EXHIBIT 4.12
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INTERCREDITOR AGREEMENT
Dated as of May 24, 2001
among
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
as Trustee of the
American Airlines Pass Through Trust 2001-1A-1,
American Airlines Pass Through Trust 2001-1A-2,
American Airlines Pass Through Trust 2001-1B
American Airlines Pass Through Trust 2001-1C
and
American Airlines Pass Through Trust 2001-1D
BOEING CAPITAL CORPORATION
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
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TABLE OF CONTENTS
Page
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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....................22
Section 2.02 Trust Accounts.............................................................................23
Section 2.03 Deposits to the Collection Account and Special Payments Account; Certain Distributions.....24
Section 2.04 Distributions of Special Payments..........................................................24
Section 2.05 Designated Representatives.................................................................27
Section 2.06 Controlling Party..........................................................................28
Article III
RECEIPT, DISTRIBUTION AND APPLICATION OF AMOUNTS RECEIVED
Section 3.01 Written Notice of Distribution.............................................................29
Section 3.02 Distribution of Amounts on Deposit in the Collection Account...............................32
Section 3.03 Distribution of Amounts on Deposit Following a Triggering Event............................34
Section 3.04 Other Payments.............................................................................36
Section 3.05 Payments to the Trustees and the Liquidity Providers.......................................37
Section 3.06 Liquidity Facilities.......................................................................37
Article IV
EXERCISE OF REMEDIES
Section 4.01 Directions from the Controlling Party......................................................45
Section 4.02 Remedies Cumulative........................................................................47
Section 4.03 Discontinuance of Proceedings..............................................................47
Section 4.04 Right of Certificateholders to Receive Payments Not to Be Impaired.........................47
Article V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF TRUSTEES, ETC.
Section 5.01 Notice of Indenture Event of Default or Triggering Event...................................47
Section 5.02 Indemnification............................................................................48
Section 5.03 No Duties Except as Specified in Intercreditor Agreement...................................48
Section 5.04 Notice from the Liquidity Providers and Trustees...........................................48
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Article VI
THE SUBORDINATION AGENT
Section 6.01 Authorization; Acceptance of Trusts and Duties.............................................49
Section 6.02 Absence of Duties..........................................................................49
Section 6.03 No Representations or Warranties as to Documents...........................................49
Section 6.04 No Segregation of Monies; No Interest......................................................49
Section 6.05 Reliance; Agents; Advice of Counsel........................................................50
Section 6.06 Capacity in Which Acting...................................................................50
Section 6.07 Compensation...............................................................................50
Section 6.08 May Become Certificateholder...............................................................50
Section 6.09 Subordination Agent Required; Eligibility..................................................50
Section 6.10 Money to Be Held in Trust..................................................................51
Article VII
SUCCESSOR SUBORDINATION AGENT
Section 7.01 Replacement of Subordination Agent; Appointment of Successor...............................51
Article VIII
SUPPLEMENTS AND AMENDMENTS
Section 8.01 Amendments, Waivers, Etc...................................................................53
Section 8.02 Subordination Agent Protected..............................................................55
Section 8.03 Effect of Supplemental Agreements..........................................................55
Section 8.04 Notice to Rating Agencies..................................................................55
Article IX
MISCELLANEOUS
Section 9.01 Termination of
Intercreditor Agreement.....................................................55
Section 9.02
Intercreditor Agreement for Benefit of Trustees, Liquidity Providers
and Subordination Agent.................................................................55
Section 9.03 Notices....................................................................................56
Section 9.04 Severability...............................................................................56
Section 9.05 No Oral Modifications or Continuing Waivers................................................57
Section 9.06 Successors and Assigns.....................................................................57
Section 9.07 Headings...................................................................................57
Section 9.08 Counterparts...............................................................................57
Section 9.09 Subordination..............................................................................57
Section 9.10 Governing Law..............................................................................58
Section 9.11 Submission to Jurisdiction; Waiver of Jury Trial; Waiver of Immunity.......................59
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INTERCREDITOR AGREEMENT
This
INTERCREDITOR AGREEMENT, dated as of May 24, 2001 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);
BOEING CAPITAL CORPORATION, a Delaware corporation, 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 (i) in
the case of each Aircraft that is owned by American at the time such Indenture
is entered into (the "Owned Aircraft") American will issue on a recourse basis
four (or five, under certain circumstances) series of Equipment Notes secured by
such Aircraft and (ii) in the case of each Aircraft that is leased to American
pursuant to a related Lease at the time the Indenture is entered into (the
"Leased Aircraft"), the related Owner Trustee will issue on a nonrecourse basis
five (or under certain circumstances six) 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 Purchase Agreement, the Initial Purchasers
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 Initial
Purchasers under the Purchase 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, 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) (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
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of the Performing Equipment 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 for all of the
Aircraft, 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, the Class C Certificates and Class D
Certificates 1.0.
"Aircraft" means, with respect to each Indenture, the "Aircraft"
referred to therein.
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"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.
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"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 Xxxxxx Xxxxx & Xxxxx, 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 May 24, 2001, 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, a Class C Certificate or Class D 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.
"Class A-1 Cash Collateral Account" means an Eligible Deposit Account
in the name of the Subordination
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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 Boeing Capital Corporation 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 Boeing Capital Corporation,
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
2001-1A-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. 2001-1A-1 thereto, dated as of the date hereof,
governing the creation and administration of the American Airlines Pass Through
Trust 2001-1A-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).
"Class A-2 Certificateholder" means, at any time, any Certificateholder
of one or more Class A-2 Certificates.
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"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 Boeing Capital Corporation 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 Boeing Capital Corporation,
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
2001-1A-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. 2001-1A-2 thereto, dated as of the date hereof,
governing the creation and administration of the American Airlines Pass Through
Trust 2001-1A-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, 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
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Trustee, and Boeing Capital Corporation, 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 Boeing Capital Corporation, 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 2001-1B
created and administered pursuant to the Class B Trust Agreement.
"Class B Trust Agreement" means the Basic Agreement, as supplemented by
Trust Supplement No. 2001-1B thereto, dated as of the date hereof, governing the
creation and administration of the American Airlines Pass Through Trust 2001-1B
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 Boeing Capital Corporation, 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 C Liquidity Provider" means Boeing Capital Corporation, 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).
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"Class C Trust" means the American Airlines Pass Through Trust 2001-1C
created and administered pursuant to the Class C Trust Agreement.
"Class C Trust Agreement" means the Basic Agreement, as supplemented by
Trust Supplement No. 2001-1C thereto, dated as of the date hereof, governing the
creation and administration of the American Airlines Pass Through Trust 2001-1C
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.
"Class D Trust" means the American Airlines Pass Through Trust 2001-1D
created and administered pursuant to the Class D Trust Agreement.
"Class D Trust Agreement" means the Basic Agreement, as supplemented by
Trust Supplement No. 2001-1D thereto, dated as of the date hereof, governing the
creation and administration of the American Airlines Pass Through Trust 2001-1D
and the issuance of the Class D Certificates, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Class D 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 D Trust Agreement, but solely as trustee under
the Class D Trust Agreement, together with any successor trustee appointed
pursuant thereto.
"Class E Certificateholder" means, at any time, any Certificateholder
of one or more Class E Certificates, if and when issued.
"Class E Certificates" means any Certificates issued by the Class E
Trust, if and when created, representing Fractional Undivided Interests in the
Class E Trust.
"Class E Trust" means the American Airlines Pass Through Trust 2001-1E,
if and when created, administered pursuant to the Basic Agreement and a Trust
Supplement.
"Class E Trustee" means the trustee of the Class E Trust, if and when
created.
"Closing Date" means May 24, 2001.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
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"Collateral" means, with respect to any Indenture, the "Collateral",
"Trust Indenture Estate" or "Indenture Estate" 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.
"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.
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"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
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, the Series C
Equipment Notes and the Series D 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.
11
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 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 Boeing Capital Corporation, 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 X-0
Xxxxxxxxxxxx, Xxxxxxxx 00, 0000, (xx) with respect to the Class A-2
Certificates, November 23, 2012, (iii) with respect to the Class B Certificates,
November 23, 2020, (iv) with respect to the Class C Certificates, November 23,
2017 and (v) with respect to the Class D Certificates, May 23, 2008.
"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 the Owner Trustee or 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).
12
"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.
"Lease" means, with respect to any Indenture relating to a Leased
Aircraft, the "Lease" referred to therein.
"Leased Aircraft" has the meaning assigned to such term in the
preliminary statements of this Agreement.
"Leased Aircraft Indenture" means, with respect to each Leased
Aircraft, the Indenture pertaining to such Aircraft.
"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, the
indemnity provisions 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).
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"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 Lease or
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 Owned Aircraft Indenture pursuant to the provisions of
Section 10.01(b) thereof, the amount of money and U.S. Government Securities
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 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, 41%, (ii) for the
Class A-2 Certificates, 41%, (iii) for the Class B Certificates, 56%, (iv) for
the Class C Certificates, 66% and (v) for the Class D Certificates 68% prior to
May 23, 2011, and thereafter (vi) for the Class A-1 and A-2 Certificates 29%,
(vii) for the Class B Certificates 46% and (viii) for the Class C Certificates
62%.
"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 Xxxxx'x 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.
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"Operative Agreements" means this Agreement, the Liquidity Facilities,
the Fee Letter, the Indentures, the Trust Agreements, the Participation
Agreements, the Leases, 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
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.
"Owned Aircraft" has the meaning assigned to such term in the
preliminary statements of this Agreement.
"Owned Aircraft Indenture" means, with respect to each Owned Aircraft,
the Indenture pertaining to such Aircraft.
15
"Owner Participant" means, with respect to any Indenture pertaining to
a Leased Aircraft, the Owner Participant (as defined therein) and any permitted
successor or assign of such Owner Participant.
"Owner Trustee" means, with respect to any Indenture pertaining to a
Leased Aircraft, the Owner Trustee (as defined therein) not in its individual
capacity but solely as trustee under the related owner trust agreement, together
with any successor trustee appointed pursuant to such owner trust agreement.
"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)(2)(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 Lease related to such Equipment Note
(in the case of a Leased Aircraft) or the Indenture related to such Equipment
Note (in the case of an Owned Aircraft), (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)(2)(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 and (iii) any payment default
occurring after the Section 1110 Period will not be taken into consideration if
such payment default is cured before the end of the grace period, if any, set
forth in the related Lease (in the case of a Leased Aircraft) or Owned Aircraft
Indenture (in the case of an Owned Aircraft).
"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.
"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.
"Placement Agents" means the placement agents listed as such in the
Placement Agreement.
"Placement Agreement" means the Placement Agreement, dated May 18,
2001, among the Placement Agents and American, relating to the purchase of the
Certificates by the
16
Placement Agents, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with its terms.
"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.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of May 18, 2001 among the Placement Agents, American and the Trustees.
"Regular Distribution Dates" means each May 23 and November 23,
commencing on November 23, 2001; 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
17
credit, surety bond, financial insurance policy or guaranty) as shall permit the
Rating Agencies to confirm in 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
18
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.
"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 the related Owner Trustee or 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 the related Owner Trustee or 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 the related Owner Trustee or 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 the related Owner Trustee or 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 Series D Equipment Notes issued
pursuant to each Leased Aircraft Indenture by the related Owner Trustee 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 E Equipment Notes" means the equipment notes, if any, issued
pursuant to any Indenture by the related Owner Trustee or American and
authenticated by the Loan Trustee thereunder, and designated "Series E 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).
19
"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
XxXxxx-Xxxx Companies, Inc.
"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, 6.977% per annum, (ii) with respect to the Class A-2 Certificates,
6.817% per annum, (iii) with respect to the Class B Certificates, 7.377% per
annum, (iv) with respect to the Class C Certificates, 7.379% per annum and (v)
with respect to the Class D Certificates 7.686% per annum plus, in each case, an
additional margin of 0.50% for any period required by the Registration Rights
Agreement for the corresponding Equipment Notes.
"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 Xxxxx'x 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 Xxxxx'x and A-1 in
20
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 Aa3 in the case of Xxxxx'x 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 Xxxxx'x and A in the case of S&P.
"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, the Class C Trust or the Class D 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, the Class C Trust Agreement or
the Class D 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, the Class C Trustee or the Class D Trustee.
"Trustee Incumbency Certificate" has the meaning specified in Section
2.05(b).
"Trustee Representatives" has the meaning specified in Section 2.05(b).
"United States" means the United States of America.
"Withdrawal Notice" has the meaning specified in Section 3.06(d).
21
"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) . (a) Each Trustee hereby acknowledges and agrees to the terms
of subordination and distribution 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 relating to the Owned Aircraft and Section 10 of the Participation
Agreements relating to the Leased Aircraft 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, Owner Trustees, Owner Participants 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, Owner Trustees or Owner
Participants) 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
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
22
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 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
23
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 Owned
Aircraft Indenture or Section 3.04 or clause "first" of Section 3.05 of any
Leased Aircraft 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.
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
24
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;
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
25
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 any Class D 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 D Certificates on such Special
Distribution Date shall be distributed to the Class D Trustee;
ninth, if the Class E Certificates have been issued and any Class E
Certificates are Outstanding on such Special Distribution Date, such amount as
shall be required to pay in full Expected Distributions to holders of Class E
Certificates on such Special Distribution Date shall be distributed to the Class
E Trustee; and
tenth, 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
27
shall be entitled to rely on the last Trustee Incumbency Certificate with
respect to such Trustee delivered to it hereunder.
(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: (v) 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); (w) 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; (x) upon
payment of Final Distributions to the holders of Class A-1 Certificates and
Class A-2 Certificates, the Class B Trustee; (y) upon payment of Final
Distributions to the holders of Class B Certificates, the Class C Trustee and
(z) upon payment of Final Distributions to the holders of Class C Certificates,
the Class D Trustee. For purposes of giving effect to the foregoing, the
Trustees (other than the Controlling Party) irrevocably agree
28
(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.
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) (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
29
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 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 the Class D Certificates, if any are then
Outstanding, the Class D Trustee shall separately set forth the amounts to be
paid in accordance with clause "eighth" of Section 3.02 or 2.04(b) as the case
may be;
(v) 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
(vi) 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
30
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 "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 the Class D Certificates, if any are then
Outstanding, the Class D Trustee shall separately set forth the amounts to be
paid in accordance with clauses "first" (to reimburse payments made by the Class
D Certificateholders pursuant to subclause (iii) of clause "first" of Section
3.03), "sixth" (to reimburse payments made by the Class D Certificateholders
pursuant to subclause (iii) of clause "sixth" of Section 3.03) and "tenth" of
Section 3.03;
(v) 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
(vi) 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
31
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 "tenth" of Section
2.04(b), clauses "first" through "eleventh" of Section 3.02 and clauses "first"
through "twelfth" of Section 3.03 to the 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(a) . 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
32
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;
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 any Class D 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 D Certificates on such Distribution
Date shall be distributed to the Class D Trustee;
ninth, if the Class E Certificates have been issued and any Class E
Certificates are outstanding on such Distribution Date, such amount as shall be
required to pay in full Expected Distributions to holders of Class E
Certificates on such Distribution Date shall be distributed to the Class E
Trustee; and
tenth, 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
33
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
eleventh, 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) 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
34
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 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;
35
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 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;
eleventh, if the Class E Certificates have been issued and any Class E
Certificates are Outstanding on such Distribution Date, such amount remaining as
shall be required to pay in full Adjusted Expected Distributions on the Class E
Certificates shall be distributed to the Class E Trustee; and
twelfth, (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 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; (iv) after giving
effect to clauses (i), (ii) and (iii) if any Class D Certificates are
outstanding on such Distribution Date, such amount remaining or shall be
required to pay Final Distributions on the Class D Certificates shall be
distributed to the Class D Trustee and (v) after giving effect to clauses (i),
(ii), (iii) and (iv) if the Class E Certificates have been issued and any Class
E Certificates are Outstanding on such Distribution Date, such amount remaining
as shall be required to pay Final Distributions on the Class E Certificates
shall be distributed to the Class E Trustee.
Section 3.04 Other Payments(a) . (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
"eleventh" 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.
36
(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 "tenth" 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", "eighth" or "ninth 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.
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
37
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 10 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 Subordination Agent shall, on such 10th (or 45th) day (or if such
10th (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). Whether or not the applicable Liquidity Provider has
received such a request from the Subordination Agent, 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
38
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; provided, further, Boeing Capital Corporation shall not agree to
extend the Stated Expiration Date beyond November 24, 2001 unless it shall have
received the written consent of Xxxxx'x. 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 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
39
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. 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 Non-Extension Drawing so
long as such Non-Extension Drawing has not been reimbursed in full to the
Liquidity Provider.
(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
40
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 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
41
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 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
42
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 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
43
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 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).
44
(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 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
45
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) Subject to the Owner Trustees' and the Owner Participants' rights
set forth in the Indentures with respect to Leased Aircraft to purchase the
Equipment Notes, 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,
(A) 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 and (B) with respect to any
Leased Aircraft, the amount and payment dates of rentals payable by American
under the Lease for such Aircraft may not be adjusted, if, as a result of such
adjustment, the discounted present value of all such rentals would be less than
75% of the discounted present value of the rentals payable by American under
such Lease before giving effect to such adjustment, in each case, using the
weighted average interest rate of the Equipment Notes issued pursuant to such
Indenture as the discount rate.
(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 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 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
46
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.
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,
47
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.
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.
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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 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.
49
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.
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
50
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.
51
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 in consultation with American
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.
52
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
53
or waiver under such Equipment Notes, the Indenture pursuant to which such
Equipment Notes were 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 rent, supplemental rent or
termination values payable by American under any Lease or reduce the amount of
principal or interest payable by American under any Equipment Note issued under
any Indenture in respect of an Owned Aircraft.
(c) If Class E 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 E Certificates to the Class A-1 Certificates,
the Class A-2 Certificates, the Class B Certificates, the Class C Certificates
and the Class D Certificates substantially in the same manner as the Class D
Certificates are subordinated hereunder to the Class A-1 Certificates, the Class
A-2 Certificates, the Class B Certificates and Class C Certificates. No such
amendment shall materially adversely affect any Trustee. The amendment to this
Agreement to give effect to the issuance of any Class E Certificates shall,
without limitation:
(i) add the Class E 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 E 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 E Certificates after payment of all relevant
distributions on the Class D Certificates.
If, with respect to any Aircraft, Series E Equipment Notes are issued to any
Person other than the Class E Trust, this Agreement shall be amended by written
agreement of the indenture trustees of the Series E Equipment Notes, the
Trustees and the Subordination Agent to (i) provide for each holder of a Series
E 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 E 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 E Equipment Notes (and the
prior rights, as
54
against the holders of such Series E Equipment Notes, of the Class A-1 Trustee,
the Class A-2 Trustee, the Class B Trustee, the Class C Trustee and the Class D
Trustee to be such "Controlling Party"). No such amendment shall materially
adversely affect any Trustee.
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
55
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.
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 received (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
000 Xxxxxx Xxxxxx
Xxxxxxx Square
Hartford, Connecticut 06103
Attention: Corporate Trust Division
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
if to any Trustee, to:
State Street Bank and Trust Company of Connecticut,
National Association
000 Xxxxxx Xxxxxx
Xxxxxxx Square
Hartford, Connecticut 06103
Attention: Corporate Trust Division
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
if to any Liquidity Provider, at the address set forth in the respective
Liquidity Facility.
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.
56
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 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 Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx 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
57
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:
(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
58
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) . (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.
(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.
59
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/ Alison Della Bella
------------------------------
Name: Alison Della Bella
Title: Assistant Vice
President
BOEING CAPITAL CORPORATION,
as Class A-1 Liquidity Provider,
Class A-2 Liquidity Provider,
Class B Liquidity Provider and
Class C Liquidity Provider
By: /s/ X.X. Xxxxxxxx, Xx.
------------------------------
Name: X.X. Xxxxxxxx, Xx.
Title: Senior Director
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION,
as Subordination Agent
By: /s/ Alison Della Bella
------------------------------
Name: Alison Della Bella
Title: Assistant Vice
President
60
