Exhibit 4(e)(3)
EXECUTION COPY
AMERICAN AIRLINES, INC.
MBIA INSURANCE CORPORATION
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
WESTLB AG, LONDON BRANCH
American Airlines Pass Through Certificates
Series 2002-1
INDEMNIFICATION AGREEMENT
Dated: As of September 24, 2002
INDEMNIFICATION AGREEMENT, dated as of September 24, 2002 (this "Indemnification
Agreement"), by and among AMERICAN AIRLINES, INC. ("American"), MBIA INSURANCE
CORPORATION (the "Policy Provider") and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., ▇.▇. ▇▇▇▇▇▇
SECURITIES INC., CREDIT SUISSE FIRST BOSTON CORPORATION, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED and WESTLB AG,
LONDON BRANCH (the "Underwriters").
Section 1. Defined Terms. Unless the context clearly requires
otherwise, all capitalized terms used but not defined herein shall have the
respective meanings assigned to them in the Underwriting Agreement, dated
September 17, 2002 (the "Underwriting Agreement"), between American and the
Underwriters.
Section 2. Representations, Warranties and Agreements of the
Underwriters. Each of the Underwriters represents, warrants and agrees with the
Policy Provider that with respect to the offering of the Class G Certificates,
it will not use any offering materials (other than the Prospectus) which make
reference to, or relate to, the Policy Provider without the written consent of
the Policy Provider.
Section 3. Representations and Warranties of American. American
represents and warrants to, and agrees with, the Policy Provider as follows:
(a) The Registration Statement has been filed with, and has been
declared effective by, the Commission and the Prospectus will be filed in
accordance with Rule 424(b) of the rules and regulations of the Commission under
the Securities Act.
(b) Except for the Policy Provider Information and the information
contained in the last three sentences of the second paragraph, the fourth
paragraph (other than the first and fourth sentences) and the eighth paragraph
appearing under the heading "Underwriting" (the "Underwriting Information") in
the Prospectus Supplement, (i) the Registration Statement on the date it became
effective under the Securities Act, neither contained any untrue statement of a
material fact nor omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, and (ii) as of the
date of the Prospectus Supplement, the Prospectus did not, and on the Closing
Date the Prospectus will not, contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
Section 4. Representations, Warranties and Agreements of the Policy
Provider. The Policy Provider represents and warrants to, and agrees with,
American and each of the Underwriters as follows:
(a) Organization and Licensing. The Policy Provider is a New York
domiciled stock insurance company which is licensed under the laws of the State
of New York to write financial guarantee insurance and is duly qualified or
licensed to do business in each jurisdiction where such qualification or
licensing is necessary.
(b) Corporate Power. The Policy Provider has the corporate power and
authority to issue the Policy and execute and deliver this Indemnification
Agreement, the
Intercreditor Agreement and the Policy Provider Agreement and to perform all of
its obligations hereunder and thereunder.
(c) Authorization; Approvals. The Policy Provider has duly
authorized, executed and delivered this Indemnification Agreement, the
Intercreditor Agreement and the Policy Provider Agreement and all licenses,
orders, consents or other authorizations or approvals of any governmental boards
or bodies required for the enforceability of the Policy have been obtained.
(d) Enforceability. The Policy, when issued, will constitute, and
each of this Indemnification Agreement, the Intercreditor Agreement and the
Policy Provider Agreement constitutes, a legal, valid and binding obligation of
the Policy Provider, enforceable in accordance with its terms, except as
enforcement may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, receivership and other similar laws affecting creditors' rights
generally and by general principles of equity and subject to principles of
public policy limiting the right to enforce the indemnification provisions
contained herein insofar as such provisions relate to indemnification for
liabilities arising under federal securities laws.
(e) Financial Information. The financial statements and financial
information of the Policy Provider included in or incorporated by reference into
the Prospectus, fairly present in all material respects the financial condition
of the Policy Provider as of the dates and for the periods covered by such
statements and information in accordance with generally accepted accounting
principles consistently applied.
(f) Policy Provider Information. On the date hereof and on the
Closing Date, the information included in or incorporated by reference into the
Prospectus under the caption "Description of the Policy Provider" (the "Policy
Provider Information") is and will be true and correct in all material respects
and does not and will not contain any untrue statement of a material fact and
does not and will not omit any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The Policy Provider consents to the inclusion in the Prospectus
of the Policy Provider Information.
(g) Modifications to the Policy Provider Information. If, during
such period after the first date of the public offering of the Class G
Certificates when the Prospectus is required by law to be delivered in
connection with sales of the Class G Certificates by an Underwriter or dealer,
any event shall occur as a result of which it is necessary, in the reasonable
opinion of counsel for the Underwriters, counsel for American or counsel for the
Policy Provider, to amend or supplement the Prospectus in order to make the
Policy Provider Information, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, forthwith to prepare and
furnish, at the Policy Provider's own expense, to American, to the Underwriters
and to the dealers (whose names and addresses the Underwriters will furnish to
the Policy Provider) to which the Class G Certificates may have been sold by the
Underwriters and to any other dealers upon request, either amendments or
supplements to the Prospectus so that the Policy Provider Information as so
amended or supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading.
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(h) No Litigation. There are no actions, suits, proceedings or
investigations pending or, to the best of the Policy Provider's knowledge,
threatened against it at law or in equity or before or by any court,
governmental agency, board or commission or any arbitrator which, if decided
adversely, would materially and adversely affect its ability to perform its
obligations under the Policy, this Indemnification Agreement, the Intercreditor
Agreement or the Policy Provider Agreement.
(i) Incorporated Documents. The documents of the parent company of
the Policy Provider incorporated by reference in the Prospectus, at the time
they were filed with the Commission, complied in all material respects with the
requirements of the Exchange Act.
(j) Exemption from Registration. The Policy is exempt from
registration under the Securities Act.
Section 5. Indemnification and Contribution.
(a) The Policy Provider agrees to indemnify and hold harmless (i)
each Underwriter and each person, if any, who controls such Underwriter within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act and (ii) American and each of its directors and each person, if
any, who controls American within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred by any Underwriter or American or
any such controlling person in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Policy Provider Information, or caused by
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Policy Provider, each of its directors and each person, if
any, who controls the Policy Provider within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Policy Provider and to such Underwriter, but only
with reference to the Underwriter Information in the Prospectus.
(c) Except for the Policy Provider Information and the Underwriter
Information in the Prospectus, American agrees to indemnify and hold harmless
the Policy Provider, each of its directors and each person, if any, who controls
the Policy Provider within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act from and against any and all losses,
claims, damages and liabilities (including, without limitation, any legal or
other expenses reasonably incurred by the Policy Provider or any such
controlling person in connection with defending or investigating any such action
or claim) caused by (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or (ii) any untrue
statement or alleged untrue statement of a material fact contained in the
Prospectus or any omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
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(d) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either of the three preceding paragraphs,
such person (the "indemnified party") shall promptly notify the person against
whom such indemnity may be sought (the "indemnifying party") in writing;
provided that the failure to notify the indemnifying party shall not relieve it
from any liability that it may have under this Section 5 except to the extent
that it has been materially prejudiced (through the forfeiture of substantive
rights or defenses) by such failure; provided further that the failure to notify
the indemnifying party shall not relieve it from any liability that it may have
to an indemnified party other than under this Section 5. An indemnifying party
may participate at its own expense in the defense of such action. If it so
elects within a reasonable time after receipt of such notice, an indemnifying
party, jointly with any other indemnifying parties receiving such notice, may,
except as provided in the immediately following sentence, assume the defense of
such action, with counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel, (ii) the indemnifying party has failed within a
reasonable time to retain counsel reasonably satisfactory to the indemnified
party or (iii) the named parties to any such proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be inappropriate due to
actual or potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all such indemnified
parties and that all such fees and expenses shall be reimbursed as they are
incurred. The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(e) If the indemnification provided for in paragraphs (a), (b) or
(c) of this Section 5 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in the case of the indemnities provided in paragraphs (a) (as
between the Policy Provider and the Underwriters) and (b) in such proportion as
is appropriate to reflect the relative fault of the Policy Provider on the one
hand and of the Underwriters on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations and (ii) in the case of the
indemnities provided in paragraphs (a) (as between the Policy Provider and
American) and (c), (A) in such proportion as is appropriate to reflect the
relative benefits received by the Policy Provider on the one hand and
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American on the other hand from the offering of the Class G Certificates or (B)
if the allocation provided by clause (A) of this clause (ii) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (A) above but also the relative fault of
the Policy Provider on the one hand and of American on the other hand in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Policy Provider or American on the one
hand and of the Underwriters on the other hand shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Policy Provider or American or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
Underwriters' respective obligations to contribute pursuant to this Section 5
are several in proportion to the respective principal amounts of Class G
Certificates they have purchased pursuant to the Underwriting Agreement, and not
joint.
(f) American, the Policy Provider and the Underwriters agree that it
would not be just or equitable if contribution pursuant to this Section 5 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (e) above. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in paragraph (e) above shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 5, (i) no Underwriter shall be required to contribute
hereunder any amount in excess of the amount by which the total price at which
the Class G Certificates underwritten by it and distributed to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission and (ii) no Underwriter shall be required to contribute
hereunder and under the Underwriting Agreement in the aggregate any amount in
excess of the amount by which the total price at which the Offered Certificates
underwritten by it and distributed to the public exceeds the amount of any
damages that such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section 11
(f) of the Securities Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The remedies provided for
in this Section 5 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in equity.
(g) The indemnity and contribution provisions contained in this
Section 5 and the representations and warranties of the Policy Provider
contained in this Indemnification Agreement shall remain operative and in full
force and effect regardless of (i) any termination of this Indemnification
Agreement, (ii) any investigation or statement as to the results of any
investigation made by or on behalf of (x) any Underwriter or any person
controlling any Underwriter (y) the Policy Provider, its officers or directors
or any person controlling the Policy Provider or (z) American, its officers or
directors or any person controlling American and (iii) acceptance of and payment
for any of the Class G Certificates.
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Section 6. Amendments, Etc. This Indemnification Agreement may be
amended, modified, supplemented or terminated only by written instrument or
written instruments signed by the parties hereto.
Section 7. Notices. All demands, notices and other communications to
be given hereunder shall be in writing (except as otherwise specifically
provided herein) and shall be mailed by registered mail or personally delivered
and telecopied to the recipient as follows:
(a) To American:
American Airlines, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
Debevoise & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇
(b) To the Policy Provider:
MBIA Insurance Corporation
▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Insured Portfolio Management, Structured Finance
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇
(c) To the Underwriters:
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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Attention: ▇▇▇▇ ▇▇▇▇▇▇, First Vice President
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
Shearman & Sterling
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇
A party may specify an additional or different address or addresses
by writing mailed or delivered to the other parties as aforesaid. All such
notices and other communications shall be effective upon receipt. All such
notices telecopied shall be effective upon acknowledgment of receipt
electronically confirmed by the sender's telecopy machine.
Section 8. Severability. In the event that any provision of this
Indemnification Agreement shall be held invalid or unenforceable by any court of
competent jurisdiction, the parties hereto agree that such holding shall not
invalidate or render unenforceable any other provision hereof. The parties
hereto further agree that the holding by any court of competent jurisdiction
that any remedy pursued by any party hereto is unavailable or unenforceable
shall not affect in any way the ability of such party to pursue any other remedy
available to it.
Section 9. Governing Law. This Indemnification Agreement shall be
governed by and construed in accordance with the laws of the State of New York.
Section 10. Counterparts. This Indemnification Agreement may be
executed in counterparts by the parties hereto, and all such counterparts shall
constitute one and the same instrument.
Section 11. Headings. The headings of Sections contained in this
Indemnification Agreement are provided for convenience only. They form no part
of this Indemnification Agreement and shall not affect its construction or
interpretation.
Section 12. Miscellaneous. This Indemnification Agreement shall
inure to the benefit and be binding upon the parties hereto and their respective
successors and assigns and the officers and directors and controlling persons
referred to in Section 5 hereof, and no other person shall have any right or
obligation hereunder. This Indemnification Agreement supercedes all prior
agreements or understandings entered into by the Policy Provider relating to the
subject matter hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
all as of the day and year first above mentioned.
AMERICAN AIRLINES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director,
Corporate Finance &
Banking
MBIA INSURANCE CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
On their behalf and on behalf of
the several Underwriters
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
By: ▇.▇. ▇▇▇▇▇▇ SECURITIES INC
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President