As filed with the Securities and Exchange Commission on November 22, 1994
Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
_______________________
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
_______________________
Federal Express Corporation
(Exact name of registrant as specified in its charter)
Delaware 71-0427007
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2005 Corporate Avenue
Memphis, Tennessee 38132
(901) 369-3600
(Address, including zip code and telephone number, including area code,
of registrant's principal executive offices)
KENNETH R. MASTERSON, ESQ.
Senior Vice President, General Counsel and Secretary
Federal Express Corporation
1980 Nonconnah Boulevard
Memphis, Tennessee 38132
(901) 395-3388
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
_______________________
Copies to:
SARAH JONES BESHAR, ESQ.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
(212) 450-4000
_______________________
Approximate date of commencement of proposed sale to public: From time
to time after the effective date of this registration statement as determined
in light of market conditions and other factors.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. [X]
CALCULATION OF REGISTRATION FEE
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Proposed
Proposed Maximum
Maximum Aggregate
Title of Each Amount Offering Offering Amount of
Class of Securities Being Price Price Registration
Being Registered Registered Per Unit Per Unit Fee
- ------------------- ---------- --------- --------- ------------
Equipment Trust Certificates;
Pass Through Certificates $430,432,000 100% $430,432,000 $148,425
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(1) Estimated solely for purposes of determining the registration fee.
_______________________
Pursuant to Rule 429 under the Securities Act of 1933, as amended, the
Prospectuses filed as part of this Registration Statement relate to the
securities registered hereby and to the remaining unsold $11,680,000 and
$22,888,000 amounts of Equipment Trust Certificates and Pass Through
Certificates previously registered by Federal Express Corporation under its
Registration Statements on Form S-3, File Nos. 33-50013 and 33-51623,
respectively.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
==============================================================================
EXPLANATORY NOTE
This Registration Statement contains two forms of prospectus; one, as
supplemented, to be used in connection with offerings of equipment trust
certificates and the other, as supplemented, to be used in connection with
offerings of pass through certificates. Neither prospectus will be used to
consummate sales of securities unless accompanied by a prospectus supplement
applicable to the securities offered thereby.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED NOVEMBER 22, 1994
PROSPECTUS
[NEW LOGO]
EQUIPMENT TRUST CERTIFICATES
_____________________
Up to $465,000,000 aggregate principal amount of Equipment Trust
Certificates (the "Certificates") may be offered for sale from time to time
pursuant to this Prospectus and one or more Prospectus Supplements. The
Certificates may be offered in one or more Series in amounts, at prices and on
terms to be determined at the time of sale. The Certificates of each Series
will be issued as nonrecourse obligations by an Owner Trustee, acting not in
its individual capacity but solely as the Owner Trustee of a separate Owner
Trust, and authenticated by the Indenture Trustee, acting not in its
individual capacity but solely as the Indenture Trustee under an Indenture
among the Owner Trustee, the Indenture Trustee and Federal Express Corporation
(the "Corporation"), to finance or refinance a portion of the payment by such
Owner Trustee of the purchase price for a specified aircraft (an "Aircraft"),
which has been or will be leased to the Corporation in connection with a
leveraged lease transaction. The Prospectus Supplement relating to each
offering will describe certain terms of the Certificates offered thereby, the
Indentures and Leases and the leveraged lease transactions and Aircraft
relating to such Certificates.
For each Aircraft, the related Owner Trustee will issue Certificates of the
related Series, each of which may have a different principal amount, maturity
date and interest rate, which will be set forth on the cover of the related
Prospectus Supplement. Each offering pursuant to this Prospectus and a related
Prospectus Supplement may consist of one or more Series of Certificates. The
Certificates of each Series will be secured by a security interest in the
related Aircraft and by the Lease relating thereto, including the right to
receive rent payable by the Corporation under such Lease. Although the
Certificates will not be obligations of, nor guaranteed by, the Corporation,
the amounts payable by the Corporation under the Lease of each Aircraft will
be sufficient to pay in full when due all principal of and interest on the
Certificates related to such Aircraft.
Interest will be payable on the Certificates of each Series on the dates
and at the rates per annum set forth for such Certificates in the applicable
Prospectus Supplement. Principal will be payable on the Certificates of each
Series in scheduled amounts and on specified dates as set forth in the
applicable Prospectus Supplement.
The Certificates may be sold to or through underwriters or directly to
other purchasers or through agents. The Prospectus Supplement relating to
each offering will set forth the names of any underwriters, dealers or agents
involved in the sale of the Certificates in connection with which this
Prospectus is being delivered, the amounts, if any, to be purchased by
underwriters and the compensation, if any, of such underwriters or agents.
Prior to their issuance there will have been no market for the Certificates
of any Series and there can be no assurance that one will develop. Unless
otherwise indicated in the applicable Prospectus Supplement, the Corporation
does not intend to apply for the listing of any Series of Certificates on a
national securities exchange.
This Prospectus may not be used to consummate sales of any Certificates
unless accompanied by the Prospectus Supplement applicable to the Certificates
being sold.
______________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
______________________
The date of this Prospectus is November , 1994.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
AVAILABLE INFORMATION
Federal Express Corporation (the "Corporation") is subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith files reports and other
information with the Securities and Exchange Commission (the "Commission").
Reports, proxy and information statements and other information filed by the
Corporation with the Commission can be inspected, and copies may be obtained
at prescribed rates, at the Public Reference Section of the Commission, 450
Fifth Street, N.W., Washington, D.C. 20549, as well as at the following
Regional Offices of the Commission: Chicago Regional Office, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511 and New York Regional Office,
7 World Trade Center, New York, New York 10048. Such material can also be
inspected and copied at the offices of the New York Stock Exchange, Inc., 20
Broad Street, New York, New York 10005.
This Prospectus constitutes a part of a registration statement on Form S-3
(together with all amendments and exhibits, herein referred to as the
"Registration Statement") filed by the Corporation under the Securities Act
of 1933, as amended (the "Securities Act"). This Prospectus does not contain
all of the information included in the Registration Statement, certain parts
of which are omitted in accordance with the rules and regulations of the
Commission. Reference is made to such Registration Statement and to the
exhibits relating thereto for further information with respect to the
Corporation and the securities offered hereby.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission in accordance with the
provisions of the Exchange Act are incorporated herein by reference and made a
part hereof:
1. The Corporation's Annual Report on Form 10-K for the fiscal year
ended May 31, 1994 and its Quarterly Report on Form 10-Q for the
fiscal quarter ended August 31, 1994, filed August 5, 1994 and
October 13, 1994, respectively; and
2. The Corporation's Current Report on Form 8-K dated September 14, 1994
and filed September 23, 1994.
All documents filed by the Corporation pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus and before the
termination of the offering made by this Prospectus shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein, or contained in this Prospectus, shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Corporation will furnish without charge to each person to whom this
Prospectus is delivered, on written or oral request of such person, a copy of
any or all documents incorporated by reference in this Prospectus, without
exhibits to such documents (unless such exhibits are specifically incorporated
by reference into such documents). Requests for such copies should be
directed to: Thomas R. Martin, Managing Director --Public Relations, Federal
Express Corporation, by mail at Box 727, Memphis, Tennessee 38194-1850 or by
telephone at (901) 395-3490.
FEDERAL EXPRESS CORPORATION
The Corporation offers a wide range of express services for the
time-definite transportation of documents, packages and freight throughout the
world using an extensive fleet of aircraft and vehicles and leading-edge
information technologies. Corporate headquarters are located at 2005
Corporate Avenue, Memphis, Tennessee 38132, telephone (901) 369-3600.
RATIO OF EARNINGS TO FIXED CHARGES
(Unaudited)
Three Months
Year Ended May 31, Ended August 31,
--------------------------- ---------------------
1990 1991 1992 1993 1994 1993 1994
Ratio of Earnings to
Fixed Charges(a) 1.4x 1.0x (b) 1.4x 1.7x 1.5x 1.9x
______________________
(a) Earnings included in the calculation of the ratio of earnings to fixed
charges represent income before income taxes plus fixed charges (other
than capitalized interest). Fixed charges include interest expense,
capitalized interest, amortization of debt issuance costs and a portion
of rent expense representative of interest.
(b) Earnings were inadequate to cover fixed charges by $173.4 million for
the year ended May 31, 1992.
USE OF PROCEEDS
The proceeds from the sale of the equipment trust certificates (the
"Certificates") of each series (a "Series") offered pursuant to this
Prospectus and a related Prospectus Supplement will be used to finance or
refinance the debt portion and, in certain cases, to refinance some of the
equity portion of a separate leveraged lease transaction entered into by the
Corporation, as lessee, with respect to an aircraft (an "Aircraft") specified
in such Prospectus Supplement. For each Aircraft, unless otherwise specified
in the applicable Prospectus Supplement, the debt portion financed or
refinanced will not exceed 80% of the purchase price for such Aircraft.
The discounts and commissions relating to the offering of the Certificates
of each Series will be paid by the Owner Participant (as defined below). The
other expenses relating to the issuance and offering of such Certificates
(other than certain expenses to be paid directly by the Corporation) will be
paid by the Owner Participant as such other expenses become due or, if
previously paid by the Corporation, will be reimbursed to the Corporation by
the Owner Participant.
OUTLINE OF LEVERAGED LEASE TRANSACTIONS
Each Prospectus Supplement will specify the type and model of Aircraft
relating to the Certificates offered thereby, the engines with which such
Aircraft is equipped and when such Aircraft was delivered new by the
manufacturer to the Corporation or the Owner Trustee, as the case may be.
Each Aircraft has been or will be sold to Wilmington Trust Company, not in its
individual capacity but solely as owner trustee (the "Owner Trustee") of a
trust (an "Owner Trust" created pursuant to a "Trust Agreement") for the
benefit of the owner participant named in the related Trust Agreement (the
"Owner Participant"). Simultaneously with such sale, the Owner Trustee has
leased or will lease the Aircraft to the Corporation pursuant to a lease (a
"Lease") between the Owner Trustee, as lessor, and the Corporation, as lessee.
Each of the leveraged lease transactions was or will be effected pursuant to a
separate participation agreement (a "Participation Agreement") among the Owner
Participant, the Owner Trustee, the Indenture Trustee (as defined below), the
Corporation and, in the case of a refinancing, each holder of a loan
certificate issued under the Indenture as originally executed.
For each Aircraft, the related Certificates will be issued as a separate
Series by the Owner Trustee, as nonrecourse obligations, and authenticated by
NationsBank of Georgia, National Association ("NationsBank of Georgia"), as
indenture trustee (the "Indenture Trustee") pursuant to a separate trust
indenture and security agreement between the Owner Trustee, the Indenture
Trustee and the Corporation (an "Indenture"). Each Owner Participant will
have provided or will provide, from sources other than the related
Certificates, unless otherwise specified in the applicable Prospectus
Supplement, at least 20% of the purchase price for the related Aircraft.
DESCRIPTION OF THE CERTIFICATES
The discussion that follows is a summary and does not purport to be
complete. The summary includes descriptions of the material terms of the
Indenture and the Certificates, the forms of which have been filed as exhibits
to the Registration Statement of which this Prospectus is a part. For the
Certificates offered pursuant to this Prospectus and any Prospectus
Supplement, this summary will be qualified in its entirety by the detailed
information appearing in such Prospectus Supplement, as well as by the form of
the Certificates of each Series offered thereby and the related Indenture,
Lease and Participation Agreement which will be filed as exhibits to a
post-effective amendment to this Registration Statement, a Current Report on
Form 8-K, a Quarterly Report on Form 10-Q or an Annual Report on Form 10-K, as
applicable, to be filed with the Commission in connection with the issuance of
such Certificates. This summary makes use of terms defined in and is
qualified in its entirety by reference to the form of Indenture referred to
above.
Each Prospectus Supplement will include a glossary of certain terms used in
connection with the Certificates offered thereby. Except as otherwise
indicated below or as described in the applicable Prospectus Supplement, the
following summary will apply to the Certificates, the Indenture, the Lease and
the Participation Agreement relating to each Aircraft. Additional provisions
with respect to the Indentures, the Certificates, the Leases and the
Participation Agreements relating to any particular offering of Certificates
will be described in the applicable Prospectus Supplement. To the extent that
any provision in any Prospectus Supplement is inconsistent with any provision
of this summary, the provision of such Prospectus Supplement will control.
General
The Certificates of each Series will be issued as nonrecourse obligations
by the Owner Trustee, acting for a separate Owner Trust for the benefit of an
Owner Participant, and will be authenticated under the related Indenture by
the Indenture Trustee for the benefit of the registered holders of the
Certificates of such Series (the "Holders"). All of the Certificates issued
under the same Indenture will relate to a specific Aircraft which will be
leased by the Owner Trustee to the Corporation pursuant to a separate Lease
between the Owner Trustee and the Corporation. The Aircraft subject to each
Lease and the Certificates issued under the related Indenture will be
specified in the applicable Prospectus Supplement. The Corporation will be
obligated to make rental payments under each Lease that will be sufficient to
pay the principal of and accrued interest on the related Certificates when and
as due and payable. The Corporation's obligations to pay rent and to cause
other payments to be made under each Lease will be general obligations of the
Corporation. The Certificates will not, however, be obligations of, or
guaranteed by, the Corporation.
The Certificates will not be obligations of the Owner Trustee, in its
individual capacity, or the Owner Participant; and neither the Owner Trustee,
in its individual capacity, nor the Owner Participant will be liable for
payment of any principal of, or premium, if any, or interest on the
Certificates.
Principal and Interest Payments
Interest will be payable on the Certificates of each Series on the dates
and at the rates per annum set forth for such Certificates in the applicable
Prospectus Supplement. Interest will be calculated on the basis of a 360-day
year consisting of twelve 30-day months. Principal will be payable on the
Certificates of each Series in scheduled amounts and on specified dates as set
forth in the applicable Prospectus Supplement. Unless otherwise set forth in
the applicable Prospectus Supplement, the record date for each interest and
principal payment date will be the fifteenth day prior to such payment date.
Principal of, premium, if any, and interest on the Certificates of each
Series will be payable at the corporate trust office of the Indenture Trustee
in Atlanta, Georgia or at such other office or agency, including the office
or agency of a paying agent that may be appointed by the Indenture Trustee (a
"Paying Agent"), maintained for the payment of the Certificates of a Series.
All amounts payable by the Indenture Trustee under the terms of the Indenture
may, however, at the option of the Indenture Trustee or Paying Agent, be paid
by check mailed to the person entitled thereto at the address shown in the
register maintained by the Indenture Trustee or other registrar, if any.
(Indenture, Sections 2.04, 3.02 and 3.04)
Unless otherwise specified in the applicable Prospectus Supplement, the
Certificates will be issued in fully registered, certificated form without
coupons and in minimum denominations of $1,000 or any integral multiple of
$1,000. Certificates may be surrendered for registration of transfer or
exchange for Certificates of the same Series, maturity and interest rate at a
facility or facilities established for such purpose by the Indenture Trustee
in New York, New York. No service charge will be levied on any Holder for any
transfer or exchange of Certificates, but payment may be required from such
Holder of any tax or other governmental charges that may be imposed in
connection therewith. (Indenture, Sections 2.04, 2.06 and 3.02)
Prepayment
The applicable Prospectus Supplement will describe the circumstances,
whether voluntary or involuntary, under which the related Certificates may or
must be prepaid prior to the stated maturity date thereof, in whole or in
part, the premium, if any, applicable upon certain prepayments and other terms
applying to the prepayment of such Certificates.
Security
The Certificates of each Series will be secured by:
(i) an assignment by the Owner Trustee to the Indenture Trustee of the
Owner Trustee's rights (except for certain limited rights described
below) under the related Lease, including the right to receive rent
and other payments thereunder;
(ii) a security interest in the related Aircraft, subject to the rights
of the Corporation under such Lease and to certain other liens and
encumbrances; and
(iii) an assignment to the Indenture Trustee of the Owner Trustee's
rights relating to such Aircraft and the related engines under the
agreements for the purchase thereof between the Corporation and the
respective manufacturers of such Aircraft and of such engines. See
"Registration of the Aircraft" below.
The assignment by the Owner Trustee to the Indenture Trustee of its rights
under each Lease will exclude rights of the Owner Trustee and the Owner
Participant relating to:
(i) indemnification by the Corporation for certain matters;
(ii) proceeds of public liability insurance payable to the Owner Trustee
in its individual capacity and to the Owner Participant under
insurance maintained by the Corporation under such Lease; and
(iii) proceeds of any insurance policies separately maintained by the
Owner Trustee in its individual capacity or by the Owner Participant.
The right of the Indenture Trustee, however, to exercise any of the rights of
the Owner Trustee under the related Lease, except the right to receive
payments of rent due thereunder, will be subject to certain limitations as
described in the applicable Prospectus Supplement. (Indenture, Granting
Clause and Section 8.01)
There will be no cross-collateralization provisions in the Indentures
and consequently the Certificates issued in respect of one of the Aircraft
will not be secured by any other Aircraft or the Leases related thereto. There
will be no cross-default provisions in the Indentures and consequently events
resulting in an Indenture Event of Default under any particular Indenture may
not result in an Indenture Event of Default occurring under any other
Indenture.
The proceeds from the sale of the Certificates of any Series will, if such
proceeds are received by the Indenture Trustee on a day that is prior to the
delivery date for the related Aircraft or, in the case of a refinancing, the
refunding date for the related original loan certificate, be deposited with
and held by the Indenture Trustee in the investments described in the
following sentence, at the direction and risk of the Corporation, as security
for such Certificates pending the delivery of the Aircraft or the consummation
of the refunding. Funds, if any, held from time to time by the Indenture
Trustee with respect to any Aircraft as a result of (i) the occurrence of an
Indenture Event of Default, which may cause the Indenture Trustee to hold
funds otherwise distributable to the Owner Trustee, (ii) an Event of Loss with
respect to such Aircraft or (iii) otherwise, will be invested in obligations
either of, or fully guaranteed by, the United States of America; certificates
of deposit, bankers' acceptances or time deposits made with or by certain
banks, trust companies or national banking associations; or commercial paper
issued by a U.S. corporation whose commercial paper is rated at least A-1/P-1
by Standard & Poor's Corporation and Moody's Investors Service, Inc.,
respectively, or if neither such organization rates such commercial paper, the
highest rating by another nationally recognized rating organization. Any
income realized as a result of such investments, net of the Indenture
Trustee's reasonable fees and expenses incurred in making such investment,
will be held and applied by the Indenture Trustee in the same manner as the
principal amount of such investment is to be applied and any losses, after
taking into account such earnings and such reasonable fees and expenses, will
be charged against the principal amount invested, in which case the
Corporation will be responsible for any losses. (Indenture, Section 5.08)
Registration of the Aircraft
The Corporation will be required, except under certain circumstances, to
register and keep each Aircraft registered under Title 49 of the United
States Code (which, among other things, recodified the Federal Aviation Act
of 1958, as amended to the time of such recodification) (the "Aviation
Act"), in the name of the Owner Trustee, and to record and maintain the
recordation of the Indenture and the Lease relating to each such Aircraft
under the Aviation Act. Such recordation will give the Indenture Trustee a
security interest in each such Aircraft perfected under the Aviation Act,
which perfected security interest will, with certain limited exceptions, be
recognized in those jurisdictions that have ratified to the Convention on
the International Recognition of Rights in Aircraft (the "Convention").
The Corporation will be able, in certain circumstances, to re-register any
Aircraft in certain countries other than the United States. Unless otherwise
specified in the applicable Prospectus Supplement, prior to any such change
in the jurisdiction of registry, the Indenture Trustee and the related Owner
Participant must receive certain assurances, including that such other country
would provide substantially equivalent protection for the rights of owner
participants, lessors and lenders in similar transactions as is provided under
United States law, except that, for the purpose of such determination, rights
and remedies similar to those available under Section 1110 of the United
States Bankruptcy Code (the "Bankruptcy Code") will not be required in the
absence of restrictions of rights and remedies of lessors and secured parties
that are similar to those imposed by Sections 362, 363 and 1129 of the
Bankruptcy Code.
Generally, each Aircraft may also be operated by the Corporation or under
sublease or interchange arrangements in countries that are not parties to the
Convention. Because no assurances can be given as to the perfection of the
Indenture Trustee's security interest in a legal proceeding outside the United
States, the ability of the Indenture Trustee in the case of an Indenture
Event of Default, to realize upon such security interest could be adversely
affected as a legal or practical matter if the Aircraft were registered or
located outside the United States.
Payments and Limitation of Liability
All payments of principal of, premium, if any, and interest on the
Certificates of each Series will be made only from the assets subject to the
Lien of the applicable Indenture or the income and proceeds received by the
Indenture Trustee therefrom, including rent payable by the Corporation under
the related Lease. See "The Leases -- Terms and Rentals" below. The
Corporation's obligations to pay rent and to cause other payments to be made
under each Lease will be general obligations of the Corporation. The
Certificates will not be direct obligations of, and will not be guaranteed by,
the Corporation.
Neither the Owner Trustee nor the Indenture Trustee (in their individual
capacities) will be liable to any Holder or, in the case of the Owner Trustee,
in its individual capacity, to the Corporation or the Indenture Trustee for
any amounts payable or for any liability under the Certificates or the
Indentures, except as provided in the Indentures and the Participation
Agreements and except for the gross negligence or willful misconduct of the
Owner Trustee. (Indenture, Section 2.05)
Merger, Consolidation and Transfer of Assets
With respect to each Series of Certificates, the Corporation will be
prohibited from consolidating with or merging into any other corporation under
circumstances in which the Corporation is not the surviving corporation, or
from transferring all or substantially all of its assets as an entirety to any
other corporation, unless, among other things:
(i) the successor or transferee corporation is a U.S. Citizen, an "air
carrier" within the meaning of and operating under the Aviation Act
and a corporation organized and existing under the laws of the
United States or a political subdivision thereof, and such
corporation expressly assumes all the obligations of the
Corporation contained in the related Indenture, the Participation
Agreement, the Lease, the Purchase Agreement and the Purchase
Agreement Assignment;
(ii) immediately after giving effect to such consolidation, merger or
transfer, the successor or transferee is in compliance with all of
the terms and conditions of such documents; and
(iii) such consolidation, merger or transfer does not give rise to a
Lease Event of Default.
The Indentures contain no debt covenants or provisions that would afford
the Holders protection in the event of a highly leveraged transaction
involving the Corporation.
Events of Default, Notice and Waiver
The Indenture Events of Default under each Indenture for the Certificates
to be offered pursuant to this Prospectus and any Prospectus Supplement will
be set forth in such Prospectus Supplement. There will be no cross-default
provisions in the Indentures and consequently events resulting in an Indenture
Event of Default under any particular Indenture may not result in an Indenture
Event of Default occurring under any other Indenture.
Each Indenture will provide that the Indenture Trustee must, within 90 days
after the occurrence of any event actually known to a responsible officer of
the Indenture Trustee that is an Indenture Default thereunder, give notice
thereof to the Holders of outstanding Certificates issued thereunder. Under
no circumstances, however, may the Indenture Trustee give such notice until
the expiration of a period of 60 days from the occurrence of such Indenture
Default. The Indenture Trustee will be protected in withholding such notice,
except in the case of a default in the payment of the principal of, premium,
if any, or interest on any Certificate issued thereunder, if it in good faith
determines that the withholding of such notice is in the interests of the
Holders of such Certificates. (Indenture, Section 7.12)
The Holders of not less than 50% in aggregate principal amount of
outstanding Certificates issued under an Indenture to which an Indenture
Default relates may on behalf of all Holders waive certain past Indenture
Default thereunder and its consequences. Consent from each Holder of an
outstanding Certificate issued under an Indenture, however, is required with
respect to a waiver of an Indenture Default in the payment of the principal
of, premium, if any, or interest on any Certificate then outstanding under
such Indenture or in respect of any covenant or provision of such Indenture or
any other related Operative Agreement that, pursuant to the provisions of such
Indenture, cannot be modified or amended without the consent of each Holder
affected thereby. (Indenture, Section 7.11)
Under each Indenture the Owner Trustee or the related Owner Participant
will have the right under certain circumstances, as specified in the
applicable Prospectus Supplement, to cure an Indenture Event of Default that
results from the occurrence of a Lease Event of Default under the related
Lease. If the Owner Trustee or the related Owner Participant exercises
such cure right, the Indenture Event of Default will be deemed to be cured.
Remedies
Each Indenture will provide that if an Indenture Event of Default has
occurred and is continuing thereunder, the Indenture Trustee may exercise
certain rights or remedies available to it under applicable law, including, if
a Lease Event of Default under the related Lease has occurred, one or more of
the remedies with respect to the Aircraft pledged under such Indenture
afforded to the Owner Trustee by the related Lease for Lease Events of Default
thereunder. The exercise by the Indenture Trustee of such rights or remedies
in connection with a Lease Event of Default will be subject, however, to the
right, if any, of the Owner Trustee or the related Owner Participant, as the
case may be, to cure certain defaults or to prepay the Certificates. The
applicable Prospectus Supplement will describe any limitation on the exercise
of remedies by the Indenture Trustee. Such remedies may be exercised by the
Indenture Trustee to the exclusion of the Owner Trustee and the Owner
Participant. Any Aircraft sold in the exercise of such remedies will be free
and clear of any rights of those parties, including the rights of the
Corporation under the applicable Lease, provided that no exercise of any
remedies by the Indenture Trustee may affect the rights of the Corporation
under a Lease unless a Lease Event of Default under such Lease has occurred
and is continuing. (Indenture, Section 7.02(a))
It is impossible to predict the resale value for any Aircraft to be sold
upon the exercise of the Indenture Trustee's remedies under the related
Indenture. The market for aircraft, whether new or used, is and will be
affected by many factors including, among other things, the supply of
similarly equipped aircraft of the same make and model, the demand for such
aircraft by air carriers and the cost and availability of financing to
potential purchasers of such aircraft. Each of these factors, in turn, will
be affected by various circumstances including, among other things, current
and anticipated demand for passenger and cargo air services, the relative
capacity of air carriers to provide such services, the current and projected
profitability of providing such services, the economic condition of the
domestic and international airline industries and global economic and
financial developments generally. In addition, the marketability of a
particular aircraft will be affected by factors such as the reputation and
actual performance record of the air carrier operating the aircraft with
respect to maintenance, the compliance of the aircraft with federal noise and
other environmental standards and the degree of technical and other support
available from the manufacturer of the aircraft. Since the market for
aircraft will fluctuate over time to reflect changes in these circumstances,
and because of the unique factors that would affect market value in a forced
disposition of an aircraft, there can be no assurance that the net proceeds
realized from the sale or other disposition of any Aircraft in the exercise of
such remedies will be sufficient to satisfy in full amounts due and payable on
the related Certificates.
If an Indenture Event of Default occurs under an Indenture as a result of
certain specified events of bankruptcy, insolvency or reorganization of the
Owner Trustee, the related Owner Participant or the Corporation, then the
unpaid principal of all outstanding Certificates of each Series issued
under such Indenture, together with interest accrued but unpaid thereon and
all other amounts due thereunder and under such Indenture, immediately and
without further act, will become due and payable. If any other Indenture
Event of Default occurs and is continuing under an Indenture, the Indenture
Trustee, acting on its own or at the direction of the Holders of not less
than 25% in aggregate principal amount of the outstanding Certificates of
eash Series issued under such Indenture, may declare the principal of all
such Certificates immediately due and payable, together with interest
accrued but unpaid thereon and all other amounts due thereunder and under
such Indenture, by written notice or notices to the Owner Trustee and the
Corporation.
The Holders of not less than 50% in aggregate principal amount of the
outstanding Certificates of such Series may rescind any such declaration by
the Indenture Trustee or by such Holders at any time prior to the sale or
disposition of the property subject to the Lien of the Indenture provided
there has been paid to or deposited with the Indenture Trustee an amount
sufficient to pay:
(a) all overdue installments of interest on all such Certificates
(together, to the extent permitted by law, with interest on such
overdue installments of interest);
(b) the principal on any Certificates that has become due otherwise than
by such declaration;
(c) all amounts paid or advanced by the Indenture Trustee under such
Indenture; and
(d) certain other expenses
or all Indenture Events of Default under such Indenture (other than the
non-payment of principal that has become due solely because of such
declaration) have been cured or waived. (Indenture, Sections 7.02(b) and (c))
In the event of the bankruptcy of the Owner Participant, it is possible
that, notwithstanding the fact that the applicable Aircraft will be owned by
the Owner Trustee in trust, such Aircraft and the related Lease and
Certificates might become part of such bankruptcy proceeding. In such event,
payments under such Lease or Certificates might be interrupted and the ability
of the Indenture Trustee to exercise its remedies under such Indenture might
be restricted, although the Indenture Trustee would retain its status as a
secured creditor in respect of such Lease and Aircraft.
The right of any Holder of a Certificate to institute an action for any
remedy under the Indenture pursuant to which such Certificate was issued
(including the right to enforce payment of the principal of, premium, if any,
and interest on such Certificates when due) will be subject to certain
conditions precedent, including a written request to the Indenture Trustee by
the Holders of not less than 25% in aggregate principal amount of outstanding
Certificates issued pursuant to such Indenture to take action, and an offer to
the Indenture Trustee of reasonable indemnification against costs, expenses
and liabilities incurred by it in doing so. (Indenture, Sections 7.08 and
7.09)
The Holders of not less than 50% in aggregate principal amount of the
outstanding Certificates of each Series may direct the time, method and place
of conducting any proceeding for any remedy available to the Indenture Trustee
or of exercising any trust or power conferred on the Indenture Trustee but, in
such event, the Indenture Trustee is entitled to be indemnified by the Holders
of such Series before proceeding so to act and the Indenture Trustee may not
be held liable for any such action taken in good faith. (Indenture, Section
7.10 and Article XI)
Section 1110 of the Bankruptcy Code provides that the right of lessors,
conditional vendors and holders of equipment security interests with respect
to aircraft used by air carriers operating under certificates issued by the
Secretary of Transportation under Section 41102(a) or 41103 of the Aviation
Act (formerly Section 401 and 418, respectively, of the Federal Aviation Act
of 1958, as amended to the time of recodification by the Aviation
Act) to take possession of such aircraft in compliance with the provisions of
the lease, conditional sale contract or equipment security agreement, as the
case may be, is not affected by:
(a) the automatic stay provision of the Bankruptcy Code, which
provision enjoins the taking of any action against a debtor by a
creditor;
(b) the provision of the Bankruptcy Code allowing the trustee in
reorganization or the debtor-in-possession to use, sell or lease
property of the debtor;
(c) the confirmation of a plan by the bankruptcy court; and
(d) any power of the bankruptcy court to enjoin a repossession.
Section 1110 provides, however, that the right of a lessor, conditional
vendor or holder of an equipment security interest to take possession of an
aircraft in the event of a default may not be exercised for 60 days
following the date of commencement of the reorganization proceedings
(unless specifically permitted by the bankruptcy court) and may not be
exercised at all if, within such 60-day period, the trustee in
reorganization or the debtor-in-possession agrees to perform the debtor's
obligations that become due on or after such date and cures all existing
defaults (other than defaults resulting solely from the financial
condition, bankruptcy, insolvency or reorganization of the debtor). The
Prospectus Supplement for each offering will discuss the availability of
the benefits of Section 1110 of the Bankruptcy Code with respect to the
related Aircraft.
If an Indenture Event of Default occurs and is continuing, any amounts held
or received by the Indenture Trustee may be applied to reimburse the Indenture
Trustee for any tax, expense, charge or other loss incurred by it and to pay
any other amounts due the Indenture Trustee prior to any payments to Holders
of the Certificates with respect to which such Indenture Event of Default
relates. (Indenture, Sections 5.03 and 9.11)
Modification of Agreements
The provisions of the Indenture, the Lease, the Participation Agreement and
the Trust Agreement with respect to any Series may be amended or modified,
except to the extent indicated below, with the consent of the Holders of more
than 50% in aggregate principal amount of outstanding Certificates of such
Series. (Indenture, Section 13.02)
The following changes may be made to the Indenture pursuant to which a
Certificate was issued or the related Lease or Participation Agreement only
with the consent of all Holders of the outstanding Certificates affected
thereby:
(a) reductions in the principal amount of, or premium, if any, or
interest payment payable on such Certificate or changes in the date
on which any such principal, premium, if any, or interest payment is
due and payable or otherwise affect the terms of payment of such
Certificate;
(b) reductions in, and modifications or amendments to, any indemnities
payable by the related Owner Participant in favor of such Holder;
(c) reductions in the amount of any rental payment payable by the
Corporation below the amount required to pay all principal of,
premium, if any, and interest on all such Certificates as and when
due and payable;
(d) creations of any security interest with respect to the property
subject to the Lien of such Indenture ranking prior to or on a parity
with the security interest created by such Indenture or deprivation to
the Holder of any such Certificate of the benefit of the Lien of such
Indenture upon the property subject thereto; or
(e) reductions in the percentage of the aggregate principal amount of
such Certificates necessary to modify or amend any provision of such
Indenture or to waive compliance therewith. (Indenture, Article XIII)
Certain provisions of the Indentures, the Leases, the Participation
Agreements and the Trust Agreements may be modified by the Owner Trustee, the
Lessee and the Indenture Trustee without the consent of the Holders of the
outstanding Certificates related thereto. (Indenture, Section 13.01)
The Indenture Trustee
Unless otherwise indicated in the applicable Prospectus Supplement,
NationsBank of Georgia, will be the Indenture Trustee under each Indenture. An
affiliate of NationsBank of Georgia acts as trustee under other indentures
with respect to other indebtedness of the Corporation. The Corporation from
time to time borrows from, and maintains deposit accounts with, NationsBank of
Georgia and its affiliates.
In accordance with the Trust Indenture Act of 1939, as amended, each
Indenture will be deemed to provide that in the case of any Indenture Event of
Default thereunder, the Indenture Trustee shall exercise such of the rights
and powers vested in it by such Indenture and use the same degree of care and
skill in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of its own affairs. Generally, the Indenture
Trustee will not be liable for any error of judgment made in good faith,
unless the Indenture Trustee was negligent in ascertaining the pertinent
facts, or for any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than 50% in aggregate
principal amount of the outstanding Certificates issued under such Indenture.
Subject to such provisions, the Indenture Trustee will be under no obligation
to exercise any of its rights or powers under such Indenture at the request of
any Holders of Certificates issued thereunder unless they shall have offered
to the Indenture Trustee reasonable security or indemnity. Each Indenture
will provide that the Indenture Trustee and the Owner Trustee may acquire and
hold Certificates issued thereunder and, subject to certain conditions, the
Indenture Trustee may otherwise deal with the Owner Trustee with the same
rights it would have if it were not the Indenture Trustee. (Indenture,
Sections 9.02, 9.03 and 9.05)
The Indenture Trustee may resign as trustee under any Indenture at any
time. If the Indenture Trustee ceases to be eligible to continue as Indenture
Trustee under an Indenture or becomes incapable of acting as Indenture Trustee
or becomes insolvent, the Owner Trustee may remove the Indenture Trustee. Any
Holder of a related Certificate who has been a Holder for at least six months
may, on behalf of such Holder and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Indenture Trustee and
the appointment of a successor trustee. In addition, the Indenture Trustee
under any Indenture may be removed without cause by the Holders of more than
50% in aggregate unpaid principal amount of the related outstanding
Certificates or by the Owner Trustee, with the consent of the Corporation and
such Holders. (Indenture, Section 12.02)
In the case of the resignation or removal of the Indenture Trustee under an
Indenture, the Holders of more than 50% in aggregate unpaid principal amount
of the related outstanding Certificates, or the Owner Trustee, with the
consent of the Corporation and such Holders, may appoint a successor Indenture
Trustee. The resignation or removal of the Indenture Trustee under any
Indenture and the appointment of the successor trustee under such Indenture
does not become effective until acceptance of the appointment by the successor
trustee. (Indenture, Section 12.02) Pursuant to such resignation and
successor trustee provisions, it is possible that a different trustee could
be appointed to act as the successor trustee under each Indenture. All
references in this Prospectus to the Indenture Trustee are to the trustee
acting in such capacity under each of the Indentures and should be read to
take into account the possibility that each of the Indentures could have a
different successor trustee in the event of such a resignation or removal.
The Leases
Terms and Rentals. Each Aircraft will be leased separately by the related
Owner Trustee to the Corporation for a term commencing on the date of the
delivery of the related Aircraft to the Owner Trustee and expiring on a date
not earlier than the latest maturity date of the Certificates issued with
respect to such Aircraft, unless previously terminated or extended, as
permitted by the related Lease. The scheduled rental payments by the
Corporation under each Lease will be payable on the dates specified in the
applicable Prospectus Supplement. The respective payments will be assigned
under the related Indenture by the Owner Trustee to the Indenture Trustee to
provide the funds necessary to make payments of principal and interest due
from such Owner Trustee on the Certificates issued under such Indenture.
Although in certain cases the scheduled rental payments under the Leases may
be adjusted, under no circumstances will such payments that the Corporation
will be unconditionally obligated to make or cause to be made under any Lease
be less than the scheduled payments of principal of and interest on the
Certificates issued under the Indenture relating to such Lease. See "Payments
and Limitations of Liability" above. Scheduled payments of principal of and
interest on the Certificates will be made on the dates specified in the
applicable Prospectus Supplement.
Net Lease. The Corporation's obligations under each Lease in respect of
the related Aircraft will be those of a lessee under a "net lease."
Accordingly, the Corporation will be obligated to pay all costs of operating
the Aircraft and, at its expense, to maintain, service, repair and overhaul
the Aircraft so as to keep the Aircraft in good condition, ordinary wear and
tear excepted, and to enable the airworthiness certification thereof to be
maintained in good standing at all times under the Aviation Act or, under
certain circumstances, under the applicable requirements of the aeronautical
authority of another country of registry. If, however, the Aircraft loses
its airworthiness certification and such loss is curable and the Corporation,
using its reasonable best efforts, undertakes such cure promptly, diligently
and continuously, then the Corporation will not be in default with respect to
such obligation.
Generally, the Corporation will be obligated to replace or cause to be
replaced all parts that may from time to time be incorporated or installed in
or attached to any Aircraft (including in or on any engine) and that may
become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond
repair or permanently rendered unfit for use. The Corporation will have the
right to make other alterations, modifications and additions to an Aircraft so
long as such alterations, modifications or additions do not materially
decrease the value or utility of such Aircraft or impair its condition or
airworthiness below its value, utility, condition and airworthiness
immediately prior to such alteration, modification or addition, assuming that
such Aircraft was then in the condition and airworthiness required by the
related Lease. Also, in certain circumstances, the Corporation will be
permitted to remove parts (without replacement) from an Aircraft or any engine
(and therefore from the Lien of the applicable Indenture) if the Corporation
deems such parts to be obsolete or no longer suitable or appropriate for use
thereon so long as such removals do not decrease the utility, condition or
airworthiness of such Aircraft or any such engine, although the value of such
Aircraft or any such engine may be reduced by such removal. The applicable
Prospectus Supplement will contain a description of certain limitations, if
any, applicable to the provisions described above.
Insurance. Unless otherwise indicated in the applicable Prospectus
Supplement, the Corporation will be obligated to carry insurance with insurers
of recognized responsibility with respect to each Aircraft, at its own cost
and expense, in such amounts, against such risks, with such deductibles or
retentions (i) in the case of hull insurance, as the Corporation customarily
maintains with respect to other aircraft in the Corporation's fleet of the
same type and model and operating on the same routes as the respective
Aircraft and (ii) in the case of liability insurance, as is usually carried by
similar corporations engaged in the same or similar business and similarly
situated as the Corporation, owning or operating aircraft similar to the
Aircraft. The Corporation will be permitted to maintain coverage below
certain stipulated values and may be permitted to self-insure (including by
way of deductibles and retentions) in certain circumstances, subject to
certain limits. Therefore, there is no assurance that any insurance will be
carried in the future, or, if it is carried, as to the amount of such
insurance.
The Corporation and any permitted sublessee of an Aircraft will be named as
insured parties under all insurance policies required by the related Lease.
The Indenture Trustee, Owner Trustee and related Owner Participant will be
named additional insureds, which will afford each of them the rights but not
the obligations of an additional insured. Unless otherwise specified in the
applicable Prospectus Supplement, liability insurance proceeds will be
distributed to the respective parties as their interests may appear and hull
insurance proceeds in excess of certain specified amounts will be distributed
to the Indenture Trustee. The applicable Prospectus Supplement will contain a
description of certain limitations, if any, applicable to the provisions
described in this paragraph.
Lease Events of Default; Remedies. The applicable Prospectus Supplement
will describe the Lease Events of Default under the related Leases, the
remedies that the Owner Trustee may exercise with respect to the related
Aircraft, and other provisions relating to the occurrence of a Lease Event of
Default and the exercise of remedies.
The Participation Agreements
The Corporation will be required to indemnify each Owner Participant,
the Owner Trustee, the Indenture Trustee and certain parties affiliated
with the foregoing (but not including Holders) for certain liabilities,
losses, fees and expenses and for certain other matters arising out of the
transactions described herein or relating to the applicable Aircraft or the
use thereof. In addition, under certain circumstances the Corporation will
be required to indemnify such persons against certain taxes, levies,
duties, withholdings and for certain other matters relating to such
transactions or the applicable Aircraft. Subject to certain restrictions
and unless otherwise provided in the related Prospectus Supplement, each
Owner Participant may convey all of its interest in the related Owner
Trust. Although the matter is not entirely free from doubt, Davis Polk &
Wardwell has advised the Corporation that an Owner Participant's conveyance
of its interest in the related Owner Trust will not constitute a taxable
event to the Holders of the related Certificates. Moreover, if so provided
in the applicable Prospectus Supplement, in certain limited instances the
Corporation may assume an Owner Trust's obligations under the related
Certificates on a full recourse basis. In this event, Holders will
recognize gain or loss on the related Certificates for federal income tax
purposes.
ERISA CONSIDERATIONS
Unless otherwise indicated in the applicable Prospectus Supplement,
Certificates may not be purchased by, or with the assets of, any employee
benefit plan subject to Title I of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), or individual retirement account or plan
subject to Section 4975 of the Code. Certain governmental plans and non-
electing church plans, however, are not subject to Title I of ERISA or
Section 4975 of the Code and, therefore, may purchase the Certificates.
PLAN OF DISTRIBUTION
The Certificates may be sold to or through underwriters, directly to other
purchasers or through agents.
The distribution of the Certificates may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, or
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Certificates, underwriters or agents may
receive compensation from the Corporation or from purchasers of Certificates
for whom they may act as agents in the form of discounts, concessions or
commissions. Underwriters may sell Certificates to or through dealers, and
such dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters or commissions from the purchasers for whom
they may act as agents. Underwriters, dealers and agents that participate in
the distribution of Certificates may be deemed to be underwriters, and any
discounts or commissions received by them from the Corporation and any profit
on the resale of Certificates by them may be deemed to be underwriting
discounts and commissions, under the Securities Act. Any such underwriter or
agent will be identified, and any such compensation received from the
Corporation will be described, in the applicable Prospectus Supplement.
Offers to purchase Certificates may be solicited directly and the sale
thereof may be made directly to institutional investors or others, who may be
deemed to be underwriters within the meaning of the Securities Act with
respect to any resale thereof. The terms of any such sales will be described
in the Prospectus Supplement relating thereto.
Under agreements which may be entered into by the Corporation, underwriters
and agents who participate in the distribution of Certificates may be entitled
to indemnification by the Corporation against certain liabilities, including
liabilities under the Securities Act.
Unless otherwise indicated in the applicable Prospectus Supplement, the
Corporation does not intend to apply for the listing of any Series of
Certificates on a national securities exchange. If the Certificates of any
Series are sold to or through underwriters, the underwriters may make a market
in such Certificates, as permitted by applicable laws and regulations. No
underwriter would be obligated, however, to make a market in such
Certificates, and any such market-making could be discontinued at any time at
the sole discretion of the underwriters. Accordingly, no assurance can be
given as to the liquidity of, or trading markets for, the Certificates of any
Series.
Certain of the underwriters or agents and their associates may be customers
of, engage in transactions with, and perform services for, the Corporation in
the ordinary course of business.
LEGAL MATTERS
Unless otherwise indicated in the applicable Prospectus Supplement, the
legality of the Certificates offered hereby will be passed upon for the
Corporation by Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York
10017, and by counsel for any agents, dealers or underwriters ("Underwriters'
Counsel"). Unless otherwise indicated in the applicable Prospectus
Supplement, both Davis Polk & Wardwell and Underwriters' Counsel may rely on
the opinion of Potter Anderson & Corroon, counsel for the Owner Trustee,
individually and as Owner Trustee, as to matters relating to the
authorization, execution and delivery of each Indenture and of the related
Series of Certificates by the Owner Trustee, and of George W. Hearn, Vice
President - Law of the Corporation, as to the Corporation's authorization,
execution and delivery of the Indentures. At November 22, 1994, Mr. Hearn
owned zero shares of the Corporation's common stock and had been granted
options to purchase 14,675 shares of the Corporation's common stock. Of the
options granted, 4,362 were vested at such date.
EXPERTS
The consolidated financial statements and schedules of the Corporation
included or incorporated by reference in the Corporation's Annual Report on
Form 10-K for the year ended May 31, 1994 and incorporated by reference
herein, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated by reference herein in reliance upon the authority of said firm
as experts in accounting and auditing in giving said reports.
With respect to the unaudited interim financial information for the quarter
ended August 31, 1994, included in the Corporation's Quarterly Report on Form
10-Q for such period, which is incorporated by reference in this Prospectus,
Arthur Andersen LLP has applied limited procedures in accordance with
professional standards for a review of such information. However, their
separate report thereon states that they did not audit and they do not express
an opinion on that interim financial information. Accordingly, the degree of
reliance on their report on that information should be restricted in light of
the limited nature of the review procedures applied. In addition, the
accountants are not subject to the liability provisions of Section 11 of the
Securities Act for their report on the unaudited interim financial information
because that report is not a "report" or "part" of the Registration Statement,
of which this Prospectus is a part, prepared or certified by the accountants
within the meaning of Sections 7 and 11 of the Securities Act.
======================================= =====================================
No dealer, salesperson or other
individual has been authorized
to give any information or to
make any representation not
contained in this Prospectus in
connection with the offering
covered by this Prospectus.
If given or made, such
information or representation
must not be relied upon as having $465,000,000
been authorized by the Corporation
or the Underwriters. This Prospectus
does not constitute an offer to sell,
or the solicitation of an offer to
buy, the Certificates in any [NEW LOGO]
jurisdiction where, or to any person to
whom, it is unlawful to make such offer
or solicitation. Neither the delivery
of this Prospectus nor any sale made $465,000,000
hereunder shall, under any circumstances,
create an implication that there has not Equipment Trust Certificates
been any change in the facts set forth in
this Prospectus or in the affairs of the
Corporation since the date hereof.
____________________
P R O S P E C T U S
TABLE OF CONTENTS ____________________
Page
----
Available Information.............. 2
Incorporation of Certain Documents
by Reference..................... 2
Federal Express Corporation........ 3
Ratio of Earnings to Fixed Charges. 3
Use of Proceeds.................... 3 November , 1994
Outline of Leveraged Lease
Transactions..................... 3
Description of the Certificates.... 4
ERISA Considerations............... 13
Plan of Distribution............... 13
Legal Matters...................... 14
Experts............................ 14
======================================= =====================================
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED NOVEMBER 22, 1994
PROSPECTUS
[NEW LOGO]
PASS THROUGH TRUSTS
PASS THROUGH CERTIFICATES
_______________________________
Up to $465,000,000 aggregate amount of Pass Through Certificates (the "Pass
Through Certificates") may be offered for sale from time to time pursuant
to this Prospectus and one or more Prospectus Supplements. The Pass
Through Certificates may be offered in one or more Series in amounts, at
prices and on terms to be determined at the time of sale. For each Series
of Pass Through Certificates offered pursuant to this Prospectus and a
Prospectus Supplement, a separate Pass Through Trust will be formed
pursuant to the Pass Through Trust Agreement (the "Pass Through Agreement")
and a supplement thereto (a "Series Supplement") between Federal Express
Corporation (the "Corporation") and NationsBank of South Carolina, National
Association, not in its individual capacity but solely as the Pass Through
Trustee under such Pass Through Trust. Each Pass Through Certificate in a
Series will evidence a fractional undivided interest in the related Pass
Through Trust and will have no rights, benefits or interest in respect of
any other Pass Through Trust or the Trust Property (as defined below) held
in any other such Pass Through Trust.
The Trust Property of each Pass Through Trust will consist of (a) equipment
purchase certificates issued with recourse to the Corporation (the "Owned
Aircraft Certificates") or (b) equipment trust certificates issued as
nonrecourse obligations by certain Owner Trustees, each acting not in its
individual capacity but solely as the Owner Trustee of a separate Owner Trust,
in connection with separate leveraged lease transactions (the "Leased Aircraft
Certificates" and, together with the Owned Aircraft Certificates, the
"Equipment Certificates"). The Owned Aircraft Certificates will be issued to
finance or refinance all or a portion of the purchase price of each of one or
more aircraft that have been or will be purchased and owned by the Corporation
(the "Owned Aircraft"). The Leased Aircraft Certificates will be issued to
finance or refinance a portion of the payment by each such Owner Trustee of
the purchase price for a specified aircraft which has been or will be
leased to the Corporation (the "Leased Aircraft" and, together with the
Owned Aircraft, the "Aircraft"). The Prospectus Supplement relating to
each offering will describe certain terms of the Pass Through Certificates
offered thereby, the respective Pass Through Trusts, the Equipment
Certificates to be purchased by such Pass Through Trusts, the leveraged
lease transactions, if any, relating thereto and the Aircraft relating to
such Equipment Certificates.
For each Aircraft, the related Owner Trustee or the Corporation, as
the case may be, may issue on or more Equipment Certificates, each of which
may have a different interest rate and final maturity date. For each
Series of Pass Through Certificates, the Pass Through Trustee will purchase
one or more Equipment Certificates held in the related Pass Through Trust
will have identical interest rates, in each case equal to the rate
applicable to the Pass Through Certificates issued by such Pass Through
Trust, and such that the latest maturity date for such Equipment
Certificates will occur on or before the final distribution date for such
Pass Through Certificates.
The Owned Aircraft Certificates issued with respect to each Owned
Aircraft will be secured by a security interest in such Owned Aircraft and
will be direct obligations of the Corporation. The Leased Aircraft
Certificates issued with respect to each Leased Aircraft, except during the
Pre-Funding Period, if any, will be secured by a security interest in such
Leased Aircraft and by the Lease relating thereto, including the right to
receive rent payable by the Corporation under such Lease. Although none of
the Leased Aircraft Certificates held in the respective Pass Through Trusts
will be obligations of, or guaranteed by, the Corporation, the amounts
payable by the Corporation under the Lease of each Leased Aircraft will be
sufficient to pay in full when due all principal of and interest on the
Leased Aircraft Certificates relating to such Leased Aircraft, except as
described under "Description of the Equipment Certificates -- General"
relating to any Pre-Funding Period with respect to such Leased Aircraft.
During any Pre-Funding Period, the related Leased Aircraft Certificates
will be secured by a collateral account funded by the net proceeds of the
sale of such Leased Aircraft Certificates to the Pass Through Trustee and
by other security (which may include a letter of credit) to be described in
the applicable Prospectus Supplement. Funds in such collateral account,
together with such other security will be available to pay any
principal due and interest accrued on such Leased Aircraft Certificates
during such Pre-Funding Period, as well as to fund any mandatory prepayment
of such Leased Aircraft Certificates during such Pre-Funding Period.
Interest paid on the Equipment Certificates held in each Pass Through Trust
will be passed through to the registered holders of the Pass Through
Certificates for such Pass Through Trust (for each Pass Through Trust, the
"Certificateholders") on the dates and at the rate per annum set forth in the
Prospectus Supplement relating to such Pass Through Certificates until the
final distribution date for such Pass Through Trust. Principal paid on the
Equipment Certificates held in each Pass Through Trust will be passed through
to the Certificateholders in scheduled amounts on the dates set forth in the
Prospectus Supplement relating to such Pass Through Certificates until the
final distribution date for such Pass Through Trust.
The Pass Through Certificates represent interests in the related Pass
Through Trust only and all payments and distributions shall be made only from
the property of such Pass Through Trust. The Pass Through Certificates do not
represent an interest in or obligation of the Corporation.
The Pass Through Certificates may be sold to or through underwriters or
directly to other purchasers or through agents. The Prospectus Supplement
relating to each offering will set forth the names of any underwriters,
dealers or agents involved in the sale of the Pass Through Certificates in
connection with which this Prospectus is being delivered, the amounts, if any,
to be purchased by underwriters and the compensation, if any, of such
underwriters or agents.
Prior to their issuance, there will have been no market for the Pass
Through Certificates of any Series and there can be no assurance that one will
develop. Unless otherwise indicated in the applicable Prospectus Supplement,
the Corporation does not intend to apply for the listing of any Series of Pass
Through Certificates on a national securities exchange. See "Plan of
Distribution."
This Prospectus may not be used to consummate sales of any Pass Through
Certificates unless accompanied by the Prospectus Supplement applicable to the
Pass Through Certificates being sold.
________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
________________________________
The date of this Prospectus is November , 1994.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
AVAILABLE INFORMATION
Federal Express Corporation (the "Corporation") is subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith files reports and other
information with the Securities and Exchange Commission (the "Commission").
Reports, proxy and information statements and other information filed by the
Corporation with the Commission can be inspected, and copies may be obtained
at prescribed rates, at the Public Reference Section of the Commission, 450
Fifth Street, N.W., Washington, D.C. 20549, as well as at the following
Regional Offices of the Commission: Chicago Regional Office, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511 and New York Regional Office,
7 World Trade Center, New York, New York 10048. Such material can also be
inspected and copied at the offices of the New York Stock Exchange, Inc., 20
Broad Street, New York, New York 10005.
This Prospectus constitutes a part of a registration statement on Form S-3
(together with all amendments and exhibits, herein referred to as the
"Registration Statement") filed by the Corporation under the Securities Act
of 1933, as amended (the "Securities Act"). This Prospectus does not contain
all of the information included in the Registration Statement, certain parts
of which are omitted in accordance with the rules and regulations of the
Commission. Reference is made to such Registration Statement and to the
exhibits relating thereto for further information with respect to the
Corporation and the securities offered hereby.
REPORTS TO PASS THROUGH CERTIFICATEHOLDERS
NationsBank of South Carolina, National Association ("NationsBank of South
Carolina"), in its capacity as Pass Through Trustee under each Pass Through
Trust, will provide the Certificateholders of each Pass Through Trust with
certain periodic statements concerning the distributions made from such Pass
Through Trust. See "Description of the Pass Through Certificates --
Statements to Certificateholders."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission in accordance with the
provisions of the Exchange Act are incorporated herein by reference and made a
part hereof.
1 The Corporation's Annual Report on Form 10-K for the fiscal year ended
May 31, 1994 and its Quarterly Report on Form 10-Q for the fiscal
quarter ended August 31, 1994, filed August 5, 1994 and October 13,
1994, respectively; and
2. The Corporation's Current Report on Form 8-K dated September 14, 1994
and filed September 23, 1994.
All documents filed by the Corporation pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus and before the
termination of the offering made by this Prospectus shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein, or contained in this Prospectus, shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Corporation will furnish without charge to each person to whom this
Prospectus is delivered, on written or oral request of such person, a copy of
any or all documents incorporated by reference in this Prospectus, without
exhibits to such documents (unless such exhibits are specifically incorporated
by reference into such documents). Requests for such copies should be
directed to: Thomas R. Martin, Managing Director -- Public Relations, Federal
Express Corporation, by mail at Box 727, Memphis, Tennessee 38194-1850 or by
telephone at (901) 395-3490.
FEDERAL EXPRESS CORPORATION
The Corporation offers a wide range of express services for the
time-definite transportation of documents, packages and freight throughout the
world using an extensive fleet of aircraft and vehicles and leading-edge
information technologies. Corporate headquarters are located at 2005
Corporate Avenue, Memphis, Tennessee 38132, telephone (901) 369-3600.
RATIO OF EARNINGS TO FIXED CHARGES
(Unaudited)
Three Months
Year Ended May 31, Ended August 31,
--------------------------- ---------------------
1990 1991 1992 1993 1994 1993 1994
---- ---- ---- ---- ---- ---- ----
Ratio of Earnings to
Fixed Charges(a) 1.4x 1.0x (b) 1.4x 1.7x 1.5x 1.9x
______________________
(a) Earnings included in the calculation of the ratio of earnings to fixed
charges represent income before income taxes plus fixed charges (other
than capitalized interest). Fixed charges include interest expense,
capitalized interest, amortization of debt issuance costs and a portion
of rent expense representative of interest.
(b) Earnings were inadequate to cover fixed charges by $173.4 million for
the year ended May 31, 1992.
OUTLINE OF PASS THROUGH TRUST STRUCTURE
For each Series of Pass Through Certificates (as such terms are
defined below) offered pursuant to this Prospectus and a related Prospectus
Supplement, a separate pass through trust (a "Pass Through Trust") will be
formed pursuant to a supplemental agreement (a "Series Supplement") between
the Corporation and NationsBank of South Carolina, not in its individual
capacity but solely as pass through trustee (the "Pass Through Trustee"),
in accordance with the Pass Through Trust Agreement, dated as of February 1,
1993, (the "Pass Through Agreement") between the Corporation and the Pass
Through Trustee, for the benefit of the registered holders (the
"Certificateholders") of the series (a "Series") of certificates (the "Pass
Through Certificates") evidencing fractional undivided interests in such
Pass Through Trust. The property held in each Pass Through Trust (the
"Trust Property") will consist of (a) equipment purchase certificates
issued in connection with the purchase by the Corporation of one or more
aircraft (the "Owned Aircraft Certificates") or (b) equipment trust
certificates issued in connection with one or more leveraged lease
transactions (the "Leased Aircraft Certificates" and, together with the
Owned Aircraft Certificates, the "Equipment Certificates"), as specified in
the applicable Prospectus Supplement.
As more fully described below under "Use of Proceeds," in connection with
each purchase or leveraged lease transaction, one or more Equipment
Certificates may be issued, each of which may have different interest rates
and final maturity dates. Concurrently with the execution and delivery of
each Series Supplement, the Pass Through Trustee, on behalf of the related
Pass Through Trust, will enter into one or more participation agreements
(each, a "Participation Agreement") pursuant to which it will, among other
things, purchase one or more Owned Aircraft Certificates or Leased Aircraft
Certificates, such that the Equipment Certificates that constitute the
property of such Pass Through Trust will have identical interest rates, in
each case equal to the rate applicable to the Pass Through Certificates issued
by such Pass Through Trust, and such that the latest maturity date for such
Equipment Certificates will occur on or before the final distribution date
applicable to such Pass Through Certificates. For each Pass Through Trust,
the aggregate amount of the related Series of Pass Through Certificates will
equal the aggregate principal amount of the Equipment Certificates constituting
the Trust Property of such Pass Through Trust. The Pass Through Trustee will
distribute the amount of payments of principal, premium, if any, and interest,
received by it as holder of the Equipment Certificates to the
Certificateholders of the Pass Through Trust in which such Equipment
Certificates are held. See "Description of the Pass Through Certificates" and
"Description of the Equipment Certificates."
USE OF PROCEEDS
Each Series of Pass Through Certificates offered pursuant to this
Prospectus and a related Prospectus Supplement will be issued to facilitate
(a) the financing of the aggregate principal amount of debt to be issued, or
the refinancing of the aggregate principal amount of the debt previously
issued, by the Corporation with respect to each of the aircraft that have been
or will be purchased and owned by the Corporation (the "Owned Aircraft"), as
specified in the applicable Prospectus Supplement, or (b) the financing or
refinancing of the debt portion and, in certain cases, refinancing some of the
equity portion of one or more separate leveraged lease transactions entered
into or to be entered into by the Corporation, as lessee, with respect to
each of the aircraft that have been or will be leased by the Corporation
(the "Leased Aircraft" and, together with the Owned Aircraft, the
"Aircraft"), as specified in the applicable Prospectus Supplement. Each
Prospectus Supplement will specify the type and model of each Aircraft
relating to the Pass Through Certificates offered thereby, the engines with
which such Aircraft is equipped and when such Aircraft was or will be
delivered new by the manufacturer to the Corporation or the Owner Trustee,
as the case may be.
The proceeds from the sale of such Pass Through Certificates will be used
by the Pass Through Trustee on behalf of the related Pass Through Trust (a) to
purchase Owned Aircraft Certificates or (b) to purchase Leased Aircraft
Certificates. The Owned Aircraft Certificates will be issued with recourse to
the Corporation to finance or refinance all or a portion of the purchase price
(as specified in the applicable Prospectus Supplement) for one or more Owned
Aircraft which have been or will be purchased and owned by the Corporation.
The Leased Aircraft Certificates will be issued as nonrecourse obligations by
Wilmington Trust Company, not in its individual capacity but solely as the
owner trustee (the "Owner Trustee") of separate owner trusts (each, an "Owner
Trust" created pursuant to a separate "Trust Agreement") for the benefit of
the owner participant named therein (each, an "Owner Participant"), in
connection with one or more leveraged lease transactions, in each case to
finance or refinance not more than, unless otherwise specified in such
Prospectus Supplement, 80% of the purchase price paid or to be paid by the
Owner Trustee for a Leased Aircraft which has been or will be leased by the
related Owner Trustee to the Corporation.
To the extent that any proceeds from the sale of the Pass Through
Certificates for any Pass Through Trust have not been applied by the Pass
Through Trustee by the date specified in the applicable Prospectus Supplement
to the purchase of the Equipment Certificates that were contemplated to be
held in such Pass Through Trust, such proceeds will be distributed on the date
specified in such Prospectus Supplement to the related Certificateholders on a
pro rata basis, together with interest accrued thereon, but without premium.
See "Description of the Pass Through Certificates -- Special Payment Upon
Unavailability of Trust Property."
If, for any Leased Aircraft, under the circumstances discussed below in
"Description of Equipment Certificates -- Delayed Lease Commencement" the
proceeds from the sale of the related Leased Aircraft Certificates to the
applicable Pass Through Trusts are not applied by the Owner Trustee to pay the
purchase price for such Leased Aircraft on the date of the purchase of such
Leased Aircraft Certificates by such Pass Through Trusts, such proceeds, after
deducting certain expenses of the Pass Through Certificate offering, will be
deposited by the Owner Trustee into a Collateral Account (as defined below).
Such Collateral Account, together with any other security pledged under the
related Indenture (see "Description of the Equipment Certificates -- Security"
below), will secure such Leased Aircraft Certificates during the related
Pre-Funding Period (as defined below) and will be available to make scheduled
payments of principal, if any, and interest accrued on such Leased Aircraft
Certificates during the Pre-Funding Period. If the Lease related to such
Leased Aircraft does not commence on the cut-off date specified in the
applicable Prospectus Supplement or an event of loss occurs with respect to
such Leased Aircraft during the Pre-Funding Period, funds in such Collateral
Account, together with such other security will be available to prepay such
Leased Aircraft Certificates as described in such Prospectus Supplement. See
"Description of the Equipment Certificates -- Delayed Lease Commencement" and
"--Mandatory Prepayment During the Pre-Funding Period."
For each Leased Aircraft, the related Leased Aircraft Certificates have
been or will be issued by the Owner Trustee and authenticated by NationsBank
of Georgia, National Association ("NationsBank of Georgia"), as indenture
trustee (the "Indenture Trustee") under a separate trust indenture and
security agreement (each, a "Leased Aircraft Indenture") between the Owner
Trustee and the Indenture Trustee. Each Owner Participant will have provided
or will provide, from sources other than the related Leased Aircraft
Certificates, at least, unless otherwise specified in the applicable
Prospectus Supplement, 20% of the purchase price for the related Leased
Aircraft. No Owner Participant, however, will be personally liable for any
amount payable under the related Leased Aircraft Indenture or the Leased
Aircraft Certificates issued thereunder. For each Owned Aircraft, the related
Owned Aircraft Certificates have been or will be issued under a separate trust
indenture and security agreement (each, an "Owned Aircraft Indenture," and
together with any Leased Aircraft Indentures, the "Indentures") between the
Indenture Trustee and the Corporation. The Owned Aircraft Certificates will be
direct obligations of the Corporation.
DIAGRAM OF PAYMENTS
The following diagram illustrates certain aspects of the payment flows in
the Pass Through Trust structure (1) for a possible transaction for Leased
Aircraft among the Corporation, the Owner Trustee, the related Owner
Participant, the Indenture Trustee, the Pass Through Trustee and the
Certificateholders, assuming each Leased Aircraft is leased by the Corporation
upon issuance of the Pass Through Certificates, and (2) for a possible
transaction for Owned Aircraft among the Corporation, the Indenture Trustee,
the Pass Through Trustee and the Certificateholders. For each Aircraft
included in a particular Pass Through Certificate offering, one or more
Equipment Certificates will be issued, each of which may have a different
interest rate and final maturity date and will be held in a separate Pass
Through Trust. Each Pass Through Trust may hold Equipment Certificates
relating to more than one Aircraft. The number of Aircraft included in each
offering and the interest rates and final maturity dates of the Equipment
Certificates held by each Pass Through Trust will be described in the
applicable Prospectus Supplement.
In a Leased Aircraft transaction, the Corporation will lease each Leased
Aircraft from the Owner Trustee under a separate Lease. The Corporation will
make scheduled rental payments for each Leased Aircraft under the related
Lease. As a result of the assignment under the related Leased Aircraft
Indenture of certain rights of the Owner Trustee under such Lease, the
Corporation will make these payments directly to the Indenture Trustee. From
these rental payments the Indenture Trustee will pay to the Pass Through
Trustee for each Pass Through Trust the interest or interest and principal due
from the Owner Trustee on the Leased Aircraft Certificates issued under the
related Leased Aircraft Indenture and held in such Pass Through Trust. After
such payments have been made, the Indenture Trustee will pay the remaining
balance to the Owner Trustee for the benefit of the related Owner Participant.
The Pass Through Trustee for each Pass Through Trust will distribute to the
related Certificateholders payments received on the Leased Aircraft
Certificates held in such Pass Through Trust. See "Description of the Pass
Through Certificates -- Payments and Distributions" and "Description of the
Equipment Certificates -- Delayed Lease Commencement" for a discussion of
payments during any Pre-Funding Period.
In an Owned Aircraft transaction, the Corporation will make scheduled
payments on the Owned Aircraft Certificates relating to each Owned Aircraft to
the Indenture Trustee. From these payments the Indenture Trustee will pay to
the Pass Through Trustee for each Pass Through Trust the interest or interest
and principal due on the Owned Aircraft Certificates issued under the related
Owned Aircraft Indenture and held in such Pass Through Trust. The Pass
Through Trustee for each Pass Through Trust will distribute to the related
Certificateholders payments received on the Owned Aircraft Certificates held
in such Pass Through Trust.
[GRAPHIC -- SEE APPENDIX A]
DESCRIPTION OF THE PASS THROUGH CERTIFICATES
In connection with each offering of Pass Through Certificates, one or more
separate Pass Through Trusts will be formed, and one or more corresponding
Series of Pass Through Certificates will be issued, pursuant to the Pass
Through Agreement and one or more separate Series Supplements to be entered
into between the Corporation and the Pass Through Trustee. The following
summary relates to the Pass Through Agreement and each of the Series
Supplements, the Pass Through Trusts to be formed thereby and the Pass Through
Certificates to be issued by each Pass Through Trust, except as otherwise
described in the applicable Prospectus Supplement.
The discussion that follows is a summary and does not purport to be
complete. The summary includes descriptions of the material terms of the Pass
Through Agreement which has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part. The Series Supplement relating
to each Series of Pass Through Certificates and the forms of the related
Indentures and Participation Agreements and, if the Pass Through Certificates
relate to Leased Aircraft, the related Leases, Trust Agreements and Collateral
Agreements, if any, will be filed as exhibits to a post-effective amendment to
this Registration Statement, a Current Report on Form 8-K, a Quarterly Report
on Form 10-Q or an Annual Report on Form 10-K, as applicable, to be filed with
the Commission in connection with the issuance of each such Series of Pass
Through Certificates. This summary makes use of terms defined in and is
qualified in its entirety by reference to the Pass Through Agreement. Each
Prospectus Supplement will include a glossary of certain defined terms used in
connection with the Pass Through Certificates offered thereby and the related
Equipment Certificates.
General
Unless otherwise provided in the applicable Series Supplement, the Pass
Through Certificates will be issued in fully registered, certificated form
only. Each Pass Through Certificate will represent a fractional undivided
interest in the separate Pass Through Trust formed by the Pass Through
Agreement and the related Series Supplement pursuant to which such Pass
Through Certificate is issued. The property of each Pass Through Trust will
include the Equipment Certificates held in such Pass Through Trust, all monies
at any time paid thereon, all monies due and to become due thereunder and
funds from time to time deposited with the Pass Through Trustee in accounts
relating to such Pass Through Trust. Each Pass Through Certificate will
represent a pro rata share of the outstanding principal amount of the
Equipment Certificates and other property held in the related Pass Through
Trust and will be issued, unless otherwise specified in the applicable
Prospectus Supplement, in minimum denominations of $1,000 or any integral
multiple of $1,000. (Pass Through Agreement, Article II)
The applicable Prospectus Supplement will describe the specific Series of
Pass Through Certificates offered thereby, including:
(1) the specific designation and title of such Pass Through
Certificates;
(2) the Regular Distribution Dates (as herein defined) and Special
Distribution Dates (as herein defined) applicable to such Pass
Through Certificates and the applicable Cut-Off Date (as herein
defined), if any;
(3) the specific form of such Pass Through Certificates;
(4) a description of the Equipment Certificates to be purchased by such
Pass Through Trust, including the period or periods within which,
the price or prices at which, and the terms and conditions upon
which such Certificates may or must be repaid in whole or in part,
by the Corporation or, with respect to Leased Aircraft
Certificates, the related Owner Trustee;
(5) a description of the related Aircraft, including whether the
Aircraft is a Leased Aircraft or an Owned Aircraft;
(6) a description of the related Participation Agreement and Indenture,
including a description of the events of default under the related
Indentures, the remedies exercisable upon the occurrence of such
events of default and any limitations on the exercise of such
remedies with respect to such Equipment Certificates;
(7) if such Pass Through Certificates relate to Leased Aircraft, a
description of the related Lease, Trust Agreement
and Collateral Agreement, if any, including (a) the names
of the related Owner Trustee, (b) a description of the events of
default under the related Lease, the remedies exercisable upon the
occurrence of such events of default and any limitations on the
exercise of such remedies with respect to such Leased Aircraft
Certificates, and (c) the rights, if any, of the related Owner
Trustee or Owner Participant to cure failures of the Corporation
to pay rent under the related Lease;
(8) the extent, if any, to which the provisions of the operative
documents applicable to such Equipment Certificates may be amended
by the parties thereto without the consent of the Holders, or
upon the consent of the Holders of a specified percentage of
aggregate principal amount of, such Equipment Certificates; and
(9) any other special terms pertaining to such Pass Through
Certificates.
Interest will be passed through to Certificateholders of each Pass Through
Trust at the rate per annum payable on the Equipment Certificates held in such
Pass Through Trust, as set forth for such Pass Through Trust on the cover page
of the applicable Prospectus Supplement.
The Pass Through Certificates represent interests in the related Pass
Through Trust only and all payments and distributions shall be made only from
the Trust Property of such Pass Through Trust. The Pass Through Certificates
do not represent an interest in or obligation of the Corporation, the Pass
Through Trustee, any related Owner Participant, the Owner Trustee in its
individual capacity or any affiliate of any of the foregoing. Each
Certificateholder by its acceptance of a Pass Through Certificate agrees to
look solely to the income and proceeds from the Trust Property of the related
Pass Through Trust as provided in the Pass Through Agreement and the
applicable Series Supplement. (Pass Through Agreement, Section 3.06)
The Pass Through Agreement does not, and the Indentures will not, contain
any debt covenants or provisions that would afford Certificateholders
protection in the event of a highly leveraged transaction involving the
Corporation. However, the Certificateholders of each Series will have the
benefit of a lien on the specific Aircraft securing the related Equipment
Certificates held in the related Pass Through Trust. See "Description of the
Equipment Certificates - Security" below for a discussion of security for
Leased Aircraft Certificates during any Pre-Funding Period.
Payments and Distributions
The Corporation will make scheduled payments of principal of, and interest
on the unpaid amount of, the Owned Aircraft Certificates to the Indenture
Trustee under the related Owned Aircraft Indenture, and the Indenture Trustee
will distribute such principal and interest payments to the Pass Through
Trustee for each of the Pass Through Trusts that hold such Owned Aircraft
Certificates. Upon commencement of the Lease for any Leased Aircraft, the
Corporation will make scheduled rental payments for each Leased Aircraft under
the related Lease. After any Pre-Funding Period for a Leased Aircraft, these
scheduled rental payments will be assigned under the applicable Leased
Aircraft Indenture by the related Owner Trustee to the Indenture Trustee to
provide the funds necessary to make the corresponding payments of principal
and interest due from the Owner Trustee on the Leased Aircraft Certificates
issued under such Leased Aircraft Indenture. Until the Corporation has
entered into a Lease in connection with a Leased Aircraft, the Corporation
will not be obligated to make any scheduled rental payments and during any
Pre-Funding Period for such Leased Aircraft the related Leased Aircraft
Certificates will not be secured by such Leased Aircraft or the related
Lease, including any rental payments under such Lease. During the Pre-
Funding Period, if any, for such Leased Aircraft, however, the related
Collateral Account, together with the other security pledged under the
related Indenture, will be available to provide funds necessary to make the
corresponding scheduled payments of principal, if any, and interest accrued
on the related Leased Aircraft Certificates during such Pre-Funding Period,
and to pay the portion, if any, of principal and interest due on the first
payment date after the Pre-Funding Period to the extent exceeding the
amount of rent payable by the Corporation on such payment date. See
"Description of the Equipment Certificates -- Delayed Lease Commencement."
Following any Pre-Funding Period, after the Indenture Trustee has made
such principal and interest payments to the Pass Through Trustee for each
of the Pass Through Trusts on the Leased Aircraft Certificates held in such
Pass Through Trust, the Indenture Trustee will, except under certain
circumstances, pay the remaining balance, if any, to the Owner Trustee for
the benefit of the related Owner Participant. The Pass Through Trustee for
each such Pass Through Trust will distribute to the Certificateholders of
such Pass Through Trust payments received on the Equipment Certificates
held in such Pass Through Trust as described below. During any Pre-Funding
Period for a Leased Aircraft, the Indenture Trustee will not make any
payments to the Owner Trustee for the benefit of the related Owner
Participant.
Payments of principal of, and interest on the unpaid amount of, the
Equipment Certificates held in each Pass Through Trust will be scheduled to be
received by the Pass Through Trustee on the dates specified in the applicable
Prospectus Supplement (such scheduled payments of principal of, and interest
on, the Equipment Certificates are referred to herein as "Scheduled Payments,"
and the dates specified for distributions of Scheduled Payments to the Pass
Through Trustee in the applicable Prospectus Supplement are referred to herein
as "Regular Distribution Dates"). For each Pass Through Trust, the Pass
Through Trustee will distribute on each Regular Distribution Date to the
related Certificateholders any Scheduled Payment received by the Pass Through
Trustee on such Regular Distribution Date. If a Scheduled Payment is not
received by the Pass Through Trustee on or before a Regular Distribution Date
but is received within five Business Days thereafter, it will be distributed
on the date received to the Certificateholders. Each such distribution of a
Scheduled Payment will be made by the Pass Through Trustee to the
Certificateholders of record of such Pass Through Trust on the fifteenth day
prior to such Regular Distribution Date, subject to certain exceptions. Each
such Certificateholder will be entitled to receive a pro rata share of any
such distribution. (Pass Through Agreement, Sections 5.01 and 5.02) If a
Scheduled Payment is received more than five Business Days after the
applicable Regular Distribution Date, it will be treated as a Special Payment
and will be distributed as described below.
After any prepayment of principal, any redemption or any default in respect
of some or all of the Equipment Certificates held in any Pass Through Trust,
any Certificateholder of such Pass Through Trust should refer to the Pool
Balance and the Pool Factor (as such terms are defined below) for such Pass
Through Trust reported periodically by the Pass Through Trustee, in order to
calculate such certificateholder's pro rata share of such Pass Through Trust.
See "Pool Factors" and "Statements to Certificateholders" below.
For any Pass Through Trust, any payments of principal, premium, if any, or
interest, other than Scheduled Payments, received by the Pass Through Trustee
on any of the Equipment Certificates held in such Pass Through Trust,
including payments received (i) for the prepayment of such Equipment
Certificates in connection with certain events specified in the applicable
Prospectus Supplement (including payments upon unavailability of Trust
Property and prepayments during any Pre-Funding Period as described below),
(ii) upon the prepayment by the related Owner Trustee of such Equipment
Certificates following a default in respect of such Equipment Certificates,
and (iii) on account of the sale of such Equipment Certificates by the Pass
Through Trustee (such payments are referred to herein as "Special Payments"),
will be distributed on the dates determined as set forth in the applicable
Prospectus Supplement (each, a "Special Distribution Date" and, together with
the Regular Distribution Dates, the "Distribution Dates"). See "Description
of the Equipment Certificates -- Mandatory Prepayment During the Pre-Funding
Period" for a discussion of the funding of such prepayments during any
Pre-Funding Period. Prior to any Special Payment for any Pass Through Trust,
the Pass Through Trustee will notify the Certificateholders of record of such
Pass Through Trust of such Special Payment and the anticipated Special
Distribution Date therefor in accordance with the Pass Through Agreement. Each
distribution of a Special Payment, other than the final distribution, for any
Pass Through Trust will be made by the Pass Through Trustee to the
Certificateholders of record of such Pass Through Trust on the fifteenth day
prior to such Special Distribution Date, unless otherwise specified in the
applicable Prospectus Supplement. Each such Certificateholder will be
entitled to receive a pro rata share of any such distribution. (Pass Through
Agreement, Section 5.02) See "Description of the Equipment Certificates --
Prepayment" and "Description of the Pass Through Certificates -- Events of
Default and Certain Rights Upon an Event of Default."
The Pass Through Agreement requires that the Pass Through Trustee establish
and maintain, for each Pass Through Trust and for the benefit of the related
Certificateholders, one or more non-interest bearing accounts (a "Certificate
Account") for the deposit of Scheduled Payments on the Equipment Certificates
held in such Pass Through Trust and one or more accounts which will, except in
connection with Permitted Investments as defined below, be non-interest
bearing (a "Special Payments Account") for the deposit of Special Payments on
such Equipment Certificates. The Pass Through Trustee is required to deposit
any Scheduled Payments relating to a Pass Through Trust received by it in the
related Certificate Account and to deposit any Special Payments so received by
it in the related Special Payments Account pending distribution thereof. (Pass
Through Agreement, Section 5.01) Special Payments that are not promptly
distributed by the Pass Through Trustee will, to the extent practicable, be
invested by the Pass Through Trustee in Permitted Investments pending the
distribution of such funds on a Special Distribution Date, and the income and
earnings on such investment will be distributed with such Special Payment.
"Permitted Investments" are non-callable and non-redeemable direct obligations
of the United States of America maturing on or prior to the day required for
the distribution of any such funds on the applicable Special Distribution
Date. (Pass Through Agreement, Article I and Section 5.04)
Distributions by the Pass Through Trustee from a Certificate Account or a
Special Payments Account of any Pass Through Trust on any Distribution Date
will be paid to each Certificateholder of record of such Pass Through Trust on
the applicable record date at its address appearing on the register maintained
for such Pass Through Trust. (Pass Through Agreement, Section 5.02) The
final distribution for each Pass Through Trust, however, will be made only
upon presentation and surrender of the Pass Through Certificates for such Pass
Through Trust at the office or agency of the Pass Through Trustee specified in
the notice given by the Pass Through Trustee of such final distribution. The
Pass Through Trustee will mail such notice of the final distribution to the
Certificateholders of such Pass Through Trust, specifying the date set for
such final distribution and the amount of such distribution. (Pass Through
Agreement, Section 12.01) See "Termination of Pass Through Trusts" below.
If any Distribution Date is not a Business Day, distributions scheduled to
be made on such Distribution Date may be made on the next succeeding Business
Day without additional interest. (Pass Through Agreement, Section 13.15)
Pool Factors
Except as provided below, the Pool Factor (as defined below) for any Pass
Through Trust will decline in proportion to the scheduled repayments of
principal on the Equipment Certificates held in such Pass Through Trust as
described in the applicable Prospectus Supplement. Where any Equipment
Certificates held in a Pass Through Trust have been prepaid, a scheduled
repayment of principal thereon has not been made or certain actions have been
taken following a default thereon, as discussed in the applicable Prospectus
Supplement or below in "Events of Default and Certain Rights Upon an Event of
Default," the Pool Factor and the Pool Balance (as defined below) of such Pass
Through Trust will be recomputed after giving effect thereto and notice
thereof will be mailed to the Certificateholders of such Pass Through Trust.
Each Pass Through Trust will have a separate Pool Factor.
Unless otherwise described in the applicable Prospectus Supplement, the
"Pool Balance" for each Pass Through Trust indicates, as of any date, the
aggregate unpaid principal amount of the Equipment Certificates held in such
Pass Through Trust on such date plus any amounts in respect of principal on
such Equipment Certificates held by the Pass Through Trustee and not yet
distributed plus any amounts transferred to the Corporation and deposited in a
deposit trust account in connection with a delayed purchase of the Equipment
Certificates. The Pool Balance for each Pass Through Trust as of any
Distribution Date will be computed after giving effect to the payment of
principal, if any, on the Equipment Certificates held in such Pass Through
Trust and the distribution thereof being made on that date. (Pass Through
Agreement, Article I)
Unless otherwise described in the applicable Prospectus Supplement, the
"Pool Factor" for each Pass Through Trust as of any Distribution Date is the
quotient (rounded to the seventh decimal place) computed by dividing (i) the
Pool Balance, by (ii) the aggregate original principal amount of the Equipment
Certificates held in such Pass Through Trust. The Pool Factor for each Pass
Through Trust as of any Distribution Date shall be computed after giving
effect to the payment of principal, if any, on the Equipment Certificates held
in such Pass Through Trust and the distribution thereof being made on that
date. The Pool Factor for each Pass Through Trust will initially be 1.0000000;
thereafter, the Pool Factor for each Pass Through Trust will decline as
described above to reflect reductions in the Pool Balance of such Pass Through
Trust. For any Pass Through Trust, the amount of any Certificateholder's pro
rata share of the Pool Balance of such Pass Through Trust can be determined by
multiplying the original denomination of such Certificateholder's Pass Through
Certificate by the Pool Factor for such Pass Through Trust as of the
applicable Distribution Date. (Pass Through Agreement, Article I)
Statements to Certificateholders
On each Distribution Date, the Pass Through Trustee will include with each
distribution of a Scheduled Payment or Special Payment to Certificateholders
of record of the related Pass Through Trust a statement, giving effect to such
distribution being made on such Distribution Date, setting forth the following
information (per $1,000 in aggregate amount of Pass Through Certificates for
such Pass Through Trust, as to (i) and (ii) below):
(i) the amount of such distribution allocable to principal and
allocable to premium, if any;
(ii) the amount of such distribution allocable to interest; and
(iii)the Pool Balance and the Pool Factor for such Pass Through Trust.
In addition, after the end of each calendar year, the Pass Through Trustee
will prepare and deliver to each Certificateholder of each Pass Through Trust
at any time during the preceding calendar year a report containing the sum of
the amounts determined pursuant to clauses (i) and (ii) above with respect to
each such Pass Through Trust for such calendar year or, in the event such
person was a Certificateholder during a portion of such calendar year, for the
applicable portion of such calendar year. (Pass Through Agreement, Section
5.03)
Voting of Equipment Certificates
The Pass Through Trustee, as holder of the Equipment Certificates held in
each Pass Through Trust, has the right to vote and give consents and waivers
in respect of such Equipment Certificates under the related Indentures. The
Pass Through Agreement sets forth the circumstances in which the Pass Through
Trustee shall direct any action or cast any vote as the holder of the
Equipment Certificates held in the applicable Pass Through Trust at its own
discretion and the circumstances in which the Pass Through Trustee shall seek
instructions from the Certificateholders of such Pass Through Trust. Prior to
an Event of Default (as defined below) with respect to any Pass Through Trust,
the principal amount of the Equipment Certificates held in such Pass Through
Trust directing any action or being voted for or against any proposal will be
in proportion to the principal amount of Pass Through Certificates held by the
Certificateholders of such Pass Through Trust taking the corresponding
position. (Pass Through Agreement, Section 7.01)
Events of Default and Certain Rights Upon an Event of Default
The Pass Through Agreement defines an event of default for any Pass Through
Trust (an "Event of Default") as the occurrence and continuance of an event of
default under one or more of the related Indentures (an "Indenture Event of
Default"). The Indenture Events of Default under the Indentures will be
described in the applicable Prospectus Supplement and, for the Leased
Aircraft, will include events of default under the related Leases ("Lease
Events of Default"). Since the Equipment Certificates outstanding under an
Indenture may be held in more than one Pass Through Trust, a continuing
Indenture Event of Default under such Indenture would result in an Event of
Default with respect to each such Pass Through Trust. All of the Equipment
Certificates issued under the same Indenture, however, will relate to a
specific Aircraft and there will be no cross-collateralization or
cross-default provisions in the Indentures. Consequently, events resulting in
an Indenture Event of Default under any particular Indenture will not
necessarily result in an Indenture Event of Default occurring under any other
Indenture. If an Indenture Event of Default occurs in fewer than all of the
Indentures related to a Pass Through Trust, the Equipment Certificates issued
pursuant to the related Indentures with respect to which an Indenture Event of
Default has not occurred will continue to be held in such Pass Through Trust
and payments of principal of, premium, if any, and interest on such Equipment
Certificates will continue to be distributed to the Certificateholders of such
Pass Through Trust as originally scheduled.
The Equipment Certificates in any Pass Through Trust, and therefore the
related Pass Through Certificates, will not have the benefit of any debt
covenants or provisions in the Indentures relating to such Equipment
Certificates or Pass Through Certificates that would afford the holders
thereof protection in the event of a highly leveraged transaction involving
the Corporation.
Under each Leased Aircraft Indenture the related Owner Trustee and the
Owner Participant will have the right under certain circumstances to cure an
Indenture Event of Default that results from the occurrence of a Lease Event
of Default under the related Lease. If the Owner Trustee or the Owner
Participant chooses to exercise such cure right, the Indenture Event of
Default and consequently the Event of Default under any Pass Through Trust
holding the related Leased Aircraft Certificates will be deemed to be cured.
The applicable Prospectus Supplement will contain a more detailed discussion
of certain provisions described in this paragraph.
The Pass Through Agreement provides that if an Indenture Event of Default
under an Indenture relating to Equipment Certificates held in a Pass Through
Trust shall have occurred and be continuing, the Pass Through Trustee may vote
all of the Equipment Certificates issued under such Indenture that are held in
such Pass Through Trust, and upon the direction of the Certificateholders
evidencing fractional undivided interests aggregating not less than a majority
in interest of such Pass Through Trust, shall vote a corresponding majority
of such Equipment Certificates, in each case in favor of directing the
Indenture Trustee to declare the unpaid principal amount of all Equipment
Certificates issued under such Indenture and any accrued and unpaid interest
thereon to be due and payable. The Pass Through Agreement also provides that
if an Indenture Event of Default under an Indenture relating to Equipment
Certificates held in a Pass Through Trust shall have occurred and be
continuing, the Pass Through Trustee may, and upon the direction of the
Certificateholders evidencing fractional undivided interests aggregating not
less than a majority in interest of such Pass Through Trust shall, vote all of
the Equipment Certificates issued under such Indenture that are held in such
Pass Through Trust in favor of directing the Indenture Trustee as to the time,
method and place of conducting any proceeding for any remedy available to such
Indenture Trustee or of exercising any trust or power conferred on such
Indenture Trustee under such Indenture. (Pass Through Agreement, Sections
7.01 and 7.09)
The ability of the Certificateholders of any one Pass Through Trust to
cause the Indenture Trustee for any Equipment Certificates held in such Pass
Through Trust to accelerate the payment on such Equipment Certificates under
the related Indenture or to direct the exercise of remedies by such Indenture
Trustee under the related Indenture will depend, in part, upon the proportion
of the aggregate principal amount of the Equipment Certificates outstanding
under such Indenture and held in such Pass Through Trust to the aggregate
principal amount of all Equipment Certificates outstanding under such
Indenture. Each Pass Through Trust will hold Equipment Certificates
outstanding under such Indenture. Each Pass Through Trust will hold Equipment
Certificates with different terms from those of the Equipment Certificates
held in any other Pass Through Trust and, therefore, the Certificateholders of
a Pass Through Trust may have divergent or conflicting interests from those of
the Certificateholders of the other Pass Through Trusts holding Equipment
Certificates relating to the same Indenture. In addition, so long as the same
institution or an affiliate of such institution acts as Pass Through Trustee
of each Pass Through Trust, in the absence of instructions from the
Certificateholders of any such Pass Through Trust, the Pass Through Trustee
for such Pass Through Trust could for the same reason be faced with a
potential conflict of interest upon an Indenture Event of Default. In such
event, the initial Pass Through Trustee has indicated that it would resign as
Pass Through Trustee of one or all of such Pass Through Trusts, and a
successor pass through trustee would be appointed in accordance with the terms
of the Pass Through Agreement and the applicable Series Supplement. See "The
Pass Through Trustee; the Indenture Trustee" below for a discussion of
resignation procedures.
As an additional remedy, if an Indenture Event of Default under an
Indenture has occurred and is continuing, the Pass Through Agreement provides
that the Pass Through Trustee of a Pass Through Trust holding Equipment
Certificates issued under such Indenture may, and upon the direction of the
Certificateholders evidencing fractional undivided interests aggregating not
less than a majority in interest of such Pass Through Trust will, sell all or
part of such Equipment Certificates for cash to any person at a price or
prices that it may reasonably deem advisable. Any proceeds received by the
Pass Through Trustee upon any such sale will be deposited in the Special
Payments Account for such Pass Through Trust and will be distributed to the
Certificateholders of such Pass Through Trust on a Special Distribution Date.
(Pass Through Agreement, Sections 7.01 and 7.02) The market for Equipment
Certificates in default may be very limited and there can be no assurance that
they could be sold for a reasonable price. Furthermore, so long as the same
institution or an affiliate of such institution acts as Pass Through Trustee
of each Pass Through Trust, it may be faced with a conflict in deciding from
which Pass Through Trust to sell Equipment Certificates to available buyers.
If the Pass Through Trustee sells any such Equipment Certificates with respect
to which an Indenture Event of Default exists for less than the outstanding
principal amount thereof, the Certificateholders of such Pass Through Trust
will receive a smaller amount of principal distributions than anticipated and
will not have any claim for the shortfall against the Pass Through Trustee,
or, in the case of Leased Aircraft Certificates, the Corporation, the Owner
Trustee or any related Owner Participant, as the case may be. Furthermore,
neither the Pass Through Trustee nor the Certificateholders of such Pass
Through Trust could take any action with respect to any remaining Equipment
Certificates held in such Pass Through Trust so long as no Indenture Event of
Default existed with respect thereto.
For any Pass Through Trust, any amount distributed to the Pass Through
Trustee by the Indenture Trustee under any Indenture on account of the
Equipment Certificates held in such Pass Through Trust following an Indenture
Event of Default under such Indenture will be deposited in the Special
Payments Account for such Pass Through Trust and will be distributed to the
Certificateholders of such Pass Through Trust on a Special Distribution Date.
In addition, if, following an Indenture Event of Default under any Leased
Aircraft Indenture, the related Owner Trustee or Owner Participant, as the
case may be, exercises its option, if any, to prepay the outstanding Leased
Aircraft Certificates issued under such Indenture as described in the related
Prospectus Supplement, the price paid by such Owner Trustee to the Pass
Through Trustee for such Leased Aircraft Certificates held in such Pass
Through Trust will be deposited in the related Special Payments Account and
will be distributed to the Certificateholders of such Pass Through Trust on a
Special Distribution Date. (Pass Through Agreement, Sections 5.01 and 5.02)
Any funds representing payments received with respect to any Equipment
Certificates held in a Pass Through Trust in default, or the proceeds from the
sale by the Pass Through Trustee of any such Equipment Certificates, held by
the Pass Through Trustee in the Special Payments Account for such Pass Through
Trust will, to the extent practicable, be invested by the Pass Through Trustee
in Permitted Investments pending the distribution of such funds on a Special
Distribution Date. (Pass Through Agreement, Article I and Section 5.04)
The Pass Through Agreement provides that the Pass Through Trustee will,
within 90 days after the occurrence of a default (as defined below) under any
Pass Through Trust, notify the Certificateholders of such Pass Through Trust
by mail of all uncured or unwaived defaults with respect to such Pass Through
Trust known to it. Under no circumstances, however, may the Pass Through
Trustee give such notice until the expiration of a period of 60 days from the
occurrence of such default. The Pass Through Trustee will be protected in
withholding such notice if it in good faith determines that the withholding of
such notice is in the interests of such Certificateholders, except in the case
of default in the payment of principal of, premium, if any, or interest on any
of the Equipment Certificates held in such Pass Through Trust. The term
"default" means the occurrence of any Event of Default with respect to a Pass
Through Trust as described above, except that in determining whether any such
Event of Default has occurred any grace period or notice in connection
therewith shall be disregarded. (Pass Through Agreement, Section 7.11)
The Pass Through Agreement provides that for each Pass Through Trust,
subject to the duty of the Pass Through Trustee during a default to act with
the required standard of care, the Pass Through Trustee is entitled to be
indemnified by the Certificateholders of such Pass Through Trust before
proceeding to exercise any right or power under such Pass Through Trust at the
request of such Certificateholders. (Pass Through Agreement, Section 8.03)
In certain cases, the Certificateholders of a Pass Through Trust evidencing
fractional undivided interests aggregating not less than a majority in
interest of such Pass Through Trust may on behalf of all the
Certificateholders of such Pass Through Trust waive any past default or Event
of Default with respect to such Pass Through Trust and thereby annul any
direction given by such Certificateholders to the Pass Through Trustee or the
Indenture Trustee with respect thereto, except (i) a default in payment of the
principal of, premium, if any, or interest on any of the Equipment
Certificates held in such Pass Through Trust and (ii) a default in respect of
any covenant or provision of the Pass Through Agreement or the related Series
Supplement that cannot be modified or amended without the consent of each
Certificateholder of such Pass Through Trust affected thereby. Any such
waiver, however, will be effective to waive any such past default or Event of
Default if, but only if, the correlative Indenture Event of Default has been
waived under the related Indenture by the requisite holders of the Equipment
Certificates outstanding thereunder. (Pass Through Agreement, Section 7.10)
Each Indenture will provide that, with certain exceptions, the holders of a
majority in aggregate unpaid principal amount of the Equipment Certificates
issued thereunder may on behalf of all such holders waive any past default or
Indenture Event of Default thereunder. If, as described above, the
Certificateholders of a Pass Through Trust elect to waive a past default or
Event of Default with respect to such Pass Through Trust, the principal amount
of the Equipment Certificates issued under the related Indenture and held in
such Pass Through Trust will be counted in favor of the waiver of the
corresponding past default or Indenture Event of Default under the related
Indenture when the Indenture Trustee determines whether such past default or
Indenture Event of Default has been waived by the requisite majority in
aggregate unpaid principal amount of Equipment Certificates under such
Indenture. If, for example, the Equipment Certificates issued under an
Indenture held in a Pass Through Trust constitute only 45% in aggregate unpaid
principal amount of the Equipment Certificates issued and unpaid under such
Indenture, even if all the Certificateholders of such Pass Through Trust were
to instruct the Pass Through Trustee not to waive a past default or Event of
Default with respect to such Pass Through Trust and, consequently, to vote
such Equipment Certificates against the waiver of the corresponding past
default or Indenture Event of Default under such Indenture, the Equipment
Certificates so voted by the Pass Through Trustee on behalf of such Pass
Through Trust would not alone be sufficient under the terms of such Indenture
to compel the Indenture Trustee to refrain from giving such waiver. Moreover,
there would be no assurance that the Certificateholders of any other Pass
Through Trust holding Equipment Certificates issued under such Indenture would
at such time vote such Equipment Certificates against such waiver. Therefore,
if the Certificateholders of a Pass Through Trust or Trusts waive a past
default or Event of Default such that the principal amount of the Equipment
Certificates held either individually in such Pass Through Trust or in the
aggregate in such Pass Through Trusts constitutes the required majority in
aggregate unpaid principal amount under the applicable Indenture, such past
default or Indenture Event of Default under such Indenture will be waived
whether or not the Certificateholders of any other Pass Through Trust holding
Equipment Certificates issued under such Indenture waive such past default or
Event of Default with respect to such other Pass Through Trust.
Modifications of the Pass Through Agreement
The Pass Through Agreement contains provisions permitting the Corporation
and the Pass Through Trustee to enter into an agreement supplemental to any
Pass Through Trust, without the consent of the Certificateholders of such Pass
Through Trust, to:
(i) provide for the formation of any Pass Through Trust and the
issuance of the related Pass Through Certificates;
(ii) evidence the succession of another corporation to the Corporation
and the assumption by such corporation of the Corporation's
obligations under the Pass Through Agreement and the applicable
Series Supplement;
(iii) add to the covenants of the Corporation for the protection of the
related Certificateholders;
(iv) surrender any right or power conferred upon the Corporation in the
Pass Through Agreement or any Series Supplement;
(v) cure any ambiguity or correct or supplement any defective or
inconsistent provision of such Pass Through Agreement or the
applicable Series Supplement, or make any other provisions in
regard to matters or questions arising thereunder that will not
adversely affect the interests of the related
Certificateholders;
(vi) correct or amplify the description of property that constitutes
Trust Property or the conveyance of such property to the Pass
Through Trustee;
(vii) evidence and provide for a successor Pass Through Trustee for some
or all of the Pass Through Trusts;
(viii) modify, eliminate or add to the provisions of the Pass Through
Agreement or any Series Supplement to the extent necessary to
continue to qualify such Pass Through Agreement or such Series
Supplement under the Trust Indenture Act or any similar Federal
statute enacted thereafter;
(ix) make any other amendments or modifications which shall only apply
to any Pass Through Trust established thereafter; and
(x) add, eliminate or change any provision under the Pass Through
Agreement that will not adversely affect the interests of the
Certificateholders
provided that in each case such modification does not cause the Pass Through
Trust to become taxable as an "association" within the meaning of Treasury
Regulation Section 301.7701-4. (Pass Through Agreement, Section 11.01)
The Pass Through Agreement also provides that the Corporation and the Pass
Through Trustee, with the consent of the Certificateholders evidencing
fractional undivided interests aggregating not less than a majority in
interest of the affected Pass Through Trust, may execute supplemental
agreements adding any provisions to or changing or eliminating any of the
provisions of the Pass Through Agreement, to the extent relating to such Pass
Through Trust, and the applicable Series Supplement, or modifying the rights
of such Certificateholders. No such supplemental agreement may, however,
without the consent of each Certificateholder so affected:
(a) reduce the amount of, or delay the timing of, any receipt by the Pass
Through Trustee of payments on the Equipment Certificates held in
such Pass Through Trust, or distributions in respect of any Pass
Through Certificate of such Pass Through Trust, or make distributions
payable in a currency other than that provided for in such Pass
Through Certificates, or impair the right of any such
Certificateholder to institute suit for the enforcement of any
payment when due;
(b) reduce, modify or amend any indemnities in favor of any
Certificateholder (unless consented to by each such holder adversely
affected thereby);
(c) create or permit the creation of any lien on the Trust Property or
deprive any holder of any such Equipment Certificate of the benefit
of the related Pass Through Trust with respect to the Trust Property
whether by disposition or otherwise, except as provided in the Pass
Through Agreement or the applicable Series Supplement;
(d) reduce the percentage of the aggregate fractional undivided interests
of the Pass Through Trust that is required to approve any
supplemental agreement or any waiver provided for in the Pass Through
Agreement or such Series Supplement; or
(e) cause the Pass Through Trust to become taxable as an "association"
within the meaning of Treasury Regulation Section 301.7701-4. (Pass
Through Agreement, Section 11.02)
Modification, Consents and Waivers under the Indenture and Related Agreements
If the Pass Through Trustee, as the holder of any Equipment Certificates
held in a Pass Through Trust, receives a request for its consent to any
amendment, modification or waiver under the Indenture, or other document
relating to such Equipment Certificates (including any Lease with respect to
Leased Aircraft Certificates), the Pass Through Trustee will mail a notice of
such proposed amendment, modification or waiver to each Certificateholder of
such Pass Through Trust as of the date of such notice. The Pass Through
Trustee will request instructions from such Certificateholders as to whether
or not to consent to such amendment, modification or waiver. The Pass Through
Trustee will vote or consent with respect to such Equipment Certificates in
the same proportion as the Pass Through Certificates of such Pass Through
Trust are actually voted by such Certificateholders by a certain date. If an
Event of Default relating to such Indenture has occurred and is continuing
under such Pass Through Trust, the Pass Through Trustee may, in the absence of
instructions from Certificateholders holding a majority in interest of such
Pass Through Trust, in its own discretion consent to such amendment,
modification or waiver, and may so notify the Indenture Trustee. (Pass
Through Agreement, Section 11.08)
Termination of Pass Through Trusts
The obligations of the Corporation and the Pass Through Trustee with
respect to a Pass Through Trust will terminate upon the distribution to the
Certificateholders of such Pass Through Trust of all amounts required to be
distributed to them pursuant to the Pass Through Agreement and the applicable
Series Supplement and the disposition of all property held in such Pass
Through Trust. The Pass Through Trustee will notify each Certificateholder of
record of such Pass Through Trust by mail of, among other things, the
termination of such Pass Through Trust, the amount of the proposed final
payment and the proposed date for the distribution of such final payment for
such Pass Through Trust. The final distribution for each Certificateholder of
such Pass Through Trust will be made only upon surrender of such
Certificateholder's Pass Through Certificates at the office or agency of the
Pass Through Trustee specified in such termination notice. (Pass Through
Agreement, Section 12.01)
Delayed Purchase
If, on the date of issuance of any Pass Through Certificates, all of the
proceeds from the sale of such Pass Through Certificates are not used to
purchase the Equipment Certificates contemplated to be held in the related
Pass Through Trust, such Equipment Certificates may be purchased by the Pass
Through Trustee at any time on or prior to the date specified in the
applicable Prospectus Supplement. In such event, the Pass Through Trustee
will transfer the proceeds from the sale of such Pass Through Certificates not
used to purchase Equipment Certificates on such date of issuance to the
Corporation which will deposit such amount into a deposit trust account
pending the purchase of the Equipment Certificates not so purchased. Such
proceeds will be invested in specified investments at the direction and risk
of, and for the benefit of, the Corporation until applied to such purchase.
Earnings on specified investments in such deposit trust account will be paid
to the Corporation periodically, and the Corporation will be responsible for
any losses. Subject to a Special Payment upon unavailability of the Trust
Property as described below, in return for its interest in the funds
transferred to the deposit trust account, if the Equipment Certificates that
were not so purchased become available for purchase on or prior to the date
specified in the applicable Prospectus Supplement, then the Corporation will
cause an amount equal to the purchase price of such Equipment Certificates to
be transferred from the deposit trust account to the Pass Through Trustee on
the date for such delayed purchase. On the initial Regular Distribution Date,
the Corporation will pay to the Pass Through Trustee an amount equal to the
interest that would have accrued on any Equipment Certificates purchased after
the date of the issuance of such Pass Through Certificates from the date of
the issuance of such Pass Through Certificates to, but excluding, the date of
the purchase of such Equipment Certificates by the Pass Through Trustee. (Pass
Through Agreement, Section 2.02)
Special Payment Upon Unavailability of Trust Property
For any Pass Through Trust, to the extent that any of the proceeds from the
sale of the related Pass Through Certificates are not applied on or prior to
the date specified in the applicable Prospectus Supplement to purchase the
Equipment Certificates that were contemplated to be held in such Pass Through
Trust, the Corporation will cause an amount equal to such unapplied proceeds
to be paid from the deposit trust account to the Pass Through Trustee. The
Pass Through Trustee will distribute such proceeds to the Certificateholders
of such Pass Through Trust on a pro rata basis upon not less than 20 days
prior notice to them as a Special Payment on the date specified in the
applicable Prospectus Supplement, together with interest thereon at a rate
equal to the rate applicable to such Pass Through Certificates, but without
premium. The Corporation will also pay to the Pass Through Trustee on such
date an amount equal to such interest. The Corporation will be responsible
for any losses in the deposit trust account. (Pass Through Agreement, Section
2.02)
The Pass Through Trustee; the Indenture Trustee
NationsBank of South Carolina will be the Pass Through Trustee for each of
the Pass Through Trusts. The Pass Through Trustee and any of its affiliates
may hold Pass Through Certificates in their own names. (Pass Through
Agreement, Section 8.05)
Unless otherwise specified in the related Prospectus Supplement,
NationsBank of Georgia, an affiliate of NationsBank of South Carolina, will be
the Indenture Trustee under the Indentures under which the Equipment
Certificates have been or will be issued. An affiliate of NationsBank of
Georgia acts as trustee under other indentures with respect to other
indebtedness by the Corporation. The Corporation from time to time borrows
from, and maintains deposit accounts with, NationsBank of Georgia and its
affiliates.
The Pass Through Trustee may resign as trustee under any or all of the Pass
Through Trusts at any time. If the Pass Through Trustee ceases to be eligible
to continue as Pass Through Trustee with respect to a Pass Through Trust or
becomes incapable of acting as Pass Through Trustee or becomes insolvent, the
Corporation may remove such Pass Through Trustee, or any Certificateholder of
such Pass Through Trust holding Pass Through Certificates for at least six
months may, on behalf of such Certificateholder and all others similarly
situated, petition any court of competent jurisdiction for the removal of such
Pass Through Trustee and the appointment of a successor trustee. In addition,
the Pass Through Trustee of any Pass Through Trust may be removed without
cause by the Certificateholders holding more than 50% in aggregate amount of
the related Pass Through Certificates.
In the case of the resignation or removal of the Pass Through Trustee, the
Certificateholders holding more than 50% in aggregate amount of the related
Pass Through Certificates may appoint a successor Pass Through Trustee. The
resignation or removal of the Pass Through Trustee for any Pass Through Trust
and the appointment of the successor trustee for such Pass Through Trust does
not become effective until acceptance of the appointment by the successor
trustee. (Pass Through Agreement, Article X) Pursuant to such resignation
and successor trustee provisions, it is possible that a different trustee
could be appointed to act as the successor trustee with respect to each Pass
Through Trust. All references in this Prospectus to the Pass Through Trustee
are to the trustee acting in such capacity under each of the Pass Through
Trusts and should be read to take into account the possibility that each of
the Pass Through Trusts could have a different successor trustee in the event
of such a resignation or removal.
The Pass Through Agreement provides that the Corporation will pay the Pass
Through Trustee's fees and expenses and that the Pass Through Trustee will
have a priority claim on the related Trust Property to the extent such fees
and expenses are not paid. The Pass Through Agreement further provides that
the Pass Through Trustee in its individual capacity will be entitled to
indemnification by the Corporation for, and will be held harmless against, any
loss, liability or expenses (other than income or similar taxes) incurred by
the Pass Through Trustee in its individual capacity in connection with the
administration of any Pass Through Trust, except to the extent incurred
through its own willful misconduct, bad faith or gross negligence or by reason
of a breach of any of its representations or warranties set forth in the Pass
Through Agreement or the applicable Series Supplement or any related
documents. In certain circumstances, the Pass Through Trustee will be entitled
to be reimbursed from the applicable Pass Through Trust for any tax (other
than income or similar taxes) incurred in its trust capacity in connection
with the administration of any Pass Through Trust. (Pass Through Agreement,
Articles VIII and IX)
DESCRIPTION OF THE EQUIPMENT CERTIFICATES
The discussion that follows is a summary that does not purport to be
complete and is qualified in its entirety by the detailed information
appearing in the applicable Prospectus Supplement. The following summary
includes descriptions of the material terms of the Equipment Certificates and
the Indentures. Except as otherwise indicated below or as described in the
applicable Prospectus Supplement, the following summary will apply to the
Equipment Certificates, the Indenture and the Participation Agreement
relating to each Aircraft and, for Leased Aircraft, the Lease and the
Collateral Agreement, if any, relating thereto. Where no distinction is made
between the Leased Aircraft Certificates and the Owned Aircraft Certificates
or between their respective Indentures, the summary applies to any Equipment
Certificate and any Indenture. Additional provisions with respect to the
Equipment Certificates, the Indentures and the Participation Agreements
and, for Leased Aircraft, the Leases and the Collateral Agreements, if any,
relating to any particular offering of Pass Through Certificates will be
described in the applicable Prospectus Supplement. To the extent that any
provision in any Prospectus Supplement is inconsistent with any provision
of this summary, the provision of such Prospectus Supplement will control.
General
For each Owned Aircraft, the related Owned Aircraft Certificates will be
issued as direct obligations by the Corporation and will be authenticated
under an Owned Aircraft Indenture by the Indenture Trustee. All of the Owned
Aircraft Certificates issued under the same Owned Aircraft Indenture will
relate to a specific Owned Aircraft and will not be secured by any other
Aircraft. The Owned Aircraft relating to each Owned Aircraft Indenture and
the related Owned Aircraft Certificates will be specified in the applicable
Prospectus Supplement. The Corporation will be directly obligated under each
Owned Aircraft Indenture to make payments of principal of, premium, if any,
and interest on the related Owned Aircraft Certificates.
For each Leased Aircraft, the related Leased Aircraft Certificates will be
issued as nonrecourse obligations by the Owner Trustee, in each case acting
for a separate Owner Trust for the benefit of an Owner Participant, and will
be authenticated under a Leased Aircraft Indenture by the Indenture Trustee.
All of the Leased Aircraft Certificates issued under the same Leased Aircraft
Indenture will relate to and, after any related Pre-Funding Period, as
discussed below under "Delayed Lease Commencement," will be secured by a
specific Leased Aircraft and will not be secured by any other Aircraft. In
each case, the Owner Trustee will lease the related Leased Aircraft to the
Corporation pursuant to a separate Lease between such Owner Trustee and the
Corporation. See "Delayed Lease Commencement" below for a discussion of the
circumstances under which the Lease for an Aircraft may commence after the
date of issuance of the related Leased Aircraft Certificates. The Leased
Aircraft subject to each Lease and the Leased Aircraft Certificates issued
under the related Leased Aircraft Indenture will be specified in the
applicable Prospectus Supplement. Upon the commencement of the Lease for any
Leased Aircraft, the Corporation will be obligated to make rental payments
under such Lease that will be sufficient to pay the principal of and accrued
interest on the related Leased Aircraft Certificates when and as due and
payable except that, with respect to a Delayed Lease Aircraft (as defined
below), on the first scheduled payment date after the related Pre-Funding
Period, any difference between the rental payment due on such date by the
Corporation and the scheduled payment of principal, if any, and interest then
due on such Leased Aircraft Certificates will be payable from the related
Collateral Account and the other security pledged under the related
Indenture. See "Delayed Lease Commencement" below. The Leased Aircraft
Certificates will not, however, be obligations of, or guaranteed by, the
Corporation. The Corporation's obligations to pay rent and to cause other
payments to be made under each Lease will be general obligations of the
Corporation.
For any Owned Aircraft, if specified in the applicable Prospectus
Supplement, the Corporation may arrange for an Owner Trustee, acting for an
Owner Trust for the benefit of an Owner Participant, to purchase such Owned
Aircraft from the Corporation and lease such Aircraft back to the Corporation
under a "net lease," subsequent to the sale of the related Owned Aircraft
Certificates to the Pass Through Trustee for each applicable Pass Through
Trust and the offering and sale of the related Pass Through Certificates
pursuant to such Prospectus Supplement. In such event, such Owner Trustee
will assume, on a nonrecourse basis, the obligations of the Corporation to
make payments of principal and interest on the related Equipment Certificates.
However, the related Equipment Certificates will no longer be direct
obligations of, and will not be guaranteed by, the Corporation, although the
Corporation will be obligated under the related Lease to make rental payments
that will be sufficient to pay the principal of and accrued interest on the
related Equipment Certificates when and as due and payable, and such Equipment
Certificates will continue to be secured by a security interest in the related
Aircraft, in addition to being secured by an assignment by such Owner Trustee
to the Indenture Trustee of such Owner Trustee's rights under such Lease and
the agreements relating to the purchase of such Aircraft. See "Security,"
"Payments and Limitation of Liability" below and "Federal Income Tax
Consequences." The terms and conditions under which any such sale and
leaseback transaction may be consummated will be described in the applicable
Prospectus Supplement.
Until the Corporation has entered into a Lease in connection with a Leased
Aircraft, the Corporation will not be obligated to make any scheduled rental
payments and during any Pre-Funding Period for such Leased Aircraft the
related Leased Aircraft Certificates will not be secured by such Leased
Aircraft or the related Lease, including any rental payments under such
Lease. During any Pre-Funding Period for such Leased Aircraft, however,
the related Collateral Account, together with the other security pledged
under the related Indenture will be available to provide funds necessary to
make the corresponding scheduled payments of principal, if any, and
interest accrued on the related Leased Aircraft Certificates during such
Pre-Funding Period, including the portion, if any, of principal and
interest due on the first payment date after the Pre-Funding Period to the
extent exceeding the amount of rent payable by the Corporation pursuant to
the related Lease. See "Delayed Lease Commencement" below.
Principal and Interest Payments
Interest received by the Pass Through Trustee on the Equipment Certificates
constituting Trust Property of each Pass Through Trust will be passed through
to the Certificateholders of such Pass Through Trust on a pro rata basis on
the dates and at the rate per annum set forth in the applicable Prospectus
Supplement. Interest on the Equipment Certificates will be calculated on the
basis of a 360-day year consisting of twelve 30-day months.
Each Pass Through Trust will hold Equipment Certificates on which principal
is payable in scheduled amounts and on specified dates as set forth in the
applicable Prospectus Supplement. Principal received by the Pass Through
Trustee on such Equipment Certificates will be passed through to the
Certificateholders of such Pass Through Trust on a pro rata basis as set forth
in the Prospectus Supplement.
Prepayment
The applicable Prospectus Supplement will describe the circumstances,
whether voluntary or involuntary, under which the related Equipment
Certificates may or must be prepaid prior to the stated maturity date thereof,
in whole or in part, the premium, if any, applicable upon certain prepayments
and other terms applying to the prepayment of such Equipment Certificates.
See "Mandatory Prepayment During the Pre-Funding Period" below for a
discussion of certain events which would require prepayment of Leased Aircraft
Certificates related to a Leased Aircraft during any related Pre-Funding
Period.
Security
Except during any related Pre-Funding Period, the Leased Aircraft
Certificates issued under each Leased Aircraft Indenture will be secured by:
(i) an assignment by the related Owner Trustee to the Indenture Trustee
of such Owner Trustee's rights (except for certain limited rights
described below) under the applicable Lease, including the right to
receive rent and other payments thereunder;
(ii) a security interest granted to the Indenture Trustee in the related
Leased Aircraft, subject to the rights of the Corporation under
such Lease and to certain other liens and encumbrances; and
(iii) an assignment to such Indenture Trustee of such Owner Trustee's
rights relating to such Leased Aircraft and the related engines
under the agreements for the purchase thereof between the
Corporation and the respective manufacturers of such Leased
Aircraft and of such engines. See "Registration of the Aircraft"
below.
The assignment by such Owner Trustee to the Indenture Trustee of its rights
under each Lease will exclude rights of such Owner Trustee and the related
Owner Participant relating to:
(i) indemnification by the Corporation for certain matters;
(ii) proceeds of public liability insurance payable to such Owner
Trustee in its individual capacity and to such Owner Participant
under insurance maintained by the Corporation under such Lease; and
(iii) proceeds of any insurance policies separately maintained by such
Owner Trustee in its individual capacity or by such Owner
Participant.
The right of the Indenture Trustee, however, to exercise any of the rights of
the Owner Trustee under the related Lease, except the right to receive
payments of rent due thereunder, will be subject to certain limitations as
described in the applicable Prospectus Supplement.
The Owned Aircraft Certificates issued under each Owned Aircraft Indenture
will be secured by (i) a security interest granted to the Indenture Trustee in
all of the Corporation's right, title and interest in and to the related Owned
Aircraft and (ii) an assignment to such Indenture Trustee of certain of the
Corporation's rights relating to such Owned Aircraft and the related engines
under the agreements for the purchase thereof between the Corporation and the
respective manufacturers of such Owned Aircraft and of such engines. See
"Registration of the Aircraft" below.
There will be no cross-collateralization provisions in the Indentures and
consequently the Equipment Certificates issued in respect of one of the
Aircraft will not be secured by any other Aircraft or, in the case of Leased
Aircraft Certificates, the Leases related thereto. There will be no
cross-default provisions in the Indentures and consequently events resulting
in an Indenture Event of Default under any particular Indenture may not result
in an Indenture Event of Default occurring under any other Indenture.
Section 1110 of the United States Bankruptcy Code (the "Bankruptcy Code")
provides that the right of lessors, conditional vendors and holders of
equipment security interests with respect to aircraft used by air carriers
operating under certificates issued by the Secretary of Transportation under
Section 41102(a) or 41103 of the Aviation Act (formerly Sections 401 and 418,
respectively, of the Federal Aviation Act of 1958, as amended to the time of
recodification by the Aviation Act) to take possession of such aircraft in
compliance with the provisions of the lease, conditional sale contract or
equipment security agreement, as the case may be, is not affected by:
(a) the automatic stay provision of the Bankruptcy Code, which provision
enjoins the taking of any action against a debtor by a creditor;
(b) the provision of the Bankruptcy Code allowing the trustee in
reorganization or the debtor-in-possession to use, sell or lease
property of the debtor;
(c) the confirmation of a plan by the bankruptcy court; and
(d) any power of the bankruptcy court to enjoin a repossession.
Section 1110 provides, however, that the right of a lessor, conditional
vendor or holder of an equipment security interest to take possession of an
aircraft in the event of a default may not be exercised for 60 days
following the date of commencement of the reorganization proceedings
(unless specifically permitted by the bankruptcy court) and may not be
exercised at all if, within such 60-day period, the trustee in
reorganization or the debtor-in-possession agrees to perform the debtor's
obligations that become due on or after such date and cures all existing
defaults (other than defaults resulting solely from the financial
condition, bankruptcy, insolvency or reorganization of the debtor). The
Prospectus Supplement for each offering will discuss the availability of
the benefits of Section 1110 of the Bankruptcy Code with respect to the
related Aircraft.
If the applicable Prospectus Supplement provides that a Pre-Funding Period
will apply to a Leased Aircraft, then during such Pre-Funding Period the
related Leased Aircraft Certificates will not be secured by such Leased
Aircraft or a related Lease. During such Pre-Funding Period, however, such
Leased Aircraft Certificates will be secured by (i) the related Collateral
Account and (ii) certain additional security which may include, unless
otherwise specified in the applicable Prospectus Supplement, a letter of
credit issued by a bank (within the meaning of Section 3(a)(2) of the
Securities Act) whose obligations at the time of the relevant Pass Through
Certificate offering carry a credit rating at least as high as the
Corporations ("Additional Collateral"). See "Delayed Lease Commencement"
below.
Registration of the Aircraft
The Corporation will be required, except under certain circumstances, to
register and keep each Aircraft registered under Title 49 of the United
States Code (which, among other things, recodified the Federal Aviation Act
of 1958, as amended to the time of such recodification) (the "Aviation
Act"), in the name of the Corporation, in the case of an Owned Aircraft, or
in the name of the Owner Trustee, after commencement of a Lease in the case
of a Leased Aircraft, and to record and maintain the recordation of the
Indenture and the Lease, if any, relating to each such Aircraft under the
Aviation Act. Such recordation of the Indenture and the Lease, if any,
relating to each Aircraft will give the Indenture Trustee a security
interest in each such Aircraft perfected under the Aviation Act which
perfected security interest will, with certain limited exceptions, be
recognized in those jurisdictions that have ratified to the Convention on
the International Recognition of Rights in Aircraft (the "Convention").
The Corporation will be able, in certain circumstances, to re-register any
Aircraft in certain countries other than the United States. Unless otherwise
specified in the applicable Prospectus Supplement, prior to any such change
in the jurisdiction of registry, the Indenture Trustee and, for Leased
Aircraft, the related Owner Participant must receive certain assurances,
including that such other country would provide substantially equivalent
protection for the rights of owner participants, lessors and lenders in
similar transactions as is provided under United States law, except that, for
the purpose of such determination, rights and remedies similar to those
available under Section 1110 of the Bankruptcy Code will not be required in
the absence of restrictions of rights and remedies of lessors and secured
parties that are similar to those imposed by Sections 362, 363 and 1129 of the
Bankruptcy Code.
Generally, each Aircraft may also be operated by the Corporation or under
lease, sublease or interchange arrangements in countries that are not parties
to the Convention. Because no assurances can be given as to the protection of
the Indenture Trustee's security interest in a legal proceeding outside the
United States or any Convention country, the ability of the Indenture Trustee
in the case of an Indenture Event of Default, to realize upon such security
interest could be adversely affected as a legal or practical matter if the
Aircraft were registered in a non-Convention country or located therein.
Merger, Consolidation and Transfer of Assets
With respect to each Aircraft, the Corporation will be prohibited from
consolidating with or merging into any other corporation under circumstances
in which the Corporation is not the surviving corporation, or from
transferring all or substantially all of its assets as an entirety to any
other corporation, unless, among other things:
(i) the successor or transferee corporation is a U.S. Citizen, an "air
carrier" within the meaning of and operating under the Aviation Act
and a corporation organized and existing under the laws of the
United States or a political subdivision thereof, and such
corporation expressly assumes all the obligations of the
Corporation contained in the related Indenture, the Participation
Agreement, the Lease, the Purchase Agreement and the Purchase
Agreement Assignment;
(ii) immediately after giving effect to such consolidation, merger or
transfer, the successor or transferee is in compliance with all of
the terms and conditions of such documents; and
(iii) such consolidation, merger or transfer does not (or would not, if
prior to commencement of the related Lease) give rise to a Lease
Event Default under the related Lease or, in the case of an Owned
Aircraft, an Indenture Event of Default under the related Owned
Aircraft Indenture.
Delayed Lease Commencement
If the applicable Prospectus Supplement provides that a Pre-Funding Period
will apply to a Leased Aircraft, then until commencement of a Lease with
respect to such Leased Aircraft and the Indenture Trustee's release of funds
from the related Collateral Account, which is expected to occur at the same
time as the commencement of such Lease, such Leased Aircraft is referred to as
a "Delayed Lease Aircraft" and the period prior to the Indenture Trustee's
release of such funds is referred to as the "Pre-Funding Period."
In the case of Leased Aircraft Certificates relating to a Delayed Lease
Aircraft, the proceeds from sale of such Leased Aircraft Certificates to
the applicable Pass Through Trusts, after deducting certain expenses of the
offering of the related Pass Through Certificates, will be deposited by the
Owner Trustee, on the date of such sale, in a collateral account (a
"Collateral Account") established pursuant to a collateral agreement
between the Owner Trustee and the Indenture Trustee (a "Collateral
Agreement"). Such Collateral Account will secure payment of the related
Leased Aircraft Certificates. In addition, the Corporation will be
required to provide to the Indenture Trustee Additional Collateral for such
Leased Aircraft Certificates during the related Pre-Funding Period. See
"Security" above.
Funds in the Collateral Account will be invested at the risk of the Owner
Trustee in U.S. government obligations pursuant to the related Collateral
Agreement and further described in the applicable Prospectus Supplement.
Earnings on such investments will be retained in the Collateral Account
pending distribution as contemplated below.
Unless otherwise specified in an applicable Prospectus Supplement, the
Leased Aircraft Certificates relating to a Delayed Lease Aircraft will be
issued in an amount such that the net proceeds thereof, together with
expected earnings on the investments in the Collateral Account, will be
sufficient (i) to make scheduled payments of principal, if any, and
interest accrued on such Leased Aircraft Certificates during the related
scheduled Pre-Funding Period specified in such Prospectus Supplement and
(ii) to finance a portion of the purchase price of such Delayed Lease
Aircraft, as specified in such Prospectus Supplement. Accordingly, the
principal amount of such Leased Aircraft Certificates at issuance will
exceed the amount that will be applied to the purchase price of the Delayed
Lease Aircraft.
Subject to any mandatory prepayment contemplated below, under the
Collateral Agreement relating to a Delayed Lease Aircraft, on each date during
the scheduled Pre-Funding Period for the scheduled payments of principal, if
any, and interest on the related Leased Aircraft Certificates, the Indenture
Trustee shall withdraw from the Collateral Account the amount necessary to
make the scheduled payment then due. If the Indenture Trustee shall not have
released the funds in the Collateral Account on the date scheduled for the
commencement of the Lease relating to such Delayed Lease Aircraft, then on
each scheduled payment date during the Pre-Funding Period that occurs after
such scheduled commencement date, the Indenture Trustee shall withdraw from
the Collateral Account the excess of the amount therein over the amount
specified to be retained in such Collateral Account to be applied to the
purchase price of the Delayed Lease Aircraft. If the amount withdrawn is
less than the scheduled payment then due, the Indenture Trustee shall draw
the deficiency from any available Additional Collateral and will apply such
amount to satisfy the corresponding payment obligation. On the first
scheduled payment date after any Pre-Funding Period with respect to a Delayed
Lease Aircraft, the Indenture Trustee will withdraw from the Collateral
Account the difference between the scheduled payment then due and the rental
payment due on such payment from the Corporation.
Mandatory Prepayment During the Pre-Funding Period
To the extent that the Lease related to a Delayed Lease Aircraft has not
commenced on or prior to the cut-off date specified in the applicable
Prospectus Supplement as the last date of the related permitted Pre-Funding
Period, a "Deemed Event of Loss" will occur and the Collateral Account and,
to the extent necessary any Additional Collateral will be drawn upon and the
related Leased Aircraft Certificates will be prepaid at a prepayment price
equal to the aggregate principal amount of such Leased Aircraft Certificates,
together with accrued but unpaid interest thereon to the date designated for
such prepayment specified in such Prospectus Supplement. Such Prospectus
Supplement will specify the date after such Deemed Event of Loss on which such
prepayment is to be made.
With respect to any Delayed Lease Aircraft, the applicable Prospectus
Supplement also will set forth any mandatory prepayment of the related Leased
Aircraft Certificates, and the prepayment price therefor, upon the occurrence
of any event of loss with respect to such Delayed Lease Aircraft during such
Pre-Funding Period.
Owned Aircraft Indenture Covenants
Maintenance. The Corporation will be obligated to pay all costs of
operating the Owned Aircraft and, at its expense, to maintain, inspect,
service, repair and overhaul the Owned Aircraft so as to keep the Owned
Aircraft in good condition, ordinary wear and tear excepted, and to enable the
airworthiness certification thereof to be maintained in good standing at all
times under the Aviation Act or, under certain circumstances, under the
applicable requirements of the aeronautical authority of another country of
registry. If, however, the Owned Aircraft loses its airworthiness
certification and such loss is curable, and the Corporation, using its
reasonable best efforts, undertakes such cure promptly, diligently and
continuously, then the Corporation will not be in default with respect to such
obligation.
Generally, the Corporation will be obligated to replace or cause to be
replaced all parts that may from time to time be incorporated or installed in
or attached to any Owned Aircraft (including in or on any engine) and that may
become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond
repair or permanently rendered unfit for use. The Corporation will have the
right to make other alterations, modifications and additions to an Owned
Aircraft so long as such alterations, modifications or additions do not
materially decrease the value or utility of such Owned Aircraft or impair its
condition or airworthiness below its value, utility, condition and
airworthiness immediately prior to such alteration, modification or addition,
assuming that such Owned Aircraft was then in the condition and airworthiness
required by the related Indenture. Also, in certain circumstances, the
Corporation will be permitted to remove parts (without replacement) from an
Owned Aircraft or any engine (and therefore from the Lien of the applicable
Indenture) if the Corporation deems such parts to be obsolete or no longer
suitable or appropriate for use thereon so long as such removals do not
decrease the utility, condition or airworthiness of such Owned Aircraft or any
such engine, although the value of such Owned Aircraft or any such engine may
be reduced by such removal. The applicable Prospectus Supplement will contain
a description of certain limitations, if any, applicable to provisions
described in this paragraph.
Insurance. Unless otherwise indicated in the applicable Prospectus
Supplement, the Corporation will be obligated to carry insurance with insurers
of recognized responsibility with respect to each Owned Aircraft, at its own
cost and expense, in such amounts, against such risks, with such deductibles
or retentions (i) in the case of hull insurance, as the Corporation
customarily maintains with respect to other aircraft in the Corporation's
fleet of the same type and model and operating on the same routes as the
respective Owned Aircraft and (ii) in the case of liability insurance, as is
usually carried by similar corporations engaged in the same or similar
business and similarly situated as the Corporation, owning or operating
aircraft similar to the Aircraft. The Corporation will be permitted to
maintain coverage below certain stipulated values and may be permitted to
self-insure (including by way of deductibles and retentions) in certain
circumstances, subject to certain limits. Therefore, there is no assurance
that any insurance will be carried in the future, or, if it is carried, as to
the amount of such insurance.
The Corporation and any permitted lessee of an Owned Aircraft will be named
as insured parties under all insurance policies required by the related
Indenture. The Indenture Trustee will be named as an additional insured,
which will afford such Indenture Trustee the rights but not the obligations of
an additional insured. Unless otherwise specified in the applicable
Prospectus Supplement, liability insurance proceeds will be distributed to the
respective parties as their interests may appear and hull insurance proceeds
in excess of certain specified amounts will be distributed to the Indenture
Trustee. The applicable Prospectus Supplement will contain a description of
certain limitations, if any, applicable to provisions described in this
paragraph.
Payments and Limitation of Liability
All payments of principal of, premium, if any, and interest on any Leased
Aircraft Certificates will be made only from the assets subject to the Lien of
the related Leased Aircraft Indenture or the income and proceeds received by
the Indenture Trustee therefrom, including, during any Pre-Funding Period
relating to a Leased Aircraft, the Collateral Account and any Additional
Collateral provided in connection with such Pre-Funding Period and, on and
after the commencement of the related Lease and, in the case of a Delayed
Lease Aircraft, after the related Pre-Funding Period, rent payable by the
Corporation under the related Lease. The Leased Aircraft Certificates will
not be direct obligations of, or guaranteed by the Corporation. The
Corporation's obligations to pay rent and to cause other payments to be
made under each Lease will be general obligations of the Corporation.
Neither the Owner Trustee nor the Indenture Trustee (in their individual
capacities) will be liable to any Certificateholder or, in the case of the
Owner Trustee, in its individual capacity, to the Corporation or the Indenture
Trustee for any amounts payable or for any liability under the Equipment
Certificates or the Indentures, except as provided in the Indentures and the
Participation Agreements and except for the gross negligence or willful
misconduct of the Owner Trustee.
The Corporation's obligations under each Owned Aircraft Indenture and under
the related Owned Aircraft Certificates will be general obligations of the
Corporation.
Indenture Events of Default and Remedies
For any Pass Through Trust, the applicable Prospectus Supplement will
describe the Indenture Events of Default under the Indentures related to the
Equipment Certificates to be held by such Pass Through Trust, the remedies
that the Indenture Trustee may exercise with respect to the related Aircraft,
either at its own initiative or upon instruction from holders of the related
Equipment Certificates, and other provisions relating to the occurrence of an
Indenture Event of Default and the exercise of remedies. There will be no
cross-default provisions in the Indentures and events resulting in an
Indenture Event of Default under any particular Indenture will not necessarily
result in an Indenture Event of Default under any other Indenture.
The Leases
Upon the commencement of any Lease, the following terms will be applicable:
Terms and Rentals. Each Leased Aircraft will be leased separately by the
related Owner Trustee to the Corporation for a term commencing on the date of
the delivery of the related Leased Aircraft to such Owner Trustee and expiring
on a date not earlier than the latest maturity date of the Leased Aircraft
Certificates issued with respect to such Leased Aircraft, unless previously
terminated or extended, as permitted by the related Lease. The scheduled
rental payments by the Corporation under each Lease will be payable on the
dates specified in the applicable Prospectus Supplement. The respective
payments will be assigned under the related Leased Aircraft Indenture by the
Owner Trustee to the Indenture Trustee to provide the funds necessary to make
payments of principal and interest due from such Owner Trustee on the Leased
Aircraft Certificates issued under such Leased Aircraft Indenture. Although
in certain cases the scheduled rental payments under the Leases may be
adjusted, under no circumstances will such payments that the Corporation will
be unconditionally obligated to make or cause to be made under any Lease be
less than the scheduled payments of principal and interest on the Leased
Aircraft Certificates issued under the Leased Aircraft Indenture relating to
such Lease. See "Payments and Limitations of Liability" above.
For any Delayed Lease Aircraft, upon the commencement of the Lease for such
Aircraft and after the related Pre-Funding Period, the Corporation will be
obligated to make scheduled rental payments under the related Lease that will
be sufficient to pay in full when due all principal of and interest on, to
the extent accrued from and after the related Pre-Funding Period, the related
Leased Aircraft Certificates, except that on the first scheduled payment date
after the related Pre--Funding Period, the difference between the rental
payment due on such date by the Corporation and the scheduled payment of
principal, if any, and interest then due on such Leased Aircraft Certificates
will be payable from the related Collateral Account and any related Additional
Collateral. See "Payments and Limitations of Liability" above. Scheduled
payments of principal and interest on the Leased Aircraft Certificates will be
made on the dates specified in the applicable Prospectus Supplement.
Net Lease. The Corporation's obligations under each Lease in respect of
the related Leased Aircraft will be those of a lessee under a "net lease."
Accordingly, the Corporation will be obligated to pay all costs of operating
the Leased Aircraft and, at its expense, to maintain, service, repair and
overhaul the Leased Aircraft so as to keep the Leased Aircraft in good
condition, ordinary wear and tear excepted, and to enable the airworthiness
certification thereof to be maintained in good standing at all times under the
Aviation Act or, under certain circumstances, under the applicable
requirements of the aeronautical authority of another country of registry.
If, however, the Leased Aircraft loses its airworthiness certification and
such loss is curable, and the Corporation, using its reasonable best
efforts, undertakes such cure promptly, diligently and continuously, then
the Corporation will not be in default with respect to such obligation.
Generally, the Corporation will be obligated to replace or cause to be
replaced all parts that may from time to time be incorporated or installed in
or attached to any Leased Aircraft (including in or on any engine) and that
may become worn out, lost, stolen, destroyed, seized, confiscated, damaged
beyond repair or permanently rendered unfit for use. The Corporation will
have the right to make other alterations, modifications and additions to a
Leased Aircraft so long as such alterations, modifications or additions do not
materially decrease the value or utility of such Leased Aircraft or impair its
condition or airworthiness below its value, utility, condition and
airworthiness immediately prior to such alteration, modification or addition,
assuming that such Leased Aircraft was then in the condition and airworthiness
required by the related Lease. Also, in certain circumstances, the
Corporation will be permitted to remove parts (without replacement) from a
Leased Aircraft or any engine (and therefore from the Lien of the applicable
Indenture) if the Corporation deems such parts to be obsolete or no longer
suitable or appropriate for use on such Leased Aircraft so long as such
removals do not decrease the utility, condition or airworthiness of such
Leased Aircraft or any such engine, although the value of such Leased Aircraft
or any such engine may be reduced by such removal. The applicable Prospectus
Supplement will contain a description of certain limitations, if any,
applicable to provisions described above.
Insurance. Unless otherwise indicated in the applicable Prospectus
Supplement, the Corporation will be obligated to carry insurance with insurers
of recognized responsibility with respect to each Leased Aircraft, at its own
cost and expense, in such amounts, against such risks, with such deductibles
or retentions (i) in the case of hull insurance, as the Corporation
customarily maintains with respect to other aircraft in the Corporation's
fleet of the same type and model and operating on the same routes as the
respective Leased Aircraft and (ii) in the case of liability insurance, as is
usually carried by similar corporations engaged in the same or similar
business and similarly situated as the Corporation, owning or operating
aircraft similar to the Aircraft. The Corporation will be permitted to
maintain coverage below certain stipulated values and may be permitted to
self-insure (including by way of deductibles and retentions) in certain
circumstances, subject to certain limits. Therefore, there is no assurance
that any insurance will be carried in the future, or, if it is carried, as to
the amount of such insurance.
The Corporation and any permitted sublessee of a Leased Aircraft will be
named as insured parties under all insurance policies required by the related
Lease. The Indenture Trustee, Owner Trustee and related Owner Participant
will be named additional insureds, which will afford each of them the rights
but not the obligations of an additional insured. Unless otherwise specified
in the applicable Prospectus Supplement, liability insurance proceeds will be
distributed to the respective parties as their interests may appear and hull
insurance proceeds in excess of certain specified amounts will be distributed
to the Indenture Trustee. The applicable Prospectus Supplement will contain a
description of certain limitations, if any, applicable to provisions described
in this paragraph.
Lease Events of Default; Remedies. The applicable Prospectus Supplement
will describe the Lease Events of Default under the related Leases, the
remedies that the Owner Trustee may exercise with respect to the related
Leased Aircraft, and other provisions relating to the occurrence of a Lease
Event of Default and the exercise of remedies.
The Participation Agreements
The Corporation will be required to indemnify each Indenture Trustee
and, in the case of Leased Aircraft Certificates, each Owner Participant
and each Owner Trustee, and certain parties affiliated with the foregoing
(but not including holders of the Equipment Certificates or the
Certificateholders), for certain liabilities, losses, fees and expenses and
for certain other matters arising out of the transactions described herein
or relating to the applicable Aircraft or the use thereof. In addition,
under certain circumstances the Corporation will be required to indemnify
such persons against certain taxes, levies, duties, withholdings and for
certain other matters relating to such transactions or the applicable
Aircraft. Subject to certain restrictions, each Owner Participant may
convey all of its right, title and interest relating to any Leased
Aircraft. Moreover, if so provided in the applicable Prospectus
Supplement, in certain limited instances the Corporation may assume an
Owner Trust's obligations under the related Leased Aircraft Certificates on
a full recourse basis.
FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Davis Polk & Wardwell, tax counsel to the Corporation,
the following discussion accurately describes the principal United States
federal income tax consequences of ownership and disposition of the Pass
Through Certificates to the initial purchasers at the "issue price" thereof
who hold such Pass Through Certificates as a capital asset, and should be
read in conjunction with any additional discussion of federal income tax
consequences included in the applicable Prospectus Supplement. This
opinion is based on laws, regulations, rulings and decisions in effect as
of the date hereof. Changes to existing law, which could have retroactive
effect, may alter the consequences described below. This opinion does not
purport to address federal income tax consequences applicable to particular
categories of investors, some of which (for example, insurance companies,
financial institutions, dealers in securities and foreign investors) may be
subject to special rules. Persons considering purchasing interests in Pass
Through Certificates should consult their own tax advisors with regard to
the application of the United States federal income tax laws to their
particular situations as well as any tax consequences arising under the
laws of any state, local or foreign jurisdiction. The Pass Through Trusts
are not indemnified for any federal income taxes that may be imposed upon
them, and the imposition of any such taxes on a Pass Through Trust could
result in a reduction in the amounts available for distribution to the
Certificate Owners of such Pass Through Trust.
General
The Pass Through Trusts will not be classified as associations taxable as
corporations, but, rather, will be classified as grantor trusts under subpart
E, Part I of Subchapter J of the Internal Revenue Code of 1986, as amended
(the "Code"), and each Certificateholder will be treated as the owner of a pro
rata undivided interest in each of the Equipment Certificates and any other
property held in the related Pass Through Trust. Each Certificateholder will
be required to report on its federal income tax return its pro rata share of
the entire income from each of the Equipment Certificates and any other
property held in the related Pass Through Trust, in accordance with such
Certificateholder's method of accounting.
A purchaser of an interest in a Pass Through Certificate will be treated as
purchasing an interest in each Equipment Certificate and any other property in
the related Pass Through Trust at a price determined by allocating the
purchase price paid for the Pass Through Certificate among such Equipment
Certificates and other property in proportion to their fair market values at
the time of purchase of the Pass Through Certificate. Unless otherwise
indicated in a Prospectus Supplement, the Corporation anticipates that when
all the Equipment Certificates have been acquired by the related Pass Through
Trust the purchase price paid for a Pass Through Certificate of such Pass
Through Trust by an original purchaser of such Pass Through Certificate should
be allocated among the Equipment Certificates held in such Pass Through Trust
in proportion to their respective principal amounts.
If an Equipment Certificate held by a Pass Through Trust is prepaid, a
Certificateholder will be considered to have sold his pro rata share of that
Equipment Certificate, and will recognize gain or loss equal to the difference
between its aggregate adjusted basis in the Equipment Certificate and the
amount realized on the sale (except to the extent attributable to accrued
interest, which would be taxable as interest income if not previously included
in income). Any such gain or loss will be long-term capital gain or loss if
the Equipment Certificate is considered to have been held for more than one
year. Net capital gains of individuals are, under certain circumstances,
taxed at lower rates than items of ordinary income. With respect to the
Leased Aircraft Certificates, although the matter is not entirely free from
doubt, an Owner Participant's conveyance of its interest in an Owner Trust
will not constitute a taxable event to the holders of interests in the related
Leased Aircraft Certificates. However, if the Corporation were to assume an
Owner Trust's obligations under the related Leased Aircraft Certificates upon
a purchase of the related Aircraft by the Corporation, or an Owner Trust were
to assume the Company's obligations under Owned Aircraft Certificates upon a
conversion of an Owned Aircraft to a Leased Aircraft, such assumption would be
treated for federal income tax purposes as a taxable exchange of the
respective Equipment Certificates resulting in the recognition of taxable gain
or loss under the rules discussed above. For this purpose the amount
realized, as determined under current Treasury regulations on original issue
discount, will be equal to the fair market value of the Certificateholder's
pro rata share of the respective Equipment Certificates at such time.
Sales or Exchanges of Pass Through Certificates
A Certificateholder that sells or exchanges a Pass Through Certificate will
be considered to have sold his pro rata portion of the property held by the
Pass Through Trust, and will recognize gain or loss on the basis discussed in
the preceding paragraph.
Backup Withholding
Payments made on the Pass Through Certificates, and proceeds from the sale
or exchange of the Pass Through Certificates to or through certain brokers,
may be subject to a "backup" withholding tax of 31% unless the
Certificateholder complies with certain reporting procedures or is an exempt
recipient under the Code. Any such withheld amounts will be allowed as a
credit against the Certificateholder's federal income tax and may entitle such
Certificateholder to a refund, provided that the required information is
furnished to the Internal Revenue Service.
CERTAIN SOUTH CAROLINA TAXES
The Pass Through Trustee is a national banking association with its
corporate trust office in South Carolina. Powell, Goldstein, Frazer & Murphy,
special South Carolina tax counsel for the Pass Through Trustee, has advised
the Corporation that, in its opinion, under currently applicable law, assuming
that each Pass Through Trust will not be classified as an association taxable
as a corporation for federal income tax purposes, but rather, will be
classified as a grantor trust under subpart E, Part I of Subchapter J of the
Code, and assuming that each Pass Through Trust does not otherwise engage in
business in South Carolina, (i) the Pass Through Trusts will not be subject to
any tax (including, without limitation, net or gross income, tangible or
intangible property, net worth, capital, franchise or doing business tax), fee
or other governmental charge under the laws of the State of South Carolina or
any political subdivision thereof and (ii) Certificateholders that are not
residents of or otherwise subject to tax in South Carolina will not be subject
to any tax (including, without limitation, net or gross income, tangible or
intangible property, net worth, capital, franchise or doing business tax), fee
or other governmental charge under the laws of the State of South Carolina or
any political subdivision thereof as a result of purchasing, owning (including
receiving payments with respect to) or selling a Pass Through Certificate.
Neither the Pass Through Trusts nor the Certificateholders will be
indemnified for any state or local taxes imposed on them, and the imposition
of any such taxes on a Pass Through Trust could result in a reduction in the
amounts available for distribution to the Certificateholders of such Pass
Through Trust.
ERISA CONSIDERATIONS
Unless otherwise indicated in the applicable Prospectus Supplement, Pass
Through Certificates may not be purchased by, or with the assets of, any
employee benefit plan subject to Title I of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or individual retirement account
or plan subject to Section 4975 of the Code. Certain governmental plans and
non-electing church plans, however, are not subject to Title I of ERISA or
Section 4975 of the Code and, therefore, may purchase the Pass Through
Certificates.
PLAN OF DISTRIBUTION
The Pass Through Certificates may be sold to or through underwriters,
directly to other purchasers or through agents.
The distribution of the Pass Through Certificates may be effected from time
to time in one or more transactions at a fixed price or prices, which may be
changed, or at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices.
In connection with the sale of Pass Through Certificates, underwriters or
agents may receive compensation from the Corporation or from purchasers of
Pass Through Certificates for whom they may act as agents in the form of
discounts, concessions or commissions. Underwriters may sell Pass Through
Certificates to or through dealers, and such dealers may receive compensation
in the form of discounts, concessions or commissions from the underwriters or
commissions from the purchasers for whom they may act as agents.
Underwriters, dealers and agents that participate in the distribution of Pass
Through Certificates may be deemed to be underwriters, and any discounts or
commissions received by them from the Corporation and any profit on the resale
of Pass Through Certificates by them may be deemed to be underwriting
discounts and commissions, under the Securities Act. Any such underwriter or
agent will be identified, and any such compensation received from the
Corporation will be described, in the applicable Prospectus Supplement.
Offers to purchase Pass Through Certificates may be solicited directly and
the sale thereof may be made directly to institutional investors or others,
who may be deemed to be underwriters within the meaning of the Securities Act
with respect to any resale thereof. The terms of any such sales will be
described in the Prospectus Supplement relating thereto.
Under agreements which may be entered into by the Corporation, underwriters
and agents who participate in the distribution of Pass Through Certificates
may be entitled to indemnification by the Corporation against certain
liabilities, including liabilities under the Securities Act.
Unless otherwise indicated in the applicable Prospectus Supplement, the
Corporation does not intend to apply for the listing of any Series of Pass
Through Certificates on a national securities exchange. If the Pass Through
Certificates of any Series are sold to or through underwriters, the
underwriters may make a market in such Pass Through Certificates, as permitted
by applicable laws and regulations. No underwriter would be obligated,
however, to make a market in such Pass Through Certificates, and any such
market-making could be discontinued at any time at the sole discretion of the
underwriters. Accordingly, no assurance can be given as to the liquidity of,
or trading markets for, the Pass Through Certificates of any Series.
Certain of the underwriters or agents and their associates may be customers
of, engage in transactions with, and perform services for, the Corporation in
the ordinary course of business.
LEGAL MATTERS
Unless otherwise indicated in the applicable Prospectus Supplement, the
legality of the Pass Through Certificates offered hereby will be passed upon
for the Corporation by Davis Polk & Wardwell, 450 Lexington Avenue, New York,
New York 10017, and by counsel for any agents, dealers or underwriters
("Underwriters' Counsel"). Unless otherwise indicated in the applicable
Prospectus Supplement, both Davis Polk & Wardwell and Underwriters' Counsel
may rely on the opinion of Powell, Goldstein, Frazer & Murphy, counsel for
NationsBank of South Carolina, individually and as Pass Through Trustee, as to
matters relating to the authorization, execution and delivery of the Pass
Through Agreement and of each Series of Pass Through Certificates by the Pass
Through Trustee, and of George W. Hearn, Vice President - Law of the
Corporation, as to the Corporation's authorization, execution and delivery of
the Pass Through Agreement. At November 22, 1994, Mr. Hearn owned zero
shares of the Corporation's common stock and had been granted options to
purchase 14,675 shares of the Corporation's common stock. Of the options
granted, 4,362 were vested at such date.
EXPERTS
The consolidated financial statements and schedules of the Corporation
included or incorporated by reference in the Corporation's Annual Report on
Form 10-K for the year ended May 31, 1994 and incorporated by reference
herein, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated by reference herein in reliance upon the authority of said firm
as experts in accounting and auditing in giving said reports.
With respect to the unaudited interim financial information for the quarter
ended August 31, 1994, included in the Corporation's Quarterly Report on Form
10-Q for such period, which is incorporated by reference in this Prospectus,
Arthur Andersen LLP has applied limited procedures in accordance with
professional standards for a review of such information. However, their
separate report thereon states that they did not audit and they do not express
an opinion on that interim financial information. Accordingly, the degree of
reliance on their report on that information should be restricted in light of
the limited nature of the review procedures applied. In addition, the
accountants are not subject to the liability provisions of Section 11 of the
Securities Act for their reports on the unaudited interim financial
information because that report is not a "report" or "part" of the
Registration Statement, of which this Prospectus is a part, prepared or
certified by the accountants within the meaning of Sections 7 and 11 of the
Securities Act.
======================================= =====================================
No dealer, salesperson or other
individual has been authorized to give
any information or to make any
representation not contained in this
Prospectus in connection with the
offering covered by this Prospectus. If
given or made, such by thisProspectus. If
given must not be relied upon as having
been authorized by the Corporation or the
or made, such information or
representation Underwriters. This
Prospectus does not constitute an offer
to sell, or the solicitatio of an offer
to buy, the Pass Through Certificates
in any jurisdiction where, or to any
person to whom, it is unlawful to make
such offer or solicitation. Neither the $465,000,000
delivery of this Prospectus nor any sale
made hereunder shall, under any
circumstances, create an implication
that there has not been any change in the [NEW LOGO]
facts set forth in this Prospectus or in
the affairs of the Corporation since the
date hereof.
$465,000,000
Pass Through Certificates
TABLE OF CONTENTS
Prospectus
Page
----
________________
Available Information.................3
Reports to Pass Through P R O S P E C T U S
Certificateholders..................3 ________________
Incorporation of Certain Documents by
Reference...........................3
Federal Express Corporation...........4
Ratio of Earnings to Fixed Charges....4
Outline of Pass Through Trust
Structure..........................4
Use of Proceeds.......................5
Diagram of Payments...................6
Description of the Pass Through
Certificates........................8
Description of the Equipment November , 1994
Certificates.......................20
Federal Income Tax Consequences......29
Certain South Carolina Taxes.........30
ERISA Considerations.................31
Plan of Distribution.................31
Legal Matters........................32
Experts..............................32
======================================= =====================================
Appendix A
Two diagrams are included following the third paragraph of
"Diagram of Payments". The diagram headed "Leased Aircraft" contains boxes
representing the parties identified in the second paragraph of "Diagram of
Payments," which are connected by arrows demonstrating the cash flows
described in the paragraph. The diagram headed "Owned Aircraft" contains
boxes representing the parties identified in the third paragraph of
"Diagram of Payments," which are connected by arrows demonstrating the cash
flows described in the paragraph.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
-------------------------------------------
The following are the estimated expenses of the issuance and
distribution of the securities (other than underwriting discounts and
commissions) being registered, all of which will be paid by the Registrant:
SEC Registration Fee................................................$148,425
Printing and Engraving.............................................. 37,500
Attorneys' Fees and Expenses........................................ 600,000
Trustees' Fees...................................................... 12,000
Accounting Fees and Expenses........................................ 25,000
Blue Sky Fees and Expenses.......................................... 15,000
Rating Agency Fees.................................................. 125,000
Miscellaneous....................................................... 5,000
Total $967,925
========
All of the above amounts, other than the SEC Registration Fee,
are estimated.
Item 15. Indemnification of Directors and Officers
-----------------------------------------
(a) Reference is made to Section 145 of the Delaware General
Corporation Law ("DGCL") as to indemnification by the Registrant of
officers and directors.
(b) Section 13 of Article III of the by-laws of the Registrant
provides for indemnification of directors as follows:
Section 13. The corporation shall indemnify to the full extent authorized
or permitted by the General Corporation Law of the State of Delaware any
person made, or threatened to be made, a party to any threatened, pending
or completed action, suit or proceeding (whether civil, criminal,
administrative or investigative) by reason of the fact that he, his
testator or intestate is or was a director of the corporation or serves
or served as a director, officer, employee or agent of any other
enterprise at the request of the corporation.
Section 18 of Article V of the by-laws of the Registrant provides for
indemnification of officers as follows:
Section 18. The corporation shall indemnify to the full extent authorized
or permitted by the General Corporation Law of the State of Delaware any
person made, or threatened to be made, a party to any threatened, pending
or completed action, suit or proceeding (whether civil, criminal,
administrative or investigative) by reason of the fact that he, his
testator or intestate is or was an officer or Managing Director of the
corporation or serves or served as a director, officer, employee or agent
of any other enterprise at the request of the corporation.
(c) The Registrant has also entered into an indemnification agreement
with each of its directors based on the sections of the DGCL that recognize
the validity of additional indemnity rights granted by agreement. The
indemnification agreement alters or clarifies the statutory indemnity with
respect to the Registrant's directors in the following respects: (i)
indemnity is explicitly provided for settlements, fines and judgments in
derivative actions to the maximum extent permitted by Delaware law, (ii)
prompt payment of expenses is provided in advance of indemnification,
provided the director undertakes to repay such amount if it is finally
determined the director is not entitled to be indemnified and (iii)
indemnification for all matters involving a director as a party by reason
of the person being a director unless the person violates the law or the
person's conduct is finally adjudged to have been knowingly fraudulent,
deliberately dishonest or willful misconduct. Therefore, a director who
has entered into the indemnification agreement will be entitled to
indemnification automatically according to its terms without prior
independent review of such director's conduct and approval of the
indemnification payment by either disinterested directors, independent
counsel or the stockholders. Certain of the provisions of the
indemnification agreement have not been tested in court and remain subject
to public policy considerations with respect to their enforceability. The
Registrant has been advised that indemnification of a judgment or amounts
paid in settlement in a derivative suit may be contrary to public policy in
the State of Delaware. Because substantial uncertainty exists as to the
validity of such payments, the Registrant will not make an indemnification
payment for fines, judgments or amounts paid in settlement in a derivative
suit without first obtaining an opinion of independent counsel that such
payment is permitted under Delaware law.
(d) The Underwriting Agreements filed as Exhibits 1(a) and 1(b) to this
Registration Statement provide, under certain circumstances, for
indemnification for the Registrant and certain other persons against certain
liabilities.
(e) The Registrant has purchased insurance designed to protect the
Registrant and its directors and officers against losses arising from
certain claims, including claims under the Securities Act of 1933.
Item 16. Exhibits
--------
Exhibit
Number Description of Exhibits
- ------- -----------------------
1(a) Form of Underwriting Agreement relating to Equipment Trust
Certificates (Filed as Exhibit 1(a) to Registrant's Registration
Statement on Form S-3, Commission File No. 33-52142, and
incorporated herein by reference, except that reference in such
Exhibit to such File Number shall be left blank.)
1(b) Form of Underwriting Agreement relating to Pass Through
Certificates (Filed as Exhibit 1(b) to Registrant's Registration
Statement on Form S-3, Commission File No. 33-52142, and
incorporated herein by reference, except that reference in such
Exhibit to such File Number shall be left blank.)
4(a)(1) Pass Through Trust Agreement, dated as of February 1, 1993,
between Federal Express Corporation and the Pass Through
Trustee for an offering of Pass Through Certificates (Filed as
Exhibit 4.19 to Registrant's 1993 Annual Report on Form 10-K,
Commission File No. 1-7806, and incorporated herein by
reference.)
4(a)(2) Form of Pass Through Certificate (included in Exhibit 4(a)(1))
4(b)(1) Form of Trust Indenture and Security Agreement among the Owner
Trustee, the Indenture Trustee and Federal Express Corporation,
as Lessee, for an offering of Equipment Trust Certificates (Filed
as Exhibit 4(b)(1) to Registrant's Registration Statement on Form
S-3, Commission File No. 33-52142, and incorporated herein by
reference.)*
4(b)(2) Form of Equipment Trust Certificate (included in Exhibit
4(b)(1))
4(c) Form of Trust Indenture and Security Agreement (Leased Aircraft
Indenture) between the Owner Trustee and the Indenture Trustee,
relating to Equipment Certificates (Leased Aircraft Certificates)
in connection with an offering of Pass Through Certificates
(Filed as Exhibit 4(c) to Registrant's Registration Statement on
Form S-3, Commission File No. 33-52142, and incorporated herein
by reference.)*
4(d)(1) Form of Trust Indenture, Mortgage and Security Agreement (Owned
Aircraft Indenture) between Federal Express Corporation and the
Indenture Trustee, relating to Equipment Certificates (Owned
Aircraft Certificates) in connection with an offering of Pass
Through Certificates*
4(e)(1) Form of Participation Agreement among Federal Express
Corporation, as Lessee, the Owner Participant, the Owner Trustee,
the Original Loan Participants, if any, the Indenture Trustee
and, when in connection with an offering of Pass Through
Certificates, the Pass Through Trustee, relating to Equipment
Trust Certificates or, when in connection with an offering of
Pass Through Certificates, Equipment Certificates (Leased
Aircraft Certificates) (Filed as Exhibit 4(e)(1) to Registrant's
Registration Statement on Form S-3, Commission File No. 33-52142,
and incorporated herein by reference.)*
4(e)(2) Form of Participation Agreement among Federal Express
Corporation, the Pass Through Trustee and the Indenture Trustee
for Equipment Certificates (Owned Aircraft Certificates) in
connection with an offering of Pass Through Certificates*
4(f) Form of Trust Agreement between the Owner Participant and the
Owner Trustee relating to Equipment Certificates (Leased Aircraft
Certificates) in connection with an offering of Equipment Trust
Certificates or Pass Through Certificates (Filed as Exhibit 4(f)
to Registrant's Registration Statement on Form S-3, Commission
File No. 33-52142, and incorporated herein by reference.)*
4(g) Form of Lease Agreement between the Owner Trustee, as the Lessor,
and Federal Express Corporation, as Lessee, relating to Equipment
Certificates (Leased Aircraft Certificates) in connection with an
offering of Equipment Trust Certificates or Pass Through
Certificates (Filed as Exhibit 4(g) to Registrant's Registration
Statement on Form S-3, Commission File No. 33-52142, and
incorporated herein by reference.)*
4(h) Form of Collateral Agreement between the Owner Trustee and the
Indenture Trustee (Filed as Exhibit 4.g to Registrant's
Registration Statement No. 33-51623, and incorporated herein by
reference.)
5(a)(1) Opinion of Davis Polk & Wardwell, counsel for Federal Express
Corporation, relating to Equipment Trust Certificates
5(a)(2) Opinion of Davis Polk & Wardwell, counsel for Federal Express
Corporation, relating to Pass Through Certificates
5(b) Opinion of Powell, Goldstein, Frazer & Murphy, counsel for the
Pass Through Trustee
5(c) Opinion of Potter Anderson & Corroon, counsel for the Owner
Trustee
5(d) Opinion of George W. Hearn, Vice President - Law of Federal
Express Corporation, relating to Equipment Trust Certificates and
Pass Through Certificates
8(a) Tax Opinion of Davis Polk & Wardwell, counsel for Federal Express
Corporation (included under the caption "Federal Income Tax
Consequences" in the Prospectus relating to Pass Through
Certificates)
8(b) Tax Opinion of Powell, Goldstein, Frazer & Murphy, special
counsel for the Pass Through Trustee (included under the caption
"Certain South Carolina Taxes" in the Prospectus relating to Pass
Through Certificates) (included in Exhibit 5(b))
12 Computation of Ratio of Earnings to Fixed Charges (Filed as
Exhibit 12.1 to Registrant's 1995 First Quarterly Report on Form
10-Q, Commission File No. 1-7806, and incorporated herein by
reference.)
15 Letter of Arthur Andersen LLP, independent public accountants
23(a) Consent of Davis Polk & Wardwell, counsel for Federal Express
Corporation (included in Exhibits 5(a)(1) and 5(a)(2))
23(b) Consent of Powell, Goldstein, Frazer & Murphy, counsel for the
Pass Through Trustee (included in Exhibit 5(b))
23(c) Consent of Potter Anderson & Corroon, counsel for the Owner
Trustee (included in Exhibit 5(c))
23(d) Consent of George W. Hearn (included in Exhibit 5(d))
23(f) Consent of Arthur Andersen LLP, independent public accountants
24 Powers of Attorney
25(a) Form T-1 Statement of Eligibility under the Trust Indenture Act
of 1939, as amended, of NationsBank of Georgia, National
Association, as Indenture Trustee
25(b) Form T-1 Statement of Eligibility under the Trust Indenture Act
of 1939, as amended, of NationsBank of South Carolina, National
Association, as Pass Through Trustee
- -------------------
* Separate Indentures, Participation Agreements, Trust Agreements and Lease
Agreements will be entered into with respect to each Leased Aircraft in
connection with any particular offering of Equipment Trust Certificates or
Pass Through Certificates. Separate Indentures and Participation Agreements
will be entered into with respect to each Owned Aircraft in connection with an
offering of Pass Through Certificates. The Prospectus Supplement for each
offering of Equipment Trust Certificates or Pass Through Certificates will set
forth any material details in which such Indentures, Participation Agreements,
Trust Agreements or Lease Agreements, as the case may be, differ from the
corresponding Exhibit for the form of such documents.
Item 17. Undertakings
------------
The undersigned Registrant hereby undertakes:
(a) (1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;
provided, however, the paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
Registration Statement is on Form S-3, Form S-8 or Form F-3 and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at the time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities
offered therein and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the provisions referred
to in Item 15 of this Registration Statement, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Memphis, State of Tennessee, on
this 22nd day of November 1994.
FEDERAL EXPRESS CORPORATION
(Registrant)
By: /s/ GRAHAM R. SMITH
_______________________________
Graham R. Smith
Vice President and Controller
(Principal Accounting Officer)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signature Capacity Date
---------- -------- ----
/s/ Frederick W. Smith* Chairman of the Board,
_________________________ President and Chief
Frederick W. Smith Executive Officer
(Principal Executive
Officer) and Director
/s/ William J. Razzouk* Executive Vice President,
_________________________ Worldwide Customer
William J. Razzouk Operations
/s/ Alan B. Graf, Jr.* Senior Vice President and
_________________________ Chief Financial Officer
Alan B. Graf, Jr. (Principal Financial Officer)
/s/ Graham R. Smith
_________________________ (Acting Principal
Graham R. Smith Accounting Officer) November 22, 1994
/s/ Robert H. Allen* Director
_________________________
Robert H. Allen
/s/ Howard H. Baker, Jr.* Director
_________________________
Howard H. Baker, Jr.
/s/ Anthony J. A. Bryan* Director
_________________________
Anthony J. A. Bryan
/s/ Robert L. Cox* Director
_________________________
Robert L. Cox
/s/ RALPH D. DENUNZIO* Director
_________________________
Ralph D. DeNunzio
/s/ JUDITH L. ESTRIN* Director
_________________________
Judith L. Estrin
/s/ PHILIP GREER* Director
_________________________
Philip Greer
/s/ J. R. HYDE, III* Director
_________________________
J. R. Hyde, III
/s/ CHARLES T. MANATT* Director
_________________________
Charles T. Manatt
/s/ JACKSON W. SMART, JR.* Director
_________________________
Jackson W. Smart, Jr.
/s/ JOSHUA I. SMITH* Director
_________________________
Joshua I. Smith
/s/ PETER S. WILLMOTT* Director
_________________________
Peter S. Willmott
*By: /s/ GRAHAM R. SMITH November 22, 1994
_____________________
Graham R. Smith
Attorney-in-Fact
EXHIBIT INDEX
Exhibits Exhibit Description
- -------- -------------------
1(a) Form of Underwriting Agreement relating to Equipment Trust
Certificates (Filed as Exhibit 1(a) to Registrant's Registration
Statement on Form S-3, Commission File No. 33-52142, and
incorporated herein by reference, except that reference in such
Exhibit to such File Number shall be left blank.)
1(b) Form of Underwriting Agreement relating to Pass Through
Certificates (Filed as Exhibit 1(b) to Registrant's Registration
Statement on Form S-3, Commission File No. 33-52142, and
incorporated herein by reference, except that reference in such
Exhibit to such File Number shall be left blank.)
4(a)(1) Pass Through Trust Agreement, dated as of February 1, 1993,
between Federal Express Corporation and the Pass Through
Trustee for an offering of Pass Through Certificates (Filed as
Exhibit 4.19 to Registrant's 1993 Annual Report on Form 10-K,
Commission File No. 1-7806, and incorporated herein by
reference.)
4(a)(2) Form of Pass Through Certificate (included in Exhibit 4(a)(1))
4(b)(1) Form of Trust Indenture and Security Agreement among the Owner
Trustee, the Indenture Trustee and Federal Express Corporation,
as Lessee, for an offering of Equipment Trust Certificates (Filed
as Exhibit 4(b)(1) to Registrant's Registration Statement on Form
S-3, Commission File No. 33-52142, and incorporated herein by
reference.)*
4(b)(2) Form of Equipment Trust Certificate (included in Exhibit
4(b)(1))
4(c) Form of Trust Indenture and Security Agreement (Leased Aircraft
Indenture) between the Owner Trustee and the Indenture Trustee,
relating to Equipment Certificates (Leased Aircraft Certificates)
in connection with an offering of Pass Through Certificates
(Filed as Exhibit 4(c) to Registrant's Registration Statement on
Form S-3, Commission File No. 33-52142, and incorporated herein
by reference.)*
4(d)(1) Form of Trust Indenture, Mortgage and Security Agreement (Owned
Aircraft Indenture) between Federal Express Corporation and the
Indenture Trustee, relating to Equipment Certificates (Owned
Aircraft Certificates) in connection with an offering of Pass
Through Certificates*
4(e)(1) Form of Participation Agreement among Federal Express
Corporation, as Lessee, the Owner Participant, the Owner Trustee,
the Original Loan Participants, if any, the Indenture Trustee
and, when in connection with an offering of Pass Through
Certificates, the Pass Through Trustee, relating to Equipment
Trust Certificates or, when in connection with an offering of
Pass Through Certificates, Equipment Certificates (Leased
Aircraft Certificates) (Filed as Exhibit 4(e)(1) to Registrant's
Registration Statement on Form S-3, Commission File No. 33-52142,
and incorporated herein by reference.)*
4(e)(2) Form of Participation Agreement among Federal Express
Corporation, the Pass Through Trustee and the Indenture
Trustee for Equipment Certificates (Owned Aircraft
Certificates) in connection with an offering of Pass Through
Certificates*
4(f) Form of Trust Agreement between the Owner Participant and the
Owner Trustee relating to Equipment Certificates (Leased Aircraft
Certificates) in connection with an offering of Equipment Trust
Certificates or Pass Through Certificates (Filed as Exhibit 4(f)
to Registrant's Registration Statement on Form S-3, Commission
File No. 33-52142, and incorporated herein by reference.)*
4(g) Form of Lease Agreement between the Owner Trustee, as the Lessor,
and Federal Express Corporation, as Lessee, relating to Equipment
Certificates (Leased Aircraft Certificates) in connection with an
offering of Equipment Trust Certificates or Pass Through
Certificates (Filed as Exhibit 4(g) to Registrant's Registration
Statement on Form S-3, Commission File No. 33-52142, and
incorporated herein by reference.)*
4(h) Form of Collateral Agreement between the Owner Trustee and the
Indenture Trustee (Filed as Exhibit 4.g to Registrant's
Registration Statement No. 33-51623, and incorporated herein by
refer ence.)
5(a)(1) Opinion of Davis Polk & Wardwell, counsel for Federal Express
Corporation, relating to Equipment Trust Certificates
5(a)(2) Opinion of Davis Polk & Wardwell, counsel for Federal Express
Corporation, relating to Pass Through Certificates
5(b) Opinion of Powell, Goldstein, Frazer & Murphy, counsel for the
Pass Through Trustee
5(c) Opinion of Potter Anderson & Corroon, counsel for the Owner
Trustee
5(d) Opinion of George W. Hearn, Vice President - Law of Federal
Express Corporation, relating to Equipment Trust Certificates and
Pass Through Certificates
8(a) Tax Opinion of Davis Polk & Wardwell, counsel for Federal Express
Corporation (included under the caption "Federal Income Tax
Consequences" in the Prospectus relating to Pass Through
Certificates)
8(b) Tax Opinion of Powell, Goldstein, Frazer & Murphy, special
counsel for the Pass Through Trustee (included under the caption
"Certain South Carolina Taxes" in the Prospectus relating to Pass
Through Certificates) (included in Exhibit 5(b))
12 Computation of Ratio of Earnings to Fixed Charges (Filed as
Exhibit 12.1 to Registrant's 1995 First Quarterly Report on Form
10-Q, Commission File No. 1-7806, and incorporated herein by
reference.)
15 Letter of Arthur Andersen LLP, independent public accountants
23(a) Consent of Davis Polk & Wardwell, counsel for Federal Express
Corporation (included in Exhibits 5(a)(1) and 5(a)(2))
23(b) Consent of Powell, Goldstein, Frazer & Murphy, counsel for the
Pass Through Trustee (included in Exhibit 5(b))
23(c) Consent of Potter Anderson & Corroon, counsel for the Owner
Trustee (included in Exhibit 5(c))
23(d) Consent of George W. Hearn (included in Exhibit 5(d))
23(f) Consent of Arthur Andersen LLP, independent public accountants
24 Powers of Attorney
25(a) Form T-1 Statement of Eligibility under the Trust Indenture Act
of 1939, as amended, of NationsBank of Georgia, National
Association, as Indenture Trustee
25(b) Form T-1 Statement of Eligibility under the Trust Indenture Act
of 1939, as amended, of NationsBank of South Carolina, National
Association, as Pass Through Trustee
- -------------------
* Separate Indentures, Participation Agreements, Trust Agreements and Lease
Agreements will be entered into with respect to each Leased Aircraft in
connection with any particular offering of Equipment Trust Certificates or
Pass Through Certificates. Separate Indentures and Participation Agreements
will be entered into with respect to each Owned Aircraft in connection with an
offering of Pass Through Certificates. The Prospectus Supplement for each
offering of Equipment Trust Certificates or Pass Through Certificates will set
forth any material details in which such Indentures, Participation Agreements,
Trust Agreements or Lease Agreements, as the case may be, differ from the
corresponding Exhibit for the form of such documents.
APPENDIX A
A diagram is included following the third paragraph of "Diagram of
Payments." The diagram contains boxes representing the parties identified
in the first paragraph of "Diagram of Payments," which are connected by
arrows demonstrating the cash flows described in each of the second and
third paragraphs.
Exhibit 4(d)(1)
TRUST INDENTURE, MORTGAGE AND SECURITY AGREEMENT
Dated as of __________ , 199_
between
FEDERAL EXPRESS CORPORATION
and
__________________,
Indenture Trustee
COVERING ONE [MANUFACTURER/MODEL] AIRCRAFT
SERIAL NO. _____, REGISTRATION NO. ______
TABLE OF CONTENTS
RECITALS.............................................................
GRANTING CLAUSES.....................................................
HABENDUM.............................................................
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions....................................
ARTICLE 2
THE EQUIPMENT PURCHASE CERTIFICATES
SECTION 2.01. Issuance of an Equipment Purchase
Certificate..................................
SECTION 2.02. Terms of the Equipment Purchase
Certificates.................................
SECTION 2.03. Execution and Authentication...................
SECTION 2.04. Method of Payment..............................
SECTION 2.05. Application of Payments........................
SECTION 2.06. Termination of Interest in
Indenture Estate.............................
SECTION 2.07. Transfer and Exchange of
Certificates; Participation..................
SECTION 2.08. Mutilated, Destroyed, Lost or
Stolen Certificates..........................
SECTION 2.09. Costs and Expenses of Issuance of
New Equipment Purchase
Certificates.................................
SECTION 2.10. No Liability of Indenture Trustee..............
SECTION 2.11. ERISA Plan Prohibition.........................
ARTICLE 3
Intentionally Left Blank.....................
ARTICLE 4
COVENANTS AND REPRESENTATIONS OF THE COMPANY
SECTION 4.01. Liens..........................................
SECTION 4.02. Registration, Maintenance and
Operation; Possession and
Lease; Insignia..............................
SECTION 4.03. Replacement and Pooling of Parts...............
SECTION 4.04. Alterations, Modifications
and Additions................................
SECTION 4.05. Loss, Destruction, Registration................
SECTION 4.06. Insurance......................................
SECTION 4.07. Inspection.....................................
SECTION 4.08. Filings........................................
SECTION 4.09. Annual Opinion.................................
SECTION 4.10. Corporate Existence............................
SECTION 4.11. Merger, Consolidation..........................
SECTION 4.12. Financial Information..........................
SECTION 4.13. Representations and Warranties
of the Company...............................
SECTION 4.14. Survival of Representations
and Warranties...............................
ARTICLE 5
RECEIPT, DISTRIBUTION AND APPLICATION
OF INCOME FROM THE INDENTURE ESTATE
SECTION 5.01. Distribution of Principal
and Interest.................................
SECTION 5.02. Intentionally Left Blank.......................
SECTION 5.03. Payments during Continuance of
Event of Default.............................
SECTION 5.04. Funds held by Indenture Trustee;
Investments..................................
ARTICLE 6
EVENTS OF DEFAULT,
REMEDIES OF THE INDENTURE
UPON AN EVENT OF DEFAULT
SECTION 6.01. Event of Default...............................
SECTION 6.02. Remedies with Respect to Indenture
Estate.......................................
ARTICLE 7
DUTIES OF THE INDENTURE TRUSTEE
SECTION 7.01. Action Upon Event of Default...................
SECTION 7.02. No Duties Except as Specified..................
SECTION 7.03. No Action Except Under Indenture
or Instructions..............................
SECTION 7.04. Action Upon Instructions Generally.............
SECTION 7.05. Indemnification................................
SECTION 7.06. Withholding Taxes..............................
ARTICLE 8
THE INDENTURE TRUSTEE
SECTION 8.01. Acceptance of Trusts and Duties................
SECTION 8.02. Absence of Certain Duties......................
SECTION 8.03. Representations, Warranties and
Agreements of Indenture Trustee..............
SECTION 8.04. Reliance; Agents; Advice of Experts............
SECTION 8.05. Compensation and Expenses of
Indenture Trustee............................
SECTION 8.06. Monies Held by Indenture Trustee...............
SECTION 8.07. Capacity in Which Active.......................
ARTICLE 9
SUCCESSOR INDENTURE TRUSTEE
SECTION 9.01. Resignation or Removal; Appointment
of Successor.................................
SECTION 9.02. Appointment of Separate Trustees...............
ARTICLE 10
SUPPLEMENTS AND AMENDMENTS TO THIS
INDENTURE AND OTHER DOCUMENTS
SECTION 10.01. Supplemental Indentures........................
SECTION 10.02. Indenture Trustee Protected....................
SECTION 10.03. Requirement of Substance, Not Form.............
SECTION 10.04. Documents Mailed to Holders....................
ARTICLE 11
LEVERAGED LEASE FINANCING
SECTION 11.01. Conversion to Leveraged Lease
Financing....................................
SECTION 11.02. Indenture Amendment............................
SECTION 11.03. The Lease......................................
SECTION 11.04. Conditions Precedent...........................
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. Termination of Indenture.......................
SECTION 12.02. No Legal Title in Indenture Estate.............
SECTION 12.03. Sale of Collateral by Indenture
Trustee......................................
SECTION 12.04. Indenture for Benefit of Parties
and Holders Only.............................
SECTION 12.05. Notices........................................
SECTION 12.06. Severability...................................
SECTION 12.07. Binding Effect.................................
SECTION 12.08. Heading; Reference.............................
SECTION 12.09. Counterparts...................................
SECTION 12.10. Governing Laws.................................
SECTION 12.11. No Oral Modifications..........................
SECTION 12.12. Normal Commercial Relations....................
SECTION 12.13. Section 1110 Compliance........................
Schedule I -- Definitions
Schedule II -- Permitted Country List
Exhibit A -- Form of Indenture Supplement
Exhibit B -- Form of Equipment Purchase Certificate
Exhibit C -- Form of Participation Agreement
Exhibit D -- Form of Lease Agreement
Exhibit E -- Form of Indenture Amendment
Exhibit F -- Form of Lease Participation Agreement
TRUST INDENTURE, MORTGAGE AND SECURITY AGREEMENT
TRUST INDENTURE, MORTGAGE AND SECURITY AGREEMENT entered into
as of _________, 199_ between FEDERAL EXPRESS CORPORATION, a Delaware
corporation (together with its successors and assigns the "Company") and
______________, a national banking corporation, as Indenture Trustee hereunder
(together with its successors hereunder, the "Indenture Trustee");
W I T N E S S E T H :
WHEREAS, unless otherwise defined herein or the context
otherwise requires, capitalized terms herein are used as provided in Article 1
hereof;
[WHEREAS, pursuant to the Purchase Agreement, the Manufacturer
has agreed to sell to the Company and the Company has agreed to purchase from
the Manufacturer the Aircraft;
WHEREAS, the Company wishes to finance a portion the purchase
price of the Aircraft through the issuance of Equipment
Purchase Certificates;](*)
WHEREAS, the Company desires by this Indenture, among other
things, (i) to provide for the issuance to the Holders by the Company of
certain Equipment Purchase Certificates [in connection with the refunding
of Equipment Purchase Certificates](**) and (ii) to provide for the
assignment, mortgage, grant of a first priority security interest in and
pledge by the Company to the Indenture Trustee, of certain of the Company's
right, title and interest in and to the Aircraft as security for the
Obligations;
(*) Bracketed information followed by an asterisk
([ ](*)) will be included only in the case of
initial funding.
(**) Bracketed information followed by two asterisks
([ ](*)) will be included only in the case of
initial funding.
WHEREAS, all things have been done to make the Equipment
Purchase Certificates, when executed by the Company, authenticated and
delivered under this Indenture and issued, the legal, valid and binding
obligations of the Company; and
WHEREAS, all things necessary to make this Indenture the legal,
valid and binding obligation of the Company, for the uses and purposes set
forth in this Indenture, in accordance with its terms, have been done and
performed and have happened.
[NOW, THEREFORE, the parties agree that the Original Indenture
be and the same is hereby amended as follows:](**)
-- GRANTING CLAUSES --
NOW, THEREFORE, THIS TRUST INDENTURE, MORTGAGE AND SECURITY
AGREEMENT WITNESSETH, that:
to secure the Obligations, and in consideration of the
premises and of the covenants herein contained, and of the acceptance of
the Equipment Purchase Certificates by the Holders, and of the sum of $1
paid to the Company by the Indenture Trustee at or before the delivery
hereof, the receipt whereof is hereby acknowledged, the Company has
granted, bargained, sold, assigned, transferred, conveyed, mortgaged,
pledged and confirmed, and does hereby grant, bargain, sell, assign,
transfer, convey, mortgage, pledge and confirm, unto the Indenture Trustee
and its successors and assigns, for the security and benefit of the
Holders, as aforesaid, a first priority security interest in and first
mortgage lien upon, all right, title and interest of the Company in, to and
under the following described property, rights and privileges (which
collectively, including all property hereafter specifically subjected to
the Lien of this Indenture by an Indenture Supplement or any other mortgage
supplemental hereto, shall constitute the "Indenture Estate"), to wit:
a. all estate, right, title and interest of the Company
in the Aircraft (including the Airframe and the Engines and all
warranties of any manufacturer in respect thereof) and all
replacements thereof and substitutions therefor to which the Company
shall from time to time acquire title, all as more particularly
described in the Indenture Supplement executed and delivered with
respect to the Aircraft or any such replacements or substitutions
therefor, as provided in this Indenture, all Parts related to the
foregoing, and all records, logs and other documents at any time
maintained with respect to the foregoing property;
b. all estate, right, title and interest of the Company
in, to and under the Estate Documents;
c. all tolls, rents, issues, profits, revenues and other
income of the property subjected or required to be subjected to the
Lien of this Indenture including all payments or proceeds payable to
the Company with respect to the Aircraft as the result of the sale,
lease or other disposition thereof, and all estate, right, title and
interest of every nature whatsoever of the Company in and to the same
and every part thereof;
d. all insurance and requisition proceeds and all other
payments of any kind with respect to the Aircraft or any part
thereof, including but not limited to the insurance required under
Section 4.06 hereof;
e. all monies and securities deposited or required to be
deposited with the Indenture Trustee pursuant to any term of this
Indenture or required to be held by the Indenture Trustee hereunder;
and
f. all proceeds of the foregoing.
All property referred to in the Granting Clauses, whenever
acquired by the Company, shall secure all Obligations at any time outstanding.
Any and all properties referred to in the Granting Clauses which are hereafter
acquired by the Company shall, without further conveyance, assignment or act
by the Company or the Indenture Trustee thereby become and be subject to the
security interest hereby granted as fully and completely as though
specifically described herein.
TO HAVE AND TO HOLD all and singular the aforesaid property
unto the Indenture Trustee, its successors and assigns, in trust for the
benefit and security of the Holders, and for the uses and purposes and subject
to the terms and provisions set forth in this Indenture.
It is expressly agreed that anything herein contained to the
contrary notwithstanding, the Company shall remain liable under the Operative
Agreements to perform all of the obligations assumed by it thereunder, all in
accordance with and pursuant to the terms and provisions thereof, and the
Indenture Trustee and the Holders shall have no obligation or liability under
any thereof by reason of or arising out of the assignment hereunder, nor shall
the Holders be required or obligated in any manner to perform or fulfill any
obligations of the Company under or pursuant to any of the Operative
Agreements, except as therein or herein expressly provided, to make any
payment, or to make any inquiry as to the nature or sufficiency of any payment
received by it, or present or file any claim, or take any action to collect or
enforce the payment of any amounts which may have been assigned to it or to
which it may be entitled at any time or times.
The Company does hereby constitute the Indenture Trustee the
true and lawful attorney of the Company, irrevocably, with full power (in the
name of the Company or otherwise) to ask, require, demand, receive, compound
and give acquittance for any and all monies and claims for monies (in each
case including insurance and requisition proceeds) due and to become due under
or arising out of the Operative Agreements and all other property which now or
hereafter constitutes part of the Indenture Estate, to endorse any checks or
other instruments or orders in connection therewith and to file any claims or
to take any action or to institute any proceedings which the Indenture Trustee
may deem to be necessary or advisable in the premises. The Company agrees
that promptly on receipt thereof, it will transfer to the Indenture Trustee
any and all monies from time to time received by it constituting part of the
Indenture Estate, for distribution by the Indenture Trustee pursuant to this
Indenture.
The Company does hereby warrant and represent that (except as
permitted herein) it has not assigned or pledged any of its right, title, and
interest hereby assigned to anyone other than the Indenture Trustee.
The Company does hereby ratify and confirm the Operative
Agreements and does hereby agree that (except as permitted herein) it will not
take or omit to take any action, the taking or omission of which would result
in an alteration or impairment of any of the Operative Agreements or of any of
the rights created by any thereof or the assignment hereunder.
IT IS HEREBY COVENANTED AND AGREED by and between the parties
hereto as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. Unless the context otherwise
requires, all capitalized used herein and not otherwise defined shall have the
meanings set forth in Schedule I hereto.
ARTICLE 2
THE EQUIPMENT PURCHASE CERTIFICATES
SECTION 2.01. Issuance of an Equipment Purchase
Certificate. There shall be issued by the Company to each of the Holders
[in connection with their respective participation in the payment of the
purchase price of the Aircraft](*), an Equipment Purchase Certificate or
Equipment Purchase Certificates [dated the Delivery Date of the Aircraft,
designated as having been issued in connection with the purchase of the
Aircraft, and](*) [the Refunding Date](**) registered in the name of such
Holder in a principal amount not in excess of the amount specified in
Section 2.02 hereof.
SECTION 2.02. Terms of the Equipment Purchase Certificates.
(a) The Equipment Purchase Certificates and the Indenture Trustee's
certificate of authentication shall be substantially in the form set forth in
Exhibit B hereto. The Equipment Purchase Certificates shall be issued in
registered form only and in denominations of $1,000 and any integral multiple
thereof and shall be issued in the Maturities and principal amounts, and bear
interest at the rates per annum, specified in the form of Equipment Purchase
Certificate set forth in Exhibit B hereto.
Any of the Equipment Purchase Certificates may be issued with
appropriate insertions, omissions, substitutions and variations, and may have
imprinted or otherwise reproduced thereon such legend or legends, not
inconsistent with the provisions of this Indenture, as may be required to
comply with any law or with any rules or regulations pursuant thereto, or with
the rules of any securities market in which the Equipment Purchase
Certificates are admitted to trading, or to conform to general usage.
Each Equipment Purchase Certificate shall bear interest from
the date of original issuance thereof or from the most recent date to which
interest has been paid and duly provided for, as the case may be, which shall
be payable on the dates specified on the face of the form of Equipment
Purchase Certificate set forth in Exhibit B hereto until the principal thereof
is paid. Interest shall be calculated on the basis of a 360-day year of
twelve 30-day months.
Notwithstanding the preceding paragraph, each Equipment
Purchase Certificate shall bear interest at the Past Due Rate on any
principal, interest and any other amount payable hereunder or under such
Certificate, which shall not be paid in full when due (whether at stated
maturity, by acceleration, by mandatory prepayment or otherwise), for the
period from and including the due date thereof to but excluding the date the
same is paid in full, payable from time to time on demand of the Indenture
Trustee.
The principal of, and Make-Whole Premium, if any, and interest on,
the Equipment Purchase Certificates shall be payable at the Corporate Trust
Office of the Indenture Trustee or at any office or agency maintained for such
purpose pursuant to Section 2.04 hereof.
The Holder at the close of business on any Record Date with
respect to any Payment Date shall be entitled to receive the interest if
any payable on such Payment Date notwithstanding any transfer or exchange
of such Equipment Purchase Certificate subsequent to the Record Date and
prior to such Payment Date, except if and to the extent the Company shall
default in the payment of the interest due on such Payment Date, in which
case such defaulted interest shall be paid to the Holder at the close of
business on a subsequent Record Date (which shall be not less than five (5)
or more than fifteen (15) Business Days prior to the date of payment of
such defaulted interest) established by notice given by mail by or on
behalf of the Owner Trustee to the Holders not less than fifteen (15) days
preceding such subsequent Record Date.
(b) Event of Loss. The Equipment Purchase Certificates shall be
prepaid in whole but not in part by the Company in connection with
an Event of Loss with respect to the Aircraft as and when provided
in Section 4.05(b) hereof at a price, in addition to any other
amounts payable to the Holders under this Indenture, equal to the
aggregate unpaid principal amount thereof together with accrued
but unpaid interest thereon to but not including the date of
payment, but without Make-Whole Premium. The Company shall give
at least 30 days' prior notice of any prepayment of the Equipment
Purchase Certificates pursuant to this subsection (b) to the
Indenture Trustee, which notice shall specify the date fixed for
prepayment and the principal amount of the Equipment Purchase
Certificates to be prepaid and the amount of accrued interest
thereon to be so payable.
(c) Prepayment Generally. The Equipment Purchase Certificates
may by prepaid in whole or in part at the option of the Company upon
30 days' prior written notice, together with Make-Whole Premium, if
any. The Equipment Purchase Certificates shall be prepaid in whole
but not in part upon any sale of the Aircraft by the Company other
than a sale of the Aircraft to an owner trust as contemplated by
Article 11 hereof.
SECTION 2.03. Execution and Authentication. The Equipment
Purchase Certificates shall be executed on behalf of the Company by an
authorized officer of the Company. No Equipment Purchase Certificate shall be
secured or entitled to any benefit under this Indenture or be valid or
obligatory for any purpose, unless there appears on such Equipment Purchase
Certificate a certificate of authentication in the form provided for in
Exhibit B hereto executed by the Indenture Trustee by the manual signature of
one of its authorized officers, and such certificate of authentication upon
any Equipment Purchase Certificate shall be conclusive evidence, and the only
evidence, that such Equipment Purchase Certificate has been duly authenticated
and delivered under this Indenture.
SECTION 2.04. Method of Payment. The Company covenants and
agrees that it will duly and punctually pay or cause to be paid in immediately
available funds the principal of, any Make-Whole Premium and interest and all
other amounts due on each of the Equipment Purchase Certificates hereunder at
the Corporate Trust Office of the Indenture Trustee (or at such other account
in New York, New York as the Indenture Trustee may designate for the purpose)
no later than 1:00 p.m. (New York City time) on the date when due and, upon
receipt of such amounts, the Indenture Trustee agrees to pay such amounts
to the appropriate Holders no later than 3:00 p.m. (New York City time) on
such day. In the event the Indenture Trustee shall fail to make any such
payment as provided in the immediately preceding sentence after its receipt
of funds at the place and prior to the time specified above, the Indenture
Trustee, in its individual capacity and not as trustee, agrees to
compensate the Holders for loss of use of such funds at the Past Due Rate;
provided, however, notwithstanding the foregoing the Indenture Trustee, in
its individual capacity, shall not be liable for such compensation to the
extent any failure to make any such payment is a result of any action,
inaction, event or other occurrence outside the Indenture Trustee's
control. The principal of and any Make-Whole Premium and interest on each
Equipment Purchase Certificate and all other amounts due hereunder or under
the Equipment Purchase Certificates shall be payable at the Corporate Trust
Office of the Indenture Trustee or at any office or agency maintained for
such purpose pursuant to this Section 2.04; provided, however, that
interest may be payable at the option of the Indenture Trustee by mailing
checks for such interest payable to or on the written order of the Holders
entitled thereto as they shall appear on the Register; provided further,
however, that notwithstanding the foregoing, any amounts payable with
respect to the Equipment Purchase Certificates as to which the Pass Through
Trustee is the Holder shall be sent by wire transfer of immediately
available funds to an account or accounts in the United States previously
specified by the Pass Through Trustee to the Indenture Trustee.
Prior to the due presentment for registration of transfer of
any Equipment Purchase Certificate, the Company and the Indenture Trustee
shall deem and treat the person in whose name any Equipment Purchase
Certificate is registered on the Register as the absolute owner and Holder of
such Equipment Purchase Certificate for the purpose of receiving payment of
all amounts payable with respect to such Equipment Purchase Certificate and
for all other purposes, and neither the Company nor the Indenture Trustee
shall be affected by any notice to the contrary.
So long as the Equipment Purchase Certificates remain
outstanding, the Indenture Trustee will maintain the following: (a) an office
or agency where the Equipment Purchase Certificates may be presented for
payment and (b) a facility or agency in New York, New York where the Equipment
Purchase Certificates may be presented for registration of transfer under this
Indenture.
SECTION 2.05. Application of Payments. All payments of
principal, any Make-Whole Premium or interest shall be applied, subject to
Section 5.03 hereof, first, to the payment of accrued interest (including
interest on overdue principal and interest) on such Equipment Purchase
Certificate to the date of such payment, second, to the payment of the
principal amount of such Equipment Purchase Certificate then due under such
Equipment Purchase Certificate, third, to the payment of any Make-Whole
Premium due on such Equipment Purchase Certificate and fourth, to the
payment of the principal amount of such Equipment Purchase Certificate
remaining unpaid.
SECTION 2.06. Termination of Interest in Indenture Estate. A
Holder of an Equipment Purchase Certificate shall have no further interest in,
or other right with respect to, the Indenture Estate when and if the principal
of and any Make-Whole Premium and interest on all Equipment Purchase
Certificates held by such Holder and all other sums payable to such Holder
under this Indenture and under such Equipment Purchase Certificates shall have
been paid in full, and upon such payment in full such Holder shall surrender
such Equipment Purchase Certificates to the Indenture Trustee for
cancellation.
SECTION 2.07. Transfer and Exchange of Certificates;
Participation. The Indenture Trustee shall keep at its Corporate Trust Office
and at each other office or agency to be maintained for the purpose as
provided in Section 2.04 hereof a register (the "Register") of Equipment
Purchase Certificates issued from time to time and the Holders thereof. A
Holder of an Equipment Purchase Certificate intending to transfer such
Equipment Purchase Certificate to a new payee, including a sale pursuant to
the Transfer Agreement, or to exchange such Equipment Purchase Certificate
for new Equipment Purchase Certificates of authorized denominations, shall
endorse such outstanding Equipment Purchase Certificate and surrender such
outstanding Equipment Purchase Certificate at the Corporate Trust Office or
other office maintained for the purpose, or execute a written instrument of
transfer, duly executed by such Holder for the issuance of a new Equipment
Purchase Certificate or Equipment Purchase Certificates, specifying the
name and address of the new payee or payees. Promptly upon receipt of such
documents, subject to satisfaction of Section 2.09 hereof, the Company
shall execute and the Indenture Trustee will authenticate and deliver a new
Equipment Purchase Certificate or Equipment Purchase Certificates, in the
same aggregate original face amount with the same Maturity and the same
interest rate and dated the same date as the Equipment Purchase Certificate
surrendered, and in such authorized denomination or denominations
registered in the name of such payee or payees as such Holder may specify
by written request. The Indenture Trustee shall make a notation on each
new Equipment Purchase Certificate of the amount of all payments of
principal previously made on the surrendered Equipment Purchase Certificate
with respect to which such new Equipment Purchase Certificate is issued and
the date to which interest on such surrendered Equipment Purchase
Certificate has been paid. From time to time, the Indenture Trustee will
provide the Company with such information as it may request as to the
registered Holders of Equipment Purchase Certificates.
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen
Certificates. If any Equipment Purchase Certificate shall become
mutilated, destroyed, lost or stolen, upon the written request of the
Holder thereof (a copy of which request shall be sent by the Holder to the
Indenture Trustee), and subject to satisfaction of Section 2.09 hereof, the
Company shall execute and the Indenture Trustee shall authenticate and
deliver as a replacement a new Equipment Purchase Certificate, payable in
the same original principal amount and dated the same date as the Equipment
Purchase Certificate so mutilated, destroyed, lost or stolen.
If the Equipment Purchase Certificate being replaced has become
mutilated, such Equipment Purchase Certificate shall be surrendered to the
Indenture Trustee and a photocopy shall be furnished to the Company by the
Indenture Trustee. If the Equipment Purchase Certificate being replaced has
been destroyed, lost or stolen, the Holder shall furnish to the Company and
the Indenture Trustee such security or indemnity as may be required by them to
save the Company and the Indenture Trustee harmless and evidence satisfactory
to the Company and Indenture Trustee of the destruction, loss or theft of such
Equipment Purchase Certificate and of the ownership of such Equipment Purchase
Certificate; provided, however, that if the Holder of such Equipment Purchase
Certificate is one of the Banks or the Pass Through Trustee (or an Affiliate
thereof) the written undertaking of such Holder delivered to the Company and
the Indenture Trustee shall be sufficient security and indemnity under this
Section 2.08.
The Indenture Trustee will promptly cancel and destroy all
Equipment Purchase Certificates surrendered for transfer, exchange or
replacement pursuant to Section 2.07 hereof and this Section.
SECTION 2.09. Costs and Expenses of Issuance of New Equipment
Purchase Certificates. Upon the issuance of a new Equipment Purchase
Certificate pursuant to Section 2.07 or 2.08 hereof, the Company and/or the
Indenture Trustee may require from the party requesting such new Equipment
Purchase Certificate payment of a sum to reimburse the Company and the
Indenture Trustee for, or to provide funds for the payment of, any tax or
other governmental charge in connection with the issuance of such new
Equipment Purchase Certificate. No service charge shall be levied for any
such transaction.
SECTION 2.10. No Liability of Indenture Trustee. All payments
to be made by the Indenture Trustee under this Indenture shall be made only to
the extent the Indenture Trustee shall have received sufficient funds from the
Company to enable the Indenture Trustee to make payments in accordance with
the terms hereof. Each Holder, by its acceptance of an Equipment Purchase
Certificate, agrees that the Indenture Trustee is not and shall not be
personally liable to the Holder for any amount payable under such Equipment
Purchase Certificate or this Indenture or, except as expressly provided in
this Indenture, for any liability under this Indenture.
SECTION 2.11. ERISA Plan Prohibition. No employee benefit
plan subject to Title I of ERISA, or individual retirement account or employee
benefit plan subject to Section 4975 of the Code, or any trust established
under any such plan or account (hereinafter collectively referred to as an
"ERISA Plan"), may acquire or hold any of the Equipment Purchase Certificates.
The purchase by any Person of any Equipment Purchase Certificate constitutes a
representation by such Person to the Company and the Indenture Trustee that
such Person is not an ERISA Plan and that such Person is not acquiring, and
has not acquired, such Equipment Purchase Certificate with assets of an ERISA
Plan.
ARTICLE 3
Intentionally Left Blank.
ARTICLE 4
COVENANTS AND REPRESENTATIONS OF THE COMPANY
SECTION 4.01. Liens. The Company will not directly or
indirectly create, incur, assume or suffer to exist, and will promptly, at its
own cost and expense, take such action as may be necessary to discharge, any
Lien on or with respect to any of the Indenture Estate or title thereto or any
interest therein except:
(a) the Lien of this Indenture and the rights of the parties
to the other Operative Agreements;
(b) the rights of any assignee, lessee or transferee under a
lease or an assignment expressly permitted by the terms of this
Indenture;
(c) Liens arising as a result of claims against or affecting
the Indenture Trustee, the Holders or any Affiliate thereof not
arising solely from participation in the transactions contemplated by
the Operative Agreements or any act or omission of the Indenture
Trustee, the Holders or any Affiliate thereof not required or
expressly permitted by the Operative Agreements;
(d) Liens for taxes imposed against the Company either not yet
due or being contested in good faith by appropriate proceedings so
long as such Liens or proceedings do not involve any material danger
of the sale, forfeiture or loss of any of the Indenture Estate or any
interest therein;
(e) materialmen's, mechanic's, workmen's, repairmen's,
employees' or other like Liens arising against the Company in the
ordinary course of the Company's business for amounts the payment of
which is either not yet overdue or is being contested in good faith
by appropriate proceedings so long as such Liens or proceedings do
not involve any material danger of the sale, forfeiture or loss of
any of the Indenture Estate or any interest therein;
(f) Liens arising from judgment or awards against the Company
with respect to which at the time an appeal or proceeding for review
is being prosecuted in good faith and with respect to which there
shall have been secured a stay of execution pending such appeal or
proceeding for review and then only for the period of such stay; and
(g) the right of any Person (other than the Company) to claim
a portion of the insurance proceeds received or receivable as a
result of an Event of Loss with respect to the Airframe, which right
arises out of such Person's having a direct interest in an engine
(other than an Engine) installed on the Airframe as a lessor,
conditional vendor, owner or otherwise.
SECTION 4.02. Registration, Maintenance and Operation;
Possession and Lease; Insignia.
(a) Registration, Maintenance and Operation. The Company at
its own cost and expense, shall:
(i) [on the Delivery Date](*) cause the Aircraft [to be duly
registered in its name, pursuant to the Act and,](*) to remain,
subject to paragraph (b) below, at all times duly registered in its
name pursuant to the Act and at all times act in accordance with the
rules and regulations of the Aeronautics Authority;
(ii) maintain, inspect, service, repair and overhaul the
Aircraft (or cause the same to be done) so as to keep the Aircraft
(and any engine which is not an Engine but is installed on the
Aircraft) in good operating condition, ordinary wear and tear
excepted, and in any event (x) in accordance with the applicable
regulations of the applicable Aeronautics Authority or regulatory
agency or body of any other jurisdiction in which the Aircraft may
then be registered in accordance with Section 4.02(b) hereof and the
Company's maintenance program approved by the applicable Aeronautics
Authority and (y) so as to keep the Aircraft in such condition as may
be necessary to enable its airworthiness certification to be
maintained in good standing at all times under the Act or any
applicable rule or regulation of the applicable regulatory agency or
body of any other jurisdiction in which the Aircraft may then be
registered, and, provided, however, the Company shall not be in
default of its obligation in this Section 4.02(a)(ii) to maintain the
Aircraft's airworthiness certification in good standing if the
Aircraft loses its airworthiness certification, such loss is curable
and the Company undertakes such cure promptly, diligently, and
continuously, using its reasonable best efforts;
(iii) maintain, or cause to be maintained, all records, logs and
other materials in respect of the Aircraft required by the
Aeronautics Authority, or the applicable regulatory agency or body of
any other jurisdiction in which the Aircraft may then be registered,
to be maintained;
(iv) not maintain, service, repair, overhaul, use or operate the
Aircraft or any Engine in violation of any airworthiness
certificate or registration relating thereto, or in violation of
any law or any license, rule, regulation or order of or by any
government or governmental authority having jurisdiction over the
Company or the Aircraft or any Engine or any service bulletin
relating to the Aircraft or any Engine or for any purpose for
which the Aircraft or any Engine is not designed; provided,
however, that the Company or any lessee may in good faith contest
the validity or application of any such law, license, rule,
regulation or order in any manner that does not adversely affect
the Indenture Trustee or any Holder; and if any such law, license,
rule, regulation or order requires alteration of the Aircraft or
any Engine, the Company will conform therewith at its own cost and
expense and will maintain the Aircraft or any Engine in compliance
with such law, license, rule, regulation or order;
(v) not operate or locate the Airframe or any Engine, or
suffer the Airframe or any Engine to be operated or located (x) in
any area excluded from coverage by any insurance policy in effect
with respect to the Airframe or any Engine required by the terms of
Section 4.06 hereof or (y) in any area that is a war zone or
recognized or, in the Company's reasonable judgment, threatened area
of hostilities, unless the Company has obtained, prior to the
operation or location of the Airframe or any Engine in such area,
indemnification from the Government, or other insurance, against the
risks and in the amounts required by, and in compliance with, Section
4.06 hereof covering such area (except in the case of a requisition
for use by the Government, to the extent that the Company certifies
that such insurance is unobtainable after diligent effort or is
obtainable only at unreasonably high rates or on unduly burdensome
terms and conditions) (and naming the Indenture Trustee as loss
payee in respect of indemnification or insurance payable in
respect of casualties to the Aircraft) or unless the Aircraft is
only temporarily located in such area as a result of an isolated
occurrence attributable to a hijacking, medical emergency,
equipment malfunction, weather conditions, navigational error or
other similar unforeseen circumstances and the Company is using
its good faith efforts promptly to remove the Aircraft from such
area.
(b) Reregistration. The Company may at its sole expense
reregister the Aircraft under the laws of a country listed in Schedule II
hereto with which the United States then maintains normal and full (other than
in the case of Taiwan) diplomatic relations, subject to the following
conditions. The Indenture Trustee shall have received:
(i) assurances satisfactory to it:
(A) to the effect that the insurance provisions of this
Indenture have been and will be complied with upon such change
of registry;
(B) as to the continuation of the Lien of this
Indenture as a first priority, duly perfected lien on the
Aircraft; and
(C) that such new country of registry (x) would provide
substantially equivalent protection for the rights of lenders
in similar transactions as provided under United States law
(except that, in the absence of restrictions under the laws of
such country on rights and remedies of lessors and secured
parties similar to those imposed by Sections 362 and 363 of the
Bankruptcy Code, rights and remedies similar to those available
under Section 1110 of the Bankruptcy Code shall not be
required), and (y) imposes aircraft maintenance standards not
materially less stringent than those of the Aeronautics
Authority; and
(ii) a favorable opinion of counsel (reasonably satisfactory
in form and substance to the Indenture Trustee) in the new
jurisdiction of registry to the effect:
(A) that the terms (including, without limitation, the
governing law, service-of-process and jurisdictional-submission
provisions thereof) of the Indenture are legal, valid, binding
and enforceable in such jurisdiction;
(B) that it is not necessary for the Indenture Trustee
to register or qualify to do business in such jurisdiction
in connection with the registration in the new jurisdiction
and the exercise of any rights or remedies with respect to
the Aircraft;
(C) that the courts of such jurisdiction would provide
substantially equivalent protection to the Indenture Trustee as
provided under United States law (with the exception described
in paragraph (b)(i)(C) of this Section 4.02);
(D) that there is no tort liability of the mortgagee of
an aircraft not in possession thereof under the laws of such
jurisdiction, other than tort liability which might have been
imposed on such mortgagee under the laws of the United States
or any state thereof (it being understood that, in the event
such latter opinion cannot be given in a form satisfactory to
the Indenture Trustee, such opinion shall be waived, if
insurance reasonably satisfactory to the Indenture Trustee is
provided, at the Company's expense to cover such risk); and
(E) (unless the Company shall have agreed to provide
insurance reasonably satisfactory to the Indenture Trustee
covering the risk of requisition of use of the Aircraft by
the government of registry of the Aircraft) that the laws of
such jurisdiction require fair compensation by the
government of such jurisdiction payable in currency freely
convertible into United States Dollars for the loss of use
of the Aircraft in the event of such requisition.
(c) Possession and Leases. The Company will not, without the
prior written consent of the Indenture Trustee, lease or otherwise in any
manner deliver, transfer or relinquish possession of the Aircraft, the
Airframe or any Engine or install any Engine, or permit any Engine to be
installed, on any airframe other than the Airframe; provided, that, so long as
(i) no Event of Default shall have occurred and be continuing, and (ii) the
Company shall comply with the provisions of Section 4.06 hereof, the Company
may without the prior written consent of the Indenture Trustee:
(i) so long as the lessee is generally meeting its material
obligations as they come due and is not subject to a proceeding or
final order under applicable bankruptcy, insolvency or reorganization
laws on the date the lease is entered into, (A) lease the Aircraft
or any Engine to a U.S. Air Carrier, (B) lease the Aircraft to an Air
Carrier which is principally based in and domiciled in one of the
countries listed on Schedule II hereto, (C) lease the Aircraft to any
Air Carrier principally based in and domiciled in a country which, at
the inception of such lease, is a signatory to the Convention on the
International Recognition of Rights in Aircraft, or (D) lease the
Aircraft to any other Air Carrier not described in this Section which
shall be reasonably acceptable to the Indenture Trustee; provided,
that, with respect to clauses (B) and (C) above, at the time of any
such lease the United States maintains normal and full (other than in
the case of Taiwan) diplomatic relations with the country in which
such Air Carrier is principally based and domiciled. In the case of
any lease (x) such lessee shall operate and maintain the Aircraft in
compliance with this Indenture, (y) such lease shall provide that
such lessee will not transfer possession of, or any other rights to,
the leased Airframe or Aircraft to any other person without the prior
written consent of the Indenture Trustee (except as permitted by
subparagraphs (ii) and (iii) below). Prior to any lease to an Air
Carrier permitted under clauses (B) and (C) of this Section
4.02(c)(i): (I) the maintenance standards of the aeronautical
authority of the country of domicile or principal operation of the
lessee taken as a whole shall be not materially less stringent than
those of the FAA and the lease will provide that the maintenance
performed during such lease will meet in all material respects such
maintenance standards; (II) the Company will provide opinions of
counsel reasonably satisfactory to the Indenture Trustee with respect
to the validity and enforceability of the Indenture in such country;
that the laws of such country require fair compensation by the
government of such country payable in a currency freely convertible
into US Dollars for the loss of the use of the Aircraft in the event
of a requisition of use by such government; (III) import and export
certificates, if required, shall be procured at the Company's own
cost and expense by the Company; (IV) duties and tariffs, if
applicable, shall be paid for by the Company; and (V) the Company
shall effect or cause to be effected at the Company's own cost and
expense all recordings and filings that are required to perfect the
Lien of this Indenture;
(ii) subject the Airframe or permit the Airframe to be
subjected to normal interchange agreements or subject the Engines or
permit any Engine to be subjected to normal interchange or pooling
agreements or arrangements, in each case customary in the airline
industry, entered into by the Company in the ordinary course of its
business with any Air Carrier; provided that no transfer of the
registration of the Airframe or any Engine shall be effected and that
throughout the period that the Airframe or any Engine is subjected to
such interchange or pooling agreement or arrangement the terms of
this Indenture shall be observed; and provided, further, that no such
agreement or arrangement contemplates or requires the transfer of
title to the Airframe or any Engine, and if the Company's title to
any Engine shall be divested under any such agreement or arrangement,
such divestiture shall be deemed to be an Event of Loss with respect
to such Engine and the Company shall comply with Section 4.05(d)
hereof in respect of such Engine;
(iii) deliver or permit the delivery of possession of the
Airframe or any Engine to their respective manufacturers or certified
maintenance providers for testing, services, repair, maintenance or
overhaul work or for alterations or modifications in or additions to
the Airframe or Engine to the extent required or permitted by the
terms of Section 4.04 hereof;
(iv) transfer or permit the transfer of possession of the
Airframe or any Engine pursuant to a contract or agreement with the
Government or pursuant to the Civil Reserve Air Fleet Program ("CRAF
Program") administered pursuant to Executive Order No. 12056, as
amended, or any similar or substitute programs, so long as the
Company or any lessee shall promptly notify the Indenture Trustee
upon such transfer of possession and provide the Indenture Trustee
with the name and address of the Contracting Officer or
representative of the Military Aircraft Command of the United States
Air Force to whom notices must be given in respect of the Aircraft;
(v) install or permit the installation of an Engine on an
airframe which is owned by the Company or any lessee free and clear
of all Liens, except (A) Liens of the type permitted under Section
4.01 hereof; (B) Liens which apply only to the engines (other than
an Engine), appliances, parts, instruments, appurtenances,
accessories, furnishings and other equipment (other than Parts)
installed on such airframe and which do not apply to substantially
all of such airframe; and (C) the rights of an Air Carrier under
normal interchange or pooling agreements which are customary in the
airline industry and do not contemplate or require the transfer of
title to such airframe or the engines installed on it;
(vi) install or permit the installation of an Engine on an
airframe leased to the Company or any lessee or purchased by the
Company subject to a conditional sale or other security agreement,
provided that (A) such lease, conditional sale or other security
agreement does not cover the Engine so installed and the Indenture
Trustee shall have received from the lessor, conditional vendor or
secured party of such airframe, an agreement (which may be the lease
or conditional sale or other security agreement covering such
airframe), whereby such lessor, conditional vendor or secured party
expressly agrees that neither it nor its successors or assigns will
acquire or claim any right, title or interest in any Engine by reason
of such Engine being installed on such airframe at any time, and (B)
such airframe is and remains free and clear of all Liens except the
rights of the parties to the lease or conditional sale or other
security agreement covering such airframe and Liens of the type
permitted by subparagraph (v) of this Section 4.02(c);
(vii) install or permit the installation of an Engine on an
airframe owned by the Company, leased to the Company or purchased by
the Company subject to a conditional sale or other security agreement
under circumstances where neither subparagraph (v) nor subparagraph
(vi) of this Section 4.02(c) is applicable, provided that such
installation shall be deemed an Event of Loss with respect to such
Engine and the Company shall comply with Section 4.05(d) hereof in
respect of such Engine, the Indenture Trustee not intending to waive
any right or interest it may have to or in such Engine under
applicable law until compliance by the Company with such Section
4.05(d); and
(viii) enter into a wet lease under which the Company has
effective control of the Aircraft in the ordinary course of the
Company's business which shall not be considered a transfer of
possession hereunder, provided that the Company's obligations under
this Indenture shall continue in full force and effect
notwithstanding any such wet lease.
(d) Rights of Transferee. Notwithstanding the provisions of
Section 4.02(c) hereof, the rights of any transferee who takes possession of
the Aircraft, the Airframe or any Engine by reason of a transfer permitted by
Section 4.02(c) hereof shall be subject and subordinate to, and any lease or
wet lease permitted by Section 4.02(c) hereof shall be made expressly subject
and subordinate to, all the terms of this Indenture, including, without
limitation, the Indenture Trustee's right to repossession pursuant to
Article 6 hereof, and to avoid such lease upon such repossession, and the
Company shall remain primarily liable for the performance of all the terms
of this Indenture to the same extent as if such lease or transfer had not
occurred. Any such lease shall include appropriate provisions for the
maintenance and insurance of the Aircraft, the Airframe or any Engine in
accordance with the provisions of this Indenture and shall provide
assurances reasonably satisfactory to the Indenture Trustee that the lessee
may not further lease any of such equipment. The Company shall notify the
Indenture Trustee within 60 days after any lease and will promptly upon
request from the Indenture Trustee furnish to the Indenture Trustee a copy
of any lease which has a term in excess of six (6) months and deliver to
the Indenture Trustee all other documents required hereunder relating to
such lease or transfer of possession.
(e) Insignia. The Company agrees to affix to and maintain in
the cockpit of the Airframe, in a clearly visible location, and on each
Engine, a clearly visible metal nameplate bearing the inscription "Mortgaged
To: ____________, as Indenture Trustee".
SECTION 4.03. Replacement and Pooling of Parts. (a)
Replacement of Parts. The Company, at its own cost and expense, will replace
or cause to be replaced as promptly as practicable all Parts which may from
time to time be incorporated or installed in or attached to the Airframe or
any Engine and which may from time to time become worn out, lost, stolen,
destroyed, seized, confiscated, damaged beyond repair or permanently rendered
unfit for use for any reason, except as otherwise provided in Section 4.04
hereof. In addition, the Company may, at its own cost and expense, remove or
cause to be removed in the ordinary course of maintenance, service, repair,
overhaul or testing, any Parts, whether or not worn out, lost, stolen,
destroyed, seized, confiscated, damaged beyond repair or permanently rendered
unfit for use, provided that the Company, except as otherwise provided in
Section 4.04 hereof, will, at its own cost and expense, replace such Parts as
promptly as practicable. All replacement Parts shall be free and clear of
Liens (except for pooling arrangements to the extent permitted by Section
4.03(b) hereof and Liens of the type permitted under Sections 4.01(d) and (e)
hereof) and shall be in as good operating condition as, and shall have a value
and utility at least equal to, the Parts replaced, assuming such replaced
Parts were in the condition and repair required to be maintained by the
provisions of this Indenture. Immediately upon any replacement Part
becoming incorporated or installed in or attached to the Airframe or any
Engine, and without further act (subject only to a pooling arrangement to
the extent permitted by Section 4.03(b) hereof) such replacement Part shall
become subject to the Lien of this Indenture and shall be deemed part of
the Airframe or any Engine, for all purposes to the same extent as the
Parts originally incorporated or installed in or attached to the Airframe
or such Engine.
(b) Pooling of Parts. Any Part removed from the Airframe or
any Engine as permitted in Section 4.03(a) hereof may be subjected by the
Company to any normal pooling arrangement customary in the airline industry
and entered into with other Air Carriers in the ordinary course of the
Company's business, provided that the Part replacing such removed Part shall
be incorporated or installed in or attached to the Airframe or such Engine, as
promptly as practicable after the removal of such removed Part. In addition,
any replacement Part when incorporated or installed in or attached to the
Airframe or any Engine in accordance with Section 4.03(a) hereof may be owned
by another Air Carrier subject to such normal pooling arrangement, provided
that the Company, at its own cost and expense and as promptly as possible,
either:
(A) causes title to such replacement Part to vest in the
Company free and clear of all Liens (other than Liens permitted under
Sections 4.01(a), (b), (c) and (e) hereof) and become subject to the
Lien of this Indenture; or
(B) replaces such replacement Part by incorporating or
installing in or attaching to the Airframe or such Engine a further
replacement Part owned by the Company free and clear of all Liens
(other than Liens permitted under Section 4.01(a), (b), (c) and (e)
hereof) and causes such replacement Part to become subject to the
Lien of this Indenture.
All replacement Parts shall meet the standards set forth in
Section 4.03(a) hereof.
SECTION 4.04. Alterations, Modifications and Additions. The
Company, at its own cost and expense, shall make or cause to be made such
alterations and modifications in and additions to the Aircraft as may be
required from time to time to meet the applicable requirements of the
Aeronautics Authority or any other governmental authority with jurisdiction
over the Aircraft and/or the Company's operations and aircraft; provided,
however, that the Company may in good faith contest the validity or
application of any such requirements in any reasonable manner that does not
adversely affect the first and prior perfected Lien and security interest of
the Indenture or the interests of the Indenture Trustee or the Holders in the
Indenture Estate. In addition, the Company, at its own cost and expense, may
from time to time make such alterations and modifications in and additions to
the Airframe or any Engine as the Company may deem desirable in the proper
conduct of its business, including, without limitation, removal of Obsolete
Parts, provided that no such alteration, modification, addition or removal
shall materially diminish the value or utility of the Airframe or any Engine
or impair its condition or airworthiness below its value, utility, condition
and airworthiness immediately prior to such alteration, modification, addition
or removal, assuming that the Airframe or such Engine was then in the
condition and airworthiness required to be maintained by the terms of this
Indenture, except that the value (but not the utility, condition or
airworthiness) of the Airframe or any Engine may be reduced by the value of
any such obsolete Parts which shall have been removed.
Each Part incorporated or installed in or attached or added to
the Airframe or any Engine as the result of any alteration, modification,
removal or addition made pursuant to this Section 4.04 shall without further
act become subject to the Lien of this Agreement. Notwithstanding the
foregoing, the Company may remove any such Part if: (i) such Part is in
addition to, and not in replacement of or substitution for, any Part
originally incorporated or installed in or attached or added to the Airframe
or such Engine on the Delivery Date or any Part in replacement of, or
substitution for, any such Part; (ii) such Part is not required to be
incorporated or installed in or attached or added to the Airframe or such
Engine pursuant to the terms of Section 4.02 hereof or the first sentence of
this Section 4.04; and (iii) such Part can be removed from the Airframe or
such Engine without (A) causing material damage to the Aircraft or diminishing
or impairing the utility, condition or airworthiness required to be maintained
by the terms of this Indenture or (B) diminishing the value or utility which
the Airframe or such Engine would have had at such time had such alteration,
modification, removal or addition not occurred assuming the Aircraft was then
in the condition required to be maintained by the terms of this Indenture.
Upon the removal by the Company of any such Part as provided in the preceding
sentence such Part shall no longer be subject to the Lien of this Indenture or
deemed a Part.
SECTION 4.05. Loss, Destruction, Registration. (a) Company's
Election Rights. The Company shall notify the Indenture Trustee as soon as
practicable but in no event more than 10 Business Days following the
occurrence of an event which constitutes or might constitute an Event of Loss
with respect to the Airframe or with respect to the Airframe and the Engines
or engines then installed on the Airframe. By written notice to the Indenture
Trustee given within 60 days of the occurrence of any Event of Loss, the
Company shall elect the alternative set forth in Section 4.05(b) hereof or the
alternative set forth in Section 4.05(c) hereof. The Company's failure to make
such election within said 60-day period shall be deemed to be an election of
the alternative set forth in Section 4.05(b) hereof.
(b) Prepayment of Equipment Purchase Certificates. The
Company shall, if it has so elected or is deemed to have so elected under
4.05(a) hereof, pay to the Indenture Trustee, by wire transfer of immediately
available funds on a date designated by the Company upon 30 days' irrevocable
notice but in no event later than 180 days following the occurrence of the
Event of Loss (the earlier of such dates in clause (A) or the date provided in
clause (B) being referred to herein as the "Loss Payment Date"), the
outstanding principal amount of the Equipment Purchase Certificates and all
accrued and unpaid interest thereon together with all other amounts due and
owing under this Indenture or the Loan Agreement, including without
limitation, but without any Make-Whole Premium, in respect of such prepayment.
Upon receipt by the Indenture Trustee of such amounts, the Indenture Trustee
shall apply such amounts as provided in Section 5.01 hereof and thereupon the
Lien of this Indenture shall terminate.
(c) Replacement of Airframe and Engines. So long as no Event
of Default shall have occurred and be continuing, and subject to Section
4.05(a) hereof, if the Company has elected to replace the Airframe and Engines
pursuant to this Section 4.05(c), the Company shall, within one hundred eighty
(180) days after the occurrence of such Event of Loss, as replacement for the
Airframe and Engines with respect to which an Event of loss has occurred,
substitute for the Aircraft subject to the Event of Loss, by causing to be
subjected to the Lien of this Indenture, a [Manufacturer-Model] airframe and a
number of engines equal to the number of Engines with respect to which the
Event of Loss has occurred of the same or an improved make and model (or
Replacement Engines), owned by the Company free and clear of all Liens not
excepted in Sections 4.01(a), (b), (c) and (e) hereof, duly certified as an
airworthy aircraft by the Aeronautics Authority and having a value and utility
at least equal to, and being in as good operating condition as, the Airframe
and Engines with respect to which such Event of Loss occurred, assuming that
the Airframe and Engines were then in the condition and airworthiness required
to be maintained by the terms of this Indenture immediately prior to the
occurrence of such Event of Loss. In such case, and as a condition to such
substitution, the Company, at its own cost and expense, will also promptly:
(i) furnish the Indenture Trustee with a certificate of a
nationally recognized aircraft appraiser reasonably satisfactory to
the Indenture Trustee certifying that such replacement airframe and
engines have a value and utility at least equal to, and are in as
good operating condition as, the Airframe and Engines replaced,
assuming such Airframe and Engines were in the condition and repair
required by the terms of this Indenture immediately prior to the
occurrence of such Event of Loss;
(ii) furnish the Indenture Trustee with such evidence as the
Indenture Trustee may reasonably request of compliance with the
insurance provisions of Section 4.06 hereof with respect to such
replacement airframe and engines;
(iii) cause an Indenture Supplement with respect to such
replacement airframe and engines to be duly executed by the Company
and the Indenture Trustee and recorded pursuant to the Act, or the
applicable laws, rules and regulations of any other jurisdiction in
which the Aircraft may then be registered as permitted by Section
4.02(b) hereof, in order that the Lien of this Indenture shall
constitute a first and prior perfected Lien and security interest on
and in respect of such replacement airframe and engines;
(iv) take such other action as the Indenture Trustee may
reasonable request in order that such replacement airframe and
engines shall be due and properly subjected to the Lien of this
Indenture to the same extent as the replaced Airframe and Engines.
Each replacement airframe shall be deemed an "Airframe," each
such replacement engine shall be deemed an "Engine" and each such replacement
airframe and engine shall be deemed part of the same Aircraft as was the
Airframe or Engine replaced.
(d) Event of Loss with Respect to an Engine. Upon the
occurrence of an Event of Loss with respect to an Engine under circumstances
in which there has not occurred an Event of Loss with respect to the Airframe,
the Company shall give the Indenture Trustee prompt written notice thereof and
shall, as soon as practicable but in any event within one hundred twenty (120)
days after the occurrence of such Event of Loss, substitute (by subjection to
the Lien of this Indenture) for the Engine with respect to which such Event of
Loss occurred, a Replacement Engine, free and clear of all Liens not excepted
in Sections 4.01(a), (b), (c) and (e) hereof and having a value and utility at
least equal to, and being in as good operating condition as, the Engine with
respect to which such Event of Loss occurred, assuming such Engine was of the
value and utility and in the condition and repair required by the terms of
this Indenture immediately prior to the occurrence of such Event of Loss. The
standards set forth in this Section with respect to Replacement Engines shall
apply upon any replacement or substitution of an Engine with a Replacement
Engine pursuant to any other provision of this Indenture.
Prior to or at the time of any substitution of an Engine
pursuant to this Section 4.05(d), the Company, at its own cost and expense
will:
(i) furnish the Indenture Trustee with such evidence of
compliance with the insurance provisions of Section 4.06 hereof with
respect to such Replacement Engine as the Indenture Trustee may
reasonably request;
(ii) furnish the Indenture Trustee with a certificate of an
aircraft advisor (who must be a nationally recognized aircraft
authority) certifying that such Replacement Engine has a value and
utility at least equal to, and is in as good operating condition as,
the Engine replaced, assuming such Engine was in the condition and
repair required by the terms of this Indenture immediately prior to
the occurrence of such Event of Loss;
(iii) cause an Indenture Supplement with respect to such
Replacement Engine to be duly executed by the Company and the
Indenture Trustee and recorded pursuant to the Act, or the applicable
laws, rule and regulations of any other jurisdiction in which the
Aircraft may be registered as permitted by Section 4.02(b) hereof in
order that the Lien of this Indenture shall constitute a first and
prior and perfected Lien and security interest on and in respect of
such Replacement Engine;
(iv) take such other action, as the Indenture Trustee may
reasonably request in order that such Replacement Engine be duly and
properly subjected to the Lien of this Indenture to the same extent
as the replaced Engine.
(e) Requisition of an Airframe and the Installed Engines for
Use by Government. In the event of the requisition for use by the Government
or any other government of registry of the Aircraft, or any agency or
instrumentality thereof of the Airframe and the Engines or engines then
installed on the Airframe, which requisition does not constitute an Event of
Loss, the Company shall promptly notify the Indenture Trustee of such
requisition and all of the Company's obligations under this Indenture with
respect to such Airframe and Engines or engines shall continue to the same
extent as if such requisition had not occurred. All payments received by the
Company, any lessee or the Indenture Trustee from the Government or other
government of registry of the Aircraft or any agency or instrumentality
thereof for such use of the Airframe and Engines or engines shall be paid to
or returned by the Indenture Trustee for application in accordance with this
Indenture.
(f) Requisition for Use by Government of an Engine not
Installed on the Airframe. In the event of the requisition for use by the
Government or any other government of registry of the Aircraft or any agency or
instrumentality thereof of any Engine not then installed on the Airframe, the
Company shall replace such Engine by complying with the terms of Section
4.05(d) hereof to the same extent as if an Event of Loss had occurred with
respect to such Engine, and any payments received by the Company, any lessee
or the Indenture Trustee from the Government or other government of registry
or any instrumentality thereof with respect to such requisition shall, be paid
over to or retained by the Company, provided that the Company shall have fully
performed its obligations under Section 4.05(d) hereof.
(g) Other Payments. Any payments (other than insurance
proceeds, the application of which is provided in Section 4.06 hereof)
received at any time by the Company or the Indenture Trustee from any
governmental authority or any other Person in connection with an Event of Loss
with respect to the Airframe or the Airframe and the Engines or engines then
installed on the Airframe will be applied towards the Company's obligations
under Section 4.05(b) hereof or if the Company has made the election under
Section 4.05(c) hereof or if the Event of Loss relates to an Engine not then
installed on the Airframe, such payments shall be paid over to the Company,
provided that the Company shall have fully performed its obligations pursuant
to Section 4.05(c) or (d) hereof, as the case may be.
SECTION 4.06. Insurance. (a) Public Liability and Property
Damage Liability Insurance. (i) The Company, at its own cost and expense,
will maintain or cause to be maintained with respect to the Aircraft,
comprehensive aircraft liability insurance including, without limitation,
passenger legal liability and property damage liability insurance and cargo
legal liability in such amounts, against such risks (including, without
limitation, contractual liability and war risk and allied perils liability),
with such retentions as the Company customarily maintains with respect to
similar aircraft and engines which comprise the fleet of the Company (subject
to the limitations set forth in Section 4.06(f) hereof), and with such
insurers (which shall be insurers of recognized responsibility), and such
insurance against such other risks as is usually carried by similar
corporations engaged in the same or similar business and similarly situated as
the Company and owning or operating aircraft and engines similar to the
Aircraft and Engines.
(ii) Notwithstanding Section 4.06(a)(i) hereof, in the event
of the requisition for use by the Government of the Airframe or the Airframe
and the Engines or engines then installed on the Airframe, the Company shall
maintain throughout the period of such requisition such insurance as would
otherwise be required under this Section 4.06 (except to the extent that the
Company certifies that such insurance is unobtainable after diligent effort or
is obtainable only at unreasonably high rates or on unduly burdensome terms and
conditions); provided that the Indenture Trustee shall accept, in lieu of such
insurance coverage, indemnification or insurance from the Government which is
substantially the same as otherwise required under this Section 4.06.
(iii) Any policy of insurance carried and maintained in
accordance with this Section 4.06(a), and any policy taken out in substitution
or replacement for any such policy subject to the terms, conditions and
limitations thereof, shall:
(A) name or be amended to name the Indenture Trustee as an
additional insured;
(B) provide that, in respect of the interest of the Additional
Insured in such policies, the insurance shall not be invalidated by
any action or inaction of the Company or the Additional Insured as
defined under the policy of insurance required under this Section
4.06 and shall insure such Additional Insured regardless of any
breach or violation of any warranty, declaration or condition
contained in such policies by the Company or as defined under the
policy of insurance required under this Section 4.06;
(C) provide that if such insurance is cancelled for any
reason, or any substantial change is made in the policies which
adversely affect the coverage required herein, or if such insurance
is allowed to lapse for nonpayment of premium, such cancellation,
change or lapse shall not be effective as to the Additional Insured
for thirty (30) days (except in the case of war risk coverage in
which event the applicable period shall be seven (7) days or such
other period as may be customary) after receipt by such Additional
Insured of written notice from such insurers of such cancellation,
change or lapse;
(D) provide that the Additional Insured shall have any
obligation or liability for premiums or other payments, if any, in
connection with such insurance;
(E) provide that the insurers shall waive any rights of
subrogation against the Additional Insured, to the extent that the
Company has waived its rights under this Indenture; provided that the
exercise by insurers of rights of subrogation derived from rights
retained by the Company shall not, in any way, delay payment of any
claim that would otherwise be payable by such insurers but for
existence of rights of subrogation derived from rights retained by the
Company;
(F) provide that such insurer shall waive the right of such
insurer to any set-off or counterclaim or any other deduction,
whether by attachment or otherwise, in respect of any liability of the
Additional Insured;
(G) provide that all of the provisions of such policy shall
operate in the same manner as if there were a separate policy
covering the Additional Insured; provided that such policies shall
not operate to increase any insurer's limit of liability; and
(H) be primary, without right of contribution from any other
insurance which is carried by the Additional Insured with respect to
its interest in the Aircraft.
(b) Insurance Against Loss or Damage to Aircraft and Engines.
The Company, at its own cost and expense, shall maintain or cause to be
maintained in effect, with insurers of recognized responsibility, all-risk
ground and flight aircraft hull insurance covering the Aircraft and all-risk
coverage with respect to any Engines and Parts while temporarily removed from
the Aircraft and not replaced by similar Engines or Parts, including in each
case war-risk and allied perils, hijacking (air piracy) and governmental
confiscation and expropriation insurance (except in the country of registry)
with such retentions (subject to the limitations set forth in Section 4.06(f)
hereof) and in such form and amounts as the Company customarily maintains with
respect to the aircraft in the Company's fleet of the same type and model and
operated on the same routes as the Aircraft (except that the Company shall be
required to maintain war-risk, hijacking (air piracy) and governmental
confiscation and expropriation insurance (except in the country of registry)
if the Aircraft is operated on routes where the custom is for major
international Air Carriers flying comparable routes to carry such insurance),
provided that such insurance shall at all times while the Aircraft is subject
to the Lien of this Indenture be for an amount not less than an amount equal
to ___% of the aggregate outstanding principal amount of the Equipment Purchase
Certificates at the date of determination (the "Threshold Value").
(ii) Any policies carried and maintained in accordance with
this Section 4.06(b) and any policies taken out in substitution or replacement
for any such policies subject to the terms, conditions and limitations thereof
shall:
(A) name or be amended to name the Indenture Trustee as
an additional insured and as loss payee (the "Loss Payee");
(B) provide with respect to coverage provided under this
Section 4.06(b), that (i) in the event of a loss involving proceeds
in excess of $5,000,000, the proceeds in respect of such loss up to
an amount equal to the Threshold Value shall be payable to the
Indenture Trustee, it being understood and agreed that in the case of
any payment to the Indenture Trustee otherwise than in respect of an
Event of Loss, the Indenture Trustee shall, unless a Payment Default
or an Event of Default shall have occurred and be continuing, upon
receipt of evidence satisfactory to it that the damage giving rise to
such payment shall have been repaired or that such payment shall then
be required to pay for repairs then being made, pay the amount of such
payment to the Company or its order, and (ii) the entire amount of
any loss involving proceeds in the aggregate of $5,000,000 or less or
the amount of any proceeds of any loss in excess of the Threshold
Value for the Aircraft shall be paid to the Company or its order
unless a Payment Default or Event of Default shall have occurred and
be continuing and the insurers have been notified thereof by the
Indenture Trustee;
(C) provide that if such insurance is cancelled for any reason
or any substantial change is made in the policies which adversely
affects the coverage required herein, or if such insurance is allowed
to lapse for nonpayment of premium, such cancellation, change or
lapse shall not be effective as to the Additional Insured or the Loss
Payee for thirty days (except in the case of war-risk coverage in
which event the applicable period shall be seven (7) days or such
other period as may be customary) after receipt by the Indenture
Trustee, whether as Additional Insured or the Loss Payee, of
written notice from such insurer of such cancellation, change or
lapse;
(D) provide that, in respect of the interest of the
Indenture Trustee as Additional Insured or Loss Payee in such
policies the insurance shall not be invalidated by any action or
inaction of the Company and shall insure the Indenture Trustee as
Additional Insured and Loss Payee regardless of any breach or
violation of any warranty, declaration or condition in such
policies by the Company as defined under the policy of insurance
required under this Section 4.06(b);
(E) provide that the insurers shall waive any rights of
subrogation against the Indenture Trustee as Loss Payee and
Additional Insured, to the extent that the Company has waived its
rights under this Indenture; provided that the exercise by
insurers of rights of subrogation derived from rights retained by
the Company shall not, in any way, delay payment of any claim that
would otherwise be payable by such insurers but for the existence
of right of subrogation derived from rights retained by the
Company;
(F) provide that such insurer shall waive any right of such
insurer to any set-off or counterclaim or any other deduction,
whether by attachment or otherwise, in respect of any liability of
the Indenture Trustee as Additional Insured or Loss Payee;
(G) be primary and without rights of contribution from any
other insurance which is carried by the Indenture Trustee
with respect to its interest in the Aircraft; and
(H) provide that the Indenture Trustee, whether as Additional
Insured or Loss Payee, shall have no obligation or liability for
premiums or other payments, if any, in connection with such
insurance.
(c) Application of Insurance Proceeds. (i) All insurance
proceeds (other than proceeds from policies carried by the Indenture Trustee,
the Agent or any Holder) received under policies described in Section 4.05(b)
hereof as the result of the occurrence of an Event of Loss with respect to the
Airframe or an Engine will be applied as follows:
(A) if such proceeds are received with respect to the Airframe
or with respect to the Airframe and the Engines or engines then
installed on the Airframe and the Company has elected or is deemed to
have elected the alternative set forth in Section 4.05(b) hereof, so
much of such proceeds as shall not exceed the amounts required to be
paid by the Company pursuant to said Section 4.05(b) hereof shall be
applied in reduction of the Company's obligation to pay such amounts
if not already paid by the Company, or if already paid by the
Company, shall be applied to reimburse the Company for its payment of
such amounts, provided that no Payment Default or Event of Default
shall have occurred and be continuing and the balance, if any, of
such proceeds remaining will be paid to the order of the Company; if
and so long as the foregoing proviso is not satisfied, such proceeds
shall be held pursuant to Section 5.04 hereof as security for the
Company's obligations hereunder; or
(B) if such proceeds are received with respect to the Airframe
or the Airframe and the Engines or engines then installed on the
Airframe and the Company has elected the alternative set forth in
Section 4.05(c) hereof, or if such proceeds are received with respect
to an Engine not then installed on the Airframe and not replaced by
an Engine or engine under the circumstances contemplated by Section
4.05(d) hereof, all such proceeds shall be paid to the Indenture
Trustee for disbursement to the order of the Company, after the
Company shall have fully performed the terms of Sections 4.05(c) or
4.05(d) hereof, as applicable, with respect to the Event of Loss for
which such proceeds are paid, provided that no Default or Event of
Default shall have occurred and be continuing; if and so long as the
foregoing proviso is not satisfied, such proceeds shall be held
pursuant to Section 5.04 hereof as security for the Company's
obligations hereunder.
(ii) The insurance proceeds of any property damage loss not
constituting an Event of Loss with respect to the Airframe or an Engine will
be applied in payment (or to reimburse the Company) for repairs or for
replacement property in accordance with Sections 4.02 and 4.03 hereof, if not
already paid for by the Company, and any balance remaining after compliance
with said Sections 4.02 and 4.03 hereof with respect to such loss shall be
paid to the order of the Company, provided that no Payment Default or Event of
Default shall have occurred and be continuing; if and so long as the foregoing
proviso is not satisfied, such proceeds shall be held pursuant to Section 5.04
hereof as security for the Company's obligations hereunder.
(iii) If the Indenture Trustee becomes subject to any claim
covered by any insurance policy maintained pursuant to this Section 4.06,
the Company shall make available any information required by the Indenture
Trustee in connection with such claim.
(d) Reports. On or before the Delivery Date and thereafter
annually on or before the scheduled expiration date for such policy, while the
Equipment Purchase Certificates are outstanding, the Company's aviation
insurance broker will furnish to the Indenture Trustee a report, signed by the
Company's independent aviation insurance broker, stating the types of coverage
and limits carried and maintained on the Aircraft and certifying that such
insurance complies with the terms and conditions of this Indenture. The
Company will cause its aviation insurance broker to advise the Indenture
Trustee in writing promptly of any default in the payment of any premium and of
any other act or omission on the part of the Company of which it has knowledge
and which might cause cancellation of all or any part of any insurance carried
by the Company with respect to the Aircraft. The Company will cause such
insurance broker to agree to advise the Indenture Trustee in writing if and
when it becomes evident to such broker that any insurance policy carried and
maintained on the Aircraft pursuant to this Section 4.06 will not be
renewed at the expiration date. If the Company shall fail to maintain
insurance as required hereby, the Indenture Trustee may, at its option,
provide such insurance, and in such event, the Company shall, upon demand,
reimburse the Indenture Trustee for the cost of such insurance; provided,
however, that no exercise of said option shall affect the provisions of
this Indenture, including the provisions that failure by the Company to
maintain the prescribed insurance shall constitute an Event of Default, or
otherwise constitute a waiver of any other rights the Indenture Trustee may
have against the Company.
(e) Indenture Trustee's Insurance. The Indenture Trustee may
insure the Airframe or any Engine at its own cost and expense, including
insuring the Aircraft for amounts in excess of the Threshold Value, provided
that any insurance so maintained by the Indenture Trustee shall not result in
a reduction of coverage or amounts payable under insurance required or
permitted to be maintained by the Company under this Section 4.06 or increase
the cost to the Company of maintaining such insurance; provided further, that
any insurance policies of the Indenture Trustee insuring the Airframe or any
Engine shall provide for a release to the Company of any and all salvage
rights in and to the Airframe or any Engine.
(f) Self-Insurance. The Company may self-insure policies, the
risks required to be insured against by Section 4.06(a) and Section 4.06(b)
hereof in such reasonable amounts as are then applicable to other aircraft or
engines of the Company of value comparable to the Aircraft, but in no case
shall such self-insurance with respect to all aircraft in the Company's fleet
in aggregate exceed for any 12-month policy year an amount equal to the lesser
of (i) 50% of the highest insured value of any single aircraft in the
Company's fleet and (ii) 1.5% of the average aggregate insured value from time
to time of the Company's entire aircraft fleet, provided that a standard
deductible per occurrence per aircraft not in excess of the amount customarily
allowed as a deductible in the industry shall be permitted in addition to the
above-mentioned self-insurance.
SECTION 4.07. Inspection. At reasonable times, and (so long
as no Event of Default shall have occurred and be continuing) upon at least
five Business Days' prior written notice to the Company, the Indenture Trustee
or its authorized representative, may inspect the Aircraft, (so long as no
Event of Default shall have occurred and be continuing) upon at least 10
Business Days' prior written notice, all Aeronautics Authority-required books
and records of the Company and any lessee relating to the maintenance of the
Aircraft and such Persons shall keep any information obtained thereby
confidential and shall not disclose the same to any Person, except (a) to the
Indenture Trustee's counsel, independent insurance advisors or other agents,
the Holders and any prospective purchaser of the Aircraft in connection with
the Indenture Trustee's exercise of remedies following an Event of Default,
each of whom agree to hold such information confidential, (b) as may be
required by any statute, court or administrative order or decree or
governmental ruling, regulation or demand or (c) as may be necessary for
purposes of protecting the interests of any such Person or for enforcement of
this Indenture by the Indenture Trustee; provided, however, that any and all
disclosures permitted by (b) or (c) above shall be made only to the extent
necessary to meet the specific requirements or needs of the Persons to whom
such disclosures are hereby permitted; any such inspection of the Aircraft
shall be a visual, walk-around inspection of the interior and exterior of the
Aircraft and shall not include opening any panel, bays or the like without the
express consent of the Company. Notwithstanding the previous sentence, the
Indenture Trustee or its authorized representative shall (so long as no Event
of Default shall have occurred and be continuing) be entitled to inspect the
Aircraft only one time among themselves during any consecutive twelve month
period. Neither the Indenture Trustee nor any Holder shall have any
duty to make any inspection of the Aircraft and none of them shall incur any
liability or obligation by reason of not making any such inspection.
SECTION 4.08. Filings. So long as the Equipment Purchase
Certificates remain unpaid, the Company will take, or cause to be taken, at
the Company's cost and expense, such action with respect to the recording,
filing, re-recording and re-filing of this Indenture, each Indenture
Supplement and any financing statements or other instruments as are necessary,
or as requested by the Indenture Trustee and appropriate, to maintain, so long
as this Indenture is in effect, the perfection of the purchase money equipment
security interest and the Lien created by this Indenture, or will furnish to
the Indenture Trustee timely notice of the necessity of such action, together
with such instruments, in execution form, and such other information as may be
required to enable it to take such action at the Company's cost and expense in
a timely manner.
SECTION 4.09. Annual Opinion. So long as the Equipment
Purchase Certificates remain unpaid, the Company shall furnish to the
Indenture Trustee annually after the execution hereof (but not later than
March 15 of each year) commencing with the year 199_, an opinion, reasonably
satisfactory to the Indenture Trustee, of Special Aviation Counsel or other
counsel reasonably satisfactory to the Indenture Trustee, with a copy to the
Agent in the case of opinions delivered prior to the Refunding Date, stating:
(i) that in the opinion of such counsel, except as otherwise
noted in the opinion, such action has been taken with respect to the
recording, filing, re-recording and re-filing of this Indenture,
Indenture Supplement and any financing statement, continuation
statement or other instruments, and all other action has been taken,
as is necessary to maintain the perfection of the security interest
created by this Indenture and reciting the details of such recording
or other action or that in the opinion of such counsel no action is
necessary to maintain the perfection of such security interest;
(ii) specifying all other action which needs to be taken during
the succeeding 14 months in order to maintain the perfection of such
security interest; and
(iii) stating that the Company is the owner of the legal title to
the Aircraft, and the Aircraft is free and clear of all Liens, except
the security interest created by this Indenture and such as are
permitted by this Indenture.
SECTION 4.10. Corporate Existence. So long as the Equipment
Purchase Certificates remain unpaid, the Company shall at all times maintain
its corporate existence except as permitted by Section 4.11 hereof and all of
its rights, privileges and franchises necessary in the normal conduct of its
business, except for any corporate right, privilege or franchise (i) that it
determines, in its reasonable, good faith business judgment, is no longer
necessary or desirable in the conduct of its business and (ii) the loss of
which will not materially adversely affect or diminish the rights of the
Holders.
SECTION 4.11. Merger, Consolidation. So long as the Equipment
Purchase Certificates remain unpaid, the Company shall not enter into any
merger or consolidation, or convey, transfer or lease all or substantially all
of its assets as an entirety to any Person, unless the surviving corporation
or Person which acquires by conveyance, transfer or lease all or substantially
all of the assets of the Company as an entirety (i) is a domestic corporation
organized and existing under the laws of the United States or a political
subdivision thereof, (ii) is a Citizen of the United States, (iii) is a
certificated Air Carrier, (iv) expressly assumes by an instrument in writing
in form and substance satisfactory to the Indenture Trustee all of the
Company's obligations hereunder and under the other Operative Agreements, and
the Company delivers such instrument to the Indenture Trustee, (v) provides an
opinion from counsel to the Company which counsel shall be reasonably
satisfactory to the Indenture Trustee and which opinion shall be reasonably
satisfactory to the Indenture Trustee that such merger, consolidation,
conveyance, transfer or lease and the instrument noted in clause (iv) above
comply with this Section 4.11, that such instrument is a legal, valid and
binding obligation of, and is enforceable against, such survivor or Person,
and that all conditions precedent herein provided for relating to such
transaction have been complied with, and (vi) immediately after such merger,
consolidation or conveyance, transfer or lease, as the case may be, the
surviving company is in compliance with all of the terms and conditions of
this Indenture and each other Operative Agreement, provided that no such
merger, consolidation or conveyance, transfer or lease shall be permitted if
the same gives rise to an Event of Default.
Upon any consolidation or merger, or any conveyance, transfer
or lease of all or substantially all of the assets of the Company and the
satisfaction of the conditions specified in this Section 4.11, the successor
corporation formed by such consolidation or into which the Company is merged
or the Person to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture and the other Operative Agreements to which
the Company is a party with the same effect as if such successor corporation
had been named as the Company herein and therein.
SECTION 4.12. Financial Information. So long as any of the
Equipment Purchase Certificates remain unpaid, the Company agrees to furnish
to the Indenture Trustee:
(i) as soon as available, but in any event within one hundred
twenty (120) days after the end of each fiscal year of the Company, a
consolidated balance sheet of the Company as of the end of such
fiscal year, and the related consolidated statements of income,
retained earnings and cash flows of the Company for the fiscal year
then ended as prepared and certified by the Company's independent
certified public accountants, including their opinion;
(ii) within sixty (60) days after the end of the first, second
and third quarterly accounting periods in each fiscal year of the
Company, a consolidated balance sheet of the Company prepared by the
Company as of the close of the accounting period then ended, together
with the related consolidated statements of income, retained earnings
and cash flows of the Company for such accounting period certified by
the chief accounting officer or a financial vice president of the
Company;
(iii) promptly upon their general transmission, copies of all
regular and periodic reports furnished by the Company to its
stockholders;
(iv) promptly after filing with the SEC, copies of the
Company's annual reports on Form 10-K, quarterly reports on Form 10-Q
and, if requested, any registration statement or prospectus filed by
the Company with any securities exchange or with the SEC;
(v) promptly upon any officer of the Company obtaining
knowledge of any condition or event which constitutes an Event of
Default, an officer's certificate specifying the nature and period of
existence thereof and what action the Company has taken or is taking
or proposes to take with respect thereto; and
(vi) from time to time, such other financial information as
the Indenture Trustee, the Agent or any Holder may reasonably request.
Concurrently with the delivery of the financial statements referred to in
clause (i) above, the Company shall deliver to the Indenture Trustee a
certificate of the Company, signed by any one of the President, the Chief
Financial Officer, the General Counsel, the Treasurer or the principal
accounting officer of the Company, stating that the signer, or an officer
reporting to same, is familiar with the relevant terms of this Indenture and
the signer has reviewed, or has caused to be made under such person's
supervision a review, of the activities of the Company and that, to the best
of his or her knowledge, there does not exist an Event of Default.
SECTION 4.13. Representations and Warranties of the Company.
The Company represents and warrants that, on the date hereof:
(i) the Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Delaware
with its principal place of business and chief executive office in
Memphis, Tennessee, and is duly qualified to do business as a foreign
corporation in good standing in all jurisdictions in which it has
intrastate routes, or offices or major overhaul facilities or in
which other activities of the Company require such qualification;
(ii) the Company has full power, authority and legal right to
conduct its current business and operations as currently conducted
and to own or hold under lease its properties and to enter into and
perform its obligations under the Operative Agreements to which it is
a party (the "Company Documents");
(iii) the Company is an "air carrier" within the meaning of the
Federal Aviation Act of 1958, as amended to the date of
recodification (the "Act"), a holder of a certificate under Sections
41102(a) and 41103 of the Act and an "air carrier operating
certificate" issued under Chapter 447 of the Act for aircraft capable
of carrying ten (10) or more individuals or 6,000 pounds or more of
cargo;
(iv) the Company possesses all necessary certificates,
franchises, licenses, permits, rights and concessions and consents
which are material to the operation of the routes flown by it and the
conduct of its business and operations as currently conducted;
(v) the Company Documents have each been duly authorized,
executed and delivered by the Company and constitute, or when
executed and delivered by the Company will constitute, the legal,
valid and binding obligations of the Company enforceable against it in
accordance with the terms thereof except as such enforceability may
be limited by bankruptcy, insolvency, moratorium, reorganization or
other similar laws of general application to or affecting the
enforcement of creditors' rights, or equitable principles;
(vi) no authorization, consent or approval of, notice to or
filing with any governmental authority is required for the execution,
delivery or performance by the Company of the Company Documents or
for the use and maintenance of the Aircraft except for those that have
been duly made, given or accomplished; and
(vii) neither the execution, delivery or performance by the
Company of the Company Documents, nor compliance with the terms and
provisions hereof or thereof, conflicts or will conflict with or will
result in a breach or violation of any of the terms, conditions or
provisions of, or will require any consent or approval under, any
law, governmental rule or regulation or the charter documents, as
amended, or bylaws, as amended, of the Company or any order, writ,
injunction or decree of any court or governmental authority against
the Company or by which it or any of its properties is bound or any
indenture, mortgage or contract or other agreement or instrument to
which the Company is a party or by which it or any of its properties
is bound, or constitutes or will constitute a default thereunder or
will result in the imposition of any Lien (other than the Lien of
this Indenture) upon any of its properties.
SECTION 4.14. Survival of Representations and Warranties. The
representations and warranties of the Company shall survive the Delivery Date
hereunder and the expiration or termination of this Indenture.
ARTICLE 5
RECEIPT, DISTRIBUTION AND APPLICATION
OF INCOME FROM THE INDENTURE ESTATE
SECTION 5.01. Distribution of Principal and Interest. Except
as otherwise provided in Section 5.03 hereof, (a) each payment or prepayment
of principal of Equipment Purchase Certificates by the Company shall be
made for the account of the Holders pro rata in accordance with the
respective unpaid principal amounts of the Equipment Purchase Certificates
held by them and (b) each payment of interest or Make-Whole Premium on
Equipment Purchase Certificates by the Company shall be made for the
account of the Holders pro rata in accordance with the amounts of interest
or Make-Whole Premium, as the case may be, on the Equipment Purchase
Certificates then due and payable to the Holders.
SECTION 5.02. Intentionally Left Blank.
SECTION 5.03. Payments during Continuance of Event of Default.
All payments received and amounts held or realized by the Indenture Trustee
after an Event of Default shall have occurred and be continuing (including any
amounts realized by the Indenture Trustee from the exercise of any remedies
pursuant to Article 6), as well as all payments or amounts then held or
thereafter received by the Indenture Trustee as part of the Indenture Estate
while such Event of Default shall be continuing, shall be distributed by the
Indenture Trustee in the following order of priority:
first, so much of such payments or amounts as shall be required
to pay the Indenture Trustee all amounts then due it pursuant to
Sections 8.05 and 7.05(b) hereof shall be applied to pay the Indenture
Trustee such amounts;
second, so much of such payments or amounts remaining as shall
be required to pay the expenses incurred, or in the judgment of the
Indenture Trustee expected to be incurred, in using, operating,
storing, leasing, controlling or managing the Indenture Estate, and
in all maintenance, repairs, replacements, alterations, additions and
improvements and in making all payments which the Indenture Trustee
may be required or may elect to make, if any, for taxes, assessments,
insurance or other proper charges upon the Indenture Estate or any
part thereof (including the employment of engineers and accountants
to examine and make reports upon the properties, books and records of
the Company), or for the satisfaction of Liens, if any, prior to the
Lien of this Indenture;
third, so much of such aggregate amount remaining as shall be
required to reimburse the Holders for payment made by them to the
Indenture Trustee pursuant to Section 7.05 hereof (to the extent not
previously reimbursed), to be distributed to the Holders ratably,
without priority of one over any other, in the proportion of the
amounts of such unreimbursed payment made pursuant to Section 7.05
hereof;
fourth, so much of such payments or amounts remaining as shall
be required to pay any Make-Whole Premium, if any, and any other
amounts owing to the Holders under this Indenture and the other
Operative Agreements in respect of the Equipment Purchase
Certificates (other than principal of and interest on the
Equipment Purchase Certificates) shall be applied ratably to the
payment of such amounts;
fifth, so much of such payments or amounts remaining as shall
be required to pay the unpaid principal of and interest on the
Equipment Purchase Certificates, shall be applied to the payment of
such amounts; and
sixth, the balance, if any, of such payments or amounts
remaining thereafter shall be held by the Indenture Trustee as
collateral security for the obligations secured hereby until such
time as no Event of Default shall be continuing hereunder or the
Equipment Purchase Certificates have been accelerated and all amounts
due thereon have been paid, at which time such payments or amounts
shall be distributed to the Company.
SECTION 5.04. Funds Held by Indenture Trustee; Investments.
At any time and from time to time, so long as no Event of Default shall have
occurred and be continuing, the Indenture Trustee shall, upon the written
instructions of the Company, invest and reinvest in Permitted Investments as
specified in the written instructions of the Company, any monies on deposit
with the Indenture Trustee as part of the Indenture Estate, and sell any
Permitted Investments, in either case, at such prices, including accrued
interest, as are set forth in the written instructions of the Company, and
such Permitted Investments shall be held by the Indenture Trustee until so
sold in trust as part of the Indenture Estate; provided, that the Company
shall upon demand pay to the Indenture Trustee the amount of any loss realized
upon maturity, sale or other disposition of any Permitted Investments and, so
long as no Event of Default shall have occurred and be continuing, be entitled
to receive from the Indenture Trustee, and the Indenture Trustee shall
promptly pay to the Company, any profit, income interest, dividend or gain
realized upon maturity, sale or other disposition of any Permitted Investment.
The Indenture Trustee shall not be responsible for any losses on any
investments or sales of Permitted Investments made pursuant to the procedure
specified in this Section 5.04. An account statement delivered by the
Indenture Trustee to the Company shall be deemed written confirmation by the
Company that the investment transactions identified therein accurately reflect
the investment directions given to the Indenture Trustee by the Company,
unless the Company notifies the Indenture Trustee in writing to the contrary
within ten (10) days of the date of receipt of such statement.
ARTICLE 6
EVENTS OF DEFAULT; REMEDIES OF THE INDENTURE TRUSTEE
UPON AN EVENT OF DEFAULT
SECTION 6.01. Events of Default. The following events shall
constitute "Events of Default" and each such Event of Default shall be deemed
to exist and continue so long as, but only so long as, it shall not have been
remedied:
(a) the Company shall fail to make any payment of principal or
Make-Whole Premium, as the case may be, or interest on any Equipment
Purchase Certificates or any fee payable under Section 2.04 of the
Loan Agreement within five (5) Business Days after the date when due;
or the Company shall fail to pay any other amount owing hereunder or
under the Equipment Purchase Certificates within 30 days after demand
therefor by the Indenture Trustee; or
(b) (i) the Company shall fail to procure, carry and maintain
insurance on the Aircraft at any time in accordance with the
provisions of Section 4.06 hereof or such insurance lapses or is
cancelled, provided that no such lapse or cancellation shall
constitute an Event of Default until the earlier of 30 days (seven
days or such shorter time as may be standard in the industry with
respect to war risk coverage) after receipt by the Indenture Trustee
of written notice of such lapse or cancellation and the date that
such lapse or cancellation is effective as to the Indenture Trustee
and provided further, that such failure for a period of not more than
30 days shall not constitute an Event of Default as long as the
Aircraft is insured as required while on the ground and not operated
or (ii) the Aircraft shall be operated at any time when public
liability insurance required under Section 4.06(a) hereof shall not
be in effect (it being understood that the Company is not required to
maintain such insurance under Section 4.06(a) hereof if the
indemnification or insurance referred to in the proviso to Section
4.06(a)(ii) hereof is obtained); or
(c) the Company shall fail to perform or observe any other
covenant, condition or agreement to be performed or observed by it
under this Indenture or any other Operative Agreement or any other
written agreement of the Company entered into in connection with the
transactions contemplated by the Operative Agreements and such
failure shall continue unremedied for a period of thirty (30) days
from the date on which the Company has knowledge of the failure or
the Company shall have received written notice, identified as a
"Notice of Indenture Default," from the Indenture Trustee (or from
the Holders of not less than 25% of aggregate principal amount of
outstanding Equipment Purchase Certificates) of such failure,
provided, that in the event such failure is curable and so long as
(but for no longer than 150 days after such 30-day period) the
Company shall have promptly undertaken such cure after the earlier of
such knowledge or notice thereof which undertaking shall be
diligently and continuously pursued using the Company's reasonable
best efforts, such failure shall not constitute an Event of
Default; or
(d) an order for relief shall be entered in respect of the
Company by a court having jurisdiction in the premises in an
involuntary case under the federal bankruptcy laws as now or
hereafter in effect; or the Company shall consent to the appointment
of a custodian, receiver, trustee or liquidator of itself or of a
substantial part of its property; or the Company is not paying, or
shall admit in writing its inability to pay, its debts generally as
they come due or shall make a general assignment for the benefit of
creditors; or the Company shall file, or the Board of Directors of
the Company shall authorize the filing of, or grant one or more
persons authority (at their discretion) to make a filing for, a
voluntary petition in bankruptcy or a voluntary petition or an answer
seeking reorganization in a proceeding under any bankruptcy laws (as
now or hereafter in effect) or an answer admitting the material
allegations of a petition filed against the Company in any such
proceeding; or the Company shall file, or the Board of Directors of
the Company shall authorize the Company to, or grant one or more
persons authority (at their discretion) to, seek relief by voluntary
petition, answer or consent, under the provisions of any other or
future bankruptcy or other similar law providing for the
reorganization or winding-up of corporations, or providing for an
agreement, composition, extension or adjustment with its creditors; or
(e) an order, judgment or decree shall be entered by any court
of competent jurisdiction appointing, without the consent of the
Company, a custodian, receiver, trustee, or liquidator of the Company
or of any substantial part of its property, or sequestering any
substantial part of the property of the Company or granting any other
relief in respect of the Company under the federal bankruptcy laws or
other insolvency laws, and any such order, judgment or decree of
appointment or sequestration shall remain in force undismissed or
unvacated for a period of sixty (60) days after the date of its
entry; or
(f) a petition against the Company in a proceeding under the
federal bankruptcy law or other insolvency laws (as now or hereafter
in effect) shall be filed and shall not be withdrawn or dismissed
within sixty (60) days, or under the provisions of any law providing
for reorganization or winding-up of corporations which may apply to
the Company, any court of competent jurisdiction shall assume
jurisdiction, custody or control of the Company or of any substantial
part of its property and such jurisdiction, custody or control shall
remain in force unrelinquished or unterminated for a period of sixty
(60) days; or
(g) any representation or warranty made by the Company in this
Indenture or in any other Operative Document shall at any time prove
to have been incorrect at the time made in any respect material to the
transactions contemplated by this Indenture and, if originally made
by the Company in good faith, shall remain material and unremedied
for a period of thirty (30) days after the Company shall have
received written notice, identified as a "Notice of Indenture
Default," of such misstatement from the Indenture Trustee or from the
Holders of not less than 25% aggregate principal amount of
outstanding Equipment Purchase Certificates.
SECTION 6.02. Remedies with Respect to Indenture Estate. (i)
Upon the occurrence of any Event of Default referred to in Section 6.01(d),
(e) or (f) hereof then and in every such case the entire unpaid principal
amount of the Equipment Purchase Certificates together with all accrued
interest and any other sums then owing by the Company hereunder shall
immediately and without further act become due and payable without
presentment, demand, protest or notice, all of which are hereby waived. Upon
the occurrence of any other Event of Default and at any time thereafter so
long as the same shall be continuing, the Indenture Trustee may on its own
accord or at the direction of Holders of not less than 25% in aggregate
principal amount of outstanding Equipment Purchase Certificates declare the
entire unpaid principal amount of the Equipment Purchase Certificates together
with all accrued interest and any other sums (not including any Make-Whole
Premium) then owing by the Company hereunder to be forthwith due and payable.
Upon the occurrence of any Event of Default and at any time thereafter so long
as the same shall be continuing, the Indenture Trustee may, and upon the
written instructions of a Majority in Interest of Certificate Holders, the
Indenture Trustee shall, do one or more of the following:
(a) cause the Company, upon the written demand of the
Indenture Trustee, at the Company's expense, to deliver promptly, and
the Company shall deliver promptly, all or such part of the Airframe
or any Engine (together with all records, logs, manuals, data, and
inspection, modification and overhaul records and other documents
maintained with respect thereto or pertaining thereto) as the
Indenture Trustee may so demand to the Indenture Trustee or its
order, or the Indenture Trustee, at its option, may enter upon the
premises where all or any part of the Airframe or any Engine (or any
such records, logs, manuals, data, or inspection, modification or
overhaul records or other documents) are located and take immediate
possession (to the exclusion of the Company and all Persons claiming
under or through the Company) of and remove the same together with
any engine which is not an Engine but which is installed on the
Airframe, subject to all of the rights of the owner, lessor, lienor or
secured party of such engine, provided, that any such engine shall be
held for the account of any such owner, lessor, lienor or secured
party or, if owned by the Company, may at the option of the Indenture
Trustee, be exchanged with the Company for an Engine in accordance
with the provisions of Section 4.05(d) hereof by summary proceedings
or otherwise, all without liability accruing to the Indenture Trustee
for or by reason of such entry or taking of possession or removal,
whether for the restoration of damage to property caused by such
taking or otherwise;
(b) sell all or any part of the Airframe and any Engine and
any other part of the Indenture Estate at public or private sale,
whether or not the Indenture Trustee shall at the time have
possession thereof, as the Indenture Trustee may determine, or
otherwise dispose of, hold, use, operate, lease to others or keep
idle all or any part of the Airframe or such Engine or any other part
of the Indenture Estate as the Indenture Trustee, in its sole
discretion, may determine, all free and clear of any rights or claims
of whatsoever kind of the Company; or
(c) exercise any or all of the rights and powers and pursue
any and all remedies of a secured party under the Uniform Commercial
Code of the State of New York (whether or not in effect in the
jurisdiction in which enforcement is sought).
Upon every taking of possession of any part of the Indenture
Estate under this Section 6.02, the Indenture Trustee may, from time to time,
at the expense of the Company or the Indenture Estate, make all such
expenditures for maintenance, insurance, repairs, replacements, alterations,
additions and improvements to and of any of the Indenture Estate, as it may
deem proper in each such case, the Indenture Trustee shall have the right to
maintain, use, operate, store, lease, control or manage all or any part of the
Indenture Estate and to exercise all rights and powers of the Company in
relation to any part of the Indenture Estate in connection therewith, as the
Indenture Trustee shall deem best, including the right to enter into any and
all such agreements with respect to the maintenance, insurance, use,
operation, storage, leasing, control, management or disposition of any and all
of the Indenture Estate as the Indenture Trustee may determine; and the
Indenture Trustee shall be entitled to collect and receive directly all tolls,
rents, revenues, issues, income, products and profits of all or any part of
the Indenture Estate, without prejudice, however, to the right of the
Indenture Trustee under any provision of this Indenture to collect and receive
all cash held by, or required to be deposited with, the Indenture Trustee
hereunder. Such tolls, rents, revenues, issues, income, products and profits
may be applied to pay the expenses of use, operation, storage, leasing,
control, management or disposition of all or any part of the Indenture Estate,
and of all maintenance, repairs, replacements, alterations additions and
improvements, and to make all payments which the Indenture Trustee may be
required or may elect to make, if any, for taxes, assessments, insurance or
other proper charges upon any or all of the Indenture Estate (including the
employment of engineers and accountants to examine, inspect and make reports
upon the properties and books and records of the Company), and all other
payments which the Indenture Trustee may be required or authorized to make
under any provision of this Indenture, as well as just and reasonable
compensation for the services of the Indenture Trustee, and of all Persons
properly engaged and employed by the Indenture Trustee.
In addition, the Company shall be liable for all legal fees and
other costs and expenses incurred by reason of the occurrence of any Event of
Default or the exercise of the Indenture Trustee's remedies with respect
thereto, including all costs and expenses incurred in connection with the
retaking or return of the Airframe or any Engine (or any records, logs,
manuals, data, or inspection, modification, or overhaul records or other
documents maintained with respect thereto or pertaining thereto) in accordance
with the terms hereof and under the Uniform Commercial Code of the State of
New York, which amounts shall, until paid, be secured by the Lien of this
Indenture.
If an Event of Default shall have occurred and be continuing
and the Equipment Purchase Certificates shall have been accelerated pursuant
to this Section 6.02(i), at the request of the Indenture Trustee, the Company
shall promptly execute and deliver to the Indenture Trustee such instruments
of title and other documents as the Indenture Trustee may deem necessary or
advisable to enable the Indenture Trustee or an agent or representative
designated by the Indenture Trustee, at such time or times and place or places
as the Indenture Trustee may specify, to obtain possession of any or all of
the Indenture Estate to which the Indenture Trustee shall at the time be
entitled hereunder. If the Company shall for any reason fail to execute and
deliver such instruments and documents after such request by the Indenture
Trustee, the Indenture Trustee may obtain a judgment conferring on the
Indenture Trustee the right to immediate possession and requiring the Company
to execute and deliver such instruments and documents to the Indenture
Trustee, to the entry of which judgment the Company hereby specifically
consents to the fullest extent it may lawfully do so.
Nothing in the foregoing shall affect the right of each Holder
to receive all payments of principal of, and interest on, the Equipment
Purchase Certificate or Certificates held by such Holder and all other amounts
owing to such Holder as and when the same may be due.
(ii) The Indenture Trustee shall give the Company at least 30
days prior notice of any public sale or of the date on or after which any
private sale will be held, which notice the Company hereby agrees is
reasonable notice.
(iii) At any time after the Indenture Trustee has declared the
unpaid principal amount of all Equipment Purchase Certificates then
outstanding to be due and payable and prior to the sale of any part of the
Indenture Estate pursuant to this Article 6, a Majority in Interest of
Certificate Holders, by written notice to the Company and the Indenture
Trustee, may rescind and annul such declaration and its consequences if: (i)
there has been paid to or deposited with the Indenture Trustee an amount
sufficient to pay all overdue installments of interest on the Equipment
Purchase Certificates, and the principal of and any Make-Whole Premium on any
Equipment Purchase Certificates that have become due otherwise than by such
declaration of acceleration, and (ii) all other Events of Default, other than
nonpayment of principal or interest on the Equipment Purchase Certificates
that have become due solely because of such acceleration, have been cured or
waived.
(iv) A Majority in Interest of Certificate Holders may on
behalf of all Holders waive any past default hereunder and its consequences,
except a default: (i) in the payment of the principal of, Make-Whole Premium,
if any, or interest on any Equipment Purchase Certificate, or (ii) in respect
of a covenant or provision hereof which under Section 10.01(b) hereof cannot
be modified or amended without the consent of each Holder affected thereby.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
(v) Each and every right, power and remedy herein
specifically given to the Indenture Trustee or otherwise in the Indentures
shall be cumulative and shall be in addition to every other right, power and
remedy herein specifically given or now or hereafter existing at law, in
equity or by statute, and each and every right, power and remedy whether
specifically herein given or otherwise existing may be exercised from time to
time and as often and in such order as may be deemed expedient by the
Indenture Trustee, and the exercise or the beginning of the exercise of any
power or remedy shall not be construed to be a waiver of the right to exercise
at the same time or thereafter any other right, power or remedy. No delay or
omission by the Indenture Trustee in the exercise of any right, remedy or
power or in the pursuance of any remedy shall impair any such right, power or
remedy or be construed to be a waiver of any default on the part of the
Company or to be an acquiescence therein.
(vi) In case the Indenture Trustee shall have instituted any
proceeding to enforce any right, power or remedy under this Indenture by
foreclosure, entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason or shall have been determined
adversely to the Indenture Trustee, then and in every such case the Company
and the Indenture Trustee shall, subject to any determination in such
proceedings, be restored to their former positions and rights hereunder with
respect to the Indenture Estate, and all rights, remedies and powers of the
Indenture Trustee shall continue, as if no such proceedings had been
undertaken (but otherwise without prejudice).
ARTICLE 7
DUTIES OF THE INDENTURE TRUSTEE
SECTION 7.01. Action Upon Event of Default. If any payments
of the principal of, or interest on, the Equipment Purchase Certificates due
and payable on any Payment Date, or when otherwise due and payable, shall not
have been paid in full on such Payment Date or such other date, the Indenture
Trustee shall give telephonic notice within one Business Day (followed by
prompt written notice) to the Company and each Holder specifying the amount and
nature of such deficiency in payment; provided that any failure to give such
notice to the Company under this Section 7.01 shall not relieve the Company of
its obligation to make such payment. If a Responsible Officer of the
Indenture Trustee shall have actual knowledge of an Event of Default or an
event or condition which after notice or lapse of time, or both, would become
an Event of Default (other than as provided in the preceding sentence), the
Indenture Trustee shall give prompt written notice within 5 Business Days of
receiving such knowledge, to the Company and each Holder; provided, however,
that the failure of the Indenture Trustee to give any such notice shall not in
any way affect the validity of any action taken by the Indenture Trustee or
any Holder pursuant to the exercise of any of the remedies provided in Article
6 hereof, except that the foregoing proviso shall not reduce the time provided
for any action or otherwise impair any right granted the Company under this
Indenture. Subject to the terms of Sections 6.02 and 7.03 hereof, the
Indenture Trustee shall take such action, or refrain from taking such action,
with respect to such Event of Default as the Indenture Trustee shall be
instructed in writing by a Majority in Interest of Certificate Holders. If
the Indenture Trustee shall not have received instructions as above provided
within twenty (20) Business Days after giving notice of such Event of Default
to the Holders, the Indenture Trustee may, subject to instructions later
received pursuant to the preceding sentence, take such action, or refrain from
taking such action, but shall be under no duty to take or refrain from taking
any action, with respect to such Event of Default as it shall determine
advisable in the best interests of the Holders, and shall use the same degree
of care and skill in connection therewith as a prudent Person would use under
the circumstances in the conduct of its own affairs. The Indenture Trustee
shall promptly provide each Holder with a copy of any notice it received
from the Company to the extent such Holder has not otherwise received such
notice from the Company.
SECTION 7.02. No Duties Except as Specified. (a) Generally.
The Indenture Trustee shall not have any duty or obligation to manage,
control, use, sell, dispose of or otherwise deal with the Aircraft or any
other part of the Indenture Estate or otherwise to take or refrain from taking
any action under or in connection with this Indenture, except as expressly
provided by the terms of this Indenture or as expressly provided in written
instructions received pursuant to the terms of Section 7.01 or 7.04 hereof. No
implied duties or obligations shall be read into this Indenture against the
Indenture Trustee.
(b) Specific Duties. Notwithstanding the provisions of
paragraph (a) of this Section 7.02, the Indenture Trustee agrees that (i) it
will, in its individual capacity and at its own cost and expense, promptly
take such action as may be necessary to discharge duly any Liens on any part
of the Indenture Estate or on any properties of the Company assigned, pledged
or mortgaged as part of the Indenture Estate, which result from claims against
the Indenture Trustee not related to the Lien and security interest created
under this Indenture on the Indenture Estate or to the administration of the
Indenture Estate or to any other transaction pursuant to this Indenture or any
document included in the Indenture Estate, (ii) so long as this Indenture is
in effect, it will, with respect to specific actions to be taken and subject
to Section 7.04 hereof, cooperate with the Company in connection with the
recording, filing, re-recording and refiling of the Indenture and any
supplements to any of them, and any financing statement or other documents as
is necessary to maintain the perfection hereof or otherwise to protect the
security interests created hereby and (iii) it will furnish the notices and
other instruments referred to in the last sentence of Section 8.02 hereof.
The Indenture Trustee shall not discriminate as between Holders.
SECTION 7.03. No Action Except Under Indenture or
Instructions. The Indenture Trustee agrees that it will not manage, control,
use, sell, dispose of or otherwise deal with the Aircraft or any other
property constituting part of the Indenture Estate except (i) in accordance
with the powers granted to, or the authority conferred upon, the Indenture
Trustee pursuant to this Indenture or (ii) in accordance with the express
terms of this Indenture or with written instructions pursuant to Section 6.02,
7.01 or 7.04 hereof.
SECTION 7.04. Action Upon Instructions Generally. Subject to
the terms of Sections 6.02, 7.01 and 7.05 hereof and except as otherwise
provided herein, upon the written instructions at any time and from time to
time of a Majority in Interest of Certificate Holders, the Indenture Trustee
shall take such of the following actions as may be specified in such
instructions or this Indenture: (i) give such notice or direction or consent
or exercise such right, remedy or power under this Indenture or in respect of
any part or all of the Indenture Estate as shall be specified in such
instructions; and (ii) take such other action as shall be specified in such
instructions, it being understood that without the written instructions of a
Majority in Interest of Certificate Holders, the Indenture Trustee will not
approve any such matter as satisfactory to the Indenture Trustee. The
Indenture Trustee will execute and the Company will file or cause to be filed
such continuation statements with respect to financing statements relating to
the security interest created under this Indenture in the Indenture Estate as
may be specified from time to time in written instructions of the Company or a
Majority in Interest of Certificate Holders (which instructions may, by their
terms, be operative only at a future date and which shall be accompanied by
the form of such continuation statement so to be filed). The Indenture
Trustee shall forthwith notify all of the Holders of any direction received
pursuant to this Section 7.04 by a Majority in Interest of Certificate Holders.
SECTION 7.05. Indemnification. (a) With Respect to Actions
Hereunder. The Indenture Trustee shall not be required to take any action or
refrain from taking any action requested by the Holders under Sections 7.01
(other than the first two sentences of Section 7.01), 7.04 or Article 6 hereof
if it shall have reasonable grounds for believing that repayment of any funds
expended by it or adequate indemnification against risks incurred in
connection therewith is not reasonably assured to it. The Indenture Trustee
shall not be required to take any action pursuant to Section 7.01 or 7.04 or
Article 6 hereof, nor shall any other provision of this Indenture be deemed to
impose a duty on the Indenture Trustee to take any action, if the Indenture
Trustee shall have been advised by counsel that such action is contrary to the
terms hereof or is otherwise contrary to law. Each Holder may, but shall not
be required to, participate in any indemnification of the Indenture Trustee
given pursuant to this Section 7.05. Each Holder so participating shall be
entitled to reimbursement from the Company for such participation.
(b) With Respect to Claims. (i) For the purposes of this
Section 7.05(b), "Claims" shall mean any and all costs, liabilities (including
strict or absolute liability without fault in tort or otherwise), losses,
damages, penalties, actions or suits or claims which may be imposed on,
incurred by, suffered by, or asserted against an Indemnified Person, as
defined herein, and, except as otherwise expressly provided in this Section
7.05(b), shall include all reasonable out-of-pocket costs, disbursements and
expenses (including legal fees and expenses) paid or incurred by an
Indemnified Person in connection therewith.
(ii) For the purposes of this Section 7.05(b), "Indemnified
Person" means the Indenture Estate, the Indenture Trustee both in its
individual capacity and as trustee and each of its successors, permitted
transferees or assigns permitted under the terms hereof, provided that as a
condition of any obligations of the Company to pay any indemnity or perform
any action under this Section 7.05(b) with respect to any Persons who are not
signatories hereto, such Persons shall expressly agree in writing to be bound
by all the terms of this Section 7.05(b).
(iii) Subject to the exclusions stated in Section 7.05(b)(iv)
hereof the Company agrees to indemnify, defend and hold harmless each
Indemnified Person on an After-Tax Basis against Claims resulting from or
arising out of:
(A) the operation, possession, use, maintenance, overhaul, testing,
registration, re-registration, modification, alteration or lease of
the Aircraft, Airframe or Engine, or any engine used in connection
with the Airframe, or any part thereof by the Company, any lessee or
any other Person whatsoever, whether or not such operation,
possession, use, maintenance, overhaul, testing, registration,
re-registration, non-use, modification, alteration or lease is in
compliance with the terms of this Indenture;
(B) the manufacture, design, purchase, acceptance, rejection,
delivery, or condition of the Aircraft or any Engine, including,
without limitation, latent and other defects, whether or not
discoverable, and claims relating to patent, trademark or
copyright infringement; and
(C) any breach of or failure to perform or observe, or any other
non-compliance with, any covenant or agreement to be performed, or
other obligation of the Company under any of the Operative
Agreements, or the falsity of any representation or warranty of the
Company in any of the Operative Agreements.
(iv) The following are excluded from the Company's agreement
to indemnify under this Section 7.05(b):
(A) Claims which are taxes whether or not covered pursuant to the
indemnity set forth in Section 8.05 hereof;
(B) Claims which are covered pursuant to Section 8.05 hereof;
(C) With respect to any particular Indemnified Person, Claims
attributable to the gross negligence or willful misconduct of, or to
the breach of any contractual obligation by, or the falsity or
inaccuracy of any representation or warranty of, such Indemnified
Person; and
(D) Claims attributable to acts or events occurring any period
subsequent to termination of this Indenture.
(v) In the case of any Claim indemnified by the Company
hereunder which is covered by a policy of insurance maintained by the Company
pursuant to Section 4.06 hereof or otherwise, it shall be a condition of such
indemnity with respect to any particular Indemnified Person that such
Indemnified Person shall use reasonable efforts to cooperate with the insurers
in the exercise of their rights to investigate, defend or compromise such
Claim as may reasonably be required to retain the benefits of such insurance
with respect to such Claim.
(vi) An Indemnified Person shall promptly notify the Company
of any Claim as to which indemnification is sought. Subject to the rights of
insurers under policies of insurance maintained by the Company, the Company
shall have the right to investigate, and the right in its sole discretion to
defend or compromise any Claim for which indemnification is sought under this
Section 7.05(b), and the Indemnified Person shall cooperate with all reasonable
requests of the Company in connection therewith. Where the Company or the
insurers under a policy of insurance maintained by the Company undertake the
defense of an Indemnified Person with respect to a Claim, no additional legal
fees or expenses of such Indemnified Person in connection with the defense of
such Claim shall be indemnified hereunder unless the fees or expenses were
incurred at the written request of the Company or such insurers. Subject to
the requirement of any policy of insurance applicable to a Claim, an
Indemnified Person may participate at its own expense in any judicial
proceeding controlled by the Company or its insurers pursuant to the preceding
provisions, provided that such party's participation does not, in the opinion
of the independent counsel appointed by the Company or its insurers to conduct
such proceedings, interfere with such control; and such participation shall
not constitute a waiver of the indemnification provided in this Section
7.05(b).
(vii) To the extent that a Claim indemnified by the Company
under this Section 7.05(b) is in fact paid by the Company and/or an insurer
under a policy of insurance maintained by the Company, the Company and/or such
insurer as the case may be shall be subrogated to the extent of such payment
to the rights and remedies of the Indemnified Person on whose behalf such
Claim was paid with respect to the transaction or event giving rise to such
Claim. Should an Indemnified Person receive any refund, in whole or in part,
with respect to any Claim paid by the Company hereunder, it shall, so long as
no Event of Default or Payment Default shall have occurred and be continuing,
promptly pay over the amount refunded, together with any interest received with
respect to such amount for the period between the indemnification payment and
the receipt of such refund, to the Company, but in no event more than the
amount theretofore received by such Indemnified Person from the Company and
its insurers in respect of such Claim.
(viii) The general indemnification provisions of this Section
7.05(b) are not intended to waive or supersede any specific provisions of, or
any rights or remedies of the Company under, this Indenture or any other
Operative Agreement to the extent such provisions apply to any Claim. The
Company does not guarantee and nothing in the general indemnification
provisions of this Section 7.05(b) shall be construed as a guarantee by the
Company with respect to the value of the Aircraft or any part thereof.
(c) Survival of Indemnity. The indemnity contained in this
Section 7.05 shall survive the Delivery Date and the expiration or termination
of this Indenture but only with respect to Claims arising out of events
occurring prior to such expiration or termination.
SECTION 7.06. Withholding Taxes. The Indenture Trustee, as
agent for the Company, shall exclude and withhold from each payment of
principal, Make-Whole Premium, if any, and interest and other amounts due
hereunder or under the Equipment Purchase Certificates any and all withholding
taxes applicable thereto as required by law. The Indenture Trustee agrees to
act as such withholding agent and, in connection therewith, whenever any
present or future taxes or similar charges are required to be withheld with
respect to any amounts payable in respect of the Equipment Purchase
Certificates, it will withhold such amounts and timely pay the same to the
appropriate authority in the name of and on behalf of the Holders, it will file
any necessary withholding tax returns or statements when due, and that, as
promptly as possible after the payment thereof, it will deliver to each
Holder, appropriate documentation showing the payment thereof, together with
such additional documentary evidence as such Holder may reasonably request
from time to time. The Indenture Trustee agrees to file any other information
reports as it may be required to file under United States law.
ARTICLE 8
THE INDENTURE TRUSTEE
SECTION 8.01. Acceptance of Trusts and Duties. The Indenture
Trustee accepts the trusts and duties hereby created and applicable to it and
agrees to perform the same but only upon the terms of this Indenture, and
agrees to receive and disburse all monies constituting part of the Indenture
Estate in accordance with the terms hereof. The Indenture Trustee shall not
be answerable or accountable under any circumstances, except for ordinary
negligence in the receipt or disbursement of money, for its obligations
specified in Section 7.02(b) hereof and the last sentence of Section 8.02
hereof and except for its own willful misconduct or gross negligence (except
as otherwise provided with respect to liabilities that may result from the
inaccuracy of any of its representations or warranties in its individual
capacity or as Indenture Trustee, set forth in this Indenture). Unless
otherwise expressly provided in this Indenture, the Indenture Trustee shall
have no obligation to advance its individual funds for any purpose and shall
have no obligation to distribute to the Holders, the Company or any third
party any amounts to be paid to the Indenture Trustee until such amounts are
collected by the Indenture Trustee.
SECTION 8.02. Absence of Certain Duties. Except in accordance
with written instructions to the Indenture Trustee furnished pursuant to
Sections 6.02, 7.01 and 7.04 and except as provided in, and without limiting
the generality of, Section 7.02 hereof, the Indenture Trustee shall have no
duty (i) to see to any registration of the Aircraft or any recording or filing
of this Indenture or any other document, or to see to the maintenance of any
such registration, recording or filing, (ii) to see to any insurance on the
Aircraft or to effect or maintain any such insurance, whether or not the
Company shall be in default with respect to effecting or maintaining such
insurance, (iii) to see to the payment or discharge of any tax, assessment or
other governmental charge or any Lien or encumbrance of any kind owing with
respect to, assessed or levied against, any part of the Indenture Estate
except as expressly provided in Section 7.02(b)(i) hereof, (iv) to confirm,
verify or inquire into the failure to receive any financial statements of the
Company, or (v) to inspect the Aircraft at any time or ascertain or inquire as
to the performance or observance of any of the Company's covenants under this
Indenture with respect to the Aircraft. Notwithstanding the foregoing, the
Indenture Trustee will furnish to each Holder promptly upon receipt thereof,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and other instruments furnished to the Indenture Trustee,
to the extent that the same shall not have been otherwise furnished to such
Holder pursuant to this Indenture or to the extent the Indenture Trustee does
not reasonably believe that the same shall have been furnished by the Company
directly to such Holder.
SECTION 8.03. Representations, Warranties and Agreements of
Indenture Trustee.
The Indenture Trustee, in its individual capacity, represents,
warrants and agrees that:
(a) Organization; Authority; Legal and Binding Obligations.
The Indenture Trustee in its individual capacity is a national banking
association duly organized, validly existing and in good standing under the
laws of the United States, is a "citizen of the United States" within the
meaning of Section 40102(a)(15) of Title 49 of the United States Code formerly
Section 101(16) of the Act and will resign as Indenture Trustee promptly after
it obtains actual knowledge that it has ceased to be such a citizen, has the
full corporate power and authority and legal right under the laws of the State
of ____________ and the laws of the United States pertaining to its banking,
trust and fiduciary powers to execute, deliver and perform this Indenture,
that this Indenture has been duly authorized, executed and delivered by it and
assuming due authorization, execution and delivery by the other party hereto,
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or other laws of general application to
or affecting the enforcement of creditors' rights generally, and that the
execution, delivery and performance by the Indenture Trustee of this Indenture
is not in violation of its articles of association or by-laws or of any
indenture, mortgage, contract or other agreement to which the Indenture
Trustee is a party or by which it is bound or of any order or judgment
applicable to the Indenture Trustee or any applicable law of the United States
or the laws of the State of __________ governing the trust powers of the
Indenture Trustee and by which it or its assets or property are bound.
NOTWITHSTANDING THE FOREGOING, THE INDENTURE TRUSTEE DOES NOT
MAKE NOR SHALL BE DEEMED TO HAVE MADE AND HEREBY EXPRESSLY DISCLAIMS ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
AIRWORTHINESS, VALUE, COMPLIANCE WITH SPECIFICATIONS, WORKMANSHIP, CONDITION,
DESIGN, QUALITY, DURABILITY, OPERATION, MERCHANTABILITY OR FITNESS FOR USE OR
FOR A PARTICULAR PURPOSE OF THE AIRCRAFT OR ANY ENGINE, AS TO THE ABSENCE OF
LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY
INFRINGEMENTS OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF
OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR ANY OTHER REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT, AIRFRAME OR ANY
ENGINE WHATSOEVER.
(b) Securities Representations. The Indenture Trustee, in
its individual capacity, represents that neither the Indenture Trustee nor
anyone authorized by it to act on its behalf has directly or indirectly
offered (i) any interest in the Indenture Estate for sale to, or solicited any
offer to acquire any of the same from, anyone other than the Banks or (ii) any
Equipment Purchase Certificate or any similar security for sale to, or
solicited any offer to acquire any of the same from, anyone.
(c) Lien; Indemnity. The Indenture Trustee shall not
directly or indirectly create, incur, assume or suffer to exist any Liens
described in Section 7.02(b)(i) hereof with respect to the Aircraft, any
interest therein, or any other portion of the Indenture Estate, and that it
will promptly cause any such Lien to be discharged at its own expense. The
Indenture Trustee in its individual capacity shall indemnify, protect, save
and keep harmless the Company and each Holder from and against any reduction
in the amount payable out of the Indenture Estate to such Holder, or any other
loss, cost or expense (including legal fees and expenses) incurred by such
Holder or the Company as a result of the imposition or enforcement of such
Lien.
SECTION 8.04. Reliance; Agents; Advice of Experts. The
Indenture Trustee shall incur no liability to anyone in acting upon any
signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond or other document or paper reasonably
believed by it to be genuine and reasonably believed by it to be signed by the
proper party or parties.
The Indenture Trustee may accept a copy of a resolution of the
Board of Directors of the Company or any Holder or any committee of said
Board, certified by the Secretary or an Assistant Secretary of said party as
duly adopted and in full force and effect, as conclusive evidence that such
resolution has been duly adopted by said Board or committee and that the same
is in full force and effect. As to any fact or matter relating to the Company
the manner of ascertainment of which is not specifically described in this
Indenture, the Indenture Trustee may for all purposes of this Indenture rely
on a certificate, signed by the President or by a Vice President signing with
the Treasurer or any Assistant Treasurer or the Secretary or an Assistant
Secretary of the Company as to such fact or matter, and such certificate shall
constitute full protection to the Indenture Trustee for any action taken or
omitted to be taken by it in good faith in reliance on such certificate.
The Indenture Trustee shall furnish to the Company upon request
such information and copies of such documents as the Indenture Trustee may
have and as are necessary for the Company to perform its duties under Article
2 hereof. In the administration of the trust under this Indenture the
Indenture Trustee may execute any trust or power of this Indenture and perform
its powers and duties directly or through agents or attorneys and may, at the
expense of the Company, consult with counsel, accountants and other skilled
Persons to be selected and retained by it, and the Indenture Trustee shall not
be liable for anything done, suffered or omitted in good faith by it in
accordance with the advice or opinion of any such counsel, accountants or
other skilled Person (so long as the Indenture Trustee shall have exercised
reasonable care and judgment in selecting such Persons).
SECTION 8.05. Compensation and Expenses of Indenture Trustee.
The Company agrees, to the extent the Indenture Trustee was not reimbursed
under Section 7.05 hereof, to pay upon written demand the reasonable and
customary fees and reasonable out-of-pocket costs and expenses (including
legal fees and expenses) of the Indenture Trustee in the performance of its
responsibilities hereunder (including in connection with the execution and
delivery of the Transfer Agreement) and agrees to indemnify the Indenture
Trustee against any taxes imposed upon it relating thereto (other than taxes,
fees or charges based on or measured by any fees or compensation received by
the Indenture Trustee for services rendered in connection with the
transactions contemplated hereby). The Indenture Trustee agrees that it shall
have no right against the Holders or the Indenture Estate for any fee as
compensation for its services hereunder. The provisions of this Section 8.05
with respect to costs and expenses shall survive the termination of this
Indenture.
SECTION 8.06. Moneys Held by Indenture Trustee. Subject to
Section 5.04 hereof, all moneys received by the Indenture Trustee shall, until
used or applied as herein provided, be held in trust for the purposes for
which they were received, but need not be segregated from other funds except
to the extent required by mandatory provisions of law. Subject to Section
5.04 hereof, neither the Indenture Trustee nor any agent of the Indenture
Trustee shall be under any liability for interest on any moneys received by
it hereunder.
SECTION 8.07. Capacity in Which Acting. The Indenture Trustee
acts hereunder not in its individual capacity but solely as trustee except as
otherwise expressly provided herein and in the other Operative Agreements.
ARTICLE 9
SUCCESSOR INDENTURE TRUSTEE
SECTION 9.01. Resignation or Removal; Appointment of
Successor. (a) Resignation and Removal. The Indenture Trustee or any
successor to it must resign if at any time it ceases to be a Citizen of the
United States and may resign at any time without cause by giving at least
30 days prior written notice to the Company, and each Holder, such
resignation to be effective upon the acceptance of the trusteeship by a
successor Indenture Trustee. In addition, a Majority in Interest of
Certificate Holders may at any time remove the Indenture Trustee without
cause by an instrument in writing delivered to the Indenture Trustee and
the Company and the Company shall promptly notify each Holder of such
action in writing, such removal to be effective upon the acceptance of the
trusteeship by a successor Indenture Trustee. In addition, the Company
may, without the consent of any Holder unless an Event of Default shall
have occurred and be continuing, remove the Indenture Trustee (i) if the
Indenture Trustee fails to comply with Section 9.01(c) hereof, (ii) if the
Indenture Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver or liquidator of the Indenture Trustee
or of its property shall be appointed, or any public officer shall take
charge or control of the Indenture Trustee or of its property or affairs
for the purpose of rehabilitation, conservation or liquidation.
In the case of the resignation or removal of the Indenture
Trustee, the Company shall promptly appoint a successor Indenture Trustee;
provided that, a Majority in Interest of Certificate Holders may appoint
after such resignation or removal, a successor Indenture Trustee which may
be other than the successor Indenture Trustee appointed by the Company and
such successor Indenture Trustee appointed by the Company shall be
superseded by the successor Indenture Trustee appointed by a Majority in
Interest of Certificate Holders. If a successor Indenture Trustee shall
not have been appointed within 30 days after such notice of resignation or
removal, the Indenture Trustee, the Company or any Holder may apply to any
,court of competent jurisdiction to appoint a successor Indenture Trustee to
act until such time, if any, as a successor shall have been appointed as
above provided. The successor Indenture Trustee so appointed by such court
shall immediately and without further act be superseded by any successor
Indenture Trustee appointed from the date of the appointment by such court.
(b) Acceptance of Appointment. Any successor Indenture
Trustee, however appointed, shall execute and deliver to the Company and to
the predecessor Indenture Trustee an instrument accepting such appointment,
and, without further act, such successor Indenture Trustee shall become vested
with all the estates, properties, rights, powers and duties of the predecessor
Indenture Trustee under this Indenture in the trusts applicable to it with like
effect as if originally named Indenture Trustee; but, nevertheless, upon the
written request of such successor Indenture Trustee, such predecessor
Indenture Trustee shall execute and deliver an instrument transferring to such
successor Indenture Trustee all the estates, properties, rights and powers of
such predecessor Indenture Trustee, and such predecessor Indenture Trustee
shall duly assign, transfer, deliver and pay over to such successor Indenture
Trustee all moneys or other property then held by such predecessor Indenture
Trustee under this Indenture.
(c) Qualification of Successor. Any successor Indenture
Trustee, however appointed, shall be a Citizen of the United States and shall
be a bank or trust company having its principal place of business in the
United States of America and having a combined capital and surplus of at least
$100,000,000 if there be such an institution willing, able and legally
qualified to perform the duties of Indenture Trustee under this Indenture upon
reasonable or customary terms.
(d) Merger. Any corporation into which the Indenture Trustee
may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Indenture Trustee shall be a party, or any corporation to which substantially
all the business of the Indenture Trustee may be transferred, shall, subject
to the terms of Section 9.01(c) hereof, be the Indenture Trustee under this
Indenture without further act.
(e) Notice Period. The notice period specified in Section
9.01(a) hereof shall be reduced as necessary so that any resignation of the
Indenture Trustee or any successor Indenture Trustee shall be effective prior
to the date such Indenture Trustee no longer qualifies, or is expected no
longer to qualify, as a Citizen of the United States.
SECTION 9.02. Appointment of Separate Trustees. (a) At any
time or times, for the purpose of meeting any legal requirements of any
jurisdiction in which any part of the Indenture Estate may at the time be
located or in which any action of the Indenture Trustee may be required to be
performed or taken, the Indenture Trustee, by an instrument in writing signed
by it, may appoint one or more individuals or corporations to act as a
separate trustee or separate trustees or co-trustee, acting jointly with the
Indenture Trustee, of all or any part of the Indenture Estate to the full
extent that local law makes it necessary for such separate trustee or separate
trustees or co-trustee acting jointly with the Indenture Trustee to act.
(b) The Indenture Trustee and, at the request of the Indenture
Trustee, the Company, shall execute, acknowledge and deliver all such
instruments as may be required by the legal requirements of any jurisdiction
or by any separate trustee or separate trustees or co-trustee for the purpose
of more fully confirming such title, rights or duties to such separate trustee
or separate trustees or co-trustee. Upon the acceptance in writing of such
appointment by any such separate trustee or separate trustees or co-trustee,
it, he or they shall be vested with such title to the Indenture Estate or any
part of it and with such rights and duties, as shall be specified in the
instrument of appointment, jointly with the Indenture Trustee (except insofar
as local law makes it necessary for any such separate trustee or separate
trustees to act alone) subject to all the terms of this Indenture. Any separate
trustee or separate trustees or co-trustee may, at any time by an instrument
in writing, constitute the Indenture Trustee its or his attorney-in-fact and
agent with full power and authority to do all acts and things and to exercise
all discretion on its or his behalf and in its or his name. In case any such
separate trustee or co-trustee shall die, become incapable of acting, resign
or be removed, the title to the Indenture Estate and all rights and duties of
such separate trustee or co-trustee shall, so far as permitted by law, vest in
and be exercised by the Indenture Trustee, without the appointment of a
successor to such separate trustee or co-trustee.
(c) Every separate trustee and co-trustee hereunder shall, to
the extent permitted by law, be appointed and act, and the Indenture Trustee
shall act, subject to the following provisions and conditions:
(i) all powers, duties, obligations and rights conferred upon
the Indenture Trustee in respect of the receipt, custody, payment of
moneys or the investment of moneys, shall be exercised solely by the
Indenture Trustee;
(ii) to the extent specified in the instrument of appointment,
all other rights, powers, duties and obligations conferred or imposed
upon the Indenture Trustee shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee and such separate
trustee or co-trustee jointly, except to the extent that under any
law of any jurisdiction in which any particular act or acts are to be
performed the Indenture Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the
Indenture Estate in any such jurisdiction) shall be exercised and
performed by such additional trustee or separate trustee;
(iii) no power hereby given to, or exercisable as provided
herein by, any such additional trustee or separate trustee shall be
exercised hereunder by such additional trustee or separate trustee
except jointly with, or with the consent of, the Indenture Trustee;
and
(iv) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder.
Any separate trustee or co-trustee may be removed by the
Indenture Trustee at any time without cause.
(d) All provisions of this Indenture which are for the
benefit of the Indenture Trustee shall extend to and apply to each separate
trustee or co-trustee appointed pursuant to this Section 9.02.
ARTICLE 10
SUPPLEMENTS AND AMENDMENTS
TO THIS INDENTURE AND OTHER DOCUMENTS
SECTION 10.01. Supplemental Indentures. (a) Supplemental
Indentures Without Consent of Holders. The Company and the Indenture Trustee,
at any time and from time to time, without notice to or the consent of the
Holders, may enter into one or more indentures supplemental hereto for any of
the following purposes:
(i) to provide for the Indenture Amendment more fully
described in Section 11.02 hereof;
(ii) to correct or amplify the description of any property at
any time subject to the Lien of this Indenture or better to assure,
convey and confirm unto the Indenture Trustee any property subject or
required to be subject to the Lien of this Indenture or to subject to
the Lien of this Indenture any Airframe or Engine or any airframe or
engine substituted for any Airframe or Engine in accordance with the
terms hereof; provided, however, that indenture supplements entered
into for the purpose of subjecting to the Lien of this Indenture any
Airframe or Engine or airframe or engine substituted for any Airframe
or Engine in accordance with the terms hereof need only be executed
by the Company; or
(iii) to add to the covenants of the Company, for the benefit
of the Holders, or to surrender any right or power herein conferred
upon the Company; or
(iv) to comply with any applicable requirements of the Trust
Indenture Act of 1939, as from time to time amended or any other
requirements of applicable law; or
(v) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any
other provision herein, or to make any other provisions with respect
to matters or questions arising hereunder so long as any such action
does not adversely affect the interests of the Holders.
(b) Supplemental Indentures With Consent of Majority. With
the written consent of a Majority in Interest of Certificate Holders, the
Company may, and the Indenture Trustee, subject to Section 10.02 hereof, shall,
at any time and from time to time, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights and obligations of the Holders and of the
Company under this Indenture; provided, however, without the consent of each
Holder affected thereby, no such supplemental indenture shall:
(i) except as permitted under the Transfer Agreement, change
the final maturity of the principal of any Equipment Purchase
Certificate, or change the dates or amounts of payment of any
installment of the principal of or any Make-Whole Premium or interest
on any Equipment Purchase Certificate, or reduce the principal amount
thereof or any Make-Whole Premium or interest thereon, or change to a
location outside the United States the place of payment where, or the
coin or currency in which, any Equipment Purchase Certificate or any
Make-Whole Premium or interest thereon is payable, or impair the
right to institute suit for the enforcement of any such payment of
principal or any Make-Whole Premium or interest becomes due and
payable; or
(ii) create any Lien with respect to the Indenture Estate
ranking prior to, or on a parity with, the security interest created
by this Indenture, except Liens permitted under Section 4.01 hereof,
or deprive any Holder of the benefit of the Lien on the Indenture
Estate created by this Indenture; or
(iii) reduce the percentage in principal amount of the
Equipment Purchase Certificates, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain
provisions of this Indenture, or of certain defaults hereunder and
their consequences) provided for in this Indenture or change the
definition of the "Majority in Interest of Certificate Holders"; or
(iv) modify any provisions of this Section 10.01(b), except to
provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each
Equipment Purchase Certificate affected thereby.
SECTION 10.02. Indenture Trustee Protected. If in the
reasonable opinion of the Indenture Trustee any document required to be
executed pursuant to the terms of Section 10.01 hereof adversely affects any
right, duty, immunity or indemnity in favor of the Indenture Trustee under
this Indenture, the Loan Agreement, or the Transfer Agreement, the Indenture
Trustee may in its discretion decline to execute such document.
SECTION 10.03. Requirement of Substance, Not Form. It shall
not be necessary for any consent of the Holders under Section 10.01(b) hereof
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such consent shall approve the substance thereof.
SECTION 10.04. Documents Mailed to Holders. Promptly after
the execution by the Indenture Trustee of any document entered into pursuant
to this Article 10, the Indenture Trustee shall mail, by first-class mail,
postage prepaid, a conformed copy thereof to each Holder at its address last
known to the Indenture Trustee, but the failure of the Indenture Trustee to
mail such conformed copies shall not impair or affect the validity of such
document.
ARTICLE 11
LEVERAGED LEASE FINANCING
SECTION 11.01. Conversion to Leveraged Lease Financing. (a)
The Lease. Subject to the provisions of this Article 11, the Company may
arrange for a trustee (the "Owner Trustee"), acting on behalf of one or more
investors with a net worth of at least $50,000,000 (the "Owner Participants"),
to purchase the Aircraft from the Company and lease the Aircraft back to the
Company pursuant to a "net" lease (the "Lease") which shall provide for the
unconditional obligation of the Company to make payments of rent in amounts
and at all times sufficient to pay the principal amount of, Make-Whole Premium
(if any) and interest on the Equipment Purchase Certificates when due or to
prepay such amounts as permitted hereunder and in any event sufficient to pay
or prepay, as permitted, the aggregate indebtedness incurred by the Equipment
Purchase Certificates issued hereunder on or prior to the maturity thereof and
otherwise shall provide for terms and conditions in all material respects no
less favorable to the Lessor and the Holders than those set forth in the form
of Lease attached hereto as Exhibit D. In connection therewith, the
outstanding indebtedness evidenced by the Equipment Purchase Certificates
issued hereunder may be assumed by such Owner Trustee on a non-recourse basis,
such assumption to be evidenced by an amendment to this Indenture (the
"Indenture Amendment") described in Section 11.02 hereof. Upon such
assumption by the Owner Trustee, all of the Company's obligations under the
Equipment Purchase Certificates shall be deemed to be obligations of the Owner
Trustee, as if the Equipment Purchase Certificates had been executed by the
Owner Trustee and authenticated and delivered by the Indenture Trustee
pursuant to the Indenture.
(b) Liens. In connection with the leveraged lease
transaction the Company shall enter into an agreement with the Owner
Participant and the Owner Trustee pursuant to which the Owner Participant and
the Owner Trustee in its individual capacity shall, among other things, agree
for the benefit of the Company, the Indenture Trustee and the Holders that
they shall not directly or indirectly create, incur, assume or suffer to
exist, any Lessor's Liens attributable to it (substantially as defined in the
form of Lease attached hereto as Exhibit D) on the Aircraft or the Indenture
Estate (as defined in the Indenture Amendment) or any interest therein and
that they will promptly at their own expense cause any such Lien to be duly
discharged and removed.
(c) Payment of Accrued Interest. In the event the Company
shall enter into the leveraged lease transactions contemplated by this Article
11 on a date (the "Lease Closing Date") which is not a Payment Date, the
Company shall provide for payment of the interest accrued on the Equipment
Purchase Certificates since the Payment Date next preceding the Lease Closing
Date by (i) depositing an amount equal to such accrued interest with the
Indenture Trustee, (ii) including such accrued interest in the first basic
rent payment to be made under the Lease, or (iii) paying such accrued interest
directly to the Indenture Trustee on the Payment Date next following the Lease
Closing Date.
SECTION 11.02. Indenture Amendment. Concurrently with the
execution of the Lease by the parties thereto, the Indenture Trustee upon
the request of the Company shall enter into an amendment to this Indenture
(the "Indenture Amendment") on terms in all material respects no less
favorable than those set forth in the form of Exhibit E hereto except for
additions and changes agreed to by the Company and the Owner Trustee (A)
which are agreed to by the Indenture Trustee in accordance with the terms
of Article 10 hereof, (B) with respect to which the Indenture Trustee shall
have received from independent counsel selected by the Indenture Trustee an
opinion to the effect that such additions and changes do not in any
material respect adversely affect the interests of the Holders as reflected
in the form of Indenture Amendment set forth in Exhibit E hereto, and (C)
with respect to which the Indenture Trustee shall have received letters
from Moody's and S&P (or if either such corporation shall no longer perform
the functions of a securities rating agency, any other nationally
recognized rating agency designated by the Company) to the effect that such
additions and changes will not result in a downgrading of the credit rating
assigned to the Pass Through Certificates. Notwithstanding the above, this
Section 11.02 shall not be construed to permit additions or changes to the
Indenture Amendment which pursuant to Section 10.01(b) hereof would require
the consent of each Holder affected.
In connection with any leveraged lease financing, the
Company shall have the right to re-optimize the schedule of payments of
principal of the Equipment Purchase Certificates set forth in each
Equipment Purchase Certificate; provided, however, that no such
re-optimization shall be permitted which would result in (i) the Equipment
Purchase Certificates having a maturity beyond the stated maturity date of
the Equipment Purchase Certificates from the date of original issue, after
giving effect to said re-optimization, (ii) a change in the principal
amount of any Equipment Purchase Certificates outstanding, and in addition,
in connection with any such re-optimization the amount of principal payable
on any Payment Date under each new Equipment Purchase Certificate issued to
each Holder shall bear the same ratio to the aggregate principal payable on
such Payment Date under all Equipment Purchase Certificates as the
principal amount of the Equipment Purchase Certificates held by such Holder
immediately prior to the date of re-optimization bears to the aggregate
principal amount of the Equipment Purchase Certificates held by all the
Holders immediately prior to any such re-optimization date, (iii) a change
in the Debt Rate and (iv) a change in the average life of any Equipment
Purchase Certificate of plus or minus one year.
SECTION 11.03. The Lease. The Lease shall be substantially in
the form of Exhibit D hereto, except for additions and changes agreed to by
the Company and the Owner Trustee (A) which could be implemented as amendments
to the Lease without the consent of the Indenture Trustee under the terms of
Article 10 of the form of Indenture Amendment annexed hereto as Exhibit E or
as to which all the conditions for giving the consent of the Indenture Trustee
under the terms of such Article 10 are met, or (B) with respect to which the
Indenture Trustee shall have received an opinion from independent counsel
selected by the Indenture Trustee to the effect that such additions and
changes do not in any material respect adversely affect the interests of the
Holders as reflected in the form of Lease set forth in Exhibit D hereto, or
(C) with respect to which the Indenture Trustee shall have received letters
from Moody's and S&P (or if either such corporation shall no longer perform
the functions of a securities rating agency, any other nationally recognized
rating agency designated by the Company) to the effect that such additions and
changes will not result in a downgrading of the credit rating assigned to the
Pass Through Certificates.
SECTION 11.04. Conditions Precedent. The obligation of the
Indenture Trustee to enter into the Indenture Amendment shall be subject to
the execution and delivery by the parties thereto of a Participation Agreement
substantially in the form of Exhibit F, and the satisfaction in the reasonable
opinion of the Indenture Trustee, of the conditions precedent therein
contained.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. Termination of Indenture. This Indenture and
the trust created hereby shall terminate and this Indenture shall be of no
further force or effect upon the payment in full of the principal amount of,
any Make-Whole Premium and interest on all Equipment Purchase Certificates
outstanding hereunder and all other sums payable to the Indenture Trustee and
the Holders hereunder and under such Equipment Purchase Certificates and the
other Operative Agreements.
SECTION 12.02. No Legal Title in Indenture Estate. No Holder
shall have legal title to any part of the Indenture Estate. No transfer, by
operation of law or otherwise, of any Equipment Purchase Certificate or other
right, title and interest of any Holder in and to the Indenture Estate or
under this Indenture shall operate to terminate this Indenture or entitle any
successor or transferee of such Holder to an accounting or to the transfer to
it of legal title to any part of the Indenture Estate.
SECTION 12.03. Sale of Collateral by Indenture Trustee. Any
sale or other conveyance of the Aircraft by the Indenture Trustee made
pursuant to the terms of this Indenture shall bind the Holders and shall be
effective to transfer or convey all right, title and interest of the Indenture
Trustee, the Company, and such Holders in and to the Aircraft. No purchaser
or other grantee shall be required to inquire as to the authorization,
necessity, expediency or regularity of such sale or conveyance or as to the
application of any sale or other proceeds by the Indenture Trustee.
SECTION 12.04. Indenture for Benefit of Parties and Holders
Only. Nothing in this Indenture shall be construed to give to any person
other than the Company, the Indenture Trustee and the Holders and former
Holders any legal or equitable right, remedy or claim under or in respect of
this Indenture or any Equipment Purchase Certificate. Upon termination of
this Indenture pursuant to Section 12.01 hereof, the Indenture Trustee in
connection with satisfaction of the Indenture shall return to the Company all
property (and related documents and instruments) constituting or evidencing
the Indenture Estate.
SECTION 12.05. Notices. (a) Unless otherwise expressly
specified or permitted by the terms of this Indenture, all notices, requests,
demands, authorizations, directions, consents, waivers or documents provided or
permitted by the Indenture to be made, given, furnished or filed shall be in
writing, mailed by certified mail, postage prepaid, return receipt requested
or delivered by hand or by Federal Express or other delivery service of
established reputation or by confirmed telex or facsimile addressed as follows:
(i) if to the Indenture Trustee, sent to it at its office at
______________________________, Attention: Corporate Trust Department
(Facsimile: (___) ________);
(ii) if to the Company, sent to it at its office at 2007
Corporate Avenue, Memphis, Tennessee, 38132, Attention: Vice
President and Treasurer (Facsimile: (901) 395-3910); and
(iii) if to any Holder, at the address set forth for such Holder
in the Register;
or to such other address as any such party shall advise the others of in
writing for such purpose.
Any notice given pursuant to this Section shall be deemed given, and such
requirement shall be deemed satisfied, when such notice is received, if such
notice is mailed by certified mail, postage prepaid or is delivered by hand or
Federal Express or other delivery service of established reputation, or is
sent by confirmed telex, telecopy or facsimile (if, in the case of a
facsimile, transmitted on a Business Day and during normal business hours of
the recipient, and otherwise on the next Business Day following transmission),
addressed as provided above.
(b) Any party may change the address to which notices to such
party will be sent by giving notice of such change to the other parties to
this Indenture.
SECTION 12.06. Severability. Any provision of this Indenture
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this
Indenture, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.
SECTION 12.07. Binding Effect. All covenants and agreements
contained in this Indenture shall be binding upon the Indenture Trustee and
its successors and assigns, the Company and its successors and assigns, and
each Holder. Any request, notice, direction, consent, waiver or other
instrument or action by any Holder shall bind the successors and assigns of
such Holder.
SECTION 12.08. Headings; Reference. The headings of the
various articles and sections and in the Table of Contents are for convenience
of reference only and shall not define or limit any of the terms or provisions
of this Indenture.
SECTION 12.09. Counterparts. This Indenture may be executed
in separate counterparts, each of which when so executed and delivered shall
be an original, but all such counterparts shall together constitute but one
and the same instrument.
SECTION 12.10. Governing Laws. THIS INDENTURE
IS BEING DELIVERED IN THE STATE OF NEW YORK AND SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
SECTION 12.11. No Oral Modifications. The terms and
provisions of this Indenture may not be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought and subject to Article 10 hereof.
SECTION 12.12. Normal Commercial Relations. Notwithstanding
anything contained in this Indenture to the contrary, the Company, the
Indenture Trustee or any affiliate of either may enter into commercial banking
or other financial transactions and conduct banking or other commercial
relationships fully to the same extent as if this Indenture were not in
effect, including, without limitation, the making of loans or other extensions
of credit for any purpose whatsoever.
SECTION 12.13. Section 1110 Compliance. Notwithstanding any
provision herein or elsewhere contained to the contrary, it is understood and
agreed among the parties hereto that the transactions contemplated by this
Agreement and the other Operative Agreements are expressly intended to be,
shall be and should be construed so as to be, entitled to the full benefits of
Section 1110 of the Bankruptcy Code and any successor provision thereof.
IN WITNESS WHEREOF, the parties have caused this Indenture to
be duly executed by their respective authorized officers, as of the day and
year first above written.
FEDERAL EXPRESS CORPORATION,
Company
By__________________________
Name: Charles Buchas
Title: Vice President
and Treasurer
____________________________,
Indenture Trustee
By__________________________
Name:
Title:
Schedule I
DEFINITIONS
GENERAL PROVISIONS
The following terms shall have the following meanings for all
purposes of the Operative Agreements referred to below, unless otherwise
defined in an Operative Agreement or the context thereof shall otherwise
require. In the case of any conflict between the provisions of this
Schedule and the provisions of any Operative Agreement, the provisions of
such Operative Agreement shall control the construction of such Operative
Agreement.
Unless the context otherwise requires, (i) references to
agreements shall be deemed to mean and include such agreements as amended and
supplemented from time to time, and (ii) references to parties to agreements
shall be deemed to include the successors and permitted assigns of such
parties.
DEFINED TERMS:
Act; Federal Aviation Act. Title 49 of the United States Code
(which, among other things, recodified the Federal Aviation Act of 1958, as
amended to the time of such recodification), as amended and in effect, on the
date of the Lease or as subsequently amended, or any successor or substituted
legislation at the time in effect and applicable, and the regulations
promulgated pursuant thereto.
Additional Insureds. The Indenture Trustee and in the case of
insurance obtained by any lessee of the Aircraft, the Company in its capacity
as lessor under any lease of the Aircraft.
Aeronautics Authority. As appropriate, the Federal Aviation
Administration and/or the Administrator of the Federal Aviation
Administration, any successor to the former United States Civil Aeronautics
Board, or any Person, governmental department, bureau, commission or agency
succeeding to the functions of any of the foregoing.
Affiliate. With respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control
with such Person. For the purposes of this definition, "control"
(including "controlled by" and "under common control with") shall mean the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person whether through the ownership or
voting securities or by contract or otherwise.
After-Tax Basis. A basis such that any payment received or
deemed to have been received by a Person shall be supplemented by a further
payment to such Person so that the sum of the two payments, after deduction of
all Taxes resulting from the receipt or accrual of such payments, shall be
equal to the payment received or deemed to have been received.
Agent. ___________________ and its successors and permitted
assigns, as Agent for the banks named in the Loan Agreement.
Air Carrier. Any U.S. Air Carrier and any "foreign air
carrier" (as defined in the Act) as to which there is in force a permit
granted under Section 41302 of the Act (formerly Section 402 of the Federal
Aviation Act of 1958, as amended to the time of recodification by the Act).
Aircraft. The Airframe [to be sold by the Manufacturer to the
Company pursuant to the Purchase Agreement](*) (or any permitted substitute
Airframe) together with the two Engines (or any Replacement Engine) whether or
not any of such initial or Replacement Engines may from time to time be
installed on such Airframe or may be installed on any other airframe or on any
other aircraft, including any aircraft substituted pursuant to Section 4.05(c)
of the Indenture.
Airframe. The [Manufacturer/Model] aircraft (excluding the
Engines or engines from time to time installed thereon) having the United
States FAA Registration Number and manufacturer's serial number specified in
the Indenture Supplement, including (i) all Parts and (ii) any replacement
airframe which may be substituted pursuant to Section 4.05(c) of the
Indenture.
Bankruptcy Code. The Federal Bankruptcy Code of 1978, as
amended, and any successor thereto.
Bankruptcy Default. An event specified in Section 6.01(d), (e)
and (f) of the Indenture which with the giving of notice or lapse of time or
both would constitute an Event of Default.
[Bills of Sale. Collectively, the FAA Bill of Sale for the
Aircraft and an additional full warranty bill of sale covering the Aircraft
(and specifically referring to each Engine) executed by the Manufacturer in
favor of the Company and dated the Delivery Date.](*)
Business Day. (a) any day on which commercial banks are not
authorized or required to close in New York City.
Citizen of the United States. A citizen of the United States as
defined in Section 40102(a)(15) of the Act (formerly Section 101(16) of the
Federal Aviation Act of 1958, as amended to the time of recodification by the
Act), or any analogous part of any successor or substituted legislation or
regulation at the time in effect.
Code. Except as otherwise provided, references to the Code
shall mean the Internal Revenue Code of 1986, as amended from time to time.
Company. Federal Express Corporation, a Delaware corporation
and its successors and permitted assigns.
Consent and Agreement. The Consent and Agreement means the
Consent and Agreement dated as of ____________, executed by the Manufacturer,
as the same may be amended, modified or supplemented from time to time.
Corporate Trust Office. The corporate trust office of the
Indenture Trustee located at _________________ or such other office at which
the Indenture Trustee's corporate trust business shall be administered that
the Indenture Trustee shall have specified by notice in writing to the
Company and the Holders.
Debt Rate. __% per annum.
Default. Any event or condition, which, with the lapse of time
or the giving of notice, or both, would constitute an Event of Default.
Delayed Delivery Notices. A certificate signed by a
Responsible Officer of the Company (i) requesting that the Pass Through
Trustee temporarily delay purchase of the Equipment Purchase Certificates to a
date later than the Pass Through Closing Date, (ii) stating the amount of the
purchase price of each such Equipment Purchase Certificate and the aggregate
purchase price of all such Equipment Purchase Certificates and (iii) either
(1) setting or resetting the [Delivery](*) [Refunding](**) Date, or (2)
indicating that such [Delivery](*) [Refunding](**) Date will be set by
subsequent written notice not less than three Business Days prior to such new
[Delivery](*) [Refunding](**) Date.
[Delivery Date. The date on which the Aircraft is to be
delivered and sold by the Manufacturer to the Company which date is also the
date of the initial Indenture Supplement.](*)
Engine. Each of the [Model] engines listed by its
manufacturer's serial number in the initial Indenture Supplement, whether or
not from time to time installed on the Airframe or installed on any other
airframe or on any other aircraft, and any Replacement Engine which may from
time to time be substituted for an Engine pursuant to Sections 4.02(c)(vii),
4.05(c) or 4.05(d) of the Indenture, together with all Parts to any such
Engine. Except as otherwise provided, at such time as a Replacement Engine
shall be so substituted and the Engine for which the substitution is made
shall be released from the lien of the Indenture, such replaced Engine shall
cease to be an "Engine" under the Indenture. The term "Engines" means, as of
any date of determination, all Engines subject to the Lien of the Indenture.
Engine Agreement. The General Terms Agreement dated
_______________, between the Company and the Engine Manufacturer (as
heretofore amended, modified and supplemented).
Engine Consent and Agreement. The Engine Consent and Agreement
dated ____________, executed by the Engine Manufacturer.
Engine Manufacturer. _____________________, a ______________
corporation.
Equipment Purchase Certificates. The Equipment Purchase
Certificates issued by the Company pursuant to the Indenture and any
certificate issued in exchange therefor or replacement thereof pursuant to the
Indenture.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
Estate Documents. The Purchase Agreement, the Consent and
Agreement, the Engine Agreement and the Engine Consent and Agreement, in each
case to the extent that the same relate to the Aircraft.
Event of Default. Each of the events specified in Section 6.01
of the Indenture.
Event of Loss. Any of the following events with respect to the
Aircraft, the Airframe or any Engine: (i) loss of such property or its use (A)
for a period in excess of 180 days due to theft or disappearance, or (B) for a
period in excess of 60 days due to the destruction, damage beyond economic
repair or rendition of such property permanently unfit for normal use by the
Company for any reason whatsoever; (ii) any damage to such property which
results in an insurance settlement with respect to such property on the basis
of a total loss, or constructive or compromised total loss; (iii)
condemnation, confiscation or seizure of, or requisition of title to such
property, by the Government, any foreign government or purported government
or agency or instrumentality thereof, (iv) requisition of use of such property
by the Government, a foreign government or instrumentality or agency thereof,
or any purported government or instrumentality or agency thereof, for a period
in excess of 180 days; and (v) as a result of any law, rule, regulation, order
or other action by the Aeronautics Authority or other governmental body having
jurisdiction, the use of the Aircraft or Airframe in the normal course of air
transportation of cargo shall have been prohibited by virtue of a condition
affecting all aircraft of the same type for a period of eighteen (18)
consecutive months, unless the Company, prior to the expiration of such
eighteen month period, shall be diligently carrying forward all steps which
are necessary or desirable to permit the normal use of the Aircraft or
Airframe or, in any event, if such use shall have been prohibited for a period
of two (2) consecutive years, unless the Company, prior to the expiration of
such two (2) year period shall have conformed at least one
[Manufacturer/Model] aircraft (but not necessarily the Aircraft or the
Airframe) to the requirements of any such law, rule, regulation, order, or
other action and shall have commenced regular commercial use and shall be
diligently carrying forward, on a non-discriminatory basis, all steps
necessary or desirable to permit the normal use of the Aircraft by the
Company. The date of such Event of Loss shall be the date of (i) loss of such
property or its use for a period in excess of 180 days due to theft or
disappearance, or loss for a period in excess of 60 days due to damage beyond
economic repair or loss of use of the Airframe because of requisition for use
for a period in excess of 180 days (or shorter period due to insurance
settlement) (ii) an insurance settlement on the basis of total loss with
respect to such property, (iii) condemnation, confiscation, seizure or
requisition of title, or (iv) prohibition from usage for the periods described
in clause (v) above. An Event of Loss with respect to the Aircraft shall be
deemed to have occurred if any Event of Loss occurs with respect to the
Airframe.
Fair Market Value. An amount determined on the basis of, and
equal in amount to, the value which would be obtained in an arm's-length
transaction between an informed and willing purchaser under no compulsion to
buy and an informed and willing seller unaffiliated with such purchaser and
under no compulsion to sell. In such determination it shall be assumed that
the Aircraft is in the condition required under the Indenture.
Federal Aviation Administration and FAA. The United States
Federal Aviation Administration and any successor agency or agencies thereto.
Government. The United States of America or an agency or
instrumentality thereof.
Holder. On any date of determination, the Person in whose name
such Equipment Purchase Certificate is registered. In no event shall the term
Holder include a holder of a Pass Through Certificate.
Indemnified Person. Has the meaning set forth in Section
7.05(b)(ii) of the Indenture.
Indenture. The Trust Indenture, Mortgage and Security
Agreement, dated as of ___________, 199_, between the Company and the
Indenture Trustee as amended, supplemented or modified by any amendment or
supplement thereto from time to time entered into.
Indenture Amendment. Has the meaning set forth in Section
11.02 of the Indenture.
Indenture Estate. Has the meaning set forth in the Granting
Clause of the Indenture.
Indenture Supplement. A supplement to the Indenture,
substantially in the form of Exhibit A to the Indenture.
Indenture Trustee. ______, a national banking association,
not in its individual capacity, but solely in its capacity as Indenture
Trustee under the Indenture and its successors and permitted assigns as
trustee thereunder.
Independent Investment Banker. An independent investment
banking institution of national standing appointed by the Company that is
independent in fact, does not have any direct financial interest, or any
material indirect financial interest, in the Company or any Affiliate of the
Company, and is not connected with the Company or any Affiliate of the Company
as an officer, employee, promoter, underwriter, trustee, partner, director or
Person performing similar functions; provided, that if the Indenture Trustee
shall not have received written notice of such an appointment at least 10 days
prior to the Prepayment Date or if an Event of Default shall have occurred and
be continuing, "Independent Investment Banker" shall mean such an institution
appointed by the Indenture Trustee.
Lien. Any mortgage, pledge, lien, charge, encumbrance, lease
or security interest.
[Loan Agreement. The Loan Agreement dated as of _________,
199_ between the Company, the banks named therein and _______, as agent for
such banks (as amended, modified, supplemented and in effect from time to
time).](**)
Majority in Interest of Certificate Holders. As of a
particular date of determination, the Holders of more than 50% in aggregate
unpaid principal amount of all Equipment Purchase Certificates outstanding as
of such date excluding for purposes of this definition any Equipment Purchase
Certificates held by the Company or any Affiliate thereof.
Make-Whole Premium. With respect to each Equipment Purchase
Certificate to be prepaid pursuant to Section 2.02(c) of the Indenture, an
amount determined as of the day before the applicable prepayment date which an
Independent Investment Banker determines to be equal to the excess, if any,
of (i) the present values of all remaining scheduled payments of principal
or portion thereof and interest thereon (excluding interest accrued from
the immediately preceding Payment Date to such prepayment date) to the
Maturity of such Equipment Purchase Certificate in accordance with
generally accepted financial practices assuming a 360-day year consisting
of twelve 30-day months at a discount rate equal to Treasury Yield, all as
determined by the Independent Investment Banker over (ii) the unpaid
principal amount of such Equipment Purchase Certificate.
Manufacturer. _________________, a ______________ corporation.
Maturity. With respect to any Equipment Purchase Certificate,
the date on which the final principal amount of such Equipment Purchase
Certificate is payable.
Moody's. Moody's Investors Service, Inc.
Obligations. Principal of and interest on the Equipment
Purchase Certificates and all other amounts owing by the Company thereunder
and under the Indenture in respect of the Equipment Purchase Certificates and
under the other Operative Agreements and the performance and observance by the
Company of all of the agreements, covenants and provisions contained in the
Indenture in respect of the Equipment Purchase Certificates and in the other
Operative Agreements.
Obsolete Parts. Parts which the Company deems obsolete or no
longer suitable or appropriate for use on the Airframe or any Engine.
Operative Agreements. The Indenture, the Indenture Supplement,
the Equipment Purchase Certificates, [the Bills of Sale,](*) the Pass Through
Agreement, the Series Supplements, the Estate Documents and the Participation
Agreement.
[Original Equipment Purchase Certificates. The equipment
purchase certificates issued on the Delivery Date.
[Original Indenture. The Indenture, Mortgage and Security
Agreement dated as of ________, 199_, between the Company and the Indenture
Trustee which, together with the Indenture and Security Agreement Supplement
No. 1 dated _________, attached thereto was recorded as one instrument by the
FAA on ________ and assigned Conveyance Number ___.](**)
Participation Agreement. The Participation Agreement to be
entered into by the Company relating to the purchase of the Equipment Purchase
Certificates by the Pass Through Trustee, substantially as set forth in
Exhibit C to the Indenture.
Parts. All appliances, parts, components, instruments,
appurtenances, accessories, furnishings and other equipment of whatever nature
(other than complete Engines or engines) which may from time to time be
incorporated or installed in or attached to the Airframe or any Engine or
prior to replacement thereof in accordance with the Indenture, which may be
removed therefrom.
Pass Through Agreement. The Pass Through Trust Agreement to be
entered into by the Company and the Pass Through Trustee, as such Pass Through
Agreement may be modified, supplemented or amended from time to time in
accordance with the provisions thereof.
Pass Through Certificates. Any of the Pass Through
Certificates, as issued by the related Pass Through Trust; and "Pass Through
Certificates" means all of the Pass Through Certificates issued by each of the
Pass Through Trusts.
Pass Through Closing Date. The Business Day on which the sale
of the Pass Through Certificates to the Underwriters pursuant to the
Underwriting Agreement takes place.
Pass Through Trust. The Federal Express Pass Through Trust
formed pursuant to the related Series Supplement in accordance with the Pass
Through Agreement.
Pass Through Trustee. __________________, a national banking
association, in its capacity as Pass Through Trustee under the Pass Through
Agreement and each Pass Through Trust, and its successors and assigns as Pass
Through Trustee thereunder.
Payment Date. Each six-month anniversary of the Refunding
Date.
Payment Default. Any event specified in Section 6.01(a) of the
Indenture which with the giving of notice or lapse of time or both would
constitute an Event of Default.
Permitted Investments. Investment in (i) direct obligations of
the United States of America; (ii) obligations fully guaranteed by the United
States; (iii) certificates of deposit issued by, or bankers' acceptances of,
or time deposits or a deposit account with, any bank, trust company or
national banking association incorporated or doing business under the laws of
the United States of America or one of its States (which may include the
Indenture Trustee, in its individual capacity, and any of its Affiliates),
having a combined capital and surplus of at least $500,000,000 and having a
rating of "B" or better from the Thomson Bank Watch; or (iv) commercial paper
rated at least A-1/P-1 by S&P and Moody's, respectively (or if neither such
organization shall rate such commercial paper at any time, by any nationally
recognized rating organization in the United States of America equal to the
highest rating assigned by such rating organization).
Person. Any individual, sole proprietorship, partnership,
joint venture, joint stock company, trust, unincorporated organization,
association, corporation, institution, entity or government (federal, state,
local, foreign or any agency, instrumentality, division or body thereof).
Post-Default Rate. A rate of interest per annum equal to ____%
per annum plus the Debt Rate.
[Purchase Agreement. The Purchase Agreement dated _________,
between the Manufacturer and the Company (as heretofore amended, modified and
supplemented), providing inter alia, for the manufacture and sale by the
Manufacturer to the Company of certain [Manufacturer/Model] aircraft, as such
Purchase Agreement may hereafter be amended, modified or supplemented, but
solely as such Purchase Agreement relates to the Aircraft.](*)
Record Date. With respect to Payment Dates under the Indenture
(except a date for payment of defaulted interest), ________ for ________
Payment Dates and _________ for ____________ Payment Dates, whether or not
such date is a Business Day.
Refunding Date. A Business Day on which the refunding of the
Original Equipment Purchase Certificates occurs, the expected date thereof
having been specified by the Company in a written notice given to the
Indenture Trustee and the Pass Through Trustee.
Register. Has the meaning specified in Section 2.07 of the
Indenture.
Replacement Engine. A [Manufacturer/Model] engine (or an
engine of the same or another manufacturer of the same or of equal or greater
value, and utility), which shall have been substituted for an Engine pursuant
to Sections 4.02(c)(vii), 4.05(c) or 4.05(d) of the Indenture and leased
pursuant to the Lease, together with all Parts relating to such engine.
Responsible Officer. With respect to the Indenture Trustee,
any officer in its Corporate Trust Administration Department designated by
such person to perform obligations under the Operative Agreements, and with
respect to any other Person, any corporate officer or other employee of a
Person who, in the normal performance of his or her operational
responsibilities, with respect to the subject matter of any covenant,
agreement or obligation of such party pursuant to any Operative Agreement,
would have responsibility for and knowledge of such matter and the
requirements of any Operative Agreement with respect thereto.
S&P. Standard & Poor's Corporation.
SEC. The Securities and Exchange Commission of the United
States and any successor agencies or authorities.
Series Supplement. Each Series Supplement to be executed and
delivered by the Company and the Pass Through Trustee, as such Series
Supplement may be modified, supplemented or amended from time to time in
accordance with the provisions thereof and "Series Supplements" means both of
such Series Supplements.
Special Aviation Counsel. Daugherty, Fowler & Peregrin.
Supplemented Indenture. Has the meaning set forth in Section
2.02(b)(i) of the Indenture.
Threshold Value. Has the meaning set forth in Section
4.06(b) of the Indenture.
Treasury Yield. (i) In the case of an Equipment Purchase
Certificate having a Maturity within one year after the prepayment date, the
average yield to maturity on a government bond equivalent basis of the
applicable United States Treasury Bill due the week of Maturity of such
Equipment Purchase Certificate and (ii) in the case of an Equipment Purchase
Certificate having a Maturity one year or more after the Prepayment Date, the
average yield of the most actively traded United States Treasury Note (as
reported by Cantor Fitzgerald Securities Corp. on page 5 of Telerate Systems,
Inc., a financial news service, or if such report is not available, a source
deemed comparable by the Independent Investment Banker selected to determine
the Make-Whole Premium and reasonably acceptable to the Company) corresponding
in maturity to such Equipment Purchase Certificate (or if there is no
corresponding maturity, an interpolation of maturities by the Independent
Investment Banker), in each case determined by the Independent Investment
Banker selected to determine the Make-Whole Premium based on the average of
the yields to stated maturity determined from the bid prices as of 10:00 a.m.
and 2:00 p.m., New York time, on the second Business Day preceding the
prepayment date.
Underwriters, for any Underwriting Agreement, the several
Underwriters named therein.
Underwriting Agreement. An agreement among the Company and the
several Underwriters relating to the purchase by such Underwriters of the Pass
Through Certificates.
United States or US. The United States of America.
U.S. Air Carrier. Any United States air carrier as to which
there is in force a certificate issued pursuant to Section 41102(a) or Section
41103 of the Federal Aviation Act (formerly Sections 401 and 418,
respectively, of the Federal Aviation Act of 1958, as amended to the time of
recodification by the Act), and as to which there is in force an air carrier
operating certificate issued pursuant to Chapter 447 of the Federal Aviation
Act and Part 121 of the regulations under such Act, or which may operate as an
air carrier by certification or otherwise under any successor or substitute
provision thereof or in absence thereof.
Schedule II
PERMITTED COUNTRY LIST
Argentina Italy
Australia Jamaica
Austria Japan
Bahamas Luxembourg
Barbados Malaysia
Belgium Malta
Brazil Mexico
British Virgin Islands Netherlands
Canada New Zealand
Cayman Islands Norway
Denmark Portugal
Egypt Republic of China (Taiwan)
Finland Singapore
France South Korea
Germany Spain
Greece Sweden
Grenada Switzerland
Hong Kong Thailand
Iceland Trinidad & Tabago
Indonesia United Kingdom
Ireland
EXHIBIT A
TO
INDENTURE
FORM OF INDENTURE SUPPLEMENT
THIS INDENTURE SUPPLEMENT, dated ________ __, 1992 between
FEDERAL EXPRESS CORPORATION (the "Company"), a Delaware corporation, and
________________, a national banking corporation, not in its individual
capacity but solely as trustee ( the "Indenture Trustee") under Trust
Indenture, Indenture and Security Agreement dated as of __________ __, 199_
(the "Indenture") between the Company and the Indenture Trustee. All
capitalized terms used herein and not defined herein shall have the respective
meanings set forth in the Indenture.
W I T N E S S E T H :
WHEREAS,(***) the Indenture provides for the execution and
delivery of a Supplement substantially in the form of this Supplement, which
Supplement shall particularly describe the Aircraft included in the Indenture
Estate, and shall specifically mortgage such Aircraft to the Indenture
Trustee; and
WHEREAS,(****) the Indenture Supplement dated ______________,
____ (the Indenture being attached to and made a part of such Supplement and
filed therewith) have been duly recorded pursuant to the Federal Aviation Act
of 1958, as amended on __________________, ____, as one document and have been
assigned Conveyance No. ________;
*** This recital is to be included only in the first Supplement.
**** This recital is not to be included in the first Supplement.
WHEREAS, the Indenture relates to the Aircraft and the Engines
described in the following paragraph and a counterpart of the Indenture is
attached to and made a part of this Supplement, and this Supplement, together
with such attachment, is being filed for recordation on or promptly after the
date of this Supplement with the Federal Aviation Administration as one
document.
NOW, THEREFORE, to secure (i) the prompt payment of the
principal of and Make-Whole Premium, if any, and interest on, and all other
amounts due with respect to, all the Equipment Purchase Certificates from time
to time outstanding under the Indenture and (ii) the performance and
observance by the Company of all the agreements, covenants and provisions in
this Indenture contained for the benefit of the Holders of the Equipment
Purchase Certificates, and for the uses and purposes and subject to the terms
and conditions of the Indenture, and in consideration of the premises and of
the covenants contained in the Indenture and in the Equipment Purchase
Certificates and of the purchase of the Equipment Purchase Certificates by the
Holders, and of the sum of $1.00 paid to the Company by the Indenture Trustee
at or before the delivery of this Supplement, the receipt of which is hereby
acknowledged, the Company has granted, bargained, sold, assigned, transferred,
conveyed, mortgaged, pledged, granted a security interest in and confirmed,
and does hereby grant, bargain, sell, assign, transfer, convey, mortgage,
pledge, grant a purchase money equipment security interest in and confirm to
the Indenture Trustee, its successors and assigns in the trust created by the
Indenture for the security and benefit of the Holders from time to time of the
Equipment Purchase Certificates, the following described Equipment (the
"Delivered Equipment"):
(i) one (1) Manufacturer/Model Registration Number ______;
Manufacturer's Serial No. _____;
(ii) Manufacturer/Model engines bearing, respectively,
Manufacturer's Serial Nos. ______, ______, and ______ (each of which
engines has 750 or more rated takeoff horsepower or the equivalent of
such horsepower); and
whether or not such engines shall be installed in or attached to such airframe
or any other airframe.
Together with all substitutions, replacements and renewals, by
whomsoever manufactured, of the property above described, and all property
which shall hereafter become physically attached to or incorporated in the
property above described, by whomsoever manufactured, whether the same are now
owned by the Company or shall hereafter be acquired by it and all Parts in
respect thereof.
TO HAVE AND TO HOLD the aforesaid property to the Indenture
Trustee, its successors and assigns, for the benefit and security of the
Holders from time to time of the Equipment Purchase Certificates and for the
uses and purposes and subject to the terms and conditions set forth in the
Indenture.
AND, FURTHER, the Company, hereby acknowledges that the
Delivered Equipment referred to in the aforesaid Indenture attached to and
made a part of this Supplement has been delivered to the Company and is
included in the property of the Company, subject to the pledge or mortgage
under the Indenture.
This Supplement shall be construed as supplemental to the
Indenture and shall form a part thereof, and the Indenture is hereby
incorporated by reference in this Supplement and is hereby ratified, approved
and confirmed.
This Supplement may be executed by the Company and the
Indenture Trustee in separate counterparts, each of which when so executed and
delivered is an original, but all such counterparts shall together constitute
but one and the same Supplement.
IN WITNESS WHEREOF, the Company and the Indenture Trustee have
each caused this Supplement to be duly executed by their respective, duly
authorized officers as of the day and year first above written.
COMPANY: FEDERAL EXPRESS CORPORATION,
By___________________________
Title: Vice President
and Treasurer
INDENTURE TRUSTEE: ___________________________,
not in its individual
capacity, but solely as
Indenture Trustee,
By___________________________
Title:
EXHIBIT B
TO
INDENTURE
FORM OF EQUIPMENT PURCHASE CERTIFICATE
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR OFFERED FOR SALE
UNLESS REGISTERED UNDER SAID ACT OR LAWS OR UNLESS AN EXEMPTION IS AVAILABLE
UNDER SAID ACT OR LAWS.
FEDERAL EXPRESS CORPORATION
EQUIPMENT PURCHASE CERTIFICATE DUE ____
FEDERAL EXPRESS CORPORATION [SERIES NAME]
ISSUED IN CONNECTION WITH ONE MANUFACTURER/MODEL AIRCRAFT WITH MANUFACTURER'S
SERIAL NO. ______, AND INITIALLY BEARING UNITED STATES FEDERAL AVIATION
ADMINISTRATION REGISTRATION NO. ______ AND INCLUDING MANUFACTURER/MODEL
ENGINES
No. ______ __, 199_
$
FEDERAL EXPRESS CORPORATION hereby promises to pay to
__________________________________, or its registered assigns, the principal
sum of ___________ in __ installments as set forth in Annex A hereto, each
such installment to be in an amount equal to the amount set forth in Annex A
hereto, together with interest on each Payment Date on the amount of said
principal sum remaining unpaid from time to time from and including the date
of this Equipment Purchase Certificate until paid at the rates per annum
provided in the Trust Indenture, Mortgage and Security Agreement, dated as of
_________ _, 199_ between the Company and _______________________, not in its
individual capacity except as otherwise expressly provided therein, but solely
as Indenture Trustee (the "Indenture"), all as more fully provided therein.
Capitalized terms used herein and not otherwise defined have
the meanings specified in Schedule I to the Indenture.
All principal, interest and other amounts payable on, under or
in respect of this Equipment Purchase Certificate shall be payable in U.S.
dollars in immediately available funds at the Corporate Trust Office of the
Indenture Trustee or at any office or agency maintained for such purpose
pursuant to the Indenture and otherwise in accordance with the terms of the
Indenture; provided, however that interest may be payable at the option of the
Indenture Trustee by mailing checks for such interest payable to or on the
written order of the Holders entitled thereto as they shall appear on the
Register; provided further, however, that notwithstanding the foregoing to the
contrary, interest payable with respect to the Equipment Purchase
Certificates as to which the Pass Through Trustee is the Holder shall be sent
by wire transfer of immediately available funds to an account or accounts in
the United States previously specified by the Pass Through Trustee to the
Indenture Trustee.
Each Holder, by its acceptance of an Equipment Purchase
Certificate, agrees that the Indenture Trustee is not and shall not be
personally liable to the Holder for any amount payable under such Equipment
Purchase Certificate or the Indenture or except as expressly provided in the
Indenture, for any liability under the Indenture.
This Equipment Purchase Certificate is one of the Equipment
Purchase Certificates referred to in the Indenture which has been or is to be
issued by the Company pursuant to the terms of the Indenture. The Indenture
Estate is held by the Indenture Trustee as security for the Equipment Purchase
Certificates. Reference is hereby made to the Indenture for a statement of
the rights and obligations of the Holder of, and the nature and extent of the
security for, this Equipment Purchase Certificate and of the rights and
obligations of the Holders of, and the nature and extent of the security for,
the other Equipment Purchase Certificates under the Indenture, as well as for
a statement of the terms and conditions of the trusts created by the
Indenture, to all of which terms and conditions in the Indenture each Holder
of this Equipment Purchase Certificate agrees by its acceptance of this
Equipment Purchase Certificate.
The obligations of the Company with respect to this Equipment
Purchase Certificate may, at the Company's option, be assumed by an Owner
Trustee on a non-recourse basis in connection with a sale-leaseback
transaction relating to the Aircraft as provided in Article 11 of the
Indenture, and the Holder hereof, by its acceptance of this Equipment
Purchase Certificate, consents to such assumption.
As provided in the Indenture and subject to certain limitations
set forth in the Indenture, the Equipment Purchase Certificates are
exchangeable for a like aggregate principal amount of Equipment Purchase
Certificates of a different denomination, as requested by the Holder
surrendering the same.
This Equipment Purchase Certificate is a registered Equipment
Purchase Certificate and is transferable, as provided in the Indenture, only
upon surrender of this Equipment Purchase Certificate for registration of
transfer duly endorsed by, or accompanied by a written statement of transfer
duly executed by, the registered Holder hereof or his attorney duly authorized
in writing. Prior to due presentment for registration of transfer of this
Equipment Purchase Certificate, the Company and the Indenture Trustee shall
deem and treat the person in whose name this Equipment Purchase Certificate is
registered as the owner of this Equipment Purchase Certificate for all
purposes whether or not this Equipment Purchase Certificate shall be overdue,
and neither the Company nor the Indenture Trustee shall be affected by notice
to the contrary.
This Equipment Purchase Certificate is not subject to
prepayment except as specifically provided in the Indenture.
Until the certificate of authentication below shall have been
duly executed by or on behalf of the Indenture Trustee by manual signature,
this Equipment Purchase Certificate shall not be entitled to any benefit under
the Indenture or be valid or obligatory for any purpose.
This Equipment Purchase Certificate may become or be declared
due and payable prior to its Maturity as provided in the Indenture.
No employee benefit plan subject to Title I of ERISA or
individual retirement account or employee benefit plan subject to Section 4975
of the Code, or any trust established under any such plan or account
(hereinafter collectively referred to as an "ERISA Plan"), may acquire or hold
any of the Equipment Purchase Certificates. The acquiring by any Person of
any Equipment Purchase Certificates shall be deemed to constitute a
representation by such Person to the Company and the Indenture Trustee that
such person is not an ERISA Plan and that such Person is not acquiring, and
has not acquired, such Equipment Purchase Certificate with assets of an ERISA
Plan.
THIS EQUIPMENT PURCHASE CERTIFICATE SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
IN WITNESS WHEREOF, the Company has caused this Equipment
Purchase Certificate to be executed by its duly authorized officer as of the
date hereof.
FEDERAL EXPRESS CORPORATION
By____________________________
Title:
[FORM OF INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is the Equipment Purchase Certificate referred to in the
within mentioned Indenture.
__________________________,
not in its individual
capacity, but solely as
Indenture Trustee
By_________________________
Title: Authorized Officer
ANNEX A
TO
EQUIPMENT PURCHASE CERTIFICATE
SCHEDULE OF PRINCIPAL PAYMENTS
EXHIBIT C
TO
INDENTURE
FORM OF PARTICIPATION AGREEMENT
See Exhibit 4(e)(2) to this Registration Statement.
EXHIBIT D
TO
INDENTURE
FORM OF LEASE AGREEMENT
See Exhibit 4(g) to this Registration Statement
EXHIBIT E
TO
INDENTURE
FORM OF INDENTURE AMENDMENT
See Exhibit 4(c) to this Registration Statement
EXHIBIT F
TO
INDENTURE
FORM OF LEASE PARTICIPATION AGREEMENT
See Exhibit 4(e)(1) to this Registration Statement
Exhibit 4(e)(2)
PARTICIPATION AGREEMENT
Dated as of ___________, 199_
among
FEDERAL EXPRESS CORPORATION,
_____________________________,
as Pass Through Trustee
and
_____________________________,
as Indenture Trustee
_________________________________________
Relating to
One [Manufacturer/Model] Aircraft
TABLE OF CONTENTS
Page
SECTION 1. Certain Definitions . . . . . . . . . 2
SECTION 2. Purchase of Equipment Purchase
Certificates . . . . . . . . . . . . 2
SECTION 3. Conditions Precedent . . . . . . . . . 4
SECTION 4. Representations, Warranties and
Agreements of the Company . . . . . . 9
SECTION 5. Representations and Warranties of
the Pass Through Trustee . . . . . . 12
SECTION 6. Representations of the Indenture
Trustee . . . . . . . . . . . . . . . 13
SECTION 7. Notices . . . . . . . . . . . . . . . 14
SECTION 8. Expenses . . . . . . . . . . . . . . 14
SECTION 9. Survival of Representations and
Warranties . . . . . . . . . . . . . 14
SECTION 10. Counterparts . . . . . . . . . . . . 15
SECTION 11. Entire Agreement; Amendments and
Waivers . . . . . . . . . . . . . . . 15
SECTION 12. Headings and Table of Contents . . . 15
SECTION 13. Governing Law . . . . . . . . . . . . 15
SECTION 14. Capacity in Which Acting . . . . . . 15
SCHEDULE I Definitions
SCHEDULE II Schedule of Equipment Purchase Certificates
EXHIBIT A Form of Opinion of ____________________,
Special Counsel for the Company
EXHIBIT B Form of Opinion of Counsel for the Company
EXHIBIT C Form of Opinion of Daugherty, Fowler &
Peregrin
EXHIBIT D Form of Opinion of _____________________,
Special Counsel for the Indenture Trustee
EXHIBIT E Form of Opinion of _____________________,
Special Counsel for the Pass Through Trustee
PARTICIPATION AGREEMENT
This PARTICIPATION AGREEMENT (this "Agreement") dated as of
__________, 199_ among FEDERAL EXPRESS CORPORATION, a Delaware corporation,
_____________________________, ____________________, a national banking
association, not in its individual capacity except as otherwise expressly
provided herein, but solely as Pass Through Trustee under the Pass Through
Agreement and ______________________, ____________________, not in its
individual capacity, except as otherwise expressly provided herein, but solely
as Indenture Trustee, under the Indenture.
W I T N E S S E T H:
[WHEREAS, the Company (such term and other capitalized terms
used herein being defined as hereinafter provided) has entered into a Purchase
Agreement with the Manufacturer regarding inter alia, the purchase of the
Aircraft by the Company from the Manufacturer; and
WHEREAS, the Company desires to finance a portion of the
purchase price of the Aircraft through the issuance of Equipment Purchase
Certificates and to such end shall execute and deliver the Indenture;](*)
[WHEREAS, the Company (such term and other capitalized terms
used herein being defined as hereinafter provided) purchased the Aircraft from
the Manufacturer and, in connection with such purchase, (i) entered into the
Loan Agreement, pursuant to which the Company borrowed funds which it applied
to the Purchase Price for the Aircraft, and (ii) entered into the Original
Indenture with the Indenture Trustee, under which, among other things, the
Company issued the Original Equipment Purchase Certificates to evidence such
borrowing and granted a security interest in the Aircraft to the Indenture
Trustee for the equal and ratable benefit of the holders from time to time of
such the Original Equipment Purchase Certificates; and
(*) Bracketed information followed by an asterisk
([ ](*)) will be included only in the case of
initial funding.
(**) Bracketed information followed by two asterisks
([ ](**)) will be included only in the case of
refunding.
WHEREAS, the Company wishes to cause a refinancing of such
Equipment Purchase Certificates, and the Pass Through Trustee wishes to
acquire Equipment Purchase Certificates issued under the Indenture, as amended
and restated, all upon the terms and conditions hereinafter set forth;](**)
NOW, THEREFORE, in consideration of the mutual agreements
herein contained and other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. Certain Definitions. Unless the context requires
otherwise, all capitalized terms used herein and not otherwise defined herein
shall have the meanings set forth in Schedule I hereto.
SECTION 2. Purchase of Equipment Purchase Certificates. (a)
On or before the [Delivery](*) [Refunding](**) Date, the Pass Through
Trustee and the Company, in accordance with the Pass Through Agreement, shall
enter into the Series Supplements, and, subject to the terms and conditions
set forth therein, on the [Delivery](*) [Refunding](**) Date (i) the Company
shall direct the Underwriters to execute a wire transfer or intra-bank
transfer to the Pass Through Trustee in the amount of the total proceeds
payable pursuant to the Underwriting Agreement with respect to the Pass
Through Certificates and (ii) the Pass Through Trustee shall deliver the Pass
Through Certificates to the Underwriters upon receipt by the Pass Through
Trustee of such proceeds.
(b) Subject to the satisfaction or waiver of the conditions set
forth herein, at 11:00 a.m. New York City time on the [Delivery](*)
[Refunding](**)Date, the Pass Through Trustee for each Pass Through Trust
shall purchase Equipment Purchase Certificates of the Maturity, aggregate
principal amount, and bearing the interest rate that relates to such Pass
Through Trust set forth on Schedule II hereto and the Indenture Trustee shall
deliver such Equipment Purchase Certificates to the Pass Through Trustee.
[Simultaneously with the payment of the Purchase Amount by the Pass Through
Trustee for each Pass Through Trust, the Company will pay to the order of the
Agent on behalf of the holders thereof an amount equal to the accrued and
unpaid interest on the original Equipment Purchase Certificates to the
Refunding Date, whether or not then due, and all other amounts (other than
principal) payable to the Indenture Trustee, the Agent and such holders
under the Original Equipment Purchase Certificates, the Indenture or the
Loan Agreement (as each such amount pertains to the Original Equipment
Purchase Certificates) on the Refunding Date.](**) As a condition
precedent to any such purchase, the Underwriters shall have indemnified the
Indenture Trustee [and]* the Pass Through Trustee[, the Agent and the
holders of the Original Equipment Purchase Certificates](**) from and
against any loss, liability, claim or expense arising out of or relating to
the underwriting of the Pass Through Certificates, it being expressly
understood and agreed that no such Person shall be deemed to have made any
representation or warranty whatsoever in connection therewith.
The Pass Through Trustee, from the proceeds of sale of the
related Pass Through Certificates, shall execute a wire transfer or intra-bank
transfer of immediately available funds in favor of the Indenture Trustee on
behalf of the Company in the amount of the [then outstanding](**) principal
amount of the applicable Equipment Purchase Certificates and which amounts
shall be [paid by the Indenture Trustee to the Company](*) [applied by the
Indenture Trustee in prepayment of the principal amount of the original
Equipment Purchase Certificates](**). [Upon receipt of the amounts set forth
in this Section 2(b) hereof, the holders of the Original Equipment Purchase
Certificates shall deliver the same to the Indenture Trustee for cancellation
and such delivery will constitute an acknowledgement by each such holder that
it has no further interest in or right with respect to the Indenture
Estate.](**)
(c) If, on or prior to the Pass Through Closing Date, the
Company delivers to the Pass Through Trustee and the Indenture Trustee a
Delayed Delivery Notice relating to the Equipment Purchase Certificates, the
[Delivery](*) [Refunding](**) Date shall be postponed to the date specified
in such Delayed Delivery Notice. On such later [Delivery](*) [Refunding](**)
Date, the purchase by the Pass Through Trustee shall occur as provided in this
Section 2 and the Company shall, on the Initial Regular Distribution Date (as
such term is defined in the Series Supplements) for each Pass Through Trust,
pay in immediately available funds to the Pass Through Trustee for such Pass
Through Trust an amount equal to the interest that would have accrued on the
Equipment Purchase Certificates purchased by such Pass Through Trust after the
Pass Through Closing Date if such Equipment Purchase Certificates had been
purchased on such Pass Through Closing Date, from such Pass Through Closing
Date to, but not including, the [Delivery](*) [Refunding](**) Date on which
such Equipment Purchase Certificates were so purchased.
(d) The Purchase Amount, and all amounts payable by the
Company pursuant to Section 2[(b) or](**) (c) above, shall be paid by wire
transfer of immediately available funds to the account(s) and in such amounts
as [the Company,](*) [the Agent](**) or the Pass Through Trustee shall specify
by notice given not less than one Business Day prior to the [Delivery](*)
[Refunding](**) Date.
(e) The closing of the transactions described in this
Agreement shall take place at the offices of Davis Polk & Wardwell, 450
Lexington Avenue, New York, New York 10017.
(f) In order to facilitate the purchase by the Pass Through
Trustee under each Pass Through Trust of the Equipment Purchase Certificates
contemplated hereby, the Company (i) is entering into the Underwriting
Agreement, (ii) [is entering] [has entered] into the Pass Through Agreement as
the "issuer" (as defined in and solely for purposes of the Securities Act of
1933, as amended) and will enter into the Series Supplements with respect to
the Pass Through Certificates and (iii) is undertaking to perform certain
administrative and ministerial duties under the Pass Through Agreement.
SECTION 3. Conditions Precedent. The obligation of the Pass
Through Trustee under each Pass Through Trust to purchase the Equipment
Purchase Certificates on the [Delivery](*) [Refunding](**) Date is subject to
the fulfillment, prior to or on the [Delivery](*) [Refunding](**) Date, of the
following conditions precedent:
(a) Each party (other than the delivering party) shall have
received the following documents in form and substance satisfactory to it:
(i) a copy of the certificate of incorporation and bylaws of
the Company certified by the Secretary or Assistant Secretary of the
Company (or other like instruments satisfactory to such party), and of
resolutions of the Board of Directors of the Company duly authorizing
the execution and delivery by the Company of this Agreement and the
other Operative Agreements, together with an incumbency certificate of
the Company as to the Person or Persons authorized to execute and
deliver said documents on behalf of the Company and the signatures of
such Person or Persons;
(ii) a copy of the articles of association and bylaws of the
Pass Through Trustee, certified by the Secretary or an Assistant
Secretary of the Pass Through Trustee, which by-laws include a
provision duly authorizing the execution and delivery by the Pass
Through Trustee or this Agreement and the other Operative Agreements
to which it is a party required to be executed and delivered in
connection herewith, together with an incumbency certificate of the
Pass Through Trustee as to the Person or Persons authorized to
execute and deliver said documents on behalf of the Pass Through
Trustee and the signatures of such Person or Persons;
(iii) a copy of the articles of association and bylaws of the
Indenture Trustee, certified by the Secretary or Assistant Secretary
of the Indenture Trustee, which by-laws include a provision duly
authorizing the execution and delivery by the Indenture Trustee of
this Agreement and any other documents required to be executed and
delivered in connection herewith, together with an incumbency
certificate of the Indenture Trustee as to the Person or Persons
authorized to execute and deliver said documents on behalf of the
Indenture Trustee and the signatures of such Person or Persons;
(iv) a certificate signed by an authorized officer of the
Company, dated the [Delivery](*) [Refunding](**) Date, certifying
that:
(A) the Aircraft has been duly certified by the Federal
Aviation Administration as to type and airworthiness in
accordance with the terms of the Indenture;
(B) the FAA Bill of Sale, the Indenture and each
Indenture Supplement have been duly [filed for recording](*)
[recorded](**) with the FAA pursuant to the Federal Aviation
Act;
(C) the Aircraft has been registered with the FAA in
the name of the Company and the Company has authority to
operate such Aircraft;
(D) the Company has good and marketable title to the
Aircraft, free and clear of all Liens other than Liens
permitted under Article IV of the Indenture;
(E) the representations and warranties of the Company
contained herein and the representations and warranties of the
Company in the Indenture, are correct as though made on and as
of the [Delivery](*) [Refunding](**) Date, except to the extent
that such representations and warranties relate solely to an
earlier date (in which case such representations and warranties
were correct on and as of such earlier date);
(F) no event has occurred and is continuing which
constitutes an Event of Default under the Indenture or would
constitute an Event of Default under the Indenture but for the
requirement that notice be given or time elapsed or both; and
(G) no event has occurred and is continuing which
constitutes, or would with the passage of time constitute, an
Event of Loss with respect to the Airframe or any Engine;
(v) a certificate signed by an authorized officer of the Pass
Through Trustee, dated the [Delivery](*) [Refunding](**) Date,
certifying that the representations and warranties of the Pass
Through Trustee contained herein are correct as though made on and as
of the [Delivery](*) [Refunding](**) Date, except to the extent that
such representations and warranties relate solely to an earlier date
(in which case such representations and warranties were correct on
and as of such earlier date); and
(vi) a certificate signed by an authorized officer of the
Indenture Trustee, dated the [Delivery](*) [Refunding](**) Date,
certifying that the representations and warranties of the Indenture
Trustee contained herein and in the Indenture are correct as though
made on and as of the [Delivery](*) [Refunding](**) Date, except to
the extent that such representations and warranties relate solely to
an earlier date (in which case such representations and warranties
were correct on and as of such earlier date.
(b) The Pass Through Trustee shall have received concurrently
with making its payment of the Purchase Amount, the Equipment Purchase
Certificates duly registered in its name.
(c) The Pass Through Trustee shall have received the audited
consolidated balance sheet of the Company for the fiscal year ended May 31,
199_ [and the unaudited consolidated balance sheet of the Company as of
_________, 199_], and the related consolidated statements of income and cash
flows for the fiscal year[ and interim reporting period] ended on such
date[s], accompanied [(except in the case of such interim reporting period)]
by a report thereon containing opinions without qualification, except as
therein noted, by Arthur Andersen & Co., independent public accountants; said
financial statements have been prepared in accordance with generally accepted
accounting principles consistently applied and present fairly the financial
position of the Company as of such dates and the results of its operations and
cash flows for such periods.
(d) No action or proceeding shall have been instituted nor
shall governmental action be threatened before any court or governmental
agency, nor shall any order, judgment or decree have been issued or proposed
to be issued by any court or governmental agency at the time of the
[Delivery](*) [Refunding](**) Date to set aside, restrain, enjoin or prevent
the consummation of this Agreement or the other Operative Agreements or the
transactions contemplated hereby or thereby.
(e) A Uniform Commercial Code ("UCC") financing statement or
statements covering the security interest created by or pursuant to the
Granting Clause of the Indenture shall have been executed and delivered by the
Company, as debtor, and by the Indenture Trustee, as secured party, and such
financing statement or statements shall have been duly filed in all places,
and all other actions shall have been taken, which in the opinion of special
counsel for the Pass Through Trustee or for the Underwriters are necessary or
desirable to perfect said security interest and no termination statement shall
have been filed with respect thereto.
(f) No change shall have occurred after the date of the
execution and delivery of this Agreement and prior to the [Delivery](*)
[Refunding](**) Date in any applicable law which would make it a violation of
any applicable law for the parties hereto to enter into any transaction
contemplated by the Operative Agreements.
(g) The Pass Through Trustee shall have received an
independent insurance broker's report, together with certificates of insurance
from such broker, evidencing the due compliance with the terms of Section 4.06
of the Indenture relating to insurance with respect to the Aircraft.
(h) Each party shall have received an opinion addressed to
it from _____________________, special counsel for the Company,
substantially in the form of Exhibit A hereto.
(i) Each party shall have received an opinion addressed to it
from the Vice President - Law of the Company, substantially in the form of
Exhibit B hereto.
(j) Each party shall have received an opinion addressed to it
from Special Aviation Counsel, substantially in the form of Exhibit C hereto.
(k) Each party shall have received opinions addressed to it
from __________________________________, special counsel for the Indenture
Trustee and the Pass Through Trustee substantially in the form of Exhibits D
and E hereto.
(l) The Company and the Underwriters shall have entered into
the Underwriting Agreement and the Company and the Pass Through Trustee shall
have entered into the Pass Through Agreement and the Series Supplements, and
the Pass Through Certificates shall have been issued pursuant to the
Underwriting Agreement and the Pass Through Agreement and there shall have
been transferred to the Pass Through Trustee in immediately available funds an
amount equal to the Purchase Amount.
[(m) The Company shall have paid to the Agent the amounts
referred to in the second sentence of Section 2(a) hereof.](**)
[(m)](*)[(n)](**) Each party shall have received such other
documents and evidence with respect to each other party to the transactions
contemplated hereby as it may reasonably request in order to establish the due
consummation of the transactions contemplated by this Agreement, the taking of
all necessary corporate action in connection herewith and therewith and
compliance with the conditions herein set forth.
Promptly upon the recording of the Supplemented Indenture, the
Company shall cause Special Aviation Counsel to deliver to the Indenture
Trustee and the Pass Through Trustee an opinion as to the due recording of
such document and the lack of filing of any intervening documents with respect
to the Aircraft.
SECTION 4. Representations, Warranties and Agreements of the
Company. The Company represents, warrants and agrees that:
(a) It is a corporation duly organized, validly existing and
in good standing under the laws of the state of Delaware; it is an "air
carrier" within the meaning of the Federal Aviation Act of 1958, as amended to
the date of recodification (the "Act"), a holder of a certificate under
Sections 41102(a) and 41103 of the Act and an "air carrier operating
certificate" issued under Chapter 447 of the Act for aircraft capable of
carrying ten (10) or more individuals or 6,000 pounds or more of cargo, and
has the corporate power and authority to conduct its current business and
operations as currently conducted, to own or hold under lease its properties
and to enter into this Agreement and perform its obligations under each of the
Operative Agreements to which it is a party; it is a Citizen of the United
States within the meaning of Section 40102(a)(15) of Title 49 of the United
States Code (formerly Section 101(16) of the Act); it is duly qualified to do
business as a foreign corporation in good standing in each state of the
United States and in all jurisdictions in which it has intrastate routes or
offices or major overhaul facilities or in which other activities of the
Company require such qualification or in which failure to so qualify would
have a material and adverse effect on its financial condition, business or
operations or on its ability to perform its obligations under any of the
Operative Agreements to which it is a party; and its chief executive office
(as such term is used in Sections 9-103 and 9-401 of the Uniform Commercial
Code as in effect in the State of New York) is located at 2005 Corporate
Avenue, Memphis, Tennessee 38132.
(b) The Company possesses all necessary certificates,
franchises, licenses, permits, rights and concessions and consents which are
material to the operation of the routes flown by it and the conduct of its
business and operations as currently conducted.
(c) The execution, delivery and performance of each of the
Operative Agreements to which it is a party have been duly authorized by all
necessary corporate action on the part of the Company, and do not or did not
at the time of execution and delivery require any stockholder approval or
consent of, or notice to, any trustee or holders of any indebtedness or
obligations of the Company.
(d) The execution, delivery or performance by the Company of
the Operative Agreements to which it is a party and the consummation or
performance by the Company of the transactions contemplated thereby do not and
did not at the time of execution and delivery thereof conflict with or result
in any violation of, or constitute a default under any term of the certificate
of incorporation or by-laws of the Company or any agreement, mortgage,
indenture, lease or other instrument, or any applicable law, by which the
Company or its properties or assets are bound.
(e) Neither the execution, delivery nor performance by the
Company of any of the Operative Agreements to which it is a party nor the
consummation of any of the transactions contemplated thereby requires, or
required at the time of execution and delivery, the consent or approval of,
the giving of notice to, or the registration with, or taking of any other
action in respect of, the FAA or the Department of Transportation, or any
other Federal, state or foreign governmental authority or agency, including
any judicial body, other than (i) the registration of the Pass Through
Certificates under the Securities Act of 1933, as amended, and under the
securities laws of any state in which the Pass Through Certificates may be
offered for sale if the laws of such state require such action, which
registrations have been duly accomplished, (ii) the qualification of the Pass
Through Agreement under the Trust Indenture Act of 1939, as amended, which
qualification has been duly obtained pursuant to an order of the Securities
and Exchange Commission and (iii) the registration and filings referred to in
Section 4(j) hereof.
(f) The Operative Agreements to which it is a party have been
duly authorized, executed and delivered by the Company, and each constitutes
(assuming due authorization, execution and delivery by each other party
thereto) the legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms; provided that enforceability
may be limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally and
(ii) general principles of equity.
(g) The Company is not in default under any material
provision of any mortgage, deed of trust, indenture or other instrument or
agreement to which it is a party or by which it or any of its properties or
assets may be bound, or in violation of any applicable law, which default or
violation would have a material adverse effect on the financial condition,
business or operations of the Company or its ability to perform any of its
obligations under the Operative Agreements to which it is a party.
(h) There are no pending or, to the knowledge of the Company,
threatened actions or proceedings by or before any court or administrative
agency or arbitrator that would either individually or in the aggregate
materially and adversely affect the financial condition, business or
operations of the Company or the ability of the Company to perform its
obligations under any of the Operative Agreements to which it is a party.
(i) The audited consolidated balance sheet of the Company for
the fiscal year ended May 31, 199_ [and the unaudited consolidated balance
sheet of the Company as of _________, 199_], and the related consolidated
statements of income, changes in common stockholders' investment and cash
flows for the fiscal year[ and interim reporting period] ended on such
date[s], accompanied [(except in the case of such interim reporting period)]
by a report thereon containing opinions without qualification, except as
therein noted, by Arthur Andersen & Co., independent public accountants; said
financial statements have been prepared in accordance with generally accepted
accounting principles consistently applied and present fairly the financial
position of the Company as of such dates and the results of its operations and
cash flows for such periods.
(j) Except for the registration of the Aircraft in the name
of the Company, the filing and recordation of the Indenture (including all
amendments thereto) and each Indenture Supplement, and the filing of the FAA
Bill of Sale covering the Aircraft pursuant to the Federal Aviation Act and
the filing of Uniform Commercial Code financing statements, no action,
including any filing or recording of any document, is or was necessary or
advisable in order to establish and perfect the Indenture Trustee's security
interest in the Indenture Estate pertaining to the Indenture, as against the
Company and any third parties.
(k) Except for the issue and sale of the Pass Through
Certificates contemplated hereby, neither the Company nor anyone acting on its
behalf has directly or indirectly offered any Equipment Purchase Certificates
or any interest in or to the Aircraft for sale to, or solicited any offer to
acquire the same from, anyone other than the Banks, the Pass Through Trustee
and not more than __ other financial institutions[; provided, however, that
the Company does not make a representation concerning the actions of the Agent
or anyone acting on the Agent's behalf](*).
(l) On the [Delivery](*) [Refunding](**) Date, there shall be
in effect with respect to the Aircraft, a current and valid airworthiness
certificate issued by the FAA pursuant to the Federal Aviation Act and the
Aircraft shall be in such condition as may be necessary to enable the
airworthiness certificate to be maintained in good standing.
SECTION 5. Representations and Warranties of the Pass Through
Trustee. The Pass Through Trustee, in its individual capacity (except with
respect to the enforceability of the Operative Documents as set forth in
paragraph (e) below which representation it makes solely in its capacity as
Pass Through Trustee), represents and warrants that:
(a) It is a national banking association duly organized,
validly existing and in good standing under the laws of the United States; and
it has the full corporate power, authority and legal right under the laws of
the State of ______________ and the United States pertaining to its banking,
trust and fiduciary powers to execute, deliver and carry out the terms of the
Operative Agreements to which it is a party.
(b) The execution, delivery and performance of the Operative
Agreements to which it is a party have been duly authorized by all necessary
action on the part of the Pass Through Trustee and do not require any
stockholder approval or approval or consent of, or notice to, any trustee or
holders of any indebtedness or obligations of the Pass Through Trustee.
(c) Neither the execution, delivery or performance by the
Pass Through Trustee of the Operative Agreements to which it is a party nor
the consummation or performance by the Pass Through Trustee of the transactions
contemplated thereby will conflict with or result in any violation of, or
constitute a default under, any term of the articles of association or by-laws
of the Pass Through Trustee or any agreement, mortgage, indenture, lease or
other instrument to which it is a party, or any applicable law relating to the
banking, trust or fiduciary powers by which the Pass Through Trustee or its
properties or assets are bound.
(d) Neither the execution, delivery or performance by the
Pass Through Trustee of the Operative Agreements to which it is a party nor
the consummation of any of the transactions contemplated thereby requires the
consent or approval of, the giving of notice to, or the registration with, or
the taking of any other action in respect of, any ______________ or United
States governmental authority or agency regulating the Pass Through Trustee's
banking, trust or fiduciary powers, other than the registrations,
qualifications and filings referred to in Section 4(d) hereof.
(e) The Operative Agreements to which it is a party have been
duly authorized, executed and delivered by the Pass Through Trustee and each
constitutes (assuming due authorization, execution and delivery by each other
party thereto) the legal, valid and binding obligation of the Pass Through
Trustee, enforceable against it in accordance with its terms; provided that
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of creditors
generally and (ii) general principles of equity.
(f) The Pass Through Trustee is not in default under any
mortgage, deed of trust, indenture or other instrument or agreement to which
it is a party, or by which it or any of its properties or assets may be bound,
or in violation of any applicable law, which default or violation would have a
material adverse effect on the financial condition, business or operations of
the Pass Through Trustee or its ability to perform any of its obligations
under the Operative Agreements to which it is a party.
(g) There are no pending or, to the knowledge of the Pass
Through Trustee, threatened actions or proceedings by or before any court or
administrative agency or arbitrator that would either individually or in the
aggregate materially and adversely affect its financial condition, business or
operations or its ability to perform its obligations under the Operative
Agreements to which it is a party.
SECTION 6. Representations of the Indenture Trustee. The
Indenture Trustee, in its individual capacity, represents and warrants that
its representations and warranties contained in the Indenture are correct as
though made on and as of the [Delivery](*) [Refunding](**) Date, except to the
extent that such representations and warranties relate solely to an earlier
date (in which case such representations and warranties were correct on and as
of such earlier date).
SECTION 7. Notices. Unless otherwise specifically provided
herein, all notices required or permitted by the terms of this Agreement shall
be in writing, and any such notice shall be deemed given when such notice is
received, if such notice is mailed by certified mail, postage prepaid or is
delivered by hand or Federal Express service or is sent by confirmed telecopy
or facsimile (if, in the case of a facsimile transmitted on a Business Day and
during normal business hours of the recipient, and otherwise on the next
Business Day following transmission) addressed to the respective addresses or
facsimile numbers of the Company, the Pass Through Trustee or the Indenture
Trustee set forth below the signatures of such parties at the end of this
Agreement.
SECTION 8. Expenses. (a) All of the out-of-pocket costs,
fees and expenses incurred by the Pass Through Trustee (to the extent set
forth below), the Indenture Trustee, [the Agent and the holders of Original
Equipment Purchase Certificates,](**) in connection with the preparation,
execution and delivery of this Agreement and the transactions contemplated
hereby shall be paid promptly by the Company including, without limitation (i)
the reasonable fees, expenses and disbursements of counsel to the Pass Through
Trustee, the Indenture Trustee, [the Agent and the holders of Original
Equipment Purchase Certificates,](**) and (ii) all other reasonable expenses in
connection with such transactions including, without limitation, 100% of any
underwriter's commissions payable in connection with the offer and sale of
that portion of the Pass Through Certificates allocable to the Equipment
Purchase Certificates being purchased hereby, printing expenses and all fees,
taxes and other charges payable in connection with the recording or filing of
instruments described in this Agreement.
(b) All of the out-of-pocket costs, fees and expenses incurred
by the Indenture Trustee[, the Agent and the holders of Original Equipment
Purchase Certificates](**) in connection with the enforcement by any of them
of their respective rights under this Agreement shall be paid promptly by the
Company including, without limitation, the reasonable fees, expenses and
disbursements of counsel to the Indenture Trustee[, the Agent and the holders
of Original Equipment Purchase Certificates](**).
SECTION 9. Survival of Representations and Warranties. Except
as otherwise provided for herein, the representations, warranties and
agreements of the Company, the Pass Through Trustee and the Indenture Trustee
shall survive the expiration or other termination of this Agreement and the
other agreements referred to herein.
SECTION 10. Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, and all such counterparts shall together
constitute one and the same instrument.
SECTION 11. Entire Agreement; Amendments and Waivers. This
Agreement expresses the entire understanding of the parties relating to the
subject matter hereof; all prior understandings, written or oral, with respect
to such subject matter are merged herein and superseded hereby; except that
the foregoing is not intended to nor shall it be construed to modify or
otherwise affect the provisions of any Operative Agreement. Neither this
Agreement nor any of the terms hereof may be terminated, amended, supplemented
waived or modified orally, but only by an instrument in writing signed by each
of the parties hereto. No failure to exercise, nor any delay in exercising,
on the part of any party hereto, any right or remedy hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any right or
remedy prevent any further or other exercise thereof or the exercise of any
other right or remedy. The rights and remedies herein provided are cumulative
and not exclusive of any rights or remedies provided by law.
SECTION 12. Headings and Table of Contents. The headings of
the various sections and table of contents of this Agreement are for
convenience of reference only and shall not modify, define, expand or limit
any of the terms or provisions hereof.
SECTION 13. Governing Law. This Agreement shall in all
respects be governed by, and construed in accordance with, the laws of the
State of New York, including all matters of construction, validity and
performance, without regard to principles of conflicts of law. This Agreement
is being delivered in the State of New York.
SECTION 14. Capacity in Which Acting. Each of the Indenture
Trustee and the Pass Through Trustee acts hereunder not in its individual
capacity but solely as trustee except as otherwise expressly provided herein
and in the other Operative Agreements. Neither the Indenture Trustee nor the
Pass Through Trustee is personally liable for any amounts payable under the
Indenture or any Equipment Purchase Certificate and has no liability under any
Equipment Purchase Certificate or the Indenture, except as expressly provided
herein or in the Indenture.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
FEDERAL EXPRESS CORPORATION
By:_________________________
Name:
Attention:
Address: 2007 Corporate Avenue
Memphis, TN 38132
_____________________________,
_____________________________
not in its individual capacity, except as
otherwise expressly provided, but solely as
Pass Through Trustee
By:_________________________
Name:
Attention:
Address:
______________________,
______________________
not in its individual capacity, except as
otherwise expressly provided, but solely as
Indenture Trustee
By:_________________________
Name:
Attention:
Address:
Exhibit 5(a)(1)
November 22, 1994
Federal Express Corporation
2005 Corporate Avenue
Memphis, Tennessee 38132
Dear Sirs:
We have acted as special counsel for Federal Express
Corporation, a Delaware corporation ("the Corporation"), in connection with
the preparation and filing with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act"), of a shelf Registration Statement on Form S-3 (the "Registration
Statement"). The Registration Statement relates to up to $465,000,000
aggregate principal amount of Equipment Trust Certificates (the "Certificates")
that may be issued by the Corporation in one or more series from time to time
on a delayed basis. Each series of Certificates will be issued pursuant to
the provisions of a separate Trust Indenture and Security Agreement to be
entered into among Wilmington Trust Company, as Owner Trustee (the "Owner
Trustee"), NationsBank of Georgia, National Association, as Indenture Trustee
(the "Indenture Trustee"), and the Corporation, as Lessee, substantially in
the form filed as Exhibit 4(b)(1) to the Registration Statement (each, an
"Indenture" and, in the case of a refinancing transaction, each, as originally
executed and as supplemented by a related Indenture Supplement, an "Original
Indenture").
In connection with the opinions expressed below, we have
examined originals, or copies certified to our satisfaction, of such
agreements, documents and certificates of governmental officials and corporate
officers as we have deemed necessary or advisable as a basis for such
opinions. In such examination, we have assumed the genuineness of all
signatures and the authenticity of all documents submitted to us as originals
and the conformity with the originals of all documents submitted to us as
copies. We have also examined the form of Indenture filed with the
Commission. Unless otherwise defined herein, capitalized terms used herein
have the meanings assigned thereto in the related Indentures.
Based on the foregoing, it is our opinion that:
Assuming (i) the due authorization, execution and delivery of
the Indentures and the Trust Agreements and, in the case of a refinancing
transaction, the Original Indentures and the related Indenture Supplements by
each of the parties thereto (other than the Corporation), (ii) that the Trust
Agreements, the Original Indentures, if any, and the related Indenture
Supplements have not been terminated, varied, transferred or assigned, (iii)
the due authorization, execution, issuance and delivery by the Owner Trustee,
and the due authentication and delivery by the Indenture Trustee, of the
Certificates to be issued under each such Indenture, in each case in
accordance with the terms of such Indenture and (iv) in the case of a
refinancing transaction, that the outstanding Original Loan Certificate under
each Original Indenture is delivered by the holder thereof to the Indenture
Trustee thereunder for cancellation and is cancelled, (A) the Indentures, when
duly executed and delivered, will constitute valid and binding agreements of
each of the parties thereto, and (B) the Certificates, when duly authorized,
executed, issued and delivered by the Owner Trustee and duly authenticated and
delivered by the Indenture Trustee in accordance with the terms of the
respective Indentures and sold in accordance with the related purchase
agreement or underwriting agreement between the Corporation and the purchasers
or underwriters, as the case may be, named therein, will be valid and binding
obligations of the Owner Trustee and will be entitled to the benefits of the
applicable Indenture.
In giving the foregoing opinion we do not purport to be experts
on, or to express any opinion herein concerning, any laws other than the laws
of the state of New York and the laws of the United States. In giving the
forgoing opinion, we express no opinion as to the priority of the security
interests created by the Original Indentures, if any, or the Indentures.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the reference to our firm under the
caption "Legal Matters" in the prospectus relating to the Certificates that
constitutes part of the Registration Statement.
Very truly yours,
Exhibit 5(a)(2)
November 22, 1994
Federal Express Corporation
2005 Corporate Avenue
Memphis, Tennessee 38132
Dear Sirs:
We have acted as special counsel for Federal Express
Corporation, a Delaware corporation (the "Corporation"), in connection with
the preparation and filing with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act"), of a shelf Registration Statement on Form S-3 (the "Registration
Statement"). The Registration Statement relates to up to $465,000,000
aggregate amount of Pass Through Certificates (the "Pass Through Certificates")
that may be issued by the Corporation in one or more series from time to time
on a delayed basis. The Pass Through Certificates will be issued pursuant to
the provisions of the Pass Through Trust Agreement to be entered into between
the Corporation and NationsBank of South Carolina, National Association, as
Pass Through Trustee (the "Pass Through Trustee"), substantially in the form
filed as Exhibit 4(a)(1) to the Registration Statement (the "Pass Through
Agreement") as supplemented by a separate Series Supplement for each series of
Pass Through Certificates (each, a "Series Supplement").
In connection with the opinions expressed below, we have
examined originals, or copies certified to our satisfaction, of such
agreements, documents and certificates of governmental officials and corporate
officers as we have deemed necessary or advisable as a basis for such
opinions. In such examination, we have assumed the genuineness of all
signatures and the authenticity of all documents submitted to us as originals
and the conformity with the originals of all documents submitted to us as
copies. We have also examined the form of Pass Through Agreement filed with
the Commission. Unless otherwise defined herein, capitalized terms used
herein have the meanings assigned thereto in the Pass Through Agreement.
Based on the foregoing, it is our opinion that:
Assuming (i) the due authorization, execution and delivery of
the Pass Through Agreement and each applicable Series Supplement by each of
the parties thereto (other than the Corporation), (ii) that the Pass Through
Agreement and each applicable Series Supplement have not been terminated,
varied, transferred or assigned, (iii) the due authorization, execution,
issue, delivery and authentication by the Pass Through Trustee of the Pass
Through Certificates to be issued under the Pass Through Agreement and each
applicable Series Supplement, in each case in accordance with the terms of
such Pass Through Agreement and each such Series Supplement and (iv) that any
outstanding equipment trust certificates previously issued by the Owner
Trustee under any related Indenture have been delivered to the Indenture
Trustee thereunder for cancellation and have been cancelled, (A) the Pass
Through Agreement and each applicable Series Supplement, when duly executed
and delivered, will constitute valid and binding agreements of each of the
parties thereto, and (B) the Pass Through Certificates, when duly
authorized, executed, issued, delivered and authenticated by the Pass
Through Trustee in accordance with the terms of the Pass Through Agreement
and each applicable Series Supplement and sold in accordance with the
related purchase agreement or underwriting agreement between the
Corporation and the purchasers or underwriters, as the case may be, named
therein, will be valid and binding obligations of the Pass Through Trustee
and will be entitled to the benefits of the Pass Through Agreement and each
applicable Series Supplement.
In giving the foregoing opinion we do not purport to be experts
on, or to express any opinion herein concerning, any laws other than the laws
of the state of New York and the laws of the United States.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the references to our firm under the
captions "Legal Matters" and "Federal Income Tax Consequences" in the
prospectus relating to the Pass Through Certificates that constitutes part of
the Registration Statement.
Very truly yours,
Exhibit 5(b)
November 22, 1994
Federal Express Corporation
2005 Corporate Avenue
Memphis, Tennessee 38132
Attention: Chief Financial Officer
Re: Federal Express Corporation -- Pass Through
Certificates -- Shelf Registration
Dear Sirs:
We have acted as special counsel to NationsBank of South Carolina, a
national banking association, in its individual capacity and as pass
through trustee (the "Pass Through Trustee"), under the Pass Through Trust
Agreement, dated as of February 1, 1993, (the "Agreement") entered into
between Federal Express Corporation (the "Corporation") and the Pass
Through Trustee. Pursuant to the Agreement and one or more supplemental
agreements thereto to be entered into between the Corporation and the Pass
Through Trustee, the Pass Through Trustee will execute, authenticate and
deliver, upon the Corporation's request, pass through certificates in one
or more series in an aggregate principal amount of up to $465,000,000 (the
"Pass Through Certificates"), to be registered with the Securities and
Exchange Commission ("SEC") under the Securities Act of 1933, as amended
(the "1933 Act"), under the Corporation's Registration Statement on Form
S-3 filed on the date hereof with the SEC (the "Registration Statement").
As such counsel, we have examined the Agreement and the Pass
Through Certificates which you have furnished to us and which will be filed
as exhibits to the Registration Statement. We have also examined and
relied upon originals, or copies certified or otherwise identified to our
satisfaction, of such documents, corporate records and other instruments as
we have deemed necessary or appropriate for the purposes of this opinion.
With respect to the discussion in the Prospectus forming part of the
Registration Statement entitled "Certain South Carolina Taxes," the
assumptions set forth therein are specifically incorporated herein. In
addition, we have assumed that each Pass Through Trust will not be
classified as a Partnership as defined in Section 7701 of the Internal
Revenue Code of 1986, as amended, and the Pass Through Trust does not
otherwise engage in business in South Carolina.
The opinions set forth herein are limited to the laws of the State of
Georgia, the federal laws of the United States of America governing the
banking and trust powers of the Pass Through Trustee, and, with respect to
the opinion set forth in paragraph 4 below, the laws of the State of South
Carolina. With respect to the validity and binding nature of the Agreement
and the Pass Through Certificates, which we note are governed by the laws
of the State of New York, we have relied, with your permission, entirely
upon the opinion of even date herewith of Davis Polk & Wardwell, and the
opinions set forth herein are subject to each of the assumptions,
exceptions, qualifications and limitations contained in such opinion
letter. In addition, the opinions set forth below are based on the
assumption that the Corporation has duly authorized, executed and delivered
the Agreement and, at the time of such authorization, execution and
delivery, had the full power, authority and legal right to have done so.
Based on the foregoing, we are of the opinion that:
1. The Pass Through Trustee is a national banking association
validly existing under the laws of the United States of America holding a
valid certificate to do business as a national banking association, with
trust powers.
2. The execution, authentication, issuance and delivery by the Pass
Through Trustee of the Pass Through Certificates and the Agreement
have been duly authorized by the Pass Through Trustee, in its
individual (to the extent provided therein) and trust capacities.
3. With respect to the Pass Through Certificates of each series, when
(a) the Agreement establishing the terms of the Pass Through Certificates
of such series and forming the related Pass Through Trust shall have been
duly authorized, executed and delivered by the Corporation and the Pass
Through Trustee in accordance with the terms and conditions of the
Agreement (assuming that (x) the terms and conditions of the Agreement are
in compliance with then applicable law at the time of such authorization,
execution and delivery and (y) the Pass Through Trustee continues in
existence as a national banking association holding a valid certificate to
do business, with trust powers, at the time of such authorization,
execution and delivery), and (b) the Pass Through Certificates of such
series shall have been duly executed, authenticated, issued and delivered
by the Pass Through Trustee and sold as contemplated by each of the
Registration Statement and the Prospectus included therein relating to the
Pass Through Certificates, the supplement or supplements to such Prospectus
relating to the Pass Through Certificates of such series, the purchase
agreement or underwriting agreement between the Corporation and the
purchasers or underwriters named therein, as the case may be, relating
thereto, the Agreement (assuming that (x) the terms of the Pass Through
Certificates of such series are in compliance with then applicable law at
the time of such authorization, execution and delivery and (y) the Pass
Through Trustee continues in existence as a national banking association
holding a valid certificate to do business, with trust powers, at the time
of such authorization, execution and delivery), (i) the Agreement will
constitute a valid and binding obligation of the Pass Through Trustee in
accordance with its terms, except as the provisions thereof may be limited
by bankruptcy, reorganization, insolvency, arrangement, fraudulent
conveyance, moratorium, or other similar laws generally affecting
creditors' rights or debtors' relief from time to time in effect, and (ii)
each of the Pass Through Certificates of such series will be validly issued
and will be entitled to the benefits of the Agreement pursuant to which it
was issued. The opinions expressed above as to the enforceability of the
documents referred to above further are subject in each case to applicable
laws and usual equitable principles that may render certain remedial
provisions in the documents referred to above invalid or unenforceable.
4. The discussion in the Prospectus forming part of the Registration
Statement entitled "Certain South Carolina Taxes," insofar as it relates to
statements of law or legal conclusions, is correct in all material respects.
We consent to the filing of this opinion as Exhibit 5 to the
Registration Statement and to the reference to us under the captions "Validity
of the Pass Through Certificates" and "Certain South Carolina Taxes" in the
Prospectus forming part of the Registration Statement.
Very truly yours,
/s/ POWELL, GOLDSTEIN, FRAZER & MURPHY
----------------------------------
POWELL, GOLDSTEIN, FRAZER & MURPHY
Exhibit 5(c)
November 22, 1994
Federal Express Corporation
2007 Corporate Avenue
Memphis, Tennessee 38132-2140
Attention: Chief Financial Officer
Re: Federal Express Corporation -- 1994 Public Offering
Equipment Trust Certificates
Ladies and Gentleman:
We have acted as counsel to Wilmington Trust Company, a Delaware
banking corporation, in its individual capacity ("WTC") and not in its
individual capacity but solely as owner trustee ("Owner Trustee") under one or
more Trust Agreements ("Trust Agreements"), in connection with the filing by
Federal Express Corporation ("Federal Express") with the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the "1933
Act"), of the Registration Statement on Form S-3 to which this opinion is
attached as Exhibit 5(c), which Registration Statement we understand is to be
filed with the Securities and Exchange Commission on or about the date hereof
(as such Registration Statement may be amended from time to time, the
"Registration Statement"). The Registration Statement relates to the issuance
from time to time of up to $465,000,000 aggregate principal amount of
Equipment Trust Certificates (the "Certificates") that will be issued by the
Owner Trustee in connection with certain leveraged lease finance transactions
pursuant to one or more Trust Agreements, each between WTC and the owner
participant named therein (the "Owner Participant"), and one or more Trust
Indenture, Mortgage and Security Agreements (individually an "Indenture",
collectively the "Indentures") among the Owner Trustee, NationsBank of
Georgia, National Association ("NationsBank") as indenture trustee, and
Federal Express.
We have examined a form of Trust Agreement and a form of Indenture
which you have furnished to us and which have been filed as exhibits to the
Registration Statement. We have also examined and relied upon originals, or
copies certified or otherwise identified to our satisfaction, of such
documents, corporate records and other instruments as we have deemed necessary
or appropriate for the purposes of this opinion.
The opinions set forth herein are limited to the federal laws of
the United States of America governing the banking and trust powers of WTC,
the laws of the State of Delaware and, solely with respect to the validity and
binding nature of the Indentures and the Certificates, the laws of the State
of New York. Insofar as the opinions expressed herein involve the laws of the
State of New York, we have with your permission and without independent
investigation relied entirely upon the opinion letter of even date herewith of
Davis Polk & Wardwell, and the opinions set forth herein are subject to each
of the assumptions, exceptions, qualifications and limitations contained in
such opinion letter. We have assumed that the Trust Agreements and the
Indentures will not differ in any material respect from the forms of Trust
Agreement and Indenture filed as exhibits to the Registration Statement and
that no relevant provision of Delaware, New York or United States of America
federal law will have differed in any material respect from such law as in
effect on the date hereof. In addition, the opinions set forth below are
based on the assumption that the Owner Participant will have duly authorized,
executed and delivered each of the Trust Agreements and, at the time of such
authorization, execution and delivery, will have had the full power, authority
and legal right to have done so.
Based on the foregoing, we are of the opinion that:
1. WTC has been duly incorporated and is validly existing as a
Delaware banking corporation in good standing under the laws of the State of
Delaware.
2. Upon the execution and delivery by WTC of each of the Trust
Agreements and assuming that at the time of such execution and delivery WTC
continues in existence as a Delaware banking corporation in good standing and
has maintained its current full corporate power and authority to enter into and
perform the Trust Agreements, each of the Trust Agreements will constitute a
legal, valid and binding obligation of WTC.
3. Upon the execution and delivery by WTC of each of the Trust
Agreements and assuming that at the time of such execution and delivery WTC
continues in existence as a Delaware bank in good standing and has maintained
its current full corporate power and authority to enter into and perform the
Trust Agreements and Indentures, the execution and delivery by the Owner
Trustee of each of the Indentures will have been duly authorized by the Owner
Trustee.
4. Assuming (i) the due authorization, execution and delivery of
each of the Indentures by each of the parties to each such document (other
than WTC or the Owner Trustee, as the case may be), (ii) that each such party
(other than WTC or the Owner Trustee, as the case may be) had, at the time of
execution, the corporate power, authority and legal right to execute, deliver
and perform each Indenture to which it is a party, (iii) that each such party
(other than WTC or the Owner Trustee, as the case may be) continues to have
such power, authority and legal right, (iv) that the execution, delivery and
performance of each such Indenture by each such party (other than WTC or the
Owner Trustee, as the case may be) did not and does not violate such party's
respective charter or by-laws and fully complies with all laws and
governmental rules and regulations (federal, state, or otherwise) that may be
applicable to such party, in its individual or trust capacity, as the case may
be, (v) that no such document has been terminated, amended, transferred or
assigned, and (vi) that WTC or the Owner Trustee, as the case may be, has
maintained its current full corporate power and authority to enter into and
perform the Trust Agreements and Indentures and to enter into, issue and
perform the Certificates to be issued under each Indenture, (a) upon the
execution and delivery of the Indentures by WTC or the Owner Trustee, as the
case may be, the Indentures will constitute valid and binding agreements of WTC
or the Owner Trustee, as the case may be, and (b) upon the due execution by
the Owner Trustee and the due authentication by NationsBank of each
Certificate to be issued under each such Indenture, in each case in accordance
with the terms of each such Indenture, each such Certificate, when issued and
sold in accordance with the purchase agreement or underwriting agreement
between Federal Express and the purchasers or underwriters, as the case may
be, named therein will be a valid and binding obligation of the Owner Trustee
and will be entitled to the benefits of the Indenture pursuant to which it was
issued.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the caption "Legal
Matters" in the Prospectus forming part of the Registration Statement. In
giving this consent, we do not thereby admit that we are in the category of
persons whose consent is required under Section 7 of the 1933 Act or the rules
and regulations of the Securities and Exchange Commission.
Very truly yours,
Exhibit 5(d)
November 22, 1994
Federal Express Corporation
2005 Corporate Avenue
Memphis, Tennessee 38132
Ladies and Gentlemen:
I am Vice President - Law of Federal Express
Corporation (the "Company") and have acted as such in connection with the
preparation and filing of a Registration Statement on Form S-3, as amended
(the "Registration Statement") and the two prospectus contained therein
(collectively, the "Prospectus") with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Securities
Act"). The Registration Statement relates to (i) Equipment Trust
Certificates, to be issued in one or more series in an aggregate principal
amount of up to $465,000,000 pursuant to one or more Trust Indenture and
Security Agreements (the "Indentures") to be entered into among the
Company, NationsBank of Georgia, National Association, as Indenture
Trustee, and Wilmington Trust Company, a Delaware banking corporation, as
Owner Trustee, and (ii) Pass Through Certificates, to be issued in one or
more series in an aggregate amount of up to $465,000,000 pursuant to a Pass
Through Agreement (the "Pass Through Agreement") to be entered into between
the Company and NationsBank of South Carolina, National Association, as
Pass Through Trustee.
In connection with the opinions expressed below, I or attorneys
under my supervision have examined originals, or copies certified to my
satisfaction, of such agreements, documents, certificates and statements of
government officials and other papers as we have deemed necessary or advisable
as a basis for such opinions. In such examination we have assumed the
genuineness of all signatures and the authenticity of all documents submitted
to us as originals, and the conformity with the originals of all documents
submitted to us as copies. I or attorneys under my supervision have also
examined the form of Pass Through Agreement and the form of Indenture filed
with the Securities and Exchange Commission.
Based upon the foregoing, it is my opinion that:
1. The Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Delaware.
2. The execution and delivery by the Company of each Indenture and
the Pass Through Agreement has been duly authorized by the Company.
I am qualified to practice law in the State of Tennessee and I do
not purport to be an expert on, or to express any opinion herein concerning,
any laws other than the laws of the State of Tennessee, the corporate laws of
the State of Delaware and the federal laws of the United States.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me under the heading "Legal
Matters" in the Prospectuses and in any subsequently filed Prospectus
Supplements. In giving such consent, I do not admit that I am
in the category of persons whose consent is required under Section 7 of the
Securities Act.
Sincerely,
FEDERAL EXPRESS CORPORATION
/s/ George W. Hearn
--------------------
George W. Hearn
Vice President - Law
GWH/PYT/ebw
1390.MEM2
Exhibit 15
[LETTERHEAD]
Arthur Andersen
Suite 1700
165 Madison Avenue
Memphis, TN 38103-2777
(901) 525-4451
November 17, 1994
Federal Express Corporation
Box 727
Memphis, TN 38194
Dear Ladies and Gentlemen:
We are aware that Federal Express Corporation will be incorporating by
reference in this Form S-3 Registration Statement its Form 10-Q for the
quarter ended August 31, 1994, which includes our report dated September 14,
1994, covering the unaudited interim financial information contained therein.
Pursuant to Regulation C of the Securities Act of 1933, that report is not
considered part of this Registration Statement prepared or certified by our
firm or a report prepared or certified by our firm within the meaning of
Sections 7 and 11 of the Act.
Very truly yours,
/s/ Arthur Andersen LLP
______________________
Arthur Andersen LLP
Exhibit 23(f)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-3 registration statement of our reports dated June
29, 1994, included (or incorporated by reference) in Federal Express
Corporation's Form 10-K for the year ended May 31, 1994, and to all references
to our Firm included in this registration statement.
/s/ ARTHUR ANDERSEN LLP
------------------------
ARTHUR ANDERSEN LLP
Memphis, Tennessee
November 17, 1994.
Exhibit 24
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned, a Director of FEDERAL EXPRESS CORPORATION, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Frederick
W. Smith, William J. Razzouk, Alan B. Graf, Jr. and Graham R. Smith, and each
of them, with full power of substitution and resubstitution, as his true and
lawful attorneys-in-fact and agents, with full power and authority to execute
in the name and on behalf of the undersigned as such Director, a Registration
Statement on Form S-3 to be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to a shelf
registration for equipment trust certificates and pass through certificates in
an amount up to $465 million and any and all amendments to such Registration
Statement whether filed prior or subsequent to the time such Registration
Statement becomes effective; and hereby ratifies and confirms all that such
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes may lawfully do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 27th day of
October 1994.
/s/ ROBERT H. ALLEN
-------------------
Robert H. Allen
STATE OF TEXAS
COUNTY OF HARRIS
I, Earlene Barbeau , a Notary Public in and for the
aforesaid State and County, do hereby certify that Robert H. Allen, personally
known to me to be the same person whose name is subscribed to the foregoing
instrument, appeared before me this day in person, and acknowledged that he
signed and delivered the foregoing instrument as his free and voluntary act,
for the uses and purposes therein set forth.
/s/ EARLENE L. BARBEAU
----------------------
NOTARY PUBLIC
My Commission Expires:
March 8, 1997
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned, a Director of FEDERAL EXPRESS CORPORATION, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Frederick
W. Smith, William J. Razzouk, Alan B. Graf, Jr. and Graham R. Smith, and each
of them, with full power of substitution and resubstitution, as her true and
lawful attorneys-in-fact and agents, with full power and authority to execute
in the name and on behalf of the undersigned as such Director, a Registration
Statement on Form S-3 to be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to a shelf
registration for equipment trust certificates and pass through certificates in
an amount up to $465 million and any and all amendments to such Registration
Statement whether filed prior or subsequent to the time such Registration
Statement becomes effective; and hereby ratifies and confirms all that such
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes may lawfully do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 27th day of
October 1994.
/s/ JUDITH L. ESTRIN
--------------------
Judith L. Estrin
STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
I, Janine Dietiker , a Notary Public in and for the aforesaid State
and County, do hereby certify that Judith L. Estrin, personally known to me to
be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person, and acknowledged that she signed and
delivered the foregoing instrument as her free and voluntary act, for the uses
and purposes therein set forth.
/s/ JANINE DIETIKER
-------------------
NOTARY PUBLIC
My Commission Expires:
February 7, 1997
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned, a Director of FEDERAL EXPRESS CORPORATION, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Frederick
W. Smith, William J. Razzouk, Alan B. Graf, Jr. and Graham R. Smith, and each
of them, with full power of substitution and resubstitution, as his true and
lawful attorneys-in-fact and agents, with full power and authority to execute
in the name and on behalf of the undersigned as such Director, a Registration
Statement on Form S-3 to be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to a shelf
registration for equipment trust certificates and pass through certificates in
an amount up to $465 million and any and all amendments to such Registration
Statement whether filed prior or subsequent to the time such Registration
Statement becomes effective; and hereby ratifies and confirms all that such
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes may lawfully do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 28th day of October
1994.
/s/ HOWARD H. BAKER, JR.
------------------------
Howard H. Baker, Jr.
STATE OF TENNESSEE
COUNTY OF SCOTT
I, Billie J. Hamilton , a Notary Public in and for the aforesaid
State and County, do hereby certify that Howard H. Baker, Jr. personally known
to me to be the same person whose name is subscribed to the foregoing
instrument, appeared before me this day in person, and acknowledged that he
signed and delivered the foregoing instrument as his free and voluntary act,
for the uses and purposes therein set forth.
/s/ BILLIE J. HAMILTON
----------------------
NOTARY PUBLIC
My Commission Expires:
6/24/98
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned, a Director of FEDERAL EXPRESS CORPORATION, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Frederick
W. Smith, William J. Razzouk, Alan B. Graf, Jr. and Graham R. Smith, and each
of them, with full power of substitution and resubstitution, as his true and
lawful attorneys-in-fact and agents, with full power and authority to execute
in the name and on behalf of the undersigned as such Director, a Registration
Statement on Form S-3 to be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to a shelf
registration for equipment trust certificates and pass through certificates in
an amount up to $465 million and any and all amendments to such Registration
Statement whether filed prior or subsequent to the time such Registration
Statement becomes effective; and hereby ratifies and confirms all that such
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes may lawfully do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 31st day of October
1994.
/s/ ANTHONY J.A. BRYAN
----------------------
Anthony J.A. Bryan
STATE OF FLORIDA
COUNTY OF PALM BEACH
I, Patricia Gmyrek , a Notary Public in and for the aforesaid
State and County, do hereby certify that Anthony J.A. Bryan, personally known
to me to be the same person whose name is subscribed to the foregoing
instrument, appeared before me this day in person, and acknowledged that he
signed and delivered the foregoing instrument as his free and voluntary act,
for the uses and purposes therein set forth.
/s/ PATRICIA A. GMYREK
----------------------
NOTARY PUBLIC
My Commission Expires:
March 30, 1997
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned, a Director of FEDERAL EXPRESS CORPORATION, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Frederick
W. Smith, William J. Razzouk, Alan B. Graf, Jr. and Graham R. Smith, and each
of them, with full power of substitution and resubstitution, as his true and
lawful attorneys-in-fact and agents, with full power and authority to execute
in the name and on behalf of the undersigned as such Director, a Registration
Statement on Form S-3 to be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to a shelf
registration for equipment trust certificates and pass through certificates in
an amount up to $465 million and any and all amendments to such Registration
Statement whether filed prior or subsequent to the time such Registration
Statement becomes effective; and hereby ratifies and confirms all that such
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes may lawfully do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 7th day
of November 1994.
/s/ ROBERT L. COX
-----------------
Robert L. Cox
STATE OF TENNESSEE
COUNTY OF SHELBY
I, Lillian W. Powers , a Notary Public in and for the aforesaid State
and County, do hereby certify that Robert L. Cox, personally known to me to be
the same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that he signed and delivered
the foregoing instrument as his free and voluntary act, for the uses and
purposes therein set forth.
/s/ LILLIAN W. POWERS
---------------------
NOTARY PUBLIC
My Commission Expires:
4/29/97
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned, a Director of FEDERAL EXPRESS CORPORATION, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Frederick
W. Smith, William J. Razzouk, Alan B. Graf, Jr. and Graham R. Smith, and each
of them, with full power of substitution and resubstitution, as his true and
lawful attorneys-in-fact and agents, with full power and authority to execute
in the name and on behalf of the undersigned as such Director, a Registration
Statement on Form S-3 to be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to a shelf
registration for equipment trust certificates and pass through certificates in
an amount up to $465 million and any and all amendments to such Registration
Statement whether filed prior or subsequent to the time such Registration
Statement becomes effective; and hereby ratifies and confirms all that such
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes may lawfully do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 2nd day
of November 1994.
/s/ RALPH D. DENUNZIO
---------------------
Ralph D. DeNunzio
STATE OF NEW YORK
COUNTY OF NEW YORK
I, Pauline Kalahele , a Notary Public in and for the aforesaid
State and County, do hereby certify that Ralph D. DeNunzio personally known to
me to be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person, and acknowledged that he signed and
delivered the foregoing instrument as his free and voluntary act, for the uses
and purposes therein set forth.
/s/ PAULINE E. KALAHELE
-----------------------
NOTARY PUBLIC
My Commission Expires:
2/28/96
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned, a Director of FEDERAL EXPRESS CORPORATION, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Frederick
W. Smith, William J. Razzouk, Alan B. Graf, Jr. and Graham R. Smith, and each
of them, with full power of substitution and resubstitution, as his true and
lawful attorneys-in-fact and agents, with full power and authority to execute
in the name and on behalf of the undersigned as such Director, a Registration
Statement on Form S-3 to be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to a shelf
registration for equipment trust certificates and pass through certificates in
an amount up to $465 million and any and all amendments to such Registration
Statement whether filed prior or subsequent to the time such Registration
Statement becomes effective; and hereby ratifies and confirms all that such
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes may lawfully do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 28th day of October
1994.
/s/ PHILIP GREER
----------------
Philip Greer
STATE OF NEW YORK
COUNTY OF NEW YORK
I, Kathleen M. Rode , a Notary Public in and for the aforesaid
State and County, do hereby certify that Philip Greer, personally known to me
to be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person, and acknowledged that he signed and
delivered the foregoing instrument as his free and voluntary act, for the uses
and purposes therein set forth.
/s/ KATHLEEN M. RODE
--------------------
NOTARY PUBLIC
My Commission Expires:
5/31/96
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned, a Director of FEDERAL EXPRESS CORPORATION, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Frederick
W. Smith, William J. Razzouk, Alan B. Graf, Jr. and Graham R. Smith, and each
of them, with full power of substitution and resubstitution, as his true and
lawful attorneys-in-fact and agents, with full power and authority to execute
in the name and on behalf of the undersigned as such Director, a Registration
Statement on Form S-3 to be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to a shelf
registration for equipment trust certificates and pass through certificates in
an amount up to $465 million and any and all amendments to such Registration
Statement whether filed prior or subsequent to the time such Registration
Statement becomes effective; and hereby ratifies and confirms all that such
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes may lawfully do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 27th day of October
1994.
/s/ J. R. HYDE, III
-------------------
J. R. Hyde, III
STATE OF TENNESSEE
COUNTY OF SHELBY
I, Nancy C. Phillips , a Notary Public in and for the aforesaid State
and County, do hereby certify that J. R. Hyde, III, personally known to me to
be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person, and acknowledged that he signed and
delivered the foregoing instrument as his free and voluntary act, for the uses
and purposes therein set forth.
/s/ NANCY C. PHILLIPS
---------------------
NOTARY PUBLIC
My Commission Expires:
10/24/95
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned, a Director of FEDERAL EXPRESS CORPORATION, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Frederick
W. Smith, William J. Razzouk, Alan B. Graf, Jr. and Graham R. Smith, and each
of them, with full power of substitution and resubstitution, as his true and
lawful attorneys-in-fact and agents, with full power and authority to execute
in the name and on behalf of the undersigned as such Director, a Registration
Statement on Form S-3 to be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to a shelf
registration for equipment trust certificates and pass through certificates in
an amount up to $465 million and any and all amendments to such Registration
Statement whether filed prior or subsequent to the time such Registration
Statement becomes effective; and hereby ratifies and confirms all that such
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes may lawfully do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 7th day of November
1994.
/s/ CHARLES T. MANATT
---------------------
Charles T. Manatt
STATE OF WASHINGTON, D.C.
COUNTY OF
I, Janet Lee Shaw , a Notary Public in and for the aforesaid
State and County, do hereby certify that Charles T. Manatt, personally known
to me to be the same person whose name is subscribed to the foregoing
instrument, appeared before me this day in person, and acknowledged that he
signed and delivered the foregoing instrument as his free and voluntary act,
for the uses and purposes therein set forth.
/s/ JANET LEE SHAW
------------------
NOTARY PUBLIC
My Commission Expires:
07/14/99
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned, a Director of FEDERAL EXPRESS CORPORATION, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Frederick
W. Smith, William J. Razzouk, Alan B. Graf, Jr. and Graham R. Smith, and each
of them, with full power of substitution and resubstitution, as his true and
lawful attorneys-in-fact and agents, with full power and authority to execute
in the name and on behalf of the undersigned as such Director, a Registration
Statement on Form S-3 to be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to a shelf
registration for equipment trust certificates and pass through certificates in
an amount up to $465 million and any and all amendments to such Registration
Statement whether filed prior or subsequent to the time such Registration
Statement becomes effective; and hereby ratifies and confirms all that such
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes may lawfully do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 27th day of October
1994.
/s/ JACKSON W. SMART, JR.
--------------------------
Jackson W. Smart, Jr.
STATE OF ILLINOIS
COUNTY OF COOK
I, Esperanza Acosta , a Notary Public in and for the aforesaid
State and County, do hereby certify that Jackson W. Smart, Jr. personally
known to me to be the same person whose name is subscribed to the foregoing
instrument, appeared before me this day in person, and acknowledged that he
signed and delivered the foregoing instrument as his free and voluntary act,
for the uses and purposes therein set forth.
/s/ ESPERANZA ACOSTA
--------------------
NOTARY PUBLIC
My Commission Expires:
2/8/97
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned, a Director of FEDERAL EXPRESS CORPORATION, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Frederick
W. Smith, William J. Razzouk, Alan B. Graf, Jr. and Graham R. Smith, and each
of them, with full power of substitution and resubstitution, as his true and
lawful attorneys-in-fact and agents, with full power and authority to execute
in the name and on behalf of the undersigned as such Director, a Registration
Statement on Form S-3 to be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to a shelf
registration for equipment trust certificates and pass through certificates in
an amount up to $465 million and any and all amendments to such Registration
Statement whether filed prior or subsequent to the time such Registration
Statement becomes effective; and hereby ratifies and confirms all that such
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes may lawfully do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 28th day of October
1994.
/s/ JOSHUA I. SMITH
-------------------
Joshua I. Smith
STATE OF MARYLAND
COUNTY OF PRINCE GEORGE'S
I, Robyn P. Armstrong , a Notary Public in and for the aforesaid
State and County, do hereby certify that Joshua I. Smith, personally known to
me to be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person, and acknowledged that he signed and
delivered the foregoing instrument as his free and voluntary act, for the uses
and purposes therein set forth.
/s/ ROBYN PROCTOR ARMSTRONG
---------------------------
NOTARY PUBLIC
My Commission Expires:
February 16, 1998
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned, a Director of FEDERAL EXPRESS CORPORATION, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Frederick
W. Smith, William J. Razzouk, Alan B. Graf, Jr. and Graham R. Smith, and each
of them, with full power of substitution and resubstitution, as his true and
lawful attorneys-in-fact and agents, with full power and authority to execute
in the name and on behalf of the undersigned as such Director, a Registration
Statement on Form S-3 to be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to a shelf
registration for equipment trust certificates and pass through certificates in
an amount up to $465 million and any and all amendments to such Registration
Statement whether filed prior or subsequent to the time such Registration
Statement becomes effective; and hereby ratifies and confirms all that such
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes may lawfully do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 3rd day of November
1994.
/s/ PETER S. WILLMOTT
---------------------
Peter S. Willmott
STATE OF TENNESSEE
COUNTY OF SHELBY
I, Joyce J. Jones , a Notary Public in and for the aforesaid State and
County, do hereby certify that Peter S. Willmott personally known to me to be
the same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that he signed and delivered
the foregoing instrument as his free and voluntary act, for the uses and
purposes therein set forth.
/s/ JOYCE J. JONES
------------------
NOTARY PUBLIC
My Commission Expires:
August 12, 1998
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned, the principal executive officer and a director of
FEDERAL EXPRESS CORPORATION, a Delaware corporation (the "Corporation"), does
hereby constitute and appoint William J. Razzouk, Alan B. Graf, Jr. and Graham
R. Smith, and each of them, with full power of substitution and
resubstitution, as his true and lawful attorneys-in-fact and agents, with full
power and authority to execute in the name and on behalf of the undersigned as
such officer and director, a Registration Statement on Form S-3 to be filed
with the Securities and Exchange Commission under the Securities Act of 1933,
as amended, with respect to a shelf registration for equipment trust
certificates and pass through certificates in an amount up to $465 million and
any and all amendments to such Registration Statement whether filed prior or
subsequent to the time such Registration Statement becomes effective; and
hereby ratifies and confirms all that such attorneys-in-fact and agents, or
any of them, or their or his substitute or substitutes may lawfully do or
cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 28th day of October
1994.
/s/ FREDERICK W. SMITH
----------------------
Frederick W. Smith
STATE OF TENNESSEE
COUNTY OF SHELBY
I, Joyce J. Jones , a Notary Public in and for the aforesaid
State and County, do hereby certify that Frederick W. Smith, personally known
to me to be the same person whose name is subscribed to the foregoing
instrument, appeared before me this day in person, and acknowledged that he
signed and delivered the foregoing instrument as his free and voluntary act,
for the uses and purposes therein set forth.
/s/ JOYCE J. JONES
------------------
NOTARY PUBLIC
My Commission Expires:
August 12, 1998
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned, the Executive Vice President, Worldwide Customer
Operations, of FEDERAL EXPRESS CORPORATION, a Delaware corporation (the
"Corporation"), does hereby constitute and appoint Frederick W. Smith, Alan B.
Graf, Jr. and Graham R. Smith, and each of them, with full power of
substitution and resubstitution, as his true and lawful attorneys-in-fact and
agents, with full power and authority to execute in the name and on behalf of
the undersigned as such officer, a Registration Statement on Form S-3 to be
filed with the Securities and Exchange Commission under the Securities Act of
1933, as amended, with respect to a shelf registration for equipment trust
certificates and pass through certificates in an amount up to $465 million and
any and all amendments to such Registration Statement whether filed prior or
subsequent to the time such Registration Statement becomes effective; and
hereby ratifies and confirms all that such attorneys-in-fact and agents, or
any of them, or their or his substitute or substitutes may lawfully do or
cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 28th day of October
1994.
/s/ WILLIAM J. RAZZOUK
----------------------
William J. Razzouk
STATE OF TENNESSEE
COUNTY OF SHELBY
I, Sharon A. Smith , a Notary Public in and for the aforesaid
State and County, do hereby certify that William J. Razzouk, personally known
to me to be the same person whose name is subscribed to the foregoing
instrument, appeared before me this day in person, and acknowledged that he
signed and delivered the foregoing instrument as his free and voluntary act,
for the uses and purposes therein set forth.
/s/ SHARON A. SMITH
-------------------
NOTARY PUBLIC
My Commission Expires:
May 16, 1997
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned, the Chief Financial Officer of FEDERAL EXPRESS
CORPORATION, a Delaware corporation (the "Corporation"), does hereby
constitute and appoint Frederick W. Smith, William J. Razzouk, and Graham R.
Smith, and each of them, with full power of substitution and resubstitution,
as his true and lawful attorneys-in-fact and agents, with full power and
authority to execute in the name and on behalf of the undersigned as such
officer, a Registration Statement on Form S-3 to be filed with the Securities
and Exchange Commission under the Securities Act of 1933, as amended, with
respect to a shelf registration for equipment trust certificates and pass
through certificates in an amount up to $465 million and any and all
amendments to such Registration Statement whether filed prior or subsequent to
the time such Registration Statement becomes effective; and hereby ratifies
and confirms all that such attorneys-in-fact and agents, or any of them, or
their or his substitute or substitutes may lawfully do or cause to be done by
virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 27th day of October
1994.
/s/ ALAN B. GRAF, JR.
---------------------
Alan B. Graf, Jr.
STATE OF TENNESSEE
COUNTY OF SHELBY
I, Sharon A. Smith , a Notary Public in and for the aforesaid State
and County, do hereby certify that Alan B. Graf, Jr., personally known to me
to be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person, and acknowledged that he signed and
delivered the foregoing instrument as his free and voluntary act, for the uses
and purposes therein set forth.
/s/ SHARON A. SMITH
-------------------
NOTARY PUBLIC
My Commission Expires:
March 16, 1994
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned, the principal accounting officer and controller of
FEDERAL EXPRESS CORPORATION, a Delaware corporation (the "Corporation"), does
hereby constitute and appoint Frederick W. Smith, William J. Razzouk and Alan
B. Graf, Jr., and each of them, with full power of substitution and
resubstitution, as his true and lawful attorneys-in-fact and agents, with full
power and authority to execute in the name and on behalf of the undersigned as
the Controller, a Registration Statement on Form S-3 to be filed with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended, with respect to a shelf registration for equipment trust certificates
and pass through certificates in an amount up to $465 million and any and all
amendments to such Registration Statement whether filed prior or subsequent to
the time such Registration Statement becomes effective; and hereby ratifies
and confirms all that such attorneys-in-fact and agents, or any of them, or
their or his substitute or substitutes may lawfully do or cause to be done by
virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 26th day of October
1994.
/s/ GRAHAM R. SMITH
-------------------
Graham R. Smith
STATE OF TENNESSEE
COUNTY OF SHELBY
I, Delores Wolfmeyer , a Notary Public in and for the aforesaid
State and County, do hereby certify that Graham R. Smith, personally known to
me to be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person, and acknowledged that he signed and
delivered the foregoing instrument as his free and voluntary act, for the uses
and purposes therein set forth.
/s/ DELORES WOLFMEYER
---------------------
NOTARY PUBLIC
My Commission Expires:
December 9, 1996
Exhibit 25(a)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
_______________
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2)
_______________
NATIONSBANK OF GEORGIA, NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
58-0193243
(I.R.S. employer identification no.)
600 Peachtree Street, N.E.
Suite 900
Atlanta, Georgia 30308
(Address of principal executive offices)
(Zip Code)
_____________________________
John T. Henderson
NationsBank of Georgia, National Association
Area Administration
6000 Feldwood Road
College Park, Georgia 30349
(404) 774-6074
(Name, Address and telephone number of agent for service)
_______________
with a copy to:
NationsBank of Georgia, National Association
Corporate Trust
600 Peachtree Street, Suite 900
Atlanta, GA 30308
________________________
Federal Express Corporation
(Exact name of obligor as specified in its charter)
Delaware 71-0427007
(State or other jurisdiction (IRS employer
of incorporation or organization) identification no.)
2005 Corporate Avenue
Memphis, Tennessee 38132
(901) 369-3600
(Name, address, including zip code, and telephone number,
including area code, of principal executive office)
__________________________________________
Equipment Trust Certificates; Pass Through Certificates
(Title of the indenture securities)
_________________________________________________________________
1. General information.
Furnish the following information as to the trustee--
(a) Name and address of each examining or supervising
authority to which it is subject.
The Comptroller of the Currency,
Washington, D.C.
Federal Reserve Bank of Atlanta
104 Marietta Street, N.W.
Atlanta, Georgia
Federal Deposit Insurance Corporation
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust
powers.
Yes.
2. Affiliations with obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
None.
16. List of Exhibits.
List below all exhibits filed as a part of this statement of
eligibility.
(1) A copy of the Articles of Association of the trustee as
now in effect. (See Exhibit 1 to Form T-1, Exhibit 25
to Registration No. 33-50233, which is incorporated
herein by reference.)
(2) A copy of the certificate of authority of the trustee
to commence business.
(3) A copy of the authorization of the trustee to exercise
corporate trust powers.
(4) A copy of the existing by-laws of the trustee, as
amended to date. (See Exhibit 4 to Form T-1, Exhibit
25 to Registration No. 33-50233, which is incorporated
herein by reference.)
(6) The consent of the trustee required by Section 321(b)
of the Trust Indenture Act of 1939.
(7) A copy of the latest report of condition of the trustee
published pursuant to law or the
requirements of its supervising or examining authority.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of
1939 the trustee, NationsBank of Georgia, National Association, a
corporation organized and existing under the laws of the United
States of America, has duly caused this statement of eligibility
and qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Atlanta and the
State of Georgia, on the 14th day of November, 1994.
NATIONSBANK OF GEORGIA,
NATIONAL ASSOCIATION
By: /s/ L. Collins Proctor .
----------------------
L. Collins Proctor
Trust Officer
EXHIBIT 6 TO FORM T-1
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust
Indenture Act of 1939 in connection with the proposed issuance of
Federal Express Corporation Equipment Trust Certificates Pass
Through Certificates, NationsBank of Georgia, National
Association hereby consents that reports of examinations by
Federal, State, Territorial or District Authorities may be
furnished by such authorities to the Securities and Exchange
Commission upon request therefor.
NATIONSBANK OF GEORGIA,
NATIONAL ASSOCIATION
By: /s/ L. Collins Proctor .
----------------------
L. Collins Proctor
Trust Officer
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of
1939 the trustee, NationsBank of Georgia, National Association, a
corporation organized and existing under the laws of the United
States of America, has duly caused this statement of eligibility
and qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Atlanta and the
State of Georgia, on the 14th day of November, 1994.
NATIONSBANK OF GEORGIA,
NATIONAL ASSOCIATION
By: /s/ L. Collins Proctor
----------------------
L. Collins Proctor
Trust Officer
EXHIBIT 6 TO FORM T-1
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust
Indenture Act of 1939 in connection with the proposed issuance of
Federal Express Corporation Equipment Trust Certificates Pass
Through Certificates, NationsBank of Georgia, National
Association hereby consents that reports of examinations by
Federal, State, Territorial or District Authorities may be
furnished by such authorities to the Securities and Exchange
Commission upon request therefor.
NATIONSBANK OF GEORGIA,
NATIONAL ASSOCIATION
By: /s/ L. Collins Proctor
----------------------
L. Collins Proctor
Trust Officer
EXHIBIT 2 TO FORM T-1
Comptroller of the Currency
Administrator of National Banks
Washington, D.C. 20219
CERTIFICATE
I, Eugene A. Ludwig, Comptroller of the Currency, do hereby
certify that:
1. The Comptroller of the Currency, pursuant to Revised
Statutes 324, et seq., as amended, 12 U.S.C. 1, et seq., as
amended, has possession, custody and control of all records
pertaining to the chartering, regulation and supervision of all
National Banking Associations.
2. "NationsBank of Georgia, National Association", Atlanta,
Georgia, (Charter No. 13068), a National Banking Association
formed under the laws of the United States and is authorized
thereunder to transact the business of banking on the date of
this Certificate.
IN TESTIMONY WHEREOF, I have
hereunto subscribed my name
and caused my seal of office
to be affixed to these presents
at the Treasury Department, in
the City of Washington and District
of Columbia, this 27th day of
October, 1994.
Eugene A. Ludwig
----------------------
/s/ Eugene A. Ludwig
Comptroller of the Currency
EXHIBIT 3 TO FORM T-1
Comptroller of the Currency
Administrator of National Banks
Washington, D.C. 20219
Certification of Fiduciary Powers
I, Eugene A. Ludwig, Comptroller of the Currency, do hereby
certify the records in this Office evidence "NationsBank of
Georgia, National Association", Atlanta, Georgia, (Charter No.
13068), was granted, under the hand and seal of the Comptroller,
the right to act in all fiduciary capacities authorized under the
provisions of The Act of Congress approved September 28, 1962, 76
Stat. 668, 12 U.S.C. 92a. I further certify the authority so
granted remains in full force and effect.
IN TESTIMONY WHEREOF, I have
hereunto subscribed my name
and caused my seal of Office
of the Comptroller of the
Currency to be affixed to these
presents at the Treasury
Department, in the City of
Washington and District of
Columbia, this 27th day of
October, 1994.
/s/ Eugene A. Ludwig
----------------------
Eugene A. Ludwig
Comptroller of the Currency
EXHIBIT 7 TO FORM T-1
Comptroller of the Currency
Administrator of National Banks
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of
NationsBank of Georgia, N.A. of Atlanta, in the state of Georgia,
at the close of business on September 30, 1994 published in
response to call made by Comptroller of the Currency, under Title
12, United States Code, Section 161. Charter Number 13281,
Comptroller of the Currency, Atlanta District.
Statement of Resources and Liabilities
Dollar Amounts in Thousands
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin 1,284,932.
Securities:
Held-to-maturity securities 2,262,168.
Available-for-sale securities 1,979,730.
Federal funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBFs:
Federal funds sold 681,581.
Securities purchased under agreements to resell 1,000.
Loans and lease financing receivables:
Loans and leases, net of unearned income 10,368,698.
LESS: Allowance for loan and lease losses 144,800.
Loans and leases, net of unearned income,
allowance, and reserve 10,223,898.
Assets held in trading accounts 17,832.
Premises and fixed assets (including capitalized
leases) 188,054.
Other real estate owned 11,810.
Customers' liability to this bank on acceptances
outstanding 166,352.
Intangible assets 41,997.
Other assets 175,432.
Total assets 17,034,786.
LIABILITIES
Deposits:
In domestic offices 8,434,032.
Noninterest-bearing 2,722,621.
Interest-bearing 5,711,411.
Federal funds purchased and securities sold
under agreements to repurchase in domestic
offices of the bank and of its Edge and
Agreement subsidiaries, and in IBFs:
Federal funds purchased 5,922,740.
Securities sold under agreements to repurchase 294,226.
Demand notes issued to the U.S. Treasury 148,359.
Trading Liabilities 6,857.
Other borrowed money:
With original maturity of one year or less 268,337.
With original maturity of more than one year 524.
Bank's liability on acceptances executed and outstanding 166,352.
Other liabilities 771,599.
Total liabilities 16,013,026.
EQUITY CAPITAL
Common stock 97,747.
Surplus 232,803.
Undivided profits and capital reserves 714,854.
Less: Net unrealized loss on marketable equity securities (23,644)
Total equity capital 1,021,760.
Total liabilities, limited-life preferred stock,
and equity capital 17,034,786.
We, the undersigned directors, attest to the correctness of this
statement of resources and liabilities. We declare that it has
been examined by us, and to the best of our knowledge and belief
has been prepared in conformance with the instructions and is
true and correct.
Hugh M. Chapman L.L. Directors
Gellerstedt, III
Harold A. Dawson
Exhibit 25(b)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
_______________
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2) _____
_______________
NATIONSBANK OF SOUTH CAROLINA, NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
57-0516069
(I.R.S. employer identification no.)
1301 Gervais Street
Columbia, South Carolina 29201
(Address of principal executive offices) (Zip Code)
_______________
John T. Henderson
NationsBank of Georgia, National Association
Area Administration
6000 Feldwood Road
College Park, Georgia 30349
(404) 774-6074
with a copy to:
NationsBank of South Carolina, National Association
Corporate Trust Administration
1301 Gervais Street
Fourth Floor
Columbia, South Carolina 29201
(Name, Address and telephone number of agent for service)
Federal Express Corporation
(Exact name of obligor as specified in its charter)
Delaware 71-0427007
(State or other jurisdiction (IRS employer
of incorporation or organization) identification no.)
2005 Corporate Avenue
Memphis, Tennessee 38132
(Address of principal executive offices) (Zip Code)
_______________
Equipment Trust Certificates;
Pass Through Certificates
(Title of the indenture securities)
______________________________________________________________________________
(1) General information.
Furnish the following information as to the trustee--
(a) Name and address of each examining or supervising
authority to which it is subject.
The Comptroller of the Currency,
Washington, D.C.
Federal Reserve Bank of Richmond
701 East Byrd Street, P.O. Box 27622
Richmond, Virginia
Federal Deposit Insurance Corporation
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes
2. Affiliations with obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
None.
16. List of Exhibits.
List below all exhibits filed as a part of this statement of
eligibility.
(1) A copy of the Articles of Association of the trustee as now in
effect. (See Exhibit 1 to form T-1 filed as exhibit 25(b) to Registration
Statement in Form S-3, Commission File No. 33-50175)
(2) A copy of the certificate of authority of the trustee to
commence business. (See Exhibit 1 to form T-1 filed as exhibit 25(b) to
Registration Statement in Form S-3, Commission File No. 33-50175)
(3) A copy of the authorization of the trustee to exercise
corporate trust powers. (See Exhibit 1 to form T-1 filed as exhibit 25(b)
to Registration Statement in Form S-3, Commission File No. 33-50175)
(6) The consent of the trustee required by Section 321(b) of the
Trust Indenture Act of 1939.
(7) A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its supervising or
examining authority.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
trustee, NationsBank of South Carolina, National Association, a corporation
organized and existing under the laws of the United States of America, has
duly caused this statement of eligibility and qualification to be signed on
its behalf by the undersigned, thereunto duly authorized, all in the City
of Atlanta and the State of Georgia, on the 14th day of November , 1994.
NATIONSBANK OF SOUTH CAROLINA,
NATIONAL ASSOCIATION
By: _________________________
L. Collins Proctor
Trust Officer
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
trustee, NationsBank of South Carolina, National Association, a corporation
organized and existing under the laws of the United States of America, has
duly caused this statement of eligibility and qualification to be signed on
its behalf by the undersigned, thereunto duly authorized, all in the City
of Atlanta and the State of Georgia, on the 14th day of November, 1994.
NATIONSBANK OF SOUTH CAROLINA,
NATIONAL ASSOCIATION
By: /s/ L. Collins Proctor
__________________________
14th day of November, 1994
Trust Officer
EXHIBIT 6 TO FORM T 1
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939 in connection with the proposed issuance of Federal Express
Corporation Equipment Trust Certificates Pass Through Certificates,
NationsBank of South Carolina, National Association hereby consents that
reports of examinations by Federal, State, Territorial or District
Authorities may be furnished by such authorities to the Securities and
Exchange Commission upon request therefor.
NATIONSBANK OF SOUTH CAROLINA,
NATIONAL ASSOCIATION
By: /s/ L. Collins Proctor
_________________________
L. Collins Proctor
Trust Officer
EXHIBIT 6 TO FORM T1
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939 in connection with the proposed issuance of Federal Express
Corporation Equipment Trust Certificates Pass Through Certificates,
NationsBank of South Carolina, National Association hereby consents that
reports of examinations by Federal, State, Territorial or District
Authorities may be furnished by such authorities to the Securities and
Exchange Commission upon request therefor.
NATIONSBANK OF SOUTH CAROLINA,
NATIONAL ASSOCIATION
By: /s/ L. Collins Proctor
__________________________
L. Collins Proctor
Trust Officer
EXHIBIT 7 TO FORM T-1
Comptroller of the Currency
Administrator of National Banks
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the NATIONSBANK OF
SOUTH CAROLINA OF COLUMBIA, in the state of SOUTH CAROLINA, at the close of
business on September 30, 1994 published in response to call made by
Comptroller of the Currency, under Title 12, United States Code, Section
161. Charter Number 14425, Comptroller of the Currency District.
Statement of Resources and Liabilities
Dollar Amounts in Thousands
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin 370,147
Interest-bearing balances 0
Securities:
Held-to-maturity securities 730,052
Available-for-sale securities 841,738
Federal funds sold 103,065
Securities purchased under agreements to resell 755
Loans and lease financing receivables:
Loans and leases, net of unearned income 6,477,477
LESS: Allowance for loan and lease losses 133,167
Loans and leases, net of unearned income,
allowance, and reserve 6,344,310
Assets held in trading accounts 50
Premises and fixed assets (including capitalized leases) 123,082
Other real estate owned 27,257
Investments in unconsolidated subsidiaries
and associated Companies 7,290
Customers' liability to this bank on acceptances outstanding 406
Intangible assets 43,919
Other assets 128,263
Total assets 8,720,334
LIABILITIES
Deposits:
In domestic offices 4,815,006
Noninterest-bearing 1,124,155
Interest-bearing 3,690,851
Federal funds purchased 3,117,585
Demand notes issued to the U.S. Treasury 25,466
Other borrowed money:
With original maturity of one year or less 2,559
With original maturity of more than one year 73
Mortgage Indebtedness and Obligors under capitalized leases 0
Bank's liability on acceptances executed and outstanding 406
Subordinated notes and debentures 10,000
Other liabilities 75,758
Total liabilities 8,046,853
EQUITY CAPITAL
Common stock 67,000
Surplus 519,398
Undivided profits and capital reserves 96,862
Net unrealized holdings gains (losses) on available
for sale securities (9,779)
Total equity capital 673,481
Total liabilities, limited-life preferred stock,
and equity capital 8,720,334
We, the undersigned directors, attest to the correctness of this
statement of resources and liabilities. We declare that it has been
examined by us, and to the best of our knowledge and belief has been
prepared in conformance with the instructions and is true and correct.
William L. Bethea, Jr. William E. Simms
Edwin S. Pearlstine, Jr.
Directors
I, Joe L. Price, Sr. Vice President of the above-named bank, do hereby
declare that this Report of Condition is true and correct to the best of my
knowledge and belief.
Joe L. Price, Sr.
Vice President
October 21, 1994
