EXHIBIT 1
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AMR CORPORATION
(a Delaware corporation)
$300,000,000
Senior Convertible Notes due 2024
UNDERWRITING AGREEMENT
Dated: February 10, 2004
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TABLE OF CONTENTS
Page
SECTION 1. REPRESENTATIONS AND WARRANTIES................................................................... 2
(a) Representations and Warranties by the Issuers........................................................ 2
(i) Form S-3 Eligibility..................................................................... 2
(ii) Effective Registration Statement......................................................... 3
(iii) Incorporated Documents................................................................... 3
(iv) Independent Accountants.................................................................. 3
(v) Financial Statements..................................................................... 4
(vi) No Material Adverse Change in Business................................................... 4
(vii) Good Standing of the Company............................................................. 4
(viii) Good Standing of Subsidiaries............................................................ 5
(ix) Capitalization........................................................................... 5
(x) Authorization of this Agreement.......................................................... 5
(xi) Authorization of the Indenture........................................................... 5
(xii) Authorization of the Securities.......................................................... 6
(xiii) Description of the Notes, the Indenture (as supplemented and amended by the First
Supplemental Indenture) and the Guarantee............................................... 6
(xiv) Authorization and Description of Common Stock............................................ 6
(xv) Absence of Defaults and Conflicts........................................................ 7
(xvi) Absence of Labor Dispute................................................................. 8
(xvii) Absence of Further Requirements.......................................................... 8
(xviii) Investment Company Act................................................................... 8
(xix) Environmental Laws....................................................................... 8
(xx) ERISA.................................................................................... 9
(xxi) Insurance................................................................................ 9
(xxii) Taxes.................................................................................... 9
(xxiii) Internal Controls........................................................................ 10
(xxiv) No Unlawful Payments..................................................................... 10
(xxv) No Brokerage Commission; Finder's Fee.................................................... 10
(xxvi) Dividend Payments........................................................................ 10
(xxvii) Reporting Company........................................................................ 10
(xxviii) Air Carrier Certification................................................................ 10
(xxix) Possession of Licenses and Permits....................................................... 10
(b) Officer's Certificates............................................................................... 11
SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING....................................................... 11
(a) Sale of Initial Securities........................................................................... 11
(b) Option Securities.................................................................................... 11
(c) Payment of Purchase Price............................................................................ 12
(d) Denominations; Registration.......................................................................... 12
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Page
SECTION 3. COVENANTS OF THE COMPANY......................................................................... 12
SECTION 4. PAYMENT OF EXPENSES.............................................................................. 15
(a) Expenses 16
(b) Termination of Agreement............................................................................. 15
SECTION 5. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS...................................................... 16
(a) Opinions of Counsel for the Issuers.................................................................. 16
(b) Opinion of Counsel for the Underwriters.............................................................. 16
(c) Officers' Certificate................................................................................ 16
(d) Accountant's Comfort Letter.......................................................................... 16
(e) Indenture............................................................................................ 17
(f) No Stop Order........................................................................................ 17
(g) Conditions to Purchase of Option Securities.......................................................... 17
(i) Officers' Certificate.................................................................... 17
(ii) Opinions of Counsel for the Company...................................................... 17
(iii) Opinion of Counsel for the Underwriters.................................................. 17
(iv) Bring-down Comfort Letter................................................................ 17
(h) Additional Documents................................................................................. 17
(i) Termination of Agreement............................................................................. 18
SECTION 6. ADDITIONAL AGREEMENTS............................................................................ 18
SECTION 7. INDEMNIFICATION AND CONTRIBUTION................................................................. 19
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY................................... 22
SECTION 9. TERMINATION OF AGREEMENT......................................................................... 22
(a) Termination; General................................................................................. 22
(b) Liabilities.......................................................................................... 23
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Page
SECTION 10. NOTICES.......................................................................................... 23
SECTION 11. DEFAULT.......................................................................................... 23
SECTION 12. PARTIES.......................................................................................... 24
SECTION 13. GOVERNING LAW AND TIME........................................................................... 24
SECTION 14. EFFECT OF HEADINGS............................................................................... 24
SECTION 15. COUNTERPARTS..................................................................................... 24
SCHEDULES
Schedule A Underwriters
Schedule B Summary of Terms of Senior Convertible Notes Due 2024
EXHIBITS
Exhibit A Form of Opinion of Gary F. Kennedy, Senior Vice President and
General Counsel of the Company, to be Delivered Pursuant to
Section 5(a)
Exhibit B Form of Opinion of Debevoise & Plimpton LLP, Counsel for the
Company, to be Delivered Pursuant to Section 5(a)
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AMR CORPORATION
$300,000,000
SENIOR CONVERTIBLE NOTES DUE 2024
UNDERWRITING AGREEMENT
February 10, 2004
Credit Suisse First Boston LLC
Morgan Stanley & Co. Incorporated
for themselves and as Representatives
for the Underwriters named on Schedule A
hereto (the "Representatives")
c/o Credit Suisse First Boston LLC
11 Madison Avenue
New York, NY 10010
Ladies and Gentlemen:
AMR Corporation, a Delaware corporation (the "Company"), and American
Airlines Inc., a Delaware corporation and a wholly-owned subsidiary of the
Company (the "Guarantor" and, together with the Company, the "Issuers") confirm
their agreement with you, as representatives of the Underwriters listed on
Schedule A hereto (the "Underwriters"), with respect to the issue and sale by
the Company and the purchase by the several Underwriters of $300,000,000
aggregate principal amount of the Company's Senior Convertible Notes due 2024
(the "Notes"), and with respect to the grant by the Company to the Underwriters
of the option described in Section 2(b) hereof to purchase all or any part of an
additional $45,000,000 aggregate principal amount of the Notes. The aforesaid
$300,000,000 aggregate principal amount of Notes (the "Initial Securities") to
be purchased by the Underwriters and all or any part of the $45,000,000
aggregate principal amount of Notes subject to the option described in Section
2(b) hereof (the "Option Securities") will both be unconditionally guaranteed
pursuant to a Guarantee to be dated as of the Closing Time (as defined in
Section 2(c)) (the "Guarantee") on a senior basis by the Guarantor. The Initial
Securities, the Option Securities and the Guarantee are hereinafter called,
collectively, the "Securities." The Securities are to be issued pursuant to an
indenture (the "Indenture") dated as of February 1, 2004 between the Company and
Wilmington Trust Company, as trustee (the "Trustee"), as supplemented and
amended by the Supplemental Indenture No. 2004-1 (the "First Supplemental
Indenture") to be dated as of the Closing Time (as defined in Section 2(c))
among the Company, the Guarantor and the Trustee.
The Notes are convertible, subject to certain conditions, at the option
of the holder prior to maturity (unless previously redeemed or otherwise
purchased) into shares of common stock, par value $1.00 per share, of the
Company (the "Common Stock") in accordance with the terms of the Notes and the
Indenture, as described in Schedule B hereto. Securities issued in book-entry
form will be issued to Cede & Co. as nominee of The Depository Trust Company
("DTC").
The Company has prepared and filed on Form S-3 with the Securities and
Exchange Commission (the "Commission") a registration statement (File Nos.
333-110760 and 333-110760-01) (including the exhibits thereto and the documents
incorporated by reference therein, the "Registration Statement") relating to the
Company's debt securities (including the Securities), common stock and other
securities and the offering thereof from time to time in accordance with Rule
415 under the Securities Act of 1933, as amended (the "Securities Act"). The
Registration Statement includes a basic prospectus referred to below which, as
supplemented from time to time, will be used in connection with offerings of
such debt securities, common stock and other securities. As provided in Section
3(a), a prospectus supplement reflecting the terms of the Securities, the terms
of the offering thereof and the other matters set forth therein has been
prepared and will be filed together with the basic prospectus referred to below
pursuant to Rule 424 under the Securities Act (such prospectus supplement, in
the form first filed on or after the date hereof pursuant to Rule 424, is herein
referred to as the "Prospectus Supplement"). The basic prospectus included in
the Registration Statement and relating to offerings of debt securities, common
stock and other securities by the Company under the Registration Statement, as
supplemented by the Prospectus Supplement, is herein called the "Prospectus",
except that, if such basic prospectus is amended on or prior to the date on
which the Prospectus Supplement is first filed pursuant to Rule 424, the term
"Prospectus" shall refer to such basic prospectus as so amended and as
supplemented by the Prospectus Supplement, in either case including the
documents filed by the Company or the Guarantor with the Commission pursuant to
the Securities Exchange Act of 1934, as amended (the "Exchange Act") that are
incorporated by reference therein. The term "preliminary prospectus" means a
preliminary prospectus supplement specifically relating to the Securities,
together with the basic prospectus and including the documents filed by the
Company or the Guarantor with the Commission pursuant to the Exchange Act that
are incorporated by reference therein. Any reference herein to the terms
"amendment" or "supplement" with respect to the Registration Statement, the
Prospectus, or any preliminary prospectus shall be deemed to refer to and
include any documents filed with the Commission under the Exchange Act after the
date hereof, the date the Prospectus is filed with the Commission, or the date
of such preliminary prospectus, as the case may be, and incorporated therein by
reference pursuant to Item 12 of Form S-3 under the Securities Act.
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included," "stated" or "described"
in the Prospectus (or other references of like import) shall be deemed to mean
and include all such financial statements and schedules and other information
which are incorporated by reference in the Prospectus; and all references in
this Agreement to amendments or supplements to the Prospectus shall be deemed to
mean and include the filing of any document under the Exchange Act, which is
incorporated by reference in the Prospectus.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Issuers. Each of the
Issuers, jointly and severally, represents and warrants to each Underwriter as
of the date hereof, as follows:
(i) Form S-3 Eligibility. The Company and the Guarantor
each meets the requirements for use of Form S-3 under the Securities
Act.
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(ii) Effective Registration Statement. The Registration
Statement has been declared effective by the Commission. On the
effective date of the Registration Statement such Registration
Statement complied in all material respects with the applicable
requirements of the Securities Act and the rules and regulations of the
Commission thereunder (the "Securities Act Regulations"), and the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the
applicable rules and regulations of the Commission thereunder (the
"Trust Indenture Act Regulations") and did not include an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; the Registration Statement and any amendments thereof, on
the date hereof, and the Prospectus, and any amendments thereof and
supplements thereto, as of their respective filing or issue dates and
at the Closing Time, comply and will comply in all material respects
with the requirements of the Securities Act, the Securities Act
Regulations, the Trust Indenture Act and the Trust Indenture Act
Regulations, and (i) neither the Registration Statement nor any
amendments thereof, as of any such respective dates, includes or will
include an untrue statement of a material fact or omits or will omit to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading and (ii) neither the
Prospectus nor any amendments thereof or supplements thereto, as of any
such respective dates, and, if any Option Securities are purchased, at
each Date of Delivery, includes or will include an untrue statement of
a material fact or omits or will omit to state any material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; except that this
representation and warranty does not apply to statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company in connection with the Registration Statement or
the Prospectus or any amendment thereof or supplement thereto by or on
behalf of any Underwriter through the Representatives expressly for use
in the Registration Statement or the Prospectus, or to statements or
omissions in that part of the Registration Statement which constitutes
the Statement of Eligibility under the Trust Indenture Act (Form T-1)
of the Trustee.
(iii) Incorporated Documents. The Prospectus as delivered
from time to time shall incorporate by reference the most recent Annual
Report of the Company on Form 10-K filed with the Commission and each
Quarterly Report of the Company on Form 10-Q filed with the Commission
and each Current Report of the Company on Form 8-K filed (not
furnished) with the Commission and such other reports as specifically
incorporated by reference in the Prospectus (the "Incorporated
Documents"). The Incorporated Documents filed on or before the date
hereof are referred to herein as the "SEC Reports." The Incorporated
Documents at the time they were or hereafter are filed with the
Commission, or if amended, as so amended, complied and will comply in
all material respects with the requirements of the Exchange Act and the
rules and regulations of the Commission thereunder (the "Exchange Act
Regulations").
(iv) Independent Accountants. Ernst & Young LLP, who
reported on the annual consolidated financial statements of the Company
and of the Guarantor that are incorporated by reference in the
Registration Statement and the Prospectus, are
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independent public accountants as required by the Securities Act and
the Securities Act Regulations.
(v) Financial Statements.
(A) Financial Statements of the Company. The
financial statements of the Company, together with the related
schedules and notes, included in the SEC Reports and to be incorporated
by reference into the Prospectus, present fairly the financial position
of the Company and its consolidated subsidiaries at the dates indicated
and the statement of income, shareholders' equity and cash flows of the
Company and its consolidated subsidiaries for the periods specified;
said financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved (except as indicated
in the footnotes to such financial statements). The supporting
schedules included in the SEC Reports and to be incorporated by
reference into the Prospectus present fairly in accordance with GAAP
the information required to be stated therein.
(B) Financial Statements of the Guarantor. The
financial statements of the Guarantor, together with the related
schedules and notes, included in the SEC Reports and to be incorporated
by reference into the Prospectus, present fairly the financial position
of the Guarantor and its consolidated subsidiaries at the dates
indicated and the statement of income, shareholders' equity and cash
flows of the Guarantor and its consolidated subsidiaries for the
periods specified; said financial statements have been prepared in
conformity with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved (except
as indicated in the footnotes to such financial statements). The
supporting schedules included in the SEC Reports and to be incorporated
by reference into the Prospectus present fairly in accordance with GAAP
the information required to be stated therein.
(vi) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein or
contemplated thereby, (A) there has been no material adverse change in
the condition, financial or otherwise, or the earnings, results of
operations or general affairs of the Company and its subsidiaries taken
as a whole, whether or not arising in the ordinary course of business
(a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its Subsidiaries (as defined
below), other than those in the ordinary course of business, which are
material with respect to the Company and its Subsidiaries taken as a
whole, and (C) there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital
stock.
(vii) Good Standing of the Company. The Company is a
corporation duly incorporated and validly existing in good standing
under the laws of the State of Delaware and has corporate power and
authority to own its properties and conduct its business as described
in the SEC Reports and to enter into and perform its obligations under,
or as contemplated by, this Agreement. The Company is duly qualified as
a foreign corporation to transact business and is in good standing in
each other jurisdiction
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in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
(viii) Good Standing of Subsidiaries. Each of the Guarantor,
AMR Investment Services, Inc., American Eagle Airlines, Inc. and
Executive Airlines, Inc. (each a "Subsidiary" and, collectively, the
"Subsidiaries") has been duly organized and is validly existing as a
corporation, partnership or limited liability company, as the case may
be, in good standing under the laws of the jurisdiction of its
incorporation or organization, as the case may be, has the power and
authority to own, lease and operate its properties and to conduct its
business as described in the SEC Reports and is duly qualified as a
foreign corporation, partnership or limited liability company, as the
case may be, to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would
not result in a Material Adverse Effect; except as otherwise disclosed
in the SEC Reports, all of the issued and outstanding equity interests
of each such Subsidiary have been duly authorized and validly issued,
are fully paid and non-assessable and are owned by the Company,
directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity; none of
the outstanding equity interests of any Subsidiary was issued in
violation of the preemptive or similar rights of any securityholder of
such Subsidiary. The Guarantor is the only "significant subsidiary" of
the Company (as such term is defined in Rule 1-02 of Regulation S-X).
(ix) Capitalization. The authorized, issued and
outstanding shares of capital stock of the Company are as set forth in
the SEC Reports (except for subsequent issuances, if any, pursuant to
this Agreement or pursuant to reservations, agreements, convertible
securities, options or employee benefit plans referred to in the SEC
Reports and/or referred to in clauses (B), (C) or (D) of Section 3(j)
hereof). The shares of issued and outstanding capital stock of the
Company have been duly authorized and validly issued and are fully paid
and non-assessable; none of the outstanding shares of capital stock of
the Company was issued in violation of any preemptive or other similar
rights of any securityholder of the Company. Other than as referred to
in this subparagraph (ix) or as disclosed in the SEC Reports, no
options, warrants or other rights to purchase, agreements or other
obligations to issue, or rights to convert any obligations into or
exchange any securities for, shares of capital stock of or ownership
interests in the Company are outstanding.
(x) Authorization of this Agreement. This Agreement has
been duly authorized, executed and delivered by each of the Issuers.
(xi) Authorization of the Indenture. The Indenture (as
supplemented and amended by the First Supplemental Indenture) has been
duly authorized by each of the Issuers and, when duly executed and
delivered by each of the Issuers and the Trustee, assuming the
Indenture (as supplemented and amended by the First Supplemental
Indenture) constitutes the legal, valid and binding agreement of the
Trustee, will
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constitute a valid and binding agreement of each of the Issuers,
enforceable against each of the Issuers in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity
(regardless of whether enforceability is considered in a proceeding in
equity or at law).
(xii) Authorization of the Securities.
(A) Notes. The Notes have been duly authorized
and, at the Closing Time, will have been duly executed by the Company
and, when authenticated, issued and delivered in the manner provided
for in the Indenture (as supplemented and amended by the First
Supplemental Indenture) and delivered against payment by the
Underwriters in accordance with the terms of this Agreement and the
Indenture (as supplemented and amended by the First Supplemental
Indenture), will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their
terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law), and will be in the form contemplated by, and
entitled to the benefits of, the Indenture (as supplemented and amended
by the First Supplemental Indenture).
(B) Guarantee. The Guarantee has been duly and
validly authorized by the Guarantor and, when the Notes are issued,
authenticated and delivered by the Company against payment by the
Underwriters in accordance with the terms of this Agreement and the
Indenture (as supplemented and amended by the First Supplemental
Indenture), will constitute the valid and binding obligation of the
Guarantor, enforceable against the Guarantor in accordance with its
terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law), and will be in the form contemplated by, and
entitled to the benefits of, the Indenture.
(xiii) Description of the Notes, the Indenture (as
supplemented and amended by the First Supplemental Indenture) and the
Guarantee. As of the Closing Time, the Notes, the Indenture (as
supplemented and amended by the First Supplemental Indenture) and the
Guarantee will conform in all material respects to the respective
descriptions thereof contained in the Prospectus.
(xiv) Authorization and Description of Common Stock. The
Common Stock conforms in all material respects to the description
thereof contained in the SEC Reports and will conform in all material
respects to the description thereof in the Prospectus, and
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such description will conform in all material respects to the rights
set forth in the instruments defining the same. Upon issuance and
delivery of the Notes in accordance with this Agreement and the
Indenture (as supplemented and amended by the First Supplemental
Indenture), the Notes will be convertible at the option of the holder
thereof into shares of Common Stock in accordance with the terms of the
Notes and the Indenture (as supplemented and amended by the First
Supplemental Indenture); the shares of Common Stock issuable upon
conversion of the Notes have been duly authorized and reserved for
issuance upon such conversion by all necessary corporate action and
such shares, when issued upon such conversion in accordance with the
terms of the Notes, will be validly issued and will be fully paid and
non-assessable; no holder of such shares will be subject to personal
liability by reason of being such a holder; and the issuance of such
shares upon such conversion will not be subject to the preemptive or
other similar rights of any securityholder of the Company.
(xv) Absence of Defaults and Conflicts. None of the
Issuers is in violation of its charter or by-laws or other constituting
or organizational document or in default in the performance or
observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or instrument to which
the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries may be bound, or to which any of the
property or assets of the Company or any of its Subsidiaries is subject
(collectively, "Agreements and Instruments") except for such defaults
that would not reasonably be expected to result in a Material Adverse
Effect; and the execution and delivery by the Company of this
Agreement, the Indenture (as supplemented and amended by the First
Supplemental Indenture) and the Securities, the consummation by the
Company of the transactions contemplated by this Agreement, and the
compliance by the Company with its obligations hereunder and the terms
hereof and thereof do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or a Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
of its Subsidiaries pursuant to, the Agreements and Instruments (except
for such conflicts, breaches, defaults or Repayment Events or liens,
charges or encumbrances that, singly or in the aggregate, would not
reasonably be expected to result in a Material Adverse Effect), or
result in a violation of the provisions of the Certificate of
Incorporation or By-Laws, as amended, or other constituting or
organizational document of the Company or any of its Subsidiaries, or
any applicable law, statute, rule, regulation, judgment, order, write
or decree of any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any of its
Subsidiaries or any of their respective assets, properties or
operations, except, in each case, for such conflicts, breaches,
violations or defaults, that, singly or in the aggregate, would not
reasonably be expected to result in a Material Adverse Effect. As used
herein, a "Repayment Event" means any event or condition which gives
the holder of any note, debenture or other evidence of indebtedness (or
any person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment prior to the stated maturity or
date of mandatory redemption or repayment thereof of all or a portion
of such indebtedness by the Company or any of its Subsidiaries.
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(xvi) Absence of Labor Dispute. Other than as described in
the SEC Reports, no labor dispute with the employees of the Company or
any of its Subsidiaries exists or, to the knowledge of the Company, is
imminent which the Company expects to have a Material Adverse Effect.
(xvii) Absence of Further Requirements. No consent,
approval, authorization, order or license of, or filing with or notice
to, any government, governmental instrumentality, regulatory body or
authority or court, domestic or foreign, is required for the
performance by each Issuer of its obligations hereunder or under the
Indenture (as supplemented and amended by the First Supplemental
Indenture), in connection with the offering, issuance or sale of the
Securities hereunder, the issuance of shares of Common Stock upon
conversion of the Notes, the consummation of the transactions
contemplated by this Agreement, or for the valid authorization,
execution, delivery and performance by each Issuer of this Agreement or
the Indenture (as supplemented and amended by the First Supplemental
Indenture), or for the valid authorization, issuance, sale and delivery
of the Securities, except such as have been already obtained and or as
may be required under the Securities Act or the Securities Act
Regulations or state securities laws in connection with the
Registration Statement and except for the qualification of the
Indenture under the Trust Indenture Act and the listing of the Common
Stock issued upon conversion of the Notes on the New York Stock
Exchange.
(xviii) Investment Company Act. Neither the Company nor any
of its Subsidiaries is, nor upon the issuance and sale of the
Securities as herein contemplated and the application of the net
proceeds therefrom as described in the Prospectus Supplement will be,
an "investment company" or an entity "controlled" by an "investment
company," as such terms are defined in the Investment Company Act of
1940, as amended (the "1940 Act").
(xix) Environmental Laws. There has been no storage,
disposal, generation, manufacture, refinement, transportation, handling
or treatment of toxic wastes, medical wastes, hazardous wastes or
hazardous substances by the Company or any of its Subsidiaries (or, to
the knowledge of the Company, any of their predecessors in interest)
at, upon or from any of the property now or previously owned or leased
by the Company or its Subsidiaries in violation of, and neither the
Company nor any of its Subsidiaries has any liability under, any
applicable law, ordinance, rule, regulation, order, judgment, decree or
permit or which would require remedial action under any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit
applicable to the Company or any of its Subsidiaries, except for any
violation or remedial action which would not have, or could not be
reasonably likely to have, singularly or in the aggregate with all such
violations and remedial actions, a Material Adverse Effect; there has
been no material spill, discharge, leak, emission, injection, escape,
dumping or release of any kind onto such property or into the
environment surrounding such property of any toxic wastes, medical
wastes, solid wastes, hazardous wastes or hazardous substances due to
or caused by the Company or any of its Subsidiaries or with respect to
which the Company or any of its Subsidiaries have knowledge, except for
any such spill, discharge, leak, emission, injection, escape, dumping
or release which would not have or would not be
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reasonably likely to have, singularly or in the aggregate with all such
spills, discharges, leaks, emissions, injections, escapes, dumpings and
releases, a Material Adverse Effect. The terms "hazardous wastes,"
"toxic wastes," "hazardous substances" and "medical wastes" shall have
the meanings specified in any applicable local, state, federal and
foreign laws or regulations with respect to environmental protection.
In the ordinary course of its business, the Company conducts a
periodic review of the effect of any and all applicable foreign,
federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws") on the business, operations and properties of the Company and
its Subsidiaries, in the course of which it identifies and evaluates
associated costs and liabilities (including, without limitation, any
capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any permit, license
or approval, any related constraints on operating activities and any
potential liabilities to third parties). On the basis of such review,
the Company has reasonably concluded that such associated costs and
liabilities have not had and would not, singularly or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(xx) ERISA. Each of the Issuers is in compliance in all
material respects with all presently applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended, including
the regulations and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in ERISA) has occurred with respect to
any "pension plan" (as defined in ERISA) for which any Issuer would
have any liability; no Issuer has incurred and does not expect to incur
liability under (A) Title IV of ERISA with respect to the termination
of, or withdrawal from, any "pension plan" or (B) Section 412 or 4971
of the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the "Code"); and
each "pension plan" for which any Issuer would have any liability that
is intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which the Company reasonably expects would
cause the loss of such qualification.
(xxi) Insurance. The Company and each of its Subsidiaries
carry, or are covered by, insurance in such amounts and covering such
risks as is adequate for the conduct of their respective businesses and
the value of their respective properties.
(xxii) Taxes. The Company and each of its Subsidiaries has
filed all federal, state and local income and franchise tax returns
required to be filed through the date hereof, except for such
exceptions as would not individually or collectively have a Material
Adverse Effect, and has paid all taxes due thereon, except such as are
being contested in good faith by appropriate proceedings, and no tax
deficiency has been determined adversely to the Company or any of its
Subsidiaries which has had, nor does the Company have any knowledge of
any tax deficiency which, if determined adversely to the Company or any
of its Subsidiaries, might have, a Material Adverse Effect.
-9-
(xxiii) Internal Controls. The Company and the Guarantor (A)
make and keep accurate books and records that, in reasonable detail,
accurately and fairly reflect the transactions and disposition of the
assets of the Company and the Guarantor, and (B) maintain internal
accounting controls which provide reasonable assurance that (i)
transactions are executed in accordance with management's
authorization, (ii) transactions are recorded as necessary to permit
preparation of its financial statements and to maintain accountability
for its assets, (iii) access to its assets is permitted only in
accordance with management's authorization and (iv) the recorded
accountability for its assets is compared with existing assets at
reasonable intervals.
(xxiv) No Unlawful Payments. The Company has implemented
compliance programs for purposes of (i) informing the appropriate
officers and employees of the Company and its Subsidiaries of (A) the
Company's policies against (1) the use of corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating
to political activity, (2) direct or indirect unlawful payments to any
foreign or domestic government official or employee from corporate
funds, (3) violations of the Foreign Corrupt Practices Act of 1977, as
amended and (4) making any bribes, rebates, payoffs, influence payments
kickbacks or other unlawful payments and (ii) requiring such officers
and employees to report to the Company any knowledge they may have of
violations of the Company's policies referred to above and no such
reports have been made.
(xxv) No Brokerage Commission; Finder's Fee. To the best of
the Company's knowledge after due inquiry, there are no contracts,
agreements or understandings between the Company or any Subsidiary and
any person that would give rise to a valid claim against the Company or
the Underwriters for a brokerage commission, finder's fee or other like
payment in connection with this offering.
(xxvi) Dividend Payments. The Guarantor is not currently
prohibited, directly or indirectly, under any agreement or other
instrument to which it is a party or is subject, from paying any
dividends to the Company, from making any other distribution on the
Guarantor's capital stock or from repaying to the Company any loans or
advances to the Guarantor from the Company, except as would not have a
Material Adverse Effect.
(xxvii) Reporting Company. The Company is subject to the
reporting requirements of Section 13 or Section 15(d) of the Exchange
Act.
(xxviii) Air Carrier Certification. The Guarantor, a wholly
owned subsidiary of the Company, (i) is an "air carrier" within the
meaning of 49 U.S.C. Section 40102(a), (ii) holds an air carrier
operating certificate issued by the Secretary of Transportation
pursuant to Chapter 447 of Title 49 of the Unites States Code for
aircraft capable of carrying 10 or more individuals or 6,000 pounds or
more of cargo, and (iii) is a "citizen of the United States" as defined
in 49 U.S.C. 40102.
(xxix) Possession of Licenses and Permits. The Company and
its Subsidiaries possess such permits, licenses, approvals, consents
and other authorizations (collectively, "Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies
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or bodies and third parties, governmental or otherwise, necessary to
conduct the business now operated by them as described in the SEC
Reports, except for such failures to possess Licenses as would not
individually or collectively have a Material Adverse Effect; the
Company and its Subsidiaries are in compliance with the terms and
conditions of all such Licenses, except where the failure so to comply
would not, singly or in the aggregate, have a Material Adverse Effect;
all of the Licenses are valid and in full force and effect, except when
the invalidity of such Licenses or the failure of such Licenses to be
in full force and effect would not have a Material Adverse Effect; and
neither the Company nor any of its subsidiaries has received any notice
of proceedings relating to the revocation or modification of any such
Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material
Adverse Effect.
(b) Officer's Certificates. Any certificate signed by any officer
of the Company delivered to the Underwriters or to counsel for the Underwriters
shall be deemed a representation and warranty by the Company to the Underwriters
as to the matters covered thereby as of the date or dates indicated in such
certificate.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Sale of Initial Securities. On the basis of the
representations, warranties and agreements herein contained and subject to the
terms and conditions herein set forth, the Issuers, jointly and severally, agree
to sell to the several Underwriters, and each Underwriter agrees, severally and
not jointly, to purchase from the Issuers at the price set forth in Schedule B
hereto, the principal amount of the Initial Securities set forth opposite such
Underwriter's name in Schedule A hereto.
(b) Option Securities. In addition, on the basis of the
representations, warranties and agreements herein contained and subject to the
terms and conditions herein set forth, the Issuers hereby grant an option to the
Underwriters to purchase up to an additional $45,000,000 aggregate principal
amount of Option Securities at the price per Security set forth in Schedule B
for the Initial Securities plus cash interest from the date the Notes are issued
to the Underwriters to the date the option is exercised. The option hereby
granted will expire 30 days after the date hereof and may be exercised in whole
or in part from time to time only for the purpose of covering over-allotments
which may be made in connection with the offering and distribution of the
Initial Securities as may be modified by subsequent purchases and sales by the
Underwriters upon written, including by email, notice by the Representatives to
the Company setting forth the number of Option Securities as to which the
Underwriters are then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of delivery (a "Date
of Delivery") shall be determined by the Representatives, but shall not be later
than seven full business days after the exercise of said option, nor in any
event prior to the Closing Time, as hereinafter defined, unless otherwise agreed
upon by the Representatives and the Company. If the option is exercised as to
all or any portion of the Option Securities, the Underwriters will purchase the
entire aggregate principal amount of Option Securities then being purchased.
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(c) Payment of Purchase Price. Payment of the purchase price for,
and delivery of one or more global certificates for, the Initial Securities
shall be made at the offices of Debevoise & Plimpton LLP, 919 Third Avenue, New
York, New York 10022, or at such other place as shall be agreed upon by the
Representatives and the Company, at 10:00 A.M. (New York time) on the third
business day after the date hereof, or at such other time not later than ten
business days after such date as shall be agreed upon by the Representatives and
the Company (such time and date of payment and delivery being herein called the
"Closing Time").
In addition, in the event that the Underwriters have exercised their
option to purchase all or any of the Option Securities, payment of the purchase
price for, and delivery of one or more global certificates for, such Option
Securities shall be made at the above-mentioned offices, or at such other place
as shall be agreed upon by the Representatives and the Company, on each Date of
Delivery as specified in the written, including by email, notice from the
Representatives to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Representatives of the Securities to be purchased by the Underwriters.
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations
($1,000 or integral multiples thereof) and registered in such names as the
Underwriters may request in writing at least one full business day before the
Closing Time or the relevant Date of Delivery, as the case may be; provided that
any Securities in global form be registered in the name of Cede & Co. The
certificates for the Initial Securities and the Option Securities, if any, will
be made available for examination and packaging by the Underwriters in The City
of New York not later than 10:00 A.M. (Eastern time) on the business day prior
to the Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company and, where
specifically indicated, the Guarantor, jointly and severally, covenant with the
Underwriters as follows:
(a) Immediately following the execution of this Agreement, the
Company will prepare a Prospectus Supplement that complies with the Securities
Act and the Securities Act Regulations and which sets forth the aggregate
principal amount at maturity of the Securities and their terms not otherwise
specified in the basic prospectus relating to offerings of debt securities and
common stock under the Registration Statement, the name of each Underwriter
participating in the offering and the face amount of the Securities that each
severally has agreed to purchase, the name of each Underwriter, if any, acting
as representative of the Underwriters in connection with the offering, the price
at which the Securities are to be purchased by the Underwriters from the
Company, any initial public offering price, any selling concession and
reallowance, and such other information as you and the Company deem appropriate
in connection with the offering of the Securities. The Company will promptly
transmit copies of the Prospectus Supplement and the Prospectus to the
Commission for filing pursuant to Rule 424 under the Securities Act and will
furnish to the Underwriters as many copies of the Prospectus Supplement and the
Prospectus as you shall reasonably request.
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(b) During the period when a prospectus relating to the Securities
is required to be delivered under the Securities Act, the Company will promptly
advise you of (i) the effectiveness of any amendment to the Registration
Statement, (ii) the transmittal to the Commission for filing of any supplement
to the Prospectus or any document that would as a result thereof be incorporated
by reference in the Prospectus, (iii) any request by the Commission for any
amendment of the Registration Statement or any amendment or supplement to the
Prospectus or for any additional information relating thereto or to any document
incorporated by reference therein, (iv) the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose, and (v) the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction or the institution
or threatening of any proceeding for such purpose. The Company will use its best
efforts to prevent the issuance of any such stop order or suspension and, if
issued, to obtain as soon as possible the withdrawal thereof.
(c) If, at any time when a prospectus relating to the Securities
is required to be delivered under the Securities Act, any event occurs as a
result of which the Prospectus as then amended or supplemented would include any
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, or if it shall be necessary to amend or supplement
the Prospectus to comply with the Securities Act or the Securities Act
Regulations, the Company promptly will prepare and file with the Commission,
subject to paragraph (d) of this Section 3, an amendment or supplement which
will correct such statement or omission or an amendment or supplement which will
effect such compliance. Neither your consent to, nor the Underwriters' delivery
of, any such amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section 5.
(d) At any time when a prospectus relating to the Securities is
required to be delivered under the Securities Act or the Securities Act
Regulations, the Company will give you notice of its intention to file any
amendment to the Registration Statement or any amendment or supplement to the
Prospectus, whether pursuant to the Exchange Act, the Securities Act or
otherwise, will furnish you with copies of any such amendment or supplement or
other documents proposed to be filed within a reasonable time in advance of
filing, and will not file any such amendment or supplement or other documents in
a form to which you shall reasonably object.
(e) The Company has furnished or will, if requested, furnish to
you and your counsel, without charge, conformed copies of the Registration
Statement as originally filed and of all amendments thereto, whether filed
before or after such Registration Statement originally became effective
(including exhibits thereto and the documents incorporated therein by reference)
and, so long as delivery of a prospectus by an underwriter or dealer may be
required by the Securities Act, as many copies of each preliminary prospectus,
the Prospectus and any amendments thereof and supplements thereto as you may
reasonably request.
(f) The Issuers shall use their reasonable efforts, in cooperation
with the Underwriters, to qualify the Securities and the shares of Common Stock
issuable upon conversion of Notes
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conversion of Notes for offering and sale under the applicable securities laws
of such states and other jurisdictions as the Underwriters may reasonably
designate and will maintain such qualification in effect as long as required in
connection with the distribution of the Securities; provided, however, that no
Issuer shall be obligated to file any general consent to service of process or
to qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not otherwise so
subject.
(g) The Company will use the net proceeds received by it from the
sale of the Securities in the manner to be indicated in the Prospectus under
"Use of Proceeds."
(h) The Company will use its reasonable efforts to cause all
shares of Common Stock issuable upon conversion of the Notes to be listed on the
New York Stock Exchange or listed on a "national securities exchange" registered
under Section 6 of the Exchange Act.
(i) The Company will reserve and keep available at all times, free
of preemptive or other similar rights, a sufficient number of shares of Common
Stock for the purpose of enabling the Company to satisfy any obligations to
issue the shares of Common Stock issuable upon conversion of the Notes.
(j) During a period of 60 days from the date of the Prospectus
Supplement, the Company will not, without the prior written consent of the
Representatives, (i) offer, pledge, announce the intention to sell, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant for the sale of, lend or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or securities convertible into or exchangeable or exercisable for or
repayable with Common Stock, or file any registration statement under the
Securities Act with respect to any of the foregoing (other than a shelf
registration statement under Rule 415 ) or (ii) enter into any swap or other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, any of the economic consequence of ownership of the Common Stock, or
any securities convertible into or exchangeable or exercisable for or repayable
with Common Stock, whether any such swap or transaction described in clause (i)
or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (A)
the Securities to be sold hereunder, the Common Stock to be delivered upon
conversion of the Notes or upon conversion of the 4.25% Senior Convertible Notes
due 2023, (B) the resale registration statement filed by the Company and the
Guarantor pursuant to the registration rights agreement relating to resales of
the Company's 4.25% Senior Convertible Notes due 2023, (C) Common Stock (or
options to purchase Common Stock) to be issued pursuant to the Corporation's
1988 Long Term Incentive Plan, as amended, the 1998 Long Term Incentive Plan, as
amended, the 1994 Directors Stock Incentive Plan, as amended, the 1997 Pilot
Stock Option Plan, the 2003 Employee Stock Incentive Plan, the 2003-2005
Performance Unit Plan for Officers and Key Employees or other employee
compensation benefit plans or pursuant to currently outstanding options,
warrants or rights existing on the date hereof and referred to in the Prospectus
Supplement and (D) up to 100,000 shares of the Common Stock to be issued to
vendors, lessors, lenders and suppliers pursuant to concessionary agreements
reached with them in the Spring of 2003.
-14-
(k) The Issuers shall cooperate with the Underwriters and use
their reasonable efforts to permit the Notes to be eligible for clearance and
settlement through the facilities of DTC.
(l) The Company, during the period when a Prospectus relating to
the Securities is required to be delivered, will file all documents required to
be filed with the Commission pursuant to the Exchange Act within the time
periods required by the Exchange Act and the Exchange Act Regulations.
(m) The Company and the Guarantor shall take all reasonable action
necessary to enable Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc. ("S&P") and Moody's Investors Service, Inc.
("Moody's") to provide their respective credit ratings for the Notes.
SECTION 4. Payment of Expenses.
(a) Expenses. The Issuers shall, jointly and severally, pay all
expenses incident to the performance of their obligations under this Agreement,
including (i) the preparation, printing, filing and distribution of any
preliminary prospectus supplements, the Prospectus (including financial
statements and any schedules or exhibits and any Incorporated Document), the
Registration Statement and any amendments thereof or supplements thereto, (ii)
the preparation, printing and delivery to the Underwriters of this Agreement,
the Indenture (including the First Supplemental Indenture), the Securities, and
such other documents as may be required in connection with the offer, purchase,
sale, issuance or delivery of the Securities or the issuance or delivery of the
Common Stock issuable upon conversion of the Notes, (iii) the preparation,
issuance and delivery of the certificates for the Securities to the Underwriters
and the certificates for the Common Stock issuable upon conversion of the Notes
including any transfer taxes, any stamp or other duties payable upon the sale,
issuance and delivery of the Securities to the Underwriters, the issuance and
delivery of the Common Stock issuable upon conversion of the Notes and any
charges of DTC in connection therewith, (iv) the fees and disbursements of the
Company's counsel, accountants and other advisors, (v) the qualification of the
Securities and the shares of Common Stock issuable upon conversion of the Notes
under securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of a single
counsel for the Underwriters in connection therewith and in connection with the
preparation of the Blue Sky Survey and any supplement thereto, (vi) any fees of
the NASD in connection with the Securities, (vii) the fees and expenses of the
Trustee, including the fees and disbursements of counsel for the Trustee in
connection with the Indenture (including the First Supplemental Indenture) and
the Securities, (viii) the fees and expenses of any transfer agent or registrar
for the Common Stock, and (ix) any fees payable in connection with the rating of
the Securities. It is understood, however, that except as provided in this
Section and Section 7 hereof, the Underwriters will pay all of their own costs
and expenses, including the fees of their counsel, transfer taxes on resale of
any of the securities by them, and any promotional expenses connected with any
offers they may make.
(b) Termination of Agreement. If this Agreement is terminated by
the Underwriters in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees
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and disbursements of a single counsel for the Underwriters incurred by it in
connection with the offering contemplated by this Agreement.
SECTION 5. Conditions of the Underwriters' Obligations. The obligations
of the Underwriters hereunder are subject to the accuracy of the representations
and warranties of the Issuers contained in Section 1 hereof or in certificates
of any officer of the Issuers delivered pursuant to the provisions hereof, to
the performance by the Issuers of their covenants and other obligations
hereunder, and to the following further conditions:
(a) Opinions of Counsel for the Issuers. At the Closing Time, you
shall have received the opinion of Gary F. Kennedy, Senior Vice President and
General Counsel of the Company, and the opinion of Debevoise & Plimpton LLP,
counsel for the Company, each in form and substance reasonably satisfactory to
counsel for the Underwriters and dated as of the Closing Time, to the effect set
forth in Exhibits A and B hereto, respectively. Such counsel may also state
that, insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of the officers of the Company and
certificates of public officials.
(b) Opinion of Counsel for the Underwriters. At the Closing Time,
you shall have received the opinion, dated as of the Closing Time, of Shearman &
Sterling LLP, counsel for the Underwriters, in form and substance reasonably
satisfactory to the Underwriters. In giving such opinion such counsel may rely,
as to all matters governed by the laws of jurisdictions other than the law of
the State of New York, the federal law of the United States and the General
Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Underwriters. Such counsel may also state that, insofar as
such opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company and certificates of public
officials.
(c) Officers' Certificate. At the Closing Time, there shall not
have been, since the date hereof or since the respective dates as of which
information is given in the Prospectus Supplement (exclusive of any amendments
or supplements thereto after the date the Prospectus Supplement is first
delivered to the Underwriters), any material adverse change in the condition,
financial or otherwise, or in the results of operations or business affairs of
the Company and its Subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Underwriters shall have
received a certificate of the President or a Senior Vice President of the
Company and the Chief Financial Officer or Chief Accounting Officer of the
Company, dated as of the Closing Time, to the effect that (i) there has been no
such material adverse change, (ii) the representations and warranties in Section
1(a) hereof are true and correct with the same force and effect as though
expressly made at and as of the Closing Time, and (iii) the Issuers have
complied with all of the agreements entered into in connection with the
transaction contemplated herein and satisfied all conditions on their part to be
performed or satisfied at or prior to the Closing Time.
(d) Accountant's Comfort Letter. At or prior to the Closing Time,
you shall have received from Ernst & Young LLP a letter dated such date, in the
form and substance reasonably satisfactory to the Underwriters, containing
statements and information of the type ordinarily included in accountants'
comfort letters to underwriters with respect to the financial statements
-16-
and certain financial information contained, or incorporated by reference, in
the Prospectus Supplement.
(e) Indenture. At or prior to the Closing Time, each of the
Issuers and the Trustee shall have executed and delivered the Indenture (as
supplemented and amended by the First Supplemental Indenture).
(f) No Stop Order. At the Closing Time, no stop order suspending
the effectiveness of the Registration Statement shall have been issued under the
Securities Act and no proceedings therefor shall have been instituted or
threatened by the Commission.
(g) Conditions to Purchase of Option Securities. In the event that
the Underwriters exercise their option provided in Section 2(b) hereof to
purchase all or any portion of the Option Securities, the obligations of the
Underwriters to purchase such Option Securities is subject to the accuracy as of
each Date of Delivery of the representations and warranties of the Company
contained in Section 1 or in certificates of any officer of the Company
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and at the relevant Date of
Delivery, the Underwriter shall have received:
(i) Officers' Certificate. A certificate, dated such Date
of Delivery, of the President or Senior Vice President of the Company
and the Chief Financial Officer or Chief Accounting Officer of the
Company confirming that the certificate delivered at the Closing Time
pursuant to Section 5(c) hereof remains true and correct as of such
Date of Delivery.
(ii) Opinions of Counsel for the Company. The opinion of
Gary F. Kennedy, Senior Vice President and General Counsel of the
Company, and the opinion of Debevoise & Plimpton LLP, counsel for the
Company, each in form and substance reasonably satisfactory to the
Representatives, each dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section 5(a)
hereof.
(iii) Opinion of Counsel for the Underwriters. The opinion
of Shearman & Sterling LLP, counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities to be purchased on
such Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(b) hereof.
(iv) Bring-down Comfort Letter. A letter from Ernst &
Young LLP, in form and substance satisfactory to the Representatives
and dated such Date of Delivery, substantially in the same form and
substance as the letter furnished to the Representatives pursuant to
Section 5(d) hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not more than
three business days prior to such Date of Delivery.
(h) Additional Documents. At the Closing Time and at each Date of
Delivery, counsel for the Underwriters shall have been furnished with such
documents, certificates and opinions as they may reasonably request for the
purpose of enabling them to pass upon the
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issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy and completeness of any of the representations or
warranties, or the fulfillment of any of the conditions, herein contained; and
all proceedings taken by the Issuers in connection with the issuance and sale of
the Securities as herein contemplated shall be reasonably satisfactory to the
Underwriters and counsel for the Underwriters.
(i) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement (or, in the case of any condition to the purchase of Option
Securities, on a Date of Delivery which is after the Closing Time, the
obligations of the Underwriters to purchase the relevant Option Securities on
such Date of Delivery) may be terminated by the Underwriters by notice to the
Company at any time at or prior to the Closing Time or such Date of Delivery, as
the case may be, and such termination shall be without liability of any party to
any other party except as provided in Section 4 and except that Sections 1, 7
and 8 shall survive any such termination and remain in full force and effect.
SECTION 6. Additional Agreements.
(a) The Representatives agree that in the aggregate, the
Securities will be widely offered. Each Underwriter and each other member of the
underwriting group that offers or sells Securities agree that the Securities
offered by such Underwriter will be primarily offered in the United States to
United States persons. The term "United States person" shall have the meaning
set forth in section 7701(a)(30) of the Internal Revenue Code of 1986, as
amended.
(b) Each Underwriter, on behalf of itself and each of its
affiliates that participates in the initial distribution of the Securities,
severally represents to and agrees with the Company that it and each such
affiliate:
(i) (x) has not offered or sold and, prior to the expiry
of the period of six months from the Closing Date and any relevant Date
of Delivery, will not offer or sell any Securities to persons in the
United Kingdom except to persons whose ordinary activities involve them
in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise
in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995 (as amended); (y) has only
communicated or caused to be communicated and will only communicate or
cause to be communicated an invitation or inducement to engage in
investment activity (within the meaning of Section 21 of the Financial
Services and Markets Act 2000 (the "FSMA")) received by it in
connection with the issue or sale of any Securities in circumstances in
which Section 21(1) of the FSMA does not apply to the Company; and (z)
has complied and will comply with all applicable provisions of the FSMA
with respect to anything done by it in relation to the Securities in,
from or otherwise involving the United Kingdom;
(ii) (x) acknowledges that the Issuers have not taken, and
will not take, any action that would permit a public offering of the
Securities or the distribution of the Prospectus or any other offering
or publicity material relating to the Securities in Germany or any
-18-
other jurisdiction outside the United States, and (y) has not offered
or sold, and will not offer or sell, directly or indirectly, any of the
Securities in Germany other than to persons who, as part of their
profession, trade or business, acquire or sell securities for their own
or a third party's account or otherwise in accordance with the
restrictions set forth in the German Securities Selling Prospectus Act
(Wertpapier-Verkaufsprospektgesetz); and
(iii) has not offered or sold, and will not offer, sell, or
deliver any of the Securities, directly or indirectly, or distribute
the Prospectus, or any other offering material relating to the
Securities, in or from any jurisdiction outside the United States
except under circumstances that will result in compliance with the
applicable laws and regulations thereof and which will not impose any
obligations on the Company, except as set forth in this Agreement.
SECTION 7. Indemnification and Contribution. (a) The Issuers agree,
jointly and severally, to indemnify and hold harmless each Underwriter and each
person who controls any Underwriter within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Securities Act, the Exchange Act, or other Federal
or state statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof) that
(1) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement as
originally filed or in any amendment thereof, or arise out of or are based upon
the omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
(2) arise out of or based upon any untrue statement or alleged untrue statement
of a material fact contained in any preliminary prospectus relating to the
Securities or in the Prospectus or in any amendment thereof or supplement
thereto, or arise out of or are based upon the omission or alleged omission
therefrom of a material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading, and,
in each case, agrees to reimburse each such indemnified party for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that (i) the neither the Company nor the Guarantor will be liable in any such
case to the extent that any such loss, claim, damage, or liability arises out of
or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon, and in conformity
with, written information relating to any Underwriter furnished to the Company
by or on behalf of such Underwriter through you specifically for use in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto) or made in the part of the Registration
Statement constituting the Statement of Eligibility under the Trust Indenture
Act of the Trustee on Form T-1, (ii) the foregoing indemnity agreement, with
respect to any preliminary prospectus, shall not inure to the benefit of any
Underwriter (or any person controlling such Underwriter) as to whom it shall be
established did not send or deliver to the person asserting any such loss,
claim, damage or liability and who purchased Securities which are the subject
thereof a copy of the Prospectus as amended or supplemented (exclusive of
material incorporated by reference) at or prior to the written confirmation of
the sale of such Securities in any case where such delivery is required by the
Securities Act, and the untrue statement or omission of a material fact
contained in such preliminary prospectus was corrected in the Prospectus as
amended or supplemented and the
-19-
Company had previously furnished copies thereof to such Underwriter, and (iii)
neither the Company nor the Guarantor will be liable for any loss, liability or
expense of any settlement or compromise of or consent to entry of judgment with
respect to, any pending or threatened litigation or any pending or threatened
governmental agency investigation or proceeding if such settlement or compromise
of or consent to entry of judgment with respect thereto is effected without the
prior written consent of the Company or the Guarantor, except to the extent that
such consent is not required pursuant to Section 7(d) hereof. This indemnity
agreement will be in addition to any liability that the Company or the Guarantor
may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Issuers, each of their directors, each of their officers who signed
the Registration Statement, and each person who controls an Issuer, as the case
may be, within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act, against any and all losses, claims, damages, liabilities
and expenses described in the indemnity contained in Section 7(a), but only with
respect to untrue statements or alleged untrue statements or omissions or
alleged omissions made in the Registration Statement (or any amendment thereto)
or the Prospectus (or any amendment or supplement thereto) in reliance upon and
in conformity with written information relating to such Underwriter furnished to
the Company by or on behalf of such Underwriter through you specifically for use
in the Registration Statement (or any amendment thereto) or the Prospectus (or
any amendment or supplement thereto). This indemnity agreement will be in
addition to any liability which any Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 7, notify the indemnifying party or parties in writing of the
commencement thereof; but the omission so to notify the indemnifying party or
parties will not relieve it from any liability which it may have to any
indemnified party otherwise than under this Section 7. In case any such action
is brought against any indemnified party and it notifies the indemnifying party
or parties of the commencement thereof, the indemnifying party or parties will
be entitled to participate therein, and to the extent that it may elect, by
written notice delivered to such indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense thereof,
with counsel satisfactory to such indemnified party; provided, however, that if,
in the reasonable judgment of such indemnified party, a conflict of interest
exists where it is advisable for such indemnified party to be represented by
separate counsel, the indemnified party shall have the right to employ separate
counsel in any such action, in which event the fees and expenses of such
separate counsel shall be borne by the indemnifying party or parties. Upon
receipt of notice from the indemnifying party or parties to such indemnified
party of the election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party or parties will not be
liable to such indemnified party under this Section 7 for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof unless (i) the indemnified party shall have employed separate
counsel in accordance with the proviso to the next preceding sentence (it being
understood, however, that the indemnifying party or parties shall not be liable
for the expenses of more than one such separate counsel representing the
indemnified parties under subparagraph (a) of this Section 7 who are parties to
such action), (ii) the indemnifying party or parties shall not have employed
counsel satisfactory to the indemnified
-20-
party to represent the indemnified party within a reasonable time after notice
of commencement of the action or (iii) the indemnifying party or parties have
authorized the employment of counsel for the indemnified party at the expense of
the indemnifying party or parties; and except that, if clause (i) or (iii) is
applicable, such liability shall be only in respect of the counsel referred to
in such clause (i) or (iii). It is understood that all such fees and expenses of
counsel for the indemnified party for which the indemnifying party is liable
shall be reimbursed as they are incurred. No indemnifying party shall, without
the prior written consent of the indemnified party (which consent shall not be
unreasonably withheld), effect any settlement or compromise of, or consent to
entry of judgment with respect to, any pending or threatened proceeding in
respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement or compromise of, or consent to entry of judgment with respect
to, includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding and does not
include a statement as to or an admission of fault, culpability or failure to
act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel payable pursuant to this Section 7, such indemnifying party agrees that
it shall be liable for any settlement, compromise or consent to entry of
judgment of the nature contemplated by clause (iii) of the proviso in Section
7(a) effected without its written consent if (i) such settlement, compromise or
consent to entry of judgment is entered into more than 45 days after receipt by
such indemnifying party of the aforesaid notice of request, (ii) such
indemnifying party shall have received notice of the terms of such settlement,
compromise or consent to entry of judgment at least 30 days prior to such
settlement being entered into, and (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request prior to the
date of such settlement, compromise or consent to entry of judgment.
(e) If the indemnification provided for in paragraph (a) or (b) of
this Section 7 is for any reason unavailable to or insufficient to hold harmless
an indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Issuers on the one hand and the
Underwriters on the other hand from the offering of the Securities pursuant to
this Agreement or (ii) if the allocation provided by clause (i) is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Issuers on the one hand and of the Underwriters on the other hand in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Issuers on the
one hand and the Underwriters on the other hand in connection with the offering
of the Securities pursuant to this Agreement shall be deemed to be in the same
proportion as the total proceeds from the offering of the Securities pursuant to
this Agreement (net of compensation paid to the Underwriters but before
deducting expenses) received by the Company and the total underwriting discounts
and commissions received by the Underwriters, in each case as set forth on the
cover of the Prospectus, bears to the aggregate initial public offering price of
the
-21-
Securities as set forth on such cover. The relative fault of the Issuers on the
one hand and the Underwriters on the other hand shall be determined by reference
to, among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Issuers or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Issuers and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section.
The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any such
action or claim. Notwithstanding the provisions of this Section, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section, each
person, if any, who controls an Underwriter within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act shall have the same rights
to contribution as such Underwriter, and each director of the Company, each
officer of the Company who signed the Registration Statement, and each person,
if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Company. The Underwriters' respective obligations to
contribute pursuant to this Section are several in proportion to the principal
amount of Securities set forth opposite their respective names in Schedule A
hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Issuers submitted pursuant
hereto shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Underwriters or any person who
controls the Underwriters within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, or by or on behalf of the Issuers, and shall
survive delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to the Closing Time
(i) if there has been, since the respective dates as of which information is
given in the Registration Statement and the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), any
material adverse change in the condition, financial or otherwise, of the Company
and its subsidiaries considered as one enterprise or in the earnings, business
affairs or business prospects of the Company and its subsidiaries considered as
one enterprise, whether or
-22-
not arising in the ordinary course of business, or (ii) if there has occurred
any material adverse change in the financial markets in the United States or in
the international financial markets, or any outbreak of hostilities or
escalation thereof or other calamity or crisis, in each case the effect of which
is such as to make it, in the judgment of the Representatives, impracticable or
inadvisable to market the Securities or to enforce contracts for the sale of the
Securities, or (iii) if trading in any securities of the Company has been
suspended by the Commission or the New York Stock Exchange or if trading
generally on the New York Stock Exchange has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the National Association of Securities Dealers,
Inc. or any other governmental authority, or (iv) if a banking moratorium has
been declared by either federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 7 and 8 shall survive such termination and remain in full force and effect.
SECTION 10. Notices. All notices and other communications hereunder
shall be in writing and effective only upon receipt. Notices to the Underwriters
shall be directed to them at: Credit Suisse First Boston LLC, 11 Madison Avenue,
New York, NY 10010, Attn: Transactions Advisory Group, Fax: 212-325-4296; and
notices to the Company shall be directed to them at P.O. Box 619616, Dallas/Fort
Worth Airport, Texas 75261-9616, facsimile no. (817) 967-2199, attention of the
Treasurer.
SECTION 11. Default. If any one or more Underwriters shall fail at the
Closing Time to purchase and pay for any of the Securities agreed to be
purchased by such Underwriter or Underwriters pursuant to this Agreement and
such failure to purchase shall constitute a default in the performance of its or
their obligations under this Agreement, the remaining Underwriters shall be
obligated severally to take up and pay for (in the respective proportions which
the aggregate face amount of Securities specified to be purchased by them in
Schedule A bears to the aggregate face amount of Securities to be purchased by
all the remaining Underwriters) the Securities which the defaulting Underwriter
or Underwriters agreed but failed to purchase; provided, however, that in the
event that the aggregate face amount of Securities that the defaulting
Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of
the aggregate face amount of Securities to be purchased pursuant to this
Agreement, the remaining Underwriters shall have the right, but not the
obligation within 24 hours thereafter, to make arrangements to purchase all, but
not less than all, of such Securities, and if such nondefaulting Underwriters do
not complete such arrangements within such 24 hour period, then this Agreement
will terminate without liability to any nondefaulting Underwriters or the
Company. In the event of any such termination, the provisions of Sections 4, 7
and 8 shall remain in effect. In the event of a default by any Underwriter as
set forth in this Section 11 that does not result in a termination of this
Agreement, the Closing Time shall be postponed for such period, not exceeding
seven days, as the nondefaulting Underwriters or the Company shall determine in
order that the required changes in the Registration Statement and the Prospectus
or in any other documents or arrangements may be effected. Nothing contained in
this Agreement shall relieve
-23-
any defaulting Underwriter of its liability, if any, to the Company and to any
nondefaulting Underwriters for damages occasioned by its default hereunder.
SECTION 12. Parties. This Agreement shall inure to the benefit of and
be binding upon the Underwriters and the Issuers and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Issuers and their respective successors and the controlling
persons referred to in Section 7 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the
Underwriters and the Issuers and their respective successors, and said
controlling persons and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
the Underwriters shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. Governing Law and Time. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
SECTION 15. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
-24-
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriters and the Issuers in accordance with its terms.
Very truly yours,
AMR CORPORATION
By: /s/ James A. Beer
-------------------------------
Name: James A. Beer
Title: Senior Vice President and
Chief Financial Officer
AMERICAN AIRLINES, INC.
By: /s/ James A. Beer
---------------------------------
Name: James A. Beer
Title: Senior Vice President - Finance
and Chief Financial Officer
-25-
CONFIRMED AND ACCEPTED, as of
the date first above written:
CREDIT SUISSE FIRST BOSTON LLC
MORGAN STANLEY & CO. INCORPORATED
Acting on behalf of themselves and the several underwriters
By: CREDIT SUISSE FIRST BOSTON LLC
By: /s/ Douglas A Fordyce
----------------------
Douglas A. Fordyce
Director
-26-
SCHEDULE A
UNDERWRITERS
PRINCIPAL AMOUNT OF
INITIAL NOTES
UNDERWRITERS TO BE PURCHASED
------------ ---------------
Credit Suisse First Boston LLC $ 258,750,000
Morgan Stanley & Co. Incorporated 86,250,000
------------------
Total $ 345,000,000
SCH-A-1
SCHEDULE B
SUMMARY OF TERMS OF SENIOR CONVERTIBLE NOTES DUE 2024
1. PRINCIPAL ECONOMIC TERMS
- Issuer - AMR Corporation (the "Company")
- Offering - $300,000,000 of Senior Convertible Notes due 2024 (the
"Securities")
- Underwriters' Purchase Option - $45,000,000. The Underwriters will
pay accrued interest at the Interest Rate on the Securities
purchased pursuant to the Purchase Option for the period from and
including the initial Closing Date to but excluding the closing
date for the Purchase Option.
- Underwriters' Price per $1,000 Principal Amount of Securities -
$1,000
- Underwriter's Commission - 2.50% of the Principal Amount of
Securities
- Interest Rate - 4.50% per annum payable semiannually in arrears
- Conversion Premium - 40%
- Guarantee - the Securities will be guaranteed by American
Airlines, Inc. (the "Guarantor")
- Closing Date - February 13, 2004
2. CONVERSION RIGHTS
- Conversion Rate - For each $1,000 principal amount of Securities
surrendered for conversion, a holder will receive 45.3515 shares
of the Company's common stock (the "Common Stock"), reflecting the
Conversion Premium set forth above. The Conversion Rate will not
be adjusted for any accrued and unpaid interest on the Securities.
However, the Conversion Rate will be adjusted, as provided in the
indenture, for the triggering events described in the prospectus
supplement for the Securities.
- Conversion Price - $1,000 divided by the number of shares of
Common Stock issuable upon conversion of a Security with a
principal amount of $1,000.
SCH- B-1
EXHIBIT A
FORM OF OPINION OF GENERAL COUNSEL OF THE COMPANY,
TO BE DELIVERED PURSUANT TO SECTION 5(a)
Credit Suisse First Boston LLC
Morgan Stanley & Co. Incorporated
c/o Credit Suisse First Boston LLC
11 Madison Avenue
New York, NY 10010
Re: AMR Corporation Senior Convertible Notes due 2024
Ladies and Gentlemen:
I am Senior Vice President and General Counsel of AMR Corporation, a
Delaware corporation (the "Company"), and of American Airlines, Inc., a Delaware
corporation and a wholly-owned subsidiary of the Company (the "Guarantor"), and
have acted as such in connection with: (a) the issuance and sale today by the
Company of $________ issue price of its Senior Convertible Notes due 2024 (the
"Notes") to you pursuant to the Underwriting Agreement, dated February __, 2004
(the "Underwriting Agreement"), among the Company, the Guarantor and the
Underwriters named therein; and (b) the preparation of (i) the Underwriting
Agreement, (ii) the Indenture, dated as of February 1, 2004, between the Company
and Wilmington Trust Company, as trustee (the "Trustee"), as supplemented and
amended by the Supplemental Indenture No. 2004-1 (the "First Supplemental
Indenture"), dated as of February ___, 2004, among the Company, the Guarantor
and the Trustee, (iii) the Guarantee, dated as of February __, 2004, of the
Guarantor in favor of the Trustee (the "Guarantee"), and (iv) the final
Prospectus Supplement, dated February ___, 2004, relating to the Notes (the
"Prospectus Supplement"). I am delivering this letter to you pursuant to Section
5(a) of the Underwriting Agreement. Capitalized terms used herein without
definition are used as defined in the Underwriting Agreement.
In so acting, I or attorneys under my supervision have examined the
Registration Statement, the Prospectus, the Underwriting Agreement, the Notes,
the Indenture (as supplemented and amended by the First Supplemental Indenture)
and the Guarantee, and have also examined and relied upon the representations
and warranties as to factual matters contained therein or made pursuant thereto
and upon the originals, or copies certified or otherwise identified to our
satisfaction, of such records, documents and other instruments as in our
judgment are necessary or appropriate to enable me to render the opinion
expressed below. In such examination, I or such attorneys have assumed the
genuineness of all signatures, the authenticity of all documents submitted as
originals, and the conformity to authentic original documents of all documents
submitted as copies.
Exhibit A-1
Based on the foregoing and subject to the assumptions and
qualifications set forth below, I am of the following opinion:
1. Each of the Company, the Guarantor, AMR Investment
Services, Inc., American Eagle Airlines, Inc. and Executive Airlines,
Inc. has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware
and has the corporate power and authority under such laws to own its
properties and to conduct its business as described in the Prospectus.
Each of the Company and the Guarantor is duly qualified to do business
as a foreign corporation in good standing in the state in which its
principal place of business is located, and in each other state in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect. The Guarantor holds an air carrier
operating certificate issued by the Secretary of Transportation
pursuant to Chapter 447 of Title 49 of the United States Code and the
Guarantor is a "citizen of the United States" as defined in 49 U.S.C.
Section 40102.
2. The Company has the corporate power and authority
under Delaware law to perform its obligations under the Notes, the
Underwriting Agreement, and the Indenture (as supplemented and amended
by the First Supplemental Indenture). The Guarantor has the corporate
power and authority under Delaware law to perform its obligations under
the Underwriting Agreement, the Indenture (as supplemented and amended
by the First Supplemental Indenture) and the Guarantee.
3. No authorization, approval, consent, order or license
of, or filing with, or the giving of notice to, any government,
governmental instrumentality, regulatory body or authority or court is
required to be made or obtained by the Company for the valid
authorization, issuance, sale and delivery of the Notes, the valid
authorization, execution, delivery and performance by the Company of
the Underwriting Agreement and the Indenture (as supplemented and
amended by the First Supplemental Indenture), or the consummation by
the Company or the transactions contemplated thereby, except those that
have previously been obtained and are in full force and effect and
except such as may be required under the securities or Blue Sky laws of
the various states.
4. No authorization, approval, consent, order or license
of, or filing with, or the giving of notice to, any government,
governmental instrumentality, regulatory body or authority or court is
required to be made or obtained by the Guarantor for the valid
authorization, delivery and performance of the Underwriting Agreement,
and the Guarantee, or the consummation by the Guarantor of the
transactions contemplated thereby, except those that have previously
been
Exhibit A-2
obtained and are in full force and effect and except such as may be
required under the securities or Blue Sky laws of the various states.
5. The Registration Statement has become effective under
the Securities Act, the Indenture has been duly qualified under the
Trust Indenture Act and, to the best of my knowledge, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or
threatened.
6. The Registration Statement, the Prospectus and each
amendment thereof or supplement thereto (except in each case for the
financial statements and other financial or statistical data included
or incorporated by reference therein, as to which I express no opinion)
comply as to form in all material respects with the requirements of the
Securities Act and the Securities Act Regulations; the Indenture (as
supplemented and amended by the First Supplemental Indenture) and the
Statement of Eligibility of the Trustee on Form T-1 filed with the
Commission as part of the Registration Statement comply as to form in
all material respects with the requirements of the Trust Indenture Act
and the rules and regulations thereunder.
7. The Notes have been duly authorized, executed and
delivered by the Company.
8. Each of the Underwriting Agreement and the Indenture
(as supplemented and amended by the First Supplemental Indenture) has
been duly authorized, validly executed and delivered by the Company and
the Guarantor.
9. The Guarantee has been duly authorized, validly
executed and delivered by the Guarantor.
10. Upon issuance and delivery of the Notes in accordance
with the Underwriting Agreement and the Indenture, the Notes will be
convertible into shares of Common Stock in accordance with the terms of
the Notes and the Indenture. The shares of Common Stock issuable upon
conversion of the Notes at the initial conversion rate have been duly
authorized and reserved for issuance upon such conversion by all
necessary corporate action on the part of the Company and such shares,
when issued upon such conversion in accordance with the terms of the
Notes and the Indenture, will be validly issued, fully paid and
non-assessable. The issuance of such shares of Common Stock upon
conversion of the Notes is not subject to preemptive rights of any
stockholder of the Company.
11. The execution, issuance and sale today by the Company
of the Notes to the Underwriters, the execution and delivery by the
Company and the
Exhibit A-3
Guarantor of the Underwriting Agreement and the Indenture (as
supplemented and amended by the First Supplemental Indenture), the
consummation by the Company and the Guarantor of the transactions
therein contemplated in the manner therein contemplated and compliance
by the Company and the Guarantor with the terms thereof, do not and
will not conflict with, or result in a breach of, any of the terms or
provisions of, or constitute a default under the Certificate of
Incorporation or By-Laws, as amended, of the Company or the Guarantor
or any indenture or other agreement or instrument known to me to which
the Company or the Guarantor is a party or by which the Company, the
Guarantor or any of their respective properties or assets is bound or
any law, rule, regulation, judgment, decree or order known to me to be
applicable to the Company or the Guarantor of any court, regulatory
body, administrative agency, government or governmental body having
jurisdiction over the Company or the Guarantor or any of their
respective properties or assets (except that I express no opinion as to
the securities or Blue Sky laws of the various states, the Securities
Act, the 1939 Act, or the rules and regulations thereunder).
12. The execution and delivery by the Guarantor of the
Guarantee, the consummation by the Guarantor of the transactions
therein contemplated in the manner therein contemplated and compliance
by the Guarantor with the terms thereof, do not and will not conflict
with, or result in a breach of, any of the terms or provisions of, or
constitute a default under the Certificate of Incorporation or By-Laws,
as amended, of the Guarantor or any indenture or other agreement or
instrument known to me to which the Guarantor is a party or by which
the Guarantor or any of its properties or assets is bound or any law,
rule, regulation, judgment, decree or order known to me to be
applicable to the Guarantor of any court, regulatory body,
administrative agency, government or governmental body having
jurisdiction over the Guarantor or any of its properties or assets
(except that I express no opinion as to the securities or Blue Sky laws
of the various states, the Securities Act, the 1939 Act, or the rules
and regulations thereunder).
13. The issued and outstanding shares of Common Stock
have been duly authorized and validly issued and are fully paid and
non-assessable; and all of the issued and outstanding shares of the
capital stock of the Guarantor have been duly authorized and validly
issued and are fully paid and non-assessable and are directly owned by
the Company, free and clear of any liens, encumbrances, equities or
claims.
14. I have no reason to believe that the statements in
the Registration Statement and the Prospectus with respect to statutes,
administrative orders and regulations and legal and governmental
proceedings do not fairly and accurately present in all material
respects the information required to be set forth therein (except that
I express no opinion as to the matters addressed in the opinions set
forth in paragraph 7 of the Debevoise Opinion (as defined below)).
There are, to the
Exhibit A-4
best of my knowledge, no statutes, administrative orders or regulations
or legal or governmental proceedings required to be described in the
Registration Statement or the Prospectus that are not described as
required, nor any contracts or documents of a character required to be
described in the Registration Statement or the Prospectus, or to be
filed as exhibits to the Registration Statement, that are not so
described or filed as required. As used in this opinion letter, the
term "Debevoise Opinion" means the opinion of Debevoise & Plimpton LLP,
dated today and delivered to you pursuant to the Underwriting
Agreement.
15. The routes presently operated by the Company are
being operated pursuant to valid certificates or exemption orders
issued by the Department of Transportation or its predecessor, the
Civil Aeronautics Board, and no such certificate or exemption order is
the subject of any "show cause" or other order of, or any proceeding
before, or any investigation by, the Department of Transportation or
its predecessor (other than proceedings for the renewal of temporary
rights), which in my opinion might reasonably result in a final order
impairing the validity of such certificates or exemption orders.
16. The statements set forth in the Prospectus Supplement
under the captions "Description of Our Capital Stock," insofar as such
statements purport to summarize certain provisions of law or the
documents referred to therein, fairly summarize such provisions in all
material respects.
17. Each document filed pursuant to the Exchange Act and
incorporated by reference in the Prospectus (except in each case for
the financial statements and other financial or statistical data
included or incorporated therein, as to which I express no opinion)
appeared on its face, as of its respective filing date, to comply as to
form in all material respects with the requirements of the Exchange Act
and the rules and regulations thereunder.
18. Neither the Company nor the Guarantor is, nor after
giving effect to the offering and sale of the Securities in the manner
contemplated in the Underwriting Agreement, the Indenture and the
Prospectus Supplement will be, an "investment company" (as defined in
the Investment Company Act of 1940, as amended).
In rendering the opinions above, I have assumed that each party to the
Underwriting Agreement and the Indenture (as supplemented and amended by the
First Supplemental Indenture) (other than the Company and the Guarantor) (i) is
duly formed, validly existing and in good standing under the laws of the state
of its incorporation or formation; (ii) has the power and authority to carry on
its business and to enter into the Underwriting Agreement and the Indenture (as
supplemented and amended by the First Supplemental Indenture), and to perform
its obligations thereunder, (iii) has duly and validly authorized the execution
and delivery of the Underwriting Agreement and the Indenture (as supple-
Exhibit A-5
mented and amended by the First Supplemental Indenture) by all necessary action,
and (iv) has duly and validly executed and delivered the Underwriting Agreement
and the Indenture (as supplemented and amended by the First Supplemental
Indenture). I have assumed that the Underwriting Agreement and the Indenture (as
supplemented and amended by the First Supplemental Indenture) constitute legal,
valid and binding obligations of each party thereto enforceable against such
party in accordance with their respective terms.
I express no opinion as to the laws of any jurisdiction other than the
laws of the States of Texas and New York, the General Corporation Law of the
State of Delaware and the federal laws of the United States of America, except
that I express no opinion with respect to the antitrust, bankruptcy,
environmental or tax laws of any jurisdiction.
No facts have come to my attention which have caused me to believe (A)
that the Registration Statement or any amendment thereto, on the original
effective date thereof (except, in each case, for the financial statements and
other financial or statistical data included or incorporated by reference
therein, and except for the Statement of Eligibility on Form T-1 of the Trustee
under the Indenture, as to which I express no belief), contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
(B) that the Prospectus at the time the Prospectus Supplement was issued or the
Prospectus, together with any amendment or supplement thereto, at the time any
such amended or supplemental prospectus was issued or at the Closing Time
(except, in each case, for the financial statements and other financial or
statistical data included or incorporated by reference therein, as to which I
express no belief), contained or contains any untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
This opinion letter is limited to the matters stated, and no opinion is
implied or may be inferred beyond those opinions expressly stated herein. The
opinions expressed herein are rendered only as of the date hereof, and I assume
no responsibility to advise you of changes in law, facts, circumstances, events
or developments which hereafter may be brought to my attention and which may
alter, affect or modify such opinions.
The opinions expressed herein are solely for the benefit of the
addressees of this opinion letter, and without my prior written consent may not
be relied on in any other context, quoted in whole or in part or otherwise
referred to in any legal opinion, document, or other report, or furnished to any
other person or entity.
Very truly yours,
Exhibit A-6
EXHIBIT B
FORM OF OPINION OF DEBEVOISE & PLIMPTON LLP
SPECIAL COUNSEL FOR THE COMPANY,
TO BE DELIVERED PURSUANT TO SECTION 5(a)
Credit Suisse First Boston LLC
Morgan Stanley & Co. Incorporated
c/o Credit Suisse First Boston LLC
11 Madison Avenue
New York, NY 10010
AMR Corporation
Senior Convertible Notes due 2024
Ladies and Gentlemen:
We have acted as special counsel to AMR Corporation, a
Delaware corporation (the "Company"), and to American Airlines, Inc., a Delaware
corporation and a wholly-owned subsidiary of the Company (the "Guarantor"), in
connection with: (a) the issuance and sale today by the Company of $300,000,000
principal amount of its Senior Convertible Notes due 2024 (the "Notes") to you
pursuant to the Underwriting Agreement, dated February __, 2004 (the
"Underwriting Agreement"), among the Company, the Guarantor and the Underwriters
named therein; and (b) the preparation of (i) the Underwriting Agreement, (ii)
the Indenture, dated as of February 1, 2004, between the Company and Wilmington
Trust Company, as trustee (the "Trustee"), as amended by the Supplemental
Indenture No. 2004-1 (the "First Supplemental Indenture"), dated as of February
__, 2004, among the Company, the Guarantor and the Trustee, (iii) the Guarantee,
dated as of February __, 2004, of the Guarantor in favor of the Trustee (the
"Guarantee"), and (iv) the final Prospectus Supplement, dated February ___,
2004, relating to the Notes (the "Prospectus Supplement"). We are delivering
this letter to you pursuant to Section 5(a) of the Underwriting Agreement.
Capitalized terms used herein without definition are used as defined in the
Underwriting Agreement.
In connection with this opinion, we have examined the form of the
Notes, the Underwriting Agreement, the Indenture (as supplemented and amended by
the First Supplemental Indenture), the Registration Statement and the
Prospectus, and originals or certified, conformed or reproduction copies of such
agreements, instruments, documents and records of the Company and the Guarantor,
such certificates of public officials, and such other documents, and have made
such investigations of law, as we have deemed necessary or appropriate for the
purposes of this opinion. In all such examinations, we have assumed the legal
capacity of all natural persons executing documents, the genuineness of all
signatures on original or certified copies, the authenticity of all original or
certified copies and the conformity to original or certified documents
Exhibit B-1
of all copies submitted to us as conformed or reproduction copies. We have
relied as to factual matters upon, and have assumed the accuracy of, the
statements made in the certificates of officers of the Company and the Guarantor
delivered to us, the representations and warranties of the parties to the
Underwriting Agreement that are contained in or made pursuant to the
Underwriting Agreement, and certificates and other statements or information of
or from public officials and officers and representatives of the Company and the
Guarantor and others (including, without limitation, the Underwriters). We have
assumed performance of and compliance with the covenants and agreements
contained in the Underwriting Agreement by the parties thereto.
We have also assumed that: (a) the Underwriters have the power and
authority to enter into and perform their respective obligations under the
Underwriting Agreement; (b) the Underwriting Agreement has been duly authorized,
executed and delivered by the Underwriters and is valid, legally binding and
enforceable against the Underwriters in accordance with its terms; (c) the
Trustee has the power and authority to enter into and perform its obligations
under the Indenture (as supplemented and amended by the First Supplemental
Indenture); (d) the Indenture (as supplemented and amended by the First
Supplemental Indenture) has been duly authorized, executed and delivered by the
Trustee and is valid, legally binding and enforceable against the Trustee in
accordance with its terms; and (e) the Notes have been duly authenticated by the
Trustee in the manner provided in the Indenture.
Based on the foregoing, and subject to the limitations, qualifications
and assumptions set forth herein, we are of the opinion that:
1. The Company has the corporate power and authority to
execute, deliver and perform its obligations under the Notes, the
Underwriting Agreement and the Indenture (as supplemented and amended
by the First Supplemental Indenture). The Guarantor has the corporate
power and authority to execute, deliver and perform its obligations
under the Underwriting Agreement, the Indenture (as supplemented and
amended by the First Supplemental Indenture) and the Guarantee.
2. The Underwriting Agreement has been duly authorized,
executed and delivered by each of the Company and the Guarantor.
3. The Indenture (as supplemented and amended by the
First Supplemental Indenture) has been duly authorized, executed and
delivered by each of the Company and the Guarantor, and constitutes the
valid and binding obligation of each of the Company and the Guarantor,
enforceable against each of them in accordance with its terms.
4. The Notes being issued today are in the form
contemplated by the Indenture (as supplemented and amended by the First
Supplemental Indenture) and have been duly authorized and executed by
the Company and delivered to the Trustee for authentication. When the
Notes are issued and authenticated by the Trustee in accordance with
the terms of the Indenture and delivered to and paid for by you today
in accordance with the terms of the Underwriting Agreement, the Notes
will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, and
will be entitled to the benefits of the Indenture.
Exhibit B-2
5. The Guarantee has been duly authorized by the
Guarantor, and, when the Notes to which the Guarantee relates are
issued and authenticated by the Trustee in accordance with the terms of
the Indenture and delivered to and paid for by you today in accordance
with the terms of the Underwriting Agreement, the Guarantee will have
been validly issued and delivered and will constitute the valid and
binding obligation of the Guarantor, enforceable against the Guarantor
in accordance with its terms.
6. Upon issuance and delivery of the Notes in accordance
with the Underwriting Agreement and the Indenture, the Notes will be
convertible into shares of Common Stock in accordance with the terms of
the Notes and the Indenture. The shares of Common Stock issuable upon
conversion of the Notes at the initial conversion rate have been duly
authorized and reserved for issuance upon such conversion by all
necessary corporate action on the part of the Company and such shares,
when issued upon such conversion in accordance with the terms of the
Notes and the Indenture, will be validly issued, fully paid and
non-assessable. The issuance of such shares of Common Stock upon
conversion of the Notes is not, under the certificate of incorporation
or by-laws of the Company, subject to preemptive rights of any
stockholder of the Company.
7. The statements in the Registration Statement and
Prospectus under the captions "Certain United States Federal Income Tax
Considerations" and "Certain ERISA Considerations," insofar as such
statements purport to summarize certain provisions of the laws referred
to therein, fairly summarize such provisions in all material respects.
The statements set forth in the Prospectus Supplement under the caption
"Description of the Notes," insofar as such statements purport to
summarize certain provisions of the Notes, the Indenture (as
supplemented and amended by the First Supplemental Indenture), fairly
summarize such provisions in all material respects.
8. The execution, delivery and performance by the
Company and the Guarantor of the Underwriting Agreement did not, the
execution, delivery and performance by each of the Company and the
Guarantor of the Indenture (as supplemented and amended by the First
Supplemental Indenture) (and, in the case of the Guarantor, the
Guarantee) do not, and the issuance and sale today by the Company of
the Notes to the Underwriters will not, (i) violate the certificate of
incorporation or by-laws of the Company or the Guarantor; or (ii) to
our knowledge, violate any existing United States Federal or New York
State statute applicable to the Company or the Guarantor or any rule or
regulation known to us of any United States Federal or New York
governmental agency or body having jurisdiction over the Company or the
Guarantor.
9. No authorization, approval, consent, order or license
of, or filing or registration with, any United States Federal or New
York governmental agency or body having jurisdiction over the Company
or the Guarantor is required to be obtained by the Company or the
Guarantor on or prior to the date hereof for the execution, delivery
and performance by the Company or the Guarantor of the Underwriting
Agreement, the execution, delivery and performance by the Company or
the Guarantor of the Indenture (as supplemented and amended by the
First Supplemental Indenture) (and, in the case of the Guarantor, the
Guarantee), the issuance and sale today by the Company of the Notes to
Exhibit B-3
the Underwriters pursuant to the Underwriting Agreement, or the
conversion of the Notes at the initial conversion rate, except (a) as
disclosed in the Prospectus Supplement or as have been obtained or made
or (b) as may be required under or pursuant to applicable securities
laws, statutes, rules or regulations.
The opinions set forth above are subject to the following additional
qualifications and assumptions:
(a) The opinions expressed above are limited to the
Federal laws of the United States of America, the laws of the State of
New York and the General Corporation Law of the State of Delaware, as
currently in effect.
(b) The opinions set forth in paragraphs 3, 4, 5 and 6
above are subject to the effects of (i) bankruptcy, insolvency,
fraudulent conveyance, fraudulent transfer, reorganization, moratorium
and other similar laws relating to or affecting enforcement of
creditors' rights or remedies generally, (ii) general principles of
equity, whether such principles are considered in a proceeding at law
or equity, and (iii) an implied covenant of good faith, reasonableness
and fair dealing, and standards of materiality. Without limiting the
foregoing, we express no opinion as to (x) the validity, binding effect
or enforceability of any provision of the Notes, the Underwriting
Agreement, the Indenture (as supplemented and amended by the First
Supplemental Indenture), or the Guarantee that purports to waive,
release or vary any statutory right of any party or any duties owing to
any party to the extent that such waiver, release or variation may be
limited by Section 1-102(3) of the UCC or other provisions of
applicable law, or of any provision thereof that purports to allow a
set-off with respect to any contingent or unmatured obligations, or (y)
any provision of the Notes, the Underwriting Agreement, the Indenture
(as supplemented and amended by the First Supplemental Indenture), the
Guarantee that purports to provide that the terms thereof may not be
waived or modified except in writing, or that any prohibited or
unenforceable provision thereof may be severed without invalidating the
remaining provisions thereof. In addition, the enforceability of the
provisions in the Underwriting Agreement, the Indenture (as
supplemented and amended by the First Supplemental Indenture) or the
Guarantee to the effect that certain determinations made by one party
shall have conclusive effect may be limited under certain
circumstances.
(c) For purposes of the opinions set forth above, we have
considered, and express an opinion with respect to, only those laws,
statutes, rules and regulations that in our experience are normally
applicable to transactions of the type contemplated by the Underwriting
Agreement and the Indenture (as supplemented and amended by the First
Supplemental Indenture), and in particular we do not express any
opinion concerning aviation laws (including without limitation Title 49
of the U.S. Code), or other laws, statutes, rules or regulations
applicable to the particular nature of the business conducted by the
Company and the Guarantor.
(d) We express no opinion on the enforceability of rights
to indemnification or contribution under United States Federal or state
securities laws, rules or regulations. The enforceability of provisions
in the Notes, the Guarantee and the Indenture (as
Exhibit B-4
supplemented and amended by the First Supplemental Indenture) otherwise
providing for indemnification, exculpation or contribution may be
limited by applicable law or public policy. We express no opinion as to
any waiver of inconvenient forum set forth in any agreement. We express
no opinion concerning whether a United States Federal court would
accept jurisdiction in any dispute, action, suit or proceeding arising
out of or relating to any agreement or the transactions contemplated
thereby.
(e) Our opinions are subject to the effects of, and we
express no opinion with respect to the application of or compliance
with, any state securities or "blue sky" laws, statutes, rules or
regulations or any United States federal or state laws regarding
fraudulent transfers or fraudulent conveyances or preferential
transfers, or provisions of state law restricting dividends, loans or
other distributions by a corporation to or for the benefit of its
stockholders.
* * * * *
We have not ourselves checked the accuracy and completeness of, or
otherwise verified, and are not passing upon and assume no responsibility for
the accuracy or completeness of, the statements contained in the Prospectus,
except to the limited extent stated in paragraph 8 above. In the course of our
review and discussion of the contents of the Prospectus with certain officers
and employees of the Company and the Guarantor and their independent
accountants, but without independent check or verification, no facts have come
to our attention which have caused us to believe (A) that the Registration
Statement or any amendment thereto, on the original effective date thereof
(except, in each case, for the financial statements and other financial or
statistical data included or incorporated by reference therein, and except for
the Statement of Eligibility on Form T-1 of the Trustee under the Indenture, as
to which we express no belief), contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (B) that the
Prospectus at the time the Prospectus Supplement was issued or the Prospectus,
together with any amendment or supplement thereto, at the time any such amended
or supplemental Prospectus was issued or at the Closing Time (except, in each
case, for the financial statements and other financial or statistical data
included or incorporated by reference therein, as to which we express no
belief), contained or contains any untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
* * * * *
We assume no obligation to supplement this letter if any applicable
laws change after the date hereof or if we become aware of any facts that might
change the opinions and beliefs expressed herein after the date hereof. The
opinions and beliefs expressed herein are solely for your benefit and may not be
relied upon in any manner or for any purpose by any other person and may not be
quoted or disclosed in whole or in part without our prior written consent.
Very truly yours,
Exhibit B-5