EXECUTION COPY
AMR CORPORATION
(a Delaware corporation)
13,000,000 Shares of Common Stock (par value $1.00 per share)
UNDERWRITING AGREEMENT
Dated: January 22, 2007
Table of Contents
Page
SECTION 1. REPRESENTATIONS AND WARRANTIES 2
(A) REPRESENTATIONS AND WARRANTIES BY THE COMPANY 2
(B) OFFICER'S CERTIFICATES 12
SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING 12
(A) SALE OF FIRM SHARES 12
(B) OPTION SHARES 12
(C) PAYMENT OF PURCHASE PRICE 13
(D) DENOMINATIONS; DELIVERY OF SHARES 13
SECTION 3. COVENANTS 14
SECTION 4. PAYMENT OF EXPENSES 17
(A) EXPENSES 17
(B) TERMINATION OF AGREEMENT 18
SECTION 5. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS 18
(A) OPINIONS OF COUNSEL FOR THE COMPANY 18
(B) OPINION OF COUNSEL FOR THE UNDERWRITERS 18
(C) OFFICERS' CERTIFICATE 18
(D) ACCOUNTANT'S COMFORT LETTER 19
(E) ACCOUNTANT'S BRING-DOWN COMFORT LETTER 19
(F) NO STOP ORDER 19
(G) CONDITIONS TO PURCHASE OF OPTION SHARES 19
(H) ADDITIONAL DOCUMENTS 20
(I) TERMINATION OF AGREEMENT 20
SECTION 6. ACKNOWLEDGEMENTS 20
SECTION 7. INDEMNIFICATION AND CONTRIBUTION 21
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS
TO SURVIVE DELIVERY 24
SECTION 9. TERMINATION OF AGREEMENT 25
(A) TERMINATION; GENERAL 25
(B) LIABILITIES 25
SECTION 10.NOTICES 25
SECTION 11. DEFAULT 25
SECTION 12. PARTIES 26
SECTION 00.XX FIDUCIARY DUTY 26
SECTION 14.GOVERNING LAW AND TIME 27
SECTION 15.EFFECT OF HEADINGS 27
SECTION 16.COUNTERPARTS 27
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SCHEDULES
Schedule A Underwriters
Schedule B Specified Information
EXHIBITS
Exhibit A-1 Form of Opinion of Xxxx X. Xxxxxxx, Senior Vice
President and General Counsel of the Company, to be
Delivered Pursuant to Section 5(a)
Exhibit A-2 Form of Disclosure Letter of Xxxx X. Xxxxxxx, Senior
Vice President and General Counsel of the Company, to
be Delivered Pursuant to Section 5(a)
Exhibit B-1 Form of Opinion of Debevoise & Xxxxxxxx LLP, Counsel
for the Company, to be Delivered Pursuant to
Section 5(a)
Exhibit B-2 Form of Disclosure Letter of Debevoise & Xxxxxxxx
LLP, Counsel for the Company, to be Delivered
Pursuant to Section 5(a)
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AMR CORPORATION
13,000,000 Shares of Common Stock
(par value $1.00 per share)
UNDERWRITING AGREEMENT
January 22, 2007
Credit Suisse Securities (USA) LLC
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
For itself and as
Representative for the
Underwriters named on
Schedule A hereto (the
"Representative")
Ladies and Gentlemen:
AMR Corporation, a Delaware corporation (the
"Company"), confirms its agreement with you, as
representative of the Underwriters listed on Schedule A
hereto (the "Underwriters"), with respect to the issue and
sale by the Company and the purchase by the several
Underwriters of an aggregate of 13,000,000 shares (the "Firm
Shares") of Common Stock, par value $1.00 per share (the
"Common Stock"), of the Company and, at the election of the
Underwriters, up to 1,950,000 additional shares (the "Option
Shares") of Common Stock (the Firm Shares and the Option
Shares that the Underwriters elect to purchase pursuant to
Section 2(b) hereof being collectively called the "Shares").
The Company has prepared and filed on Form S-3 with the
Securities and Exchange Commission (the "Commission") a
registration statement (File Nos. 333-136563 and 333-136563-
01) relating to the Company's debt securities, Common Stock
(including the Shares) and other securities (collectively,
the "Securities") and the offering thereof from time to time
in accordance with Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"). Such registration
statement, at any given time, including the amendments
thereto to such time, the exhibits and any schedules thereto
at such time, the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the Securities
Act at such time and the documents otherwise deemed to be a
part thereof or included therein by the rules and
regulations under the Securities Act, is herein called the
"Registration Statement." The Registration Statement at the
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time it originally became effective is herein called the
SOriginal Registration Statement." As provided in Section
3(a) hereof, promptly after execution and delivery of this
Agreement, the Company will prepare and file a final
prospectus relating to the Shares in accordance with the
provisions of Rule 430B under the Securities Act ("Rule
430B") and paragraph (b) of Rule 424 under the Securities
Act ("Rule 424"). Any information included in such final
prospectus that was omitted from the Original Registration
Statement but that is deemed to be part of and included in
such registration statement pursuant to Rule 430B(f) is
referred to as the "Rule 430B Information."
The term "Statutory Prospectus" means the preliminary
prospectus supplement relating to the Shares that omits Rule
430B Information together with the base prospectus included
in the Original Registration Statement, and including any
document incorporated by reference therein pursuant to Item
12 of Form S-3 under the Securities Act immediately prior to
the Applicable Time (as defined below).
The term "Final Prospectus" means the final prospectus
supplement relating to the Shares and the base prospectus,
collectively, in the form first filed pursuant to Rule
424(b) after the execution of this Agreement, which includes
the Rule 430B Information, including the documents
incorporated by reference therein pursuant to Item 12 of
Form S-3 under the Securities Act at the time the Final
Prospectus was issued.
Any reference to any amendment or supplement to the
Final Prospectus shall be deemed to refer to and include any
document incorporated by reference after the date of such
Final Prospectus. Any reference to any amendment to the
Registration Statement shall be deemed to include any
document incorporated by reference after the effective time
of such Registration Statement.
The term "Issuer Free Writing Prospectus" means any
"issuer free writing prospectus," as defined in Rule 433
under the Securities Act ("Rule 433"), relating to the
public offer of the Shares that is prepared or approved in
writing in advance by the Company and that is required to be
filed with the Commission by the Company.
The terms of the public offering of the Shares are set
forth in the General Disclosure Package (as such term is
defined in Section 1(a)(iii) hereof) and the Final
Prospectus.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company.
The Company represents and warrants to each
Underwriter as of the date hereof, as follows:
(i) Form S-3 Eligibility. The Company meets the
requirements for use of Form S-3 under the Securities Act.
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(ii) Effective Registration Statement. The Company
is a well-known seasoned issuer (as defined in Rule 405 under the
Securities Act) eligible to use the Registration Statement
as an automatic shelf registration statement; the
Registration Statement has been filed with the Commission,
became effective upon filing under Rule 462(e) under the
Securities Act and is an "automatic shelf registration
statement" as defined in Rule 405 under the Securities Act;
the Company has not received from the Commission any notice
pursuant to Rule 401(g)(2) under the Securities Act
objecting to the use of the automatic shelf registration
statement form; no stop order suspending the effectiveness
of the Registration Statement has been issued and no
proceeding for that purpose has been initiated or threatened
by the Commission; no order preventing or suspending the use
of the Statutory Prospectus or any Issuer Free Writing
Prospectus has been issued by the Commission; any request on
the part of the Commission for additional information has
been complied with to the reasonable satisfaction of counsel
to the Underwriters; and the Final Prospectus containing the
Rule 430B Information shall be filed with the Commission in
the manner and within the time period required by Rule
424(b) without reliance on Rule 424(b)(8) (or a post-
effective amendment providing such information shall have
been filed and become effective in accordance with the
requirements of Rule 430B). At the respective times the
Original Registration Statement and each amendment thereto
became effective, at the deemed effective date pursuant to
Rule 430B(f)(2) and at the Closing Time (as defined herein),
the Registration Statement complied and will comply in all
material respects with the requirements of the Securities
Act and the rules and regulations under the Securities Act
(the "Securities Act Regulations") and the Trust Indenture
Act of 1939, as amended (the "TIA"), and the rules and
regulations under the TIA. At the deemed effective date
pursuant to Rule 430B(f)(2), the Registration Statement did
not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
provided, however, that the representations and warranties
in this Section 1(a)(ii) shall not apply to statements in or
omissions from the Registration Statement, the General
Disclosure Package, the Final Prospectus or any Issuer Free
Writing Prospectus made in reliance upon and conformity with
written information furnished to the Company by the
Underwriters expressly for use therein or to those parts of
the Registration Statement constituting a Statement of
Eligibility and Qualification under the TIA (Form T-1) of a
trustee pursuant to an indenture.
(iii) Final Prospectus and General Disclosure Package.
Neither the Final Prospectus nor any amendments or
supplements thereto, at the time the Final Prospectus or any
such amendment or supplement is issued and at the Closing
Time (as defined herein), will include an untrue statement
of a material fact or will omit to state a material fact
necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; the Final Prospectus will comply when filed with
the Commission in all material respects with the Securities
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Act Regulations and each of the Statutory Prospectus and the
Final Prospectus delivered to the Underwriters for use in
connection with this offering was or will be, as the case
may be, identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except
to the extent permitted by Regulation S-T or required under
Rule 424(e); and, as of 9:10 a.m. on January 23, 2007 (the
"Applicable Time"), the Statutory Prospectus and the
information listed in Schedule B hereto, all considered
together (collectively, the "General Disclosure Package"),
did not include any untrue statement of a material fact or
omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances
under which they were made, not misleading; each Issuer Free
Writing Prospectus does not include any information that
conflicts with the information contained in the Registration
Statement or the Statutory Prospectus that has not been
superseded or modified; provided, however, that the
representations and warranties in this Section 1(a)(iii)
shall not apply to statements in or omissions from the
Registration Statement, the General Disclosure Package, the
Final Prospectus or any Issuer Free Writing Prospectus made
in reliance upon and in conformity with written information
furnished to the Company by the Underwriters expressly for
use therein or to those parts of the Registration Statement
constituting a Statement of Eligibility and Qualification
under the TIA (Form T-1) of a Trustee pursuant to an
indenture.
(iv) Incorporated Documents. The General Disclosure Package
and the Final Prospectus as delivered from time to time
shall incorporate by reference the most recent Annual Report
of the Company on Form 10-K, as amended, filed with the
Commission and each Quarterly Report of the Company on Form
10-Q, as amended, filed with the Commission and each Current
Report of the Company on Form 8-K filed (not furnished) with
the Commission and such other reports as specifically
incorporated by reference in the General Disclosure Package
and the Final Prospectus (the "Incorporated Documents").
The Incorporated Documents filed on or before the date
hereof or hereafter are referred to herein as the "SEC
Reports." The Incorporated Documents at the time they were
or hereafter are filed with the Commission, or if amended,
as so amended, complied and will comply in all material
respects with the requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations of the Commission thereunder (the "Exchange
Act Regulations"). The Company will give the Representative
notice of its intention to make any filings pursuant to the
Exchange Act or the Exchange Act Regulations from the
Applicable Time to the Closing Time (as defined herein) and
will furnish the Representative with copies of any such
documents prior to such proposed filing.
(v) Independent Accountants. Ernst & Young LLP, who
reported on the annual consolidated financial statements of
the Company that are incorporated by reference in the
Statutory Prospectus and the Final Prospectus, is an
independent registered public accounting firm as required by
the Securities Act and the Securities Act Regulations.
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(vi) Financial Statements. The financial statements of the
Company, together with the related schedules and notes,
included in the SEC Reports and incorporated by reference
into the Registration Statement and the Statutory Prospectus
and to be included in the Final Prospectus, present fairly
the financial position of the Company and its consolidated
subsidiaries at the dates indicated and the statement of
income, shareholders' equity and cash flows of the Company
and its consolidated subsidiaries for the periods specified;
said financial statements have been or will be prepared in
conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the
periods involved (except as indicated in the footnotes to
such financial statements). The supporting schedules
included in the SEC Reports and to be incorporated by
reference into the General Disclosure Package and the Final
Prospectus present fairly in accordance with GAAP the
information required to be stated therein.
(vii) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the
Registration Statement or the General Disclosure Package or
the Final Prospectus, except as otherwise stated therein or
contemplated thereby, (A) there has been no material adverse
change in the condition, financial or otherwise, or the
earnings, results of operations or general affairs of the
Company and its subsidiaries taken as a whole, whether or
not arising in the ordinary course of business (a "Material
Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its Subsidiaries (as
defined below), other than those in the ordinary course of
business, which are material with respect to the Company and
its Subsidiaries taken as a whole, and (C) there has been no
dividend or distribution of any kind declared, paid or made
by the Company on any class of its capital stock.
(viii) Good Standing of the Company. The Company is a
corporation duly incorporated and validly existing in good
standing under the laws of the State of Delaware and has
corporate power and authority to own its properties and
conduct its business as described in the General Disclosure
Package and the Final Prospectus and to enter into and
perform its obligations under, or as contemplated by, this
Agreement. The Company is duly qualified as a foreign
corporation to transact business and is in good standing in
each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the
failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
(ix) Good Standing of Subsidiaries. Each of American
Airlines, Inc. ("American"), American Beacon Advisors, Inc.,
AMR Eagle Holding Corporation, American Eagle Airlines, Inc.
and Executive Airlines, Inc. (each a "Subsidiary" and,
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collectively, the "Subsidiaries") has been duly organized
and is validly existing as a corporation, partnership or
limited liability company, as the case may be, in good
standing under the laws of the jurisdiction of its
incorporation or organization, as the case may be, has the
power and authority to own, lease and operate its properties
and to conduct its business as described in the General
Disclosure Package and the Final Prospectus and is duly
qualified as a foreign corporation, partnership or limited
liability company, as the case may be, to transact business
and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect;
except as otherwise disclosed in the General Disclosure
Package and the Final Prospectus, all of the issued and
outstanding equity interests of each such Subsidiary have
been duly authorized and validly issued, are fully paid and
non-assessable and are owned by the Company, directly or
through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or
equity (except for the security interest in all of the
common stock of American granted by the Company pursuant to
the Pledge Agreement dated as of December 17, 2004 from the
Company to Citicorp USA, Inc., as collateral agent (the
"Pledge Agreement")); none of the outstanding equity
interests of any Subsidiary was issued in violation of the
preemptive or similar rights of any securityholder of such
Subsidiary. American and AMR Eagle Holding Corporation are
the only "significant subsidiaries" of the Company (as such
term is defined in Rule 1-02 of Regulation S-X).
(x) Capitalization. The authorized, issued and outstanding
shares of capital stock of the Company are as set forth in
the General Disclosure Package and the Final Prospectus
(except for subsequent issuances, if any, pursuant to this
Agreement or pursuant to reservations, agreements,
convertible securities, options or employee benefit plans
referred to in the General Disclosure Package and the Final
Prospectus and/or referred to in clauses (B), (C), or (D) of
Section 3(i) hereof). The shares of issued and outstanding
capital stock of the Company have been duly authorized and
validly issued and are fully paid and non-assessable; none
of the outstanding shares of capital stock of the Company
was issued in violation of any preemptive or other similar
rights of any securityholder of the Company. Other than as
referred to in this subparagraph (x) or as disclosed in the
General Disclosure Package and the Final Prospectus, no
options, warrants or other rights to purchase, agreements or
other obligations to issue, or rights to convert any
obligations into or exchange any securities for, shares of
capital stock of or ownership interests in the Company are
outstanding.
(xi) Authorization of this Agreement. This Agreement has
been duly authorized, executed and delivered by the Company.
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(xii) Authorization and Description of Common Stock.
The Common Stock conforms in all material respects to the
description thereof contained in the General Disclosure
Package and the Final Prospectus, and such description will
conform in all material respects to the rights set forth in
the instruments defining the same. The Shares have been
duly authorized and, when issued as contemplated by this
Agreement, will be validly issued and will be fully paid and
non-assessable; no holder of the Shares will be subject to
personal liability by reason of being such a holder; and
such issuance of the Shares is not subject to the preemptive
or other similar rights of any securityholder of the
Company.
(xiii) Absence of Defaults and Conflicts. Neither the
Company nor any of its Subsidiaries is in violation of its
charter or by-laws or other constituting or organizational
document or in default in the performance or observance of
any obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or
instrument to which the Company or any of its Subsidiaries
is a party or by which the Company or any of its
Subsidiaries may be bound, or to which any of the property
or assets of the Company or any of its Subsidiaries is
subject (collectively, "Agreements and Instruments"), except
for such defaults that would not reasonably be expected to
result in a Material Adverse Effect; and the execution and
delivery by the Company of this Agreement, the consummation
by the Company of the transactions contemplated by this
Agreement, and the compliance by the Company with its
obligations hereunder and the terms hereof and thereof do
not and will not, whether with or without the giving of
notice or passage of time or both, conflict with or
constitute a breach of, or default or a Repayment Event (as
defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its Subsidiaries
pursuant to, the Agreements and Instruments (except for such
conflicts, breaches, defaults or Repayment Events or liens,
charges or encumbrances that, singly or in the aggregate,
would not reasonably be expected to result in a Material
Adverse Effect), or result in a violation of the provisions
of the Certificate of Incorporation or By-Laws, as amended,
or other constituting or organizational document of the
Company or any of its Subsidiaries, or any applicable law,
statute, rule, regulation, judgment, order, write 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 assets,
properties or operations, except, in each case, for such
conflicts, breaches, violations or defaults, that, singly or
in the aggregate, would not reasonably be expected to result
in a Material Adverse Effect. As used herein, a "Repayment
Event" means any event or condition which gives the holder
of any note, debenture or other evidence of indebtedness (or
any person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment prior to the
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stated maturity or date of mandatory redemption or repayment
thereof of all or a portion of such indebtedness by the
Company or any of its Subsidiaries.
(xiv) Absence of Labor Dispute. Other than as described
in the General Disclosure Package and the Final Prospectus,
no labor dispute with the employees of the Company or any of
its Subsidiaries exists or, to the knowledge of the Company,
is imminent which the Company expects to have a Material
Adverse Effect.
(xv) Absence of Further Requirements. 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, execution, delivery and
performance by the Company of this Agreement, for the valid
authorization, issuance, sale and delivery of the Shares, or
for the performance by the Company of its obligations
hereunder, except such as have been already obtained and or
as may be required under the Securities Act or the
Securities Act Regulations or state securities laws in
connection with the Registration Statement and the listing
of the Shares on the New York Stock Exchange.
(xvi) Investment Company Act. Neither the Company nor
any of its Subsidiaries is, nor upon the issuance and sale
of the Shares as herein contemplated and the application of
the net proceeds therefrom as described in the General
Disclosure Package and the Final Prospectus will be, an
"investment company" or an entity "controlled" by an
"investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
(xvii) Environmental Laws. There has been no storage,
disposal, generation, manufacture, refinement,
transportation, handling or treatment of toxic wastes,
medical wastes, hazardous wastes or hazardous substances by
the Company or any of its Subsidiaries (or, to the knowledge
of the Company, any of their predecessors in interest) at,
upon or from any of the property now or previously owned or
leased by the Company or its Subsidiaries in violation of,
and neither the Company nor any of its Subsidiaries has any
liability under, any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit or which would
require remedial action under any applicable law, ordinance,
rule, regulation, order, judgment, decree or permit
applicable to the Company or any of its Subsidiaries, except
for any violation or remedial action which would not have,
or could not be reasonably likely to have, singularly or in
the aggregate with all such violations and remedial actions,
a Material Adverse Effect; there has been no material spill,
discharge, leak, emission, injection, escape, dumping or
release of any kind onto such property or into the
environment surrounding such property of any toxic wastes,
medical wastes, solid wastes, hazardous wastes or hazardous
substances due to or caused by the Company or any of its
Subsidiaries or with respect to which the Company or any of
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its Subsidiaries have knowledge, except for any such spill,
discharge, leak, emission, injection, escape, dumping or
release which would not have or would not be reasonably
likely to have, singularly or in the aggregate with all such
spills, discharges, leaks, emissions, injections, escapes,
dumpings and releases, a Material Adverse Effect. The terms
"hazardous wastes," "toxic wastes," "hazardous substances"
and "medical wastes" shall have the meanings specified in
any applicable local, state, federal and foreign laws or
regulations with respect to environmental protection.
In the ordinary course of its business, the
Company conducts a periodic review of the effect of any
and all applicable foreign, federal, state and local
laws and regulations relating to the protection of
human health and safety, the environment or hazardous
or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws") on the business,
operations and properties of the Company and its
Subsidiaries, in the course of which it identifies and
evaluates associated costs and liabilities (including,
without limitation, any capital or operating
expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any
permit, license or approval, any related constraints on
operating activities and any potential liabilities to
third parties). On the basis of such review, the
Company has reasonably concluded that such associated
costs and liabilities have not had and would not,
singularly or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
(xviii) ERISA. Each of the Company and American is in
compliance in all material respects with all presently
applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations
and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in ERISA) has occurred with
respect to any "pension plan" (as defined in ERISA) for
which either the Company or American would have any
liability; neither the Company nor American has incurred and
does not expect to incur liability under (A) Title IV of
ERISA with respect to the termination of, or withdrawal
from, any "pension plan" or (B) Section 412 or 4971 of the
Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the
"Code"); and each "pension plan" for which either the
Company or American would have any liability that is
intended to be qualified under Section 401(a) of the Code is
so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which the
Company reasonably expects would cause the loss of such
qualification.
(xix) Insurance. The Company and each of its
Subsidiaries carry, or are covered by, insurance in such
amounts and covering such risks as is adequate for the
conduct of their respective businesses and the value of
their respective properties.
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(xx) Taxes. The Company and each of its Subsidiaries has
filed all federal, state and local income and franchise tax
returns required to be filed through the date hereof, except
for such exceptions as would not individually or
collectively have a Material Adverse Effect, and has paid
all taxes due thereon, except such as are being contested in
good faith by appropriate proceedings, and no tax deficiency
has been determined adversely to the Company or any of its
Subsidiaries which has had, nor does the Company have any
knowledge of any tax deficiency which, if determined
adversely to the Company or any of its Subsidiaries, might
have, a Material Adverse Effect.
(xxi) Internal Controls. The Company (A) makes and
keeps accurate books and records that, in reasonable detail,
accurately and fairly reflect the transactions and
disposition of the assets of the Company, and (B) maintains
internal accounting controls which provide reasonable
assurance that (i) transactions are executed in accordance
with management's authorization, (ii) transactions are
recorded as necessary to permit preparation of its financial
statements in conformity with generally accepted accounting
principles and to maintain accountability for its assets,
(iii) access to its assets is permitted only in accordance
with management's authorization and (iv) the recorded
accountability for its assets is compared with existing
assets at reasonable intervals. The Company maintains a
system of internal control over financial reporting (as such
term is defined in Rule 13a-15(f) of the Exchange Act) that
has been designed by the Company's principal executive
officer and principal financial officer, or under their
supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of
financial statements for external purposes in accordance
with generally accepted accounting principles. The Company
is not aware of any material weaknesses in its internal
control over financial reporting which are reasonably likely
to adversely affect the Company's ability to record,
process, summarize and report financial information. Since
the date of the latest audited financial statements included
in the General Disclosure Package and the Final Prospectus,
there has been no change in the Company's internal control
over financial reporting that has materially affected, or is
reasonably likely to materially affect, the Company's
internal control over financial reporting.
(xxii) Disclosure Controls and Procedures. The Company
maintains disclosure controls and procedures (as such term
is defined in Rule 13a-15(e) of the Exchange Act) that have
been designed to ensure that material information relating
to the Company, including its consolidated subsidiaries, is
made known to the Company's principal executive officer and
principal financial officer by others within those entities;
such disclosure controls and procedures are effective.
(xxiii) No Unlawful Payments. The Company has implemented
compliance programs for purposes of (i) informing the
appropriate officers and employees of the Company and its
Subsidiaries of (A) the Company's policies against (1) the
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use of corporate funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to
political activity, (2) direct or indirect unlawful payments
to any foreign or domestic government official or employee
from corporate funds, (3) violations of the Foreign Corrupt
Practices Act of 1977, as amended, and (4) making any
bribes, rebates, payoffs, influence payments kickbacks or
other unlawful payments and (ii) requiring such officers and
employees to report to the Company any knowledge they may
have of violations of the Company's policies referred to
above and no such reports have been made.
(xxiv) No Brokerage Commission; Finder's Fee. To the
best of the Company's knowledge after due inquiry, there are
no contracts, agreements or understandings between the
Company or any Subsidiary and any person that would give
rise to a valid claim against the Company or the
Underwriters for a brokerage commission, finder's fee or
other like payment in connection with this offering.
(xxv) Dividend Payments. Except as provided in the
Pledge Agreement, neither American is nor AMR Eagle Holding
Corporation is currently prohibited, directly or indirectly,
under any agreement or other instrument to which it is a
party or is subject, from paying any dividends to the
Company, from making any other distribution on its
respective capital stock or from repaying to the Company any
loans or advances to it from the Company, except as would
not have a Material Adverse Effect.
(xxvi) Reporting Company. The Company is subject to the
reporting requirements of Section 13 or Section 15(d) of the
Exchange Act.
(xxvii) Air Carrier Certification. American, a wholly
owned subsidiary of 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
Unites States Code for aircraft capable of carrying 10 or
more individuals or 6,000 pounds or more of cargo, and (iii)
is a "citizen of the United States" as defined in 49 U.S.C.
40102.
(xxviii) Possession of Licenses and Permits. The Company
and its Subsidiaries possess such permits, licenses,
approvals, consents and other authorizations (collectively,
"Licenses") issued by the appropriate federal, state, local
or foreign regulatory agencies or bodies and third parties,
governmental or otherwise, necessary to conduct the business
now operated by them as described in the General Disclosure
Package and the Final Prospectus, except for such failures
to possess Licenses as would not individually or
collectively have a Material Adverse Effect; the Company and
its Subsidiaries are in compliance with the terms and
conditions of all such Licenses, except where the failure so
to comply would not, singly or in the aggregate, have a
Material Adverse Effect; all of the Licenses are valid and
in full force and effect, except when the invalidity of such
Licenses or the failure of such Licenses to be in full force
11
and effect would not have a Material Adverse Effect; and
neither the Company nor any of its subsidiaries has received
any notice of proceedings relating to the revocation or
modification of any such Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling
or finding, would result in a Material Adverse Effect.
(xxix) Well-Known Seasoned Issuer. (A)(i) At the time of
filing the Registration Statement, (ii) at the time of the
most recent amendment thereto for the purposes of complying
with Section 10(a)(3) of the Securities Act (whether such
amendment was by post-effective amendment, incorporated
report filed pursuant to Section 13 or 15(d) of the Exchange
Act or form of prospectus), and (iii) at the time the
Company or any person acting on its behalf (within the
meaning, for this clause only, of Rule 163(c)) made any
offer relating to the Securities in reliance on the
exemption of Rule 163 under the Securities Act, the Company
was a "well-known seasoned issuer" as defined in Rule 405
under the Securities Act, including not having been an
"ineligible issuer" as defined in Rule 405 of the Securities
Act; and (B) at the time of filing the Original Registration
Statement, at the earliest time thereafter that the Company
or another offering participant made a bona fide offer
(within the meaning of Rule 164(h)(2) under the Securities
Act) of the Securities and at the date hereof, the Company
was not and is not an "ineligible issuer" as defined in Rule
405 under the Securities Act.
(b) Officer's Certificates. Any certificate signed by any
officer of the Company delivered to the Underwriters or to
counsel for the Underwriters shall be deemed a representation
and warranty by the Company to the Underwriters as to the matters
covered thereby as of the date or dates indicated in such
certificate.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Sale of Firm Shares. On the basis of the representations,
warranties and agreements herein contained and subject to the
terms and conditions herein set forth, the Company agrees to
sell to the several Underwriters, and each Underwriter
agrees, severally and not jointly, to purchase the number of
Firm Shares set forth opposite such Underwriter's name in
Schedule A hereto at the price per share set forth in
Schedule A hereto.
(b) Option Shares. In addition, on the basis of the
representations, warranties and agreements herein contained
and subject to the terms and conditions herein set forth,
the Company hereby grants a one-time option to the
Underwriters topurchase up to an additional 1,950,000 Option
Shares at the price per Share set forth in Schedule A hereto.
In the event and to the extent that the Underwriters shall exercise
the election to purchase Option Shares as provided above,
the Company agrees to issue and sell to each of the
Underwriters, and each of the Underwriters agrees, severally
and not jointly, to purchase from the Company, at the price
per Share set forth in the paragraph above, that number of
12
Option Shares (to be adjusted by you so as to eliminate
fractional shares) that bears the same proportion to the
total number of Option Shares as to which such election
shall have been exercised as the number of Firm Shares set
forth in Schedule A opposite the name of such Underwriter
bears to the aggregate number of Firm Shares. The option
hereby granted will expire 30 days after the date hereof and
may be exercised solely for the purpose of covering over-
allotments which may be made in connection with the offering
and distribution of the Firm Shares upon written, including
by email, notice by the Representative to the Company
setting forth the number of Option Shares as to which the
Underwriters are then exercising the option and the time and
date of payment and delivery for such Option Shares. Such
time and date of delivery (the "Date of Delivery") shall be
determined by the Representative, but shall not be later
than seven full business days after the exercise of said
option, nor in any event prior to the Closing Time, as
hereinafter defined, unless otherwise agreed upon by the
Representative and the Company. If the option is exercised
as to all or any portion of the Option Shares, the
Underwriters will purchase the entire aggregate principal
amount of Option Shares then being purchased.
(c) Payment of Purchase Price. Payment of the purchase
price for and delivery of the Firm Shares shall be made at the
offices of Debevoise & Xxxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, or at such other place as shall be agreed
upon by the Representative and the Company, at 10:00 A.M.
(New York time) on January 26, 2007, the fourth business day
after the date hereof, or at such other time not later than
ten business days after such date as shall be agreed upon by the
Representative and the Company (such time and date of
payment and delivery being herein called the "Closing
Time").
In addition, in the event that the Underwriters have
exercised their option to purchase all or any of the Option
Shares, payment of the purchase price for and delivery of
such Option Shares shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by
the Representative and the Company, on each Date of Delivery
as specified in the written, including by email, notice from
the Representative to the Company.
Payment shall be made to the Company by wire or
interbank transfer of immediately available funds to a bank
account designated by the Company, against delivery to the
Representative of the Shares to be purchased by the
Underwriters.
(d) Denominations; Delivery of Shares. The Shares to
be purchased by the Underwriters hereunder, in such authorized
denominations and registered in such names as the Underwriters
may request in writing upon at least at least one full business
day prior to the Closing Time or the Date of Delivery, as the
case may be, shall be delivered by or on behalf of the Company
by book entry transfer through the facilities of The Depository
Trust Company ("DTC") to each Underwriter, for the account
13
of each Underwriter, against payment by or on behalf of each
Underwriter of the purchase price therefore by wire or
interbank transfer of immediately available funds to a bank
account designated by the Company.
SECTION 3. Covenants. (A) Covenants of the Company.
The Company covenants with the Underwriters as follows:
(a) Immediately following the execution of this
Agreement, the Company will (a) prepare the Final Prospectus
with respect to the Shares that complies with the Securities
Act and the Securities Act Regulations and which sets forth
the name of each Underwriter participating in the offering
and the number of Shares that each Underwriters 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 Shares
are to be purchased by the Underwriters from the Company,
any initial public offering price, any selling concession
and re-allowance, and such other information as the
Underwriters and the Company deem appropriate in connection
with the offering of the Shares and (b) file all material
required to be filed by the Company with the Commission
pursuant to Rule 433(d) within the time required by such
Rule. The Company will promptly transmit copies of the
Final Prospectus to the Commission for filing pursuant to
Rule 424 and will furnish to the Underwriters as many copies
of the Final Prospectus as the Underwriters shall reasonably
request.
(b) During the period when a prospectus (or in lieu
thereof, a notice referred to in Rule 173(a) under the
Securities Act ("Rule 173(a)")) relating to the Shares is
required to be delivered under the Securities Act, the
Company will promptly advise the Representative of (i) the
effectiveness of any amendment to the Registration
Statement, (ii) the transmittal to the Commission for filing
of any supplement to the Final Prospectus or any document
that would as a result thereof be incorporated by reference
in the Final Prospectus, (iii) any request by the Commission
for any amendment of the Registration Statement or any
amendment or supplement to the Final 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 Shares for sale in
any jurisdiction or the institution or threatening of any
proceeding for such purpose. The Company will use its best
efforts to prevent the issuance of any such stop order or
suspension and, if issued, to obtain as soon as possible the
withdrawal thereof.
(c) If, at any time when a prospectus (or in lieu
thereof, a notice referred to in Rule 173(a)) relating to
the Shares is required to be delivered under the Securities
Act, any event occurs as a result of which the Final
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 the
14
Registration Statement or amend or supplement the Final
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, such amendment or supplement which
will correct such statement or omission or such amendment or
supplement which will effect such compliance and the Company
will use its reasonable efforts to have any such amendment
to the Registration Statement or new registration statement
declared effective as soon as practicable (if it is not an
automatic shelf registration statement with respect to the
Shares). Neither the Underwriters' 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 5.
(d) At any time when a prospectus (or in lieu thereof,
a notice referred to in Rule 173(a)) relating to the Shares
is required to be delivered under the Securities Act or the
Securities Act Regulations, the Company will give the
Representative notice of its intention to file any amendment
to the Registration Statement or any amendment or supplement
to the Final Prospectus, whether pursuant to the Exchange
Act, the Securities Act or otherwise, will furnish the
Representative 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 the Representative shall reasonably object.
(e) The Company has furnished or will, if requested,
furnish to the Underwriters and the Underwriters' counsel,
without charge, conformed copies of the Original
Registration Statement 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 the
copies of the Original Registration Statement and each
amendment thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof
filed with the Commission pursuant to XXXXX, except to the
extent permitted by Regulation S-T. So long as delivery of
a Final Prospectus (or in lieu thereof, a notice referred to
in Rule 173(a)) by the Underwriters or dealers may be
required by the Securities Act, the Company will furnish as
many copies of any Statutory Prospectus, the Final
Prospectus and any amendments thereof and supplements
thereto as the Underwriters may reasonably request; and the
Final Prospectus and any amendments or supplements thereto
furnished to each Underwriter will be identical to the
electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted
by Regulation S-T or required under Rule 424(e).
(f) The Company shall use its reasonable efforts, in
cooperation with the Underwriters, to qualify the Shares for
offering and sale under the applicable securities laws of
such states in the United States as the Underwriters may
reasonably designate and will maintain such qualification in
effect as long as required in connection with the
distribution of the Shares; provided, however, that the
Company shall not be obligated to file any general consent
to service of process or to qualify as a foreign corporation
15
or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is
not otherwise so subject.
(g) The Company intends to use the net proceeds
received by it from the sale of the Shares in the manner to
be indicated in the Final Prospectus under "Use of
Proceeds."
(h) The Company will use its reasonable efforts to
cause the Shares to be listed on the New York Stock Exchange
or listed on a "national securities exchange" registered
under Section 6 of the Exchange Act.
(i) During a period of thirty (30) days from the date
of the Final Prospectus, the Company will not, without the
prior written consent of the Representative (i) offer,
pledge, announce the intention to sell, sell, contract to
sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or
warrant for the sale of, lend or otherwise transfer or
dispose of, directly or indirectly, any shares of Common
Stock or securities convertible into or exchangeable or
exercisable for or repayable with Common Stock, or file any
registration statement under the Securities Act with respect
to any of the foregoing (other than a shelf registration
statement under Rule 415 under the Securities Act) or (ii)
enter into any swap or other agreement or any transaction
that transfers in whole or in part, directly or indirectly,
any of the economic consequence of ownership of the Common
Stock, or any securities convertible into or exchangeable or
exercisable for or repayable with Common Stock, whether any
such swap or transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Shares to be sold
hereunder, (B) the Common Stock to be delivered upon
conversion of the Company's 4.25% Senior Convertible Notes
due 2023 or the Company's 4.50% Senior Convertible Notes due
2024, (C) Common Stock (or options to purchase Common Stock)
to be issued pursuant to the Corporation's 1988 Long Term
Incentive Plan, as amended, the 1998 Long Term Incentive
Plan, as amended, the 1994 Directors Stock Incentive Plan,
as amended, the 1997 Pilot Stock Option Plan, the 2003
Employee Stock Incentive Plan or other employee compensation
benefit plans or pursuant to currently outstanding options,
warrants or rights existing on the date hereof and referred
to in the Final Prospectus, and (D) up to 100,000 shares of
the Common Stock to be issued to vendors, lessors, lenders
and suppliers pursuant to concessionary agreements reached
with them in the Spring of 2003.
(j) The Company shall cooperate with the Underwriters
and use its reasonable efforts to permit the Shares to be
eligible for clearance and settlement through the facilities
of DTC.
(k) The Company, during the period when a Final
Prospectus (or in lieu thereof, the notice referred to in
Rule 173(a)) relating to the Shares is required to be
16
delivered, will file all documents required to be filed with
the Commission pursuant to the Exchange Act within the time
periods required by the Exchange Act and the Exchange Act
Regulations.
(B) Free Writing Prospectus Covenants. The Company
represents and agrees that, unless it obtains the prior
consent of each Underwriter, and each Underwriter represents
and agrees that, unless it obtains the prior consent of the
Company, it has not made and will not make any offer
relating to the Shares that would constitute an "issuer free
writing prospectus," as defined in Rule 433 or that would
otherwise constitute a "free writing prospectus," as defined
in Rule 405. Any such free writing prospectus consented to
by the Company and the Underwriters is hereinafter referred
to as a "Permitted Free Writing Prospectus." The Company
represents that it has treated or agrees that it will treat
each Permitted Free Writing Prospectus as an "issuer free
writing prospectus," as defined in Rule 433, and has
complied and will comply with the requirements of Rule 433
applicable to any Permitted Free Writing Prospectus,
including timely filing with the Commission where required,
legending and record keeping.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company shall pay all expenses incident
to the performance of its obligations under this Agreement,
including (i) the preparation, printing, filing and
distribution of the Statutory Prospectus, the Final
Prospectus (including financial statements and any schedules
or exhibits and any Incorporated Document), the Registration
Statement and any Permitted Free Writing Prospectus,
(ii) the preparation, printing and delivery to the
Underwriters of this Agreement, the Shares, and such other
documents as may be required in connection with the offer,
purchase, sale, issuance or delivery of the Shares and any
cost associated with electronic delivery of any of the
foregoing by the Underwriters to investors, (iii) the
preparation, issuance and delivery of the certificates for
the Shares to the Underwriters, including any transfer
taxes, any stamp or other duties payable upon the sale,
issuance and delivery of the Shares to the Underwriters and
any charges of DTC in connection therewith, (iv) the fees
and disbursements of the Company's counsel, accountants and
other advisors, (v) the qualification of the Shares under
securities laws in accordance with the provisions of
Section 3(f) hereof, including filing fees and the
reasonable fees and disbursements of a single counsel for
the Underwriters in connection therewith and in connection
with the preparation of the Blue Sky Survey and any
supplement thereto, (vi) any fees of the National
Association of Securities Dealers, Inc. in connection with
the Shares, and (vii) the fees and expenses of any transfer
agent or registrar for the Common Stock. It is understood,
however, that except as provided in this Section and Section
7 hereof, the Underwriters will pay all of their own costs
and expenses, including the fees of their counsel, transfer
taxes on resale of any of the securities by them, and any
promotional expenses connected with any offers they may
make.
17
(b) Termination of Agreement. If this Agreement is
terminated by the Underwriters in accordance with the
provisions of Section 5 or Section 9(a)(i) hereof,
the Company shall reimburse the Underwriters for all of
their out-of-pocket expenses, including the reasonable fees
and disbursements of a single counsel for the Underwriters
incurred by it in connection with the offering contemplated
by this Agreement.
SECTION 5. Conditions of the Underwriters' Obligations.
The obligations of the Underwriters hereunder are
subject to the accuracy of the representations and
warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company delivered
pursuant to the provisions hereof, to the performance by the
Company of its covenants and other obligations hereunder,
and to the following further conditions:
(a) Opinions of Counsel for the Company. At the Closing
Time, the Underwriters shall have received the opinion and
letter of Xxxx X. Xxxxxxx, Senior Vice President and General
Counsel of the Company, and the opinion and letter of Debevoise
& Xxxxxxxx LLP, counsel for the Company, each in form
and substance reasonably satisfactory to counsel for the
Underwriters and dated as of the Closing Time, to the effect
set forth in Exhibits X-0, X-0, X-0 and B-2 hereto, respectively.
Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they
deem proper, upon certificates of the officers of the
Company and certificates of public officials.
(b) Opinion of Counsel for the Underwriters. At the
Closing Time, the Underwriters shall have received the
opinion, dated as of the Closing Time, of Shearman &
Sterling LLP, counsel for the Underwriters, in form and
substance reasonably satisfactory to the Representative.
In giving such opinion such counsel may rely, as to
all matters governed by the laws of jurisdictions
other than the law of the State of New York, the federal
law of the United States and the General Corporation
Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Underwriters. Such counsel
may also state that, insofar as such opinion involves
factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company and
certificates of public officials.
(c) Officers' Certificate. At the Closing Time,
there shall not have been, since the date hereof or since
the respective dates as of which information is given in the
General Disclosure Package and the Final Prospectus, any
material adverse change in the condition, financial or
otherwise, or in the results of operations or business
affairs of the Company and its Subsidiaries considered
as one enterprise, whether or not arising in the ordinary
course of business, and the Underwriters shall have
received a certificate of the President or a Senior Vice
President of the Company and the Chief Financial Officer or
Chief Accounting Officer of the Company, dated as of the
Closing Time, to the effect that (i) there has been no such
material adverse change, (ii) the representations and warranties
in Section 1(a) hereof are true and correct with the same
18
force and effect as though expressly made at and as of the
Closing Time, and (iii) the Company has complied with all
of the agreements entered into in connection with the transaction
contemplated herein and satisfied all conditions on its
part to be performed or satisfied at or prior to the Closing Time.
(d) Accountant's Comfort Letter.
Promptly after the execution of this Agreement, the
Underwriters shall have received from Ernst & Young LLP a
letter, dated as of the date of the Final Prospectus, in the
form and substance reasonably satisfactory to the
Representative, containing statements and information of the
type ordinarily included in accountants' "comfort letters"
to underwriters with respect to the financial statements and
certain financial information contained, or incorporated by
reference, in the Registration Statement and the General
Disclosure Package.
(e) Accountant's Bring-Down Comfort Letter.
At the Closing Time, the Underwriters shall have
received from Ernst & Young LLP a letter, dated as of the
Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to Section
5(d) hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not
more than three business days prior to the Closing Time, and
such letter shall contain statements and information with
respect to certain financial information contained in the
Final Prospectus.
(f) No Stop Order.
At the Closing Time, the Company has not received
from the Commission any notice pursuant to Rule 401(g)(2)
under the Securities Act objecting to the use of the
automatic shelf registration statement form; no stop order
suspending the effectiveness of the Registration Statement
has been issued and no proceeding for that purpose has been
initiated or threatened by the Commission.
(g) Conditions to Purchase of Option Shares.
In the event that the Underwriters exercise their
option provided in Section 2(b) hereof to purchase all or
any portion of the Option Shares, the obligations of the
Underwriters to purchase such Option Shares is subject to
the accuracy as of each Date of Delivery of the
representations and warranties of the Company contained in
Section 1 or in certificates of any officer of the Company
delivered pursuant to the provisions hereof, to the
performance by the Company of its covenants and other
obligations hereunder, and at the relevant Date of Delivery,
the Underwriters shall have received:
(i) Officers' Certificate. A certificate, dated such Date
of Delivery, of the President or Senior Vice President of
the Company and the Chief Financial Officer or Chief
Accounting Officer of the Company confirming that the
certificate delivered at the Closing Time pursuant to
Section 5(c) hereof remains true and correct as of such Date
of Delivery.
(ii) Opinions of Counsel for the Company. The opinion and
letter of Xxxx X. Xxxxxxx, Senior Vice President and General
19
Counsel of the Company, and the opinion and letter of
Debevoise & Xxxxxxxx LLP, counsel for the Company, each in
form and substance reasonably satisfactory to the
Representative, each dated such Date of Delivery, relating
to the Option Shares to be purchased on such Date of
Delivery and otherwise to the same effect as the respective
opinions required by Section 5(a) hereof.
(iii) Opinion of Counsel for the Underwriters. The
opinion of Shearman & Sterling LLP, counsel for the
Underwriters, dated such Date of Delivery, relating to the
Option Shares to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by
Section 5(b) hereof.
(iv) Bring-down Comfort Letter. A letter from Ernst & Young
LLP, in form and substance satisfactory to the
Representative and dated such Date of Delivery,
substantially in the same form and substance as the letter
furnished to the Underwriters pursuant to Section 5(e)
hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not
more than three business days prior to such Date of
Delivery.
(h) Additional Documents
At the Closing Time and at the Date of Delivery,
counsel for the Underwriters shall have been furnished with
such documents, certificates and opinions as they may
reasonably request for the purpose of enabling them to pass
upon the issuance and sale of the Shares as herein
contemplated, or in order to evidence the accuracy and
completeness of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained;
and all proceedings taken by the Company in connection with
the issuance and sale of the Shares as herein contemplated
shall be reasonably satisfactory to the Representative and
counsel for the Underwriters.
(i) Termination of Agreement
If any condition specified in this Section shall not
have been fulfilled when and as required to be fulfilled,
this Agreement (or, in the case of any condition to the
purchase of Option Shares, on a Date of Delivery which is
after the Closing Time, the obligations of the Underwriters
to purchase the relevant Option Shares on such Date of
Delivery) may be terminated by the Underwriters by notice to
the Company at any time at or prior to the Closing Time or
such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any
other party except as provided in Section 4 and except that
Sections 1, 7 and 8 shall survive any such termination and
remain in full force and effect.
SECTION 6. Acknowledgements
Each of the Underwriters, on behalf of itself and
each of its affiliates that participates in the initial
distribution of the Shares, acknowledges that (i) the
Company has not authorized or taken, and will not take, any
action that would permit a public offering of the Shares or
the public distribution of the Final Prospectus or any other
offering or publicity material relating to the Shares in any
jurisdiction outside the United States; (ii) no prospectus
will be published in relation to any Shares in any Member
20
State of the European Economic Area that has implemented the
Prospectus Directive (each, a "Relevant Member State"); and
(iii) no prospectus in relation to any Shares will be
approved by a competent authority in any Relevant Member
State. For the purposes of the preceding sentence, the
expression "Prospectus Directive" means Directive 2003/71/EC
and includes any relevant implementing measure in each
Relevant Member State.
SECTION 7. 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 either Section 15 of the
Securities Act or Section 20 of the Exchange 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) (1) arise out of
or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration
Statement, including without limitation the Rule 430B
Information (or any amendment to the Registration
Statement), or arise out of or are based upon the omission
or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements
therein not misleading, or (2) arise out of or based upon
any untrue statement or alleged untrue statement of a
material fact contained in the General Disclosure Package or
in the Final Prospectus or in any amendment thereof or
supplement thereto or in any Permitted Free Writing
Prospectus, or arise out of or are based upon the omission
or alleged omission therefrom of a material fact necessary
in order to make the statements therein, in light of the
circumstances under which they were made, not misleading,
and, in each case, 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 shall not be liable in any such case to
the extent that any such loss, claim, damage, or liability
arises out of or is based upon 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 the
Representative specifically for use in the Registration
Statement including without limitation the Rule 430B
Information (or any amendment thereto) or any Permitted Free
Writing Prospectus or the General Disclosure Package or the
Final Prospectus (or any amendment or supplement thereto) or
made in those parts of the Registration Statement
constituting a Statement of Eligibility under the TIA of a
Trustee on Form T-1, and (ii) the Company shall not be
liable for any loss, liability or expense of any settlement
or compromise of or consent to entry of judgment with
respect to, any pending or threatened litigation or any
pending or threatened governmental agency investigation or
proceeding if such settlement or compromise of or consent to
entry of judgment with respect thereto is effected without
the prior written consent of the Company, except to the
extent that such consent is not required pursuant to Section
21
7(d) hereof. This indemnity agreement will be in addition
to any liability that 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
either Section 15 of the Securities Act or Section 20 of the
Exchange Act, against any and all losses, claims, damages,
liabilities and expenses described in the indemnity
contained in Section 7(a), but only with respect to untrue
statements or alleged untrue statements or omissions or
alleged omissions made in the Registration Statement,
including, without limitation, the 430B Information (or any
amendment thereto), any Permitted Free Writing Prospectus,
the General Disclosure Package, or the Final 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 the Representative specifically for use
in the Registration Statement (or any amendment thereto),
the General Disclosure Package, any Permitted Free Writing
Prospectus or the Final Prospectus (or any amendment or
supplement thereto). This indemnity agreement will be in
addition to any liability that any Underwriter may otherwise
have.
(c) Promptly after receipt by an indemnified party
under this Section 7 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 7, 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 7. 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 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 7 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
22
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 7 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 or compromise
of, or consent to entry of judgment with respect to, 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 or compromise of,
or consent to entry of judgment with respect to, 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 at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel payable pursuant to
this Section 7, such indemnifying party agrees that it shall
be liable for any settlement, compromise or consent to entry
of judgment of the nature contemplated by clause (ii) of the
proviso in Section 7(a) effected without its written consent
if (i) such settlement, compromise or consent to entry of
judgment is entered into more than 45 days after receipt by
such indemnifying party of the aforesaid notice of request,
(ii) such indemnifying party shall have received notice of
the terms of such settlement, compromise or consent to entry
of judgment at least 30 days prior to such settlement being
entered into, and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with
such request prior to the date of such settlement,
compromise or consent to entry of judgment.
(e) If the indemnification provided for in paragraph
(a) or (b) of this Section 7 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 Shares 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
23
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 other hand in connection with
the offering of the Shares pursuant to this Agreement shall
be deemed to be in the same proportion as the total proceeds
from the offering of the Shares pursuant to this Agreement
(net of underwriting discounts and commissions 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 Final Prospectus, bears to the aggregate
initial public offering price of the Shares 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 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 Shares underwritten by it and distributed to the
public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required
to pay by reason of 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 any 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 the 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 number of Firm Shares set forth
opposite their respective names in Schedule A hereto and not
joint.
SECTION 8. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements
contained in this Agreement or in certificates of officers
of the Company submitted pursuant hereto shall remain
24
operative and in full force and effect, regardless of any
investigation made by or on behalf of the Underwriters or
any person who controls the Underwriters within the meaning
of Section 15 of the Securities Act or Section 20 of the
Exchange Act, or by or on behalf of the Company, and shall
survive delivery of the Shares to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General.
The Representative may terminate this Agreement, by
notice 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 Final Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of
this Agreement), 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 material adverse change in
the financial markets in the United States or in the
international financial markets, or any outbreak of
hostilities or escalation thereof or other calamity or
crisis, in each case the effect of which is such as to make
it, in the judgment of the Reprsentative, impracticable or
inadvisable to market the Shares or to enforce contracts for
the sale of the Shares, or (iii) if trading in any
securities of the Company has been suspended by the
Commission or the New York Stock Exchange or if trading
generally on the New York Stock Exchange has been suspended
or materially limited, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by such system or
by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental
authority, or (iv) if a banking moratorium has been declared
by either federal or New York authorities.
(b) Liabilities.
If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any
party to any other party except as provided in Section 4
hereof, and provided further that Sections 1, 7 and 8 shall
survive such termination and remain in full force and
effect.
SECTION 10. Notices.
All notices and other communications hereunder shall
be in writing and effective only upon receipt. Notices to
the Underwriters shall be directed to the Representative at
Eleven Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, facsimile no.
(000) 000-0000; attention of IBD Legal Group; and notices to
the Company shall be directed to them at X.X. Xxx 000000,
Xxxxxx/Xxxx Xxxxx Xxxxxxx, Xxxxx 00000-0000, facsimile no.
(000) 000-0000, attention of the Treasurer.
SECTION 11. Default.
If any one or more Underwriters shall fail at the Closing
Time to purchase and pay for any of the Shares 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
25
severally to take up and pay for (in the respective
proportions which the aggregate number of Shares specified
to be purchased by them in Schedule A bears to the aggregate
number of Shares to be purchased by all the remaining
Underwriters) the Shares which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided,
however, that in the event that the aggregate number of
Shares that the defaulting Underwriter or Underwriters
agreed but failed to purchase shall exceed 10% of the
aggregate number of Shares 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
Shares, 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 4, 7 and 8
shall remain in effect. In the event of a default by any
Underwriter as set forth in this Section 11 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 General
Disclosure Package and the Final 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
SECTION 12. 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 Underwriters and
the Company and their respective successors and the
controlling persons referred to in Section 7 and their 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 Underwriters and the
Company and their respective successors, and said
controlling persons and their heirs and legal
representatives, and for the benefit of no other person,
firm or corporation. No purchaser of Shares from the
Underwriters shall be deemed to be a successor by reason
merely of such purchase.
SECTION 13. No Fiduciary Duty.
The Company acknowledges and agrees that each
Underwriter is acting solely in the capacity of an arm's
length contractual counterparty to the Company with respect
to the offering of Shares contemplated hereby (including in
connection with determining the terms of such offering) and
not as a financial advisor or a fiduciary to, or an agent
of, the Company or any of its subsidiaries. Additionally,
no Underwriter is advising the Company or any of its
subsidiaries as to any legal, tax, investment, accounting or
regulatory matters in any jurisdiction with respect to the
offering of the Shares or the process leading thereto
(irrespective of whether the Underwriter has advised or is
advising the Company on other matters). Each Underwriter
26
advises that it and its affiliates are engaged in a broad
range of securities and financial services and that it and
its affiliates may enter into contractual relationships with
purchasers or potential purchasers of the Company's
securities and that some of these services or relationships
may involve interests that differ from those of the Company
and need not be disclosed to the Company, unless otherwise
required by law. The Company has consulted with its own
advisors concerning such matters and shall be responsible
for making its own independent investigation and appraisal
of the transactions contemplated hereby, and no Underwriter
shall have any responsibility or liability to the Company or
any of its subsidiaries with respect thereto. Any review by
the Underwriters of the Company, the transactions
contemplated hereby or other matters relating to such
transactions will be performed solely for the benefit of the
Underwriters and shall not be on behalf of the Company. The
Company waives, to the fullest extent permitted by law, any
claims it may have against the Underwriters for breach of
fiduciary duty or alleged breach of fiduciary duty and
agrees that no Underwriter shall have any liability (whether
direct or indirect) to the Company in respect of such a
fiduciary duty claim.
SECTION 14. Governing Law and Time.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT
AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER
TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings.
The Article and Section headings herein and the
Table of Contents are for convenience only and shall not
affect the construction hereof.
SECTION 16. Counterparts.
This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together
constitute one and the same Agreement.
27
If the foregoing is in accordance with your
understanding of our agreement, please sign and return to
the Company a counterpart hereof, whereupon this instrument,
along with all counterparts, will become a binding agreement
between the Underwriters and the Company in accordance with
its terms.
Very truly yours,
AMR CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President -
Finance and Planning and
Chief Financial Officer
28
CONFIRMED AND ACCEPTED, as
of the date first above written:
CREDIT SUISSE SECURITIES (USA) LLC
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Managing Director
Acting on behalf of itself and the several Underwriters
29
