October 6,
1999, among the Company, the Pass Through Trustee, the
Subordination Agent and State Street Bank and Trust Company
of Connecticut, National Association, as loan trustee, and
State Street Bank.
(11)(b) Indenture and Security Agreement (N398AN), dated as of
October 6, 1999, between the Company and the Loan Trustee.
(12)(a) Participation Agreement (N399AN), dated as of October 6,
1999, among the Company, the Pass Through Trustee, the
Subordination Agent and State Street Bank and Trust Company
of Connecticut, National Association, as loan trustee, and
State Street Bank.
(12)(b) Indenture and Security Agreement (N399AN), dated as of
October 6, 1999, between the Company and the Loan Trustee.
(13)(a) Participation Agreement (N778AN), dated as of October 6,
1999, among the Company, the Pass Through Trustee, the
Subordination Agent and State Street Bank
<PAGE> 4
and Trust Company of Connecticut, National Association, as
loan trustee, and State Street Bank.
(13)(b) Indenture and Security Agreement (N778AN), dated as of
October 6, 1999, between the Company and the Loan Trustee.
(14)(a) Participation Agreement (N779AN), dated as of October 6,
1999, among the Company, the Pass Through Trustee, the
Subordination Agent and State Street Bank and Trust Company
of Connecticut, National Association, as loan trustee, and
State Street Bank.
(14)(b) Indenture and Security Agreement (N779AN), dated as of
October 6, 1999, between the Company and the Loan Trustee.
