EXHIBIT 4.3
EXECUTION COPY
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SPARE PARTS SECURITY AGREEMENT
from
AMERICAN AIRLINES, INC.
to
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Security Agent
Dated as of February 5, 2004
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Spare Parts Security Agreement
Table of Contents
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ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1 Definitions.................................................... 2
Section 1.2 Rules of Construction.......................................... 2
ARTICLE II
SECURITY INTEREST
Section 2.1 Grant of Security Interest..................................... 2
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Organization; Qualification.................................... 6
Section 3.2 Corporate Authorization........................................ 6
Section 3.3 No Violation................................................... 6
Section 3.4 Approvals...................................................... 7
Section 3.5 Valid and Binding Agreements................................... 7
Section 3.6 Registration and Recordation................................... 7
Section 3.7 The Company's Location......................................... 7
Section 3.8 Compliance with Laws........................................... 7
Section 3.9 Broker's Fees.................................................. 8
Section 3.10 Section 1110................................................... 8
Section 3.11 Security Interest.............................................. 8
ARTICLE IV
COVENANTS
Section 4.1 Notice of Change of Location................................... 8
Section 4.2 Use, Possession and Designated Locations....................... 8
Section 4.3 Permitted Sale or Dispositions................................. 10
Section 4.4 Certain Assurances............................................. 10
Section 4.5 Obligations Under Other Operative Documents.................... 11
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ARTICLE V
INSURANCE
Section 5.1 Application of Insurance Proceeds.............................. 11
Section 5.2 Application of Payments During Existence of a Special Default
or Event of Default............................................ 12
ARTICLE VI
REMEDIES
Section 6.1 Remedies....................................................... 12
Section 6.2 Application of Proceeds........................................ 15
Section 6.3 Obligations of Company Not Affected by Remedies................ 15
Section 6.4 Remedies Cumulative............................................ 15
Section 6.5 Discontinuance of Proceedings.................................. 16
Section 6.6 Waiver of Past Defaults........................................ 16
Section 6.7 Security Agent Authorized to Execute Bills of Sale, Etc........ 16
ARTICLE VII
CASH COLLATERAL
Section 7.1 Maintaining the Cash Collateral................................ 17
Section 7.2 Investing of Cash Collateral................................... 17
Section 7.3 Release of Cash Collateral..................................... 18
Section 7.4 Information to the Trustee..................................... 19
ARTICLE VIII
SECURITY AGENT
Section 8.1 Security Agent................................................. 19
Section 8.2 Replacement of Security Agent.................................. 19
Section 8.3 Successor Security Agent by Merger, Etc........................ 20
Section 8.4 Appointment of Additional and Separate Security Agents......... 20
ARTICLE IX
MISCELLANEOUS
Section 9.1 Termination.................................................... 22
Section 9.2 Benefits of Security Agreement Restricted...................... 23
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Section 9.3 Certificates and Opinions of Counsel; Statements to be
Contained Therein; Basis Therefor.............................. 23
Section 9.4 Appraiser's Certificate........................................ 23
Section 9.5 Notices; Waiver................................................ 23
Section 9.6 Amendments, Etc................................................ 24
Section 9.7 No Waiver...................................................... 24
Section 9.8 Conflict with Trust Indenture Act of 1939...................... 25
Section 9.9 Successors and Assigns......................................... 25
Section 9.10 GOVERNING LAW.................................................. 25
Section 9.11 Effect of Headings............................................. 25
Section 9.12 Counterpart Originals.......................................... 25
Section 9.13 Severability................................................... 26
Section 9.14 Survival Provisions............................................ 26
Section 9.15 Bankruptcy..................................................... 26
Section 9.16 No Legal Title to Spare Parts Collateral in Noteholders........ 26
SCHEDULE 1 DESIGNATED LOCATIONS
APPENDIX I DEFINITIONS APPENDIX
EXHIBIT A FORM OF SUPPLEMENTAL SECURITY AGREEMENT (TO ADD DESIGNATED
LOCATIONS)
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SPARE PARTS SECURITY AGREEMENT
SPARE PARTS SECURITY AGREEMENT, dated as of February 5, 2004, by and
between (i) AMERICAN AIRLINES, INC., a Delaware corporation (the "Company"), and
(ii) U.S. BANK TRUST NATIONAL ASSOCIATION, a national banking association, as
agent (the "Security Agent") for U.S. Bank Trust National Association, in its
capacity as trustee (the "Trustee") under the Indenture, dated as of the date
hereof, among the Company, the Trustee and Citibank, N.A., as Class A Liquidity
Provider (the "Class A Liquidity Provider").
RECITALS
WHEREAS, the Company, which is a certificated air carrier under Section
44705 of title 49 of the U.S. Code, the Trustee and the Class A Liquidity
Provider have entered into the Indenture, providing for the issuance of certain
Notes; and
WHEREAS, in order to secure the payment of the principal amount of and
interest on the Notes and all other Obligations of the Company under the
Indenture, the Notes, the Collateral Maintenance Agreement, and the other
Operative Documents, the Company has agreed to grant a security interest in
certain Spare Parts, Appliances and other Collateral, as provided for herein;
and
WHEREAS, Schedule 1 to this Agreement specifically describes the locations
at which such Spare Parts and Appliances covered by the security interest of
this Agreement may be maintained by or on behalf of the Company, and Section
4.2(b) of this Agreement provides for the designation of additional locations
pursuant to Supplemental Security Agreements; and
WHEREAS, the Company and the Security Agent wish to set forth herein their
respective rights, liabilities and obligations with respect to the Spare Parts
Collateral.
NOW, THEREFORE, in consideration of the premises and other benefits to the
Company, the receipt and sufficiency of which are hereby acknowledged, the
Company and the Security Agent agree as follows:
Spare Parts Security Agreement
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1 Definitions. Capitalized terms used above or hereinafter and
not otherwise defined herein shall have the meanings ascribed to such terms in
Section 1 of the Definitions Appendix attached hereto as Appendix I, which shall
be part of this Spare Parts Security Agreement as if fully set forth in this
place. Unless otherwise defined in this Spare Parts Security Agreement or in
Section 1 of the Definitions Appendix, terms defined in Article 8 or 9 of the
UCC as in effect in the State of New York (the "NY UCC") are used in this Spare
Parts Security Agreement as such terms are defined in such Article 8 or 9 of the
NY UCC.
Section 1.2 Rules of Construction. The rules of construction for this
Spare Parts Security Agreement are set forth in Section 2 of the Definitions
Appendix.
ARTICLE II
SECURITY INTEREST
Section 2.1 Grant of Security Interest. To secure the prompt payment of
the principal amount of, interest on, and Make-Whole Amount or other premium, if
any, with respect to, all Notes from time to time Outstanding under the
Indenture according to their tenor and effect, and the prompt payment of all
other amounts from time to time owing by the Company under, and the performance
and observance by the Company of all the agreements, covenants and provisions
contained in, the Indenture, the Notes, this Spare Parts Security Agreement, the
Collateral Maintenance Agreement, and the other Operative Documents
(collectively, the "Obligations"), for the benefit of the Holders and each of
the Indemnitees, and in consideration of the premises and of the covenants
herein contained, and of the acceptance of the Notes by the Holders thereof, and
for other good and valuable consideration the receipt and adequacy whereof are
hereby acknowledged, the Company has granted, bargained, sold, assigned,
transferred, conveyed, mortgaged, pledged and confirmed, and does hereby grant,
bargain, sell, assign, transfer, convey, mortgage, pledge and confirm, unto the
Security Agent, its successors in trust and permitted assigns, for the security
and benefit of, the Holders and each of the Indemnitees, a first priority
security interest in and mortgage lien on all right, title and interest of the
Company in, to and under the following described property, rights and
privileges, whether now owned or hereafter acquired (which, collectively,
together with
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all property hereafter specifically subject to the Lien of this Spare Parts
Security Agreement by the terms hereof or any supplement hereto, are included
within, and are referred to as, the "Spare Parts Collateral"), to wit:
(1) all Rotables first placed in service after October 22, 1994 and
currently owned or hereafter acquired by the Company that are (a)
appropriate for incorporation in, installation on, attachment or
appurtenance to, or use in (i) either the Boeing model 737-800 of Aircraft
or the Boeing model 777-200 of Aircraft, or both such Aircraft models, or
(ii) any Engine, Spare Part or Appliance utilized on any such Aircraft
model, and (b) not appropriate for incorporation in, installation on,
attachment or appurtenance to, or use in, any other model of Aircraft
currently operated by the Company or any Engine, Spare Part or Appliance
utilized on any such other model of Aircraft (such Rotables, collectively,
the "Qualified Non-Expendable Spare Parts"); provided that the following
Qualified Non-Expendable Spare Parts shall be excluded from the Lien of
this Spare Parts Security Agreement: (A) any Qualified Non-Expendable
Spare Part so long as it is incorporated in, installed on, attached or
appurtenant to, or being used in, an Aircraft, Engine, Spare Part or
Appliance; (B) any Qualified Non-Expendable Spare Part that has been
incorporated in, installed on, attached or appurtenant to, or used in an
Aircraft, Engine, Spare Part, or Appliance, for so long after its removal
from such Aircraft, Engine, Spare Part, or Appliance as it remains owned
by a lessor or conditional seller of, or subject to a Lien applicable to,
such Aircraft, Engine, Spare Part, or Appliance; (C) any Qualified
Non-Expendable Spare Part that is an Excluded Part; and (D) any Qualified
Non-Expendable Spare Part leased to, loaned to, or held on consignment by,
the Company (such Qualified Non-Expendable Spare Parts, giving effect to
such exclusions, the "Pledged Non-Expendable Spare Parts");
(2) all Expendables and Life-Limited Parts first placed in service
after October 22, 1994 and currently owned or hereafter acquired by the
Company that are appropriate for incorporation in, installation on,
attachment or appurtenance to, or use in (i) one or more of the following
models of Aircraft: Boeing model 737-800, Boeing model 757-200, Boeing
model 767-200, Boeing model 767-300, Boeing model 777-200 and XxXxxxxxx
Xxxxxxx model MD-80 or (ii) any Engine, Spare Part or Appliance utilized
on any such Aircraft model (such Expendables and Life Limited Parts,
collectively, the "Qualified Expendable Spare Parts", and together with
the Qualified Non-Expendable Spare Parts, the "Qualified Spare Parts");
provided that the following Qualified Expendable Spare Parts shall be
excluded from the Lien of this Spare Parts Security Agreement: (A) any
Qualified Expendable Spare Part so long as it is incorporated in,
installed on, attached or appurtenant to, or being used in, an Aircraft,
Engine, Spare Part, or Appliance; (B) any Qualified Expendable Spare Part
that has been incorporated in, installed on, attached or appurtenant to,
or used in an Aircraft, Engine, Spare
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Part, or Appliance, for so long after its removal from such Aircraft,
Engine, Spare Part, or Appliance as it remains owned by a lessor or
conditional seller of, or subject to a Lien applicable to, such Aircraft,
Engine, Spare Part, or Appliance; (C) any Qualified Expendable Spare Part
that is an Excluded Part; and (D) any Qualified Expendable Spare Part
leased to, loaned to, or held on consignment by, the Company (such
Qualified Expendable Spare Parts, giving effect to such exclusions, the
"Pledged Expendable Spare Parts", and together with the Pledged
Non-Expendable Spare Parts, the "Pledged Spare Parts");
(3) the Warranty Rights;
(4) all proceeds with respect to the sale or other disposition by
the Security Agent of any Pledged Spare Part or other Spare Parts
Collateral pursuant to the terms of this Spare Parts Security Agreement,
and all insurance proceeds with respect to any Pledged Spare Part, but
excluding any insurance maintained by the Company and not required under
the Collateral Maintenance Agreement;
(5) all rents, revenues and other proceeds collected by the Security
Agent pursuant to Section 6.1(c);
(6) all Cash Collateral; all Eligible Accounts; all cash, Investment
Securities and other financial assets held therein by the Security Agent
or an Eligible Institution; and all security entitlements with respect
thereto;
(7) all repair, maintenance and inventory records, logs, manuals and
all other documents and materials similar thereto (including, without
limitation, any such records, logs, manuals, documents and materials that
are computer print-outs) at any time maintained, created or used by the
Company, and all records, logs, documents and other materials required at
any time to be maintained by the Company under the Federal Aviation Act or
by the FAA, in each case only to the extent that the same relate to any of
the Pledged Spare Parts (the "Spare Parts Documents"); and
(8) all proceeds of the foregoing;
provided, however, that notwithstanding any of the foregoing provisions, so long
as no Event of Default shall have occurred and be continuing, (a) the Security
Agent shall not take or cause to be taken any action contrary to the Company's
right hereunder to quiet enjoyment of the Spare Parts Collateral, to possess,
use, retain and control the Spare Parts Collateral and to all revenues, income
and profits derived therefrom, and (b) the Company shall have the right, to the
exclusion of the Security Agent, with respect to the Warranty Rights, to
exercise in the Company's name all rights and powers (other than to amend,
modify or waive any of the warranties or indemnities contained therein, except
in
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the ordinary course in the exercise of the Company's reasonable business
judgment) and to retain any recovery or benefit resulting from the enforcement
of any such Warranty Right; and provided further that, notwithstanding the
occurrence or continuation of an Event of Default, the Security Agent shall not
enter into any amendment or modification of any such Warranty Right that would
increase the obligations or limit any rights or benefits of the Company
thereunder.
TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Security Agent, and its successors and permitted assigns, in trust for the equal
and proportionate benefit and security of the Holders and the Indemnitees,
except as provided in Section 3.2 of the Indenture, without any preference,
distinction or priority of any one Note over any other by reason of priority of
time of issue, sale, negotiation, date of maturity thereof or otherwise for any
reason whatsoever, and for the uses and purposes and in all cases and as to all
property specified in clauses (1) through (8) inclusive above, subject to the
terms and provisions set forth in this Spare Parts Security Agreement.
The Company does hereby constitute the Security Agent the true and lawful
attorney of the Company, irrevocably, granted for good and valuable
consideration and coupled with an interest and with full power of substitution,
and with full power (in the name of the Company or otherwise) to ask for,
require, demand, receive, compound and give acquittance for any and all monies
and claims for monies (in each case including insurance and requisition
proceeds) due and to become due under or arising out of all property which now
or hereafter constitutes part of the Spare Parts Collateral, to endorse any
checks or other instruments or orders in connection therewith and to file any
claims or to take any action or to institute any proceedings which the Security
Agent may deem to be necessary or advisable in the premises; provided that the
Security Agent shall not exercise any such rights except upon the occurrence and
during the continuance of an Event of Default hereunder.
The Company agrees that at any time and from time to time, upon the
written request of the Security Agent, the Company will promptly and duly
execute and deliver or cause to be duly executed and delivered any and all such
further instruments and documents (including without limitation UCC continuation
statements) as the Security Agent may reasonably deem necessary to perfect,
preserve or protect the mortgage, security interests and assignments created or
intended to be created hereby or to obtain for the Security Agent the full
benefits of the security interest granted hereunder and of the rights and powers
herein granted; provided that any instrument or other document so executed by
the Company will not increase any obligations or limit any rights or benefits of
the Company in respect of the transactions contemplated by the Operative
Documents or the Support Documents.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants, as of the date hereof, to the
Trustee, the Class A Liquidity Provider and the Security Agent as follows:
Section 3.1 Organization; Qualification. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware and has the corporate power and authority to conduct the business in
which it is currently engaged and to own or hold under lease its properties and
to enter into and perform its obligations under the Operative Documents to which
it is party. The Company is duly qualified to do business as a foreign
corporation in good standing in each jurisdiction in which the nature and extent
of the business conducted by it, or the ownership of its properties, requires
such qualification, except where the failure to be so qualified would not have a
material adverse effect on the consolidated financial condition of the Company
and its subsidiaries, considered as a whole or its ability to observe or perform
its obligations and agreements under the Operative Documents.
Section 3.2 Corporate Authorization. The Company has taken, or caused to
be taken, all necessary corporate action (including, without limitation, the
obtaining of any consent or approval of stockholders required by its Certificate
of Incorporation or By-Laws) to authorize the execution and delivery of each of
the Operative Documents to which it is party, and the performance of its
obligations thereunder.
Section 3.3 No Violation. The execution and delivery by the Company of the
Operative Documents to which it is party, the performance by the Company of its
obligations thereunder and the consummation by the Company on the Closing Date
of the transactions contemplated thereby, do not and will not (a) violate any
provision of the Certificate of Incorporation or By-Laws of the Company, (b)
violate any law applicable to or binding on the Company or (c) violate or
constitute any default under (other than any violation or default that would not
have a material adverse effect on the consolidated financial condition of the
Company and its subsidiaries, considered as a whole or its ability to observe or
perform its obligations and agreements under the Operative Documents), or result
in the creation of any Lien (other than a Permitted Lien) upon the Pledged Spare
Parts under, any material indenture, mortgage, chattel mortgage, deed of trust,
conditional sales contract, lease, loan or other material agreement, instrument
or document to which the Company is a party or by which the Company or any of
its properties is bound.
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Section 3.4 Approvals. The execution and delivery by the Company of the
Operative Documents to which the Company is a party, the performance by the
Company of its obligations thereunder and the consummation by the Company on the
Closing Date of the transactions contemplated thereby do not and will not
require the consent or approval of, or the giving of notice to, or the
registration with, or the recording or filing of any documents with, or the
taking of any other action in respect of, (a) any trustee or other holder of any
debt of the Company and (b) any Government Entity, other than (i) the filing of
the FAA Filed Documents (with the FAA) and the Financing Statements in respect
of the Spare Parts Collateral (and continuation statements relating thereto at
periodic intervals), (ii) filings, recordings, notices or other ministerial
actions pursuant to any routine recording, contractual or regulatory
requirements applicable to it, and (iii) consents, approvals, notices,
registrations, recordings, filings, or other actions, which, if not obtained,
given, made or taken, as the case may be, would not have a material adverse
effect on the consolidated financial condition of the Company and its
subsidiaries, considered as a whole or its ability to observe or perform its
obligations and agreements under the Operative Documents.
Section 3.5 Valid and Binding Agreements. The Operative Documents to which
the Company is a party have been duly authorized, executed and delivered by the
Company and, assuming the due authorization, execution and delivery thereof by
the other party or parties thereto, constitute the legal, valid and binding
obligations of the Company and are enforceable against the Company in accordance
with the respective terms thereof, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, receivership, moratorium or other
similar laws affecting the rights of creditors generally and by general
principles of equity, whether considered in a proceeding at law or in equity.
Section 3.6 Registration and Recordation. Except for (a) the filing for
recordation (and recordation) of the FAA Filed Documents with the FAA, and (b)
the filing of the Financing Statements in respect of the Spare Parts Collateral
(and continuation statements relating thereto at periodic intervals), no further
action, including any filing or recording of any document (including any
financing statement in respect thereof under Article 9 of the UCC), is necessary
in order to establish and perfect the Security Agent's security interest created
herein with respect to the Pledged Spare Parts, the Warranty Rights, and the
Spare Parts Documents as against the Company and any other Person, in each case,
in any applicable jurisdictions in the United States.
Section 3.7 The Company's Location. The Company's location (as such term
is used in Section 9-307 of the UCC) is Delaware. The full and correct legal
name and mailing address of the Company are correctly set forth in Section 9.5
hereof.
Section 3.8 Compliance with Laws. (a) The Company is a Citizen of the
United States and a U.S. Air Carrier.
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(b) The Company holds all licenses, permits and franchises from the
appropriate Government Entities necessary to authorize the Company to lawfully
engage in air transportation and to carry on scheduled commercial passenger
service as currently conducted, except where the failure to so hold any such
license, permit or franchise would not have a material adverse effect on the
consolidated financial condition of the Company and its subsidiaries, considered
as a whole or its ability to observe or perform its obligations and agreements
under the Operative Documents.
(c) The Company is not an "investment company" or a company controlled by
an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
Section 3.9 Broker's Fees. No Person acting on behalf of the Company is or
will be entitled to any broker's fee, commission or finder's fee in connection
with the transactions pursuant to the Operative Documents on the Closing Date,
other than the fees and expenses payable by the Company in connection with the
sale of the Class A Notes.
Section 3.10 Section 1110. The Security Agent, as agent for the Trustee,
is entitled to the benefits of Section 1110 with respect to the Pledged Spare
Parts subject to the Lien hereof. The Pledged Spare Parts constitute "spare
parts" or "appliances" within the meaning of Section 40102 of Title 49 of the
United States Code.
Section 3.11 Security Interest. This Spare Parts Security Agreement
creates in favor of the Security Agent, for the benefit of the Holders and the
Indemnitees, a valid and perfected Lien on the Spare Parts Collateral purported
to be covered hereby, subject to no equal or prior Lien, except Permitted Liens.
There are no Liens of record with the FAA on the Spare Parts Collateral that are
equal or prior to the Lien of the this Spare Parts Security Agreement.
ARTICLE IV
COVENANTS
Section 4.1 Notice of Change of Location. The Company will give the
Security Agent timely written notice (but in any event within 30 days prior to
the expiration of the period of time specified under applicable law to prevent
lapse of perfection) of any change in its location (as such term is used in
Section 9-307 of the UCC) or legal name and will promptly take any action
required by Section 4.4(c) hereof as a result of such relocation.
Section 4.2 Use, Possession and Designated Locations. (a) Subject to
Article III of the Collateral Maintenance Agreement, the Company shall have the
right, at any time
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and from time to time at its own cost and expense, without any release from or
consent by the Security Agent, to deal with the Pledged Spare Parts in any
manner consistent with the Company's ordinary course of business, including
without limitation any of the following:
(i) to incorporate in, install on, attach or make appurtenant to, or
use in, any Aircraft, Engine, Spare Part, or Appliance, in each case
leased to or owned by the Company (whether or not subject to any Lien),
any Pledged Spare Part, free from the Lien of this Spare Parts Security
Agreement;
(ii) to dismantle any Pledged Spare Part that has become worn out,
unfit for use, not reasonably or economically repairable, or obsolete
(operationally, economically or otherwise), and to sell or dispose of any
such Pledged Spare Part or any salvage resulting from such dismantling of
a Pledged Spare Part, free from the Lien of this Spare Parts Security
Agreement; and
(iii) to transfer any or all of the Pledged Spare Parts located at
one or more Designated Locations to one or more other Designated Locations
or to one or more locations which are not Designated Locations.
(b) The Company shall keep the Pledged Spare Parts at one or more of the
Designated Locations, except as otherwise permitted under Section 4.2(a) or 4.3
of this Spare Parts Security Agreement or under the Collateral Maintenance
Agreement. If and whenever the Company shall wish, or shall be required pursuant
to Section 3.9 of the Collateral Maintenance Agreement, to add a location as a
Designated Location, the Company will furnish to the Security Agent (with a copy
to each Rating Agency and the Class A Liquidity Provider) the following:
(i) a Supplemental Security Agreement duly executed by the Company,
identifying each location that is to become a Designated Location for
purposes of this Spare Parts Security Agreement;
(ii) an Opinion of Counsel, dated the date of execution of said
Supplemental Security Agreement, stating that said Supplemental Security
Agreement has been duly filed for recording in accordance with the
provisions of the Federal Aviation Act, and either: (a) no other filing or
recording is required in any other place within the United States in order
to perfect the Lien of this Spare Parts Security Agreement on the Pledged
Spare Parts held at the Designated Locations specified in such
Supplemental Security Agreement under the laws of the United States, or
(b) if any such other filing or recording shall be required, that said
filing or recording has been accomplished in such other manner and places,
which shall be specified in such Opinion of Counsel, as are necessary to
perfect the Lien of this Spare Parts Security Agreement; and
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(iii) an Officers' Certificate stating that in the opinion of the
Officers executing the Officers' Certificate, all conditions precedent
provided for in this Spare Parts Security Agreement relating to the
subjection of such property to the Lien of this Spare Parts Security
Agreement have been complied with.
(c) The Company's right to rely upon Section 4.2(a) hereof will be
conditioned upon (i) the Company delivering the Nonappraisal Compliance Reports
to the Security Agent containing the certification described in Section 3 of the
form of Nonappraisal Compliance Report attached as Appendix III to the
Collateral Maintenance Agreement and (ii) the continued attachment of the Lien
of this Spare Parts Security Agreement to newly acquired Pledged Spare Parts and
Pledged Spare Parts that have been removed from the Company's Aircraft, Engines,
and other Spare Parts and Appliances.
Section 4.3 Permitted Sale or Dispositions. (a) So long as no Event of
Default has occurred and is continuing, the Company may sell, transfer or
dispose of Pledged Spare Parts free from the Lien of the Spare Parts Security
Agreement, subject to the provisions of the Collateral Maintenance Agreement.
(b) No purchaser in good faith of property purporting to be transferred
pursuant to Section 4.2(a)(ii) or 4.3(a) hereof shall be bound to ascertain or
inquire into the authority of the Company to make any such transfer, free and
clear of the Lien of this Spare Parts Security Agreement. Any instrument of
transfer executed by the Company under Section 4.2(a)(ii) or 4.3(a) hereof shall
be sufficient for the purposes of this Spare Parts Security Agreement and shall
constitute a good and valid release, assignment and transfer of the property
therein described free from any right, title or interest of the Security Agent
and the Lien of this Spare Parts Security Agreement.
Section 4.4 Certain Assurances. (a) The Company shall duly execute,
acknowledge and deliver, or shall cause to be executed, acknowledged and
delivered, all such further agreements, instruments, certificates or documents,
and shall do and cause to be done such further acts and things, in any case, as
Security Agent shall reasonably request in writing for accomplishing the
purposes of this Spare Parts Security Agreement, provided that any instrument or
other document so executed by the Company will not increase any obligations or
limit any rights or benefits of the Company in respect of the transactions
contemplated by any Operative Document.
(b) The Company shall promptly take such action with respect to the
recording, filing, re-recording and refiling of this Spare Parts Security
Agreement and any amendments or supplements thereto, as shall be necessary to
continue the perfection and priority of the Lien created by this Spare Parts
Security Agreement.
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10
(c) The Company, at its sole cost and expense, will cause the FAA Filed
Documents, the Financing Statements in respect of the Spare Parts Collateral and
all continuation statements (and any amendments necessitated by any
consolidation or merger of the Company, any conveyance or transfer of all or
substantially all of the assets of the Company, or any change of the Company's
location) in respect of the Financing Statements in respect of the Spare Parts
Collateral to be prepared and, subject only to the execution and delivery
thereof by Security Agent, duly and timely filed and recorded, or filed for
recordation, to the extent permitted under the Federal Aviation Act (with
respect to the FAA Filed Documents) or the UCC or similar law of any other
applicable jurisdiction (with respect to such other documents).
Section 4.5 Obligations Under Other Operative Documents. The Company
agrees to perform and observe all of the agreements, covenants and obligations
of the Company set forth in the Indenture, the Notes, the Collateral Maintenance
Agreement, and the other Operative Documents and confirms that the Indenture,
the Notes, the Collateral Maintenance Agreement, this Spare Parts Security
Agreement, and the other Operative Documents constitute the collective agreement
of the Company with respect to the subject matter hereof (it being understood
that nothing in this Section 4.5 shall restrict the ability to amend or
supplement, or waive compliance with, any Operative Document in accordance with
its terms).
ARTICLE V
INSURANCE
Section 5.1 Application of Insurance Proceeds. (a) As between the Company
and the Security Agent, all insurance proceeds up to the Debt Balance paid under
policies required to be maintained by the Company pursuant to paragraph (b) of
Appendix IV to the Collateral Maintenance Agreement as a result of the
occurrence of an Event of Loss with respect to any Pledged Spare Parts involving
proceeds in excess of the Threshold Amount will be paid to the Security Agent.
All losses or damages with respect to any Pledged Spare Parts shall be adjusted
by the Company and its insurers. If either the Security Agent or the Company
receives a payment of such insurance proceeds in excess of its entitlement
pursuant to this Section 5.1, it shall promptly pay such excess to the other. At
any time or from time to time after the receipt by the Security Agent of
insurance proceeds, upon submission to the Security Agent of an Officers'
Certificate stating that the Company has after the occurrence of such Event of
Loss purchased additional Qualified Spare Parts that are located at a Designated
Location, and stating the aggregate purchase price for such additional Qualified
Spare Parts, the Security Agent shall pay the amount of such purchase price, up
to the amount of such insurance proceeds not previously disbursed pursuant to
this sentence or otherwise distributed under the Indenture in accordance with
its terms, to the Company or its designee. Any insurance
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11
proceeds described in this Article V that are being held by the Security Agent
shall be invested pursuant to Article VII hereof.
(b) All proceeds of insurance required to be maintained by the Company in
accordance with the Collateral Maintenance Agreement in respect of any property
damage or loss involving proceeds of the Threshold Amount or less or not
constituting an Event of Loss with respect to any Pledged Spare Parts and
insurance proceeds in excess of the Debt Balance shall be paid over to, and
retained by, the Company.
Section 5.2 Application of Payments During Existence of a Special Default
or Event of Default. Any amount described in this Article V that is payable or
creditable to, or retainable by, the Company shall not be paid or credited to,
or retained by, the Company if at the time such payment, credit or retention
would otherwise occur a Special Default or Event of Default shall have occurred
and be continuing, but shall instead be held by or paid over to the Security
Agent as security for the obligations of the Company under this Spare Parts
Security Agreement and shall be invested pursuant to Article VII hereof. At such
time as there shall not be continuing any Special Default or Event of Default,
such amount and any gains thereon shall be paid to the Company to the extent not
previously applied in accordance with this Spare Parts Security Agreement or the
Indenture, as applicable; provided that if any such amount has been so held by
the Security Agent as security for more than 180 days after any such Special
Default or Event of Default has occurred, during which period (i) the Security
Agent shall not have been limited by operation of law or otherwise from
exercising remedies under this Spare Parts Security Agreement and (ii) the
Security Agent shall not have exercised any remedy available to it under Section
6.1 hereof, then such amount shall be paid to the Company.
ARTICLE VI
REMEDIES
Section 6.1 Remedies. (a) If an Event of Default shall have occurred and
be continuing and so long as the same shall continue unremedied and the Notes
shall have been Accelerated or are otherwise due and payable, then and in every
such case the Security Agent may exercise any or all of the rights and powers
and pursue any and all of the remedies pursuant to this Article VI, and shall
have and may exercise all of the rights and remedies of a secured party under
Article 9 of the UCC, and in furtherance thereof may take possession of all or
any part of the Spare Parts Collateral covered or intended to be covered by the
Lien created hereby or pursuant hereto, may exclude the Company and all persons
claiming under it wholly or partly therefrom and may sell, lease, or otherwise
dispose of the Spare Parts Collateral as a whole or from time to time in part;
provided, that the Security Agent shall give the Company 30 days' prior written
notice of its intention to sell, lease, or otherwise dispose of any Spare Parts
Collateral. Without limiting any of the foregoing, it is understood and agreed
that the Security Agent may
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12
exercise any right of sale, lease or other disposition of any Spare Parts
Collateral available to it, even though it shall not have taken possession of
such Spare Parts Collateral and shall not have possession thereof at the time of
such sale, lease or disposition.
(b) If an Event of Default shall have occurred and be continuing and the
Notes shall have been Accelerated or are otherwise due and payable, at the
request of the Security Agent, the Company shall assemble the Spare Parts
Collateral and make it available to the Security Agent at the Designated
Locations and shall promptly execute and deliver to the Security Agent such
instruments of title and other documents as the Security Agent may deem
necessary or advisable to enable the Security Agent or an agent or
representative designated by the Security Agent, at such time or times and place
or places as the Security Agent may specify, to obtain possession of all or any
part of the Spare Parts Collateral to which the Security Agent shall at the time
be entitled hereunder. If the Company shall for any reason fail to execute and
deliver such instruments and documents after such request by the Security Agent,
the Security Agent may, to the extent permitted by applicable law, (i) seek to
obtain a judgment conferring on the Security Agent the right to immediate
possession and requiring the Company to execute and deliver such instruments and
documents to the Security Agent, to the entry of which judgment the Company
hereby specifically consents to the fullest extent permitted by law, or (ii)
pursue all or part of such Spare Parts Collateral wherever it may be found and
may enter any of the premises of the Company wherever such Spare Parts
Collateral may be or are supposed to be and search for such Spare Parts
Collateral and take possession of and remove such Spare Parts Collateral. All
expenses of obtaining such judgment or of pursuing, searching for and taking
such property shall, until paid, be secured by the Lien of this Security
Agreement.
(c) Upon every such taking of possession, the Security Agent may, from
time to time, at the expense of the Spare Parts Collateral, make all such
expenditures for maintenance, use, operation, storage, insurance, leasing,
control, management, disposition, modifications or alterations to and of the
Spare Parts Collateral, as it may deem proper. In each such case, the Security
Agent shall have the right to maintain, use, operate, store, insure, lease,
control, manage, dispose of, modify or alter the Spare Parts Collateral and to
exercise all rights and powers of the Company relating to the Spare Parts
Collateral, as the Security Agent shall deem best, including the right to enter
into any and all such agreements with respect to the maintenance, use,
operation, storage, insurance, leasing, control, management, disposition,
modification or alteration of the Spare Parts Collateral or any part thereof as
the Security Agent may determine, and the Security Agent shall be entitled to
collect and receive directly all rents, revenues and other proceeds of the Spare
Parts Collateral and every part thereof, without prejudice, however, to the
right of the Security Agent under any provision of this Spare Parts Security
Agreement to collect and receive all cash held by, or required to be deposited
with, the Security Agent hereunder. Such rents, revenues and other proceeds
shall be
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13
applied, subject to Section 6.2 hereof, to pay the expenses of the maintenance,
use, operation, storage, insurance, leasing, control, management, disposition,
modification or alteration of the Spare Parts Collateral and of conducting the
business thereof, and to make all payments which the Security Agent may be
required or may elect to make, if any, for taxes, assessments, insurance or
other proper charges upon the Spare Parts Collateral or any part thereof
(including the employment of engineers and accountants to examine, inspect and
make reports upon the Pledged Spare Parts and Spare Parts Documents), and all
other payments which the Security Agent may be required or expressly authorized
to make under any provision of this Spare Parts Security Agreement, as well as
just and reasonable compensation for the services of the Security Agent, and of
all persons properly engaged and employed by the Security Agent with respect
hereto. The Company shall be liable for all legal fees and other costs and
expenses incurred by the Security Agent in connection with any Event of Default
or the exercise of remedies hereunder with respect thereto, including all costs
and expenses incurred in connection with the repossession of all or any part of
the Spare Parts Collateral in accordance with the terms hereof or under
applicable law, which amounts shall, until paid, be secured by the Lien of this
Spare Parts Security Agreement.
(d) Each of the Holders shall be entitled, at any sale pursuant to this
Section 6.1, to credit against any purchase price bid at such sale by such
Holder all or any part of the unpaid obligations owing to such Holder under the
Operative Documents and secured by the Lien of this Spare Parts Security
Agreement (but only to the extent that such purchase price would have been paid
to such Holder pursuant to Section 3.2 of the Indenture if such purchase price
were paid in cash and the foregoing provisions of this subsection (d) were not
given effect).
(e) In the event of any sale of the Spare Parts Collateral, or any part
thereof, pursuant to any judgment or decree of any court or otherwise in
connection with the enforcement of any of the terms of this Spare Parts Security
Agreement, the aggregate unpaid principal amount of all Notes then outstanding,
together with accrued but unpaid interest thereon, and other amounts due
thereunder (but, for the avoidance of doubt, without any Make-Whole Amount or
other premium), shall immediately become due and payable without presentment,
demand, protest or notice, all of which are hereby waived.
(f) Except as set forth in Section 9.6(b), as provided in Section 3.9(a)
of the Indenture, if no Event of Default has occurred and is continuing, in
taking, or refraining from taking, any action under this Security Agreement, the
Security Agent, as agent for the Trustee, shall be directed by the Trustee, and
after the occurrence and during the continuation of an Event of Default, in
taking, or refraining from taking, any action under this Security Agreement
pursuant to the exercise of remedies under this Article VI, the Security Agent
shall be directed by the Controlling Party.
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14
(g) After the occurrence and during the continuation of an Event of
Default, and if the Notes shall have been Accelerated or are otherwise due or
payable, the Company agrees to provide to the Security Agent all necessary
access to the Spare Parts Collateral in order to permit the Security Agent or
its authorized representatives to inspect the Spare Parts Collateral.
Section 6.2 Application of Proceeds. If, in the case of the happening of
any Event of Default or Acceleration, the Security Agent shall exercise any of
the powers conferred upon it by Section 6.1 hereof, all payments made by the
Company to the Security Agent hereunder after such Event of Default or
Acceleration, and the proceeds of any judgment collected by the Security Agent
hereunder, and the proceeds of every sale, lease or other disposition by the
Security Agent hereunder of any part or the whole of the Spare Parts Collateral,
together with any other monies which may then be held by the Security Agent
under any of the provisions hereof, shall be applied by the Security Agent in
the manner set forth in Section 7.11 of the Indenture.
After all such payments shall have been made in full, the Lien of this
Spare Parts Security Agreement with respect to any part or the whole of the
Spare Parts Collateral remaining unsold and abandoned by the Security Agent
shall be released. If after applying all such sums of money realized by the
Security Agent as aforesaid there shall remain any due and unpaid Obligations
owing by the Company, the Company agrees to pay the amount of such deficit to
the Security Agent for application in accordance with the Indenture.
Section 6.3 Obligations of Company Not Affected by Remedies. No retaking
of possession of part or the whole of the Spare Parts Collateral by the Security
Agent, nor any withdrawal, lease or sale thereof, nor any action or failure or
omission to act against the Company or in respect of the Spare Parts Collateral,
on the part of the Security Agent, the Controlling Party or the Holder of any
Notes, nor any delay or indulgence granted to the Company by the Security Agent,
the Controlling Party or any such Holder, shall affect the obligations of the
Company hereunder, except that the Company shall not be required to comply with
its obligations hereunder with respect to any Spare Parts Collateral to the
extent that the possession of such Spare Parts Collateral has been retaken by
the Security Agent, or such Spare Parts Collateral has been withdrawn, leased or
sold by the Security Agent.
Section 6.4 Remedies Cumulative. No right, power or remedy herein
conferred upon or reserved to the Security Agent is intended to be exclusive of
any other right, power or remedy conferred upon or reserved to any one or more
of them and every right, power and remedy shall, to the extent permitted by law,
be cumulative and in addition to every other right, power and remedy given
hereunder or under the Indenture or the other Operative Documents or now or
hereafter existing at law or in equity or otherwise
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15
(including, without limitation, under the UCC as in effect in any applicable
jurisdiction) and, to the extent permitted by applicable law, may be exercised
from time to time and as often and in such order as may be deemed expedient by
the Security Agent, to the extent such right, power or remedy has been conferred
upon or reserved to it. To the extent permitted by applicable law, the exercise
by the Security Agent of any right, power or remedy shall not be construed as a
waiver of the right of the Security Agent to exercise at the same time or
thereafter any other right, power or remedy, nor as an election precluding
exercise at the same time or thereafter of any alternative right, power or
remedy.
Section 6.5 Discontinuance of Proceedings. In case the Security Agent
shall have instituted any proceeding to enforce any right, power or remedy under
this Spare Parts Security Agreement by foreclosure, entry of judgment or
otherwise, and such proceedings shall have been discontinued or abandoned for
any reason or shall have been determined adversely to the Security Agent, then
and in every such case the Company and the Security Agent shall, subject to any
determination in such proceedings, be restored to their former positions and
rights hereunder with respect to the Spare Parts Collateral, and all rights,
remedies and powers of the Company or the Security Agent, as the case may be,
shall continue as if no such proceedings had been instituted.
Section 6.6 Waiver of Past Defaults. So long as an Event of Default has
occurred and is continuing, upon written instruction from the Controlling Party,
the Security Agent shall waive any past Default hereunder and its consequences
and upon any such waiver such Default shall cease to exist and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Spare Parts Security Agreement, the other Operative Documents, and the
Support Documents, but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
Section 6.7 Security Agent Authorized to Execute Bills of Sale, Etc. To
the extent permitted by applicable law, the Company irrevocably appoints, while
an Event of Default has occurred and is continuing, the Security Agent the true
and lawful attorney-in-fact of the Company (which appointment is coupled with an
interest) in its name and stead and on its behalf, for the purpose of
effectuating any sale, assignment, transfer or delivery for the enforcement of
the Lien of this Spare Parts Security Agreement, whether pursuant to foreclosure
or power of sale, assignments and other instruments as may be necessary or
appropriate, with full power of substitution, the Company hereby ratifying and
confirming all that such attorney or any substitute shall do by virtue hereof in
accordance with applicable law. Nevertheless, if so requested by the Security
Agent or any purchaser, the Company shall ratify and confirm any such sale,
assignment, transfer or delivery, by executing and delivering to the Security
Agent or such purchaser all bills of sale, assignments, releases and other
proper instruments to effect such ratification and confirmation as may be
reasonably designated in any such request.
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ARTICLE VII
CASH COLLATERAL
Section 7.1 Maintaining the Cash Collateral. So long as any Obligation of
the Company under the Indenture or other Operative Document shall remain unpaid,
the Company will maintain all Cash Collateral only with one or more Eligible
Institutions in one or more Eligible Accounts (as defined below) other than the
Collection Account or any Liquidity Facility Cash Collateral Account.
Section 7.2 Investing of Cash Collateral. (a) The Security Agent agrees
that, notwithstanding anything to the contrary in this Spare Parts Security
Agreement or the Indenture, (i) any Investment Securities and any investment
earnings thereon shall be credited to an Eligible Account for which either the
Security Agent or another Eligible Institution is the "securities intermediary"
(as defined in Section 8-102(a)(14) of the NY UCC) and the Security Agent is the
"entitlement holder" (as defined in Section 8-102(a)(7) of the NY UCC) of the
"securities entitlement" (as defined in Section 8-102(a)(17) of the NY UCC) with
respect to each "financial asset" (as defined in Section 8-102(a)(9) of the NY
UCC) credited to such Eligible Account, (ii) all such amounts, Investment
Securities and all other property acquired with cash credited to such Eligible
Account will be credited to such Eligible Account, (iii) all items of property
(whether cash, investment property, Investment Securities, other investments,
securities, instruments or other property) credited to any Eligible Account will
be treated as a "financial asset" under Article 8 of the NY UCC, (iv) the
"securities intermediary's jurisdiction" (as defined in Section 8-110(e) of the
NY UCC) with respect to such Eligible Account is the State of New York, and (v)
all securities, instruments and other property in order or registered form and
credited to an Eligible Account shall be payable to or to the order of, or
registered in the name of, the applicable securities intermediary or shall be
indorsed to such securities intermediary or in blank, and in no case whatsoever
shall any financial asset credited to such Eligible Account be registered in the
name of the Company, payable to or to the order of the Company or specially
indorsed to the Company except to the extent the foregoing have been specially
endorsed by the Company to such securities intermediary or in blank. The
Security Agent agrees that it will hold (and will indicate clearly in its books
and records that it holds) its "securities entitlement" to the "financial
assets" credited to any Eligible Account in trust for the benefit of the
Holders, the Indemnitees and the Trustee. The Company acknowledges that, by
reason of the Security Agent being the "entitlement holder" in respect of such
Eligible Account as provided above, the Security Agent shall have the sole right
and discretion, subject only to the terms of this Security Agreement and the
Indenture, to give all "entitlement orders" (as defined in Section 8-102(a)(8)
of the NY UCC) with respect to such Eligible Account and any and all financial
assets and other property credited thereto to the exclusion of the Company.
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17
(b) From time to time the Security Agent will (a) invest, or direct the
applicable Eligible Institution to invest, amounts received with respect to the
applicable Cash Collateral in such Investment Securities as the Company may
select and (b) invest or direct the applicable Eligible Institution to invest
interest paid on the Investment Securities referred to in clause (a) above, and
reinvest other proceeds of any such Investment Securities that may mature or be
sold, in each case in such Investment Securities credited in the same manner.
Interest and proceeds that are not invested or reinvested in Investment
Securities as provided above shall be deposited and held as Spare Parts
Collateral in the applicable Eligible Account.
(c) The Security Agent may sell or direct any Eligible Institution to sell
any Investment Securities as the Company may direct and the proceeds of such a
sale may be retained by the Security Agent as Spare Parts Collateral hereunder.
Section 7.3 Release of Cash Collateral. (a) Upon written request by the
Company to the Security Agent after notice of redemption of the most senior
Class of Notes then Outstanding has been given to Holders pursuant to Article IV
of the Indenture, the Security Agent shall deliver to the Trustee for deposit in
the Collection Account Cash Collateral then held by the Security Agent up to the
amount required to pay amounts due with respect to the Notes to be redeemed on
the applicable Redemption Date; provided that as a condition of such delivery of
Cash Collateral, each of the Class A Collateral Ratio and Class B Collateral
Ratio (in each case recalculated after giving effect to such redemption and
application of Cash Collateral and, if applicable, other actions by the Company
pursuant to Section 3.1(a) of the Collateral Maintenance Agreement, but
otherwise using the information used to determine the Class A Collateral Ratio
and the Class B Collateral Ratio set forth in the most recently delivered
Appraisal Compliance Report) shall be less than or equal to the Maximum Class A
Collateral Ratio or Maximum Class B Collateral Ratio, as applicable.
(b) If any Appraisal Compliance Report demonstrates that the Class A
Collateral Ratio is less than the Maximum Class A Collateral Ratio and the Class
B Collateral Ratio is less than the Maximum Class B Collateral Ratio, and the
Security Agent holds any Cash Collateral, upon written request of the Company
received by the Security Agent on or within five Business Days after the receipt
by it of such Appraisal Compliance Report and provided that at such time no
Event of Default shall have occurred and be continuing, the Security Agent shall
pay to the Company an amount of the Cash Collateral such that the Class A
Collateral Ratio would not be greater than the Maximum Class A Collateral Ratio
and the Class B Collateral Ratio would not be greater than the Maximum Class B
Collateral Ratio after giving effect to such payment (but otherwise using the
information set forth in such Appraisal Compliance Report).
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Section 7.4 Information to the Trustee. Upon request from the Trustee, the
Security Agent shall provide the Trustee with such information concerning the
Cash Collateral as the Trustee may request.
ARTICLE VIII
SECURITY AGENT
Section 8.1 Security Agent. USBT has been appointed pursuant to the
Indenture as the Security Agent for the Trustee with respect to this Spare Parts
Security Agreement. The Security Agent shall be obligated, and shall have the
right, hereunder to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking action (including,
without limitation, the release of Spare Parts Collateral) solely in accordance
with this Spare Parts Security Agreement and the Indenture. The Security Agent
agrees to and shall have the benefit of all provisions of the Indenture and the
other Operative Documents stated therein to be applicable to the Security Agent.
Section 8.2 Replacement of Security Agent. (a) If USBT or a successor
Trustee under the Indenture resigns as Trustee under the Indenture or is
otherwise no longer the Trustee under the Indenture, USBT or such successor
Trustee, as the case may be, shall resign and be replaced as Security Agent
hereunder by the institution acting as successor Trustee under the Indenture as
promptly as practicable, in accordance with this Section 8.2.
(b) A successor Security Agent shall execute and deliver a written
acceptance of its appointment to the retiring Security Agent and to the Company.
Immediately after that, the resignation or removal of the retiring Security
Agent shall become effective, and the successor Security Agent shall succeed to
and become vested with all the rights, powers and duties of the Security Agent
under this Spare Parts Security Agreement. On request of the Company or the
successor Security Agent, the retiring Security Agent shall execute and deliver
an instrument transferring to such successor Security Agent all such rights,
powers and duties of the retiring Security Agent and shall duly and promptly
assign, transfer and deliver all property and all books and records (or true,
correct and complete copies thereof), held by the retiring Security Agent in its
capacity as Security Agent. Upon request of any such successor Security Agent,
the Company, the retiring Security Agent and such successor Security Agent shall
execute and deliver any and all instruments containing such provisions as shall
be necessary or desirable to transfer and confirm to, and for more fully and
certainly vesting in, such successor Security Agent, all such rights powers and
duties.
(c) No resignation or removal of the Security Agent and no appointment of
a successor Security Agent pursuant to this Section 8.2 shall become effective
until the
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19
acceptance of appointment by the successor Security Agent under this Section
8.2. If a successor Security Agent does not take office within 60 days after the
retiring Security Agent resigns or is removed, the retiring Security Agent, the
Company, the Class A Liquidity Provider, the Controlling Party or Holders of at
least 10% in principal amount of any Class of Notes Outstanding may petition any
court of competent jurisdiction for the appointment of a successor Security
Agent.
(d) After any retiring Security Agent's resignation or removal, the
provisions of this Spare Parts Security Agreement shall inure to its benefit as
to any actions taken or omitted to be taken by it under this Spare Parts
Security Agreement while it was Security Agent.
(e) The Security Agent shall be a bank, trust company or other financial
institution organized and doing business under the laws of the United States or
any state thereof or the District of Columbia, and shall have a combined capital
and surplus of at least $50,000,000 (or a combined capital and surplus in excess
of $5,000,000 and the obligations of which, whether now in existence or
hereinafter incurred, are fully and unconditionally guaranteed by a corporation
organized and doing business under the laws of the United States or any state or
territory thereof or the District of Columbia and having a combined capital and
surplus of at least $50,000,000), as set forth in its most recent, published
annual report of condition. The Security Agent shall satisfy and comply with any
applicable requirements of the TIA.
Section 8.3 Successor Security Agent by Merger, Etc. If the Security Agent
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business or assets to, another Person, the resulting,
surviving, transferee, or successor Person shall be the successor of the
Security Agent hereunder (provided that such Person shall be otherwise qualified
and eligible under Article VIII hereof), without the execution or filing of any
paper or any further act on the part of any of the parties hereto.
Section 8.4 Appointment of Additional and Separate Security Agents. (a)
Whenever (i) the Security Agent shall deem it necessary or desirable in order to
conform to any law of any jurisdiction in which all or any part of the Spare
Parts Collateral shall be situated or to make any claim or bring any suit with
respect to or in connection with the Spare Parts Collateral, any Operative
Document or any of the transactions contemplated by the Operative Documents,
(ii) the Security Agent shall be advised by counsel satisfactory to it that it
is necessary or prudent in the interests of the Holders (and the Security Agent
shall so advise the Company), or (iii) the Security Agent shall have been
requested to do so by the Controlling Party, then in any such case, the Security
Agent and, upon the written request of the Security Agent, the Company, shall
execute and deliver a supplemental security agreement and such other instruments
as may from time to time be necessary or advisable either (1) to constitute one
or more banks or trust
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20
companies or corporations meeting the requirements of Section 8.2(e) and
approved by the Security Agent, either to act jointly with the Security Agent as
additional trustee or trustees of all or any part of the Spare Parts Collateral
or to act as separate trustee or trustees of all or any part of the Spare Parts
Collateral, in each case with such rights, powers, duties and obligations
consistent with this Spare Parts Security Agreement as may be provided in such
supplemental security agreement or other instruments as the Security Agent or
the Trustee may deem necessary or advisable, or (2) to clarify, add to or
subtract from the rights, powers, duties and obligations theretofore granted any
such additional or separate trustee, subject in each case to the remaining
provisions of this Section 8.4. If no Event of Default has occurred and is
continuing, no additional or supplemental security agent shall be appointed
without the Company's consent. If the Company shall not have taken any action
requested of it under this Section 8.4(a) that is required by its terms within
15 days of a written request from the Security Agent to do so, or if an Event of
Default shall have occurred and be continuing, the Security Agent may act under
the foregoing provisions of this Section 8.4(a) without the concurrence of the
Company, and the Company hereby irrevocably appoints (which appointment is
coupled with an interest) the Security Agent as its agent and attorney-in-fact
to act for it under the foregoing provisions of this Section 8.4(a). The
Security Agent may, in such capacity, execute, deliver and perform any such
supplemental security agreement, or any such instrument, as may be required for
the appointment of any such additional or separate security agent or for the
clarification of, addition to or subtraction from the rights, powers, duties or
obligations theretofore granted to any such additional or separate security
agent, subject in each case to the remaining provisions of this Section 8.4. In
case any additional or separate security agent appointed under this Section
8.4(a) shall become incapable of acting, resign or be removed, all the assets,
property, rights, powers, trusts, duties and obligations of such additional or
separate security agent shall revert to the Security Agent until a successor
additional or separate security agent is appointed as provided in this Section
8.4(a).
(b) No additional or separate security agent shall be entitled to exercise
any of the rights, powers, duties and obligations conferred upon the Security
Agent in respect of the custody, investment and payment of monies and all monies
received by any such additional or separate security agent from or constituting
part of the Spare Parts Collateral or otherwise payable under any Operative
Documents to the Security Agent shall be promptly paid over by it to the
Security Agent. All other rights, powers, duties and obligations conferred or
imposed upon any additional or separate trustee shall be exercised or performed
by the Security Agent and such additional or separate security agent jointly
except to the extent that applicable law of any jurisdiction in which any
particular act is to be performed renders the Security Agent incompetent or
unqualified to perform such act, in which event such rights, powers, duties and
obligations (including the holding of title to all or part of the Spare Parts
Collateral in any such jurisdiction) shall be exercised and performed by such
additional or separate security agent. No additional or separate security agent
shall take any discretionary action except on the
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21
instructions of the Security Agent or the Trustee. No security agent hereunder
shall be personally liable by reason of any act or omission of any other
security agent hereunder, except that the Security Agent shall be liable for the
consequences of its lack of reasonable care in selecting, and the Security
Agent's own actions in acting with, any additional or separate security agent.
Each additional or separate security agent appointed pursuant to this Section
8.4 shall be subject to, and shall have the benefit of Article IV, Article V,
Article VI, Article VIII and Article IX hereof insofar as they apply to the
Security Agent. The powers of any additional or separate security agent
appointed pursuant to this Section 8.4 shall not in any case exceed those of the
Security Agent hereunder.
(c) If at any time the Security Agent shall deem it no longer necessary or
desirable to continue the appointment of any additional or separate security
agent or in the event that the Security Agent shall have been requested to do so
in writing by the Controlling Party, the Security Agent and, upon the written
request of the Security Agent, the Company, shall execute and deliver a
supplemental security agreement and all other instruments and agreements
necessary or proper to remove any additional or separate security agent. The
Security Agent may act on behalf of the Company under this Section 8.4(c) when
and to the extent it could so act under Section 8.4(a) hereof. The Company may
remove an additional or separate security agent if:
(i) such security agent fails to comply with Section 8.2(e) hereof;
(ii) such security agent is adjudged a bankrupt or an insolvent;
(iii) a receiver or other public officer takes charge of such
security agent or its property or affairs;
(iv) such security agent becomes incapable of acting; or
(v) no Default or Event of Default has occurred and is continuing
and the Company determines in good faith to remove such security agent.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Termination. The Company agrees that this is a continuing
agreement and shall remain in full force and effect until the discharge of
obligations of the Company and the Trustee under the Indenture and the Notes
pursuant to Article IX of the Indenture, at which time the Security Agent shall
have no further interest in and to the Spare Parts Collateral and will promptly
release all of the Security Agent's interest in and to the Spare Parts
Collateral, including any cash and/or Investment Securities held in
Spare Parts Security Agreement
22
accordance with the terms of this Spare Parts Security Agreement. The Security
Agent shall acknowledge the termination of this Spare Parts Security Agreement
and the release of the Spare Parts Collateral by executing and delivering to the
Company such instruments to the foregoing effect as the Company shall reasonably
request, at the sole cost and expense of the Company.
Section 9.2 Benefits of Security Agreement Restricted. Subject to the
provisions of Section 9.9 hereof, nothing in this Spare Parts Security Agreement
or the Notes, express or implied, shall give or be construed to give to any
Person, other than the parties hereto, the Controlling Party, the Holders, the
Trustee and, in the case of Sections 2.1, 4.2, 4.5, 5.1, 5.2, 9.1, 9.2, 9.6 and
Articles III and VI, the Class A Liquidity Provider, any legal or equitable
right, remedy or claim under or in respect of this Spare Parts Security
Agreement or under any covenant, condition or provision herein contained, all
such covenants, conditions and provisions, subject to Section 9.9 hereof, being
for the sole benefit of the parties hereto, the Controlling Party, the Holders,
the Trustee, and, in the case of Sections 2.1, 4.2, 4.5, 5.1, 5.2, 9.1, 9.2, 9.6
and Articles III and VI, the Class A Liquidity Provider.
Section 9.3 Certificates and Opinions of Counsel; Statements to be
Contained Therein; Basis Therefor. Upon any application or Request by the
Company to the Security Agent to take any action under any of the provisions of
this Spare Parts Security Agreement, the Company shall furnish to the Security
Agent an Officers' Certificate and an Opinion of Counsel in compliance with, but
only if required by, Sections 12.4 and/or 12.5 of the Indenture.
Section 9.4 Appraiser's Certificate. Unless otherwise specifically
provided, an Independent Appraiser's Certificate shall be sufficient evidence of
the Appraised Value and Fair Market Value to the Company of any property under
this Spare Parts Security Agreement.
Section 9.5 Notices; Waiver. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other document provided or permitted by
this Spare Parts Security Agreement to be made upon, given or furnished to, or
filed with
(i) the Company shall be sufficient for every purpose hereunder if
in writing and mailed, first-class postage prepaid, to the Company at
American Airlines, Inc., 0000 Xxxx Xxxxxx Xxxxxxxxx, Xxxx Xxxxx, Xxxxx
00000, Attention: Treasurer, or such other then-current address furnished
in writing to the Security Agent by the Company, or
(ii) the Security Agent shall be sufficient for every purpose
hereunder if in writing and mailed, first-class postage prepaid, to the
Security Agent at the Corporate Trust Office, or such other then-current
address furnished in writing to
Spare Parts Security Agreement
23
the Company by the Security Agent.
(b) Any such delivery shall be deemed made on the date of receipt by the
addressee of such delivery or of refusal by such addressee to accept delivery.
Section 9.6 Amendments, Etc. This Spare Parts Security Agreement may be
amended or supplemented, and compliance with any obligation in this Spare Parts
Security Agreement may be waived:
(a) as provided in Article X of the Indenture; and
(b) by written agreement of the Company and the Security Agent,
without the consent of the Trustee, the Controlling Party, any Liquidity
Provider or any Holder, for any of the following purposes: (i) to convey,
transfer, assign, mortgage or pledge any property to or with the Security
Agent; (ii) to correct or amplify the description of any property at any
time subject to the Lien of this Spare Parts Security Agreement or better
to assure, convey and confirm unto the Security Agent any property subject
or required to be subject to the Lien of this Spare Parts Security
Agreement; (iii) to add any location as a Designated Location; (iv) to add
to the covenants of the Company for the benefit of the Security Agent, the
Trustee, the Liquidity Providers or the Holders, or to surrender any
rights or power herein conferred upon the Company; (v) to cure any
ambiguity, defect, mistake, or inconsistency; or (vi) to accomplish any of
the matters described in Section 10.1 of the Indenture.
If, in the opinion of the institution acting as Security Agent hereunder, any
document required to be executed by it pursuant to the terms of Section 9.6
hereof affects any right, duty, immunity or indemnity with respect to such
institution under this Spare Parts Security Agreement, such institution may in
its discretion decline to execute such document.
Section 9.7 No Waiver. With respect to each party hereto, no failure on
the part of such party to exercise, and no delay in exercising any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. To the extent permitted by applicable law,
failure by the Security Agent at any time or times hereafter to require strict
performance by the Company or any other Person with any of the provisions,
warranties, terms or conditions contained herein shall not waive, affect or
diminish any right of the Security Agent at any time or times hereafter to
demand strict performance thereof, and such right shall not be deemed to have
been modified or waived by any course of conduct or knowledge of the Security
Agent or any agent, officer or employee of the Security Agent.
Spare Parts Security Agreement
24
Section 9.8 Conflict with Trust Indenture Act of 1939. It is intended that
this Spare Parts Security Agreement will become subject to the TIA. If any
provision hereof limits, qualifies or conflicts with a provision of the TIA that
is required by the TIA to be a part of and govern this Spare Parts Security
Agreement, then the provision of the TIA shall control. If any provision of this
Spare Parts Security Agreement modifies or excludes any provision of the TIA
that may be so modified or excluded, the provision of the TIA shall be deemed to
apply to this Spare Parts Security Agreement as so modified, or to be excluded,
as the case may be, whether or not such provision of this Spare Parts Security
Agreement expressly refers to such provision of the TIA.
Section 9.9 Successors and Assigns. This Spare Parts Security Agreement
and all obligations of the Company hereunder shall be binding upon the
successors and permitted assigns of the Company, and shall, together with the
rights and remedies of the Security Agent hereunder, inure to the benefit of the
Security Agent and the Trustee, and their respective successors and permitted
assigns. This Spare Parts Security Agreement and all obligations of the Security
Agent and the Trustee hereunder shall be binding upon the successors and
permitted assigns of the Security Agent and the Trustee, respectively, and
shall, together with the rights and remedies of the Company hereunder, inure to
the benefit of the Company, and its successors and permitted assigns. To the
extent permitted by applicable law, the interest of the Company under this Spare
Parts Security Agreement is not assignable, and any attempt to assign all or any
portion of this Spare Parts Security Agreement by the Company shall be null and
void except for an assignment in connection with a merger, consolidation or
conveyance or transfer of all or substantially all the Company's assets
permitted under the Indenture.
Section 9.10 GOVERNING LAW. THIS SPARE PARTS SECURITY AGREEMENT IS BEING
DELIVERED IN THE STATE OF NEW YORK. THIS SPARE PARTS SECURITY AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 9.11 Effect of Headings. The Article and Section headings and the
Table of Contents contained in this Spare Parts Security Agreement have been
inserted for convenience of reference only, and are and shall be without
substantive meaning or content of any kind whatsoever and are not a part of this
Spare Parts Security Agreement.
Section 9.12 Counterpart Originals. This Spare Parts Security Agreement
may be signed in two or more counterparts, each of which shall be deemed an
original, but all of which shall together constitute one and the same agreement.
Spare Parts Security Agreement
25
Section 9.13 Severability. To the extent permitted by applicable law, the
provisions of this Spare Parts Security Agreement are severable, and if any
clause or provision shall be held invalid, illegal or unenforceable in whole or
in part in any jurisdiction, then such invalidity or unenforceability shall
affect in that jurisdiction only such clause or provision, or part thereof, and
shall not in any manner affect such clause or provision in any other
jurisdiction or any other clause or provision of this Spare Parts Security
Agreement in any jurisdiction.
Section 9.14 Survival Provisions. To the extent permitted by applicable
law, notwithstanding any right of the Security Agent or any of the Holders to
investigate the affairs of the Company, and notwithstanding any knowledge of
facts determined or determinable by any of them pursuant to such investigation
or right of investigation, all representations and warranties of the Company
contained herein shall survive the execution and delivery of this Spare Parts
Security Agreement.
Section 9.15 Bankruptcy. It is the intention of the parties that the
Security Agent shall be entitled to the benefits of Section 1110 with respect to
the right to take possession of the Pledged Spare Parts and to enforce any of
its other rights or remedies as provided herein, in the Collateral Maintenance
Agreement and in the other Operative Documents with respect to the Pledged Spare
Parts in the event of a case under Chapter 11 of the Bankruptcy Code in which
the Company is a debtor, in each case on behalf of the Trustee, and in any
instance where more than one construction is possible of the terms and
conditions hereof or any other pertinent Operative Document, each such party
agrees, to the extent permitted by applicable law, that a construction which
would preserve such benefits shall control over any construction which would not
preserve such benefits.
Section 9.16 No Legal Title to Spare Parts Collateral in Noteholders. No
Noteholder shall have legal title to any part of the Spare Parts Collateral. No
transfer, by operation of law or otherwise, of any Note or other right, title
and interest of any Noteholder in and to the Spare Parts Collateral or hereunder
shall operate to terminate this Spare Parts Security Agreement or entitle such
Noteholder or any successor or transferee of such Holder to an accounting or to
the transfer to it of any legal title to any part of the Spare Parts Collateral.
[SIGNATURE PAGE FOLLOWS]
Spare Parts Security Agreement
26
IN WITNESS WHEREOF, the parties have caused this Spare Parts Security
Agreement to be duly executed and delivered all as of the date first above
written.
AMERICAN AIRLINES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President, Corporate
Development & Treasurer
U.S. BANK TRUST NATIONAL
ASSOCIATION,
as Security Agent
By: /s/ Alison X. X. Xxxxxx
---------------------------------
Name: Alison X. X. Xxxxxx
Title Vice President
Spare Parts Security Agreement
27
Schedule 1
DESIGNATED LOCATIONS
# LONG NAME ADDRESS
---- --------- -------
1 AMERICAN AIRLINES, INC. INTERNATIONAL AIRPORT
0000 XXXXXXX XXXX XX
XXXXXXXXXXX, XX 00000
2 AMERICAN AIRLINES, INC. ATTN SUPPLY SVCS SHOP ACM
MAINTENANCE AND ENGR CENTER
0000 XX XXXXX XXXX
XXXXX, XX 00000
3 AMERICAN AIRLINES, INC. MTCE WAREHOUSE -
STORES RECEIVING
BLDG 11 MD 8250
0000 XXXXX XXXXXXX
XX XXXXX, XX 00000
4 AMERICAN AIRLINES, INC. ATTN: XXXX XXXXX AUTO LC
STORES RECEIVING XXXX 0
0000 XX 000XX XXXXXX
XXXXXX XXXX, XX 00000
5 AMERICAN AIRLINES, INC. ACCESSARY LOAD CENTER
STORES RECEIVING GROUND OPPS CTR
0000 XX 000XX XXXXXX
XXXXXX XXXX, XX 00000
6 AMERICAN AIRLINES, INC. ATTN: STORES RECEIVING/
XXXX XXXXXX
RAMP LEVEL GATE T14
XXXXXXXXXX INTL AIRPORT
XXXXXXX, XX 00000
7 AMERICAN AIRLINES, INC. ATTN: STORES DEPT.
0000 XXXXXXXXXXXX XXXX
RMP LVL GATE 19
XXXXXX XXXXXXXXX INTL. AIRPORT
AUSTIN , TX 78719
8 AMERICAN AIRLINES, INC. STORES RECEIVING DEPARTMENT
XXXXXXX INTL AIRPORT
STORES RECEIVING
XXXXXXX XXXXX, XX 00000
Schedule 1
Spare Parts Security Agreement
# LONG NAME ADDRESS
---- --------- -------
9 AMERICAN AIRLINES, INC. XXXXXXX CONTROLS
0000 XXXXXXX XXXXXXX XXXX 00
XXXXXXXXXX, XX 00000
10 AMERICAN AIRLINES, INC. ATTN: STORES RECEIVING DEPARTMENT
000 XXXXXXX XXXXXXX XXXX
XXXXXXXXX, XX 00000
11 AMERICAN AIRLINES, INC. STORES RECEIVING
000 XXXXXXX XXXX
XXXXX XXXX XXXXXXX
XXXX XXXXXX, XX 00000
12 AMERICAN AIRLINES, INC. SUPPLY RECEIVING
0000 XXXXX XXXXXXXXX XXX
XXXXXXX, XX 00000
13 AMERICAN AIRLINES, INC. STORES RECEIVING DEPT.
RAMP LEVEL GATE C7
ROLL UP DOOR
XXXXXXXXX/XXXXXXXXXX
XXXX. XXXXXXX
XXXXXXXXX, XX 00000
14 AMERICAN AIRLINES, INC. MAINTENANCE AND ENGINEERING CENTER
0000 XXXXX XXXXX XX.
XXXXX, XX 00000
15 AMERICAN AIRLINES, INC. ATTN: T XXXXXXX
0000 XXXXX XX
XXXXXXX XXXXXXXXXXXXX XXXXXXX
XXXXXXXXX, XX 00000
16 AMERICAN AIRLINES, INC. ATTN XXX XXXXXXX
0000 XXX XXXX XXXX
XXXXXXXXX, XX 00000
17 AMERICAN AIRLINES, INC. PORT COLUMBUS INTRNTL AIRPORT
0000 XXXXXXX XXXXXXX
XXXXXXXX, XX 00000
18 AMERICAN AIRLINES, INC. MAINTENANCE ENGINEERING
ATTN SUPPLY SERVICES HGR 1 & 2
0000 X XXXXX XXXX
XXXXX, XX 00000
19 AMERICAN AIRLINES, INC. 0000 XXXX XXXXXXX XXXX
XXXXXXXX XXXXXXX MUNICIPAL ARPRT
XXXXXXXX XXXXXXX, XX 00000
Spare Parts Security Agreement
2
# LONG NAME ADDRESS
---- --------- -------
20 AMERICAN AIRLINES, INC. CENTRAL TOOL ROOM
STORES RECEIVING GROUND OPPS CTR
0000 XX 000XX XXXXXX
XXXXXX XXXX, XX 00000
21 AMERICAN AIRLINES, INC. 0000 X. XXXXXXXX XX.
XXXXXXXX, XX 00000
22 AMERICAN AIRLINES, INC. STORES RECEIVING DEPT.
HANGER 0
XXXXXX XXXXXXXXXX
XXXXXXXX XXXXXXX
XXXXXXXXXX, XX 00000
23 AMERICAN AIRLINES, INC. ATTN: AIRCRAFT SUPPLY
DENVER INTERNATIONAL AIRPORT
0000 XXXX XXXXXXXXX
XXXXXX, XX 00000
24 AMERICAN AIRLINES, INC. STORES DEPT.
HANGAR 1 - RECEIVING DEPT.
WEST 21ST STREET
DALLAS-FORT WORTH AIRPORT, TX 75261-9047
25 AMERICAN AIRLINES, INC. XXX XXXXXX XXXXXXXXX XXXXXXX
XXX XXXXXX, XX 00000
26 AMERICAN AIRLINES, INC. ATTN STORES RECEIVING
BUILDING 000
XXXXXXXXXXXX XXXXXXX
XXXXXXX, XX 00000
27 AMERICAN AIRLINES, INC. EAGLE COUNTY AIRPORT TERMINAL
0215 XXXXX XXXXXX ROAD
AIRCRAFT PARTS
XXXXX, XX 00000
28 AMERICAN AIRLINES, INC. HANGER/EHGJJ
0000 XXXXX XXXXXXX
XXXX XXXXX, XX 00000
29 AMERICAN AIRLINES, INC. C/O ELP INTL XXXXXXX
XXXX XXXXXXX
XX XXXX, XX 00000
30 AMERICAN AIRLINES, INC. GUARD POST E
NEWARK INTERNATIONAL AIRPORT
TERMINAL A
XXXXXX, XX 00000
Spare Parts Security Agreement
3
# LONG NAME ADDRESS
---- --------- -------
31 AMERICAN AIRLINES, INC. 0000 XXXX XXXXXXX XXX
XXXXXX, XX 00000
32 AMERICAN AIRLINES, INC. 000 XXXXXXXX XXXXX
XXXX XXXXXXXXXX
INTERNATIONAL AIRPORT
XXXX XXXXXXXXXX, XX 00000
33 AMERICAN AIRLINES, INC. 0000 XXXXXXXXXX
XX. XXXXX, XX 00000
34 AMERICAN AIRLINES, INC. FLIGHT ACADEMY
0000 XXXXXXX 000
XX. XXXXX, XX 00000
35 AMERICAN AIRLINES, INC. SPECTRUM XXX XXXXXX
XXXXXX XXXX 00X
XXXXXX, XX 00000
36 AMERICAN AIRLINES, INC. A/C MAINTENANCE
000 XXXXXX XXXX. XXXX 00
XXXXXXXX, XX 00000
37 AMERICAN AIRLINES, INC. XXXXXXX X. HOBBY AIRPORT
0000 XXXXXXX XXXXXXXXX
XXXXXXX, XX 00000
38 AMERICAN AIRLINES, INC. XXXXXXXXXXX XXXXXX XXXXXXX
XXXXX XXXXXX, XX 00000
39 AMERICAN AIRLINES, INC. AMERICAN AIRLINES, INC.
1000 XXXXX XXXXX BLVD.
HUNTSVILLE INTERNATIONAL AIRPORT
XXXXXXXXXX, XX 00000
40 AMERICAN AIRLINES, INC. ATTN: STORES RECEIVING DEPT.
MIDFIELD TERMINAL RAMP
LEVEL D21
DULLES INTL AIRPORT
XXXXXX, XX 00000
41 AMERICAN AIRLINES, INC. ATTN: STORES RECEIVING
0000 X. XXXXXXXX XX.
XXXX INTERCONTINENTAL AIRPORT
XXXXXXX, XX 00000
42 AMERICAN AIRLINES, INC. C/O AMERICAN EAGLE AIRLINES, INC.
ATTN: XXX XXXXXXXX
0000 XXXXXXX XXXX
XXXXXXX, XX 00000
Spare Parts Security Agreement
4
# LONG NAME ADDRESS
---- --------- -------
43 AMERICAN AIRLINES, INC. ATTN.STORES RECEIVING
XXXXXXXXXXXX XXXX XXXXXXX
XXXXXXXXXXXX, XX 00000
44 AMERICAN AIRLINES, INC. XXXXXXX XXXX XXXXXXX
XXXXXXX 00
XXXXXXX XXXX, XX 00000
45 AMERICAN AIRLINES, INC. JACKSONVILLE INTERNATIONAL AIRPORT
0000 XXXXXX XXXXXXX XXXXX
XXXXX 000
XXXXXXXXXXXX, XX 00000
46 AMERICAN AIRLINES, INC. ATTN STORES RECEIVING
HANGAR 10
RECEIVING DOCK
XXXX X XXXXXXX XXXX XXXXXXX
XXXXXXX, XX 00000
47 AMERICAN AIRLINES, INC. 00 XXXXXX XXXXXX
XXXXXX XXXX INTERNATION AIRPORT
ATTN: SUPPLY RCVNG
000-000-0000
XXXXXX XXXX, XX 00000-0000
48 AMERICAN AIRLINES, INC. C/O ALOHA AIRLINES
(000)000-0000
00-000 XXXXXX XXXXXX
KONA INT'L AIRPORT
KAILUA, HI 96740
49 AMERICAN AIRLINES, INC. 000 XXXXXX XXXX. XX.
XXXXX 000
XXX XXXXX, XX 00000
50 AMERICAN AIRLINES, INC. ATTN STORES RECEIVING
LOS ANGELES INTL AIRPORT
0000 XXXXX XXX XXXX
XXX XXXXXXX, XX 00000
51 AMERICAN AIRLINES, INC. SUPERVISOR STORES SUPPLY
HANGAR 5
RECEIVING DOCK
LAGUARDIA AIRPORT XXXXXXX
XXXXXXXX, XX 00000
52 AMERICAN AIRLINES, INC. TICKET COUNTER (000)000-0000
0000 XXXXXX XXXXXXX XXXX
XXXX XXXXX XXXXXXX
XXXX XXXXX, XX 00000
Spare Parts Security Agreement
5
# LONG NAME ADDRESS
---- --------- -------
53 AMERICAN AIRLINES, INC. ATTN SUPPLY SVCS HGR 3/4
MAINTENANCE AND ENGR CENTER
0000 XXXXX XXXXX XXXX
XXXXX, XX 00000-0000
54 AMERICAN AIRLINES, INC. LIHUE AIRPORT
C/O ALOHA AIRLINES,
AIRCRAFT MAINTENANCE
0000 XXXXXXXX XXXX, XXXX 00
XXXXX, XX 00000-0000
55 AMERICAN AIRLINES, INC. MAIN STORES RECEIVING
GROUND OPERATIONS CENTER
0000 XX 000XX XXXXXX
XXXXXX XXXX, XX 00000-0000
56 AMERICAN AIRLINES, INC. STORES/MAINTENANCE
ORLANDO INT L AIRPORT
0000 XXXX XXXX
XXXXXXX, XX 00000
57 AMERICAN AIRLINES, INC. C/O CONTINENTAL AIRLINES AIRFREIGHT
MIDWAY AIRPORT
0000 X 00XX XXXXXX
XXXXXXX, XX 00000
58 AMERICAN AIRLINES, INC. STORES DEPT. MEMPHIS INT'L AIRPORT
TERMINAL C TICKET COUNTER
0000 XXXXXXXXXX XX. XXXXX 000
XXXXXXX, XX 00000
59 AMERICAN AIRLINES, INC. MCALLEN INTERNATIONAL AIRPORT
0000 XXXXX XXXXXXXXXXXX XXXX
XXXXX 000
XXXXXXX, XX 00000
60 AMERICAN AIRLINES, INC. ATTN: SUPPLY RECEIVING
MIA INTERNATIONAL AIRPORT
BUILDING 0000 X.X. 00XX XX.
XXXXX, XX 00000
61 AMERICAN AIRLINES, INC. STORES RECEIVING GROUND OPPS CTR
MKC LOAD CENTER
0000 XX 000XX XXXXXX
XXXXXX XXXX, XX 00000
62 AMERICAN AIRLINES, INC. ATTN. STORES RECEIVING
0000 00XX XXX. XXXXX
XXXXX 000
XXXXXXXXXXX, XX 00000
Spare Parts Security Agreement
6
# LONG NAME ADDRESS
---- --------- -------
63 AMERICAN AIRLINES, INC. NEW ORLEANS INTERNATIONAL AIRPORT
000 XXXXXXX XXXXXXX
XXX XXXXXXX, XX 00000
64 AMERICAN AIRLINES, INC. ATTN: GENERAL MANAGER
0000 XXXXXXX XXXX
XXXXXXXX, XX 00000
65 AMERICAN AIRLINES INC. NARROW BODY LOAD CENTER
STORES RECEIVING GROUND OPPS CTR
0000 XX 000XX XXXXXX
XXXXXX XXXX, XX 00000-0000
66 AMERICAN AIRLINES, INC. SPEC200 S/T=W S (000)000-0000
STORES RECEIVING DEPT.
0 XXXXXXX XXXXX
XXXXXXX XXXXXXXXXXXXX XXXXXXX
XXXXXXX, XX 00000
67 AMERICAN AIRLINES, INC. KAHULUI AIRPORT
AIRCRAFT MAINTENANCE
XXXXXXX, XXXX, XX 00000
68 AMERICAN AIRLINES, INC. ATTN: STORES SUPPLY
XXXX XXXXXX WORLD AIRPORT
0000 XXXXXXXX XXXXX, XXX 000
XXXXXXXX XXXX, XX 00000
69 AMERICAN AIRLINES, INC. 0000 XXXXXX XXXXX, XXX 0000
XXXXXX XXXXXXXX
XXXXX, XX 00000
70 AMERICAN AIRLINES, INC. AA XXXXXXXX XXXX.
XXXXXXXXXXXXX XXXXXXX
XXXXXXX, XX 00000
71 AMERICAN AIRLINES, INC. ATTN STORES RECEIVING
TOUHY AND MT. PROSPECT ROADS
X'XXXX INTERNATIONAL AIRPORT
XXXXXXX, XX 00000
72 AMERICAN AIRLINES, INC. C/O AA TICKET COUNTER
NORFOLK INTERNATIONAL AIRPORT
XXXXXXX, XX 00000
73 AMERICAN AIRLINES, INC. ATTN. GENERAL MANAGER
XXXX XXXXX XXX'X XXXXXXX
XXXX XXXX XXXXX, XX 00000
Spare Parts Security Agreement
7
# LONG NAME ADDRESS
---- --------- -------
74 AMERICAN AIRLINES, INC. AMERICAN AIRLINES AIR CARGO
0000 XXXXX XXXX XXXXXXX XXX
000-000-0000
XXXXXXXX, XX 00000
75 AMERICAN AIRLINES, INC. ATTN: SUPPLY RECEIVING DEPT.
WEST PAC BLDG C2 DOOR 0
XXXXXXXXXXXXX XXXXXXX
XXXXXXXXXXXX, XX 00000
76 AMERICAN AIRLINES, INC. ATTN STORES RECEIVING
0000 XXX XXXXXX XXXX
XXXXXXX, XX 00000
77 AMERICAN AIRLINES, INC. ATTN STORES RECEIVING
GREATER PITTSBURG INTL AIRPORT
XXXXXXXXXX, XX 00000
78 AMERICAN AIRLINES, INC. PHONE 000-0000
MUNICIPAL AIRPORT
XXXX XXXXXXX, XX 00000
79 AMERICAN AIRLINES, INC. XXXXXXXX X XXXXX AIRPORT
0000 XXXX XXXX
XXXXXXX, XX 00000
80 AMERICAN AIRLINES, INC. ATTN: STORES RECEIVING DEPT
RAMP LEVEL GATE C19, MD 0000
XXX XXXXXXXXXXXXX XXXXXXX
XXXXXXXXXXX, XX 00000
81 AMERICAN AIRLINES, INC. STORES BUILDING 1
ATTN: REI SUPPORT CENTER
0000 XX 000XX XXXXXX
XXXXXX XXXX, XX 00000-0000
82 AMERICAN AIRLINES, INC. AIR XXXXX XXXXXXXX
XXXXXXX XXXX
XXXXXXXX, XX 00000
83 AMERICAN AIRLINES, INC. RNO HANGAR / STORES RECEIVING
000 XXXXX XXXX XXXX
XXXX, XX 00000
84 AMERICAN AIRLINES, INC. ROCHESTER INTERNATIONAL AIRPORT
XXXXXXXXX, XX 00000
85 AMERICAN AIRLINES, INC. SOUTHWEST FLORIDA INTERNATIONAL AIRPORT
0000 XXXXXXXXXX XXXXXXX 0000
XXXX XXXXX, XX 00000
Spare Parts Security Agreement
8
# LONG NAME ADDRESS
---- --------- -------
86 AMERICAN AIRLINES, INC. ATTN. STORES DEPARTMENT
0000 XXXXXXXXXX XXXX
XXX XXXXX, XX 00000
87 AMERICAN AIRLINES, INC. ATTN STORES RECEIVING
INTERNATIONAL AIRPORT
00000 XXXX XXXXXXXX XXXX
XXX XXXXXXX, XX 00000
88 AMERICAN AIRLINES, INC. 0000 XXXXXXXX XXXXX
CARGO BAY 15, XXXXXXXXXX FIELD
XXXXXXXXXX, XX 00000
89 AMERICAN AIRLINES, INC. 2345 SO. 156 TH ST.
C/O AMERICAN AIRFREIGHT
SEATTLE/TACOMA INTL AIRPORT
XXXXXXX, XX 00000
90 AMERICAN AIRLINES, INC. ATTN SHIPPING & RECEIVING
COAST GUARD RD /
SUPERBAY XXXXXX
XXX XXXXXXXXXXXXX XXXXXXX
XXX XXXXXXXXX, XX 00000
91 AMERICAN AIRLINES, INC. ATTN BAE 146 RETENTION
INTERNATIONAL AIRPORT
XXX XXXXXXXXX, XX 00000
92 AMERICAN AIRLINES, INC. ATTN: SUPPLY SERVICES HGR #6
0000 XXXXX XXXXX XXXX
XXXXX, XX 00000
93 AMERICAN AIRLINES, INC. STORES REC. RAMP LVL GATE 11
TERM A
XXX XXXX XXXXXXXXXXXXX XXXXXXX
XXX XXXX, XX 00000
94 AMERICAN AIRLINES, INC. ATTN: STORES RECEIVING
000 X. XXXXXXXX XX.
XXXX XXXX XXXX XXXXXXX
XXXX XXXX XXXX, XX 00000
95 AMERICAN AIRLINES, INC. METROPOLITAN AIRPORT
0000 XXXXXXX XXXX.
XXXXXXXXXX, XX 00000
96 AMERICAN AIRLINES, INC. 0000 XXXXXX XXX
XXXXX XXXX, XX 00000
Spare Parts Security Agreement
9
# LONG NAME ADDRESS
----- --------- -------
97 AMERICAN AIRLINES, INC. SQU SURPLUS SALES
PROCESSING CENTER
6929 EAST READING PLACE
FAX: 000-000-0000
XXXXX, XX 00000
98 AMERICAN AIRLINES, INC. ATTN: STORES RECEIVING
MAINT FACILITY
XXXXXXX , ST. XXXXX INT'L AIRPORT
00000 XXXXXXX XXX'X XXXX.
XXXXXXXXX, XX 00000
99 AMERICAN AIRLINES, INC. ATTN SUPPLY SERVICES RECEIVING
OPERATIONS-TERMINAL XXXX.
XXXXXXXXXXXXX XXXXXXX
XXXXX, XX 00000
100 AMERICAN AIRLINES, INC. STORES RECEIVING
ATTN XXXXXXX XXXXXXXXX
AIRSIDE F SERVICE ROAD
TAMPA INT'L AIRPORT GATE 78
XXXXX, XX 00000
101 AMERICAN AIRLINES, INC. ATTN STORES RECEIVING
TULJ NEW WAREHOUSE
0000 XX. XXXXX XXXX
XXXXX, XX 00000-0000
102 AMERICAN AIRLINES, INC. TUCSON INTERNATIONAL AIRPORT
STORES RECEIVING DOCK
XXXXXX, XX 00000
103 AMERICAN AIRLINES, INC. WIDE BODY LOAD CENTER
STORES RECEIVING GROUND OPPS CTR
0000 XX 000XX XXXXXX
XXXXXX XXXX, XX 00000-0000
104 AMERICAN AIRLINES, INC. 0000 XXXXX XXXXXXX
XX. XXXXX, XX 00000
105 AMERICAN AIRLINES, INC. ATTN: SUPPLY SERVICES HGR#5
0000 X. XXXXX XXXX
XXXXX, XX 00000
106 AMERICAN AIRLINES, INC. NWARKANSAS REGIONAL AIRPORT
0 XXXXXXX XXXX.
XXXXXXXXXXX, XX 00000
Spare Parts Security Agreement
10
Spare Parts Security Agreement
11
DEFINITIONS APPENDIX
SECTION 1.Defined Terms.
"Acceleration" means, with respect to the amounts payable in respect of
the Notes issued under the Indenture, such amounts becoming immediately due and
payable pursuant to Section 7.2 of the Indenture. "Accelerate", "Accelerated"
and "Accelerating" have meanings correlative to the foregoing.
"Advance", with respect to any Liquidity Facility, has the meaning
specified in such Liquidity Facility.
"Affiliate" of any specified Person means any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"Control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"Controlling" and "Controlled" have meanings correlative to the foregoing.
"Agent" means any Registrar, Paying Agent or co-Registrar or co-Paying
Agent.
"Agent Members" is defined in Section 2.5(a) of the Indenture.
"Aircraft" means any contrivance invented, used, or designed to navigate,
or fly in, the air.
"Aircraft Model" is defined in Section 3.3(b) of the Collateral
Maintenance Agreement.
"American Bankruptcy Event" means the occurrence and continuation of an
Event of Default under Section 7.1(g), (h) or (i) of the Indenture.
Spare Parts Security Agreement
Appendix I-1
"American Class C Notes" means any Original Class C Notes or New Class C
Notes that are sold to an American Entity.
"American Entity" means AMR Corporation, a Delaware corporation, the
Company, and any Affiliate of AMR Corporation.
"Annual Appraisal Report Date" means, with respect to 2004 and each year
thereafter, October 1, in each case subject to Sections 2.5, 2.6, and 2.8 of the
Collateral Maintenance Agreement.
"Annual Methodology" means, in determining an opinion as to the Fair
Market Value of the Pledged Spare Parts, taking the following actions: (i)
reviewing the Parts Inventory Report prepared as of the applicable Parts
Inventory Report Date; (ii) reviewing the Independent Appraiser's internal value
database for values applicable to Qualified Spare Parts included in the Pledged
Spare Parts; (iii) developing a representative sampling of a reasonable number
of the different Qualified Spare Parts included in Pledged Spare Parts for which
a market check will be conducted; (iv) checking other sources, such as
manufacturers, other airlines, U.S. government procurement data and airline
parts pooling price lists, for current market prices of the sample parts
referred to in clause (iii); (v) establishing a ratio of Serviceable Parts to
Unserviceable Parts as of the applicable Parts Inventory Report Date based upon
information provided by the Company and the Independent Appraiser's limited
physical review of the Pledged Spare Parts referred to in the following clause
(vi); (vi) visiting at least two locations selected by the Independent Appraiser
where the Pledged Spare Parts are kept by the Company (none of which was visited
for purposes of the last appraisal based upon the Annual Methodology, unless it
would be impossible to comply with the immediately following proviso without
visiting one or more of the locations visited for purposes of such last
appraisal), provided that at least one such location shall be one of the top
three locations at which the Company keeps the largest number of Pledged Spare
Parts, to conduct a limited physical inspection of the Pledged Spare Parts;
(vii) conducting a review of the inventory reporting system applicable to the
Pledged Spare Parts the scope of which shall be reasonably determined by the
Independent Appraiser in its professional judgment, including checking
information reported in such system against information determined through
physical inspection pursuant to the preceding clause (vi); and (viii) reviewing
a sampling of the Spare Parts Documents.
"Annual Methodology Request" is defined in Section 2.5(a) of the
Collateral Maintenance Agreement.
Spare Parts Security Agreement
Appendix I-2
"Annual Parts Inventory Report" means any Parts Inventory Report dated as
of a date falling within the time period set forth in clause (iii) of the
definition of "Parts Inventory Report Period", subject to Section 2.5(b)(ii) of
the Collateral Maintenance Agreement.
"Appliance" means an instrument, equipment, apparatus, a part, an
appurtenance, or an accessory used, capable of being used, or intended to be
used, in operating or controlling Aircraft in flight, including a parachute,
communication equipment, and another mechanism installed in or attached to
Aircraft during flight, and not a part of an Aircraft, Engine, or Propeller.
"Applicable Period" means, with respect to any Nonappraisal Compliance
Report Date, the period commencing on the immediately preceding Nonappraisal
Compliance Report Date (or in the case of the first Nonappraisal Compliance
Report Date following the Closing Date, commencing on the Closing Date) through
the date immediately preceding but not including such Nonappraisal Compliance
Report Date.
"Applied Downgrade Advance", with respect to any Liquidity Facility, has
the meaning specified in such Liquidity Facility.
"Applied Non-Extension Advance", with respect to any Liquidity Facility,
has the meaning specified in such Liquidity Facility.
"Appraisal Compliance Report" means, as of any date, a report providing
information relating to the calculation of each Collateral Ratio, which report
shall be substantially in the form of Appendix II to the Collateral Maintenance
Agreement.
"Appraisal Report Date" means (a) any Annual Appraisal Report Date and (b)
any Quarterly Appraisal Report Date.
"Appraised Value" means, (i) with respect to any Pledged Spare Parts or
Cash Collateral, the Fair Market Value of such Pledged Spare Parts or Cash
Collateral as most recently determined pursuant to (x) the report attached as
Appendix II to the Offering Memo or (y) Article II of the Collateral Maintenance
Agreement, and (ii) with respect to Other Collateral, the Fair Market Value of
such Other Collateral determined in accordance with the applicable Collateral
Agreement, as contemplated by Section 3.1(c) of the Collateral Maintenance
Agreement.
Spare Parts Security Agreement
Appendix I-3
"Bankruptcy Code" means the United States Bankruptcy Code, 11 U.S.C.
Section 101 et seq.
"Base Rate", with respect to any Liquidity Facility, has the meaning
specified in such Liquidity Facility.
"Business Day" means any day that is other than a Saturday, a Sunday, or
(a) a day on which commercial banks are required or authorized to close in (i)
Fort Worth, Texas, (ii) New York, New York, or (iii) the city and state in which
the Trustee maintains its Corporate Trust Office or receives and disburses
funds, or (b) solely with respect to draws under any Liquidity Facility, a day
which is not a "Business Day" as defined in such Liquidity Facility.
"Cash Collateral" means cash and/or Investment Securities: (a) deposited
or to be deposited with the Collateral Agent or an Eligible Institution (i) by
the Company or (ii) consisting of the proceeds of the Collateral pursuant to the
Collateral Agreements, and (b) subject to the Lien of any Collateral Agreement.
For the avoidance of doubt, a drawing on any Liquidity Facility or any Liquidity
Facility Cash Collateral Account will not be deemed to be "Cash Collateral" for
purposes of any Collateral Agreement.
"Citibank" has the meaning assigned to such term in the first paragraph of
the Indenture.
"Citizen of the United States" is defined in 49 U.S.C. Section
40102(a)(15).
"Claims" is defined in Section 6.1 of the Indenture.
"Class" means any class of Notes, including the Class A Notes, the Class B
Notes and, if issued, the Class C Notes.
"Class A Collateral Ratio" means a percentage determined by dividing (i)
the aggregate principal amount of all Class A Notes Outstanding minus the Fair
Market Value of the Cash Collateral held by the Collateral Agent by (ii) the
Fair Market Value of all Pledged Spare Parts, as set forth in the most recent
Independent Appraiser's Certificate delivered by the Company pursuant to Article
II of the Collateral Maintenance Agreement, plus the Fair Market Value of Other
Collateral, if any, excluding any Cash Collateral, as provided in Section 3.1(c)
of the Collateral Maintenance Agreement.
Spare Parts Security Agreement
Appendix I-4
"Class A Debt Rate" means a rate per annum equal to 7.25%, provided that,
solely in the event no Registration Event (as defined in the Class A
Registration Rights Agreement) occurs on or prior to the 270th day after the
Closing Date, the Class A Debt Rate for the Initial Class A Notes shall be
increased by 0.50% per annum, effective from and including such 270th day (or,
if such 270th day is not a Business Day, the first Business Day thereafter) to
but excluding the date on which such Registration Event occurs, provided
further, that, if to permit additional Holders of Offered Securities (as defined
in the Class A Registration Rights Agreement) (who have notified the Company in
writing of their intention to participate in the Exchange Offer) to participate
in the Exchange Offer, the length of such Exchange Offer is extended beyond such
270th day (or, if such 270th day is not a Business Day, the first Business Day
thereafter), the interest rate shall not be increased if the Exchange Offer is
consummated within 60 days of such extension. In the event that the Shelf
Registration Statement (as defined in the Class A Registration Rights Agreement)
required to be effective pursuant to Section 2(b) of the Class A Registration
Rights Agreement ceases to be effective at any time during the period specified
by Section 2(b) of the Class A Registration Rights Agreement for more than 60
days, whether or not consecutive, during any 12-month period, the Class A Debt
Rate for the Initial Class A Notes shall be increased by 0.50% per annum from
and including the 61st day of the applicable 12-month period such Shelf
Registration Statement ceases to be effective until such time as the Shelf
Registration Statement again becomes effective.
"Class A Final Legal Maturity Date" means February 5, 2011.
"Class A Final Scheduled Payment Date" means February 5, 2009.
"Class A Liquidity Facility" means, initially, the Revolving Credit
Agreement, dated as of the Issuance Date, between the Trustee and the initial
Class A Liquidity Provider, and, from and after the replacement of such
Revolving Credit 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 Liquidity Facility Cash Collateral Account" means an Eligible
Deposit Account in the name of the Trustee maintained at an Eligible
Institution, which shall be the Trustee if it shall so qualify, into which all
amounts drawn under the Class A Liquidity Facility pursuant to Section 3.6(c),
3.6(d) or 3.6(i) of the Indenture shall be deposited.
Spare Parts Security Agreement
Appendix I-5
"Class A Liquidity Provider" means, initially, Citibank, N.A., or, upon
the issuance of a Replacement Liquidity Facility to replace the Class A
Liquidity Facility pursuant to Section 3.6(e) of the Indenture, the Replacement
Liquidity Provider issuing such Replacement Liquidity Facility.
"Class A Liquidity Provider Provisions" is defined in Section 4.1 of the
Collateral Maintenance Agreement.
"Class A Noteholder" means any Holder of one or more Class A Notes.
"Class A Notes" means the Initial Class A Notes and the Exchange Class A
Notes.
"Class A Registration Rights Agreement" means the Registration Rights
Agreement, dated as of February 6, 2004, by and between the Company and the
Initial Purchasers.
"Class B Collateral Ratio" means a percentage determined by dividing (i)
the aggregate principal amount of all Class A Notes and Class B Notes
Outstanding minus the Fair Market Value of the Cash Collateral held by the
Collateral Agent by (ii) the Fair Market Value of all Pledged Spare Parts, as
set forth in the most recent Independent Appraiser's Certificate delivered by
the Company pursuant to Article II of the Collateral Maintenance Agreement, plus
the Fair Market Value of Other Collateral, if any, excluding any Cash
Collateral, as provided in Section 3.1(c) of the Collateral Maintenance
Agreement.
"Class B Debt Rate" means a rate per annum equal to 9.00%.
"Class B Final Legal Maturity Date" means February 5, 2009.
"Class B Final Scheduled Payment Date" means February 5, 2009.
"Class B Liquidity Facility", if any, means a revolving credit agreement
(or agreements) in substantially the form of the Class A Liquidity Facility,
including reinstatement provisions, or in such other form (which may include a
letter of credit, surety bond, financial insurance policy or guaranty) between
the Trustee and the Class B
Spare Parts Security Agreement
Appendix I-6
Liquidity Provider, in each case in accordance with the applicable provisions of
Exhibit D to the Indenture, 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 Facility Cash Collateral Account", if any, means an
Eligible Deposit Account in the name of the Trustee maintained at an Eligible
Institution, which shall be the Trustee if it shall so qualify, into which all
amounts drawn under the Class B Liquidity Facility pursuant to Section 3.6(c),
3.6(d) or 3.6(i) of the Indenture shall be deposited.
"Class B Liquidity Provider", if any, means the Person issuing the initial
Class B Liquidity Facility or, upon the issuance of a Replacement Liquidity
Facility to replace the Class B Liquidity Facility pursuant to Section 3.6(e) of
the Indenture, the Replacement Liquidity Provider issuing such Replacement
Liquidity Facility.
"Class B Noteholder" means any Holder of one or more Class B Notes.
"Class B Notes" means the Initial Class B Notes and the Exchange Class B
Notes.
"Class C Noteholder" means any Holder of one or more Class C Notes, if and
when issued.
"Class C Notes" means (a) the Original Class C Notes, (b) following a
Refunding of the American Class C Notes that are Original Class C Notes, the New
Class C Notes or (c) following a Refunding of the American Class C Notes that
are New Class C Notes, the Second New Class C Notes.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act.
"Clearstream" means Clearstream Banking societe anonyme, Luxembourg.
"Closing Date" means February 6, 2004.
Spare Parts Security Agreement
Appendix I-7
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means the Spare Parts Collateral and all other collateral in
which the Collateral Agent has a security interest pursuant to the Collateral
Agreements.
"Collateral Agent" means the Security Agent and each other Person acting
as agent on behalf of the Holders under any other Collateral Agreement.
"Collateral Agreement" means each of the Spare Parts Security Agreement
and any agreement under which a security interest has been granted in any Other
Collateral pursuant to Section 3.1(a)(i) of the Collateral Maintenance
Agreement.
"Collateral Maintenance Agreement" means the Collateral Maintenance
Agreement, dated as of the Issuance Date, between the Company and the Security
Agent, as the same may be amended, supplemented, or otherwise modified from time
to time in accordance with its terms.
"Collateral Ratio" means the Class A Collateral Ratio or the Class B
Collateral Ratio, as applicable.
"Collection Account" means the Eligible Deposit Account established by the
Trustee pursuant Section 8.13(a) of the Indenture which the Trustee shall make
deposits in and withdrawals from in accordance with the Indenture.
"Company" means the party named as such in the Indenture until a successor
replaces it pursuant to the Indenture and thereafter means the successor.
"Compliance Report Date" means, with respect to any Appraisal Compliance
Report, the date by which the Independent Appraiser's Certificate related to
such Appraisal Compliance Report is to be furnished by the Company under Article
II of the Collateral Maintenance Agreement.
"Consent Period" is defined in Section 3.6(d) of the Indenture.
Spare Parts Security Agreement
Appendix I-8
"Controlling Party" means the Person entitled to act as such pursuant to
the terms of Section 3.9 of the Indenture.
"Corporate Trust Office" when used with respect to the Trustee or the
Security Agent, as the case may be, means the office of such Person at which at
any particular time its corporate trust business is administered and which, at
the Closing Date, is located at U.S. Bank Trust National Association, Xxx
Xxxxxxx Xxxxxx, 0xx Xxxxx, XX-XXX-XX, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention:
Corporate Trust Department.
"Debt Balance" means 110% of the principal amount of the Outstanding
Notes.
"Debt Rate" means (i) with respect to the Class A Notes and the Original
Class B Notes, the Class A Debt Rate or Class B Debt Rate, as applicable, (ii)
with respect to any New Class B Notes, the rate per annum specified as such in
an Indenture Refunding Amendment applicable to such Class, subject to any
adjustments as provided therein, and (iii) with respect to any Class C Notes,
the rate per annum specified in an amendment to the Indenture at the time of
issuance of such Class C Notes, subject to any adjustments as provided therein.
"Default" means any event which is, or after notice or passage of time, or
both, would be, an Event of Default.
"Definitions Appendix" means the Definitions Appendix attached as Appendix
I to each of the Indenture, the Spare Parts Security Agreement, and the
Collateral Maintenance Agreement, and constituting a part of each such Operative
Document, respectively.
"Definitive Exchange Note" is defined in Section 2.1(e) of the Indenture.
"Definitive Initial Note" is defined in Section 2.1(e) of the Indenture.
"Definitive Notes" is defined in Section 2.1(e) of the Indenture.
"Designated Locations" means the locations in the U.S. owned or leased by
the Company and designated from time to time by the Company at which the Pledged
Spare Parts may be stored, located, maintained by or on behalf of the Company,
which initially
Spare Parts Security Agreement
Appendix I-9
shall be the locations set forth on Schedule 1 to the Spare Parts Security
Agreement and shall include the additional locations included by the Company in
Supplemental Security Agreements filed for recording in accordance with the
provisions of the Federal Aviation Act.
"Designated Representatives" is defined in Section 3.8(b) of the
Indenture.
"Direction" is defined in Section 12.15 of the Indenture.
"Distribution Date" means (i) each Scheduled Payment Date (and, if a
Payment required to be paid to the Trustee for distribution on such Scheduled
Payment Date has not been so paid by 12:30 p.m., New York time, in whole or in
part, on such Scheduled Payment Date, the next Business Day on which the Trustee
receives some or all of such Payment by 12:30 p.m., New York time) and (ii) each
day established for payment by the Trustee pursuant to Section 7.11 of the
Indenture.
"Dollar" and "$" mean the lawful currency of the United States.
"Downgrade Drawing" is defined in Section 3.6(c) of the Indenture.
"Downgraded Facility" is defined in Section 3.6(c) of the Indenture.
"Drawing" means an Interest Drawing, a Final Drawing, a Non-Extension
Drawing or a Downgrade Drawing, as the case may be.
"DTC" means The Depository Trust Company, its nominees and their
respective successors.
"Eligible Account" means an account established by and with an Eligible
Institution at the request of the Security Agent, which institution agrees, for
all purposes of the NY UCC including Article 8 thereof, that (a) such account
shall be a "securities account" (as defined in Section 8-501 of the NY UCC), (b)
such institution is a "securities intermediary" (as defined in Section
8-102(a)(14) of the NY UCC), (c) all property (other than cash) credited to such
account shall be treated as a "financial asset" (as defined in Section 8-102(9)
of the NY UCC), (d) the Security Agent shall be the "entitlement holder" (as
defined in Section 8-102(7) of the NY UCC) in respect of such
Spare Parts Security Agreement
Appendix I-10
account, (e) it will comply with all entitlement orders issued by the Security
Agent to the exclusion of the Company, (f) it will waive or subordinate in favor
of the Security Agent all claims (including without limitation, claims by way of
security interest, lien or right of set-off or right of recoupment), and (g) the
"securities intermediary jurisdiction" (under Section 8-110(e) of the NY UCC)
shall be the State of New York.
"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 of America or any one of the states thereof or the District of Columbia
(or any U.S. 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 senior unsecured long-term corporate rating
from Fitch of at least A- or its equivalent, a long-term unsecured debt rating
from Moody's of at least A3 or its equivalent or a long-term issuer credit
rating from Standard & Poor's of at least A- or its equivalent. An Eligible
Deposit Account may be maintained with a Liquidity Provider so long as such
Liquidity Provider is an Eligible Institution; provided that such Liquidity
Provider shall have waived all rights of set-off and counterclaim with respect
to such account.
"Eligible Institution" means (a) the Security Agent or the Trustee, or (b)
a depository institution organized under the laws of the United States of
America or any one of the states thereof or the District of Columbia (or any
U.S. branch of a foreign bank), which has a senior unsecured long-term corporate
rating from Fitch of at least A- or its equivalent, a long-term unsecured debt
rating from Moody's of at least A3 or its equivalent or a long-term issuer
credit rating from Standard & Poor's of at least A- or its equivalent.
"Eligible Investments" means (a) investments in obligations of, or
guaranteed by, the U.S. Government having maturities no later than 90 days
following the date of such investment, (b) investments in open market commercial
paper of any corporation incorporated under the laws of the United States or any
state thereof rated by Fitch at least F-1 or its equivalent, by Moody's at least
P-1 or its equivalent or by Standard & Poor's at least A-1 or its equivalent
having maturities no later than 90 days following the date of such investment or
(c) investments in negotiable certificates of deposit, time deposits, banker's
acceptances, commercial paper or other direct obligations of, or obligations
guaranteed by, commercial banks organized under the laws of the United States or
of any political subdivision thereof (or any U.S. branch of a foreign bank) with
a senior unsecured short-term corporate rating by Fitch of at least F-1, a
short-term unsecured debt rating by Moody's of at least P-1 or a short-term
issuer credit rating by Standard & Poor's of at least A-1, having maturities no
later than 90 days following the
Spare Parts Security Agreement
Appendix I-11
date of such investment; provided, however, that (x) all Eligible Investments
that are bank obligations shall be denominated in U.S. dollars; and (y) the
aggregate amount of Eligible Investments at any one time that are bank
obligations issued by any one bank shall not be in excess of 5% of such bank's
capital surplus; provided further that any investment of the types described in
clauses (a), (b) and (c) above may be made through a repurchase agreement in
commercially reasonable form with a bank or other financial institution
qualifying as an Eligible Institution so long as such investment is held by a
third party custodian also qualifying as an Eligible Institution.
Notwithstanding the foregoing, no investment of the types described in clause
(b) above which is issued or guaranteed by the Company or any of its Affiliates,
and no investment in the obligations of any one bank in excess of $10,000,000,
shall be an Eligible Investment unless a Ratings Confirmation shall have been
received with respect to the making of such investment.
"Engine" means an engine used, or intended to be used, to propel an
Aircraft, including a part, appurtenance, and accessory of the Engine, except a
Propeller.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Euroclear" means Euroclear Bank S.A./N.V., as operator of the Euroclear
System.
"Event of Default" is defined in Section 7.1 of the Indenture.
"Event of Loss" means (i) the loss of any of the Pledged Spare Parts or of
the use thereof due to destruction, damage beyond repair or rendition of any of
the Pledged Spare Parts permanently unfit for normal use for any reason
whatsoever (other than the use of Pledged Spare Parts in the Company's
operations); (ii) any damage to any of the Pledged Spare Parts which results in
the receipt of insurance proceeds with respect to such Pledged Spare Parts on
the basis of an actual or constructive total loss; or (iii) the loss of
possession of any of the Pledged Spare Parts by the Company for 90 consecutive
days as a result of the theft or disappearance of such Pledged Spare Parts.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time.
Spare Parts Security Agreement
Appendix I-12
"Exchange 7.25% Class A Secured Notes due 2009" is defined in Section
2.1(a) of the Indenture.
"Exchange Class A Notes" means the Class A Notes substantially in the form
of Exhibit A-1 to the Indenture issued in exchange for, or replacement of, the
Initial Class A Notes pursuant to the Class A Registration Rights Agreement and
authenticated pursuant to the Indenture.
"Exchange 9.00% Class B Secured Notes due 2009" is defined in Section
2.1(a) of the Indenture.
"Exchange Class B Notes" means the Class B Notes substantially in the form
of Exhibit A-2 to the Indenture issued in exchange for, or in replacement of,
the New Class B Notes pursuant to a registration rights agreement entered into
with respect to the Initial Class B Notes and authenticated pursuant to the
Indenture.
"Exchange Notes" means the Exchange Class A Notes, if any, and the
Exchange Class B Notes, if any.
"Exchange Offer" means, (i) with respect to the Class A Notes, the
exchange offer which may be made pursuant to the Class A Registration Rights
Agreement to exchange Initial Class A Notes for Exchange Class A Notes, and (ii)
with respect to New Class B Notes, the exchange offer which may be made pursuant
to a registration rights agreement with respect to such Notes to exchange such
Notes for Exchange Class B Notes.
"Exchange Offer Registration Statement" means, (i) with respect to the
Class A Notes, the registration statement that, pursuant to the Class A
Registration Rights Agreement, is filed by the Company with the SEC with respect
to the exchange of Initial Class A Notes for Exchange Class A Notes, and (ii)
with respect to New Class B Notes, the registration statement that, pursuant to
a registration rights agreement with respect to such Notes, is filed by the
Company with the SEC with respect to the exchange such Notes for Exchange Class
B Notes.
"Excluded Parts" means Spare Parts and Appliances (a) not located at a
Designated Location, or (b) subject to a Loan to any Person.
Spare Parts Security Agreement
Appendix I-13
"Expendable" means a Spare Part or Appliance that, once used, cannot be
reused and, if not serviceable, generally cannot be overhauled or repaired.
"FAA" means the United States Federal Aviation Administration and any
agency or instrumentality of the United States government succeeding to its
functions.
"FAA Filed Documents" means the Spare Parts Security Agreement and, to the
extent required by the FAA to be filed with the FAA, any other Collateral
Agreements.
"Fair Market Value", (i) with respect to any Pledged Spare Part or Cash
Collateral, means its fair market value, subject to Sections 2.7 and 4.2 of the
Collateral Maintenance Agreement, determined on the basis of a hypothetical sale
negotiated in an arm's length free market transaction between a willing and able
seller and a willing and able buyer, neither of whom is under undue pressure to
complete the transaction, under then current market conditions, provided that
cash shall be valued at its Dollar amount, and, (ii) with respect to Other
Collateral, has the meaning specified in the applicable Collateral Agreement, as
contemplated by Section 3.1(c) of the Collateral Maintenance Agreement.
"Federal Aviation Act" means Title 49 of the United States Code,
"Transportation", as amended from time to time, or any similar legislation of
the United States enacted in substitution or replacement thereof.
"Fee Letters" means, with respect to each Liquidity Facility, the Fee
Letter between such Liquidity Provider and the Trustee with respect to the
related Liquidity Facility and any fee letter entered into by the Trustee and
any Replacement Liquidity Provider in respect of any Replacement Liquidity
Facility.
"Final Advance" with respect to any Liquidity Facility, has the meaning
specified in such Liquidity Facility.
"Final Drawing" is defined in Section 3.6(i) of the Indenture.
"Final Legal Maturity Date" means, as the context requires: the Class A
Final Legal Maturity Date or the Class B Final Legal Maturity Date.
Spare Parts Security Agreement
Appendix I-14
"Final Scheduled Payment Date" means, as the context requires: the Class A
Final Scheduled Payment Date or the Class B Final Scheduled Payment Date.
"Financing Statements" means, collectively, UCC-1 financing statements
covering the Collateral, by the Company, as debtor, showing the Security Agent
as secured party, for filing in Delaware, and each other jurisdiction that, in
the opinion of the Security Agent, is necessary to perfect its Lien on the
Collateral.
"Fitch" means Fitch Ratings, Inc.
"Fleet Reduction" is defined in Section 3.3(a) of the Collateral
Maintenance Agreement.
"GAAP" means generally accepted accounting principles in the United States
as in effect on the Closing Date and consistent with the accounting principles
applied in the preparation of the Company's financial statements filed with the
SEC in connection with the most recent annual report of the Company on Form
10-K.
"Global Exchange Class A Note" is defined in Section 2.1(f) of the
Indenture.
"Global Exchange Class B Note" is defined in Section 2.1(f) of the
Indenture.
"Global Exchange Notes" is defined in Section 2.1(f) of the Indenture.
"Global Initial Notes" is defined in Section 2.1(d) of the Indenture.
"Global Notes" is defined in Section 2.1(f) of the Indenture.
"Government Entity" means (a) any federal, state or similar government,
and any body, board, department, commission, court, tribunal, authority, agency
or other instrumentality of any such government or otherwise exercising any
executive, legislative, judicial, administrative or regulatory functions of such
government or (b) any other government entity having jurisdiction over any
matter contemplated by the Operative Documents or the Support Documents, or
relating to the observance or
Spare Parts Security Agreement
Appendix I-15
performance of the obligations of any of the parties to the Operative Documents
or the Support Documents.
"Holder", "holder", or "Noteholder" means, with respect to a Note, the
Person in whose name the Note is registered on the Registrar's books.
"Indemnitee" is defined in Section 6.2 of the Indenture.
"Indenture" means the Indenture, dated as of February 5, 2004, among the
Company, the Trustee and the Class A Liquidity Provider under which the Notes
are issued, as the same may be amended, supplemented or otherwise modified from
time to time in accordance with its terms, including by an Indenture Refunding
Amendment or a supplemental indenture.
"Indenture Refunding Amendment" means an amendment to the Indenture
entered into for purposes of effecting a Refunding.
"Independent Appraiser" means Simat, Helliesen & Xxxxxxx, Inc. or any
other Person (i) engaged in a business which includes appraising Aircraft and
assets related to the operation and maintenance of Aircraft from time to time
and (ii) who does not have any material financial interest in the Company and is
not connected with the Company or any of its Affiliates as an officer, director,
employee, promoter, underwriter, partner or Person performing similar functions.
"Independent Appraiser's Certificate" means an appraisal report prepared
and signed by an Independent Appraiser, addressed to the Security Agent and the
Company and attached as Appendix II to the Offering Memo or delivered thereafter
pursuant to Article II of the Collateral Maintenance Agreement.
"Initial 7.25% Class A Secured Notes due 2009" is defined in Section
2.1(a) of the Indenture.
"Initial Class A Notes" mean the securities issued and authenticated
pursuant to the Indenture and substantially in the form of Exhibit A-1 thereto,
other than the Exchange Class A Notes.
Spare Parts Security Agreement
Appendix I-16
"Initial 9.00% Class B Secured Notes due 2009" is defined in Section
2.1(a) of the Indenture.
"Initial Class B Notes" means (a) the Original Class B Notes, or (b)
following a Refunding of the Original Class B Notes, the New Class B Notes, in
each case other than Exchange Class B Notes.
"Initial Notes" means the Initial Class A Notes and the Initial Class B
Notes.
"Initial Purchasers" means Citigroup Global Markets Inc. and Xxxxxx
Xxxxxxx & Co. Incorporated.
"Inspecting Parties" is defined in Section 3.7 of the Collateral
Maintenance Agreement.
"Institutional Accredited Investor" means, subject to Section 2.1(i) of
the Indenture, an institutional investor that is an "accredited investor" within
the meaning set forth in Rule 501(a)(1), (2), (3) or (7) of Regulation D under
the Securities Act.
"Interest Drawing" is defined in Section 3.6(a) of the Indenture.
"Interest Payment Date" means February 5 and August 5 of each year so long
as any Note is Outstanding (commencing August 5, 2004).
"Investment Earnings" means investment earnings on funds on deposit in the
Trust Accounts net of losses and the reasonable investment expenses of the
Trustee in making such investments.
"Investment Security" means each of (a) direct obligations of the United
States and agencies thereof; (b) obligations fully guaranteed by the United
States; (c) certificates of deposit issued by, or bankers' acceptances of, or
time deposits with, any bank, trust company or national banking association
incorporated or doing business under the laws of the United States or one of the
states thereof having combined capital and surplus and retained earnings of at
least $100,000,000 and having a rating of A, its equivalent or better by any
Rating Agency (or, if no Rating Agency shall rate such institution at any time,
by any nationally recognized rating organization in the United States);
Spare Parts Security Agreement
Appendix I-17
(d)commercial paper of any holding company of a bank, trust company or national
banking association described in clause (c); (e) commercial paper of companies
having a rating assigned to such commercial paper by any Rating Agency (or, if
no Rating Agency shall rate such commercial paper at any time, by any nationally
recognized rating organization in the United States) equal to either of the two
highest ratings assigned by such organization; (f) Dollar-denominated
certificates of deposit issued by, or time deposits with, the European
subsidiaries of (i) any bank, trust company or national banking association
described in clause (c), or (ii) any other bank or financial institution
described in clause (g) or (h) below; (g) United States-issued Yankee
certificates of deposit issued by, or bankers' acceptances of, or commercial
paper issued by, any bank having combined capital and surplus and retained
earnings of at least $100,000,000 and headquartered in Canada, Japan, the United
Kingdom, France, Germany, Switzerland or The Netherlands and having a rating of
A, its equivalent or better by any Rating Agency (or, if no Rating Agency shall
rate such institution at any time, by any nationally recognized rating
organization in the United States); (h) Dollar-denominated-time deposits with
any Canadian bank having a combined capital and surplus and retained earnings of
at least $100,000,000 and having a rating of A, its equivalent or better by any
Rating Agency (or, if no Rating Agency shall rate such institution at any time,
by any nationally recognized rating organization in the United States); (i)
Canadian Treasury Bills fully hedged to Dollars; (j) repurchase agreements with
any financial institution having combined capital and surplus and retained
earnings of at least $100,000,000 collateralized by transfer of possession of
any of the obligations described in clauses (a) through (i) above; (k) bonds,
notes or other obligations of any state of the United States, or any political
subdivision of any state, or any agencies or other instrumentalities of any such
state, including, but not limited to, industrial development bonds, pollution
control revenue bonds, public power bonds, housing bonds, other revenue bonds or
any general obligation bonds, provided that, at the time of their purchase, such
obligations are rated A, its equivalent or better by any Rating Agency (or, if
no Rating Agency shall rate such obligations at any time, by any nationally
recognized rating organization in the United States); (l) bonds or other debt
instruments of any company, if such bonds or other debt instruments, at the time
of their purchase, are rated A, its equivalent or better by any Rating Agency
(or, if no Rating Agency shall rate such obligations at such time, by any
nationally recognized rating organization in the United States); (m) mortgage
backed securities guaranteed by the Federal National Mortgage Association, the
Federal Home Loan Mortgage Corporation or the Government National Mortgage
Association or rated AAA, its equivalent or better by any Rating Agency (or, if
no Rating Agency shall rate such obligations at any time, by any nationally
recognized rating organization in the United States) or, if unrated, deemed to
be of a comparable quality by the Trustee; (n) asset-backed securities rated A,
its equivalent or better by any Rating Agency (or, if no Rating Agency shall
rate such obligations at any time, by any nationally recognized rating
organization in the United States) or, if unrated, deemed to be of a comparable
quality by the Trustee; and (o) such other investments approved in writing by
the Trustee; provided that the instruments described in the foregoing clauses
shall have a maturity no
Spare Parts Security Agreement
Appendix I-18
later than the earliest date when such investments may be required for
distribution. Any of the investments described herein may be made through or
with, as applicable, a bank acting as Trustee or any of its affiliates.
"Issuance Date" means, with respect to the Class A Notes and Original
Class B Notes, the Closing Date, and with respect to the New Class B Notes, the
Original Class C Notes, if issued, and the New Class C Notes, if issued, the
date of initial issuance of the Notes of such Class.
"Lien" means any mortgage, pledge, lease, security interest, encumbrance,
lien or charge of any kind affecting title to or any interest in property.
"Life Limited Part" means a Spare Part or Appliance that (i) has a finite
operating life that is defined by hours, cycles or calendar limit and (ii)
cannot be overhauled or repaired when it reaches its life limit.
"Liquidity Event of Default" with respect to any Liquidity Facility, has
the meaning specified in such Liquidity Facility.
"Liquidity Expenses" means, with respect to any Liquidity Facility, all
Liquidity Obligations with respect to such Liquidity Facility other than (i) the
principal amount of any Drawings under such Liquidity Facility and (ii) any
interest accrued on such Liquidity Obligations.
"Liquidity Facility" means, at any time, the Class A Liquidity Facility or
the Class B Liquidity Facility, as applicable.
"Liquidity Facility Cash Collateral Account" means the Class A Liquidity
Facility Cash Collateral Account or the Class B Liquidity Facility Cash
Collateral Account, as applicable.
"Liquidity Guarantee" means, with respect to any Liquidity Facility, if
applicable, a guarantee executed and delivered by a Liquidity Guarantor fully
and unconditionally guaranteeing the obligations of the Liquidity Provider under
such Liquidity Facility.
Spare Parts Security Agreement
Appendix I-19
"Liquidity Guarantee Event" means, with respect to any Liquidity
Guarantee, (i) such Liquidity Guarantee ceasing to be in full force and effect
or becoming invalid or unenforceable or (ii) the Liquidity Guarantor under such
Liquidity Guarantee denying its liability thereunder.
"Liquidity Guarantor" means, with respect to any Liquidity Facility, if
applicable, any Person that shall execute and deliver a Liquidity Guarantee and
at the time of such execution and delivery shall meet the ratings requirements
applicable to a Replacement Liquidity Provider.
"Liquidity Obligations" means all principal, interest, fees and other
amounts owing to the Liquidity Provider under any Liquidity Facility or the
applicable Fee Letter.
"Liquidity Provider" means the Class A Liquidity Provider or the Class B
Liquidity Provider, as applicable.
"Liquidity Provider Election Date" is defined in Section 3.9(c) of the
Indenture.
"Loans" means all Pledged Spare Parts subject to leases or loans to any
Person.
"Make-Whole Amount" means (a) with respect to any Class A Note or Original
Class B Note, the amount (as determined by an investment bank of national
standing selected by the Company), if any, by which (i) the present value of the
remaining scheduled payments of principal and interest from the redemption date
to maturity of such Note computed by discounting each such payment on a
semi-annual basis from its respective Payment Date (assuming a 360-day year of
twelve 30-day months) using a discount rate equal to the Treasury Yield, exceeds
(ii) the outstanding principal amount of such Note plus accrued but unpaid
interest thereon to the date of redemption; (b) with respect to any New Class B
Note, the amount computed in the manner set forth in an Indenture Refunding
Amendment applicable to such Class; and (c) with respect to any Class C Note,
the amount computed in the manner set forth in an amendment to the Indenture at
the time of issuance of the Class C Notes. For purposes of determining the
Make-Whole Amount, "Treasury Yield" means, at the time of determination, the
interest rate (expressed as a semi-annual equivalent and as a decimal and, in
the case of United States Treasury bills, converted to a bond equivalent yield)
determined to be the per annum rate equal to the semi-annual yield to maturity
for United States Treasury securities maturing on the Average Life Date and
trading in the public securities market either as determined by interpolation
between the most recent weekly average yield to
Spare Parts Security Agreement
Appendix I-20
maturity for two series of United States Treasury securities trading in the
public securities markets, (A) one maturing as close as possible to, but earlier
than, the Average Life Date and (B) the other maturing as close as possible to,
but later than, the Average Life Date, in each case as published in the most
recent H.15(519) or, if a weekly average yield to maturity for United States
Treasury securities maturing on the Average Life Date is reported on the most
recent H.15(519), such weekly average yield to maturity as published in such
H.15(519). "H.15(519)" means the weekly statistical release designated as such,
or any successor publication, published by the Board of Governors of the Federal
Reserve System. The date of determination of a Make-Whole Amount shall be the
third Business Day prior to the applicable redemption date and the "most recent
H.15(519)" means the latest H.15(519) published prior to the close of business
on the third Business Day prior to the applicable redemption date. "Average Life
Date" means, for each Note to be redeemed, the date that follows the redemption
date by a period equal to the Remaining Weighted Average Life at the redemption
date of such Note. "Remaining Weighted Average Life" of an Note, at the
redemption date of such Note, means the number of days equal to the quotient
obtained by dividing: (i) the sum of the products obtained by multiplying (A)
the amount of each then remaining installment of principal, including the
payment due on the maturity date of such Note, by (B) the number of days from
and including the redemption date to but excluding the scheduled payment date of
such principal installment, by (ii) the then unpaid principal amount of such
Note.
"Maximum Available Commitment" with respect to any Liquidity Facility, has
the meaning specified in such Liquidity Facility.
"Maximum Class A Collateral Ratio" means 54.0%.
"Maximum Class B Collateral Ratio" means 70.0%.
"Maximum Commitment" means, with respect to any Liquidity Facility, the
Maximum Commitment (as defined in such Liquidity Facility).
"Minimum Sale Price" means, with respect to any Pledged Spare Part or
Other Collateral, at any time, the lesser of (a) 75% of the Fair Market Value of
such Pledged Spare Parts or Other Collateral, and (b) the aggregate principal
amount of the Notes Outstanding (disregarding for this purpose the Notes of any
Class if all of the Notes of such Class are held or beneficially owned by
American Entities), plus accrued and unpaid interest thereon.
Spare Parts Security Agreement
Appendix I-21
"Moody's" means Xxxxx'x Investors Service, Inc.
"Moves" means all Pledged Spare Parts that become Excluded Parts by
operation of one or more transactions contemplated by Section 4.2(a)(iii) of the
Spare Parts Security Agreement or by operation of a transaction contemplated by
a similar provision of any other Collateral Agreement. For the avoidance of
doubt, "Moves" shall not include any Pledged Spare Part: (a) that becomes an
Excluded Part by operation of one or more of the actions contemplated by clause
(i) or (ii) of Section 4.2(a) of the Spare Parts Security Agreement or Section
3.6(b) of the Collateral Maintenance Agreement; or (b) transferred under, or
subject to an agreement or arrangement contemplated by, clause (i) or (ii) of
Section 3.6(a) of the Collateral Maintenance Agreement.
"New Appraisal Report Date" is defined in Section 2.8 of the Collateral
Maintenance Agreement.
"New Appraiser" means an Independent Appraiser that has not previously
provided to the Company a signed Independent Appraiser's Certificate which the
Company has delivered to the Trustee pursuant to the Collateral Maintenance
Agreement or in connection with the Offering Memo.
"New Class" is defined in Exhibit D to the Indenture.
"New Class B Notes" means Notes that are issued as new Class B Notes in
connection with a Refunding of the Original Class B Notes, in the original
principal amount and maturities and bearing interest as specified in the
applicable Indenture Refunding Amendment.
"New Class C Notes" means Notes (other than any Second New Class C Notes)
that are issued as new Class C Notes in connection with a Refunding of the
Original Class C Notes, if issued, in the original principal amount and
maturities and bearing interest as specified in the applicable Indenture
Refunding Amendment.
"Nonappraisal Compliance Report" means a report providing information
relating to compliance by the Company with Section 3.2 of the Collateral
Maintenance Agreement, which shall be substantially in the form of Appendix III
to the Collateral Maintenance Agreement.
Spare Parts Security Agreement
Appendix I-22
"Nonappraisal Compliance Report Date" means January 1, April 1, July 1,
and October 1 of each year, commencing with April 1, 2004.
"Non-Controlling Party" means, at any time, the Class A Noteholders, the
Class B Noteholders, the Class C Noteholders (if any) and each Liquidity
Provider, excluding whichever is the Controlling Party at such time.
"Non-Designated Spare Part" means a Qualified Spare Part owned by the
Company that: (a) is not incorporated in, installed on, attached or appurtenant
to, or being used in, an Aircraft, Engine, Spare Part or Appliance; (b) if such
Qualified Spare Part was previously incorporated in, installed on, attached or
appurtenant to, or used in an Aircraft, Engine, Spare Part, or Appliance, does
not remain owned by a lessor or conditional seller of, or subject to a Lien
applicable to, such Aircraft, Engine, Spare Part, or Appliance; (c) for the
avoidance of doubt, is not leased to, loaned to, or held on consignment by, the
Company; and (d) is not subject to a Loan to any Person.
"Non-Extended Facility" is defined in Section 3.6(d) of the Indenture.
"Non-Extension Drawing" is defined in Section 3.6(d) of the Indenture.
"Non-Performing" means, with respect to any Note, a Payment Default
existing thereunder (without giving effect to any Acceleration); provided, that
in the event of a bankruptcy proceeding in which the Company is a debtor under
the Bankruptcy Code: (a) any Payment Default occurring before the date of the
order of relief in such proceeding will not be taken into account during the
Section 1110 Period; (b) any Payment Default occurring after the date of the
order of relief in such proceeding shall not be taken into consideration if (i)
on or before the expiry of the Section 1110 Period the Company shall have
entered into an agreement of the kind described in Section 1110(a)(2)(A) of the
Bankruptcy Code with respect such Note, and (ii) 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
(c) any Payment Default occurring after the Section 1110 Period will not be
taken into consideration if (i) on or before the expiry of the Section 1110
Period the Company shall have entered into an agreement of the kind described in
Section 1110(a)(2)(A) of the Bankruptcy Code with respect such Note, and (ii)
such Payment Default is cured before the end of the applicable grace period, if
any, set forth in the Indenture.
Spare Parts Security Agreement
Appendix I-23
"Non-Pledged Spare Part" means a Non-Designated Spare Part stored, located
or maintained by or on behalf of the Company at a Section 3.9 Location.
"Non-U.S. Person" means any Person other than a "U.S. person", as defined
in Regulation S.
"Noteholder" means any Holder of one or more Notes.
"Notes" means the Class A Notes, the Class B Notes, and, if any are
issued, the Class C Notes.
"NY UCC" is defined in Section 1.1 of the Spare Parts Security Agreement.
"Obligations" is defined in Section 2.1 of the Spare Parts Security
Agreement.
"Offering Memo" means the Offering Memorandum, dated February 5, 2004, of
the Company relating to the offering of the Notes, as such Offering Memorandum
may be amended or supplemented.
"Officer" means the Chairman of the Board, the President, any Vice
President of any grade, the Chief Financial Officer, the Treasurer, any
Assistant Treasurer, the Secretary, any Assistant Secretary or the Controller of
the Company.
"Officers' Certificate" means a certificate signed by an Officer,
satisfying the requirements of Sections 12.4 and 12.5 of the Indenture.
"Operative Documents" means the Indenture, the Collateral Agreements, the
Collateral Maintenance Agreement, and the Notes.
"Opinion of Counsel" means a written opinion from the General Counsel of
the Company, legal counsel to the Company or another legal counsel who is
reasonably acceptable to the Trustee, which Opinion of Counsel shall comply with
Sections 12.4 and 12.5 of the Indenture. The counsel may be an employee of the
Company. The acceptance by the Trustee (without written objection to the Company
during the 15 Business Days following receipt) of, or its action on, an opinion
of counsel not
Spare Parts Security Agreement
Appendix I-24
specifically referred to above shall be sufficient evidence that such counsel is
acceptable to the Trustee.
"Original Class B Notes" means the securities issued and authenticated on
the Closing Date pursuant to the Indenture and substantially in the form of
Exhibit A-2 thereto.
"Original Class C Notes" means the securities, if any, issued and
authenticated pursuant to Section 10.1 of the Indenture in the original
principal amount and maturities and bearing interest as specified in an
amendment to the Indenture at the time of issuance.
"Original Number of Aircraft" means: (a) initially, (i) with respect to
Boeing model 737-800 Aircraft, 77, and (ii) with respect to Boeing model 777-200
Aircraft, 45; and (b) following any redemption or cancellation of Notes required
by any Fleet Reduction of an Aircraft Model pursuant to Section 3.3 of the
Collateral Maintenance Agreement, the Original Number of Aircraft with respect
to such Aircraft Model shall be the Reduced Number of Aircraft with respect to
such Fleet Reduction.
"Other Collateral" is defined in Section 3.1(a)(i) of the Collateral
Maintenance Agreement.
"Outstanding" or "outstanding", when used with respect to Notes or a Note,
means all Notes theretofore authenticated and delivered under the Indenture,
except:
(a) Notes theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(b) Notes, or portions thereof, for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Trustee in trust for the Holders of such Notes, provided that, if such
Notes are to be redeemed, notice of such redemption has been duly given
pursuant to the Indenture or provision therefor satisfactory to the
Trustee has been made;
(c) Notes for which payment has been deposited with the Trustee or
any Paying Agent in trust pursuant to Article IX of the Indenture (except
to the extent provided therein); and
Spare Parts Security Agreement
Appendix I-25
(d) Notes which have been paid, or for which other Notes shall have
been authenticated and delivered in lieu thereof or in substitution
therefor pursuant to the terms of Section 2.12 of the Indenture.
A Note does not cease to be Outstanding because the Company or one of its
Affiliates holds the Note; provided, however, that in determining whether the
Holders of the requisite aggregate principal amount of Notes Outstanding have
given or concurred in any request, demand, authorization, direction, notice,
consent or waiver under the Indenture or any other Operative Document, Section
2.13 of the Indenture shall be applicable.
"Overdue Scheduled Payment" means any Payment of accrued interest on any
Notes which is not in fact received by the Trustee (whether from the Company, a
Liquidity Provider or otherwise) on or within five days after the Scheduled
Payment Date relating thereto.
"Parts Inventory Report" means, as of any date, a report consisting of:
(a) a list identifying the Pledged Spare Parts by Company part number and brief
description, stating the quantity of each such part included in the Pledged
Spare Parts as of such specified date, and indicating, for each Company part
number, the percentages of such Pledged Spare Parts that are Serviceable Parts
and Unserviceable Parts; (b) a list of the Designated Locations setting forth,
for each such location as of such specified date, the percentage of the
aggregate System Value of all Pledged Spare Parts that is represented by the
aggregate System Value of the Pledged Spare Parts located at that Designated
Location; (c) a list identifying the Non-Pledged Spare Parts by Company part
number and brief description, stating the quantity of each such part included in
the Non-Pledged Spare Parts as of such specified date, and indicating, for each
Company part number the percentages of such Non-Pledged Spare Parts that are
Serviceable Parts and Unserviceable Parts; and (d) a list of the Section 3.9
Locations as of such date, setting forth for each such Section 3.9 Location as
of such specified date, the percentage of the aggregate System Value of all
Non-Pledged Spare Parts that is represented by the aggregate System Value of the
Non-Pledged Spare Parts located at that Section 3.9 Location. Some or all of the
information in a Parts Inventory Report may be in the form of a CD-ROM.
"Parts Inventory Report Date" is defined in Section 2.1 of the Collateral
Maintenance Agreement.
Spare Parts Security Agreement
Appendix I-26
"Parts Inventory Report Period" means, for 2004 and each year thereafter:
(i) February 19 through and including March 1; (ii) May 22 through and including
June 1; (iii) August 22 through and including September 1; and (iv) November 21
through and including December 1.
"Paying Agent" is defined in Section 2.8 of the Indenture.
"Payment" means (i) any payment of principal of, interest on, or
Make-Whole Amount or other premium, if any, with respect to the Notes from the
Company, (ii) any payment of interest on a Class of Notes with funds drawn under
the applicable Liquidity Facility or from the applicable Liquidity Facility Cash
Collateral Account or (iii) any payment received or amount realized by the
Trustee from the exercise of remedies after the occurrence of an Event of
Default.
"Payment Default" means a Default referred to in Section 7.1(a)(i) of the
Indenture.
"Payment Due Rate" means, for any Class of Notes, (a) the applicable Debt
Rate plus 1% or, if less, (b) the maximum rate permitted by applicable law.
"Permanent Regulation S Global Class A Note" is defined in Section 2.1(d)
of the Indenture.
"Permanent Regulation S Global Class B Note" is defined in Section 2.1(d)
of the Indenture.
"Permanent Regulation S Global Notes" is defined in Section 2.1(d) of the
Indenture.
"Permitted Lien" means (a) the rights of any Person existing pursuant to
any Operative Document or any Support Document; (b) Liens attributable to the
Trustee or any Collateral Agent (both in its capacity as Trustee or Collateral
Agent and in its individual capacity); (c) the rights of others under agreements
or arrangements to the extent expressly permitted by the terms of Section 3.6 of
the Collateral Maintenance Agreement; (d) Liens for Taxes of the Company (and
its U.S. federal tax law consolidated group), either not yet due or payable or
being contested in good faith by appropriate proceedings, so long as such Liens
and such proceedings do not involve any
Spare Parts Security Agreement
Appendix I-27
material risk of the sale, forfeiture or loss of the Pledged Spare Parts or the
interest of any Collateral Agent therein or impair the Lien of any Collateral
Agreement; (e) materialmen's, mechanics', workers', repairers', warehousemans',
employees', or other like Liens arising in the ordinary course of business
(including those arising under maintenance agreements entered into in the
ordinary course of business) for amounts the payment of which is either not yet
delinquent for more than 60 days or is being contested in good faith by
appropriate proceedings, so long as such Liens and such proceedings do not
involve any material risk of the sale, forfeiture, or loss of the Pledged Spare
Parts or the interest of any Collateral Agent therein or impair the Lien of any
Collateral Agreement; (f) Liens arising out of any judgment or award against the
Company, so long as such judgment shall, within 60 days after the entry thereof,
have been discharged, vacated or reversed, or with respect to which there shall
have been secured a stay of execution pending appeal or other judicial review
and such judgment or award shall have been discharged, vacated or reversed
within 60 days after the expiration of such stay, so long as during any such 60
day period, such Liens or such judicial proceedings do not involve any material
risk of the sale, forfeiture, or loss of the Pledged Spare Parts or the interest
of any Collateral Agent therein or impair the Lien of any Collateral Agreement;
(g) purchase money security interest Liens held by a vendor of the Company for
goods purchased from such vendor by the Company, in each case arising in the
ordinary course of business and for which the Company pays such vendor within 60
days of such purchase; provided that in each case that such Liens do not involve
any material risk of the sale, forfeiture or loss of the Pledged Spare Parts or
the interest of any Collateral Agent therein or impair the Lien of any
Collateral Agreement and that the aggregate System Value of Pledged Spare Parts
subject to such Liens at any time does not exceed $5,000,000; (h) any other Lien
with respect to which the Company shall have provided a bond, cash collateral or
other security adequate in the reasonable opinion of the Security Agent; and (i)
salvage or similar right of insurers under insurance policies maintained by the
Company.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, trustee,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Pledged Expendable Spare Parts" is defined in clause (2) of the first
paragraph of Section 2.1 of the Spare Parts Security Agreement.
"Pledged Non-Expendable Spare Parts" is defined in clause (1) of the first
paragraph of Section 2.1 of the Spare Parts Security Agreement.
Spare Parts Security Agreement
Appendix I-28
"Pledged Spare Parts" is defined in clause (2) of the first paragraph of
Section 2.1 of the Spare Parts Security Agreement.
"Prepaid Class" is defined in Exhibit D to the Indenture.
"Propeller" includes a part, appurtenance, and accessory of a propeller.
"Provider Incumbency Certificate" is defined in Section 3.8(b) of the
Indenture.
"Provider Representatives" is defined in Section 3.8(b) of the Indenture.
"Purchase Agreement" means the Purchase Agreement, dated February 2, 2004,
by and between the Initial Purchasers and the Company.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Qualified Expendable Spare Parts" is defined in clause (2) of the first
paragraph of Section 2.1 of the Spare Parts Security Agreement.
"Qualified Non-Expendable Spare Parts" is defined in clause (1) of the
first paragraph of Section 2.1 of the Spare Parts Security Agreement.
"Qualified Spare Parts" is defined in clause (2) of the first paragraph in
Section 2.1 of the Spare Parts Security Agreement.
"Quarterly Appraisal Report Date" means, with respect to a Parts Inventory
Report Period ending on: (i) March 1, the immediately following April 1; (ii)
June 1, the immediately following July 1; and (iii) December 1, the immediately
following January 1; in each case, subject to Sections 2.5, 2.6, and 2.8 of the
Collateral Maintenance Agreement.
"Quarterly Methodology" means, in determining an opinion as the Fair
Market Value of the Pledged Spare Parts, taking the following actions: (i)
reviewing the Parts Inventory Report prepared as of the applicable Parts
Inventory Report Date;
Spare Parts Security Agreement
Appendix I-29
(ii) reviewing the Independent Appraiser's internal value database for values
applicable to Qualified Spare Parts included in the Pledged Spare Parts; and
(iii) establishing a ratio of Serviceable Parts to Unserviceable Parts as of the
applicable Parts Inventory Report Date based upon information provided by the
Company.
"Quarterly Parts Inventory Report" means any Parts Inventory Report dated
as of a date falling within a time period set forth in clause (i), (ii) or (iv)
of the definition of "Parts Inventory Report Period"; in each case, subject to
Section 2.5(b)(ii) of the Collateral Maintenance Agreement.
"Rating Agencies" means, collectively, at any time, and with respect to a
Class of Notes, each of up to three nationally recognized rating agencies that
shall have been requested by the Company to rate such Class of Notes and which
shall then be rating such Class of Notes. The initial Rating Agencies with
respect to the Class A Notes and the Class B Notes will be Moody's, Fitch, and
Standard & Poor's.
"Ratings Confirmation" means, with respect to any action proposed to be
taken, a written confirmation from each of the Rating Agencies with respect to
the applicable Class of Notes that such action would not result in (i) a
reduction of the rating for such Class of Notes below the then current rating
for such Class of Notes or (ii) a withdrawal of the rating of such Class of
Notes.
"Record Date" means the 15th day preceding any Interest Payment Date,
whether or not a Business Day.
"Redemption Date", when used with respect to any Note to be redeemed,
means the date fixed for such redemption by or pursuant to the Indenture and
such Note.
"Redemption Percentage", with respect to any Aircraft Model, means, as of
any date of determination, the percentage determined by multiplying (a) the
fraction with (i) a numerator equal to the Original Number of Aircraft for such
Aircraft Model minus the Reduced Number of Aircraft for such Aircraft Model, and
(ii) a denominator equal to the Original Number of Aircraft for such Aircraft
Model by (b) the fraction with (i) a numerator equal to the aggregate Fair
Market Value of the Pledged Spare Parts (as set forth in the Independent
Appraiser's Certificate most recently delivered prior to such date of
determination) that are appropriate for installation on, or use in, only such
Aircraft Model, or the Engines or Spare Parts or Appliances utilized only on
such Aircraft Model,
Spare Parts Security Agreement
Appendix I-30
and (ii) a denominator equal to the aggregate Fair Market Value of the Pledged
Spare Parts for all models of Aircraft (as set forth in such Independent
Appraiser's Certificate).
"Reduced Number of Aircraft" means in the case of an Aircraft Model as to
which the Company's in-service fleet of such Aircraft Model is below the then
applicable Specified Minimum for such Aircraft Model during each day of a period
of any 60 consecutive days as provided in Section 3.3 of the Collateral
Maintenance Agreement, the number of Aircraft of such Aircraft Model remaining
in the Company's in-service fleet as of the last day of such 60-day period.
"Refunding" means a refunding of the Class B Notes or, if issued, the
Class C Notes in accordance with Exhibit D of the Indenture.
"Register" has the meaning provided in Section 2.8 of the Indenture.
"Registrar" has the meaning provided in Section 2.8 of the Indenture.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Definitive Notes" is defined in Section 2.1(e) of the
Indenture.
"Regulation S Global Notes" is defined in Section 2.1(d) of the Indenture.
"Regulation S Restricted Period Legend" is defined in Section 2.2 of the
Indenture.
"Relevant Appraisal Report Date" is defined in Section 2.5(b) of the
Collateral Maintenance Agreement.
"Relevant Appraiser's Certificate" is defined in Section 2.5(b) of the
Collateral Maintenance Agreement.
"Replacement Liquidity Facility" means, for any Liquidity Facility, an
irrevocable revolving credit agreement (or agreements) in substantially the form
of the
Spare Parts Security Agreement
Appendix I-31
replaced Liquidity Facility, including reinstatement provisions, or in such
other form or forms (which may include a letter of credit, surety bond,
insurance policy or guaranty) as shall permit the Rating Agencies to issue a
Ratings Confirmation with respect to each Class of Notes (before downgrading of
such ratings, if any, as a result of the downgrading of the applicable Liquidity
Provider or, if applicable, the downgrading of any guarantor of the obligations
of the applicable Liquidity Provider or any such guarantee becoming invalid or
unenforceable), in a face amount (or in an aggregate face amount) equal to the
Required Amount and issued by a Person (or Persons) (or, if applicable, by a
Person (or Persons) with a guarantor (or guarantors)) having a debt rating
issued by each Rating Agency that is equal to or higher than the applicable
Threshold Rating or with such other ratings and qualifications as shall permit
each Rating Agency to issue a Ratings Confirmation with respect to each Class of
Notes (before downgrading of such ratings, if any, as a result of the
downgrading of the Liquidity Provider or, if applicable, the downgrading of any
guarantor of the obligations of the Liquidity Provider or any such guarantee
becoming invalid or unenforceable). Without limitation of the form that a
Replacement Liquidity Facility otherwise may have pursuant to the preceding
sentence, a Replacement Liquidity Facility for the Class A Notes or the Class B
Notes may have a stated expiration date earlier than 15 days after the Final
Legal Maturity Date so long as such Replacement Liquidity Facility provides for
a Non-Extension Drawing as contemplated by Section 3.6(d) of the Indenture.
"Replacement Liquidity Provider" means a Person who issues a Replacement
Liquidity Facility.
"Request" means a written request for the action therein specified signed
on behalf of the Company by any Officer and delivered to the Trustee. Each
Request shall be accompanied by an Officers' Certificate if and to the extent
required by Section 12.4 of the Indenture.
"Required Amount" means, with respect to the Liquidity Facility or the
Liquidity Facility Cash Collateral Account for any Class of Notes, for any day,
the sum of the applicable aggregate amount of interest, calculated at the rate
per annum equal to the Stated Interest Rate applicable to the related Class of
Notes on the basis of a 360-day year comprised of twelve 30-day months, that
would be payable on such Class of Notes on each of the four consecutive
semi-annual Interest Payment Dates immediately following such day or, if such
day is an Interest Payment Date, on such day and the succeeding three
semi-annual Interest Payment Dates, in each case calculated on the basis of the
outstanding principal amount of such Class of Notes on such date and without
regard to expected future payments of principal on such Class of Notes.
Spare Parts Security Agreement
Appendix I-32
"Required Class A Holders" means from time to time the Holders of more
than 50% in aggregate unpaid principal amount of the Class A Notes then
Outstanding.
"Required Class B Holders" means from time to time the Holders of more
than 50% in aggregate unpaid principal amount of the Class B Notes then
Outstanding.
"Required Class C Holders" means from time to time the Holders of more
than 50% in aggregate unpaid principal amount of the Class C Notes, if issued,
then Outstanding.
"Required Reports" means, with respect to any Appraisal Report Date, the
Independent Appraiser's Certificate, Appraisal Compliance Report, and Parts
Inventory Report relating thereto.
"Responsible Officer" means (i) with respect to the Trustee, any officer
in the corporate trust administration department of the Trustee 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 or her knowledge of and familiarity with a
particular subject and (ii) with respect to a Liquidity Provider, any authorized
officer of such Liquidity Provider.
"Restricted Definitive Class A Notes" is defined in Section 2.1(e) of the
Indenture.
"Restricted Definitive Class B Notes" is defined in Section 2.1(e) of the
Indenture.
"Restricted Definitive Notes" is defined in Section 2.1(e) of the
Indenture.
"Restricted Global Class A Note" is defined in Section 2.1(c) of the
Indenture.
"Restricted Global Class B Note" is defined in Section 2.1(c) of the
Indenture.
"Restricted Global Notes" means the Restricted Global Class A Notes and
the Restricted Global Class B Notes.
Spare Parts Security Agreement
Appendix I-33
"Restricted Legend" is defined in Section 2.2 of the Indenture.
"Restricted Notes" is defined in Section 2.2 of the Indenture.
"Restricted Period" is defined in Section 2.1(d) of the Indenture.
"Rotable" means a Spare Part or Appliance (i) that wears over time and can
be repeatedly and economically restored to a serviceable condition over a period
approximating the life of the flight equipment to which it relates or (ii) that
can be economically restored to a serviceable condition but has a life less than
the related flight equipment and can be overhauled or repaired only a limited
number of times.
"Rule 144A" means Rule 144A under the Securities Act.
"Sales" means all Pledged Spare Parts sold, transferred, or otherwise
disposed of, excluding any Pledged Spare Part: (a) sold, transferred or
otherwise disposed of in a transaction pursuant to Section 4.2(a) of the Spare
Parts Security Agreement or pursuant to a similar provision of any other
Collateral Agreement; or (b) deemed sold pursuant to the proviso of Section
3.6(a) of the Collateral Maintenance Agreement but as to which the Company has
reacquired title.
"Scheduled Payment Date" means (i) with respect to any payment of
interest, the Interest Payment Date applicable thereto, (ii) with respect to any
payment of defaulted interest, the payment date established pursuant to Section
2.16 of the Indenture, (iii) with respect to amounts due on the redemption of
any Note, the Redemption Date applicable thereto, and (iv) with respect to the
final maturity of the Notes, the Final Scheduled Payment Date.
"SEC" means the Securities and Exchange Commission and any government
agency succeeding to its functions.
"Second New Class C Notes" means Notes that are issued as new Class C
Notes in connection with a Refunding of any New Class C Notes that are American
Class C Notes, in the original principal amount and maturities and bearing
interest as specified in the applicable Indenture Refunding Amendment.
Spare Parts Security Agreement
Appendix I-34
"Section 3.9 Location" means, at any time, any location in the United
States owned or leased by the Company where the Company holds Non-Designated
Spare Parts (other than any such location with Non-Designated Spare Parts that
have an immaterial aggregate System Value) that is not a Designated Location,
but which, by operation of Section 3.9 of the Collateral Maintenance Agreement
and Section 4.2(b) of the Spare Parts Security Agreement, is expected to become
a Designated Location.
"Section 1110" means Section 1110 of the Bankruptcy Code.
"Section 1110 Period" means the continuous period of 60 days specified in
Section 1110(a)(2)(A) of the Bankruptcy Code (or such longer period, if any (not
to exceed an additional 75 days), agreed to under Section 1110(b) of the
Bankruptcy Code).
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
"Security Agent" means the Trustee acting in the capacity of security
agent on behalf of the Holders under the Spare Parts Security Agreement and
under the Collateral Maintenance Agreement until a successor replaces it, or is
substituted for it, in accordance with the provisions of the Spare Parts
Security Agreement or the Collateral Maintenance Agreement, as the case may be,
and thereafter means such successor.
"Security Agreement" means the Spare Parts Security Agreement.
"Serviceable Parts" means Pledged Spare Parts or Non-Pledged Spare Parts,
as the context requires, in condition satisfactory for incorporation in,
installation on, attachment or appurtenance to or use in an Aircraft, Engine,
Spare Part or Appliance.
"Shelf Registration Statement" means the shelf registration statement
which may be required with respect to any Class of Notes to be filed by the
Company with the SEC pursuant to a registration rights agreement, other than an
Exchange Offer Registration Statement.
"Spare Part" means an accessory, appurtenance, or part of an Aircraft
(except an Engine or Propeller), Engine (except a Propeller), Propeller, or
Appliance, that is to be installed at a later time in an Aircraft, Engine,
Propeller or Appliance.
Spare Parts Security Agreement
Appendix I-35
"Spare Parts Collateral" is defined in Section 2.1 of the Spare Parts
Security Agreement.
"Spare Parts Documents" is defined in clause (7) of the first paragraph of
Section 2.1 of the Spare Parts Security Agreement.
"Spare Parts Security Agreement" means the Spare Parts Security Agreement,
dated as of the Issuance Date, between the Company and the Security Agent, as
the same may be amended, supplemented, or otherwise modified from time to time
in accordance with its terms.
"Special Default" means a Payment Default or an American Bankruptcy Event.
"Special Record Date" is defined in Section 2.10 of the Indenture.
"Specified Minimum" is defined in Section 3.3(b) of the Collateral
Maintenance Agreement.
"Standard & Poor's" means Standard & Poor's Ratings Services, a division
of The XxXxxx-Xxxx Companies, Inc.
"Stated Expiration Date" is defined in Section 3.6(d) of the Indenture.
"Stated Interest Rate" means, with respect to any Class of Notes, the Debt
Rate for such Class of Notes.
"Subordinated Note Provisions" is defined in Section 4.1 of the Collateral
Maintenance Agreement.
"Successor Company" is defined in Section 5.4(a)(i) of the Indenture.
"Supplemental Security Agreement" means a supplement to the Spare Parts
Security Agreement substantially in the form of Exhibit A to the Spare Parts
Security Agreement.
Spare Parts Security Agreement
Appendix I-36
"Support Documents" means the Liquidity Facilities and the Fee Letters.
"System Value" means, with respect to any Qualified Spare Part as of any
date, the system average unit price of such Qualified Spare Part as of such date
as set forth in the Company's equipment inventory tracking system.
"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.
"Temporary Regulation S Global Class A Note" is defined in Section 2.1(d)
of the Indenture.
"Temporary Regulation S Global Class B Note" is defined in Section 2.1(d)
of the Indenture.
"Temporary Regulation S Global Notes" is defined in Section 2.1(d) of the
Indenture.
"Termination Notice", with respect to any Liquidity Facility, has the
meaning specified in such Liquidity Facility.
"Threshold Amount" means $2,000,000.
"Threshold Rating" means a senior unsecured short-term corporate rating of
F-1 by Fitch (if the applicable Person is then rated by Fitch), a short-term
unsecured debt rating of P-1 by Xxxxx'x and a short-term issuer credit rating of
A-1 by Standard & Poor's; and in the case of any Person who does not have a
senior unsecured short-term corporate rating by Fitch, a short-term unsecured
debt rating from Xxxxx'x or a short-term issuer credit rating from Standard &
Poor's, then in lieu of such rating from such Rating Agencies, a senior
unsecured long-term corporate rating of A in the case of Fitch
Spare Parts Security Agreement
Appendix I-37
(if such Person is then rated by Fitch), a long-term unsecured debt rating of A2
in the case of Xxxxx'x and a long-term issuer credit rating of A in the case of
Standard & Poor's.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the date of the Indenture; provided, however, that
in the event the TIA is amended after such date, "TIA" means, to the extent
required by any such amendment, the TIA as so amended.
"Trust Accounts" is defined in Section 8.13(a) of the Indenture.
"Trust Officer" means any Responsible Officer of the Trustee.
"Trustee" means the party named as such in the Indenture until a successor
replaces it in accordance with the provisions of the Indenture and thereafter
means the successor Trustee and if, at any time, there is more than one Trustee,
"Trustee" as used with respect to the Notes of any Class shall mean the Trustee
with respect to the Notes of that Class.
"Trustee Incumbency Certificate" is defined in Section 3.8(a) of the
Indenture.
"Trustee Representatives" is defined in Section 3.8(a) of the Indenture.
"UCC" means the Uniform Commercial Code as in effect in any applicable
jurisdiction.
"Unapplied Provider Advance", with respect to any Liquidity Facility, has
the meaning specified in such Liquidity Facility.
"Unpaid Advance", with respect to any Liquidity Facility, has the meaning
specified in such Liquidity Facility.
"Unserviceable Parts" means Pledged Spare Parts or Non-Pledged Spare
Parts, as the context requires, that have been either removed from service (i)
because they did not
Spare Parts Security Agreement
Appendix I-38
work correctly or (ii) because upon inspection and testing, they were found not
to meet certain prescribed standards.
"U.S." or "United States" means the United States of America.
"U.S. Air Carrier" means any United States air carrier that is a Citizen
of the United States holding an air carrier operating certificate issued
pursuant to chapter 447 of title 49 of the United States Code for aircraft
capable of carrying 10 or more individuals or 6000 pounds or more of cargo, or
that otherwise is certificated or registered to the extent required to fall
within the purview of Section 1110.
"U.S. Government" means the federal government of the United States, or
any instrumentality or agency thereof the obligations of which are guaranteed by
the full faith and credit of the federal government of the United States.
"U.S. Government Obligations" means securities that are direct obligations
of the U.S. Government which are not callable or redeemable, and shall also
include a depository receipt issued by a bank or trust company as custodian with
respect to any such U.S. Government Obligations or a specific payment of
interest on or principal of any such U.S. Government Obligations held by such
custodian for the account of the holder of a depository receipt so long as such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the U.S. Government Obligations or the specific payment of interest
on or principal of the U.S. Government Obligations evidenced by such depository
receipt.
"USBT" is defined in the first paragraph of the Indenture.
"Warranty Rights" means the rights of the Company under any warranty or
indemnity, express or implied, regarding title, materials, workmanship, design
and patent infringement, or related matters in respect of the Pledged Spare
Parts, in each case to the extent that: (a) such rights relate to the Pledged
Spare Parts (and not to other Spare Parts, Appliances or any other properties or
assets), (b) such rights are assignable at no additional expense to the Company,
and (c) that such assignment does not require the consent of any Person and does
not violate any contract or agreement binding upon the Company relating to such
rights.
Spare Parts Security Agreement
Appendix I-39
"Written Notice" means, from the Trustee or any Liquidity Provider, a
written instrument executed by the Designated Representative of such Person.
SECTION 2.Rules of Construction. Unless the context otherwise requires,
the following rules of construction shall apply for all purposes of the
Operative Documents (including this appendix) and of such agreements as may
incorporate this appendix by reference.
(a) In each Operative Document, unless otherwise expressly provided, a
reference to:
(i) each of the Company, the Trustee, the Collateral Agent, the
Security Agent or any other person includes, without prejudice to the
provisions of any Operative Document, any successor in interest to it and
any permitted transferee, permitted purchaser or permitted assignee of it;
(ii) words importing the plural include the singular and words
importing the singular include the plural;
(iii) any agreement, instrument or document, or any annex, schedule
or exhibit thereto, or any other part thereof, includes, without prejudice
to the provisions of any Operative Document, that agreement, instrument or
document, or annex, schedule or exhibit, or part, respectively, as
amended, modified or supplemented from time to time in accordance with its
terms and in accordance with the Operative Documents, and any agreement,
instrument or document entered into in substitution or replacement
therefor;
(iv) any provision of any law includes any such provision as
amended, modified, supplemented, substituted, reissued or reenacted prior
to the Closing Date, and thereafter from time to time;
(v) the words "Agreement", "this Agreement", "hereby", "herein",
"hereto", "hereof" and "hereunder" and words of similar import when used
in any Operative Document refer to such Operative Document as a whole and
not to any particular provision of such Operative Document;
Spare Parts Security Agreement
Appendix I-40
(vi) the words "including", "including, without limitation",
"including, but not limited to", and terms or phrases of similar import
when used in any Operative Document, with respect to any matter or thing,
mean including, without limitation, such matter or thing; and
(vii) a "Section", an "Exhibit", an "Annex", an "Appendix" or a
"Schedule" in any Operative Document, or in any annex thereto, is a
reference to a Section of, or an exhibit, an annex, an appendix or a
schedule to, such Operative Document or such annex, respectively.
(b) Each exhibit, annex, appendix and schedule to each Operative Document
is incorporated in, and shall be deemed to be a part of, such Operative
Document.
(c) Unless otherwise defined or specified in any Operative Document, all
accounting terms therein shall be construed and all accounting determinations
thereunder shall be made in accordance with GAAP.
(d) Headings used in any Operative Document are for convenience only and
shall not in any way affect the construction of, or be taken into consideration
in interpreting, such Operative Document.
Spare Parts Security Agreement
Appendix I-41
EXHIBIT A
FORM OF SUPPLEMENTAL SECURITY AGREEMENT
(To Add Designated Locations)
SUPPLEMENTAL SECURITY AGREEMENT NO. _____
SUPPLEMENTAL SECURITY AGREEMENT NO. _______, dated as of __________ of
AMERICAN AIRLINES, INC., a Delaware corporation (together with its successors
and assigns, the "Company").
WHEREAS, the Company, which is a certificated air carrier under Section
44705 of title 49 of the U.S. Code, and U.S. Bank Trust National Association, as
Security Agent (the "Security Agent"), have heretofore executed and delivered a
Spare Parts Security Agreement, dated as of February 5, 2004 (the "Security
Agreement"), and terms defined in the Security Agreement and used herein have
such defined meanings unless otherwise defined herein;
WHEREAS, the Security Agreement grants a Lien on, among other things,
certain Pledged Spare Parts to secure (subject to the provisions of the Security
Agreement) the payment of the Notes and the other Obligations;
WHEREAS, the Company has previously designated the locations at which the
Pledged Spare Parts may be maintained by or on behalf of the Company in the
Security Agreement [and in Supplemental Security Agreement No. __];
WHEREAS, the Security Agreement [and Supplemental Security Agreement]
[No.1] [Nos. __ and __] has [have] been duly recorded with the Federal Aviation
Administration at Oklahoma City, Oklahoma, pursuant to the Federal Aviation Act
on the following date as a document or conveyance bearing the following number:
Spare Parts Security Agreement
EXHIBIT A
1
DOCUMENT OR
DATE OF RECORDING CONVEYANCE NO.
Security Agreement......
WHEREAS, the Company, as provided in the Security Agreement, is hereby
executing and delivering to the Security Agent this Supplemental Security
Agreement for the purposes of adding locations at which the Pledged Spare Parts
may be maintained by or on behalf of the Company; and
WHEREAS, all things necessary to make this Supplemental Security Agreement
the valid, binding and legal obligation of the Company, including all proper
corporate action on the part of the Company, have been done and performed and
have happened;
NOW, THEREFORE, THIS SUPPLEMENTAL SECURITY AGREEMENT NO. _____WITNESSETH,
that the locations listed on Schedule 1 hereto shall be Designated Locations for
purposes of the Security Agreement at which Pledged Spare Parts may be
maintained by or on behalf of the Company.
This Supplemental Security Agreement shall be construed as supplemental to
the Security Agreement and shall form a part thereof, and the Security Agreement
is hereby incorporated by reference herein and is hereby ratified, approved and
confirmed.
THIS SUPPLEMENTAL SECURITY AGREEMENT IS DELIVERED IN THE STATE OF NEW
YORK. THIS SUPPLEMENTAL SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Spare Parts Security Agreement
EXHIBIT A
2
IN WITNESS WHEREOF, this Supplemental Security Agreement No. ____ has been
duly executed and delivered all as of the date first above written.
AMERICAN AIRLINES, INC.
By: ___________________________________
Name:
Title:
Spare Parts Security Agreement
EXHIBIT A
3
Schedule 1
to Exhibit A
DESIGNATED LOCATIONS
Spare Parts Security Agreement
Schedule 1 to Exhibit A
1
SUPPLEMENTAL SECURITY AGREEMENT NO. 1
SUPPLEMENTAL SECURITY AGREEMENT NO. 1, dated as of August 19, 2004 of
AMERICAN AIRLINES, INC., a Delaware corporation (together with its successors
and assigns, the "Company").
WHEREAS, the Company, which is a certificated air carrier under Section
44705 of title 49 of the U.S. Code, and U.S. Bank Trust National Association, as
Security Agent (the "Security Agent"), have heretofore executed and delivered a
Spare Parts Security Agreement, dated as of February 5, 2004 (the "Security
Agreement"), and terms defined in the Security Agreement and used herein have
such defined meanings unless otherwise defined herein;
WHEREAS, the Security Agreement grants a Lien on, among other things,
certain Pledged Spare Parts to secure (subject to the provisions of the Security
Agreement) the payment of the Notes and the other Obligations;
WHEREAS, the Company has previously designated the locations at which
the Pledged Spare Parts may be maintained by or on behalf of the Company in the
Security Agreement;
WHEREAS, the Security Agreement has been duly recorded with the Federal
Aviation Administration at Oklahoma City, Oklahoma, pursuant to the Federal
Aviation Act on the following date as a document or conveyance bearing the
following number:
DOCUMENT OR
DATE OF RECORDING CONVEYANCE NO.
Security Agreement................ February 13, 2004 Y007347
WHEREAS, the Company, as provided in the Security Agreement, is hereby
executing and delivering to the Security Agent this Supplemental Security
Agreement for the purposes of adding locations at which the Pledged Spare Parts
may be maintained by or on behalf of the Company; and
WHEREAS, all things necessary to make this Supplemental Security
Agreement the valid, binding and legal obligation of the Company, including all
proper corporate action on the part of the Company, have been done and performed
and have happened;
NOW, THEREFORE, THIS SUPPLEMENTAL SECURITY AGREEMENT NO. 1 WITNESSETH,
that the locations listed on Schedule 1 hereto shall be Designated Locations for
purposes of the Security Agreement at which Pledged Spare Parts may be
maintained by or on behalf of the Company. Further, the Company hereby confirms
its grant of a Lien to the Security Agent on the Pledged Spare Parts being
maintained at the locations listed on Schedule 1 hereto.
This Supplemental Security Agreement shall be construed as supplemental
to the Security Agreement and shall form a part thereof, and the Security
Agreement is hereby incorporated by reference herein and is hereby ratified,
approved and confirmed.
THIS SUPPLEMENTAL SECURITY AGREEMENT IS DELIVERED IN THE STATE OF NEW
YORK. THIS SUPPLEMENTAL SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, this Supplemental Security Agreement No. 1 has been
duly executed and delivered all as of the date first above written.
AMERICAN AIRLINES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
Corporate Finance & Banking
SCHEDULE 1
DESIGNATED LOCATIONS
# LONG NAME ADDRESS
--------- ------------------------------- --------------------------------
107 AMERICAN AIRLINES, INC. SEAT SHOP - ESR
C/O STORES RECEIVING
0000 XX 000XX XXXXXX
XXXXXX XXXX, XX 00000
108 AMERICAN AIRLINES, INC. ATTN: SEAT XXXX 000-0 XXXXX
XXXXXXXXXXX & ENGINEERING CENTER
0000 X. XXXXX XXXX
XXXXX, XX 00000
109 AMERICAN AIRLINES, INC. ATTN: FEDEX A300 LINE
TULSA MAINTENANCE BASE
0000 X. XXXXX XXXX
XXXXX, XX 00000-0000
110 AMERICAN AIRLINES, INC. WIDE BODY LOAD CENTER TOOLING
STORES RECEIVING GROUND OPPS CTR
0000 XX 000XX XXXXXX
XXXXXX XXXX, XX 00000-0000
