Exhibit 4(d)(3)
Date: September 24, 2002
To: State Street Bank and Trust Company of Connecticut, National
Association
From: Credit Suisse First Boston International
Subject: CLASS G ABOVE CAP LIQUIDITY FACILITY CONFIRMATION
REFERENCE NUMBER: 522620007
Ladies and Gentlemen:
The purpose of this letter agreement (this "Confirmation") is to confirm
the terms and conditions of the Interest Rate Cap Transaction entered into on
the Trade Date referred to in Paragraph 2 below (the "Transaction") between
Credit Suisse First Boston International ("Party A") and State Street Bank and
Trust Company of Connecticut, National Association in its capacity as
Subordination Agent on behalf of the Trustee under the Pass Through Trust
Agreement dated as of March 21, 2002 between State Street Bank and Trust Company
of Connecticut, National Association, and American Airlines, Inc., as
supplemented by the Trust Supplement No. 2002-1G dated as of September 24, 2002
("Party B"). This letter agreement constitutes a "Confirmation" as referred to
in the ISDA Master Agreement specified below.
1. The definitions and provisions contained in the 2000 ISDA Definitions
and Annex to the 2000 ISDA Definitions (June 2000 Version) as published
by the International Swaps and Derivatives Association, Inc. (as so
supplemented, the "Definitions") are incorporated into this
Confirmation. In the event of any inconsistency between the
Definitions and this Confirmation, this Confirmation will govern.
References herein to a "Transaction" shall be deemed to be references
to a "Swap Transaction" for the purposes of the Definitions.
This Confirmation supplements, forms a part of, and is subject to the 1992
ISDA Master Agreement (Multicurrency - Cross Border) including the
Schedule thereto, dated as of September 24, 2002 as amended and
supplemented from time to time (collectively, the "Agreement"), between
us. All provisions contained in the Agreement govern this Confirmation
except as modified below. In the event of any inconsistency between the
Agreement and this Confirmation, this Confirmation will govern.
Capitalized terms not otherwise defined in the Agreement or this
Confirmation shall have the meanings ascribed to them in the Intercreditor
Agreement dated as of September 24, 2002 among State Street Bank and Trust
Company of Connecticut, National Association, as Trustee under the
American Airlines Pass Through Trust 2002-1G, American Airlines Pass
Through Trust 2002-1C, and American Airlines Pass Through Trust 0000-0X,
XxxxXX XX, Xxx Xxxx Branch, as Class G and Class C Primary Liquidity
Provider, Party A as Class G Above-Cap Liquidity Provider, Party B as
Subordination Agent, and MBIA Insurance Corporation as Policy Provider
(the "Intercreditor Agreement"). The Agreement and each Confirmation will
be governed by and construed in accordance with the laws of the State of
New York.
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Each of Party A and Party B represents to the other that it has entered
into this Transaction in reliance upon such independent accounting,
regulatory, legal, tax and financial advice as it deems necessary and not
upon any view expressed by the other.
2. Party A and Party B by this Confirmation are entering into a Transaction
(the "Above Cap Liquidity Facility") that provides an irrevocable interest
rate cap. The terms of the Above Cap Liquidity Facility are as follows:
General Terms:
Transaction Type: Interest Rate Cap Transaction
Notional Amount: The Pool Balance for the Class G Certificates
from time to time. The Notional Amount as of any
Floating Rate Payer Payment Date shall be
determined before giving effect to any
distributions on such Certificates on such
Floating Rate Payer Payment Date.
Trade Date: September 24, 2002
Effective Date: September 24, 2002
Termination Date: The first Business Day following the
earlier of (i) March 23, 2009 and (ii) the date
upon which the Pool Balance of the Class G
Certificates equals zero.
Currency Unit: USD
Business Day Convention: Following
Fixed Amounts:
Fixed Amount Payer: Party B
Fixed Amount Payer
Payment Date: September 24, 2002
Fixed Amount: As set forth in a separate letter agreement
between Party A and Party B.
Floating Amounts:
Floating Rate Payer: Party A
Floating Amount: On each Floating Rate Payer Payment Date on
which the Floating Rate Option exceeds the Cap
Rate, the Floating Amount shall be calculated
as follows:
(i) in the event that the Interest Shortfall (as
defined in Paragraph 5 below) is equal to zero,
the Floating Amount shall equal zero;
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(ii) in the event that there is a non-zero
Interest Shortfall and at least one of the
following is true: (x) the Available Amount
under the Class G Primary Liquidity Facility
(before giving effect to any Interest Drawing to
be made on such Payment Date) is greater than
zero, (y) the amount on deposit in the Class G
Primary Cash Collateral Account (before giving
effect to any withdrawals to be made from such
account on such Payment Date) is greater than
zero, or (z) the amount on deposit in the
Above-Cap Account (before giving effect to any
withdrawals to be made from such account on such
Payment Date) is greater than zero, the Floating
Amount shall equal the Above-Cap Payment (as
defined in the Intercreditor Agreement) for such
date; and
(iii) in the event that there is a non-zero
Interest Shortfall and none of the statements in
clauses (ii)(x), (ii)(y) and (ii)(z) above are
true, the Floating Amount shall equal zero.
Period End Dates: Each March 23, June 23, September 23, and
December 23, commencing on December 23, 2002
and ending on the Termination Date, subject to
adjustment in accordance with the Following
Business Day Convention.
Floating Rate Payer Each day that is a Period End Date and any
Payment Dates: Special Distribution Date under and as defined
in the Intercreditor Agreement not coinciding
with a Period End Date on which a distribution
of interest is, by the terms of the
Intercreditor Agreement, to be made on the Class
G Certificates.
Floating Rate Option: USD-LIBOR-BBA; provided, that, if
the relevant rate does not appear on the
Telerate Page 3750, the rate shall be "LIBOR" as
determined by the Reference Agent under Section
6(b)(ii) of the Reference Agency Agreement.
Cap Rate: 8.19%
Designated Maturity: 3 months, including the initial Calculation
Period
Spread: None
Floating Rate Day Count
Fraction: Actual/360
Reset Dates: The first day of the relevant Calculation
Period.
Compounding: Inapplicable
Notice: Party B shall, on or before 10:30 a.m. (New
York time) on each Floating Rate Payer Payment
Date, provide Party A with notice of the
then-current Pool Balance and the then-current
Interest Shortfall, if any, together with, if
such a shortfall exists, the
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certificate referred to in the final sentence of
Section 3.06(a) of the Intercreditor Agreement.
3. Role of Party A; Role of Calculation Agent
(i) Party B acknowledges that: (a) in connection with this Transaction
and this Agreement, Party A has acted in the capacity of an
arm's-length contractual counterparty and not as its financial
advisor or fiduciary; and (b) in exercising its rights or performing
any of its duties under this Agreement, Party A will act as
principal and not as a fiduciary of Party B.
(ii) Whenever the Calculation Agent is required to act or exercise
judgment in any way, it will do so in good faith and in a
commercially reasonable manner. The calculations and determinations
of the Calculation Agent shall be made in accordance with terms of
this Confirmation having regard in each case to the criteria
stipulated herein.
4. Additional Termination Event
It will be an Additional Termination Event with respect to Party A if the
relevant rating of Party A issued by any Rating Agency is lower than the
applicable Threshold Rating ("Credit Downgrade"). In the event of a Credit
Downgrade, Party A may, within ten days but no later than the Termination Date,
at its own expense, arrange for one or more Replacement Above-Cap Liquidity
Providers to enter into and deliver to Party B a Replacement Above-Cap Liquidity
Facility for the Above-Cap Liquidity Facility. If Party A does not arrange for
such replacement and if this Above-Cap Liquidity Facility has not otherwise been
replaced by American Airlines, Inc. (at the expense of American Airlines, Inc.)
in accordance with the terms of Section 3.06(c)(ii) of the Intercreditor
Agreement, such 10th day (or if such 10th day is not a Business Day, the next
succeeding Business Day) shall be deemed to be an "Early Termination Date" and
Party A shall make a termination payment to Party B in accordance with Part 1(j)
of the Schedule to the Agreement. Party A shall be the sole Affected Party with
respect to this Additional Termination Event.
5. Additional Definitions
For the purposes of this Confirmation, the following terms shall have the
meanings set forth below:
"Business Day" and "Local Business Day" mean, with respect to the
Transaction set forth in this Confirmation, "Business Day" as defined in the
Intercreditor Agreement for all purposes under the Agreement.
"Interest Shortfall" means, on any Floating Rate Payer Payment Date, the
additional amount required in order for Party B to have sufficient funds to pay
interest (calculated at the applicable Stated Interest Rate) due on any Class G
Certificates, after giving effect to the provisions of the Intercreditor
Agreement (but without regard to drawings under the Class G Primary Liquidity
Facility or withdrawals from the Class G Primary Cash Collateral Account or
Above-Cap Account).
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6. Payments
Party A hereby irrevocably instructs Party B to make any payment due to
Party A directly to the account specified below in the name of Party A. Party B
hereby irrevocably instructs Party A to make any payments of Floating Amounts
and any Termination Amount due to Party B directly to the account(s) specified
below in the name of Party B. All payments by Party A of Floating Amounts and
any Termination Amount due to Party B shall be made prior to 4:00 p.m. (New York
City time) on the date such payment is due without set-off, deduction,
withholding, netting, or any other reduction.
7. Account Details
Payments to Party A: Credit Suisse First Boston
Bank of New York
SWIFT XXXXXX0X
For favor Credit Suisse First Boston International,
London
Account Number: 8900360968
Payments to Party B: State Street Bank and Trust Company
ABA Number: 011 0000 28
DDA Number: 0000-000-0
Reference: Amer. Air 2002-1 #131360-002
Attention: May Xxxx
8. Offices
The Office of Party A for the Transaction is its office at the address
specified for notices to it in the Schedule to the Agreement. The Office of
Party B for the Transaction is its office at the address specified for notices
to it in the Schedule to the Agreement.
Party A has entered into this transaction as principal. The time at which
the above transaction was executed will be notified to Party B on request.
9. Counterparts
This Confirmation may be executed in any number of counterparts and by
each party hereto on separate counterparts, each of which counterparts, when so
executed and delivered, shall be deemed to be an original and all of which
counterparts, taken together, shall constitute but one and the same
Confirmation.
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Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the copy of this Confirmation enclosed for that purpose
and returning it to us.
Yours sincerely,
CREDIT SUISSE FIRST BOSTON INTERNATIONAL
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
Confirmed as of the date first written above:
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION in its
capacity as Subordination Agent on behalf of the Trustee under the Class G Trust
Agreement
By: /s/ Alison X.X. Xxxxxx
----------------------
Name: Alison X.X. Xxxxxx
Title: Vice President
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