SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report : March 16, 1994
(Date of earliest event reported)
---------------------------------
FEDERAL EXPRESS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State of Incorporation)
1-7806 71-0427007
(Commission File Number) (IRS Employer Identification No.)
2005 Corporate Avenue, Memphis, Tennessee 38132
(Address of principal executive offices)
Registrant's Telephone Number, including area code:
(901) 369-3600
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
The following documents relating to the 1994 Pass Through
Certificates, Series A310-A1, Series A310-A2 and Series A310-A3 are being
filed in connection with, and incorporated by reference in, the
Registrant's Registration Statement on Form S-3 No. 33-51623, which was
declared effective February 18, 1994.
Exhibit Description of Exhibit
- ------- ----------------------
1 Underwriting Agreement relating to Federal Express
Corporation 1994 Pass Through Certificates Series
A310-A1, Series A310-A2 and Series A310-A3.
4.a.1 Pass Through Trust Agreement dated as of March 1, 1994,
between Federal Express Corporation and the Pass Through
Trustee.
4.a.2 Revised form of Pass Through Certificates (included
in Exhibit 4.a.3).
4.a.3 Forms of Series Supplements 1994 A310-A1, 1994 A310-A2
and 1994 A310-A3 to the Pass Through Trust Agreement
between Federal Express Corporation and the Pass
Through Trustee relating to the Pass Through Certificates.
4.b.1 Form of Trust Indenture and Security Agreement (Federal
Express Corporation Trust [A] [B] [C] [D] [E] [F] [G]
[H] [I] [J] [K] [L] [M]) between the Owner Trustee and
the Indenture Trustee relating to Equipment Trust
Certificates (Federal Express Corporation Trust [A]
[B] [C] [D] [E] [F] [G] [H] [I] [J] [K] [L] [M]) in
connection with the offering of Pass Through Certificates.*
4.b.2 Form of Equipment Trust Certificates (included in
Exhibit 4.b.1).
4.c.1 Form of Participation Agreement (Federal Express
Corporation Trust [A] [B] [C] [D] [E] [F] [G] [H] [I]
[J] [K] [L] [M]) among Federal Express Corporation,
as Lessee, the Owner Participant, the Indenture Trustee,
the Owner Trustee, the LC Bank and the Pass Through
Trustee relating to Equipment Trust Certificates
(Federal Express Corporation Trust [A] [B] [C] [D] [E]
[F] [G] [H] [I] [J] [K] [L] [M]).**
4.d Form of Trust Agreement between the Owner Participant
and the Owner Trustee relating to thirteen Airbus
A310-203 Aircraft.
4.e Form of Lease Agreement (Federal Express Corporation
Trust [A] [B] [C] [D] [E] [F] [G] [H] [I] [J] [K]
[L] [M]) between the Owner Trustee, as Lessor,
and Federal Express Corporation, as Lessee, relating to
Equipment Trust Certificates (Federal Express
Corporation Trust [A] [B] [C] [D] [E] [F] [G] [H]
[I] [J] [K] [L] [M]).**
4.f Form of Letter of Credit from the LC Bank to the
Indenture Trustee relating to Equipment Trust
Certificates (Federal Express Corporation Trust [A]
[B] [C] [D] [E] [F] [G] [H] [I] [J] [K] [L] [M]).**
4.g Form of Collateral Agreement (Trust [A] [B] [C]
[D] [E] [F] [G] [H] [I] [J] [K] [L] [M]) between
the Owner Trustee and the Indenture Trustee
relating to Equipment Trust Certificates (Federal
Express Corporation Trust [A] [B] [C] [D] [E]
[F] [G] [H] [I] [J] [K] [L] [M]) in connection
with the offering of Pass Through Certificates.**
23.c Consent of Kenneth R. Masterson
- -------------
* Separate Trust Indenture and Security Agreements will be entered into
with respect to each Aircraft. Except for differences in designations,
dollar amounts, interest rates, percentages, final distribution dates and
the like, there are no material details in which the Trust Indenture and
Security Agreements and related forms of Equipment Trust Certificates not
filed herewith differ from the corresponding Exhibit for the form of such
document.
** Separate Participation Agreements, Lease Agreements, Letters of
Credit and Collateral Agreements will be entered into with respect to each
Aircraft. Except for differences in the Aircraft Registration Numbers,
Manufacturer's Serial Numbers for the Aircraft and the Engines,
designations, dollar amounts, scheduled lease commencement dates, exchange
dates, expiration dates and the like, there are no material details in
which any agreement not filed herewith differs from the corresponding
Exhibit for the form of such document.
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
FEDERAL EXPRESS CORPORATION
By: /s/ GRAHAM R. SMITH
------------------------------
Graham R. Smith Vice President
& Controller
Dated: March 16, 1994
EXHIBIT INDEX
Exhibit Description of Exhibit
- ------- ----------------------
1 Underwriting Agreement relating to Federal Express
Corporation 1994 Pass Through Certificates Series A310-
A1, Series A310-A2 and Series A310-A3.
4.a.1 Pass Through Trust Agreement dated as of March 1, 1994,
between Federal Express Corporation and the Pass Through
Trustee.
4.a.2 Revised form of Pass Through Certificates (included
in Exhibit 4.a.3).
4.a.3 Forms of Series Supplements 1994 A310-A1, 1994 A310-A2
and 1994 A310-A3 to the Pass Through Trust Agreement
between Federal Express Corporation and the Pass Through
Trustee relating to the Pass Through Certificates.
4.b.1 Form of Trust Indenture and Security Agreement (Federal
Express Corporation Trust [A] [B] [C] [D] [E] [F] [G] [H]
[I] [J] [K] [L] [M]) between the Owner Trustee and the
Indenture Trustee relating to Equipment Trust
Certificates (Federal Express Corporation Trust [A] [B]
[C] [D] [E] [F] [G] [H] [I] [J] [K] [L] [M]) in
connection with the offering of Pass Through
Certificates.*
4.b.2 Form of Equipment Trust Certificates (included in
Exhibit 4.b.1).
4.c.1 Form of Participation Agreement (Federal Express
Corporation Trust [A] [B] [C] [D] [E] [F] [G] [H] [I] [J]
[K] [L] [M]) among Federal Express Corporation, as
Lessee, the Owner Participant, the Indenture Trustee, the
Owner Trustee, the LC Bank and the Pass Through Trustee
relating to Equipment Trust Certificates (Federal Express
Corporation Trust [A] [B] [C] [D] [E] [F] [G] [H] [I] [J]
[K] [L] [M]).**
4.d Form of Trust Agreement between the Owner Participant
and the Owner Trustee relating to thirteen Airbus A310-
203 Aircraft.
4.e Form of Lease Agreement (Federal Express Corporation
Trust [A] [B] [C] [D] [E] [F] [G] [H] [I] [J] [K] [L]
[M]) between the Owner Trustee, as Lessor, and Federal
Express Corporation, as Lessee, relating to Equipment
Trust Certificates (Federal Express Corporation Trust [A]
[B] [C] [D] [E] [F] [G] [H] [I] [J] [K] [L] [M]).**
4.f Form of Letter of Credit from the LC Bank to the
Indenture Trustee relating to Equipment Trust
Certificates (Federal Express Corporation Trust [A] [B]
[C] [D] [E] [F] [G] [H] [I] [J] [K] [L] [M]).**
4.g Form of Collateral Agreement (Trust [A] [B] [C] [D] [E]
[F] [G] [H] [I] [J] [K] [L] [M]) between the Owner
Trustee and the Indenture Trustee relating to Equipment
Trust Certificates (Federal Express Corporation Trust [A]
[B] [C] [D] [E] [F] [G] [H] [I] [J] [K] [L] [M]) in
connection with the offering of Pass Through
Certificates.**
23.c Consent of Kenneth R. Masterson
- -------------
* Separate Trust Indenture and Security Agreements will be
entered into with respect to each Aircraft. Except for differences in
designations, dollar amounts, interest rates, percentages, final
distribution dates and the like, there are no material details in which
the Trust Indenture and Security Agreements and related forms of
Equipment Trust Certificates not filed herewith differ from the
corresponding Exhibit for the form of such document.
** Separate Participation Agreements, Lease Agreements, Letters of
Credit and Collateral Agreements will be entered into with respect to each
Aircraft. Except for differences in the Aircraft Registration Numbers,
Manufacturer's Serial Numbers for the Aircraft and the Engines,
designations, dollar amounts, scheduled lease commencement dates, exchange
dates, expiration dates and the like, there are no material details in
which any agreement not filed herewith differs from the corresponding
Exhibit for the form of such document.
FEDERAL EXPRESS CORPORATION
1994 Pass Through Certificates, Series A310-A1
1994 Pass Through Certificates, Series A310-A2
1994 Pass Through Certificates, Series A310-A3
UNDERWRITING AGREEMENT
March 16, 1994
Goldman, Sachs & Co.
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
Federal Express Corporation, a Delaware corporation (the
"Company"), proposes that NationsBank of South Carolina, National
Association, acting not in its individual capacity but solely as pass
through trustee (the "Trustee") under the Pass Through Trust Agreement
dated as of March 1, 1994 (the "Basic Agreement"), as supplemented for each
series (each, a "Series") of pass through certificates (the "Pass Through
Certificates") to be purchased hereunder by a Series Supplement (each, a
"Series Supplement"), in each case between the Company and the Trustee (for
each Series, the Basic Agreement, as supplemented by the related Series
Supplement, being referred to herein as the "Pass Through Agreement"),
issue and sell to the underwriters named in Schedule I hereto its Pass
Through Certificates in the aggregate amounts and with the applicable
interest rates and final distribution dates set forth on Exhibit A hereto
(the "Offered Certificates") on the terms and conditions stated herein and
in Schedule II.
Each Series of Pass Through Certificates will represent interests
in a separate trust (each, a "Pass Through Trust") established pursuant to
the related Pass Through Agreement to fund the purchase of equipment trust
certificates ("Equipment Trust Certificates") which are to be issued as
nonrecourse obligations by an owner trustee, acting not in its individual
capacity but solely as owner trustee (the "Owner Trustee") under the Trust
Agreement, dated as of September 1, 1993, as amended and restated as of
March 1, 1994, between LLG Aircraft Leasing, L.P., as owner participant
(the "Owner Participant") and the Owner Trustee, in connection with
thirteen separate leveraged lease transactions to be entered into by the
Company, in each case to fund a portion of the payment by the Owner Trustee
of the acquisition cost (including any costs of modification required prior
to commencement of each Lease) of thirteen Airbus A310-203 aircraft,
registration numbers D-AICA, D-AICB, D-AICC, D-AICD, D-AICF, D-AICH, D-
AICK, D-AICL, D-AICM, D-AICN, D-AICP, D-AICR and D-AICS, respectively
(collectively, the "Aircraft"), that are to be leased by the Company from
the Owner Trustee pursuant to thirteen leases, all in accordance with the
Agreement to Lease, dated as of September 1, 1993, as amended and restated
as of March 1, 1994 (the "Agreement to Lease"), among the Company, the
Owner Trustee and Deutsche Lufthansa Aktiengesellschaft ("Lufthansa").
Each of the thirteen series of Equipment Trust Certificates will be issued
under a separate Trust Indenture and Security Agreement between NationsBank
of Georgia, National Association, as Indenture Trustee (the "Indenture
Trustee") and the Owner Trustee (each, an "Indenture" and, collectively,
the "Indentures"). As used herein, unless the context otherwise requires,
the term "Underwriters" shall mean the firm or firms named as Underwriter
or Underwriters in Schedule I.
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (No. 33-51623) for
the registration of certain pass through certificates, including the
Offered Certificates, under the Securities Act of 1933, as amended (the
"1933 Act"), and the offering thereof from time to time in accordance with
Rule 415 of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations"). Such registration statement, as amended by a
pre-effective amendment thereto, has been declared effective by the
Commission and the Basic Agreement has been qualified under the Trust
Indenture Act of 1939, as amended (the "1939 Act"). The Company has,
pursuant to Rule 424 under the 1933 Act, filed with, or transmitted for
filing to, or shall within the required period of time hereafter file with
or transmit for filing to, the Commission a prospectus supplement (the
"Prospectus Supplement") specifically relating to the Offered Certificates,
together with a prospectus relating to pass through certificates. The term
"Registration Statement" means the above-referenced registration statement
in the form in which it became effective, including the exhibits thereto
and the documents incorporated by reference therein, as amended to the date
hereof. The term "Basic Prospectus" means the above-referenced prospectus
relating to pass through certificates. The term "Prospectus" means the
Basic Prospectus supplemented by the Prospectus Supplement. The term
"Preliminary Prospectus" means a preliminary prospectus supplement
specifically relating to the Offered Certificates together with the Basic
Prospectus. As used herein, the terms "Basic Prospectus," "Prospectus" and
"Preliminary Prospectus" shall include in each case the documents, if any,
incorporated by reference therein. The terms "supplement" and "amendment"
or "amend" as used herein shall include all documents deemed to be
incorporated by reference in the Prospectus that have been filed subsequent
to the date of the Basic Prospectus by the Company with the Commission
pursuant to the Securities Exchange of 1934, as amended (the "1934 Act").
Capitalized terms used but not otherwise defined in this Agreement
shall have the meanings specified in or pursuant to the Pass Through
Agreement or the Indenture relating to each related series of Equipment
Trust Certificates.
SECTION 1. Representations and Warranties.
(a) The Company represents and warrants to each Underwriter, as
of the date hereof, as follows:
(i) Due Incorporation and Qualification. The Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the state of Delaware, is a "citizen of the United
States" and a "certificated air carrier" within the meaning of the
Federal Aviation Act of 1958, as amended (the "Aviation Act"), has the
corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus; and the
Company is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as
one enterprise.
(ii) Subsidiaries. Each subsidiary of the Company which is a
significant subsidiary as defined in Rule 405 of Regulation C of the
1933 Act Regulations (each a "Significant Subsidiary") has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify would not
have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise; and all
of the issued and outstanding capital stock of each Significant
Subsidiary has been duly authorized and validly issued, is fully paid
and non-assessable and, except for directors' qualifying shares (except
as otherwise stated in the Registration Statement), is owned by the
Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity.
(iii) Registration Statement and Prospectus. At the time the
Registration Statement became effective, the Registration Statement
complied, and as of the date hereof does comply, in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations and the 1939 Act and the rules and regulations of the
Commission promulgated thereunder. The Registration Statement, at the
time it became effective, did not, and at each time thereafter at which
any amendment to the Registration Statement becomes effective and any
Annual Report on Form 10-K is filed by the Company with the Commission,
will not, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading. The Prospectus, as of the
date hereof does not contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that the representations and
warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or Prospectus made in
reliance upon and in conformity with information furnished to the
Company in writing by an Underwriter expressly for use in the
Registration Statement or Prospectus, to that part of the Registration
Statement which constitutes the Indenture Trustee's Statement of
Eligibility under the 1939 Act (Form T-1), or to those sections of the
Prospectus captioned "Description of the Letters of Credit" and
"Appendix B -- Westdeutsche Landesbank Girozentrale." No stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been initiated or
threatened by the Commission.
(iv) Incorporated Documents. The documents incorporated by
reference in the Prospectus, at the time they were or hereafter are
filed with the Commission, complied and will comply in all material
respects with the requirements of the 1934 Act and the rules and
regulations promulgated thereunder (the "1934 Act Regulations"), and,
when read together and with the other information in the Prospectus,
did not and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(v) Accountants. The accountants who certified the financial
statements included or incorporated by reference in the Prospectus are
independent public accountants as required by the 1933 Act and the 1933
Act Regulations.
(vi) Financial Statements. The financial statements of the Company
included or incorporated by reference in the Prospectus and the
Registration Statement present fairly the financial position of the
Company as of the dates thereof and the results of operations, changes
in common stockholders' investment and cash flows of the Company, for
the respective periods covered thereby, all in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the entire period involved, except as stated in such
financial statements; and the financial schedules included or
incorporated by reference in the Registration Statement meet the
requirements of the 1933 Act Regulations or the 1934 Act Regulations,
as applicable, and accurately present the information required to be
shown therein.
(vii) Material Changes or Material Transactions. Except as stated in
the Prospectus, subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
the Company has not incurred any liabilities or obligations, direct or
contingent, or entered into any transactions which are material to the
Company, and there has not been any material change in the capital
stock or short-term debt, or any material increase in long-term debt of
the Company, or any material adverse change, or any development
involving a prospective material adverse change, in the condition
(financial or other), business, prospects, net worth or results of
operations of the Company.
(viii) No Defaults; Regulatory Approvals. Neither the Company nor
any of its subsidiaries is in violation of its charter or in default in
the performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which it is a party
or by which it or any of them or their properties may be bound; and the
execution and delivery by the Company of this Agreement, each Pass
Through Agreement and any other Operative Agreement to which the
Company is or is to be a party and the consummation of the transactions
contemplated herein and therein have been duly authorized by all
necessary corporate action and will not conflict with or constitute a
breach of, or default under, or result in the creation or imposition of
any lien (other than as will be permitted under the Leases), charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company or any
such subsidiary is a party or by which it or any of them may be bound
or to which any of the property or assets of the Company or any such
subsidiary is subject, which conflict, breach or default would have,
individually or in the aggregate with any other such instances, a
material adverse effect on the condition (financial or other),
business, prospects, net worth or results of operations of the Company
and its subsidiaries considered as one entity, nor will such action
result in any violation of the provisions of the charter or by-laws of
the Company or any law, administrative regulation or administrative or
court order or decree currently in effect or in effect at the time of
execution and delivery of this Agreement, each Pass Through Agreement
and the other Operative Agreements and applicable to the Company or any
of its subsidiaries; and no consent, approval, authorization, order or
decree of any court or governmental agency or body is required for the
consummation by the Company of the transactions contemplated by this
Agreement, any Pass Through Agreement or any other Operative Agreement
to which the Company is or is to be a party, except such as may be
required under the 1933 Act, the 1939 Act, the 1933 Act Regulations or
state securities or Blue Sky laws, the Aviation Act, and the Uniform
Commercial Code as in effect in Delaware and Tennessee.
(ix) Legal Proceedings; Contracts. Except for matters described in
the Prospectus (as to which the Company makes no representation as to
the outcome), there is no pending legal, governmental or administrative
proceeding or series of related proceedings to which the Company is a
party or of which any property of the Company is the subject which is
reasonably likely, individually or in the aggregate to have a material
adverse effect on the condition (financial or other), business,
prospects, net worth or results of operations of the Company on a
consolidated basis, to the best knowledge of any financial or legal
officer of the Company, no such proceedings are threatened or
contemplated against the Company by governmental authorities or others
and no basis for any such proceedings exists; and there are no
contracts or documents of the Company or any of its subsidiaries which
are required to be filed as exhibits to the Registration Statement by
the 1933 Act or by the 1933 Act Regulations which have not been so
filed.
(x) Compliance with Laws. The Company's business and operations
comply in all material respects with all laws and regulations
applicable thereto and there are no known, proposed or threatened
changes in any laws or regulations which would have a material adverse
effect on the Company or the manner in which it conducts its business;
the Company possesses all valid and effective certificates, licenses
and permits required to conduct its business as now conducted, except
for instances which individually or in the aggregate do not, or will
not, have a material adverse effect on the condition (financial or
other), business, prospects, net worth or results of operations of the
Company.
(xi) Enforceability of Operative Agreements. Each of the Pass
Through Agreements and the other Operative Agreements to which the
Company is or is to be a party have been duly authorized by the
Company, will each be substantially in the form heretofore supplied to
the Underwriters and, when duly executed and delivered by the Company
and the other parties thereto, will each constitute a valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms. The Basic Agreement as executed is
substantially in the form filed as an exhibit to the Registration
Statement and has been duly qualified under the 1939 Act.
(xii) Validity of the Offered Certificates. When executed, issued,
authenticated and delivered pursuant to the provisions of the
applicable Pass Through Agreement and sold and paid for as provided in
this Agreement, each Series of Offered Certificates will constitute
valid and legally binding obligations of the Trustee enforceable in
accordance with their terms; and the Certificateholders of such Offered
Certificates will be entitled to the benefits provided by such Pass
Through Agreement.
(xiii) Equipment Trust Certificates. The Equipment Trust Certificates
to be issued under each applicable Indenture, when duly executed and
delivered by the related Owner Trustee and duly authenticated by the
Indenture Trustee in accordance with the terms of such Indenture, will
be duly issued under such Indenture and will constitute the valid and
binding obligations of such Owner Trustee, and the Holders thereof will
be entitled to the benefits of such Indenture.
(xiv) Due Execution. This Agreement has been duly executed and
delivered by the Company.
(xv) Descriptions. The Offered Certificates, Pass Through
Agreements, Indentures, Participation Agreements, Leases and other
Operative Agreements conform, or will upon execution conform, in all
material respects to the descriptions thereof in the Prospectus.
The representations and warranties made by the Company as to the
enforceability of the Pass Through Agreements, the Indentures, the Offered
Certificates, the Equipment Trust Certificates and any other Operative
Agreement to which the Company is or is to be a party set forth in
subparagraphs (xi), (xii) and (xiii) above are limited by bankruptcy,
insolvency, reorganization and other laws of general applicability relating
to or affecting enforcement of creditors' rights or by general equity
principles, and the enforceability of any Pass Through Agreement, Lease and
Indenture is also limited by applicable laws which may affect the remedies
provided therein but which do not affect the validity of such Pass Through
Agreement, Lease or Indenture or make such remedies inadequate for the
practical realization of the benefits intended to be provided thereby.
(b) Lufthansa represents and warrants to each Underwriter and to
the Company that those sections of the Prospectus captioned "Description of
the Letters of Credit" and "Appendix B -- Westdeutsche Landesbank
Girozentrale," as of the date hereof, do not contain an untrue statement of
a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading.
(c) Additional Certifications. Any certificate signed by any
officer or general partner, as the case may be, of the Company, Lufthansa
or the Owner Participant and delivered to the Underwriters or to counsel
for the Underwriters in connection with an offering of the Offered
Certificates shall be deemed a representation and warranty by the Company,
Lufthansa or the Owner Participant, as the case may be, to each Underwriter
participating in such offering as to the matters covered thereby on the
date of such certificate and unless subsequently amended or supplemented
subsequent thereto.
SECTION 2. Purchase and Sale.
(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions set forth herein and in
Schedule II, if any, the Company agrees to cause the Trustee to sell to
each Underwriter, and each Underwriter agrees, severally and not jointly,
to purchase from the Trustee, at the purchase price specified in the first
column of Exhibit A hereto, the respective amounts of each Series of
Offered Certificates set forth opposite the name of such Underwriter in
Schedule I. It is understood that the Underwriters propose to offer the
Offered Certificates for sale to the public as set forth in the Prospectus.
(b) Payment of the purchase price for any Offered Certificates to
be purchased by the Underwriters shall be made at Sullivan & Cromwell, 125
Broad Street, New York, New York 10004, or at such other place as shall be
agreed upon by the Underwriters and the Company, at 10:00 A.M., New York
City time, on the fifth business day (unless postponed in accordance with
the provisions of Section 10) following the date hereof or at such other
date, time or location specified in Schedule II, or as otherwise shall be
agreed upon by the Underwriters and the Company (such time and date being
referred to as a "Closing Time"). Delivery of the Offered Certificates
shall be made for the account of the Underwriters as specified in Schedule
II against payment by the Underwriters of the purchase price thereof to, or
upon the order of, the Trustee (or such other person as the Company may
direct) by wire transfer of federal or other immediately available funds or
by intra-bank transfer of immediately available funds. Such Offered
Certificates shall be registered in such names, and in such denominations,
as the Underwriters may request in writing at least two business days prior
to the Closing Time. Such Offered Certificates, which may be in temporary
form, will be made available for examination and packaging by the
Underwriters in New York, New York, on or before the first business day
prior to the Closing Time or at such other time and place specified in
Schedule II.
(c) As compensation to the Underwriters for their commitments and
obligations hereunder in respect of the Offered Certificates, including
their undertakings to distribute Offered Certificates, the Owner
Participant will pay to the Underwriters an amount equal to that percentage
of the aggregate amount of each series of Offered Certificates purchased by
the Underwriters as set forth in the sixth column of Exhibit A as the
underwriting discounts and commissions. Such payment shall be made at the
Closing Time simultaneously with the payment by the Underwriters to the
Trustee of the purchase price of the Offered Certificates as specified in
Section 2(b) hereof. Payment of such compensation shall be made by wire
transfer of federal or other immediately available funds or by intra-bank
transfer of immediately available funds.
SECTION 3. Covenants of the Company.
The Company covenants with each of the Underwriters as follows:
(a) Prospectus Supplement. The Company has prepared a
Preliminary Prospectus containing such information as the Underwriters and
the Company have deemed appropriate, and immediately following the
execution of this Agreement the Company will prepare a Prospectus
Supplement setting forth such information as the Underwriters and the
Company deem appropriate in connection with the offering of the Offered
Certificates. The Company will promptly transmit copies of the Prospectus
Supplement to the Commission for filing pursuant to Rule 424 of the 1933
Act Regulations.
(b) Notice of Certain Events. The Company will notify the
Underwriters immediately (i) of the effectiveness of any amendment to the
Registration Statement, (ii) of the transmittal to the Commission for
filing of any supplement to the Prospectus or any document to be filed
pursuant to the 1934 Act which will be incorporated by reference in the
Prospectus, (iii) of the receipt of any comments from the Commission with
respect to the Registration Statement, the Prospectus or the Prospectus
Supplement relating in any way to the offer and sale of the Offered
Certificates, (iv) of any request by the Commission for any amendment to
the Registration Statement or any amendment or supplement to the Prospectus
or for additional information, and (v) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or the initiation of any proceedings for that purpose. The Company will
make every reasonable effort to prevent the issuance of any stop order and,
if any stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
(c) Notice of Certain Proposed Filings. The Company will give
notice of its intention to file or prepare any amendment to the
Registration Statement or any amendment or supplement to the Prospectus,
whether by the filing of documents pursuant to the 1934 Act, the 1933 Act
or otherwise, and will furnish the Underwriters with copies of any such
amendment or supplement or other documents proposed to be filed or prepared
a reasonable time in advance of such proposed filing or preparation, as the
case may be.
(d) Copies of the Registration Statement and the Prospectus. The
Company will deliver to the Underwriters one signed copy and as many
conformed copies of the Registration Statement (as originally filed) and of
each amendment thereto (including exhibits filed therewith or incorporated
by reference therein and documents incorporated by reference in the
Prospectus) as the Underwriters may reasonably request. The Company will
furnish to the Underwriters as many copies of the Prospectus (as amended or
supplemented) as the Underwriters shall reasonably request so long as the
Underwriters are required to deliver a Prospectus in connection with sales
or solicitations of offers to purchase the Offered Certificates.
(e) Revisions of Prospectus -- Material Changes. If at any time
when the Prospectus is required by the 1933 Act to be delivered in
connection with sales of the Offered Certificates any event shall occur or
condition exist as a result of which it is necessary, in the reasonable
opinion of counsel for the Underwriters or counsel for the Company, to
further amend or supplement the Prospectus in order that the Prospectus
will not include an untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the reasonable
opinion of such counsel, at any such time to amend or supplement the
Registration Statement or the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations the Company will
promptly prepare and file with the Commission such amendment or supplement,
whether by filing documents pursuant to the 1934 Act, the 1933 Act or
otherwise, as may be necessary to correct such untrue statement or omission
or to make the Registration Statement and Prospectus comply with such
requirements.
(f) Earnings Statements. The Company will make generally
available to its security holders as soon as practicable, but not later
than 90 days after the close of the period covered thereby, an earnings
statement (in form complying with the provisions of Rule 158 under the 1933
Act) covering each twelve-month period beginning, in each case, not later
than the first day of the Company's fiscal quarter next following the
"effective date" (as defined in such Rule 158) of the Registration
Statement with respect to each sale of Offered Certificates.
(g) Blue Sky Qualifications. The Company will endeavor, in
cooperation with the Underwriters, to qualify the Offered Certificates for
offering and sale under the applicable securities laws of such states and
other jurisdictions of the United States as the Underwriters may designate,
and will maintain such qualifications in effect for so long as may be
required for the distribution of the Offered Certificates; provided,
however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation or to
subject itself to taxation as doing business in any jurisdiction in which
it is not otherwise required to be so qualified. The Company will file
such statements and reports as may be required by the laws of each
jurisdiction in which the Offered Certificates have been qualified as
provided above.
(h) 1934 Act Filings. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act, will file
promptly all documents required to be filed with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the 1934 Act.
(i) Stand-Off Agreement. The Company will not, between the date
of this Agreement and termination of any trading restrictions with respect
to the Offered Certificates (as notified to the Company by the
Underwriters) or the Closing Time, whichever is later, (i) without the
prior written consent of the Underwriters, offer or sell, or enter into any
agreement to sell, any debt securities of the Company pursuant to a public
offering of securities registered under the 1933 Act (other than the
Offered Certificates which are to be sold pursuant hereto and commercial
paper in the ordinary course of business), (ii) offer or sell, or enter
into any agreement to sell, any equipment notes, pass through certificates,
equipment trust certificates or equipment purchase certificates secured by
aircraft owned or leased by the Company (or rights relating thereto) unless
the Company has provided the Underwriters at least three business days'
notice thereof, or (iii) as may otherwise be provided in Schedule II.
SECTION 4. Payment of Expenses.
Except as set forth herein, the Owner Participant will pay all
expenses incident to the consummation of the transactions contemplated by
the Prospectus, including:
(i) the preparation and filing of the Registration Statement and all
amendments thereto, the Preliminary Prospectus and the Prospectus and
any amendments or supplements thereto;
(ii) the preparation and filing of this Agreement;
(iii) the preparation, printing, issuance and delivery of the Offered
Certificates;
(iv) the reasonable fees and disbursements of counsel for the
Trustee, the Owner Trustee and the Indenture Trustees;
(v) the qualification of the Offered Certificates under securities
laws in accordance with the provisions of Section 3(g), including
filing fees and the reasonable fees and disbursements of counsel to the
Underwriters in connection therewith and in connection with the
preparation of any Blue Sky Survey and any Legal Investment Survey;
(vi) the printing and delivery to the Underwriters in quantities as
hereinabove stated of copies of the Registration Statement and any
amendments thereto, and of the Prospectus and any amendments or
supplements thereto, and the delivery by the Underwriters of the
Prospectus and any amendments or supplements thereto in connection with
solicitations or confirmations of sales of the Offered Certificates;
(vii) the preparation and delivery to the Underwriters of copies of
the Pass Through Agreements and the other Operative Agreements,
including all expenses incident to the performance of the Company's
obligations under the Pass Through Agreements, Participation
Agreements, Indentures, Leases and each of the other agreements and
instruments referred to in the Indentures and Participation Agreements;
(viii) any fees charged by rating agencies for the rating of the
Offered Certificates; and
(ix) certain fees and disbursements of counsel to the Underwriters,
as heretofore agreed.
The Company will pay the reasonable fees and disbursements of the
Trustee, the Owner Trustee and the Indenture Trustees and the reasonable
fees and disbursements of the Company's accountants and its counsel
incident to the consummation of the transactions contemplated by the
Prospectus, but shall not otherwise be obligated to pay any other expenses
incident thereto.
If this Agreement is terminated by the Underwriters in accordance
with the provisions of Section 5 or clause (i) of Section 9 hereof, the
Owner Participant shall reimburse upon demand the Underwriters for all of
their out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Underwriters that shall have been incurred
by the Underwriters in connection with the proposed purchase and sale of
the Offered Certificates.
SECTION 5. Conditions of Underwriters' Obligations.
The several obligations of the Underwriters to purchase the
Offered Certificates pursuant to this Agreement will be subject at all
times to the accuracy of the representations and warranties on the part of
the Company and Lufthansa herein, to the accuracy of the statements of the
Company's and Lufthansa's officers made in any certificate furnished
pursuant to the provisions hereof, to the performance and observance by the
Company and the Owner Participant of all covenants and agreements contained
herein, or in Schedule II hereto, on their part to be performed and
observed and to the following additional conditions precedent:
(a) Stop Order; Ratings Change; etc. At the Closing Time, (i)
no stop order suspending the effectiveness of the Registration Statement
shall have been issued under the 1933 Act or proceedings therefor initiated
or threatened by the Commission, (ii) the rating assigned as of the date of
this Agreement by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g) under
the 1933 Act Regulations, to any debt securities of the Company shall not
have been lowered since the execution of this Agreement nor shall any such
rating organization have publicly announced that it has placed any debt
securities of the Company on what is commonly termed a "watch list" for
possible downgrading, and (iii) there shall not have come to the attention
of the Underwriters any facts that would cause the Underwriters to believe
that the Prospectus, including the Prospectus Supplement, at the time it
was required to be delivered to a purchaser of the Offered Certificates,
contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in light
of the circumstances existing at such time, not misleading.
(b) Legal Opinions. At the Closing Time, the Underwriters shall
have received the following documents:
(1) Opinion of Special Counsel to the Company. The opinion of
Davis Polk & Wardwell, special counsel to the Company, dated as of such
date, in form and substance satisfactory to the Underwriters, to the
effect set forth in Exhibit B.
(2) Opinion of Company Counsel. The opinion of the Senior Vice
President and General Counsel of the Company or the Vice President Law
- Corporate and Business Transactions, dated as of such date, in form
and substance satisfactory to the Underwriters, to the effect as set
forth in Exhibit C.
(3) Opinion of Counsel to the Underwriters. The opinion of
Sullivan & Cromwell, counsel to the Underwriters, with respect to such
matters as the Underwriters may reasonably request.
(c) Officer's Certificate. At the Closing Time, there shall not
have been, since the respective dates as of which information is given in
the Registration Statement and the Prospectus, any material adverse change
in the condition (financial or otherwise) of the Company, or in the
earnings, business affairs or business prospects of the Company, whether or
not arising in the ordinary course of business; and the Underwriters shall
have received a certificate of the Chief Executive Officer or the Executive
Vice President, Worldwide Customer Operations and the Chief Financial
Officer, the Treasurer or the Controller of the Company, dated as of the
Closing Time, to the effect (i) that there has been no such material
adverse change, (ii) that the other representations and warranties of the
Company contained in Section 1 are true and correct with the same force and
effect as though expressly made at and as of the date of such certificate,
(iii) that the Company has made or caused to be made any required filing of
the Prospectus pursuant to Rule 424(b) in the manner and within the time
period required by Rule 424(b), and (iv) that the Company has complied with
all agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the date of such certificate.
(d) Comfort Letter. At the time of the execution of this
Agreement and at the Closing Time, the Underwriters shall have received a
letter from
Arthur Andersen & Co. or their successors as the Company's independent
accountants (the "Independent Accountants"), dated as of the date hereof
and of the Closing Time, as the case may be, in form and substance
satisfactory to the Underwriters, to the effect that:
(i) they are independent public accountants within the meaning of
the 1933 Act and the 1933 Act Regulations;
(ii) in their opinion the Company's financial statements and
schedules included or incorporated by reference in the Registration
Statement and Prospectus and covered by their reports included or
incorporated therein comply as to form in all material respects with
the applicable accounting requirements of the 1933 Act and the 1933 Act
Regulations or the 1934 Act and the 1934 Act Regulations, as the case
may be;
(iii) they have conducted a review of the unaudited interim
consolidated financial information of the Company included in the
Company's Quarterly Reports on Form 10-Q incorporated in the
Registration Statement and Prospectus in compliance with the standards
for such reviews promulgated by the American Institute of Certified
Public Accountants;
(iv) on the basis of the review described in clause (iii) above, or a
reading of the financial statements and schedules of the Company
included or incorporated in the Prospectus and the Registration
Statement, and the latest available unaudited interim financial
statements of the Company, inquiries of officials of the Company
responsible for financial and accounting matters, a reading of the
minute books of the Company, and other specified procedures and
inquiries, nothing has come to their attention that caused them to
believe that:
(A) the unaudited financial statements of the Company included
or incorporated in the Prospectus and the Registration Statement
do not comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act and the 1933
Act Regulations or the 1934 Act and the 1934 Act Regulations
thereunder, as the case may be, or that such unaudited financial
statements are not presented fairly in conformity with generally
accepted accounting principles
applied on a basis substantially consistent with that of the
audited financial statements of the Company incorporated in the
Prospectus;
(B) with respect to the period subsequent to the date of the
most recent financial statements incorporated in the Registration
Statement and the Prospectus, as of a specified date not more than
five business days prior to the date of delivery of such letter,
there has been any change in the common or preferred stock or
long-term debt of the Company or, as of such date, there has been
any decrease in assets or common stockholders' investment, in each
case as compared with amounts shown in the most recent
consolidated balance sheet of the Company included or incorporated
in the Registration Statement and the Prospectus, except in each
case for changes or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; or
(C) for the period from the date of the most recent financial
statements incorporated in the Registration Statement and the
Prospectus to such specified date, there was any decrease in
operating revenues, operating income, income before taxes or net
income of the Company in each case as compared with the comparable
period of the preceding year, except in each case for decreases
which the Prospectus discloses have occurred or may occur or which
are described in such letter; and
(v) in addition to their audit referred to in their reports included
or incorporated by reference in the Registration Statement and the
Prospectus and the review, inquiries and procedures referred to in
clauses (iii) and (iv) above, such letter shall state that Arthur
Andersen & Co. has performed other specified procedures, with respect
to certain numerical data and information included or incorporated in
the Registration Statement and the Prospectus, as are requested by an
Underwriter and specified in such letter and have found such data and
information to be in agreement with the accounting records of or
analyses prepared by the Company.
(e) Satisfaction of Conditions Precedent in Participation
Agreements. At the Closing Time, all conditions precedent specified in
each Participation Agreement with respect to the issuance of the related
Equipment Trust Certificates shall have been satisfied; the representations
and warranties of the Company, the Owner Trustee, the Pass Through Trustee,
the Indenture Trustee, the LC Bank and the Owner Participant contained in
each of the Participation Agreements shall be accurate as of the Closing
Time (except to the extent that they relate solely to an earlier date in
which case they shall be accurate as of such earlier date) and the
Underwriters shall have received certificates of the Chief Financial
Officer or the Treasurer of the Company and appropriate officers of each of
the Owner Trustee, Pass Through Trustee, Indenture Trustee, LC Bank and
Owner Participant, dated as of the Closing Time, to such effect; and the
Underwriters shall have received a copy of each opinion required to be
delivered under each of the Participation Agreements dated as of the
Closing Time, and addressed to the Underwriters, and of such other
documents furnished in connection with the fulfillment of such conditions
as the Underwriters or counsel to the Underwriters may reasonably request.
(f) At the time of the execution of this Agreement, the
Underwriters, the Company, Lufthansa and Westdeutsche Landesbank
Girozentrale, New York Branch shall have executed and delivered the
Indemnification Agreement.
(g) Other Documents. At the Closing Time, counsel for the
Underwriters shall have been furnished with such documents and opinions as
such counsel may reasonably require for the purpose of enabling such
counsel to pass upon the issuance and sale of Offered Certificates as
herein contemplated and related proceedings, or in order to evidence the
accuracy and completeness of any of the representations and warranties, or
the fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the issuance and sale
of Offered Certificates as herein contemplated shall be satisfactory in
form and substance to the Underwriters and to counsel for the Underwriters.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Underwriters by notice to the Company at any time at or
prior to the Closing Time, and such termination
shall be without liability of any party to any other party except as
provided in Section 4 hereof.
SECTION 6. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, joint or several, as incurred, arising out of or based upon
any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment thereto), or
the omission or alleged omission therefrom of a material fact required
to be stated therein or necessary to make the statements therein not
misleading or arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in the Prospectus
(or any amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, joint or several, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or investigation
or proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever arising out of or based upon any
such untrue statement or omission, or any such alleged untrue statement
or omission, if such settlement is effected with the written consent of
the Company; and
(iii) against any and all expense whatsoever (including the fees and
disbursements of counsel chosen by the Underwriters), joint or several,
as incurred, reasonably incurred in investigating, preparing or
defending against any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever arising out of or based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made
in reliance upon and in conformity with written information furnished to
the Company by any Underwriter expressly for use in the Registration
Statement (or any amendment thereto) or the Prospectus (or any amendment or
supplement thereto), made in reliance upon the Trustee's Form T-1 Statement
of Eligibility under the 1939 Act filed as an exhibit to the Registration
Statement or made in those sections of the Prospectus (as amended or
supplemented) captioned "Description of the Letters of Credit" and
"Appendix B -- Westdeutsche Landesbank Girozentrale;" and provided,
further, that the foregoing indemnity agreement, with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter
from whom the person asserting any such losses, claims, damages or
liabilities purchased Offered Certificates, or any person controlling such
Underwriter, if a copy of the Prospectus (as then amended or supplemented
if the Company shall have furnished any amendments or supplements thereto)
was not sent or given by or on behalf of such Underwriter to such person,
if required by law so to have been delivered by or on behalf of such
Underwriter, at or prior to the written confirmation of the sale of the
Offered Certificates by or on behalf of such Underwriter to such person,
and if the Prospectus (as so amended or supplemented) would have cured the
defect giving rise to such losses, claims, damages or liabilities.
(b) Lufthansa agrees to indemnify and hold harmless each
Underwriter and each person (if any) who controls any Underwriter within
the meaning of Section 15 of the 1933 Act against any and all loss,
liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section 6, as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions,
made in the sections of the Prospectus (or any amendment or supplement
thereto) captioned "Description of the Letters of Credit" and "Appendix B
- -- Westdeutsche Landesbank Girozentrale."
(c) Each Underwriter severally agrees to indemnify and hold
harmless the Company, the directors and officers of the Company, each
person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act and Lufthansa, the directors and officers of Lufthansa and
each person, if any, who controls Lufthansa within the meaning of Section
15 of the 1933 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in
subsection (a) of this Section 6, as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions,
made in the Registration Statement (or any amendment thereto) or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by the
Underwriters expressly for use in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement
thereto).
(d) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability which it
may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of
such action. In no event shall the indemnifying parties be liable for the
fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions
in the same jurisdiction arising out of the same general allegations or
circumstances.
SECTION 7. Contribution.
In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section 6 is
for any reason held to be unenforceable by the indemnified parties although
applicable in accordance with its terms, the Company, Lufthansa and the
Underwriters of each offering of Offered Certificates shall contribute to
the aggregate losses, liabilities, claims, damages and expenses of the
nature contemplated by said indemnity agreement incurred by the Company,
Lufthansa and one or more of the Underwriters in respect of such offering,
as incurred, in such proportions that the Underwriters are responsible for
that portion represented by the percentage that the underwriting discount
appearing on the cover page of the Prospectus in respect of such offering
bears to the initial public offering price appearing thereon and the
Company and Lufthansa, severally, are responsible for the balance, to the
extent set forth in Section 6; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
1933 Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
The Underwriters' obligations in this Section 7 to contribute are several
in proportion to their respective underwriting obligations and not joint.
For purposes of this Section, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act shall have the
same rights to contribution as such Underwriter, each director of the
Company, each officer of the Company who signed the Registration Statement,
and each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act shall have the same rights to contribution as
the Company and each director and officer of Lufthansa and each person, if
any, who controls Lufthansa within the meaning of Section 15 of the 1933
Act shall have the same rights to contribution as Lufthansa.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers of the Company or
Lufthansa submitted pursuant hereto, shall remain operative and in full
force and effect, regardless of any investigation made by or on behalf of
any party hereto, and shall survive each delivery of and payment for any of
the Offered Certificates.
SECTION 9. Termination of Agreement.
The Underwriters may also terminate this Agreement, immediately
upon notice to the Company, at any time prior to the Closing Time (i) if
there has been, since the date hereof or since the respective dates as of
which information is given in the Registration Statement, any material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company, whether or
not arising in the ordinary course of business, or (ii) if there shall have
occurred any material adverse change in the financial markets in the United
States or any outbreak or escalation of hostilities or other national or
international calamity or crisis, the effect of which shall be such as to
make it, in the judgment of the Underwriters, impracticable to market the
Offered Certificates or enforce contracts for the sale of the Offered
Certificates, or (iii) if trading in any securities of the Company shall
have been suspended by the Commission or a national securities exchange, or
if trading generally on either the American Stock Exchange or the New York
Stock Exchange shall have
been suspended, or minimum or maximum prices for trading shall have been
fixed, or maximum ranges for prices for securities shall have been
required, by either of said exchanges or by order of the Commission or any
other governmental authority, or if a banking moratorium shall have been
declared by either federal or New York authorities. In the event of any
termination of this Agreement, the covenant set forth in Section 3(f)
hereof, the provisions of Section 4 hereof, the indemnity and contribution
agreements set forth in Sections 6 and 7 hereof, and the provisions of
Sections 8 and 13 hereof shall remain in effect.
SECTION 10. Default by One or More of the Underwriters.
If any Underwriter shall fail at the Closing Time to purchase the
Offered Certificates which it is obligated to purchase hereunder (the
"Defaulted Certificates"), then the remaining Underwriter (the "Non-
Defaulting Underwriter") shall have the right, but not the obligation,
within 24 hours thereafter, to arrange for another party or parties to
purchase all, but not less than all, of the Defaulted Certificates upon the
terms herein set forth; if, however, the Non-Defaulting Underwriter shall
not have completed such arrangements for the purchase of all of the
Defaulted Certificates within such 24-hour period, then this Agreement
shall terminate without liability on the part of the Non-Defaulting
Underwriter.
No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of its default under this
Agreement.
In the event of any such default which does not result in a
termination of this Agreement, either the Non-Defaulting Underwriter or the
Company shall have the right to postpone the Closing Time for a period not
exceeding seven days in order to effect any required changes in the
Registration Statement or Prospectus or in any other documents or
arrangements. With respect to the Defaulted Certificates, the term
"Underwriter" as used in this Agreement shall include any person
substituted under this Section 10 with like effect as if such person had
originally been a party to this Agreement.
SECTION 11. Notices.
All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given if mailed, delivered by Federal
Express service or transmitted by any facsimile communication. Notices to
the Underwriters shall be directed, on behalf of all of the Underwriters,
to Goldman, Sachs & Co., 85 Broad Street, New York, New York 10004,
Attention: Registration Department, with copies thereof directed to
Sullivan & Cromwell, 125 Broad Street, New York, New York 10004, Attention:
David M. Huggin. Notices to the Company shall be directed to it at 2007
Corporate Avenue, Memphis, Tennessee 38132 (if by Federal Express service)
or P.O. Box 727, Memphis, Tennessee 38194 (if by mail), attention of Vice
President and Treasurer, with copies thereof directed to the Legal
Department of the Company at 2005 Corporate Avenue, Memphis, Tennessee
38132 (if by Federal Express service) or P.O. Box 727, Memphis, Tennessee
38194 (if by mail), attention of the Managing Director of Business
Transactions. Notices to Lufthansa shall be directed to it at Deutsche
Lufthansa Aktiengesellschaft, Von-Gablenz Strasse 4-6, D-50679 Koln,
Germany, Attention: Managing Director, with copies thereof directed to
Dewey Ballantine, 1301 Avenue of the Americas, New York, New York 10019,
Attention: Junaid H. Chida. Notices to the Owner Participant shall be
directed to it at LLG Aircraft Leasing, L.P., 1209 Orange Street,
Wilmington, Delaware 19801, with copies thereof directed to Dewey
Ballantine, 1301 Avenue of the Americas, New York, New York 10019,
Attention: Junaid H. Chida.
SECTION 12. Parties.
This Agreement shall inure to the benefit of and be binding upon
the Company, Lufthansa, the Owner Participant and each Underwriter and
their respective successors. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person, firm or
corporation, other than the parties hereto and their respective successors
and the controlling persons and officers and directors referred to in
Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or
any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of
the parties hereto, their respective successors and said controlling
persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Offered Certificates from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. Governing Law.
This Agreement and the rights and obligations of the parties
created hereby and thereby shall be governed by and construed in accordance
with the laws of the State of New York applicable to agreements made and to
be performed in such state. Any suit, action or proceeding brought by the
Company, Lufthansa or the Owner Participant against an Underwriter in
connection with, or arising under this Agreement shall be brought solely in
the state or federal court of appropriate jurisdiction located in the
Borough of Manhattan, The City of New York.
* * *
Please sign and return a counterpart hereof to each party hereto,
whereupon this instrument along with all counterparts will become a binding
agreement among the Underwriters, the Company, Lufthansa and the Owner
Participant in accordance with its terms.
Very truly yours,
FEDERAL EXPRESS CORPORATION
By: /s/ ROBERT D. HENNING
---------------------
Robert D. Henning
Managing Director,
Aircraft Financing
LLG AIRCRAFT LEASING, L.P.
By: LLG OF DELAWARE, INC.,
its General Partner
By: /s/ MARC M. BAMBERGER
---------------------
Name: Marc M. Bamberger
Title: President
DEUTSCHE LUFTHANSA
AKTIENGESELLSCHAFT
By: /s/ JURGEN STROMEL
------------------
Name: Jurgen Stromel
Title: Vice President, Finance
By: /s/ CHRISTIAN REHM
------------------
Name: Christian Rehm
Title: Attorney-in-Fact
Accepted as of the date hereof:
/s/ GOLDMAN, SACHS & CO.
- -------------------------
(Goldman, Sachs & Co.)
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ ALAN M. KRAMER
------------------
Name: Alan M. Kramer
Title: Director, Investment
Banking Group
Exhibit A
FEDERAL EXPRESS CORPORATION
1994 Pass Through Certificates, Series A310-A1
1994 Pass Through Certificates, Series A310-A2
1994 Pass Through Certificates, Series A310-A3
1994 Pass Underwriting
Through Applicable Final Discounts
Certificates Purchase Interest Distribution Aggregate and
Designation Price Rate Date Amounts Commissions
- ------------- -------- ---------- ------------ --------- ------------
Series A310-A1 $125,000,000 7.53% September 23, $125,000,000 .625%
2006
Series A310-A2 174,971,000 7.89% September 23, 174,971,000 .650%
2008
Series A310-A3 77,141,000 8.40% March 23, 2010 77,141,000 .750%
TOTAL $377,112,000 $377,112,000
============ ============
Exhibit B
Opinion of Davis Polk & Wardwell,
Special Counsel for the Company
The opinion of Davis Polk & Wardwell, special
counsel for the Company, to be delivered pursuant to
Section 5(b)(1) of the Underwriting Agreement shall be
to the effect that:
1. The Underwriting Agreement has been duly
authorized, executed and delivered by the Company.
2. The Registration Statement has become
effective under the 1933 Act and the Basic Agreement
has been duly qualified under the 1939 Act.
3. Although we are not aware of any judicial
authority, none of the Pass Through Trusts is required
to be registered under the Investment Company Act of
1940, as amended.
4. 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, and each
Certificateholder will be treated as the owner of a
pro rata undivided interest in each of the Equipment
Trust Certificates and any other property held in the
related Pass Through Trust. With respect to all other
matters addressed in the Basic Prospectus under the
caption "Federal Income Tax Consequences," we are also
of the opinions ascribed to us therein.
We have considered the matters required to be
included in the Registration Statement and the
Prospectus and the information contained therein. In
our opinion (i) the statements in the Basic Prospectus
under the captions "Description of the Pass Through
Certificates" and "Description of the Equipment Trust
Certificates" and in the Prospectus Supplement under
the captions "Description of the Pass Through
Certificates" and Description of the Equipment Trust
Certificates," insofar as such statements constitute a
summary of the Pass Through Agreement, the Leases, the
Agreement to Lease, the Participation Agreements, the
Indentures and the Collateral Agreements fairly
present the information called for by the 1933 Act and
the 1933 Act Regulations with respect thereto and
fairly summarize the material provisions thereof and
(ii) the statements in the Basic Prospectus in the
____ paragraph under the caption "Description of the
Equipment Trust Certificates -- Security" and in the
Prospectus Supplement in the ___ paragraph under the
caption "Description of the Equipment Trust
Certificates -- Remedies," insofar as such statements
constitute a description of Section 1110 of the
Bankruptcy Code as such Section would be applicable to
the Offered Certificates, fairly summarize the
material provisions of such Section as such Section
would be applicable to the Equipment Trust
Certificates. The Offered Certificates conform in all
material respects to the summary descriptions thereof
contained in the Prospectus.
We have not ourselves checked the accuracy or
completeness of, or otherwise verified, the
information furnished with respect to other matters in
the Registration Statement or the Prospectus. We have
generally reviewed and discussed with certain officers
and employees of the Company, its independent public
accountants and your representatives and counsel the
information furnished, whether or not subject to our
check and verification. On the basis of such
consideration, review and discussion, but without
independent check or verification, except as stated,
(i) we are of the opinion that the Registration
Statement and the Prospectus as amended or
supplemented (except for the financial statements and
other financial and statistical information set forth
or incorporated by reference therein and the section
of the Prospectus Supplement captioned "Appendix B --
Westdeutsche Landesbank Gironzentrale," as to which we
are not called upon to express any opinion) comply as
to form in all material respects with the 1933 Act and
the applicable 1933 Act Regulations and (ii) we have
no reason to believe that the Registration Statement
(except for the financial statements and other
financial information set forth or incorporated by
reference therein and the Statement of Eligibility
(Form T-1) under the 1939 Act of NationsBank of South
Carolina, National Association, as to all of which we
are not called upon to express a belief) at the time
the Registration Statement became effective contained
any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or
necessary to make the statements therein not
misleading, or that, as of its date or as of the
Closing Time, the Prospectus (except for the financial
statements and other financial information set forth
or incorporated by reference therein and the section
of the Prospectus Supplement captioned "Appendix B --
Westdeutsche Landesbank Gironzentrale," as to which we
are not called upon to express a belief), contained or
contains an untrue statement of a material fact or
omitted or omits to state a material fact necessary to
make the statements therein, in light of the
circumstances in which they were made, not misleading.
In expressing the foregoing opinion and belief we do
not assume any responsibility for the adequacy or
accuracy of the derivation or compilation from the
Company's financial statements or financial records of
any financial or statistical data included in the
Registration Statement or Prospectus.
The foregoing opinions are subject to the
following qualifications:
(a) We are members of the Bar of the State
of New York and the foregoing opinions are limited to
the laws of the State of New York, the federal laws of
the United States of America and the General
Corporation Laws of the State of Delaware.
(b) We express no opinion as to the scope,
effect or other matters arising under the Federal
Aviation Act of 1958, as amended, or the rules and
regulations thereunder or as to matters involving
filing and recording with the Federal Aviation
Administration.
(c) This opinion is issued solely to you in
connection with the above matter and may not be relied
upon by you for any other purpose or relied upon by or
furnished to any other person without our prior
written consent.
Exhibit C
Form of Opinion of Company Counsel
March __, 1994
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Re: Federal Express Corporation
Pass Through Certificates (the "Offered Certificates")
------------------------------------------------------
Ladies and Gentlemen:
This opinion is directed to the Underwriters pursuant to Section
5(b)(2) of the Underwriting Agreement dated March __, 1994 (the
"Underwriting Agreement"), among the Company, LLG Aircraft Leasing, L.P.,
Deutsche Lufthansa Aktiengesellschaft and you, with respect to the offer
and sale of the Offered Certificates. All terms defined or used in the
Underwriting Agreement have the same meaning when used herein, unless
otherwise noted.
I am Senior Vice President and General Counsel of the Company and
have acted as such in connection with the Offered Certificates and the
Underwriting Agreement. I or attorneys under my supervision have made such
examination and investigation as we have deemed necessary in order to give
the following opinion.
Based on the foregoing, it is my opinion that:
(i) The Company is a corporation duly incorporated and
validly existing in good standing under the laws of the State of Delaware
and the Company has full corporate power and authority under such laws to
own its properties and to conduct its business as described in the
Prospectus; the Company is a "certificated air carrier" and a "citizen of
the United States" within the meaning of the Aviation Act; the Company is
duly qualified to do business and is in good standing in each jurisdiction
in which it owns or leases real property or in which the conduct of its
business requires such qualification, except for such instances which in
the aggregate will not have a material adverse effect on the Company;
(ii) Each subsidiary of the Company which is a significant
subsidiary as defined in Rule 405 of Regulation C of the 1933 Act
Regulations (each a "Significant Subsidiary") has been duly incorporated
and is validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and conduct its business as described
in the Registration Statement, and, to the best of my knowledge, is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
except where the failure to so qualify would not have a material adverse
effect on the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise; all of the issued and outstanding capital
stock of each Significant Subsidiary has been duly authorized and validly
issued and is fully paid and nonassessable, and all of such capital stock,
except for directors' qualifying shares, is owned by the Company, directly
or through subsidiaries, free and clear of any mortgage, pledge, lien,
encumbrance, claim or equity;
(iii) Except for matters described in the Prospectus (as
to which I express no opinion concerning the outcome), there is no pending
legal, governmental or administrative proceeding or series of related
proceedings to which the Company is a party or of which any property of the
Company is the subject which is reasonably likely, individually or in the
aggregate, to have a material adverse effect on the condition (financial or
other), business, prospects, net worth or results of operations of the
Company; and, to the best of my knowledge, no such proceedings are
threatened or contemplated against the Company by governmental authorities
or others and no basis for any such proceedings exists;
(iv) Each of the Operative Agreements to which the
Company is a party has been duly and validly authorized and, except for the
Leases and Lease Supplements covering the Aircraft and the Tax Indemnity
Agreements, has been executed and delivered by the Company.
(v) The Equipment Trust Certificates are in due and
proper form and have been duly and validly authorized by all necessary
corporate action;
(vi) The Company possesses all permits, approvals,
franchises and other rights from federal aviation, aeronautical,
communications, transportation and shipping authorities which are requisite
for the conduct of its business as described in the Prospectus or for the
actions contemplated by the Underwriting Agreement and the offering
contemplated by the Prospectus; and the actions contemplated by the
Underwriting Agreement and the Operative Agreements,
and the offering contemplated by the Prospectus, are not in violation of
any federal statute or regulation relating to aviation, aeronautics,
communications, transportation or shipping;
(vii) The Basic Agreement is qualified under the 1939
Act; I have reviewed or caused to be reviewed by attorneys under my
supervision the Registration Statement, the Prospectus and each amendment
and supplement thereto (including the documents incorporated by reference)
and have no reason to believe that, as of their respective effective or
issue dates, or as of the Closing Time, either the Registration Statement
or the Prospectus or any such amendment or supplement (or any such
documents incorporated by reference) (except for the sections of the
Prospectus Supplement captioned "Description of the Letters of Credit" and
"Appendix B - Westdeutsche Landesbank Girozentrale," as to which I express
no opinion) contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading;
(viii) I do not know of any statute or regulation or
legal or governmental proceeding required to be described in the Prospectus
which is not described as required, nor of any contract or document of a
character required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement which
is not described and filed as required; and the descriptions in the
Registration Statement and the Prospectus of the contracts and other
documents (except for the Letters of Credit, as to which I express no
opinion) therein described are accurate and fairly present the information
required to be shown;
(ix) The execution and delivery by the Company of the
Underwriting Agreement and each of the Operative Agreements to which the
Company is a party, the consummation by the Company of the transactions
herein and therein contemplated and compliance with the terms of the
Underwriting Agreement and such Operative Agreements do not and will not
conflict with or result in a breach of any of the terms of the Certificate
of Incorporation or By-laws of the Company, and will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan, credit or note
agreement, lease or other agreement or instrument material to the Company
to which the Company is a party or by which it or any or its properties are
bound, or any existing applicable law, rule, regulation, judgment, order or
decree of any government, governmental instrumentality or court,
having jurisdiction over the Company or any of its properties;
(x) The statements in the Basic Prospectus under the
captions "Description of the Pass Through Certificates" and "Description of
the Equipment Trust Certificates" and in the Prospectus Supplement under
the captions "Description of the Pass Through Certificates," "The Pre-
Funding Periods" and "Description of the Equipment Trust Certificates,"
insofar as such statements constitute a summary of the Pass Through
Agreements, the Offered Certificates, the Leases, the Participation
Agreements, the Indentures, the Collateral Agreements and the Agreement to
Lease, are accurate summaries of the material provisions thereof and fairly
present the information called for by the 1933 Act and the 1933 Act
Regulations with respect thereto;
(xi) No authorization, approval, consent or license of
any regulatory body or authority (other than under the 1933 Act, the 1939
Act and the securities or Blue Sky laws of the various states) is required
for the valid authorization, issuance, sale and delivery of the Offered
Certificates as herein contemplated or the valid authorization, execution,
delivery and performance by the Company of the Underwriting Agreement and
the Operative Agreements to which the Company is a party or the
consummation by the Company of the transactions contemplated herein or
therein, or, if so required, all such authorizations, approvals, consents
and licenses, specifying the sale, have been obtained and are in full force
and effect;
(xii) The Registration Statement has become effective
under the 1933 Act and, to the best of my knowledge, no stop order
suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or are pending or
contemplated under the 1933 Act; the Registration Statement and the
Prospectus, and each amendment or supplement thereto (except for the
financial statements and schedules included therein, as to which I express
no opinion) comply as to form in all material respects to the requirements
of the 1933 Act and the 1933 Act Regulations and, as to documents
incorporated therein, to the requirements of the 1934 Act and the 1934 Act
Regulations in effect at the time such documents were filed with the
Commission; and
(xiii) Each of the Underwriting Agreement and the
Indemnification Agreement has been duly and validly authorized, executed
and delivered by the Company and constitutes a valid and binding agreement
of the Company, enforceable in accordance with its terms, except as
enforcement thereof is limited by bankruptcy, insolvency, reorganization
and other laws of general applicability relating to or affecting
enforcement of creditors' rights or by general equity principles and
subject to any principles of public policy limiting the right to enforce
the indemnification and contribution provisions contained in Sections 6
and 7 of the Underwriting Agreement and Sections 2 and 3 of the
Indemnification Agreement.
In rendering the foregoing opinion, we have assumed that (i) all
signatures on all documents examined by us are genuine and that where any
such signature (other than a signature purporting to have been made on
behalf of the Company) purports to have been made in a corporate,
governmental, fiduciary or other capacity, the person who affixed such
signature had the due authority to do so, (ii) certain factual matters
contained in certificates of public officials are accurate, true and
correct and (iii) photostatic copies of such documents, records and
certificates conform to the originals.
This opinion is intended solely for the benefit of the
Underwriters and is not to be relied on by, and no copies of it are to be
delivered to, any other person without my prior written consent, except
that Underwriters' counsel may rely upon this opinion as to all matters of
Tennessee law or Delaware corporate law in rendering its opinion of even
date herewith. I am not assuming any professional responsibility to any
other person by rendering this opinion.
It is understood that this opinion speaks as of the date given,
notwithstanding any delivery as contemplated above on any other date.
FEDERAL EXPRESS CORPORATION
_________________________________________
Kenneth R. Masterson
Senior Vice President and General Counsel
Schedule I
to
Underwriting
Agreement
Dated: March 16, 1994
FEDERAL EXPRESS CORPORATION
1994 Pass Through Certificates, Series A310-A1
1994 Pass Through Certificates, Series A310-A2
1994 Pass Through Certificates, Series A310-A3
Aggregate Aggregate Aggregate
Amount of Amount of Amount of Total
Series A310-A1 Series A310-A2 Series A310-A3 Aggregate
Pass Through Pass Through Pass Through Amount to
Underwriter Certificates Certificates Certificates Be Purchased
- ----------- ------------ ------------ ------------ ------------
GOLDMAN,
SACHS & CO. $95,625,000 $133,971,000 $59,141,000 $288,737,000
MERRILL LYNCH,
PIERCE, FENNER
& SMITH
INCORPORATED 29,375,000 41,000,000 18,000,000 88,375,000
$125,000,000 $174,971,000 $77,141,000 $377,112,000
============ ============ =========== ============
Schedule II
to
Underwriting
Agreement
Dated: March 16, 1994
FEDERAL EXPRESS CORPORATION
1994 Pass Through Certificates, Series A310-A1
1994 Pass Through Certificates, Series A310-A2
1994 Pass Through Certificates, Series A310-A3
To: Federal Express Corporation
2005 Corporate Avenue
Memphis, Tennessee 38132
Deutsche Lufthansa Aktiengesellschaft
Von-Gablenz Strasse 4-6
D-50679 Koln
Germany
LLG Aircraft Leasing, L.P.
1209 Orange Street
Wilmington, Delaware 19801
Re: Underwriting Agreement dated March 16, 1994.
-------------------------------------------
Title of Offered Certificates: 1994 Pass Through Certificates, Series A310-A1
1994 Pass Through Certificates, Series A310-A2
1994 Pass Through Certificates, Series A310-A3
Current ratings: BBB+/Baa2
Interest rate: Series A310-A1 ............. 7.53%
Series A310-A2 ............. 7.89%
Series A310-A3 ............. 8.40%
Interest payable: March 23 and September 23
Public offering price: 100%, plus accrued interest from March 23, 1994
Closing date, time and location:
March 23, 1994, 10:00 A.M., New York City time
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Location for checking
Offered Certificates: Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Listing requirement: None
Other terms and conditions: The Offered Certificates will be issued
in fully registered, certificated form.
Exceptions, if any, to Section 3(i) of the
Underwriting Agreement: None
/s/ GOLDMAN, SACHS & CO.
-------------------------
(Goldman, Sachs & Co.)
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ ALAN M. KRAMER
-------------------
Name: Alan M. Kramer
Title: Director, Investment
Banking Group
Accepted:
FEDERAL EXPRESS CORPORATION
By: /s/ ROBERT D. HENNING
----------------------
Robert D. Henning
Managing Director, Aircraft
Financing
LLG AIRCRAFT LEASING, L.P.
By: LLG OF DELAWARE, INC.,
its General Partner
By: /s/ MARC M. BAMBERGER
----------------------
Name: Marc M. Bamberger
Title: President
DEUTSCHE LUFTHANSA AKTIENGESELLSCHAFT
By: /s/ JURGEN STROMEL
-------------------
Name: Jurgen Stromel
Title: Vice President, Finance
By: /s/ CHRISTIAN REHM
-------------------
Name: Christian Rehm
Title: Attorney-in-Fact
Exhibit 4.a.1
============================================================
PASS THROUGH TRUST AGREEMENT
Dated as of
March 1, 1994
BETWEEN
NATIONSBANK OF SOUTH CAROLINA,
NATIONAL ASSOCIATION,
as Pass Through Trustee,
AND
FEDERAL EXPRESS CORPORATION
============================================================
CROSS REFERENCE SHEET
Between
Provisions of the Trust Indenture Act of 1939, as
amended, and the Pass Through Trust Agreement:
Section of
Section of the Act the Agreement
310(a)(1) and (2).............................. 10.02
310(a)(3) ..................................... 10.05
310(a)(4)...................................... (1)
310(a)(5)...................................... *
310(b)(i)-(iii)................................ 10.01,10.03
310(b)(remainder).............................. *
310(c)......................................... Inapplicable
311(a)......................................... *
311(b)......................................... *
311(c)......................................... Inapplicable
312(a)......................................... 2.12, 4.01
312(b)......................................... *
312(c)......................................... 4.02
313(a)......................................... 4.04
313(b)(1)...................................... *
313(b)(2)...................................... *
313(c)......................................... 4.04
313(d)......................................... *
314(a)......................................... 4.03
314(b)......................................... Inapplicable
314(c)(1) and (2).............................. 13.07
314(c)(3)...................................... Inapplicable
314(d)(1)...................................... *
314(d)(2)...................................... *
314(d)(3)...................................... *
314(e)......................................... 13.07
314(f)......................................... Inapplicable
315(a), (c) and (d)............................ *
315(b)......................................... 7.11
315(e)......................................... *
316(a)(1)...................................... 7.09, 7.10
316(a)(2)...................................... *
316(a)(last sentence).......................... 6.04
316(b)......................................... 7.08
316(c)......................................... 6.01(b)
317(a)......................................... 7.03, 7.05
317(b)......................................... 3.04
318(a)......................................... 13.08
(1) Intentionally deleted.
TABLE OF CONTENTS
Page
RECITALS............................................... 1
ARTICLE I
Definitions............................................ 2
ARTICLE II
ISSUANCE OF PASS THROUGH CERTIFICATES;
ACQUISITION OF Equipment Trust Certificates
SECTION 2.01. Amount Unlimited; Issuable in Series;
Series Supplements................. 10
SECTION 2.02. Acquisition of Equipment Certificates... 12
SECTION 2.03. Initial Certificateholders as
Grantors........................... 12
SECTION 2.04 Limitation of Powers.................... 13
SECTION 2.05. Execution of Pass Through
Certificates....................... 13
SECTION 2.06. Certificate of Authentication........... 13
SECTION 2.07. Form of Pass Through Certificates....... 14
SECTION 2.08. Registration, Transfer and Exchange..... 14
SECTION 2.09. Mutilated, Defaced, Destroyed,
Lost and Stolen Pass Through
Certificates....................... 15
SECTION 2.10. Cancellation of Pass Through
Certificates; Destruction Thereof.. 17
SECTION 2.11. Temporary Pass Through Certificates..... 17
ARTICLE III
CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 3.01. Covenants of the Company................ 18
SECTION 3.02. Offices for Payments; Registrar......... 19
SECTION 3.03. Representations and Warranties of
the Pass Through Trustee.............. 20
SECTION 3.04. Paying Agents........................... 21
SECTION 3.05. No Representations or Warranties
as to Documents....................... 22
SECTION 3.06. Payments from Trust Property Only....... 22
SECTION 3.07. Limitation of the Company's
Liability............................ 22
ARTICLE IV
CERTIFICATEHOLDER LISTS AND REPORTS BY
THE COMPANY AND THE PASS THROUGH TRUSTEE
SECTION 4.01. Certificateholder Lists; Ownership
of Pass Through Certificates.......... 23
SECTION 4.02. Disclosure of Certificateholder
Lists................................. 23
SECTION 4.03. Reports by the Company.................. 23
SECTION 4.04. Reports by the Pass Through Trustee..... 24
ARTICLE V
RECEIPT AND DISTRIBUTION OF INCOME
AND PROCEEDS FROM THE TRUST PROPERTY
SECTION 5.01. Certificate Account and Special
Payments Account...................... 25
SECTION 5.02. Distributions from Certificate
Account and Special Payments
Account............................... 25
SECTION 5.03. Statements to Certificateholders........ 27
SECTION 5.04. Investment of Special Payment Moneys.... 28
SECTION 5.05. Withholding Taxes....................... 28
ARTICLE VI
CONCERNING THE CERTIFICATEHOLDERS
SECTION 6.01. Evidence of Action Taken by
Certificateholders.................... 29
SECTION 6.02. Proof of Execution of Instruments
and of Holding of Certificates........ 29
SECTION 6.03. Certificateholders to Be Treated
as Owners............................. 30
SECTION 6.04. Pass Through Certificates Owned
by the Company and Related
Owner Trustees Deemed Not
Outstanding........................... 30
SECTION 6.05. Right of Revocation of Action Taken..... 31
SECTION 6.06. ERISA Plan Prohibition.................. 32
ARTICLE VII
REMEDIES OF PASS THROUGH TRUSTEE
AND CERTIFICATEHOLDERS
SECTION 7.01. Events of Default....................... 32
SECTION 7.02. Incidents of Sale of Equipment
Certificates......................... 33
SECTION 7.03. Pass Through Trustee May Prove Debt..... 34
SECTION 7.04. Remedies Cumulative..................... 35
SECTION 7.05. Suits for Enforcement................... 35
SECTION 7.06. Discontinuance of Proceedings........... 36
SECTION 7.07. Limitations on Suits by
Certificateholders................... 36
SECTION 7.08. Unconditional Right of
Certificateholders
to Receive Principal,
Interest and Premium, and
to Institute Certain Suits........... 37
SECTION 7.09. Control by Certificateholders........... 37
SECTION 7.10. Waiver of Past Events of Default........ 38
SECTION 7.11. Notice of Pass Through Defaults......... 39
ARTICLE VIII
CONCERNING THE PASS THROUGH TRUSTEE
SECTION 8.01. Acceptance by Pass Through
Trustee............................... 40
SECTION 8.02. Pass Through Trustee's Liens............ 40
SECTION 8.03. Certain Rights of the Pass Through
Trustee............................... 40
SECTION 8.04. Pass Through Trustee Not Responsible
for Recitals.......................... 42
SECTION 8.05. Pass Through Trustee and Agents May
Hold Pass Through Certificates;
Collections........................... 42
SECTION 8.06. Moneys Held by Pass Through Trustee..... 42
SECTION 8.07. Right of Pass Through Trustee to Rely
on Officers' Certificate.............. 43
SECTION 8.08. Compensation............................ 43
ARTICLE IX
INDEMNIFICATION OF PASS
THROUGH TRUSTEE BY THE COMPANY......................... 44
ARTICLE X
SUCCESSOR TRUSTEES
SECTION 10.01. Resignation and Removal of Pass
Through Trustee; Appointment
of Successor......................... 45
SECTION 10.02. Persons Eligible for Appointment
as Pass Through Trustee.............. 46
SECTION 10.03. Acceptance of Appointment by
Successor Trustee.................... 47
SECTION 10.04. Merger, Conversion, Consolidation or
Succession to Business of Pass
Through Trustee...................... 48
SECTION 10.05. Appointment of Separate
Pass Through Trustees................ 49
ARTICLE XI
SUPPLEMENTS AND AMENDMENTS TO THIS PASS
THROUGH AGREEMENT AND OTHER DOCUMENTS
SECTION 11.01. Supplemental Agreements Without
Consent of Certificateholders........ 51
SECTION 11.02. Supplemental Agreements With Consent
of Certificateholders................ 53
SECTION 11.03. Effect of Supplemental Agreements...... 55
SECTION 11.04. Documents to Be Given to
Trustee.............................. 55
SECTION 11.05. Notation on Pass Through
Certificates in Respect
of Supplemental Agreements........... 55
SECTION 11.06. Trust Indenture Act.................... 55
SECTION 11.07. Revocation and Effect of Consents...... 56
SECTION 11.08. Amendments, Waivers, etc., of
Related Indenture Documents.......... 56
ARTICLE XII
TERMINATION OF PASS THROUGH TRUSTS;
UNCLAIMED MONEYS
SECTION 12.01. Termination of Pass Through Trusts..... 57
SECTION 12.02. Application by Pass Through Trustee
of Funds Deposited for Payment of
Pass Through Certificates............ 57
SECTION 12.03. Repayment of Moneys Held by Paying
Agent................................ 58
SECTION 12.04. Transfer of Moneys Held by Pass
Through Trustee and Paying Agent
Unclaimed for Two Years and
Eleven Months........................ 58
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01. Capacity in Which Acting............... 58
SECTION 13.02. No Legal Title to Trust Property
in Certificateholders................ 59
SECTION 13.03. Certificates Nonassessable and
Fully Paid........................... 59
SECTION 13.04. Pass Through Agreement for the
Benefit of the Company, the Pass
Through Trustee and the
Certificateholders................... 59
SECTION 13.05. Limitation Rights of Certificate-
holders.............................. 59
SECTION 13.06. Notices................................ 60
SECTION 13.07. Officers' Certificates and Opinions
of Counsel; Statements to Be
Contained Therein.................... 61
SECTION 13.08. Conflict of Any Provision of Pass
Through Agreement with the Trust
Indenture Act........................ 62
SECTION 13.09. Severability........................... 62
SECTION 13.10. No Oral Modifications or Continuing
Waivers.............................. 62
SECTION 13.11. Successors and Assigns................. 63
SECTION 13.12. Headings............................... 63
SECTION 13.13. Normal Commercial Relations............ 63
SECTION 13.14. Governing Law; Counterpart Form........ 63
SECTION 13.15. Distributions Due on Days Other
than Business Days................... 63
EXHIBIT A - Form of Pass Through Certificate
PASS THROUGH TRUST AGREEMENT
PASS THROUGH TRUST AGREEMENT dated as of
March 1, 1994, between FEDERAL EXPRESS CORPORATION, a
Delaware corporation (the "Company"), and NATIONSBANK
OF SOUTH CAROLINA, NATIONAL ASSOCIATION, a national
banking association organized under the laws of the
United States of America, as Pass Through Trustee (the
"Pass Through Trustee").
RECITALS
WHEREAS, capitalized terms used herein shall
have the respective meanings set forth or referred to
in Article I hereof;
WHEREAS, from time to time the Company and
the Pass Through Trustee will enter into a Series
Supplement in accordance with this Pass Through
Agreement pursuant to which the Pass Through Trustee
will declare the creation of a separate Pass Through
Trust for the benefit of the Certificateholders of the
Series of Pass Through Certificates to be issued
pursuant to such Pass Through Trust, and the initial
Certificateholders of such Series, as the grantors of
such Pass Through Trust, by their respective
acceptances of such Pass Through Certificates, will
join in the creation of such Pass Through Trust;
WHEREAS, the Pass Through Certificates of
each Series will evidence fractional undivided
interests in the Pass Through Trust pursuant to which
they will be issued, and will have no rights, benefits
or interest in respect of any other separate Pass
Through Trust or the Trust Property held in any such
other Pass Through Trust;
WHEREAS, for each Pass Through Trust, the
Pass Through Trustee will purchase one or more issues
of Equipment Trust Certificates of the same interest
rate as, and final maturity dates not later than the
final scheduled Regular Distribution Date of, the
Series of Pass Through Certificates to be issued in
respect of such Pass Through Trust and will hold such
Equipment Trust Certificates in trust as Trust
Property for the benefit of the Certificateholders of
such Series;
WHEREAS, to facilitate the sale of Equipment
Trust Certificates to, and the purchase of Equipment
Trust Certificates by, the Pass Through Trustee on
behalf of each such Pass Through Trust, the Company
has duly authorized the execution and delivery of this
Pass Through Agreement and each Series Supplement as
the "issuer," as such term is defined in and solely
for purposes of the Securities Act, of the Pass
Through Certificates to be issued in respect of each
Pass Through Trust and as the "obligor," as such term
is defined in and solely for purposes of the Trust
Indenture Act, with respect to all such Pass Through
Certificates and is undertaking to perform certain
administrative and ministerial duties hereunder and is
also undertaking to pay the fees and expenses of the
Pass Through Trustee;
WHEREAS, this Pass Through Agreement, as
supplemented from time to time, is subject to the
provisions of the Trust Indenture Act and shall, to
the extent applicable, be governed by such provisions;
IT IS HEREBY COVENANTED AND AGREED by and
between the parties hereto as follows:
ARTICLE I
DEFINITIONS
The following terms (except as otherwise
expressly provided or unless the context otherwise
clearly requires) for all purposes of this Pass
Through Agreement have the respective meanings
specified in this Section, as amended or supplemented
by the provisions of the Series Supplement for a
particular Series. All other terms used in this Pass
Through Agreement that are defined in the Trust
Indenture Act (as defined below) or the definitions of
which in the Securities Act (as defined below) are
referred to in the Trust Indenture Act (except as
herein otherwise expressly provided or unless the
context otherwise requires), have the meanings
assigned to such terms in the Trust Indenture Act and
in the Securities Act as in force at the date of this
Pass Through Agreement. All accounting terms used and
not expressly defined herein have the meanings given
to them in accordance with generally accepted
accounting principles, and the term "generally
accepted accounting principles" means the accounting
principles that are generally accepted at the date or
time of any computation or otherwise at the date
hereof. The words "herein," "hereof" and "hereunder"
and other words of similar import refer to this Pass
Through Agreement as a whole and not to any particular
Article, Section or other subdivision. References to
designated "Articles," "Sections," "subsections" and
other subdivisions of this Pass Through Agreement are
to the designated Articles, Sections, subsections and
other subdivisions of this Pass Through Agreement as
originally executed. The terms defined in this
Article include the plural as well as the singular.
"Affiliate" has, for any Person, the meaning
specified in Rule 0-2 under the Trust Indenture Act.
"Business Day" means, for any Series, any day
other than Saturday, Sunday or other day on which
banking institutions in the States of New York or
Tennessee, or any other state in which the Pass
Through Trustee or any Related Indenture Trustee or
Related Owner Trustee for the Pass Through Trust for
such Series maintains an office for the receipt or
disbursement of funds for the transactions
contemplated herein or in any Indenture Documents for
the Equipment Trust Certificates that constitute Trust
Property of such Pass Through Trust, are authorized or
required by law to close.
"Certificate Account" means, for any Pass
Through Trust, the account or accounts created and
maintained for such Pass Through Trust pursuant to
Section 5.01(a) and the related Series Supplement.
"Certificateholder" means, for any Series,
the registered holder of any Pass Through Certificate
as evidenced on the Register for such Series.
"Code" means the Internal Revenue Code of
1986, as amended.
"Commission" means the Securities and
Exchange Commission, as from time to time constituted,
created under the Exchange Act, or if at any time
after the execution and delivery of this Pass Through
Agreement such Commission is not existing and
performing the duties now assigned to it under the
Trust Indenture Act, then the body performing such
duties on such date.
"Company" means Federal Express Corporation,
a Delaware corporation, and its permitted successors
and assigns hereunder.
"Corporate Trust Office" means the corporate
trust office of the Pass Through Trustee located at
1301 Gervis Street, 4th Floor, Columbia, South
Carolina 29201, or such other office at which the Pass
Through Trustee's corporate trust business shall be
administered and which the Pass Through Trustee shall
have specified by notice in writing to the Company and
the Certificateholders of each Series.
"Distribution Date" means, for any Series,
any Regular Distribution Date or Special Distribution
Date or both for such Series.
"Dollars" and "$" mean lawful currency of the
United States of America.
"Equipment Trust Certificate" means, for any
Pass Through Trust, any "Equipment Trust Certificate"
or "Certificate," as the case may be, as such term is
defined in the related Indenture, issued by an Owner
Trustee pursuant to such Indenture and described in,
or on a schedule attached to, the Series Supplement
for such Pass Through Trust, which is to be held by
the Pass Through Trustee as part of the Trust Property
of such Pass Through Trust.
"Event of Default" has the meaning specified
in Section 7.01 hereof.
"Exchange Act" means the Securities Exchange
Act of 1934, as amended.
"Fractional Undivided Interest" means, for
any Pass Through Certificate, the fractional undivided
interest in the related Pass Through Trust that is
evidenced thereby.
"Government Obligations" means direct
obligations of the United States of America which are
not callable, redeemable or payable prior to maturity,
in whole or in part, directly or indirectly, by any
Person.
"Indenture" means for any Equipment Trust
Certificate, the trust indenture and security
agreement among the Indenture Trustee and the Owner
Trustee pursuant to which such Equipment Trust
Certificate is issued.
"Indenture Default" means, for any Indenture,
any event or condition defined as a "Default" under
such Indenture.
"Indenture Documents" means for any Equipment
Trust Certificate, the related Indenture, the related
Trust Agreement, the related Lease, the related
Participation Agreement and any other documents
defined as such in such Indenture.
"Indenture Event of Default" means, for any
Indenture, any event or condition defined as an
"Indenture Event of Default" in such Indenture.
"Indenture Trustee" means, for any Equipment
Trust Certificate, the Person defined as such in the
related Indenture.
"Initial Regular Distribution Date" means,
for any Pass Through Trust, the first Regular
Distribution Date following the Issuance Date for such
Pass Through Trust.
"Issuance Date" means, for any Pass Through
Trust, the date of the issuance of the related Pass
Through Certificates.
"Lease" means, for any Equipment Trust
Certificate, the agreement between the Company, as
lessee, and an Owner Trustee, as lessor, that is
defined as the "Lease" in the related Indenture.
"Letter of Representations" means, for any
Series, a letter from the Company and the Pass Through
Trustee to, and accepted by, the Depository in form
and substance satisfactory to the Company and the Pass
Through Trustee for the purposes of the related Series
Supplement, as such letter may be modified or
supplemented, or any successor letter thereto.
"Lien" means any mortgage, pledge, lien,
charge, disposition of title, encumbrance, lease or
security interest.
"Majority in Interest of Certificateholders"
means, for any Series at any time, Pass Through
Certificates of such Series then Outstanding (or the
proxy therefor) representing in the aggregate not less
than a majority of the aggregate Fractional Undivided
Interests of the Pass Through Certificates then
Outstanding under the related Pass Through Trust.
"Officers' Certificate" means a certificate
signed by a Responsible Officer of the Company, any
Indenture Trustee or any Owner Trustee, as the case
may be, delivered to the Pass Through Trustee. Each
such certificate shall include the statements provided
for in Section 13.07.
"Opinion of Counsel" means a written opinion
of legal counsel, who in the case of counsel (a) for
the Company may be (i) an attorney employed by the
Company who is generally empowered to deliver such
written opinions, (ii) Davis Polk & Wardwell or a
successor firm or (iii) other counsel designated by
the Company and reasonably satisfactory to the Pass
Through Trustee and (b) for any Owner Trustee or
Indenture Trustee, an attorney selected by such Person
and reasonably satisfactory to the Pass Through
Trustee.
"Outstanding" means, when used with respect
to Pass Through Certificates of any Series, as of the
date of determination and subject to the provisions of
Section 6.04 hereof, all Pass Through Certificates
theretofore authenticated and delivered for such
Series, with the exception of the following:
(i) Pass Through Certificates theretofore
cancelled by the Pass Through Trustee or
delivered to the Pass Through Trustee for
cancellation pursuant to Section 2.10;
(ii) All Pass Through Certificates of such
Series if money in the amount required to make
the final distribution thereon in accordance with
Section 12.01 has been theretofore deposited with
the Pass Through Trustee in trust for the
Certificateholders of such Series pending such
final distribution; and
(iii) Pass Through Certificates in exchange
for or in lieu of which other Pass Through
Certificates have been authenticated and
delivered pursuant to Article II hereof.
"Overdue Scheduled Payment" means, for any
Pass Through Trust, any Scheduled Payment that is not
received within five Business Days after the Regular
Distribution Date applicable to such Scheduled
Payment.
"Owner Participant" means, for any Equipment
Trust Certificate, the Person defined as such in the
related Indenture.
"Owner Trustee" means, for any Equipment
Trust Certificate, the Person defined as such in the
related Indenture.
"Participation Agreement" means for any
Equipment Trust Certificate, the agreement among the
Company, the Owner Participant, the Owner Trustee, the
Indenture Trustee, the Pass Through Trustee and, if
applicable, each Original Loan Participant or Voting
Trustee (as defined in such Participation Agreement),
that is defined as the "Participation Agreement" in
the related Indenture and pursuant to which the Pass
Through Trustee agrees to purchase such Equipment
Trust Certificate upon the issuance thereof by such
Owner Trustee.
"Pass Through Agreement," "this Pass Through
Agreement" and other like words mean this Pass Through
Trust Agreement as the same may be modified,
supplemented or amended from time to time in
accordance with the provisions hereof, but does not
include, unless otherwise specified, any Series
Supplement.
"Pass Through Certificate" means, for any
Series, any of the certificates executed,
authenticated and delivered for such Series by the
Pass Through Trustee, in accordance with this Pass
Through Agreement and pursuant to the related Series
Supplement.
"Pass Through Default" means, for any Pass
Through Trust, an Event of Default or an event or
condition that, with the giving of notice or the lapse
of time or both, would become an Event of Default.
"Pass Through Trust" means a separate trust
created in accordance with this Pass Through Agreement
by a Series Supplement incorporating the provisions
hereof, as such provisions may be amended or
supplemented thereby, the estate of which consists of
the related Trust Property.
"Pass Through Trustee" means NationsBank of
South Carolina, National Association, a national
banking association, not in its individual capacity
except as expressly stated herein, but solely in its
capacity as Pass Through Trustee under this Pass
Through Agreement, and its successors and assigns as
Pass Through Trustee hereunder.
"Paying Agent" has the meaning set forth in
Section 3.04 hereof.
"Permitted Investments" means any Government
Obligations.
"Person" means any individual, corporation,
partnership, joint venture, association, joint-stock
company, trust, nonincorporated organization or
government or any agency or political subdivision
thereof.
"Pool Balance" means, for any Pass Through
Trust, as of any date of determination the aggregate
unpaid principal amount of the Equipment Trust
Certificates that constitute Trust Property of such
Pass Through Trust on such date plus the amount of the
principal payments on such Equipment Trust
Certificates held by the Pass Through Trustee and not
yet distributed. The Pool Balance as of any Regular
Distribution Date or Special Distribution Date shall
be computed after giving effect to the payment of
principal, if any, on such Equipment Trust
Certificates and the distribution thereof being made
on that date.
"Pool Factor" means, for any Pass Through
Trust, as of any date of determination the quotient
(rounded to the seventh decimal place) computed by
dividing (i) the Pool Balance by (ii) the aggregate
original amount of the Pass Through Certificates of
the related Series. The Pool Factor as of any Regular
Distribution Date or Special Distribution Date shall
be computed after giving effect to the payment of
principal, if any, on such Equipment Trust
Certificates and the distribution thereof being made
on that date.
"Record Date," for any Series, means, (i) for
any Regular Distribution Date, the date specified in
the related Series Supplement as the Record Date for
such Regular Distribution Date and (ii) for any
Special Distribution Date, the 15th day preceding such
Special Distribution Date, in any event, whether or
not such date is a Business Day.
"Register" has the meaning set forth in
Section 3.02 hereof.
"Registrar" has the meaning set forth in
Section 3.02 hereof.
"Regular Distribution Date" means, for any
Pass Through Trust, any date specified in the related
Series Supplement for the distribution of any
Scheduled Payment from such Pass Through Trust to the
related Certificateholders.
"Related Indenture Trustee" means, for any
Pass Through Trust, any Indenture Trustee under an
Indenture relating to any Equipment Trust Certificate
that constitutes Trust Property thereof, and "Related
Indenture Trustees" means all such Indenture Trustees
for all such Equipment Trust Certificates constituting
Trust Property thereof.
"Related Owner Participant" means, for any
Pass Through Trust, any Owner Participant under a
Trust Agreement relating to any Equipment Trust
Certificate that constitutes Trust Property, and
"Related Owner Participants" means all such Owner
Participants for all such Equipment Trust Certificates
constituting Trust Property thereof.
"Related Owner Trustee" means, for any Pass
Through Trust, any Owner Trustee under a Trust
Agreement relating to any Equipment Trust Certificate
that constitutes Trust Property, and "Related Owner
Trustees" means all such Owner Trustees for all such
Equipment Trust Certificates constituting Trust
Property thereof.
"Responsible Officer" means the president or
any other officer with authority of at least a vice
president; or, in the case of the Pass Through
Trustee, an officer or assistant officer of the Pass
Through Trustee in its Corporate Trust Administration
department.
"Scheduled Payment" means, for any Pass
Through Trust, any scheduled payment of principal of
(whether by installment or redemption or otherwise)
and interest on any Equipment Trust Certificate that
constitutes Trust Property thereof to be made in the
amounts and on the date set forth for such payment in
such Equipment Trust Certificate, but does not include
any Overdue Scheduled Payment.
"Securities Act" means the Securities Act of
1933, as amended.
"Series" means a separate series of Pass
Through Certificates issued pursuant to this Pass
Through Agreement and a Series Supplement.
"Series Supplement" means an agreement
executed and delivered by the Company and the Pass
Through Trustee in accordance with this Pass Through
Agreement, incorporating the provisions hereof, as
amended or supplemented thereby, and creating a
separate Pass Through Trust for the benefit of the
Certificateholders of the Series of Pass Through
Certificates to be issued under such Pass Through
Trust.
"Special Distribution Date" means, for any
Pass Through Trust, any date on which a Special
Payment is to be distributed from such Pass Through
Trust to the related Certificateholders.
"Special Payment" means, for any Pass Through
Trust, any payment (including any Overdue Scheduled
Payment) other than a Scheduled Payment on any
Equipment Trust Certificate that constitutes Trust
Property thereof, any proceeds from the sale of such
Equipment Trust Certificate pursuant to Article VII or
any payment by the Company pursuant to the last two
paragraphs of Section 2.02(b).
"Special Payments Account" means, for any
Pass Through Trust, the account or accounts created
and maintained for such Pass Through Trust pursuant to
Section 5.01(b) and the related Series Supplement.
"Trust Agreement" means, for any Equipment
Trust Certificate, the agreement between an Owner
Trustee and an Owner Participant that is defined as
the "Trust Agreement" in the related Indenture.
"Trust Indenture Act" means (except as
otherwise provided in Sections 4.04, 11.01, 11.02 and
11.06) the Trust Indenture Act of 1939, as amended, as
in force at the date as of which this Pass Through
Agreement was first qualified under such Act.
"Trust Property" means, for any Pass Through
Trust, all money, instruments, including the related
Equipment Trust Certificates, and other property held
as the property of such Pass Through Trust, including
all distributions thereon and proceeds thereof.
ARTICLE II
ISSUANCE OF PASS THROUGH CERTIFICATES;
ACQUISITION OF EQUIPMENT TRUST CERTIFICATES
SECTION 2.01. Amount Unlimited; Issuable in
Series; Series Supplements. (a) The aggregate amount
of Pass Through Certificates that may be authenticated
and delivered in accordance with this Pass Through
Agreement is unlimited. The Pass Through Certificates
may be issued from time to time in one or more Series,
each Series relating to a separate Pass Through Trust,
and shall be designated generally as the "Pass Through
Certificates," with further designations added or
incorporated in the title for the Pass Through
Certificates of any Series as specified in the related
Series Supplement. Each Pass Through Certificate
shall bear upon its face the designation so selected
for the Series to which it belongs. All Pass Through
Certificates of the same Series shall be substantially
identical except as to denomination and as may
otherwise be provided in the related Series
Supplement. The Pass Through Certificates of each
Series will evidence fractional undivided interests in
the separate Pass Through Trust formed by the related
Series Supplement, and will have no rights, benefits
or interest in respect of any other separate Pass
Through Trust or the Trust Property held in such other
Pass Through Trust. All Pass Through Certificates of
the same Series shall be in all respects equally and
ratably entitled to the benefits of the related Pass
Through Trust without preference, priority, or
distinction on account of the actual time or times of
authentication and delivery, all in accordance with
the terms and provisions of this Pass Through
Agreement and the related Series Supplement.
(b) The following matters shall be
established for the Pass Through Certificates of each
Series in a Series Supplement executed and delivered
by the Company and the Pass Through Trustee:
(1) the formation of the Pass Through Trust
in which the Pass Through Certificates of such
Series evidence fractional undivided interests
and its designation (which designation shall
distinguish such Pass Through Trust from each
other Pass Through Trust);
(2) the specific title of the Pass Through
Certificates of such Series (which title shall
distinguish the Pass Through Certificates of the
Series from each other Series);
(3) subject to Section 2.02, any limit upon
the aggregate amount of the Pass Through
Certificates of such Series that may be
authenticated and delivered under this Pass
Through Agreement;
(4) the related Regular Distribution Dates;
(5) the related Special Distribution Dates;
(6) if other than as provided in Section
3.02, the Registrar or the Paying Agent for such
Series, including any Co-Registrar or additional
Paying Agent;
(7) if other than as provided in Section
2.07, the denominations in which the Pass Through
Certificates of such Series are issuable;
(8) a description of the Equipment Trust
Certificates to be acquired by and held in the
related Pass Through Trust and of the related
Indenture Documents;
(9) provisions with respect to the terms
for which the definitions set forth in Article I
hereof permit or require further specification in
the related Series Supplement; and
(10) any other terms of the Pass Through
Certificates of such Series (which terms shall
not be inconsistent with the provisions of the
Trust Indenture Act or adversely affect the
interest of the Certificateholders of any Series
outstanding at the time), including any terms
that may be required or advisable under United
States laws or regulations or advisable in
connection with the marketing of the Series.
(c) At any time and from time to time after
the execution and delivery of this Pass Through
Agreement, the Company and the Pass Through Trustee
may execute and deliver one or more Series
Supplements, each forming a separate Pass Through
Trust and establishing the terms of the Pass Through
Certificates of the related Series, and pursuant to
which the Pass Through Certificates of such Series
shall be executed, authenticated and delivered by the
Pass Through Trustee to the Person or Persons
specified by the Company upon request of the Company
and upon satisfaction of any conditions precedent set
forth in the related Series Supplement on the Issuance
Date for such Series.
SECTION 2.02 Acquisition of Equipment Trust
Certificates. Pass Through Certificates of a Series
executed, authenticated and delivered by the Pass
Through Trustee upon request of the Company in
accordance with Section 2.01(c) shall equal in the
aggregate the aggregate principal amount of the
Equipment Trust Certificates to be purchased by the
Pass Through Trustee pursuant to the related
Participation Agreements and evidence the entire
ownership of the related Pass Through Trust. The Pass
Through Trustee shall issue and sell such Pass Through
Certificates, in authorized denominations and in such
Fractional Undivided Interests, so as to result in the
receipt of consideration in an amount equal to the
aggregate principal amount of such Equipment Trust
Certificates and, concurrently therewith, the Pass
Through Trustee shall purchase, pursuant to the terms
and conditions of the related Participation
Agreements, the Equipment Trust Certificates at a
purchase price equal to the amount of such
consideration so received. Except as provided in
Sections 2.08 and 2.09, the Pass Through Trustee shall
not execute, authenticate or deliver Pass Through
Certificates of such Series in excess of the aggregate
amount determined in accordance with this Section
2.02.
SECTION 2.03. Initial Certificateholders as
Grantors. By its payment for and acceptance of any
Pass Through Certificate of any Series issued to it
under the related Pass Through Trust, each initial
Certificateholder of such Series as grantor of such
Pass Through Trust shall join in the creation and
declaration of such Pass Through Trust.
SECTION 2.04. Limitation of Powers. Each
Pass Through Trust shall be constituted solely for the
purpose of making the investment in the Equipment
Trust Certificates provided for in the related Series
Supplement, and, except as set forth herein or in such
Series Supplement, the Pass Through Trustee shall not
be authorized or empowered to acquire any other
investments or engage in any other activities and, in
particular, the Pass Through Trustee shall not be
authorized or empowered to do anything that would
cause such Pass Through Trust to fail to qualify as a
"grantor trust" for federal income tax purposes
(including as subject to this restriction, acquiring
any Aircraft (as defined in the respective related
Indentures) by bidding such Equipment Trust
Certificates or otherwise, or taking any action with
respect to any such Aircraft once acquired).
SECTION 2.05. Execution of Pass Through
Certificates. The Pass Through Certificates of each
Series shall be signed on behalf of the Pass Through
Trustee by an authorized officer of the Pass Through
Trustee. Such signatures may be the manual or
facsimile signatures of such officer and minor errors
or defects in any reproduction of any such signature
shall not affect the validity or enforceability of any
Pass Through Certificate which has been duly
authenticated and delivered by the Pass Through
Trustee.
If any officer of the Pass Through Trustee
who signs any of the Pass Through Certificates
subsequently ceases to be such officer before the Pass
Through Certificate so signed is authenticated and
delivered or disposed of by the Pass Through Trustee,
such Pass Through Certificate nevertheless may be
authenticated and delivered or disposed of as though
the person who signed such Pass Through Certificate
had not ceased to be such officer of the Pass Through
Trustee; and any Pass Through Certificate may be
signed on behalf of the Pass Through Trustee by such
person or persons as, at the actual date of the
execution of such Pass Through Certificate, are the
proper officers of the Pass Through Trustee, although
at the date of the execution and delivery of the
related Series Supplement any such person was not such
officer.
SECTION 2.06. Certificate of Authentication.
The Pass Through Trustee shall duly authenticate and
deliver Pass Through Certificates for each Series in
authorized denominations equalling in the aggregate,
the aggregate principal amount of the Equipment Trust
Certificates to be purchased for the related Pass
Through Trust by the Pass Through Trustee pursuant to
the related Participation Agreements, and evidencing
the entire ownership of the related Pass Through
Trust. Only such Pass Through Certificates of such
Series as shall bear thereon a certificate of
authentication substantially in the form set forth in
Exhibit A, executed by the Pass Through Trustee by
manual or facsimile signature of one of its authorized
officers, shall be entitled to the benefits of the
related Pass Through Trust or be valid or obligatory
for any purpose. Such certificate by the Pass Through
Trustee upon any Pass Through Certificate for such
Series executed by the Pass Through Trustee shall be
conclusive evidence that the Pass Through Certificate
so authenticated has been duly authenticated and
delivered hereunder and that the Certificateholder, as
evidenced on the Register for such Series, is entitled
to the benefits of the related Pass Through Trust.
SECTION 2.07. Form of Pass Through
Certificates. The Pass Through Certificates of each
Series shall be substantially in the form set forth in
Exhibit A hereto. The Pass Through Certificates shall
be issuable as registered securities without coupons
and shall be numbered, lettered, or otherwise
distinguished in such manner or in accordance with
such plans as set forth in the related Series
Supplement. The Pass Through Certificates of each
Series shall be issued in denominations of $1,000 and
any integral multiple thereof and shall be dated the
date of their authentication.
The Pass Through Certificates of any Series
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
Pass Through Agreement or the related Series
Supplement, 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 such
Pass Through Certificates are admitted to trading, or
to conform to general usage.
SECTION 2.08. Registration, Transfer and
Exchange. The Pass Through Trustee will keep at each
office or agency to be maintained for any Series for
the purpose as provided in Section 3.02 a Register or
Registers in which, subject to such reasonable
regulations as it may prescribe, it will register, and
will register the transfer of, Pass Through
Certificates of the related Series as provided in this
Article. Such Register shall be in written form in
the English language or in any other form capable of
being converted into such form within a reasonable
time.
Upon due presentation for registration of
transfer of any Pass Through Certificate of the
related Series at any such office or agency, the Pass
Through Trustee shall execute, authenticate and
deliver in the name of the transferee or transferees a
new Pass Through Certificate or Pass Through
Certificates of such Series in authorized
denominations and for a like aggregate Fractional
Undivided Interest.
Any Pass Through Certificate or Pass Through
Certificates may be exchanged for a Pass Through
Certificate or Pass Through Certificates in other
authorized denominations and for a like aggregate
Fractional Undivided Interest. Pass Through
Certificates to be exchanged shall be surrendered at
any office or agency to be maintained by the Pass
Through Trustee for the related Series for the purpose
as provided in Section 3.02, and the Pass Through
Trustee shall execute, authenticate and deliver in
exchange therefor the Pass Through Certificate or Pass
Through Certificates which the Certificateholder
making the exchange shall be entitled to receive,
bearing numbers not contemporaneously or previously
outstanding.
All Pass Through Certificates presented for
registration of transfer, exchange, redemption or
payment shall (if so required by the Pass Through
Trustee) be duly endorsed by, or be accompanied by a
written instrument or instruments of transfer in form
satisfactory to the Pass Through Trustee duly executed
by, the Certificateholder or his attorney duly
authorized in writing.
The Pass Through Trustee may require payment
from the Certificateholder of a sum sufficient to
cover any tax or other governmental charge that may be
imposed in connection with any exchange or
registration of transfer of Pass Through Certificates.
No service charge to the Certificateholder shall be
made for any such transaction.
All Pass Through Certificates issued upon any
transfer or exchange of Pass Through Certificates
shall evidence ownership in the same Pass Through
Trust and be entitled to the same benefits under this
Pass Through Agreement and the applicable Series
Supplement, as the Pass Through Certificates
surrendered upon such transfer or exchange.
SECTION 2.09. Mutilated, Defaced, Destroyed,
Lost and Stolen Pass Through Certificates. If any
temporary or definitive Pass Through Certificate
becomes mutilated, defaced or is apparently destroyed,
lost or stolen, the Pass Through Trustee in its
discretion may execute, authenticate and deliver, a
new Pass Through Certificate of like Fractional
Undivided Interest in the related Pass Through Trust,
bearing a number not contemporaneously or previously
outstanding, in exchange and substitution for the
mutilated or defaced Pass Through Certificate, or in
lieu of and substitution for the Pass Through
Certificate so apparently destroyed, lost or stolen.
In every case the applicant for a substitute Pass
Through Certificate shall furnish to the Pass Through
Trustee and any agent of the Pass Through Trustee such
security or indemnity as may be required by them to
indemnify and defend and to save each of them harmless
from any such substitution and, in every case of
destruction, loss or theft, evidence to their
satisfaction of the apparent destruction, loss or
theft of such Pass Through Certificate and of the
ownership thereof.
Upon the issuance of any substitute Pass
Through Certificate, the Pass Through Trustee may
require payment from the Certificateholder of a sum
sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any
other reasonable expenses (including the reasonable
fees and expenses of the Pass Through Trustee)
connected therewith. If any Pass Through Certificate
of a Pass Through Trust for which a notice of
termination has been or is about to be given pursuant
to Section 12.01 becomes mutilated or defaced or is
apparently destroyed, lost or stolen, the Pass Through
Trustee may, instead of issuing a substitute Pass
Through Certificate, pay or authorize the payment of
the same (without surrender thereof except in the case
of a mutilated or defaced Pass Through Certificate),
if the applicant for such payment furnishes to the
Pass Through Trustee and any agent of the Pass Through
Trustee such security or indemnity as any of them may
require to save each of them harmless from all risks,
however remote, resulting from such payment and, in
every case of apparent destruction, loss or theft, the
applicant shall also furnish to the Pass Through
Trustee and any agent of the Pass Through Trustee
evidence to their satisfaction of the apparent
destruction, loss or theft of such Pass Through
Certificate and of the ownership thereof.
Every substitute Pass Through Certificate
issued pursuant to the provisions of this Section by
virtue of the fact that any Pass Through Certificate
is apparently destroyed, lost or stolen will
constitute conclusive evidence of the Fractional
Undivided Interest in the applicable Pass Through
Trust evidenced by the Pass Through Certificate that
it replaces, whether or not the apparently destroyed,
lost or stolen Pass Through Certificate may be
enforceable at any time by anyone and will be entitled
to all the benefits of (but will be subject to all the
limitations of rights set forth in) the applicable
Pass Through Trust equally and proportionately with
any and all other Pass Through Certificates duly
authenticated and delivered therefor. All Pass
Through Certificates will be held and owned upon the
express condition that, to the extent permitted by
law, the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated,
defaced, or apparently destroyed, lost or stolen Pass
Through Certificates and will preclude any and all
other rights or remedies notwithstanding any law or
statute existing or hereafter enacted to the contrary
with respect to the replacement or payment of
negotiable instruments or other securities without
their surrender.
SECTION 2.10. Cancellation of Pass Through
Certificates; Destruction Thereof. All Pass Through
Certificates surrendered for payment, redemption,
registration of transfer or exchange, if surrendered
to any agent of the Pass Through Trustee, shall be
delivered to the Pass Through Trustee for cancellation
or, if surrendered to the Pass Through Trustee, shall
be cancelled by it; and no Pass Through Certificates
shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Pass
Through Agreement or the applicable Series Supplement.
The Pass Through Trustee shall destroy cancelled Pass
Through Certificates held by it.
SECTION 2.11. Temporary Pass Through
Certificates. Pending the preparation of definitive
Pass Through Certificates of any Series, the Pass
Through Trustee may execute, authenticate and deliver
temporary Pass Through Certificates for such Series
(printed, lithographed, typewritten or otherwise
reproduced, in each case in form satisfactory to the
executing officer of the Pass Through Trustee, as
evidenced by such officer's execution thereof). Such
temporary Pass Through Certificates shall be issuable
as registered Pass Through Certificates without
coupons, of any authorized denomination, and
substantially in the form of the definitive Pass
Through Certificates of such Series but with such
omissions, insertions and variations as may be
appropriate for temporary Pass Through Certificates,
all as may be determined by the executing officer of
the Pass Through Trustee, as evidenced by such
officer's execution thereof. Temporary Pass Through
Certificates may contain such reference to any
provisions of this Pass Through Agreement or the
applicable Series Supplement as may be appropriate.
Every such temporary Pass Through Certificate shall be
executed and authenticated by the Pass Through Trustee
upon the same conditions and in substantially the same
manner, and with like effect, as the definitive Pass
Through Certificates of such Series. Without
unreasonable delay the Company shall furnish
definitive Pass Through Certificates for such Series
and thereupon temporary Pass Through Certificates
shall be surrendered in exchange therefor without
charge at any office or agency to be maintained by the
Pass Through Trustee for the purpose pursuant to
Section 3.02, and the Pass Through Trustee shall
execute, authenticate and deliver in exchange for such
temporary Pass Through Certificates such definitive
Pass Through Certificates evidencing a like aggregate
Fractional Undivided Interest in the applicable Pass
Through Trust in authorized denominations. Until so
exchanged, temporary Pass Through Certificates shall
be entitled to the same benefits under the applicable
Pass Through Trust as definitive Pass Through
Certificates of the applicable Series.
ARTICLE III
CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 3.01. Covenants of the Company. (a)
The Company will preserve and maintain its corporate
existence, except as permitted by subsection (b)
below. The Company will preserve and maintain all of
its rights, privileges and franchises necessary in the
normal conduct of its business; provided that the
Company shall not be required to preserve any right,
privilege or franchise if the Company shall reasonably
determine that the loss thereof will not materially
adversely affect the Company's ability to perform its
obligations hereunder or under any Series Supplement.
(b) The Company shall not (i) consolidate
with or merge into any other corporation under
circumstances in which the Company is not the
surviving corporation or (ii) convey, transfer or
lease all or substantially all of its assets as an
entirety to any Person, unless the corporation formed
by such consolidation or into which the Company is
merged or the Person which acquired by conveyance,
transfer or lease substantially all of the assets of
the Company as an entirety shall be a corporation
organized and existing under the laws of the United
States of America or any State or the District of
Columbia, and shall execute and deliver to the Pass
Through Trustee an agreement reasonably satisfactory
in form and substance to the Pass Through Trustee
containing an effective assumption by such successor
corporation of the due and punctual performance and
observance of each covenant and condition to be
performed or observed by the Company hereunder and
under each Series Supplement.
(c) Upon any consolidation or merger, or any
conveyance, transfer or lease of substantially all the
assets of the Company as an entirety in accordance
with this Section, the successor corporation formed by
such consolidation or the Person into which the
Company is merged or 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 Agreement and each
Series Supplement with the same effect as if such
successor corporation or such Person, as the case may
be, had been named as the Company herein and therein.
No such conveyance, transfer or lease of substantially
all of the assets of the Company as an entirety shall
have the effect of releasing the Company or any
successor corporation which shall theretofore have
become such in the manner prescribed in this Section
from its liability hereunder or under any Series
Supplement.
(d) The Pass Through Trustee shall receive
an Officer's Certificate and an Opinion of Counsel of
the Company as conclusive evidence that any
consolidation, merger, sale, lease or conveyance, and
any assumption complies with the provisions of this
Section and the Pass Through Trustee shall be entitled
to rely upon the same for all purposes hereof.
SECTION 3.02. Offices for Payments;
Registrar. So long as any Pass Through Certificates of
a Series remain outstanding, the Pass Through Trustee
will maintain the following for such Series: (a) an
office or agency where such Pass Through Certificates
may be presented for payment and (b) a facility or
agency in New York, New York where such Pass Through
Certificates may be presented or surrendered for
registration of transfer and for exchange and for
redemption as provided in this Pass Through Agreement
(the "Registrar"). Written notice of the location of
each such other office or agency and of any change of
location thereof shall be given by the Pass Through
Trustee to the Company, any Owner Trustees, the
Indenture Trustees and the Certificateholders of such
Series. In the event that no such office or agency
shall be maintained or no such notice of location or
of change of location shall be given, presentations
and demands may be made and notices may be served at
the Corporate Trust Office of the Pass Through
Trustee. The Registrar shall keep a register (the
"Register") with respect to the Pass Through
Certificates of each Series and their transfer and
exchange. The Pass Through Trustee may appoint one or
more co-registrars ("Co-Registrars") for any Series
and may terminate any such appointment at any time
upon written notice. The term "Registrar" includes
any Co-Registrar.
Any Registrar shall be a bank or trust
company organized and doing business under the laws of
the United States or any state, with a combined
capital and surplus of at least $100,000,000, or a
direct or indirect subsidiary of such an entity, or a
member of a bank holding company group, having a
combined capital and surplus of at least $100,000,000
and such subsidiary or member itself having a capital
and surplus of at least $10,000,000.
The Pass Through Trustee shall initially act
as Registrar and shall initially serve as an office
where Pass Through Certificates can be presented for
payment.
SECTION 3.03. Representations and Warranties
of the Pass Through Trustee. (a) The Pass Through
Trustee, in its individual capacity (except with
respect to clause (iv) below), represents, warrants
and agrees that:
(i) it is a validly existing national
banking association duly organized under the laws
of the United States of America, holding a valid
certificate to do business as a national banking
association with banking and trust powers and has
the corporate power and authority to enter into
and perform its obligations under this Pass
Through Agreement;
(ii) this Pass Through Agreement has been duly
authorized by all necessary corporate action on
its part, and neither the execution and delivery
hereof nor its performance of any of the terms
and provisions hereof will violate any Federal
law or regulation relating to its banking or
trust powers or contravene or result in any
breach of, or constitute any default under its
articles of association, or by-laws or the
provisions of any indenture, mortgage, contract
or other agreement to which it is a party or by
which it or its properties may be bound or
affected;
(iii) the execution, delivery and performance
by the Pass Through Trustee of this Pass Through
Agreement will not require the authorization,
consent, or approval of, the giving of notice to,
the filing or registration with, or the taking of
any other action in respect of, any United States
or state governmental authority or agency
regulating the banking and corporate trust
activities of the Pass Through Trustee other than
(i) the registration of the Pass Through
Certificates under the Securities Act 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 and
(ii) the qualification of the Pass Through
Agreement under the Trust Indenture Act pursuant
to an order of the Securities and Exchange
Commission;
(iv) this Pass Through Agreement has been duly
executed and delivered by it and, assuming that
this Pass Through Agreement is the legal, valid
and binding obligation of the Company, is the
legal, valid and binding obligation of the Pass
Through Trustee, enforceable against the Pass
Through Trustee in accordance with its terms
except as limited by bankruptcy, insolvency,
moratorium, reorganization, receivership,
fraudulent conveyance or similar laws or
equitable principles of general application to or
affecting the enforcement of creditors' rights
and remedies generally from time to time in
effect, regardless of whether such enforceability
is considered in a proceeding in equity or at
law; and
(v) each Series Supplement will be, upon the
date of execution and delivery of such Series
Supplement, executed and delivered by one of its
officers duly authorized to execute and deliver
such Series Supplement on its behalf.
(b) The representations and warranties set
forth in subsection (a) above shall be deemed to be
made by the Pass Through Trustee on each Issuance
Date, except as otherwise provided in the applicable
Series Supplement.
SECTION 3.04. Paying Agents. Whenever the
Pass Through Trustee in its sole discretion shall
appoint a paying agent (the "Paying Agent") for any
Pass Through Trust, it will cause the Paying Agent to
execute and deliver an instrument in which the Paying
Agent shall agree with the Pass Through Trustee,
subject to the provisions of this Section,
(a) that it will hold all sums received by
it as such agent for distribution to the
Certificateholders of the related Series (whether
such sums have been paid to it by the Pass
Through Trustee or the Related Owner Trustee or
Indenture Trustee) in trust for the benefit of
the Certificateholders of the related Series or
of the Pass Through Trustee, and
(b) that it will notify the Pass Through
Trustee if the principal of or interest or
premium on the Equipment Trust Certificates that
constitute Trust Property of such Pass Through
Trust is not paid when the same is due and
payable.
Anything in this Section to the contrary
notwithstanding, the agreements to hold sums in trust
as provided in this Section are subject to the
provisions of Sections 12.03 and 12.04 hereof.
SECTION 3.05. No Representations or
Warranties as to Documents. The Pass Through Trustee
neither makes nor shall be deemed to have made any
representation or warranty as to the validity,
legality or enforceability of this Pass Through
Agreement, any Series Supplement, any related Pass
Through Certificates or any related Indenture
Documents or as to the correctness of any statement
contained in any thereof, except for the
representations and warranties of the Pass Through
Trustee made in its individual capacity under this
Pass Through Agreement, in any Series Supplement or in
any related Participation Agreement.
SECTION 3.06. Payments from Trust Property
Only. For any Pass Through Trust, all payments to be
made by the Pass Through Trustee under such Pass
Through Trust shall be made only from the income and
the proceeds from the related Trust Property and only
to the extent that the Pass Through Trustee shall have
sufficient income or proceeds from such Trust Property
to enable the Pass Through Trustee to make
distributions of the amounts due in respect of the
Pass Through Certificates thereunder. Each
Certificateholder of such Series by its acceptance of
a related Pass Through Certificate agrees that it will
look solely to the income and proceeds from the
related Trust Property to the extent available for
distribution to it as provided herein and in the
related Series Supplement and that the Pass Through
Trustee is not personally liable to such
Certificateholder for any amounts payable under such
Pass Through Trust except as expressly provided
herein.
SECTION 3.07. Limitation of the Company's
Liability. The Company is a party to this Pass
Through Agreement solely for purposes of meeting the
requirements of the Trust Indenture Act, and therefore
shall not be liable hereunder, except as otherwise
expressly provided herein, or under the terms of any
Series Supplement or any Pass Through Certificates,
except as otherwise expressly provided therein.
ARTICLE IV
CERTIFICATEHOLDER LISTS AND REPORTS BY THE
COMPANY AND THE PASS THROUGH TRUSTEE
SECTION 4.01. Certificateholder Lists;
Ownership of Pass Through Certificates. (a) For each
Series, the Pass Through Trustee shall preserve in as
current a form as is reasonably practicable the most
recent list available to it of the names and addresses
of the Certificateholders of such Series. If the Pass
Through Trustee is not the Registrar for such Series,
the Company shall cause the Registrar to furnish to
the Pass Through Trustee semi-annually not more than
15 days after each Record Date, as of such Record
Date, or at such other times as the Pass Through
Trustee may request in writing, a list, in such form
and as of such date as the Pass Through Trustee may
reasonably require, containing all the information in
the possession or control of the Registrar as to the
names and addresses of the Certificateholders of such
Series and the amounts of the Pass Through
Certificates held by such Certificateholders.
(b) For each Series, ownership of the Pass
Through Certificates shall be proved by the Register
for such Series kept by the Registrar.
SECTION 4.02. Disclosure of
Certificateholder Lists. Each and every
Certificateholder, by receiving and holding such Pass
Through Certificate, agrees with the Company and the
Pass Through Trustee that neither the Company, the
Pass Through Trustee, the Pass Through Trustee in its
individual capacity nor any agent of any of the
foregoing shall be held accountable by reason of the
disclosure of any such information as to the names and
addresses of any Certificateholders in accordance with
the provisions of Section 312 of the Trust Indenture
Act, regardless of the source from which such
information was derived, and that the Pass Through
Trustee shall not be held accountable by reason of
mailing any material pursuant to a request made under
Section 312(b) of the Trust Indenture Act.
SECTION 4.03. Reports by the Company. The
Company covenants:
(a) to file with the Pass Through Trustee,
within 30 days after the Company is required to
file the same with the Commission, copies of the
annual reports and of the information, documents,
and other reports (or copies of such portions of
any of the foregoing as the Commission may from
time to time by rules and regulations prescribe)
which the Company may be required to file with
the Commission pursuant to Section 13 or 15(d) of
the Exchange Act or, if the Company is not
required to file information, documents, or
reports pursuant to either of such Sections of
the Exchange Act, then to file with the Pass
Through Trustee and the Commission, in accordance
with rules and regulations prescribed from time
to time by the Commission, such of the
supplementary and periodic information,
documents, and reports that would be required
pursuant to Section 13 of the Exchange Act, or,
in respect of a security listed and registered on
a national securities exchange, as may be
prescribed from time to time in such rules and
regulations;
(b) to file with the Pass Through Trustee
and the Commission, in accordance with rules and
regulations prescribed from time to time by the
Commission, such additional information,
documents, and reports with respect to compliance
by the Company with the conditions and covenants
provided for in this Pass Through Agreement as
may be required from time to time by such rules
and regulations;
(c) to transmit to the Certificateholders of
each Series in the manner and to the extent
required by Section 313(c) of the Trust Indenture
Act, within 30 days after the filing thereof with
the Pass Through Trustee, such summaries of any
information, documents and reports required to be
filed by the Company pursuant to subsections (a)
and (b) of this Section 4.03 as may be required
by rules and regulations prescribed from time to
time by the Commission; and
(d) furnish to the Pass Through Trustee, on
or before each March 15, a brief certificate
from the principal executive officer, principal
financial officer or principal accounting officer
of the Company as to his or her knowledge of such
Company's compliance with all conditions and
covenants under this Pass Through Agreement and
each Series Supplement. For purposes of this
subsection (d), such compliance shall be
determined without regard to any period of grace
or requirement of notice provided under this Pass
Through Agreement or any Series Supplement.
SECTION 4.04. Reports by the Pass Through
Trustee. For each Series, on or before each May 15,
the Pass Through Trustee shall transmit, in the manner
and to the extent required by Section 313(c) of the
Trust Indenture Act, any report required by Section
313(a) of the Trust Indenture Act to be transmitted by
the Pass Through Trustee to the related
Certificateholders.
ARTICLE V
RECEIPT AND DISTRIBUTION OF INCOME
AND PROCEEDS FROM THE TRUST PROPERTY
SECTION 5.01. Certificate Account and
Special Payments Account. (a) The Pass Through
Trustee shall establish and maintain for each Pass
Through Trust, on behalf of the related
Certificateholders, a Certificate Account as one or
more non-interest bearing accounts. In each case, the
Pass Through Trustee shall hold such Certificate
Account in trust for the benefit of such
Certificateholders, respectively, and shall make or
permit withdrawals therefrom only as provided in this
Pass Through Agreement or the related Series
Supplement. Upon receipt of any Scheduled Payment,
the Pass Through Trustee shall immediately deposit
such Scheduled Payment in the applicable Certificate
Account.
(b) The Pass Through Trustee shall establish
and maintain, as and when required, for each Pass
Through Trust, on behalf of the related
Certificateholders, a Special Payments Account as one
or more accounts, which shall be non-interest bearing
except as provided in Section 5.04. In each case, the
Pass Through Trustee shall hold such Special Payments
Account in trust for the benefit of such
Certificateholders, respectively, and shall make or
permit withdrawals therefrom only as provided in this
Pass Through Agreement or the related Series
Supplement. Upon receipt of any Special Payment, the
Pass Through Trustee shall immediately deposit such
Special Payment in the applicable Special Payments
Account.
(c) The Pass Through Trustee shall present
any Equipment Trust Certificate to the applicable
Related Indenture Trustee on the date of its stated
final maturity, or on such earlier date as such
Equipment Trust Certificate is to be redeemed or
purchased in whole pursuant to the relevant Indenture.
SECTION 5.02. Distributions from Certificate
Account and Special Payments Account. (a) For each
Pass Through Trust, on each related Regular
Distribution Date, or as soon thereafter as the Pass
Through Trustee has confirmed receipt of any Scheduled
Payment due on the related Equipment Trust
Certificates on such Regular Distribution Date, the
Pass Through Trustee shall distribute out of the
applicable Certificate Account the entire amount
deposited therein pursuant to Section 5.01(a) by
paying to each Certificateholder of the related Series
of record at the close of business on the Record Date
for such Regular Distribution Date (except as provided
in Section 12.01 concerning the final distribution),
at the address for such Certificateholder appearing in
the related Register, such Certificateholder's pro
rata share (based on the aggregate Fractional
Undivided Interest in the related Pass Through Trust
held by such Certificateholder) of the aggregate
amount in the applicable Certificate Account.
(b) For each Pass Through Trust, on each
related Special Distribution Date, or as soon
thereafter as the Pass Through Trustee has confirmed
receipt of any Special Payment due on the related
Equipment Trust Certificates or realized upon the sale
of any such Equipment Trust Certificates, the Pass
Through Trustee shall distribute out of the applicable
Special Payments Account the entire amount of such
Special Payment deposited therein pursuant to Section
5.01(b) by paying to each Certificateholder of the
related Series of record at the close of business on
the Record Date for such Special Distribution Date
(except as provided in Section 12.01 concerning the
final distribution), at the address for such
Certificateholder appearing in the related Register,
such Certificateholder's pro rata share (based on the
aggregate Fractional Undivided Interest in the related
Pass Through Trust held by such Certificateholder) of
the aggregate amount in the applicable Special
Payments Account on account of such Special Payment.
(c) For each Pass Through Trust, the Pass
Through Trustee shall at the expense of the Company
notify each Certificateholder of the related Series by
mail at its address as it appears in the related
Register of each related Special Payment for such
Series. If the related Equipment Trust Certificates
are to be redeemed or purchased in whole prior to
their respective maturities, or if a Special Payment
is to be made pursuant to either of the last two
paragraphs of Section 2.02(b), such notice shall be
mailed not less than 20 days prior to the date any
such Special Payment is scheduled to be distributed.
For any other Special Payment, such notice shall be
mailed as soon as practicable after the Pass Through
Trustee has received funds for such Special Payment.
Such notices of Special Payments shall set forth:
(i) the Special Distribution Date and the
Record Date therefor (except as otherwise
provided in Section 12.01);
(ii) the amount of the Special Payment for
each $1,000 face amount Pass Through Certificate
and the amount thereof constituting principal,
premium, if any, and interest on the related
Equipment Trust Certificates;
(iii) the reason for the Special Payment; and
(iv) if the Special Distribution Date is the
same date as a Regular Distribution Date for such
Series, the total amount to be received on such
date for each $1,000 face amount Pass Through
Certificate.
If the amount of premium, if any, payable upon the
redemption or purchase in whole of an Equipment Trust
Certificate has not been calculated at the time that
the Pass Through Trustee mails the notice of the
related Special Payment, it shall be sufficient if the
notice sets forth the other amounts to be distributed
and states that any premium received will also be
distributed.
If, for any Pass Through Trust, any
cancellable redemption of the related Equipment Trust
Certificates is cancelled, the Pass Through Trustee,
as soon as possible after learning thereof, shall
notify by mail each Certificateholder of the related
Series at its address as it appears on the related
Register.
(d) For each Pass Through Trust, any
Scheduled Payment or Special Payment to be distributed
pursuant to this Article shall be payable at the
Corporate Trust Office of the Pass Through Trustee or
at any office or agency maintained for such purpose
for the related Series pursuant to Section 3.02,
provided that any Scheduled Payment or Special Payment
may be payable at the option of the Pass Through
Trustee or its Paying Agent for the related Series by
mailing checks for such Scheduled Payment or Special
Payment payable to or upon the written order of the
related Certificateholders entitled thereto as they
appear on the related Register.
SECTION 5.03. Statements to Certificateholders
(a) On each Regular Distribution Date and Special
Distribution Date, the Pass Through Trustee shall include
with each distribution to Certificateholders of the related
Series a statement, giving effect to such distribution to
be made on such Regular Distribution Date or Special
Distribution Date, as the case may be, setting forth the
following information (as to (i) and (ii) below, for each
$1,000 face amount Pass Through Certificate):
(i) The amount of such distribution
allocable to principal and the amount allocable
to premium, if any, on the related Equipment
Trust Certificates;
(ii) The amount of such distribution
allocable to interest on the related Equipment
Trust Certificates; and
(iii) The Pool Balance and the Pool Factor of
the related Pass Through Trust.
(b) For each Series, within a reasonable
period of time after the end of each calendar year but
not later than the latest date permitted by law, the
Pass Through Trustee shall furnish to each Person who
at any time during such calendar year was a
Certificateholder of such Series a statement
containing the sum of the amounts determined pursuant
to clauses (a)(i) and (a)(ii) of this Section for the
related Pass Through Trust for such calendar year or,
in the event such Person was a Certificateholder of
such Series during a portion of such calendar year,
for the applicable portion of such year.
SECTION 5.04. Investment of Special Payment
Moneys. Any money received by the Pass Through
Trustee pursuant to Section 5.01(b) representing a
Special Payment that is not to be promptly distributed
shall, to the extent practicable, be invested by the
Pass Through Trustee in Permitted Investments selected
by the Company pending distribution of such Special
Payment pursuant to Section 5.02. Any investment made
pursuant to this Section 5.04 shall be in such
Permitted Investments having maturities not later than
the date that such moneys are required to be used to
make the payment required under Section 5.02 on the
applicable Special Distribution Date and the Pass
Through Trustee shall hold any such Permitted
Investments until maturity. The proceeds upon
maturity of any Permitted Investment shall not be
reinvested pending distribution. The Pass Through
Trustee shall have no liability with respect to any
investment made pursuant to this Section, other than
by reason of the willful misconduct or gross
negligence of the Pass Through Trustee. All income
and earnings from such investments shall be
distributed on such Special Distribution Date as part
of such Special Payment.
SECTION 5.05. Withholding Taxes. The Pass
Through Trustee shall withhold any taxes required to
be withheld on payments to any Certificateholder,
except to the extent that such Certificateholder has
furnished evidence reasonably satisfactory to the Pass
Through Trustee of any exemption from withholding
claimed by such Certificateholder, and under no
circumstances shall the failure of any such
Certificateholder to receive any amounts so withheld
constitute an Event of Default. Notwithstanding any
provision to the contrary herein, if the Company is
required to pay any withholding tax or any interest or
penalty thereon, the Pass Through Trustee shall be
entitled to retain any payments otherwise
distributable to such Certificateholder that was
subject to such withholding until such amounts shall
have been recovered in full by the Pass Through
Trustee.
ARTICLE VI
CONCERNING THE CERTIFICATEHOLDERS
SECTION 6.01. Evidence of Action Taken by
Certificateholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or
other action provided by this Pass Through Agreement
to be given or taken by Certificateholders of any
Series may be embodied in and evidenced by one or more
substantially similar instruments signed by such
Certificateholders in person or by an agent duly
appointed in writing, and, except as otherwise
expressly provided herein, such action shall become
effective when such instrument or instruments are
delivered to the Pass Through Trustee. Proof of
execution of any instrument or of a writing appointing
any such agent shall be sufficient for any purpose of
this Pass Through Agreement and (subject to Sections
8.02 and 8.03) conclusive in favor of the Pass Through
Trustee, if made in the manner provided in this
Article.
(b) For the purpose of determining the
Certificateholders of any Series entitled to vote or
consent to any direction, waiver or other action of
such Certificateholders under Section 7.10 or 7.11,
the Company may set a record date for such vote or
consent by specifying such record date in an Officer's
Certificate delivered to the Pass Through Trustee.
Notwithstanding Section 316(c) of the Trust Indenture
Act, such record date shall be a date not more than 15
days prior to the first solicitation of such vote or
consent.
SECTION 6.02. Proof of Execution of
Instruments and of Holding of Certificates. Subject
to Sections 8.02 and 8.03, the execution of any
instrument by a Certificateholder or his agent or
proxy may be proved in accordance with such reasonable
rules and regulations as may be prescribed by the Pass
Through Trustee. The holding of Pass Through
Certificates shall be proved by the Register or by a
certificate of the Registrar.
SECTION 6.03. Certificateholders to Be
Treated as Owners. Prior to due presentment for
registration of transfer of any Pass Through
Certificate, each related Indenture Trustee, the Pass
Through Trustee, any agent of any such related
Indenture Trustee or the Pass Through Trustee, the
Paying Agent, if any, the Registrar and the Company
may deem and treat the Person in whose name such Pass
Through Certificate shall be registered upon the
Register as the absolute owner of such Pass Through
Certificate (whether or not such Pass Through
Certificate shall be overdue and notwithstanding any
notation of ownership or other writing thereon) for
the purpose of receiving payment on account of the
principal payable with respect to and, subject to the
provisions of this Pass Through Agreement, interest
payable with respect to such Pass Through Certificate
and for all other purposes; and neither any such
related Indenture Trustee nor the Pass Through Trustee
(nor any agent of any such related Indenture Trustee
or the Pass Through Trustee) nor the Paying Agent, if
any, nor the Registrar nor the Company shall be
affected by any notice to the contrary. All such
payments so made to any such person, or upon his
order, shall be valid, and, to the extent of the sum
or sums so paid, effectual to satisfy and discharge
the liability for moneys payable upon any such Pass
Through Certificate.
SECTION 6.04. Pass Through Certificates
Owned by the Company and Related Owner Trustees Deemed
Not Outstanding. In determining whether the
Certificateholders of the requisite aggregate
Fractional Undivided Interest of Pass Through
Certificates of any Series have concurred in any
direction, consent or waiver under this Pass Through
Agreement, Pass Through Certificates of such Series
that are owned by the Company, any Related Owner
Trustee or Related Owner Participant or any obligor on
such Pass Through Certificates or by any Affiliate of
the Company, any such Related Owner Trustee or Related
Owner Participant or any obligor on such Pass Through
Certificates shall be disregarded and deemed not to be
Outstanding for the purpose of any such determination;
provided that for the purpose of determining whether
the Pass Through Trustee shall be protected in relying
on any such direction, consent or waiver, only if a
Responsible Officer of the Pass Through Trustee has
actual knowledge that certain Pass Through
Certificates are so owned shall such Pass Through
Certificates be so disregarded; and provided further
that if all Pass Through Certificates of such Series
that would be deemed Outstanding in the absence of the
foregoing provision are owned by the Company, any
Related Owner Trustee or Related Owner Participant or
any obligor on such Pass Through Certificates or by
any Affiliate of the Company, any such Related Owner
Trustee or Related Owner Participant or any obligor on
such Pass Through Certificates, then such Pass Through
Certificates shall be deemed Outstanding for the
purpose of any such determination. Pass Through
Certificates so owned that have been pledged in good
faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Pass Through
Trustee the pledgee's right so to act with respect to
such Pass Through Certificates and that the pledgee is
not the Company, any Related Owner Trustee or Related
Owner Participant or any obligor upon the Pass Through
Certificates or any Affiliate of the Company, any
Related Owner Trustee or Related Owner Participant or
any obligor on such Pass Through Certificates. In
case of a dispute as to such right, the advice of
counsel shall be full protection in respect of any
decision made by the Pass Through Trustee in
accordance with such advice. For any Series, upon
request of the Pass Through Trustee, the Company, the
Related Owner Trustees and the Related Owner
Participants shall furnish to the Pass Through Trustee
promptly an Officers' Certificate listing and
identifying all Pass Through Certificates of such
Series, if any, known by the Company or any such
Related Owner Trustee or Related Owner Participant to
be owned or held by or for the account of any of the
above-described persons; and the Pass Through Trustee
shall be entitled to accept such Officers'
Certificates as conclusive evidence of the facts set
forth therein and of the fact that all Pass Through
Certificates of such Series not listed therein are
Outstanding for the purpose of any such determination.
For the purpose of determining whether Pass Through
Certificates of a Series are Outstanding as described
in this Section, an "obligor" on such Pass Through
Certificates shall include any obligor or any
Affiliate of any such obligor on any Equipment Trust
Certificates that constitute Trust Property of the
related Pass Through Trust.
SECTION 6.05. Right of Revocation of Action
Taken. For any Series, at any time prior to (but not
after) the evidencing to the Pass Through Trustee, as
provided in Section 6.01, of any action taken by the
related Certificateholders of the percentage in
aggregate of Fractional Undivided Interests in the
related Pass Through Trust specified in this Pass
Through Agreement in connection with such action, any
Certificateholder of a Pass Through Certificate of
such Series, the serial number of which is shown by
the evidence to be included among the serial numbers
of the Pass Through Certificates of such Series, the
Certificateholders of which have consented to such
action, may, by filing written notice at the Corporate
Trust Office and upon proof of holding as provided in
this Article, revoke such action so far as concerns
such Pass Through Certificate. Except as aforesaid,
any such action taken shall be conclusive and binding
upon such Certificateholder for such Pass Through
Certificate and upon all future Certificateholders and
owners of such Pass Through Certificate and of any
Pass Through Certificates issued in exchange or
substitution therefor, irrespective of whether or not
any notation in regard thereto is made upon any such
Pass Through Certificate or otherwise. Any action
taken by such Certificateholders of the percentage in
aggregate of Fractional Undivided Interests in the
related Pass Through Trust specified in this Pass
Through Agreement in connection with such action shall
be conclusively binding upon the Pass Through Trustee
and all the Certificateholders of such Series.
SECTION 6.06. ERISA Plan Prohibition.
Unless otherwise specified in the applicable Series
Supplement, no 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
(hereinafter collectively referred to as an "ERISA
Plan"), may acquire or hold any of the Pass Through
Certificates. The purchase by any person of any Pass
Through Certificate constitutes a representation by
such person to the Company, the Related Owner
Participants, the Related Owner Trustees, the Related
Indenture Trustees and the Pass Through Trustee that
such person is not an ERISA Plan and that such person
is not acquiring, and has not acquired, such Pass
Through Certificate with assets of an ERISA Plan.
ARTICLE VII
REMEDIES OF PASS THROUGH TRUSTEE
AND CERTIFICATEHOLDERS
SECTION 7.01. Events of Default. If, for
any Pass Through Trust, an Indenture Event of Default
under an Indenture relating to any Equipment Trust
Certificate that constitutes Trust Property of such
Pass Through Trust (an "Event of Default") shall occur
and be continuing, then, and in each and every case,
the Pass Through Trustee may vote all of the Equipment
Trust Certificates under such Indenture held by such
Pass Through Trust, and upon the direction of the
Majority In Interest of Certificateholders of the
related Series, the Pass Through Trustee shall vote a
corresponding majority of such Equipment Trust
Certificates in favor of directing the applicable
Related Indenture Trustee to declare the unpaid
principal of such Equipment Trust Certificates then
outstanding, together with interest accrued but unpaid
thereon and all other amounts due under such Equipment
Trust Certificates and the related Indenture, to be
due and payable under, and in accordance with the
provisions of, such Indenture. In addition, if such
Event of Default shall have occurred and be
continuing, the Pass Through Trustee may in accordance
with such related Indenture vote such Equipment Trust
Certificates to direct the applicable Related
Indenture Trustee regarding the exercise of remedies
provided in such Indenture.
If, for any Pass Through Trust, an Event of
Default shall have occurred and be continuing, the
Pass Through Trustee also may in its discretion, and
upon the direction of the Majority In Interest of
Certificateholders of the related Series shall, by
such officer or agent as it may appoint, sell, convey,
transfer and deliver any Equipment Trust Certificates
held in such Pass Through Trust that are subject to
the corresponding Indenture Event of Default, without
recourse to or warranty by the Pass Through Trustee or
any Certificateholder of such Series, to any Person.
In any such case, the Pass Through Trustee shall sell,
assign, contract to sell or otherwise dispose of and
deliver any such Equipment Trust Certificates in one
or more parcels at public or private sale or sales, at
any location or locations at the option of the Pass
Through Trustee, all upon such terms and conditions as
it may reasonably deem advisable and at such prices as
it may reasonably deem advisable, for cash. If the
Pass Through Trustee so decides or is required to sell
or otherwise dispose of any Equipment Trust
Certificates pursuant to this Section, the Pass
Through Trustee shall take such of the actions
described above as it may reasonably deem most
effective to complete the sale or other disposition of
such Equipment Trust Certificates, so as to provide
for the payment in full of all amounts due on such
Equipment Trust Certificates with respect to the
related Series. Notwithstanding the foregoing, any
action taken by the Pass Through Trustee under this
Section shall not, in the reasonable judgment of the
Pass Through Trustee, be adverse to the best interests
of the Certificateholders of such Series.
SECTION 7.02. Incidents of Sale of Equipment
Trust Certificates. Upon any sale of all or any part
of the Equipment Trust Certificates held in any Pass
Through Trust made either under the power of sale
given under this Pass Through Agreement or the related
Series Supplement or otherwise for the enforcement of
this Pass Through Agreement and the related Series
Supplement, the following shall be applicable:
(1) Any Certificateholder of the related
Series, the Pass Through Trustee in its
individual or any other capacity or any other
Person may bid for and purchase any of such
Equipment Trust Certificates, and upon compliance
with the terms of sale, may hold, retain, possess
and dispose of such Equipment Trust Certificates
in its or their own absolute right without
further accountability.
(2) The receipt of the Pass Through Trustee
or of the officer making such sale shall be a
sufficient discharge to any purchaser for his
purchase money, and, after paying such purchase
money and receiving such receipt, such purchaser
or its personal representative or assigns shall
not be obliged to see to the application of such
purchase money, or be in any way answerable for
any loss, misapplication or non-application
thereof.
(3) Any moneys collected by the Pass Through
Trustee upon any sale made either under the power
of sale given by this Pass Through Agreement or
the related Series Supplement or otherwise for
the enforcement of the related Pass Through
Trust, shall be deposited and distributed as a
Special Payment as provided in Article V.
SECTION 7.03. Pass Through Trustee May Prove
Debt. If any amount payable under any Equipment Trust
Certificate held by any Pass Through Trust is not paid
when due and payable, the Pass Through Trustee, in its
own name and as trustee of an express trust, as holder
of such Equipment Trust Certificate shall be, to the
extent permitted by and in accordance with the terms
of the related Indenture Documents, entitled and
empowered to institute any action or proceedings at
law or in equity for the collection of the sums so due
and unpaid, and may prosecute any such action or
proceedings to judgment or final decree, and may
enforce any such judgment or final decree against the
applicable Owner Trustee or other obligor upon such
Equipment Trust Certificate and collect in the manner
provided by law out of the property of such Owner
Trustee or such other obligor upon such Equipment
Trust Certificate, as the case may be, wherever
situated, the moneys adjudged or decreed to be
payable.
All rights of action and of asserting claims
under this Pass Through Agreement, or under any of the
Pass Through Certificates, may be prosecuted and
enforced by the Pass Through Trustee without the
possession of any of such Pass Through Certificates or
the production thereof in any trial or other
proceedings relative thereto, and any such action or
proceedings instituted by the Pass Through Trustee
shall be brought in its own name as trustee of an
express trust, and any recovery of judgment, subject
to the payment of the expenses, disbursements and
compensation of the Pass Through Trustee, each
predecessor Pass Through Trustee and their respective
agents and attorneys, shall be for the ratable benefit
of the Certificateholders of the related Series.
In any proceedings brought by the Pass
Through Trustee (and also any proceedings involving
the interpretation of any provision of this Pass
Through Agreement or any Series Supplement to which
the Pass Through Trustee shall be a party) the Pass
Through Trustee shall be held to represent all the
Certificateholders of the related Series, and it shall
not be necessary to make any such Certificateholders
parties to any such proceedings.
SECTION 7.04. Remedies Cumulative. Each and
every right, power and remedy given to the Pass
Through Trustee specifically or otherwise under any
Pass Through Trust shall be cumulative and shall be in
addition to every other right, power and remedy
specifically given thereunder or now or hereafter
existing at law, in equity or by statute, and each and
every right, power and remedy whether specifically
given thereunder or otherwise existing may be
exercised from time to time and as often and in such
order as may be deemed expedient by the Pass Through
Trustee or the Certificateholders of the related
Series, 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 Pass Through Trustee or of
any such Certificateholder 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 applicable Owner Trustee, or to be an
acquiescence therein.
SECTION 7.05. Suits for Enforcement. If an
Indenture Event of Default has occurred, has not been
waived and is continuing, the Pass Through Trustee may
in its discretion and subject to its rights of
appropriate indemnification under Sections 7.07 and
8.03 and Article IX hereof, to the extent permitted by
and in accordance with the Indenture Documents,
proceed to protect and enforce its rights and rights
of the Certificateholders of the related Series by
such appropriate judicial proceedings as the Pass
Through Trustee shall deem most effectual to protect
and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the
specific enforcement of any covenant or agreement
under the related Pass Through Trust or in aid of the
exercise of any power granted thereunder or to enforce
any other legal or equitable right vested in the Pass
Through Trustee or the Certificateholders under such
Pass Through Trust or by law; provided that any sale
of any portion of the related Trust Property shall be
done in accordance with Section 7.02.
SECTION 7.06. Discontinuance of Proceedings.
If the Pass Through Trustee or any Certificateholder
of any Series institutes any proceeding to enforce any
right, power or remedy under the related Pass Through
Trust, and such proceeding is discontinued or
abandoned for any reason or is determined adversely to
the Pass Through Trustee or such Certificateholder,
then and in every such case the applicable Owner
Trustee, and the applicable Indenture Trustee, the
Pass Through Trustee, the Certificateholders of such
Series and the Company shall, subject to any
determination in such proceeding, be restored to their
former positions and rights under such Pass Through
Trust with respect to the Trust Property and all
rights, remedies and powers of the Pass Through
Trustee and such Certificateholders shall continue as
if no such proceeding had been instituted.
SECTION 7.07. Limitations on Suits by
Certificateholders. No Certificateholder of any
Series shall have any right by virtue or by availing
of any provision of the related Pass Through Trust to
institute any action or proceeding at law or in equity
or in bankruptcy or otherwise upon or under or with
respect to such Pass Through Trust, or for the
appointment of a trustee, receiver, liquidator,
custodian or other similar official or for any other
remedy thereunder, unless such Certificateholder
previously has notified the Pass Through Trustee in
writing of an Event of Default under such Pass Through
Trust and of the continuance thereof, as provided
herein, and the Certificateholders of the related Pass
Through Certificates then Outstanding (or the proxy
therefor) representing in the aggregate not less than
25% of the Fractional Undivided Interests of Pass
Through Certificates then Outstanding under such Pass
Through Trust have requested in writing that the Pass
Through Trustee institute such action or proceedings
in its own name as trustee under such Pass Through
Trust and have offered to the Pass Through Trustee
such reasonable indemnity as it may require against
the costs, expenses and liabilities to be incurred
therein or thereby, and the Pass Through Trustee for
60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such
action or proceedings and no direction inconsistent
with such written request has been given to the Pass
Through Trustee pursuant to Section 7.10; it being
understood and intended, and being expressly
covenanted by such Certificateholder with every other
Certificateholder of such Series and the Pass Through
Trustee, that no one or more Certificateholders of
such Series shall have any right in any manner
whatever to affect, disturb or prejudice the rights of
any other Certificateholder of such Series or to
obtain or seek to obtain priority over or preference
to any other Certificateholder of such Series or to
enforce any right under the related Pass Through
Trust, except in the manner provided therein and for
the equal, ratable and common benefit of all
Certificateholders of such Series. For the protection
and enforcement of the provisions of this Section,
each and every Certificateholder of the related Series
and the Pass Through Trustee shall be entitled to such
relief as can be given either at law or in equity.
SECTION 7.08. Unconditional Right of
Certificateholders to Receive Principal, Interest and
Premium, and to Institute Certain Suits. Nothwithstanding
any other provision in this Pass Through Agreement, any
Series Supplement or any Pass Through Certificate issued
pursuant to such Series Supplement, the right of any
Certificateholder of the related Series to receive
distributions on such Pass Through Certificate of Scheduled
Payments or Special Payments pursuant to Article V on or
after the respective due dates set forth in such Series
Supplement, or, subject to Section 7.07, to institute
suit for the enforcement of any such distribution on
or after such respective dates as provided herein or
therein, shall not be impaired or affected without the
consent of such Certificateholder. The purchase by
any Certificateholder of any Pass Through Certificate
constitutes the consent of such Certificateholder to
the retention by the Pass Through Trustee of certain
amounts otherwise distributable to such
Certificateholder in accordance with Section 5.05.
SECTION 7.09. Control by Certificateholders.
A Majority In Interest of Certificateholders of any
Series has the right with respect to the related Pass
Through Trust to direct the Pass Through Trustee as to
the time, method, and place of conducting any
proceeding for any remedy available to the Pass
Through Trustee, or exercising any trust or power
conferred on the Pass Through Trustee under such Pass
Through Trust; provided that such direction is not
otherwise than in accordance with law and the
provisions of such Pass Through Trust and the Pass
Through Trustee has received, to the extent provided
in Sections 7.07 and 8.03 and Article IX hereof, such
reasonable indemnification as it may require against
the costs, expenses and liabilities to be incurred by
the Pass Through Trustee; and provided further that
the Pass Through Trustee has the right to decline to
follow any such direction if the Pass Through Trustee,
being advised by counsel, determines that the action
or proceeding so directed may not lawfully be taken or
if the Pass Through Trustee in good faith by its board
of directors, the executive committee, or a trust
committee of directors or Responsible Officers of the
Pass Through Trustee determines that the action or
proceedings so directed would involve the Pass Through
Trustee in personal liability or if the Pass Through
Trustee in good faith so determines that the actions
or forebearances specified in or pursuant to such
direction would be unduly prejudicial to the interests
of the Certificateholders of such Series not joining
in the giving of said direction, it being understood
that the Pass Through Trustee shall have no duty to
ascertain whether or not such actions or forebearances
are unduly prejudicial to such Certificateholders.
Nothing in this Pass Through Agreement or any
Series Supplement shall impair the right of the Pass
Through Trustee in its discretion to take any action
deemed proper by the Pass Through Trustee with respect
to the related Pass Through Trust and which is not
inconsistent with such direction by Certificateholders
of the related Series.
SECTION 7.10. Waiver of Past Events of
Default. Upon written instructions from a Majority in
Interest of Certificateholders of any Series, the Pass
Through Trustee shall waive any past Event of Default
under the related Pass Through Trust and its
consequences and upon such waiver such Event of
Default will cease to exist and any Event of Default
arising therefrom will be deemed to have been cured
for every purpose of such Pass Through Trust, but no
such waiver will extend to any subsequent or other
Event of Default thereunder or impair any right
consequent thereon; provided that any such waiver will
be effective to waive any such past Event of Default
and its consequences as described above if, but only
if, the correlative Indenture Event of Default has
been waived under the related Indenture by the
requisite holders of the Equipment Trust Certificates
outstanding thereunder; and provided further that in
the absence of written instructions from all
Certificateholders of any Series (or the proxy
therefor), the Pass Through Trustee shall not waive
any Event of Default (i) consisting of the failure to
pay any principal of, or premium (if any), or interest
on, or other amounts due under, any Equipment Trust
Certificate held by the related Pass Through Trust and
the consequent failure to distribute any related
Scheduled Payment or Special Payment pursuant to
Article V on or after the respective due date therefor
set forth in the related Series Supplement or (ii) in
respect of a covenant or provision under any Pass
Through Trust that, under Article XI hereof or the
related Series Supplement, cannot be modified or
amended without the consent of each Certificateholder
of the related Series (or the proxy therefor).
SECTION 7.11. Notice of Pass Through
Defaults. The Pass Through Trustee shall, in the
manner and to the extent required by Section 313(c) of
the Trust Indenture Act, notify the Certificateholders
of any Series of all Pass Through Defaults under the
related Pass Through Trust actually known to a
Responsible Officer of the Pass Through Trustee,
unless such Pass Through Defaults have been cured
before the giving of such notice; provided that under
no circumstances shall the Pass Through Trustee give
such notice until the earlier of the time at which
such Pass Through Default becomes an Event of Default
or the expiration of a period of 60 days from the
occurrence of such Pass Through Default; and provided
further that, except in the case of the failure to pay
any principal of or interest on or any other amount
due under any of the Equipment Trust Certificates held
by any Pass Through Trust and the consequent failure
to distribute any related Scheduled Payment or Special
Payment pursuant to Article V on or after the
respective due date therefor set forth in the related
Series Supplement, the Pass Through Trustee shall be
protected in withholding such notice if and so long as
the board of directors, the executive committee, or a
trust committee of directors or trustees or
Responsible Officers of the Pass Through Trustee in
good faith determines that the withholding of such
notice is in the interests of the Certificateholders
of the related Series.
ARTICLE VIII
CONCERNING THE PASS THROUGH TRUSTEE
SECTION 8.01. Acceptance by Pass Through
Trustee. The Pass Through Trustee, upon the execution
and delivery of a Series Supplement creating a Pass
Through Trust and providing for the issuance of a
Series of Pass Through Certificates, shall acknowledge
its acceptance of all right, title and interest in and
to the Equipment Trust Certificates to be acquired as
Trust Property of such Pass Through Trust pursuant to
the applicable Participation Agreements and Section
2.02, and shall declare that the Pass Through Trustee
holds and will hold such right, title, and interest,
together with all other property constituting the
Trust Property of such Pass Through Trust, for the
benefit of all then present and future
Certificateholders of such Series, upon the trusts set
forth in such Pass Through Trust.
SECTION 8.02. Pass Through Trustee's Liens.
The Pass Through Trustee agrees that it will, in its
individual capacity and at its own cost and expense
(but without any right of indemnity in respect of any
such cost or expense under Article IX hereof) promptly
take such action as may be necessary to duly discharge
all Liens on any part of the Trust Property of any
Pass Through Trust that result from claims against it
in its individual capacity not related to the
administration of such Trust Property or any other
transaction pursuant to this Pass Through Agreement or
the related Series Supplement.
SECTION 8.03. Certain Rights of the Pass
Through Trustee. Subject to Section 315 of the Trust
Indenture Act:
(a) the Pass Through Trustee may rely and
shall be protected in acting or refraining from
acting upon any resolution, Officers' Certificate
or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order,
bond, debenture, note, coupon, security or other
paper or document believed by it to be genuine
and to have been signed or presented by the
proper party or parties;
(b) any request of any Related Indenture
Trustee or Related Owner Trustee in connection
with any Pass Through Trust shall be sufficiently
evidenced by an Officers' Certificate (unless
other evidence in respect thereof is specifically
prescribed herein) upon which the Pass Through
Trustee may rely to prove or establish a matter
set forth therein;
(c) the Pass Through Trustee may consult
with counsel and any advice or Opinion of Counsel
shall be full and complete authorization and
protection in respect of any action taken,
suffered or omitted to be taken by it hereunder
in good faith and in accordance with such advice
or Opinion of Counsel;
(d) the Pass Through Trustee shall not be
obligated to exercise any of the trusts or powers
vested in it under any Pass Through Trust at the
request, order or direction of the
Certificateholders of the related Series in
accordance with the provisions thereof, unless
such Certificateholders have offered to the Pass
Through Trustee reasonable security or indemnity
against the costs, expenses and liabilities which
might be incurred therein or thereby;
(e) the Pass Through Trustee shall not be
liable for any action taken or omitted by it in
good faith and believed by it to be authorized or
within the discretion, rights or powers conferred
upon it under any Pass Through Trust;
(f) prior to the occurrence of an Event of
Default under any Pass Through Trust and after
the curing or waiving of all Events of Default
thereunder, the Pass Through Trustee shall not be
bound to make any investigation into the facts or
matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice,
request, consent, order, approval, appraisal,
bond, debenture, note, coupon, security, or other
paper or document unless requested in writing to
do so by the Majority in Interest of
Certificateholders of the related Series;
provided that if the payment within a reasonable
time to the Pass Through Trustee of the costs,
expenses or liabilities likely to be incurred by
it in the making of such investigation is, in the
opinion of the Pass Through Trustee, not
reasonably assured to the Pass Through Trustee by
the security afforded to it by the terms of such
Pass Through Trust, the Pass Through Trustee may
require reasonable indemnity against such
expenses or liabilities as a condition to
proceeding; the reasonable expenses of every such
examination shall be paid by the Company or, if
paid by the Pass Through Trustee or any
predecessor trustee, shall be repaid by the
Company upon demand;
(g) the Pass Through Trustee may execute any
of the trusts or powers under any Pass Through
Trust or perform any duties thereunder either
directly or by or through agents or attorneys not
regularly in its employ and the Pass Through
Trustee shall not be responsible for any
misconduct or negligence on the part of any such
agent or attorney appointed by it with due care;
and
(h) the Pass Through Trustee shall not be
required to expend or risk its own funds or
otherwise incur personal financial liability in
the performance of any of its duties or in the
exercise of any of its rights or powers under any
Pass Through Trust, if the Pass Through Trustee
has determined in good faith that the repayment
of such funds or adequate indemnity against such
liability is not reasonably assured to it.
SECTION 8.04. Pass Through Trustee Not
Responsible for Recitals. The Pass Through Trustee
assumes no responsibility for the correctness of the
recitals contained herein or in any Pass Through
Certificates, except for the execution and
authentication of such Pass Through Certificates by
the Pass Through Trustee in accordance with Section
2.05 and 2.06, respectively.
SECTION 8.05. Pass Through Trustee and
Agents May Hold Pass Through Certificates;
Collections. The Pass Through Trustee and any agent
of the Pass Through Trustee, in its individual or any
other capacity, may become the owner or pledgee of
Pass Through Certificates with the same rights it
would have if it were not the Pass Through Trustee or
such agent and, subject to the applicable provisions
of the Trust Indenture Act, may otherwise deal with
the Company, any Related Indenture Trustee or Related
Owner Trustee and receive, collect, hold and retain
collections therefrom with the same rights it would
have if it were not the Pass Through Trustee or such
agent.
SECTION 8.06. Moneys Held by Pass Through
Trustee. Subject to Sections 5.04 and 12.04 hereof,
all moneys received by the Pass Through Trustee shall,
until used or applied as provided herein, 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, neither the Pass Through
Trustee nor any agent thereof shall be under any
liability for interest on any moneys received by it
hereunder.
SECTION 8.07. Right of Pass Through Trustee
to Rely on Officers' Certificate. Subject to Section
8.03, whenever in the administration of any Pass
Through Trust the Pass Through Trustee shall deem it
necessary or desirable that a matter be proved or
established prior to taking or suffering or omitting
any action thereunder, such matter (unless other
evidence in respect thereof is specifically prescribed
herein) may, in the absence of bad faith on the part
of the Pass Through Trustee, be deemed to be
conclusively proved and established by an Officers'
Certificate delivered to the Pass Through Trustee by
the Company, any Related Indenture Trustee or any
Related Owner Trustee, as the case may be, and such
certificate, in the absence of bad faith on the part
of the Pass Through Trustee, shall be full warrant to
the Pass Through Trustee for any action taken,
suffered or omitted by it under the provisions of this
Pass Through Agreement upon the faith thereof.
SECTION 8.08. Compensation. The Company
covenants and agrees to pay, and the Pass Through
Trustee shall be entitled to receive, reasonable
compensation and payment or reimbursement for its
reasonable advances, expenses and disbursements
(including the reasonable compensation and expenses
and disbursements of its counsel, agents and other
persons not regularly in its employ) in connection
with its services rendered hereunder or in any way
relating to or arising out of the administration of
any Pass Through Trust or the related Trust Property,
except any such advance, expense or disbursement
attributable to the Pass Through Trustee's negligence,
willful misconduct or bad faith or incurred as a
result of the breach of its representation and
covenant set forth in Section 8.02, and shall have a
priority claim on such Trust Property for the payment
of such compensation, advances, expenses and
disbursements to the extent that such compensation,
advances, expenses and disbursements shall not be paid
by the Company.
In addition, the Pass Through Trustee shall
be entitled to reimbursement from, and shall have a
priority claim on, all property and funds held or
collected by the Pass Through Trustee with respect to
any Series or the related Pass Through Trust in its
capacity as Pass Through Trustee for any tax incurred
without negligence, bad faith or willful misconduct on
its part, arising out of or in connection with the
acceptance or administration of such Pass Through
Trust (other than any tax attributable to the Pass
Through Trustee's compensation for serving as such),
including any costs and expenses incurred in
contesting the imposition of any such tax. If the
Pass Through Trustee reimburses itself from the Trust
Property of such Pass Through Trust for any such tax
it shall within 30 days mail a brief report setting
forth the circumstances thereof to all
Certificateholders of the related Series as their
names and addresses appear in the related Register.
ARTICLE IX
INDEMNIFICATION OF
PASS THROUGH TRUSTEE BY THE COMPANY
The Company hereby agrees, whether or not any
of the transactions contemplated hereby shall be
consummated, to assume liability for, and does hereby
indemnify, protect, save and keep harmless the Pass
Through Trustee, in its individual capacity, and its
successors, assigns, agents and servants, with respect
to the claims of the Pass Through Trustee for payment
or reimbursement under Section 8.08 and from and
against any and all liabilities, obligations, losses,
damages, penalties, taxes (excluding any taxes payable
by the Pass Through Trustee on or measured by any
compensation received by the Pass Through Trustee for
its services under this Pass Through Agreement,
claims, actions, suits, costs, expenses or
disbursements (including legal fees and expenses) of
any kind and nature whatsoever which may be imposed
on, incurred by or asserted against the Pass Through
Trustee in its individual capacity (whether or not
also agreed to be indemnified against by any other
Person under any other document) in any way relating
to or arising out of this Pass Through Agreement, or
any Series Supplement or the enforcement of any of the
terms of any thereof, or in any way relating to or
arising out of the administration of any Pass Through
Trust or the related Trust Property or the action or
inaction of the Pass Through Trustee hereunder, except
only (i) in the case of negligence, willful misconduct
or bad faith of the Pass Through Trustee in the
performance of its duties hereunder or under any
Series Supplement, (ii) as may result from the
inaccuracy of any representation or warranty of the
Pass Through Trustee herein or in any Participation
Agreement or (iii) as otherwise provided in Section
8.02 hereof. The Pass Through Trustee in its
individual capacity shall be entitled to
indemnification, from the related Trust Property, for
any liability, obligation, loss, damage, penalty,
claim, action, suit, cost, expense or disbursement
indemnified against pursuant to this Article IX to the
extent not reimbursed by the Company or others, but
without releasing any of them from their respective
agreements of reimbursement; and to secure the same,
the Pass Through Trustee shall have a prior Lien on
such Trust Property. The indemnities contained in
this Article IX shall survive the termination of this
Pass Through Agreement or any Pass Through Trust and
the resignation or removal of the Pass Through Trustee
hereunder or thereunder.
ARTICLE X
SUCCESSOR TRUSTEES
SECTION 10.01. Resignation and Removal of
Pass Through Trustee; Appointment of Successor. (a)
The Pass Through Trustee may resign at any time as
trustee of any Pass Through Trust without cause by
giving at least 30 days prior written notice to the
Company, the Related Indenture Trustees and the
Related Owner Trustees, such resignation to be
effective upon the acceptance of the trusteeship by a
successor Pass Through Trustee. In addition, a
Majority in Interest of Certificateholders of any
Series may at any time remove the related Pass Through
Trustee without cause by an instrument in writing
delivered to the Company, the Related Owner Trustees,
the Related Indenture Trustees and the Pass Through
Trustee, and the Pass Through Trustee shall promptly
notify each Certificateholder of such Series of such
removal in writing, such removal to be effective upon
the acceptance of the trusteeship by a successor Pass
Through Trustee. In the case of the resignation or
removal of the Pass Through Trustee, a Majority in
Interest of Certificateholders of the related Series
may appoint a successor Pass Through Trustee by an
instrument signed by such Certificateholders. If a
successor Pass Through Trustee shall not have been
appointed within 90 days after such notice of
resignation or removal, the Pass Through Trustee, the
Company or any Certificateholder of the related Series
may apply to any court of competent jurisdiction to
appoint a successor Pass Through Trustee to act until
such time, if any, as a successor shall have been
appointed as provided above. The successor Pass
Through Trustee so appointed by such court shall
immediately and without further act be superseded by
any successor Pass Through Trustee appointed as
provided above within one year from the date of the
appointment by such court.
(b) If at any time any of the following
occurs with respect to any Pass Through Trust:
(i) the Pass Through Trustee fails to comply
with the requirements of Section 310 of the Trust
Indenture Act after written request for such
compliance by any Certificateholder of the
related Series who has been a bona fide
Certificateholder of such Series for at least six
months; or
(ii) the Pass Through Trustee ceases to be
eligible in accordance with the provisions of
Section 10.02 to act as trustee for such Pass
Through Trust and fails to resign after written
request for such resignation by the Company or by
any such bona fide Certificateholder; or
(iii) the Pass Through Trustee becomes
incapable of acting, or shall be adjudged a
bankrupt or insolvent, or a receiver or
liquidator of the Pass Through Trustee or of its
property shall be appointed, or any public
officer takes charge or control of the Pass
Through Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or
liquidation;
then the Company may remove the Pass Through Trustee
and appoint a successor trustee by written instrument,
in duplicate, executed by a Responsible Officer of the
Company, one copy of which instrument shall be
delivered to the Pass Through Trustee so removed and
one copy to the successor trustee, or, subject to the
provisions of Section 315(e) of the Trust Indenture
Act, any Certificateholder of the related Series who
has been a bona fide Certificateholder of such Series
for at least six months may, on behalf of himself and
all others similarly situated, petition any court of
competent jurisdiction for the removal of the Pass
Through Trustee and the appointment of a successor
trustee. Such court may thereupon, after such notice,
if any, as it may deem proper and prescribe, remove
the Pass Through Trustee and appoint a successor
trustee, which removal and appointment shall become
effective upon acceptance of appointment by the
successor trustee as provided in Section 10.03. The
successor Pass Through Trustee so appointed by such
court shall immediately and without further act be
superseded by any successor Pass Through Trustee
appointed by the Certificateholders of the related
Series as provided in subsection (a) above within one
year from the date of appointment by such court.
SECTION 10.02. Persons Eligible for
Appointment as Pass Through Trustee. Each Pass
Through Trust shall at all times have a Pass Through
Trustee which shall be a Person eligible to act as
trustee under Section 310(a) of the Trust Indenture
Act and shall be a corporation organized and doing
business under the laws of the United States of
America or of any State or the District of Columbia
having a combined capital and surplus of at least
$100,000,000, or a direct or indirect subsidiary of
such a corporation, or a member of a bank holding
company group, having a combined capital and surplus
of at least $100,000,000 and such subsidiary or member
itself having a capital and surplus of at least
$10,000,000, which corporate trustee shall be a
citizen of the United States as defined in Section
101(16) of the Federal Aviation Act of 1958, as
amended, and which is authorized under such laws to
exercise corporate trust powers and is subject to
supervision of examination by Federal, State or
District of Columbia authority. If such corporation
publishes reports of condition at least annually,
pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for
the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most
recent report of condition so published. If at any
time the Pass Through Trustee ceases to be eligible in
accordance with the provisions of this Section to act
as trustee for any Pass Through Trust, the Pass
Through Trustee shall resign immediately as Pass
Through Trustee for such Pass Through Trust in the
manner and with the effect specified in Section 10.01.
SECTION 10.03. Acceptance of Appointment by
Successor Trustee. Any successor trustee appointed as
provided in Section 10.01 for any Pass Through Trust
shall execute and deliver to the Company and to its
predecessor trustee an instrument accepting such
appointment with respect to such Pass Through Trust,
and thereupon the resignation or removal of the
predecessor trustee shall become effective and such
successor trustee, without any further act, deed or
conveyance, shall become vested with all rights,
powers, duties and obligations of its predecessor with
respect to such Pass Through Trust, as if such
successor trustee was originally named as trustee of
such Pass Through Trust. Notwithstanding the
foregoing, on the written request of the Company or
the successor trustee, the trustee ceasing to act
shall, upon payment of its charges then unpaid and
subject to Section 12.04, pay over to the successor
trustee all moneys at the time held by it with respect
to such Pass Through Trust and shall execute and
deliver an instrument transferring to such successor
trustee all such rights, powers, duties and
obligations. Upon request of any such successor
trustee, the Company shall execute any and all
instruments in writing for more fully and certainly
vesting in and confirming to such successor trustee
all such rights and powers. Any trustee ceasing to
act shall, nevertheless, retain a prior claim upon all
property or funds held or collected by such trustee
with respect to such Pass Through Trust to secure any
amounts then due it pursuant to the provisions of
Article IX.
If a successor trustee is appointed with
respect to all the Pass Through Trusts created
pursuant to this Pass Through Agreement, a supplement
to this Pass Through Agreement executed and delivered
by the Company, the predecessor trustee and the
successor trustee shall be sufficient with respect to
each such Pass Through Trust to effect the removal of
the predecessor trustee and to vest the successor
trustee all rights, powers, duties and obligations of
its predecessor under each such Pass Through Trust, as
if such successor trustee was originally named as Pass
Through Trustee hereunder and thereunder.
No successor trustee shall accept appointment
as provided in this Section unless at the time of such
acceptance such successor trustee shall be eligible
under the provisions of Section 10.02 to act as
trustee of the relevant Pass Through Trust.
Upon acceptance of appointment by a successor
trustee as provided in this Section, the successor
trustee shall notify the Certificateholders of the
related Series of such appointment by first-class mail
at their last addresses as they shall appear in the
Register, and shall mail a copy of such notice to the
Company, the Related Indenture Trustees and the
Related Owner Trustees, if any. If the acceptance of
appointment is substantially contemporaneous with the
resignation, then the notice called for by the
preceding sentence may be combined with the notice
called for by Section 10.01.
SECTION 10.04. Merger, Conversion,
Consolidation or Succession to Business of Pass
Through Trustee. Any corporation into which the Pass
Through 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 Pass Through Trustee is a party, or any
corporation succeeding to the corporate trust business
of the Pass Through Trustee, shall be the successor to
the Pass Through Trustee hereunder, provided that,
anything herein to the contrary notwithstanding, such
corporation shall be eligible under the provisions of
Section 10.02 to act as trustee hereunder, without the
execution or filing of any paper or any further act on
the part of any of the parties hereto.
If, with respect to any Pass Through Trusts
at the time of such succession to the Pass Through
Trustee, any of the Pass Through Certificates of the
related Series have been authenticated but not
delivered, such successor may adopt the certificate of
authentication of any such predecessor Pass Through
Trustee and deliver such Pass Through Certificates so
authenticated; and, if at that time any of such Pass
Through Certificates have not been authenticated, such
successor may authenticate such Pass Through
Certificates either in the name of any of its
predecessor or in its own name as the successor Pass
Through Trustee; and in all such cases such
certificate of authentication shall have the full
force of the certificate of authentication of the Pass
Through Trustee set forth in Section 2.01; provided
that the right to adopt the certificate of
authentication of any predecessor Pass Through Trustee
or to authenticate Pass Through Certificates in the
name of any predecessor Pass Through Trustee shall
apply only to its successor or successors by merger,
conversion or consolidation.
SECTION 10.05. Appointment of Separate Pass
Through Trustees. (a) At any time or times, for the
purpose of meeting any legal requirements of any
jurisdiction in which any part of the Trust Property
of any Pass Through Trust may at the time be located
or in which any action of the Pass Through Trustee may
be required to be performed or taken, the Pass Through
Trustee, by an instrument in writing signed by it, may
appoint one or more individuals or corporations to act
as separate trustee or separate trustees or
co-trustee, acting jointly with the Pass Through
Trustee, of all or any part of such Trust Property, to
the full extent that local law makes it necessary for
such separate trustee or separate trustees or
co-trustee, acting jointly with the Pass Through
Trustee, to act.
(b) The Pass Through Trustee and, at the
request of the Pass Through 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 such
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,
she or they shall be vested with such title to such
Trust Property or any part thereof, and with such
rights, powers, duties and obligations, as shall be
specified in the instrument of appointment, and such
rights, powers, duties and obligations shall be
conferred or imposed upon and exercised or performed
by the Pass Through Trustee, or the Pass Through
Trustee and such separate trustee or separate trustees
or co-trustee jointly with the Pass Through Trustee
subject to all the terms of this Pass Through
Agreement, except to the extent that under any law of
any jurisdiction in which any particular act or acts
are to be performed the Pass Through Trustee shall be
incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and
obligations shall be exercised and performed by such
separate trustee or separate trustees or co-trustee,
as the case may be. Any separate trustee or separate
trustees or co-trustee may, at any time by an
instrument in writing, constitute the Pass Through
Trustee its, her 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, her or
his behalf and in its, her 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 any Trust Property and all assets, property,
rights, powers, duties and obligations of such
separate trustee or co-trustee shall, so far as
permitted by law, vest in and be exercised by the Pass
Through Trustee, without the appointment of a
successor to such separate trustee or co-trustee
unless and until a successor is appointed.
(c) All provisions of this Pass Through
Agreement which are for the benefit of the Pass
Through Trustee (including without limitation Article
IX hereof) shall extend to and apply to each separate
trustee or co-trustee appointed pursuant to the
foregoing provisions of this Section 10.06.
(d) For any Pass Through Trust, every
additional trustee and separate trustee hereunder
shall, to the extent permitted by law, be appointed
and act and the Pass Through Trustee shall act,
subject to the following provisions and conditions:
(i) all powers, duties, obligations and
rights conferred upon the Pass Through Trustee in
respect of the receipt, custody, investment and
payment of moneys shall be exercised solely by
the Pass Through Trustee;
(ii) all other rights, powers, duties and
obligations conferred or imposed upon the Pass
Through Trustee shall be conferred or imposed and
exercised or performed by the Pass Through
Trustee and such additional trustee or trustees
and separate trustee or trustees jointly except
to the extent that under any law of any
jurisdiction in which any particular act or acts
are to be performed, the Pass Through 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 Trust Property in any
such jurisdiction) shall be exercised and
performed by such additional trustee or trustees
or separate trustee or trustees;
(iii) no power hereby given to, or
exercisable 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
Pass Through Trustee; and
(iv) no trustee hereunder shall be
personally liable by reason of any act or
omission of any other trustee hereunder.
If at any time the Pass Through Trustee shall deem it
no longer necessary or prudent in order to conform to
any such law, the Pass Through Trustee shall execute
and deliver all instruments and agreements necessary
or proper to remove any additional trustee or separate
trustee.
(e) Any request, approval or consent in
writing by the Pass Through Trustee to any additional
trustee or separate trustee shall be sufficient
warrant to such additional trustee or separate
trustee, as the case may be, to take such action as
may be so requested, approved or consented to.
(f) Notwithstanding any other provision of
this Section 10.06, the powers of any additional
trustee or separate trustee shall not exceed those of
the Pass Through Trustee hereunder.
ARTICLE XI
SUPPLEMENTS AND AMENDMENTS TO THIS
PASS THROUGH AGREEMENT AND OTHER DOCUMENTS
SECTION 11.01. Supplemental Agreements
Without Consent of Certificateholders. The Company
and the Pass Through Trustee may enter into an
agreement or agreements supplemental hereto for one or
more of the following purposes:
(a) to provide for the formation of any Pass
Through Trust, the issuance of the related Series
and the other matters contemplated by Section
2.01(b);
(b) to evidence the succession of another
corporation to the Company, or successive
successions, and the assumption by the successor
corporation of the covenants, agreements and
obligations of the Company herein and in each
Series Supplement;
(c) to add to the covenants of the Company
such further covenants, restrictions, conditions
or provisions as the Pass Through Trustee shall
consider to be for the protection of the
Certificateholders of any Series;
(d) to surrender any right or power
conferred upon the Company herein or in any
Series Supplement;
(e) to cure any ambiguity or to correct or
supplement any provision contained herein or in
any Series Supplement that may be defective or
inconsistent with any other provision contained
herein or in such Series Supplement; or to make
such other provisions in regard to matters or
questions arising under this Pass Through
Agreement or under any Series Supplement as the
Company may deem necessary or desirable and that
will not adversely affect the interests of the
related Certificateholders;
(f) to correct or amplify the description of
any property at any time that constitutes Trust
Property or better to assure, convey and confirm
unto the Pass Through Trustee any such property
to be included in any such Trust Property;
(g) to evidence and provide for the
acceptance and appointment hereunder or under one
or more Pass Through Trusts of a successor
trustee and to add to or change any of the
provisions hereof as may be necessary to provide
for or facilitate the administration of one or
more Pass Through Trusts by more than one
trustee, pursuant to the requirements of Section
10.03;
(h) to modify, eliminate or add to the
provisions of this Pass Through Agreement or any
Series Supplement to the extent necessary to
continue the qualification of this Pass Through
Agreement or such Series Supplement (including
any supplemental agreement) under the Trust
Indenture Act, or under any similar Federal
statute enacted after the date hereof, and to add
to this Pass Through Agreement or any Series
Supplement such other provisions as may be
expressly permitted by the Trust Indenture Act,
excluding, however, the provisions referred to in
Section 316(a)(2) of the Trust Indenture Act as
in effect on the date hereof or any corresponding
provision in any similar Federal statute enacted
after the date hereof;
(i) to make any other amendments or
modifications to this Pass Through Agreement,
provided such amendments or modifications shall
only apply to one or more Series to be issued
after the date of such amendment or modification;
or
(j) to add, eliminate or change any
provision hereunder so long as such action shall
not adversely affect the interests of the
Certificateholders of any Series;
provided that no such supplemental agreement shall
cause any Pass Through Trust to become taxable as an
association within the meaning of Treasury Regulation
Section 301.7701-4.
The Pass Through Trustee is hereby authorized
to join in the execution of any such supplemental
agreement, to make any further appropriate agreements
and stipulations that may be contained therein and to
accept the conveyance, transfer, assignment, mortgage
or pledge of any property thereunder, but the Pass
Through Trustee shall not be obligated to enter into
any such supplemental agreement that adversely affects
the Pass Through Trustee's own rights, duties or
immunities under this Pass Through Agreement, any
Series Supplement or otherwise, whether in its
official or individual capacity.
Any supplemental agreement contemplated by
this Section may be executed without the consent of
the Certificateholders of the Outstanding Pass Through
Certificates of any Series, notwithstanding any of the
provisions of Section 11.02.
SECTION 11.02. Supplemental Agreements With
Consent of Certificateholders. With the consent
(evidenced as provided in Article VI) of the Majority
in Interest of Certificateholders of any Series, the
Company and the Pass Through Trustee may, from time to
time and at any time, enter into an agreement or
agreements supplemental hereto for the purpose of
adding any provisions to or changing in any manner or
eliminating any of the provisions of this Pass Through
Agreement or of the related Series Supplement or of
modifying in any manner the rights of the related
Certificateholders; provided, that no such
supplemental agreement shall cause any Pass Through
Trust to become taxable as an association within the
meaning of Treasury Regulation Section 301.7701-4; and
provided further that, without the consent of each
Certificateholder of such Series (or the proxy
therefor), no such amendment of or supplement to this
Pass Through Agreement or such related Series
Supplement, or modification of the terms of, or
consent under, any thereof, shall (aa) modify any of
the provisions of Section 7.10 or this Section 11.02,
(bb) reduce the amount or extend the time of payment
of any amount owing or payable on the related
Equipment Trust Certificates or distributions to be
made on any related Pass Through Certificate pursuant
to Article V, or alter the currency in which any
amount payable under any such Pass Through Certificate
is to be paid, or impair the right of any related Pass
Through Certificateholder to commence legal
proceedings to enforce a right to receive payment
hereunder, (cc) reduce, modify or amend any
indemnities in favor of any Certificateholder (except
as consented to by each such Certificateholder
adversely affected thereby (or the proxy therefor)),
or (dd) create or permit the creation of any Lien on
the related Trust Property or any part thereof, or
deprive any related Certificateholder of the benefit
of the related Pass Through Trust with respect to the
related Trust Property, whether by disposition of such
Trust Property or otherwise, except as provided in
Section 7.02 or in connection with the exercise of
remedies under Article VII.
Upon the request of the Company and upon the
filing with the Pass Through Trustee of evidence of
the consent of the applicable Certificateholders
required under this Section and other documents, if
any, required by Section 6.01, the Pass Through
Trustee shall join with the Company in the execution
of such supplemental agreement unless such
supplemental agreement affects the Pass Through
Trustee's own rights, duties or immunities under this
Pass Through Agreement or the related Series
Supplement or otherwise, in which case the Pass
Through Trustee may in its discretion, but shall not
be obligated to, enter into such supplemental
agreement.
It shall not be necessary for the consent of
the Certificateholders of any Series under this
Section to approve the particular form of any proposed
supplemental agreement, but it shall be sufficient if
such consent shall approve the substance thereof.
Promptly after the execution by the Company
and the Pass Through Trustee of any supplemental
agreement relating to any Pass Through Trust pursuant
to the provisions of this Section, the Pass Through
Trustee shall mail a notice thereof by first-class
mail to the related Certificateholders at their
addresses as they shall appear on the related
Register, setting forth in general terms the substance
of such supplemental agreement. Any failure of the
Pass Through Trustee to mail such notice, or any
defect therein, shall not, however, in any way impair
or affect the validity of any such supplemental
agreement.
SECTION 11.03. Effect of Supplemental
Agreements. Upon the execution of any supplemental
agreement pursuant to the provisions hereof and of any
applicable Series Supplement, this Pass Through
Agreement and such Series Supplement shall be and be
deemed to be modified and amended in accordance
therewith and the respective rights, limitations of
rights, obligations, duties and immunities hereunder
and under the related Pass Through Trust of the Pass
Through Trustee, the Company and the related
Certificateholders shall thereafter be determined,
exercised and enforced hereunder and thereunder
subject in all respects to such modifications and
amendments, and all the terms and conditions of any
such supplemental agreement shall be and be deemed to
be part of the terms and conditions of this Pass
Through Agreement and such Pass Through Trust for any
and all purposes.
SECTION 11.04. Documents to Be Given to
Trustee. The Pass Through Trustee, subject to the
provisions of Sections 8.02 and 8.03, may receive an
Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any such supplemental
agreement complies with the applicable provisions of
this Pass Through Agreement and any applicable Series
Supplement.
SECTION 11.05. Notation on Pass Through
Certificates in Respect of Supplemental Agreements.
Pass Through Certificates of any Series authenticated
and delivered after the execution of any supplemental
agreement relating to such Series pursuant to the
provisions of this Article may bear a notation in form
approved by the Pass Through Trustee as to any matter
provided for by such supplemental agreement. If the
Company or the Pass Through Trustee shall so
determine, new Pass Through Certificates for such
Series so modified as to conform, in the opinion of
the Company and the Pass Through Trustee, to any
modification of this Pass Through Agreement contained
in any such supplemental agreement may be provided by
the Company, executed and authenticated by the Pass
Through Trustee and delivered in exchange for the
Outstanding Pass Through Certificates of such Series.
SECTION 11.06. Trust Indenture Act. Any
supplemental agreement executed pursuant to the terms
of this Article shall on the date of the execution
thereof conform to the provisions of the Trust
Indenture Act as in force on such date.
SECTION 11.07. Revocation and Effect of
Consents. Until an amendment or waiver becomes
effective, a consent to it by a Certificateholder is a
continuing consent by such Certificateholder and every
subsequent Certificateholder of the related Pass
Through Certificate, even if notation of the consent
is not made on such Pass Through Certificate.
However, any such Certificateholder or subsequent
Certificateholder may revoke the consent as to his
Pass Through Certificate if the Pass Through Trustee
receives the notice of revocation before the date the
amendment or waiver becomes effective. After an
amendment or waiver becomes effective, it shall bind
every Certificateholder affected by such amendment or
waiver.
SECTION 11.08. Amendments, Waivers, etc., of
Related Indenture Documents. If the Pass Through
Trustee, as holder of any Equipment Trust Certificate
in trust for the benefit of the Certificateholders of
any Series, receives a request for a consent to any
modification, amendment or supplement to any related
Indenture or other related Indenture Document or to
give any consent, waiver, authorization or approval
under such related Indenture or such other related
Indenture Documents, the Pass Through Trustee shall
forthwith notify each Certificateholder of such
Series, as shown on the related Register as of such
date, of such request. Such notice shall request
instructions from such Certificateholders with respect
to such request. Subject to Section 7.10, the Pass
Through Trustee shall, as the holder of such Equipment
Trust Certificate, consent or vote with respect
thereto in the same proportion as so instructed by the
respective Certificateholders of the related Pass
Through Certificates. Notwithstanding the foregoing,
but subject to Section 7.09, if an Event of Default
shall have occurred and be continuing, the Pass
Through Trustee may, in its own discretion and at its
own direction, consent and notify the Related
Indenture Trustee of such consent to any modification,
amendment, supplement or waiver under any related
Indenture Document.
ARTICLE XII
TERMINATION OF PASS THROUGH TRUSTS;
UNCLAIMED MONEYS
SECTION 12.01. Termination of Pass Through
Trusts. For any Pass Through Trust, such Pass Through
Trust and the respective obligations and responsibilities
of the Company and the Pass Through Trustee under such
Pass Through Trust shall terminate upon the distribution
to all Certificateholders of the related Series and the Pass
Through Trustee of all amounts required to be distributed
to them pursuant to this Pass Through Agreement and the
related Series Supplement and the disposition of all
property held as part of the Trust Property of such Pass
Through Trust; provided that in no event shall such Pass
Through Trust continue beyond the final expiration
date determined as provided in such Series Supplement.
Notice of termination of any Pass Through
Trust, specifying the applicable Distribution Date
upon which the Certificateholders of the related
Series may surrender their Pass Through Certificates
to the Pass Through Trustee for payment of the final
distribution and cancellation thereof, shall be mailed
promptly by the Pass Through Trustee to such
Certificateholders not earlier than the 60th day and
not later than the 20th day next preceding such final
distribution specifying (i) the Distribution Date upon
which such final distribution will be made and that
such distribution will be made only upon presentation
and surrender of the related Pass Through Certificates
at the office or agency of the Pass Through Trustee
specified therein, (ii) the amount of any such final
distribution, and (iii) that the Record Date otherwise
applicable to such Distribution Date is not applicable.
The Pass Through Trustee shall notify the related
Registrar at the time such Certificateholders are
notified of such final distribution. Upon presentation
and surrender of the Pass Through Certificates of such
Series, the Pass Through Trustee shall distribute all
amounts distributable on such Pass Through Certificates
on such Distribution Date pursuant to Section 5.02.
SECTION 12.02. Application by Pass Through
Trustee of Funds Deposited for Payment of Pass Through
Certificates. Subject to Section 12.04, all moneys
deposited with the Pass Through Trustee for payment
pursuant to Section 12.01 shall be held in trust and
applied by it to the prompt payment, either directly
or through any Paying Agent, to the Certificateholders
of the particular Pass Through Certificates for the
payment or redemption of which such moneys have been
deposited with the Pass Through Trustee, of all sums
due and to become due thereon; but such money need not
be segregated from other funds except to the extent
required by law.
In the event that all of the
Certificateholders of such Series shall not surrender
their Certificates for cancellation within six months
after the date specified in the above-mentioned
written notice, the Pass Through Trustee shall give a
second written notice to the remaining
Certificateholders of such Series to surrender their
Certificates for cancellation and to receive the final
distribution with respect thereto.
SECTION 12.03. Repayment of Moneys Held by
Paying Agent. In connection with the satisfaction and
discharge of any Pass Through Trust, all moneys then
held by any Paying Agent for such Pass Through Trust
shall, upon demand of the Pass Through Trustee, be
repaid to it and thereupon such Paying Agent shall be
released from all further liability with respect to
such moneys.
SECTION 12.04. Transfer of Moneys Held by
Pass Through Trustee and Paying Agent Unclaimed for
Two Years and Eleven Months. Any moneys deposited
with or paid to the Pass Through Trustee or any Paying
Agent to be distributed on any Pass Through
Certificate and not applied but remaining unclaimed
for two years and eleven months after the date upon
which such amount has become due and payable, shall,
unless otherwise required by mandatory provisions of
applicable escheat or abandoned or unclaimed property
law, be paid to the applicable Related Indenture
Trustees by the Pass Through Trustee or such Paying
Agent and the applicable Certificateholder shall,
unless otherwise required by mandatory provisions of
applicable escheat or abandoned or unclaimed property
laws, thereafter look only to such Related Indenture
Trustees for any payment which such Certificateholder
may be entitled to collect, and all liability of the
Pass Through Trustee, or any Paying Agent with respect
to such moneys shall thereupon cease.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01. Capacity in Which Acting.
The Pass Through Trustee acts hereunder and under any
Pass Through Trust not in its individual capacity but
solely as trustee except as expressly provided herein
or in the related Series Supplement.
SECTION 13.02. No Legal Title to Trust
Property in Certificateholders. No Certificateholder
of any Series shall have legal title to any part of
the Trust Property of the related Pass Through Trust.
No transfer, by operation of law or otherwise, of any
Pass Through Certificate or other right, title and
interest of any Certificateholder in and to such Trust
Property or under the related Pass Through Trust shall
operate to terminate such Pass Through Trust or
entitle such Certificateholder or any successor or
transferee of such Certificateholder to an accounting
or to the transfer to it of legal title to any part of
such Trust Property.
SECTION 13.03. Certificates Nonassessable
and Fully Paid. No Certificateholder of any Series
shall be personally liable for obligations of the
related Pass Through Trust, the Fractional Undivided
Interests represented by the Pass Through Certificates
of such Series shall be nonassessable for any losses
or expenses of such Pass Through Trust or for any
reason whatsoever, and upon authentication of such
Pass Through Certificates by the Pass Through Trustee
pursuant to Section 3.02, such Pass Through
Certificates will be and shall be deemed fully paid.
No Certificateholder of such Series shall have any
right (except as expressly provided herein) to vote or
in any manner otherwise control the operation and
management of the related Trust Property, the related
Pass Through Trust, or the obligations of the parties
hereto, nor shall anything set forth herein, in the
related Series Supplement or in the related Pass
Through Certificates be construed so as to constitute
the Certificateholders of such Series from time to
time as partners or members of an association.
SECTION 13.04. Pass Through Agreement for
the Benefit of the Company, the Pass Through Trustee
and the Certificateholders. Nothing in this Pass
Through Agreement, in any Series Supplement or in any
Pass Through Certificate, whether express or implied,
shall be construed to give to any person other than
the Company, the Pass Through Trustee, as trustee and
in its individual capacity, and the Certificateholders
of the respective related Series any legal or
equitable right, remedy or claim under or in respect
of this Pass Through Agreement, any Pass Through Trust
or any such Pass Through Certificate.
SECTION 13.05. Limitation on Rights of
Certificateholders. The death or incapacity of any
Certificateholder of any Series shall not operate to
terminate the related Pass Through Trust, nor entitle
such Certificateholder's legal representatives or
heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition
or winding up of such Pass Through Trust, nor
otherwise affect the rights, obligations, and
liabilities of the parties hereto or any of them. No
Certificateholder of any Series shall be entitled to
revoke the related Pass Through Trust.
SECTION 13.06. Notices. Unless otherwise
expressly specified or permitted by the terms hereof,
all notices, requests, demands, authorizations,
directions, consents, waivers or documents provided or
permitted by this Pass Through Agreement to be made,
given, furnished or filed shall be in writing, mailed
by certified mail, postage prepaid, or by confirmed
telecopy, and (i) if to the Pass Through Trustee, at
its office at 1301 Gervis Street, 4th Floor, Columbia,
South Carolina 29201 (telecopier (803) 929-5922),
Attention: Corporate Trust Administration (with a copy
to NationsBank of Georgia, National Association, at
600 Peachtree Street, N.E., Suite 900, Atlanta,
Georgia 30308 (telecopier (404) 607-6534), Attention:
Corporate Trust Administration); or (ii) if to the
Company, addressed to it at its offices at 2005
Corporate Avenue, Memphis, Tennessee 38132, Attention:
Senior Vice President and Chief Financial Officer;
telecopier (901) 395-4758. Any party hereto may
change the address to which notices to such party will
be sent by giving notice of such change to the other
party to this Pass Through Agreement.
Where this Pass Through Agreement or any
Series Supplement provides for notice to
Certificateholders of any Series, such notice shall be
sufficiently given (unless otherwise expressly
provided herein) if in writing and mailed, first-class
postage prepaid, to each such Certificateholder
entitled thereto, at his last address as it appears in
the related Register. In any case where notice to
Certificateholders of any Series is given by mail,
neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular
Certificateholder shall affect the sufficiency of such
notice with respect to other Certificateholders of
such Series. Where this Pass Through Agreement or any
Series Supplement provides for notice in any manner,
such notice may be waived in writing by the person
entitled to receive such notice, either before or
after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by
Certificateholders shall be filed with the Pass
Through Trustee, but such filing shall not be a
condition precedent to the validity of any action
taken in reliance upon such waiver.
In case, by reason of the suspension of or
irregularities in regular mail service, it shall be
impracticable to mail notice to any Certificateholders
when such notice is required to be given pursuant to
any provision of this Pass Through Agreement or any
related Series Supplement, then any manner of giving
such notice as shall be satisfactory to the Pass
Through Trustee shall be deemed to be a sufficient
giving of such notice.
SECTION 13.07. Officers' Certificates and
Opinions of Counsel; Statements to Be Contained
Therein. Upon any application or demand by the
Company to the Pass Through Trustee to take any
action, the Company shall furnish to the Pass Through
Trustee (i) an Officers' Certificate stating that all
conditions precedent, if any, provided for in this
Pass Through Agreement and the applicable Series
Supplement relating to the proposed action have been
complied with and that the proposed action is in
conformity with the requirements of this Pass Through
Agreement and such Series Supplement, and (ii) an
Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have
been complied with, except that in the case of any
such application or demand as to which the furnishing
of such documents is specifically required by any
provision of this Pass Through Agreement or such
Series Supplement relating to such particular
application or demand, no additional certificate or
opinion need be furnished.
Each certificate or opinion required by this
Pass Through Agreement or any Series Supplement and
delivered to the Pass Through Trustee with respect to
compliance with a condition or covenant provided for
in this Pass Through Agreement or such Series
Supplement, except for the certificate required by
Section 4.03(d) shall include (a) a statement that the
person making such certificate or opinion has read
such covenant or condition, (b) a brief statement as
to the nature and scope of the examination or
investigation upon which the statements or opinions
contained in such certificate or opinion are based,
(c) a statement that, in the opinion of such person,
he has made such examination or investigation as is
necessary to enable him to express an informed opinion
as to whether or not such covenant or condition has
been complied with and (d) a statement as to whether
or not, in the opinion of such person, such condition
or covenant has been complied with.
Any certificate, statement or opinion of
counsel may be based, insofar as it relates to factual
matters information with respect to which is in the
possession of the Company, upon the certificate,
statement or opinion of or representations by an
officer or officers of the Company unless such counsel
knows that the certificate, statement or opinion or
representations with respect to the matters upon which
his certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are
erroneous.
Any certificate, statement or opinion of an
officer of the Company or of counsel thereto may be
based, insofar as it relates to accounting matters,
upon a certificate or opinion of or representations by
an accountant or firm of accountants employed by the
Company unless such officer or counsel, as the case
may be, knows that the certificate or opinion or
representations with respect to the accounting matters
upon which his certificate, statement or opinion may
be based as aforesaid are erroneous, or in the
exercise of reasonable care should know that the same
are erroneous.
Any certificate or opinion of any independent
firm of public accountants filed with the Pass Through
Trustee shall contain a statement that such firm is
independent.
SECTION 13.08. Conflict of Any Provision of
Pass Through Agreement with the Trust Indenture Act.
If and to the extent that any provision of this Pass
Through Agreement limits, qualifies or conflicts with
another provision included in this Pass Through
Agreement by operation of Sections 310 to 317,
inclusive, of the Trust Indenture Act (an
"incorporated provision"), such incorporated provision
shall control.
SECTION 13.09. Severability. Any provision
of this Pass Through Agreement or any Series
Supplement 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 hereof or thereof, and any such prohibition
or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in
any other jurisdiction.
SECTION 13.10. No Oral Modifications or
Continuing Waivers. No terms or provisions of this
Pass Through Agreement, any Series Supplement, or any
Pass Through Certificates may be changed, waived,
discharged or terminated orally, but only by an
instrument in writing signed by the party or other
person against whom enforcement of the change, waiver,
discharge or termination is sought; and any waiver of
the terms hereof or thereof shall be effective only in
the specific instance and for the specific purpose
given.
SECTION 13.11. Successors and Assigns. All
covenants and agreements contained herein shall be
binding upon, and inure to the benefit of, each of the
parties hereto and the successors and permitted
assigns of each, all as herein provided. Any request,
notice, direction, consent, waiver or other instrument
or action by any Certificateholder shall bind the
successors and assigns of such Certificateholder.
SECTION 13.12. Headings. The headings of
the various Articles and Sections herein and in the
table of contents hereto are for the convenience of
reference only and shall not define or limit any of
the terms or provisions hereof.
SECTION 13.13. Normal Commercial Relations.
Anything contained in this Pass Through Agreement to
the contrary notwithstanding, the Pass Through Trustee
and any Certificateholder, or any bank or other
affiliate of any such party, may conduct any banking
or other financial transactions, and have banking or
other commercial relationships, with the Company fully
to the same extent as if this Pass Through Agreement
were not in effect, including without limitation the
making of loans or other extensions of credit to the
Company for any purpose whatsoever, whether related to
any of the transactions contemplated hereby or
otherwise.
SECTION 13.14. Governing Law; Counterpart
Form. THIS PASS THROUGH AGREEMENT, EACH SERIES
SUPPLEMENT AND EACH PASS THROUGH CERTIFICATE SHALL IN
ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE. This Pass Through Agreement may be
executed by the parties hereto 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 13.15. Distributions Due on Days
Other than Business Days. If, for any Pass Through
Trust, any Distribution Date is not a Business Day,
then such distribution need not be made on such date,
but may be made on the next succeeding Business Day
with the same force and effect as if made on the
applicable Distribution Date, and no interest shall
accrue for the intervening period.
IN WITNESS WHEREOF, the parties hereto have
caused this Pass Through Agreement to be duly executed
this 16 day of March, 1994 by their respective
officers or signatories thereunto duly authorized, and
acknowledge that this Pass Through Agreement has been made
and delivered in the City of New York, and this Pass
Through Agreement shall be effective only upon such
execution and delivery.
NATIONSBANK OF SOUTH CAROLINA,
NATIONAL ASSOCIATION
not in its individual capacity,
except as otherwise expressly
provided herein, but solely
as Pass Through Trustee
By: /s/ Howard L. Shellkopf
------------------------
Title: Vice President
FEDERAL EXPRESS CORPORATION
By: /s/ Robert D. Henning
----------------------
Title: Managing Director -
Aircraft Financing
Exhibit A to
Pass Through
Agreement
FORM OF PASS THROUGH CERTIFICATE
FEDERAL EXPRESS CORPORATION PASS THROUGH TRUST, 199_-__
199_ Pass Through Certificate, Series __
Final Scheduled Regular Distribution Date: _________,
____
evidencing a fractional undivided interest in a
pass through trust, the property of which
includes certain Equipment Trust Certificates.
Certificate No. _______
Applicable interest rate on Equipment Trust
Certificates held in Pass Through Trust, 199_-__:
____%.
$___________ Fractional Undivided Interest
representing __________ of the Pass Through Trust per
$1,000 face amount.
THIS CERTIFIES THAT ______________, for value
received, is the registered owner of a $_________
(_____________ dollars) Fractional Undivided Interest
in the Federal Express Corporation Pass Through Trust,
199_-__ (the "Pass Through Trust") created and
declared by NationsBank of South Carolina, National
Association, as pass through trustee (the "Pass
Through Trustee"), pursuant to the Pass Through Trust
Agreement dated as of March 1, 1994 (the "Pass
Through Agreement"), as supplemented by Series
Supplement 199_-__ thereto dated _________, 199_ (the
"Series Supplement") between the Pass Through Trustee
and Federal Express Corporation, a Delaware
corporation (the "Company"), a summary of certain of
the pertinent provisions of which is set forth below.
To the extent not otherwise defined herein, the
capitalized terms used herein have the meanings
assigned to them in the Pass Through Agreement and the
Series Supplement. This Pass Through Certificate is
one of the duly authorized Pass Through Certificates
designated as "Federal Express Corporation 199_ Pass
Through Certificates, Series __." This Pass Through
Certificate is issued under and is subject to the
terms, provisions and conditions of the Pass Through
Agreement and the Series Supplement, to which the
Certificateholder of this Pass Through Certificate by
virtue of the acceptance hereof assents and by which
such Certificateholder is bound. The property of the
Pass Through Trust (the "Trust Property") includes
certain Equipment Trust Certificates (the "Equipment
Trust Certificates"). Each series of Equipment Trust
Certificates is secured as described in the related
Indenture Documents. The Pass Through Certificates
represent fractional undivided interests in the
Pass Through Trust and the Trust Property, and
have no rights, benefits or interests in respect of
any other separate trust established pursuant to the
terms of the Pass Through Agreement for any other
Series of Pass Through Certificates issued pursuant
thereto.
Subject to and in accordance with the terms
of the Pass Through Agreement and the Series
Supplement, from funds then available to the Pass
Through Trustee, there will be distributed on each
_________ and __________ (a "Regular Distribution
Date"), commencing on __________, 199_, to the Person
in whose name this Pass Through Certificate is
registered at the close of business on the 15th day
preceding the applicable Regular Distribution Date, an
amount in respect of the Scheduled Payments on the
Equipment Trust Certificates due on such Regular
Distribution Date, equal to the product of the
percentage interest in the Pass Through Trust
evidenced by this Pass Through Certificate and an
amount equal to the sum of such Scheduled Payments.
Subject to and in accordance with the terms of the
Pass Through Agreement and the Series Supplement, if
Special Payments on the Equipment Trust Certificates
are received by the Pass Through Trustee, from funds
then available to the Pass Through Trustee, there
shall be distributed on the applicable Special
Distribution Date, to the Person in whose name this
Pass Through Certificate is registered at the close of
business on the 15th day preceding such Special
Distribution Date, an amount in respect of such
Special Payments on the Equipment Trust Certificates,
equal to the product of the percentage interest in the
Pass Through Trust evidenced by this Pass Through
Certificate and an amount equal to the sum of such
Special Payments so received.
If a Distribution Date is not a Business Day,
distribution shall be made on the immediately
following Business Day with the same force and effect
as if made on such Distribution Date and no interest
shall accrue during the intervening period. The
Special Distribution Date shall be the ________ day of
the month determined as provided in the Pass Through
Agreement and the Series Supplement, except in certain
circumstances, in which case it will be the date of
receipt of proceeds by the Pass Through Trustee as
provided in the Series Supplement. The Pass Through
Trustee shall mail notice of each Special Payment and
the Special Distribution Date therefor to the
Certificateholder of this Pass Through Certificate.
Distributions on this Pass Through
Certificate will be made by the Pass Through Trustee
to the Person entitled thereto, without the
presentation or surrender of this Pass Through
Certificate or the making of any notation hereon.
Except as otherwise provided in the Pass Through
Agreement and notwithstanding the above, the final
distribution on this Pass Through Certificate will be
made after notice is mailed by the Pass Through
Trustee of the pendency of such distribution and only
upon presentation and surrender of this Pass Through
Certificate at the office or agency of the Pass
Through Trustee specified in such notice.
NO 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
INTERNAL REVENUE CODE OF 1986, AS AMENDED (HEREINAFTER
COLLECTIVELY REFERRED TO AS AN "ERISA PLAN"), MAY
ACQUIRE OR HOLD ANY OF THE PASS THROUGH CERTIFICATES.
THE PURCHASE BY ANY PERSON OF ANY PASS THROUGH
CERTIFICATE CONSTITUTES A REPRESENTATION BY SUCH
PERSON TO FEDERAL EXPRESS CORPORATION, THE RELATED
OWNER PARTICIPANTS, THE RELATED OWNER TRUSTEES, THE
RELATED INDENTURE TRUSTEES AND THE PASS THROUGH
TRUSTEE OR THEIR RESPECTIVE SUCCESSORS, AS THE CASE
MAY BE, THAT SUCH PERSON IS NOT AN ERISA PLAN AND THAT
SUCH PERSON IS NOT ACQUIRING, AND HAS NOT ACQUIRED,
SUCH PASS THROUGH CERTIFICATE WITH ASSETS OF AN ERISA
PLAN.
This Pass Through Certificate shall be
governed by and construed in accordance with the laws
of the State of New York.
Reference is hereby made to the further
provisions of this Pass Through Certificate set forth
on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth
at this place.
Unless the certificate of authentication hereon
has been executed by the Pass Through Trustee, by
manual signature, this Pass Through Certificate shall
not be entitled to any benefit under the Pass Through
Trust or be valid for any purpose.
IN WITNESS WHEREOF, the Pass Through Trustee
has caused this Pass Through Certificate to be duly
executed.
FEDERAL EXPRESS CORPORATION
PASS THROUGH TRUST, 199_-__
By: NATIONSBANK OF SOUTH CAROLINA,
NATIONAL ASSOCIATION,
as Pass Through Trustee
By: _______________________________
Authorized Signatory
[FORM OF THE PASS THROUGH TRUSTEE'S CERTIFICATE OF
AUTHENTICATION]
Dated:
This is one of the Pass Through Certificates
referred to in the within-mentioned Pass Through
Agreement and the Series Supplement.
NATIONSBANK OF GEORGIA,
NATIONAL ASSOCIATION,
as Registrar, Paying Agent
and Authenticating Agent
By: _______________________
Authorized Signatory
[Reverse of Pass Through Certificate].
The Pass Through Certificates do not
represent a direct obligation of, or an obligation
guaranteed by, or an interest in, the Company or the
Pass Through Trustee or any affiliate thereof. The
Pass Through Certificates are limited in right of
payment, all as more specifically set forth on the
face hereof and in the Pass Through Agreement and the
Series Supplement. All payments or distributions made
to Certificateholders under the Pass Through Agreement
shall be made only from the Trust Property and only to
the extent that the Pass Through Trustee shall have
sufficient income or proceeds from the Trust Property
to make such payments in accordance with the terms of
the Pass Through Agreement and the Series Supplement.
Each Certificateholder of this Pass Through
Certificate, by its acceptance hereof, agrees that it
will look solely to the income and proceeds from the
Trust Property to the extent available for
distribution to such Certificateholder as provided in
the Pass Through Agreement and the Series Supplement.
In connection with withholding taxes, under certain
circumstances the Pass Through Trustee may retain
certain amounts otherwise distributable to a
Certificateholder. The purchase by any
Certificateholder of any Pass Through Certificate
constitutes the consent of such Certificateholder to
such retention in accordance with the terms of the
Pass Through Agreement. This Pass Through Certificate
does not purport to summarize the Pass Through
Agreement and the Series Supplement and reference is
made to the Pass Through Agreement and the Series
Supplement for information with respect to the
interests, rights, benefits, obligations, proceeds and
duties evidenced hereby. A copy of the Pass Through
Agreement and the Series Supplement may be examined
by any Certificateholder upon request during normal
business hours at the principal office of the Pass
Through Trustee, and at such other places designated
by the Pass Through Trustee.
As of the date of issuance of this Pass
Through Certificate, and assuming that no prepayment,
purchase or default in respect of the Equipment Trust
Certificates shall occur, the aggregate scheduled
repayments of principal on the Equipment Trust
Certificates for the Pass Through Trust and the
resulting Pool Factors for the Pass Through Trust
after taking into account each such repayment are set
forth below:
Pass Through Trust, 199_-__
Scheduled Principal
Regular Payments
Distribution on Equipment Trust
Date Certificates Pool Factor
The Pass Through Agreement and the Series
Supplement permit, with certain exceptions provided
therein, the amendment thereof and the modification of
the rights and obligations of the Company and the
rights of the Certificateholders under the Pass
Through Trust at any time by the Company and the Pass
Through Trustee with the consent of the Majority In
Interest of Certificateholders in the Pass Through
Trust. Any such consent by the Certificateholder of
this Pass Through Certificate shall be conclusive and
binding on such Certificateholder and upon all future
Certificateholders of this Pass Through Certificate
and of any Pass Through Certificate issued upon the
transfer hereof or in exchange hereof or in lieu
hereof whether or not notation of such consent is made
upon this Pass Through Certificate. The Pass Through
Agreement and the Series Supplement also permit the
amendment thereof, in certain limited circumstances,
without the consent of the Certificateholders of any
of the Pass Through Certificates.
As provided in the Pass Through Agreement and
the Series Supplement and subject to certain
limitations set forth therein, the transfer of this
Pass Through Certificate is registrable in the
Register upon surrender of this Pass Through
Certificate for registration of transfer to the Pass
Through Trustee in its capacity as Registrar, or by
any successor Registrar, duly endorsed or accompanied
by a written instrument of transfer in form
satisfactory to the Pass Through Trustee and the
Registrar duly executed by the Certificateholder
hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new
Pass Through Certificates of authorized denominations
evidencing the same aggregate Fractional Undivided
Interest in the Pass Through Trust will be issued to
the designated transferee or transferees.
The Pass Through Certificates are issuable
only as registered Pass Through Certificates without
coupons in minimum denominations of $1,000 Fractional
Undivided Interest and integral multiples thereof. As
provided in the Pass Through Agreement and the Series
Supplement and subject to certain limitations set
forth therein, the Pass Through Certificates are
exchangeable for new Pass Through Certificates of
authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Pass Through
Trust, as requested by the Certificateholder
surrendering the same.
No service charge will be made for any such
registration of transfer or exchange, but the Pass
Through Trustee shall require payment of a sum
sufficient to cover any tax or governmental charge
payable in connection therewith.
The Pass Through Trustee, the Registrar, and
any agent of the Pass Through Trustee or the Registrar
may treat the person in whose name this Pass Through
Certificate is registered as the owner hereof for all
purposes, and neither the Pass Through Trustee, the
Registrar, nor any such agent shall be affected by any
notice to the contrary.
The obligations and responsibilities created
by the Pass Through Agreement and the Series
Supplement and the Pass Through Trust created thereby
shall terminate upon the distribution to
Certificateholders of all amounts required to be
distributed to them pursuant to the Pass Through
Agreement and the Series Supplement and the
disposition of all property held as part of the Trust
Property.
Exhibit 4.a.3
__________________________________________
SERIES SUPPLEMENT 1994-A310-A1
Dated March __, 1994
to
PASS THROUGH TRUST AGREEMENT
Dated as of March 1, 1994
In Each Case Between
NATIONSBANK OF SOUTH CAROLINA,
NATIONAL ASSOCIATION,
as Pass Through Trustee,
and
FEDERAL EXPRESS CORPORATION
$125,000,000
Federal Express Corporation
Pass Through Trust, 1994-A310-A1
Federal Express Corporation
1994 Pass Through Certificates,
Series A310-A1
__________________________________________
TABLE OF CONTENTS
Page
RECITALS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
DESIGNATIONS; TRUST FORMATION; ISSUANCE OF
PASS THROUGH CERTIFICATES
SECTION 2.01 Designations; Aggregate Amount . . . . . . . . . . . . 4
SECTION 2.02 Declaration of Trust; Authorization. . . . . . . . . . 4
SECTION 2.03 Issuance of Pass Through Certificates . . . . . . . . 5
SECTION 2.04 Purchase of Equipment Trust Certificates . . . . . . . 5
SECTION 2.05 Representations and Warranties of the Company. . . . . 5
SECTION 2.06 Conditions Precedent . . . . . . . . . . . . . . . . . 5
ARTICLE III
DISTRIBUTION AND RECORD DATES;
CERTIFICATE AND SPECIAL PAYMENTS ACCOUNTS
SECTION 3.01 Distribution Dates . . . . . . . . . . . . . . . . . . 6
SECTION 3.02 Record Dates . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.03 Certificate Account and Special Payments Account . . . 6
SECTION 3.04 Form of Pass Through Certificates. . . . . . . . . . . 6
SECTION 3.05 Appointment of Authenticating Agent; Paying Agent
and Registrar. . . . . . . . . . . . . . . . . . . . . 7
ARTICLE IV
MISCELLANEOUS
SECTION 4.01 Governing Law; Counterpart Form. . . . . . . . . . . . 7
SECTION 4.02 Reports by the Company . . . . . . . . . . . . . . . . 8
SECTION 4.03 Modification and Ratification of Pass Through
Agreement. . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 4.04 Termination. . . . . . . . . . . . . . . . . . . . . . 8
EXHIBIT A Form of Pass Through Certificate
SCHEDULE I Equipment Trust Certificates;
Related Indenture Documents
SERIES SUPPLEMENT 1994-A310-A1
SERIES SUPPLEMENT 1994-A310-A1, dated
March __, 1994 (this "Series Supplement"), to the Pass
Through Trust Agreement, dated as of March 1, 1994
(the "Pass Through Agreement"), in each case between
FEDERAL EXPRESS CORPORATION, a Delaware corporation
(the "Company") and NATIONSBANK OF SOUTH CAROLINA,
NATIONAL ASSOCIATION, a national banking association
organized under the laws of the United States of
America, as Pass Through Trustee (the "Pass Through
Trustee").
RECITALS
WHEREAS, capitalized terms used herein shall
have the respective meanings set forth or referred to
in Article I hereof;
WHEREAS, Section 2.01 of the Pass Through
Agreement provides, among other things, that the
Company and the Pass Through Trustee may execute and
deliver one or more series supplements, each for the
purpose of forming a separate pass through trust for
the benefit of the certificateholders of the series of
pass through certificates to be issued pursuant to
such pass through trust, establishing certain terms of
such pass through certificates, and pursuant to which
the pass through certificates of such series shall be
executed and authenticated by the Pass Through Trustee
and delivered as directed by the Company;
WHEREAS, pursuant to the Participation
Agreements, the Company has agreed to cause the
Equipment Trust Certificates to be issued and sold to
the Pass Through Trustee, and the Pass Through Trustee
has agreed to purchase the Equipment Trust
Certificates, which will be held in trust as Trust
Property for the benefit of the Certificateholders;
WHEREAS, in order to facilitate such sale,
the Company has agreed, pursuant to the Underwriting
Agreement, to cause the Pass Through Trustee to issue
and sell the Pass Through Certificates to the
Underwriters;
WHEREAS, pursuant to the Pass Through
Agreement and the terms of this Series Supplement, the
Pass Through Trustee will execute, authenticate and
deliver the Pass Through Certificates to the
Underwriters upon receipt by the Pass Through Trustee
of the purchase price therefor, which will be applied
in accordance with this Series Supplement to purchase
the Equipment Trust Certificates;
WHEREAS, the Pass Through Trustee hereby
declares the creation of this Pass Through Trust for
the benefit of the Certificateholders, and the initial
Certificateholders of such Pass Through Certificates,
as the grantors of such Pass Through Trust, by their
respective acceptances of such Pass Through
Certificates, join in the creation of such Pass
Through Trust;
WHEREAS, to facilitate the sale of the
Equipment Trust Certificates to, and the purchase of
the Equipment Trust Certificates by, the Pass Through
Trustee on behalf of this Pass Through Trust, the
Company has duly authorized the execution and delivery
of this Series Supplement as the "issuer," as such
term is defined in and solely for purposes of the
Securities Act, of the Pass Through Certificates and
as the "obligor," as such term is defined in and
solely for purposes of the Trust Indenture Act, with
respect to all such Pass Through Certificates; and
WHEREAS, this Series Supplement is subject to
the provisions of the Trust Indenture Act and shall,
to the extent applicable, be governed by such
provisions;
IT IS HEREBY COVENANTED AND AGREED by and
between the parties hereto as follows:
ARTICLE I
CERTAIN DEFINITIONS
All terms used in this Series Supplement that
are defined in the Pass Through Agreement, either
directly or by reference therein, have the meanings
assigned to them therein as supplemented by this
Article I, if applicable, except to the extent the
context clearly requires otherwise. Any such defined
term that is defined in the Pass Through Agreement as
relating to a particular Pass Through Trust or Series
rather than to any Pass Through Trust or Series
generally shall, when used in this Series Supplement,
relate solely to the Federal Express Corporation Pass
Through Trust, 1994-A310-A1, or the Federal Express
Corporation 1994 Pass Through Certificates, Series
A310-A1, as the case may be, whether or not expressly
so stated herein.
"Authenticating Agent" has the meaning set
forth in Section 3.05 hereof.
"Certificate Account" means the Certificate
Account specified in Section 3.03 hereof.
"Certificateholders" means the
Certificateholders of the Series of Pass Through
Certificates designated in Section 2.01 hereof.
"Equipment Trust Certificates" means those
Equipment Trust Certificates listed in Schedule I
hereto.
"Issuance Date" means the date defined as the
Closing Time in the Underwriting Agreement.
"Participation Agreements" means those
Participation Agreements listed in Schedule I hereto.
"Pass Through Certificates" means the Pass
Through Certificates designated in Section 2.01
hereof.
"Pass Through Trust," "this Pass Through
Trust" and other like words means the Pass Through
Trust designated in Section 2.01 hereof.
"Paying Agent" means the Person specified as
such in Section 3.05 hereof.
"Record Date" means any Record Date specified
in Section 3.02 hereof.
"Registrar" means the Person specified as
such in Section 3.05 hereof.
"Regular Distribution Date" means any Regular
Distribution Date specified in Section 3.01 hereof.
"Special Distribution Date" means, for any
Special Payment, the Special Distribution Date for
such Special Payment specified in Section 3.01 hereof.
"Special Payments Account" means the Special
Payments Account specified in Section 3.03 hereof.
"Trust Property" means all money,
instruments, including the Equipment Trust
Certificates that have been issued by the related
Owner Trustee and delivered to and accepted by the
Pass Through Trustee for the benefit of the
Certificateholders, and other property held as the
property of this Pass Through Trust, including all
distributions thereon and proceeds thereof.
"Underwriters" means the several Underwriters
named in the Underwriting Agreement.
"Underwriting Agreement" means the
Underwriting Agreement dated March 16, 1994 among the
Company, Lufthansa, the Owner Participant,
Goldman, Sachs & Co. and Merrill Lynch, Pierce,
Fenner & Smith Incorporated.
ARTICLE II
DESIGNATIONS; PASS THROUGH TRUST FORMATION; ISSUANCE
OF PASS THROUGH CERTIFICATES
SECTION 2.01. Designations; Aggregate
Amount. The Pass Through Trust created hereby shall
be designated Federal Express Corporation Pass Through
Trust, 1994-A310-A1 (herein sometimes called this
"Pass Through Trust"). The Pass Through Certificates
evidencing Fractional Undivided Interests in such Pass
Through Trust shall be designated as the Federal
Express Corporation 1994 Pass Through Certificates,
Series A310-A1 (herein sometimes called the "Series
A310-A1 Pass Through Certificates"). The Series
A310-A1 Pass Through Certificates shall be the
only instruments evidencing a fractional undivided
interest in such Pass Through Trust.
Except as provided in Section 2.09 of the
Pass Through Agreement, the aggregate amount of Series
A310-A1 Pass Through Certificates that may be
authenticated, delivered and outstanding under this
Series Supplement is limited to $125,000,000.
SECTION 2.02. Declaration of Trust;
Authorization. Each initial Certificateholder, by its
payment for and acceptance of any Series A310-A1 Pass
Through Certificate is hereby deemed (1) as grantor,
to join in the creation and declaration of this Pass
Through Trust and (2) as beneficiary of such Pass
Through Trust, to authorize and direct the Pass
Through Trustee to execute and deliver all documents
to which the Pass Through Trustee is a party that may
be necessary or desirable to consummate the
transactions contemplated hereby and to exercise its
rights and perform its duties under the Participation
Agreements, the Indentures, the Pass Through Agreement
and this Series Supplement.
The Pass Through Trustee hereby acknowledges
and accepts this grant of trust and declares that it
will hold the Trust Property as Pass Through Trustee
upon this Pass Through Trust for the use and benefit
of the Certificateholders.
SECTION 2.03. Issuance of Pass Through
Certificates. Subject to the terms set forth herein,
on the Issuance 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 by such Underwriters
pursuant to the Underwriting Agreement with respect to
the Series A310-A1 Pass Through Certificates and
(ii) the Pass Through Trustee shall deliver the Series
A310-A1 Pass Through Certificates to the
Underwriters as provided in the Underwriting Agreement
upon receipt by the Pass Through Trustee of such
proceeds.
SECTION 2.04. Purchase of Equipment Trust
Certificates. On the Issuance Date, the Pass Through
Trustee shall purchase, in accordance with Section
2.02 of the Pass Through Agreement, each of the
Equipment Trust Certificates upon the satisfaction or
waiver of the conditions for such purchase by the Pass
Through Trustee set forth in the related Participation
Agreements.
SECTION 2.05. Representations and Warranties
of the Company. All of the representations and
warranties of the Company set forth or incorporated by
reference in Section 1 of the Underwriting Agreement
are incorporated by reference in this Series
Supplement as if set forth herein and the Company
represents and warrants that such representations and
warranties are true and correct on the date hereof,
except to the extent that such representations and
warranties expressly relate solely to an earlier date
or later date (in which case such representations and
warranties were correct on and as of such earlier date
or will be correct on and as of such later date, as
the case may be).
SECTION 2.06. Conditions Precedent. The
obligations of the Pass Through Trustee to participate
in the transactions described in Sections 2.03 and
2.04 hereof are subject to (i) receipt by the Pass
Through Trustee of a certificate of the Company to the
same effect as the certificate of the Company
delivered to the Underwriters pursuant to Section 5(c)
of the Underwriting Agreement, and (ii) satisfaction or
waiver of the conditions for the purchase by the
Underwriters of the Pass Through Certificates set
forth in Section 5 of the Underwriting Agreement,
which satisfaction or waiver for the purposes hereof
shall be conclusively demonstrated by the receipt by
the Pass Through Trustee of the total proceeds payable
by such Underwriters pursuant to the Underwriting
Agreement with respect to the Series A310-A1
Pass Through Certificates.
ARTICLE III
DISTRIBUTION AND RECORD DATES;
CERTIFICATE AND SPECIAL PAYMENT ACCOUNTS
SECTION 3.01. Distribution Dates. The
Regular Distribution Dates are March 23 and
September 23, commencing on September 23, 1994. The
Special Distribution Date for any month in which a
Special Payment is to be distributed will be the
twenty-third (23rd) day of such month, except that the
Special Distribution Date for any Special Payment
received by the Pass Through Trustee in connection with a
prepayment of any Equipment Trust Certificate pursuant
to Section 6.02(a)(i) or 6.02(a)(vi) of the related
Indenture will correspond to the date of the receipt
of such Special Payment by the Pass Through Trustee.
Notice of such Special Payment shall be mailed as soon
as practicable after receipt by the Pass Through
Trustee of the notice of such prepayment.
SECTION 3.02. Record Dates. The Record
Dates for the Regular Distribution Dates are
March 8 and September 8, respectively, and the Record
Date for any Special Distribution Date is the
fifteenth day preceding such Special Distribution
Date, in any event, whether or not such date is a
Business Day.
SECTION 3.03. Certificate Account and
Special Payments Account. In accordance with Section
5.01(a) of the Pass Through Agreement and upon receipt
of any Scheduled Payment, the Pass Through Trustee
shall immediately deposit such Scheduled Payment into
the Certificate Account, a separate and non-interest
bearing account designated by the Pass Through Trustee
to be used for such purpose. In accordance with
Section 5.01(b) of the Pass Through Agreement and upon
receipt of any Special Payment, the Pass Through
Trustee shall immediately deposit such Special Payment
into the Special Payments Account, a separate and,
except as provided in Section 5.04 of the Pass Through
Agreement, non-interest bearing account designated by
the Pass Through Trustee to be used for such purpose.
SECTION 3.04. Form of Pass Through
Certificates. Subject to Section 2.07 of the Pass
Through Agreement, each of the Series A310-A1
Pass Through Certificates will be substantially in the
form of Exhibit A hereto.
SECTION 3.05. Appointment of Authenticating
Agent; Paying Agent and Registrar. (a) The Pass
Through Trustee may appoint an authenticating agent
(the "Authenticating Agent") with respect to the Pass
Through Certificates which shall be authorized to act
on behalf of the Pass Through Trustee to authenticate
the Pass Through Certificates issued upon original
issue and upon exchange or registration of transfer
thereof or pursuant to Section 2.09 of the Pass
Through Agreement. Pass Through Certificates so
authenticated shall be entitled to the benefits of the
Pass Through Agreement and this Series Supplement and
shall be valid and obligatory for all purposes as if
authenticated by the Pass Through Trustee. Whenever
reference is made in the Pass Through Agreement or
this Series Supplement to the authentication and
delivery of Pass Through Certificates by the Pass
Through Trustee or the Pass Through Trustee's
certificate of authentication, such reference shall be
deemed to include authentication and delivery on
behalf of the Pass Through Trustee by an
Authenticating Agent and a certificate of
authentication executed on behalf of the Pass Through
Trustee by an Authenticating Agent.
(b) The Paying Agent, Registrar and
Authenticating Agent for the Series A310-A1 Pass
Through Certificates initially shall be NationsBank of
Georgia, National Association ("NationsBank of
Georgia"), 600 Peachtree Street, N.E., GA1-006-09-11,
Atlanta, Georgia 30308. The Company, the Pass
Through Trustee and NationsBank of Georgia have
entered into a Registrar, Authenticating and Paying
Agency Agreement dated the date hereof which sets
forth the rights, duties and obligations of the
parties thereto with respect to the appointment of
NationsBank of Georgia as Paying Agent, Registrar and
Authenticating Agent for the Series A310-A1 Pass
Through Certificates.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Governing Law; Counterpart
Form. AS PROVIDED IN SECTION 13.14 OF THE PASS
THROUGH AGREEMENT, THIS SERIES SUPPLEMENT AND EACH
SERIES A310-A1 PASS THROUGH CERTIFICATE SHALL IN
ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE.
This Series Supplement may be executed by the
parties hereto 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 4.02. Reports by the Company. In
addition to the reports required to be provided by the
Company pursuant to Section 4.03 of the Pass Through
Agreement, the Company agrees to furnish to the Pass
Through Trustee from time to time, such other
financial information as the Pass Through Trustee may
reasonably request.
SECTION 4.03. Modification and Ratification
of Pass Through Agreement. The Pass Through Agreement
is incorporated herein by reference in its entirety,
and shall be deemed to be a part of this Series
Supplement as if set forth in full herein, and is in
all respects ratified and confirmed, as supplemented
and modified by this Series Supplement.
SECTION 4.04. Termination. In no event
shall this Pass Through Trust continue beyond the
expiration of 21 years after the death of the last
survivor of Mario Cuomo, Governor of New York State,
living on the date of this Series Supplement.
IN WITNESS WHEREOF, the parties have caused
their names to be signed hereto by their respective
officers or signatories thereunto duly authorized, all
as of the day and year first above written.
FEDERAL EXPRESS CORPORATION
By:___________________________
Name:
Title:
NATIONSBANK OF SOUTH CAROLINA,
NATIONAL ASSOCIATION,
as Pass Through Trustee
By:___________________________
Name:
Title:
Exhibit A to
Series
Supplement
FORM OF PASS THROUGH CERTIFICATE
FEDERAL EXPRESS CORPORATION PASS THROUGH TRUST,
1994-A310-A1
1994 Pass Through Certificate, Series A310-A1
Final Scheduled Regular Distribution Date: September 23, 2006
evidencing a fractional undivided interest in a
pass through trust, the property of which
includes certain Equipment Trust Certificates.
Certificate No. _______
Applicable interest rate on Equipment Trust Certificates
held in Pass Through Trust, 1994-A310-A1: 7.53%.
$___________ Fractional Undivided Interest representing
__________ of the Pass Through Trust per $1,000 face
amount.
THIS CERTIFIES THAT ______________, for value
received, is the registered owner of a $_________
(_____________ dollars) Fractional Undivided Interest
in the Federal Express Corporation Pass Through Trust,
1994-A310-A1 (the "Pass Through Trust") created and
declared by NationsBank of South Carolina, National
Association, as pass through trustee (the "Pass
Through Trustee"), pursuant to the Pass Through Trust
Agreement dated as of March 1, 1994 (the "Pass Through
Agreement"), as supplemented by Series Supplement
1994-A310-A1 thereto dated March __, 1994 (the "Series
Supplement") between the Pass Through Trustee and
Federal Express Corporation, a Delaware corporation
(the "Company"), a summary of certain of the pertinent
provisions of which is set forth below. To the extent
not otherwise defined herein, the capitalized terms
used herein have the meanings assigned to them in the
Pass Through Agreement and the Series Supplement.
This Pass Through Certificate is one of the duly
authorized Pass Through Certificates designated as
"Federal Express Corporation 1994 Pass Through
Certificates, Series A310-A1." This Pass Through
Certificate is issued under and is subject to the
terms, provisions and conditions of the Pass Through
Agreement and the Series Supplement, to which the
Certificateholder of this Pass Through Certificate by
virtue of the acceptance hereof assents and by which
such Certificateholder is bound. The property of the
Pass Through Trust (the "Trust Property") includes
certain Equipment Trust Certificates (the "Equipment
Trust Certificates"). Each series of Equipment Trust
Certificates is secured as described in the related
Indenture Documents. The Pass Through Certificates
represent fractional undivided interests in the Pass
Through Trust and the Trust Property, and have no rights,
benefits or interests in respect of any other
separate trust established pursuant to the
terms of the Pass Through Agreement for any other
Series of Pass Through Certificates issued pursuant
thereto.
Subject to and in accordance with the terms
of the Pass Through Agreement and the Series
Supplement, from funds then available to the Pass
Through Trustee, there will be distributed on each
March 23 and September 23 (a "Regular Distribution
Date"), commencing on September 23, 1994, to the Person
in whose name this Pass Through Certificate is
registered at the close of business on the 15th day
preceding the applicable Regular Distribution Date, an
amount in respect of the Scheduled Payments on the
Equipment Trust Certificates due on such Regular
Distribution Date, equal to the product of the
percentage interest in the Pass Through Trust
evidenced by this Pass Through Certificate and an
amount equal to the sum of such Scheduled Payments.
Subject to and in accordance with the terms of the
Pass Through Agreement and the Series Supplement, if
Special Payments on the Equipment Trust Certificates
are received by the Pass Through Trustee, from funds
then available to the Pass Through Trustee, there
shall be distributed on the applicable Special
Distribution Date, to the Person in whose name this
Pass Through Certificate is registered at the close of
business on the 15th day preceding such Special
Distribution Date, an amount in respect of such
Special Payments on the Equipment Trust Certificates,
equal to the product of the percentage interest in the
Pass Through Trust evidenced by this Pass Through
Certificate and an amount equal to the sum of such
Special Payments so received.
If a Distribution Date is not a Business Day,
distribution shall be made on the immediately
following Business Day with the same force and effect
as if made on such Distribution Date and no interest
shall accrue during the intervening period. The
Special Distribution Date shall be the twenty-third (23rd) day
of the month determined as provided in the Pass Through
Agreement and the Series Supplement, except in certain
circumstances, in which case it will be the date of
receipt of proceeds by the Pass Through Trustee as
provided in the Series Supplement. The Pass Through
Trustee shall mail notice of each Special Payment and
the Special Distribution Date therefor to the
Certificateholder of this Pass Through Certificate.
Distributions on this Pass Through
Certificate will be made by the Pass Through Trustee
to the Person entitled thereto, without the
presentation or surrender of this Pass Through
Certificate or the making of any notation hereon.
Except as otherwise provided in the Pass Through
Agreement and notwithstanding the above, the final
distribution on this Pass Through Certificate will be
made after notice is mailed by the Pass Through
Trustee of the pendency of such distribution and only
upon presentation and surrender of this Pass Through
Certificate at the office or agency of the Pass
Through Trustee specified in such notice.
NO 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
INTERNAL REVENUE CODE OF 1986, AS AMENDED (HEREINAFTER
COLLECTIVELY REFERRED TO AS AN "ERISA PLAN"), MAY
ACQUIRE OR HOLD ANY OF THE PASS THROUGH CERTIFICATES.
THE PURCHASE BY ANY PERSON OF ANY PASS THROUGH
CERTIFICATE CONSTITUTES A REPRESENTATION BY SUCH
PERSON TO FEDERAL EXPRESS CORPORATION, THE RELATED
OWNER PARTICIPANTS, THE RELATED OWNER TRUSTEES, THE
RELATED INDENTURE TRUSTEES AND THE PASS THROUGH
TRUSTEE OR THEIR RESPECTIVE SUCCESSORS, AS THE CASE
MAY BE, THAT SUCH PERSON IS NOT AN ERISA PLAN AND THAT
SUCH PERSON IS NOT ACQUIRING, AND HAS NOT ACQUIRED,
SUCH PASS THROUGH CERTIFICATE WITH ASSETS OF AN ERISA
PLAN.
This Pass Through Certificate shall be
governed by and construed in accordance with the laws
of the State of New York.
Reference is hereby made to the further
provisions of this Pass Through Certificate set forth
on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth
at this place.
Unless the certificate of authentication hereon
has been executed by the Pass Through Trustee, by
manual signature, this Pass Through Certificate shall
not be entitled to any benefit under the Pass Through
Trust or be valid for any purpose.
IN WITNESS WHEREOF, the Pass Through Trustee
has caused this Pass Through Certificate to be duly
executed.
FEDERAL EXPRESS CORPORATION
PASS THROUGH TRUST, 1994-A310-A1
By: NATIONSBANK OF SOUTH CAROLINA,
NATIONAL ASSOCIATION,
as Pass Through Trustee
By: _______________________________
Authorized Signatory
[FORM OF THE PASS THROUGH TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
Dated:
This is one of the Pass Through Certificates
referred to in the within-mentioned Pass Through
Agreement and the Series Supplement.
NATIONSBANK OF GEORGIA,
NATIONAL ASSOCIATION,
as Registrar, Paying Agent
and Authenticating Agent
By: _______________________
Authorized Signatory
[Reverse of Pass Through Certificate].
The Pass Through Certificates do not
represent a direct obligation of, or an obligation
guaranteed by, or an interest in, the Company or the
Pass Through Trustee or any affiliate thereof. The
Pass Through Certificates are limited in right of
payment, all as more specifically set forth on the
face hereof and in the Pass Through Agreement and the
Series Supplement. All payments or distributions made
to Certificateholders under the Pass Through Agreement
shall be made only from the Trust Property and only to
the extent that the Pass Through Trustee shall have
sufficient income or proceeds from the Trust Property
to make such payments in accordance with the terms of
the Pass Through Agreement and the Series Supplement.
Each Certificateholder of this Pass Through
Certificate, by its acceptance hereof, agrees that it
will look solely to the income and proceeds from the
Trust Property to the extent available for
distribution to such Certificateholder as provided in
the Pass Through Agreement and the Series Supplement.
In connection with withholding taxes, under certain
circumstances the Pass Through Trustee may retain
certain amounts otherwise distributable to a
Certificateholder. The purchase by any
Certificateholder of any Pass Through Certificate
constitutes the consent of such Certificateholder to
such retention in accordance with the terms of the
Pass Through Agreement. This Pass Through Certificate
does not purport to summarize the Pass Through
Agreement and the Series Supplement and reference is
made to the Pass Through Agreement and the Series
Supplement for information with respect to the
interests, rights, benefits, obligations, proceeds and
duties evidenced hereby. A copy of the Pass Through
Agreement and the Series Supplement may be examined by
any Certificateholder upon request during normal business
hours at the principal office of the Pass Through Trustee,
and at such other places designated by the Pass Through
Trustee.
As of the date of issuance of this Pass
Through Certificate, and assuming that no prepayment,
purchase or default in respect of the Equipment Trust
Certificates shall occur, the aggregate scheduled
repayments of principal on the Equipment Trust
Certificates for the Pass Through Trust and the
resulting Pool Factors for the Pass Through Trust
after taking into account each such repayment are set
forth below:
Pass Through Trust, 1994-A310-A1
Scheduled Principal
Regular Payments
Distribution on Equipment Trust
Date Certificates Pool Factor
---- ------------ -----------
March 23, 1995 $ 2,051,710 0.9835863
September 23, 1995 4,938,803 0.9440759
March 23, 1996 7,282,492 0.8858160
September 23, 1996 7,556,678 0.8253625
March 23, 1997 7,841,189 0.7626330
September 23, 1997 8,136,408 0.6975418
March 23, 1998 8,442,722 0.6300000
September 23, 1998 0 0.6300000
March 23, 1999 0 0.6300000
September 23, 1999 0 0.6300000
March 23, 2000 963,237 0.6222941
September 23, 2000 2,260,216 0.6042124
March 23, 2001 3,878,515 0.5731842
September 23, 2001 5,726,656 0.5273710
March 23, 2002 5,942,266 0.4798329
September 23, 2002 6,247,325 0.4298543
March 23, 2003 10,132,161 0.3487970
September 23, 2003 8,615,570 0.2798724
March 23, 2004 8,383,932 0.2128010
September 23, 2004 8,151,434 0.1475895
March 23, 2005 6,253,712 0.0975598
September 23, 2005 6,337,194 0.0468622
March 23, 2006 4,516,005 0.0107342
September 23, 2006 1,341,775 0.0000000
The Pass Through Agreement and the Series
Supplement permit, with certain exceptions provided
therein, the amendment thereof and the modification of
the rights and obligations of the Company and the
rights of the Certificateholders under the Pass
Through Trust at any time by the Company and the Pass
Through Trustee with the consent of the Majority In
Interest of Certificateholders in the Pass Through
Trust. Any such consent by the Certificateholder of
this Pass Through Certificate shall be conclusive and
binding on such Certificateholder and upon all future
Certificateholders of this Pass Through Certificate
and of any Pass Through Certificate issued upon the
transfer hereof or in exchange hereof or in lieu
hereof whether or not notation of such consent is made
upon this Pass Through Certificate. The Pass Through
Agreement and the Series Supplement also permit the
amendment thereof, in certain limited circumstances,
without the consent of the Certificateholders of any
of the Pass Through Certificates.
As provided in the Pass Through Agreement and
the Series Supplement and subject to certain
limitations set forth therein, the transfer of this
Pass Through Certificate is registrable in the
Register upon surrender of this Pass Through
Certificate for registration of transfer to the Pass
Through Trustee in its capacity as Registrar, or by
any successor Registrar, duly endorsed or accompanied
by a written instrument of transfer in form
satisfactory to the Pass Through Trustee and the
Registrar duly executed by the Certificateholder
hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new
Pass Through Certificates of authorized denominations
evidencing the same aggregate Fractional Undivided
Interest in the Pass Through Trust will be issued to
the designated transferee or transferees.
The Pass Through Certificates are issuable
only as registered Pass Through Certificates without
coupons in minimum denominations of $1,000 Fractional
Undivided Interest and integral multiples thereof. As
provided in the Pass Through Agreement and the Series
Supplement and subject to certain limitations set
forth therein, the Pass Through Certificates are
exchangeable for new Pass Through Certificates of
authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Pass Through
Trust, as requested by the Certificateholder
surrendering the same.
No service charge will be made for any such
registration of transfer or exchange, but the Pass
Through Trustee shall require payment of a sum
sufficient to cover any tax or governmental charge
payable in connection therewith.
The Pass Through Trustee, the Registrar, and
any agent of the Pass Through Trustee or the Registrar
may treat the person in whose name this Pass Through
Certificate is registered as the owner hereof for all
purposes, and neither the Pass Through Trustee, the
Registrar, nor any such agent shall be affected by any
notice to the contrary.
The obligations and responsibilities created
by the Pass Through Agreement and the Series
Supplement and the Pass Through Trust created thereby
shall terminate upon the distribution to
Certificateholders of all amounts required to be
distributed to them pursuant to the Pass Through
Agreement and the Series Supplement and the
disposition of all property held as part of the Trust
Property.
Schedule I to
Series Supplement
Federal Express Corporation
Pass Through Trust, 1994-A310-A1
Equipment Trust Certificates;
Related Indenture Documents
1. Equipment Trust Certificates (Federal Express
Corporation Trust A)
Interest Rate: 7.53%
Maturity: March 23, 1998
Principal Amount: $4,166,194
2. Equipment Trust Certificates (Federal Express
Corporation Trust B)
Interest Rate: 7.53%
Maturity: March 23, 2003
Principal Amount: $5,202,323
3. Equipment Trust Certificates (Federal Express
Corporation Trust C)
Interest Rate: 7.53%
Maturity: March 23, 2003
Principal Amount: $5,459,459
4. Equipment Trust Certificates (Federal Express
Corporation Trust D)
Interest Rate: 7.53%
Maturity: March 23, 1998
Principal Amount: $4,097,109
5. Equipment Trust Certificates (Federal Express
Corporation Trust E)
Interest Rate: 7.53%
Maturity: March 23, 2004
Principal Amount: $6,508,237
6. Equipment Trust Certificates (Federal Express
Corporation Trust F)
Interest Rate: 7.53%
Maturity: September 23, 2004
Principal Amount: $10,778,919
7. Equipment Trust Certificates (Federal Express
Corporation Trust G)
Interest Rate: 7.53%
Maturity: September 23, 2004
Principal Amount: $9,697,934
8. Equipment Trust Certificates (Federal Express
Corporation Trust H)
Interest Rate: 7.53%
Maturity: March 23, 2006
Principal Amount: $9,850,146
9. Equipment Trust Certificates (Federal Express
Corporation Trust I)
Interest Rate: 7.53%
Maturity: September 23, 2005
Principal Amount: $12,207,788
10. Equipment Trust Certificates (Federal Express
Corporation Trust J)
Interest Rate: 7.53%
Maturity: March 23, 2006
Principal Amount: $12,620,316
11. Equipment Trust Certificates (Federal Express
Corporation Trust K)
Interest Rate: 7.53%
Maturity: March 23, 2006
Principal Amount: $15,005,244
12. Equipment Trust Certificates (Federal Express
Corporation Trust L)
Interest Rate: 7.53%
Maturity: September 23, 2006
Principal Amount: $14,790,634
13. Equipment Trust Certificates (Federal Express
Corporation Trust M)
Interest Rate: 7.53%
Maturity: September 23, 2006
Principal Amount: $14,615,697
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal
Express Corporation Trust A through M), dated as of
March 1, 1994, between First Security Bank of
Utah, National Association, as Owner Trustee and
NationsBank of Georgia, National Association, as
Indenture Trustee.*
Trust Agreement dated as of September 1, 1993, as
amended and restated as of March 1, 1994, between
LLG Aircraft Leasing, L.P., as Trustor, and First
Security Bank of Utah, National Association, as
Owner Trustee.
Participation Agreement (Federal Express Corporation
Trust A through M), dated as of March 1, 1994, among
Federal Express Corporation, as Lessee, LLG Aircraft
Leasing, L.P., as Owner Participant, NationsBank of
South Carolina, National Association, as Pass Through
Trustee, First Security Bank of Utah, National
Association, as Owner Trustee, NationsBank of Georgia,
National Association, as Indenture Trustee and
Westdeutsche Landesbank Girozentrale, New York Branch,
as LC Bank.**
Collateral Agreement (Trust A through M), dated as of
March 1, 1994, between First Security Bank of Utah,
National Association, as Owner Trustee, and
NationsBank of Georgia, National Association, as
Indenture Trustee.***
Letter of Credit to be dated the Closing Date referred
to in the related Participation Agreement, from
Westdeutsche Landesbank Girozentrale, New York Branch,
to NationsBank of Georgia, National Association, as
Indenture Trustee;****
Lease Agreement (Federal Express Corporation Trust
A through M) to be dated on or prior to the related
Commencement Date referred to in the related
Participation Agreement (or the form thereof prior
to such Commencement Date), between First Security
Bank of Utah, National Association, as Owner Trustee
and Lessor and Federal Express Corporation as
Lessee.*****
With respect to each of Trusts A through M, the other
Indenture Documents defined as such in the related Trust
Indenture.
* A separate Trust Indenture will be executed with
respect to each of Trusts A through M.
** A separate Participation Agreement will be
execution with respect to each of the Trusts
A through M.
*** A separate Collateral Agreement will be executed
with respect to each of Trusts A through M.
**** A separate Letter of Credit will be executed with
respect to each of Trusts A through M.
***** A separate Lease Agreement will be executed with
respect to each of Trusts A through M.
Exhibit 4.a.3
__________________________________________
SERIES SUPPLEMENT 1994-A310-A2
Dated March __, 1994
to
PASS THROUGH TRUST AGREEMENT
Dated as of March 1, 1994
In Each Case Between
NATIONSBANK OF SOUTH CAROLINA,
NATIONAL ASSOCIATION,
as Pass Through Trustee,
and
FEDERAL EXPRESS CORPORATION
$174,971,000
Federal Express Corporation
Pass Through Trust, 1994-A310-A2
Federal Express Corporation
1994 Pass Through Certificates,
Series A310-A2
__________________________________________
TABLE OF CONTENTS
Page
RECITALS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
DESIGNATIONS; TRUST FORMATION; ISSUANCE OF
PASS THROUGH CERTIFICATES
SECTION 2.01 Designations; Aggregate Amount . . . . . . . . . . . . 4
SECTION 2.02 Declaration of Trust; Authorization. . . . . . . . . . 4
SECTION 2.03 Issuance of Pass Through Certificates . . . . . . . . 5
SECTION 2.04 Purchase of Equipment Trust Certificates . . . . . . . 5
SECTION 2.05 Representations and Warranties of the Company. . . . . 5
SECTION 2.06 Conditions Precedent . . . . . . . . . . . . . . . . . 5
ARTICLE III
DISTRIBUTION AND RECORD DATES;
CERTIFICATE AND SPECIAL PAYMENTS ACCOUNTS
SECTION 3.01 Distribution Dates . . . . . . . . . . . . . . . . . . 6
SECTION 3.02 Record Dates . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.03 Certificate Account and Special Payments Account . . . 6
SECTION 3.04 Form of Pass Through Certificates. . . . . . . . . . . 6
SECTION 3.05 Appointment of Authenticating Agent; Paying Agent
and Registrar. . . . . . . . . . . . . . . . . . . . . 7
ARTICLE IV
MISCELLANEOUS
SECTION 4.01 Governing Law; Counterpart Form. . . . . . . . . . . . 7
SECTION 4.02 Reports by the Company . . . . . . . . . . . . . . . . 8
SECTION 4.03 Modification and Ratification of Pass Through
Agreement. . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 4.04 Termination. . . . . . . . . . . . . . . . . . . . . . 8
EXHIBIT A Form of Pass Through Certificate
SCHEDULE I Equipment Trust Certificates;
Related Indenture Documents
SERIES SUPPLEMENT 1994-A310-A2
SERIES SUPPLEMENT 1994-A310-A2, dated
March __, 1994 (this "Series Supplement"), to the Pass
Through Trust Agreement, dated as of March 1, 1994
(the "Pass Through Agreement"), in each case between
FEDERAL EXPRESS CORPORATION, a Delaware corporation
(the "Company") and NATIONSBANK OF SOUTH CAROLINA,
NATIONAL ASSOCIATION, a national banking association
organized under the laws of the United States of
America, as Pass Through Trustee (the "Pass Through
Trustee").
RECITALS
WHEREAS, capitalized terms used herein shall
have the respective meanings set forth or referred to
in Article I hereof;
WHEREAS, Section 2.01 of the Pass Through
Agreement provides, among other things, that the
Company and the Pass Through Trustee may execute and
deliver one or more series supplements, each for the
purpose of forming a separate pass through trust for
the benefit of the certificateholders of the series of
pass through certificates to be issued pursuant to
such pass through trust, establishing certain terms of
such pass through certificates, and pursuant to which
the pass through certificates of such series shall be
executed and authenticated by the Pass Through Trustee
and delivered as directed by the Company;
WHEREAS, pursuant to the Participation
Agreements, the Company has agreed to cause the
Equipment Trust Certificates to be issued and sold to
the Pass Through Trustee, and the Pass Through Trustee
has agreed to purchase the Equipment Trust
Certificates, which will be held in trust as Trust
Property for the benefit of the Certificateholders;
WHEREAS, in order to facilitate such sale,
the Company has agreed, pursuant to the Underwriting
Agreement, to cause the Pass Through Trustee to issue
and sell the Pass Through Certificates to the
Underwriters;
WHEREAS, pursuant to the Pass Through
Agreement and the terms of this Series Supplement, the
Pass Through Trustee will execute, authenticate and
deliver the Pass Through Certificates to the
Underwriters upon receipt by the Pass Through Trustee
of the purchase price therefor, which will be applied
in accordance with this Series Supplement to purchase
the Equipment Trust Certificates;
WHEREAS, the Pass Through Trustee hereby
declares the creation of this Pass Through Trust for
the benefit of the Certificateholders, and the initial
Certificateholders of such Pass Through Certificates,
as the grantors of such Pass Through Trust, by their
respective acceptances of such Pass Through
Certificates, join in the creation of such Pass
Through Trust;
WHEREAS, to facilitate the sale of the
Equipment Trust Certificates to, and the purchase of
the Equipment Trust Certificates by, the Pass Through
Trustee on behalf of this Pass Through Trust, the
Company has duly authorized the execution and delivery
of this Series Supplement as the "issuer," as such
term is defined in and solely for purposes of the
Securities Act, of the Pass Through Certificates and
as the "obligor," as such term is defined in and
solely for purposes of the Trust Indenture Act, with
respect to all such Pass Through Certificates; and
WHEREAS, this Series Supplement is subject to
the provisions of the Trust Indenture Act and shall,
to the extent applicable, be governed by such
provisions;
IT IS HEREBY COVENANTED AND AGREED by and
between the parties hereto as follows:
ARTICLE I
CERTAIN DEFINITIONS
All terms used in this Series Supplement that
are defined in the Pass Through Agreement, either
directly or by reference therein, have the meanings
assigned to them therein as supplemented by this
Article I, if applicable, except to the extent the
context clearly requires otherwise. Any such defined
term that is defined in the Pass Through Agreement as
relating to a particular Pass Through Trust or Series
rather than to any Pass Through Trust or Series
generally shall, when used in this Series Supplement,
relate solely to the Federal Express Corporation Pass
Through Trust, 1994-A310-A2, or the Federal Express
Corporation 1994 Pass Through Certificates, Series
A310-A2, as the case may be, whether or not expressly
so stated herein.
"Authenticating Agent" has the meaning set
forth in Section 3.05 hereof.
"Certificate Account" means the Certificate
Account specified in Section 3.03 hereof.
"Certificateholders" means the
Certificateholders of the Series of Pass Through
Certificates designated in Section 2.01 hereof.
"Equipment Trust Certificates" means those
Equipment Trust Certificates listed in Schedule I
hereto.
"Issuance Date" means the date defined as the
Closing Time in the Underwriting Agreement.
"Participation Agreements" means those
Participation Agreements listed in Schedule I hereto.
"Pass Through Certificates" means the Pass
Through Certificates designated in Section 2.01
hereof.
"Pass Through Trust," "this Pass Through
Trust" and other like words means the Pass Through
Trust designated in Section 2.01 hereof.
"Paying Agent" means the Person specified as
such in Section 3.05 hereof.
"Record Date" means any Record Date specified
in Section 3.02 hereof.
"Registrar" means the Person specified as
such in Section 3.05 hereof.
"Regular Distribution Date" means any Regular
Distribution Date specified in Section 3.01 hereof.
"Special Distribution Date" means, for any
Special Payment, the Special Distribution Date for
such Special Payment specified in Section 3.01 hereof.
"Special Payments Account" means the Special
Payments Account specified in Section 3.03 hereof.
"Trust Property" means all money,
instruments, including the Equipment Trust
Certificates that have been issued by the related
Owner Trustee and delivered to and accepted by the
Pass Through Trustee for the benefit of the
Certificateholders, and other property held as the
property of this Pass Through Trust, including all
distributions thereon and proceeds thereof.
"Underwriters" means the several Underwriters
named in the Underwriting Agreement.
"Underwriting Agreement" means the
Underwriting Agreement dated March 16, 1994 among the
Company, Lufthansa, the Owner Participant,
Goldman, Sachs & Co. and Merrill Lynch, Pierce,
Fenner & Smith Incorporated.
ARTICLE II
DESIGNATIONS; PASS THROUGH TRUST FORMATION; ISSUANCE
OF PASS THROUGH CERTIFICATES
SECTION 2.01. Designations; Aggregate
Amount. The Pass Through Trust created hereby shall
be designated Federal Express Corporation Pass Through
Trust, 1994-A310-A2 (herein sometimes called this
"Pass Through Trust"). The Pass Through Certificates
evidencing Fractional Undivided Interests in such Pass
Through Trust shall be designated as the Federal
Express Corporation 1994 Pass Through Certificates,
Series A310-A2 (herein sometimes called the "Series
A310-A2 Pass Through Certificates"). The Series
A310-A2 Pass Through Certificates shall be the
only instruments evidencing a fractional undivided
interest in such Pass Through Trust.
Except as provided in Section 2.09 of the
Pass Through Agreement, the aggregate amount of Series
A310-A2 Pass Through Certificates that may be
authenticated, delivered and outstanding under this
Series Supplement is limited to $174,971,000.
SECTION 2.02. Declaration of Trust;
Authorization. Each initial Certificateholder, by its
payment for and acceptance of any Series A310-A2 Pass
Through Certificate is hereby deemed (1) as grantor,
to join in the creation and declaration of this Pass
Through Trust and (2) as beneficiary of such Pass
Through Trust, to authorize and direct the Pass
Through Trustee to execute and deliver all documents
to which the Pass Through Trustee is a party that may
be necessary or desirable to consummate the
transactions contemplated hereby and to exercise its
rights and perform its duties under the Participation
Agreements, the Indentures, the Pass Through Agreement
and this Series Supplement.
The Pass Through Trustee hereby acknowledges
and accepts this grant of trust and declares that it
will hold the Trust Property as Pass Through Trustee
upon this Pass Through Trust for the use and benefit
of the Certificateholders.
SECTION 2.03. Issuance of Pass Through
Certificates. Subject to the terms set forth herein,
on the Issuance 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 by such Underwriters
pursuant to the Underwriting Agreement with respect to
the Series A310-A2 Pass Through Certificates and
(ii) the Pass Through Trustee shall deliver the Series
A310-A2 Pass Through Certificates to the
Underwriters as provided in the Underwriting Agreement
upon receipt by the Pass Through Trustee of such
proceeds.
SECTION 2.04. Purchase of Equipment Trust
Certificates. On the Issuance Date, the Pass Through
Trustee shall purchase, in accordance with Section
2.02 of the Pass Through Agreement, each of the
Equipment Trust Certificates upon the satisfaction or
waiver of the conditions for such purchase by the Pass
Through Trustee set forth in the related Participation
Agreements.
SECTION 2.05. Representations and Warranties
of the Company. All of the representations and
warranties of the Company set forth or incorporated by
reference in Section 1 of the Underwriting Agreement
are incorporated by reference in this Series
Supplement as if set forth herein and the Company
represents and warrants that such representations and
warranties are true and correct on the date hereof,
except to the extent that such representations and
warranties expressly relate solely to an earlier date
or later date (in which case such representations and
warranties were correct on and as of such earlier date
or will be correct on and as of such later date, as
the case may be).
SECTION 2.06. Conditions Precedent. The
obligations of the Pass Through Trustee to participate
in the transactions described in Sections 2.03 and
2.04 hereof are subject to (i) receipt by the Pass
Through Trustee of a certificate of the Company to the
same effect as the certificate of the Company
delivered to the Underwriters pursuant to Section 5(c)
of the Underwriting Agreement, and (ii) satisfaction or
waiver of the conditions for the purchase by the
Underwriters of the Pass Through Certificates set
forth in Section 5 of the Underwriting Agreement,
which satisfaction or waiver for the purposes hereof
shall be conclusively demonstrated by the receipt by
the Pass Through Trustee of the total proceeds payable
by such Underwriters pursuant to the Underwriting
Agreement with respect to the Series A310-A2
Pass Through Certificates.
ARTICLE III
DISTRIBUTION AND RECORD DATES;
CERTIFICATE AND SPECIAL PAYMENT ACCOUNTS
SECTION 3.01. Distribution Dates. The
Regular Distribution Dates are March 23 and
September 23, commencing on September 23, 1994. The
Special Distribution Date for any month in which a
Special Payment is to be distributed will be the
twenty-third (23rd) day of such month, except that the
Special Distribution Date for any Special Payment
received by the Pass Through Trustee in connection with
a prepayment of any Equipment Trust Certificate pursuant
to Section 6.02(a)(i) or 6.02(a)(vi) of the related
Indenture will correspond to the date of the receipt
of such Special Payment by the Pass Through Trustee.
Notice of such Special Payment shall be mailed as soon
as practicable after receipt by the Pass Through
Trustee of the notice of such prepayment.
SECTION 3.02. Record Dates. The Record
Dates for the Regular Distribution Dates are
March 8 and September 8, respectively, and the Record
Date for any Special Distribution Date is the
fifteenth day preceding such Special Distribution
Date, in any event, whether or not such date is a
Business Day.
SECTION 3.03. Certificate Account and
Special Payments Account. In accordance with Section
5.01(a) of the Pass Through Agreement and upon receipt
of any Scheduled Payment, the Pass Through Trustee
shall immediately deposit such Scheduled Payment into
the Certificate Account, a separate and non-interest
bearing account designated by the Pass Through Trustee
to be used for such purpose. In accordance with
Section 5.01(b) of the Pass Through Agreement and upon
receipt of any Special Payment, the Pass Through
Trustee shall immediately deposit such Special Payment
into the Special Payments Account, a separate and,
except as provided in Section 5.04 of the Pass Through
Agreement, non-interest bearing account designated by
the Pass Through Trustee to be used for such purpose.
SECTION 3.04. Form of Pass Through
Certificates. Subject to Section 2.07 of the Pass
Through Agreement, each of the Series A310-A2
Pass Through Certificates will be substantially in the
form of Exhibit A hereto.
SECTION 3.05. Appointment of Authenticating
Agent; Paying Agent and Registrar. (a) The Pass
Through Trustee may appoint an authenticating agent
(the "Authenticating Agent") with respect to the Pass
Through Certificates which shall be authorized to act
on behalf of the Pass Through Trustee to authenticate
the Pass Through Certificates issued upon original
issue and upon exchange or registration of transfer
thereof or pursuant to Section 2.09 of the Pass
Through Agreement. Pass Through Certificates so
authenticated shall be entitled to the benefits of the
Pass Through Agreement and this Series Supplement and
shall be valid and obligatory for all purposes as if
authenticated by the Pass Through Trustee. Whenever
reference is made in the Pass Through Agreement or
this Series Supplement to the authentication and
delivery of Pass Through Certificates by the Pass
Through Trustee or the Pass Through Trustee's
certificate of authentication, such reference shall be
deemed to include authentication and delivery on
behalf of the Pass Through Trustee by an
Authenticating Agent and a certificate of
authentication executed on behalf of the Pass Through
Trustee by an Authenticating Agent.
(b) The Paying Agent, Registrar and
Authenticating Agent for the Series A310-A2 Pass
Through Certificates initially shall be NationsBank of
Georgia, National Association ("NationsBank of
Georgia"), 600 Peachtree Street, N.E., GA1-006-09-11,
Atlanta, Georgia 30308. The Company, the Pass
Through Trustee and NationsBank of Georgia have
entered into a Registrar, Authenticating and Paying
Agency Agreement dated the date hereof which sets
forth the rights, duties and obligations of the
parties thereto with respect to the appointment of
NationsBank of Georgia as Paying Agent, Registrar and
Authenticating Agent for the Series A310-A2 Pass
Through Certificates.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Governing Law; Counterpart
Form. AS PROVIDED IN SECTION 13.14 OF THE PASS
THROUGH AGREEMENT, THIS SERIES SUPPLEMENT AND EACH
SERIES A310-A2 PASS THROUGH CERTIFICATE SHALL IN
ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE.
This Series Supplement may be executed by the
parties hereto 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 4.02. Reports by the Company. In
addition to the reports required to be provided by the
Company pursuant to Section 4.03 of the Pass Through
Agreement, the Company agrees to furnish to the Pass
Through Trustee from time to time, such other
financial information as the Pass Through Trustee may
reasonably request.
SECTION 4.03. Modification and Ratification
of Pass Through Agreement. The Pass Through Agreement
is incorporated herein by reference in its entirety,
and shall be deemed to be a part of this Series
Supplement as if set forth in full herein, and is in
all respects ratified and confirmed, as supplemented
and modified by this Series Supplement.
SECTION 4.04. Termination. In no event
shall this Pass Through Trust continue beyond the
expiration of 21 years after the death of the last
survivor of Mario Cuomo, Governor of New York State,
living on the date of this Series Supplement.
IN WITNESS WHEREOF, the parties have caused
their names to be signed hereto by their respective
officers or signatories thereunto duly authorized, all
as of the day and year first above written.
FEDERAL EXPRESS CORPORATION
By:___________________________
Name:
Title:
NATIONSBANK OF SOUTH CAROLINA,
NATIONAL ASSOCIATION,
as Pass Through Trustee
By:___________________________
Name:
Title:
Exhibit A to
Series
Supplement
FORM OF PASS THROUGH CERTIFICATE
FEDERAL EXPRESS CORPORATION PASS THROUGH TRUST,
1994-A310-A2
1994 Pass Through Certificate, Series A310-A2
Final Scheduled Regular Distribution Date: September 23, 2008
evidencing a fractional undivided interest in a
pass through trust, the property of which
includes certain Equipment Trust Certificates.
Certificate No. _______
Applicable interest rate on Equipment Trust Certificates
held in Pass Through Trust, 1994-A310-A2: 7.89%.
$___________ Fractional Undivided Interest representing
__________ of the Pass Through Trust per $1,000 face
amount.
THIS CERTIFIES THAT ______________, for value
received, is the registered owner of a $_________
(_____________ dollars) Fractional Undivided Interest
in the Federal Express Corporation Pass Through Trust,
1994-A310-A2 (the "Pass Through Trust") created and
declared by NationsBank of South Carolina, National
Association, as pass through trustee (the "Pass
Through Trustee"), pursuant to the Pass Through Trust
Agreement dated as of March 1, 1994 (the "Pass Through
Agreement"), as supplemented by Series Supplement
1994-A310-A2 thereto dated March __, 1994 (the "Series
Supplement") between the Pass Through Trustee and
Federal Express Corporation, a Delaware corporation
(the "Company"), a summary of certain of the pertinent
provisions of which is set forth below. To the extent
not otherwise defined herein, the capitalized terms
used herein have the meanings assigned to them in the
Pass Through Agreement and the Series Supplement.
This Pass Through Certificate is one of the duly
authorized Pass Through Certificates designated as
"Federal Express Corporation 1994 Pass Through
Certificates, Series A310-A2." This Pass Through
Certificate is issued under and is subject to the
terms, provisions and conditions of the Pass Through
Agreement and the Series Supplement, to which the
Certificateholder of this Pass Through Certificate by
virtue of the acceptance hereof assents and by which
such Certificateholder is bound. The property of the
Pass Through Trust (the "Trust Property") includes
certain Equipment Trust Certificates (the "Equipment
Trust Certificates"). Each series of Equipment Trust
Certificates is secured as described in the related
Indenture Documents. The Pass Through Certificates
represent fractional undivided interests in the Pass
Through Trust and the Trust Property, and have no rights,
benefits or interests in respect of any other
separate trust established pursuant to the
terms of the Pass Through Agreement for any other
Series of Pass Through Certificates issued pursuant
thereto.
Subject to and in accordance with the terms
of the Pass Through Agreement and the Series
Supplement, from funds then available to the Pass
Through Trustee, there will be distributed on each
March 23 and September 23 (a "Regular Distribution
Date"), commencing on September 23, 1994, to the Person
in whose name this Pass Through Certificate is
registered at the close of business on the 15th day
preceding the applicable Regular Distribution Date, an
amount in respect of the Scheduled Payments on the
Equipment Trust Certificates due on such Regular
Distribution Date, equal to the product of the
percentage interest in the Pass Through Trust
evidenced by this Pass Through Certificate and an
amount equal to the sum of such Scheduled Payments.
Subject to and in accordance with the terms of the
Pass Through Agreement and the Series Supplement, if
Special Payments on the Equipment Trust Certificates
are received by the Pass Through Trustee, from funds
then available to the Pass Through Trustee, there
shall be distributed on the applicable Special
Distribution Date, to the Person in whose name this
Pass Through Certificate is registered at the close of
business on the 15th day preceding such Special
Distribution Date, an amount in respect of such
Special Payments on the Equipment Trust Certificates,
equal to the product of the percentage interest in the
Pass Through Trust evidenced by this Pass Through
Certificate and an amount equal to the sum of such
Special Payments so received.
If a Distribution Date is not a Business Day,
distribution shall be made on the immediately
following Business Day with the same force and effect
as if made on such Distribution Date and no interest
shall accrue during the intervening period. The
Special Distribution Date shall be the twenty-third (23rd) day
of the month determined as provided in the Pass Through
Agreement and the Series Supplement, except in certain
circumstances, in which case it will be the date of
receipt of proceeds by the Pass Through Trustee as
provided in the Series Supplement. The Pass Through
Trustee shall mail notice of each Special Payment and
the Special Distribution Date therefor to the
Certificateholder of this Pass Through Certificate.
Distributions on this Pass Through
Certificate will be made by the Pass Through Trustee
to the Person entitled thereto, without the
presentation or surrender of this Pass Through
Certificate or the making of any notation hereon.
Except as otherwise provided in the Pass Through
Agreement and notwithstanding the above, the final
distribution on this Pass Through Certificate will be
made after notice is mailed by the Pass Through
Trustee of the pendency of such distribution and only
upon presentation and surrender of this Pass Through
Certificate at the office or agency of the Pass
Through Trustee specified in such notice.
NO 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
INTERNAL REVENUE CODE OF 1986, AS AMENDED (HEREINAFTER
COLLECTIVELY REFERRED TO AS AN "ERISA PLAN"), MAY
ACQUIRE OR HOLD ANY OF THE PASS THROUGH CERTIFICATES.
THE PURCHASE BY ANY PERSON OF ANY PASS THROUGH
CERTIFICATE CONSTITUTES A REPRESENTATION BY SUCH
PERSON TO FEDERAL EXPRESS CORPORATION, THE RELATED
OWNER PARTICIPANTS, THE RELATED OWNER TRUSTEES, THE
RELATED INDENTURE TRUSTEES AND THE PASS THROUGH
TRUSTEE OR THEIR RESPECTIVE SUCCESSORS, AS THE CASE
MAY BE, THAT SUCH PERSON IS NOT AN ERISA PLAN AND THAT
SUCH PERSON IS NOT ACQUIRING, AND HAS NOT ACQUIRED,
SUCH PASS THROUGH CERTIFICATE WITH ASSETS OF AN ERISA
PLAN.
This Pass Through Certificate shall be
governed by and construed in accordance with the laws
of the State of New York.
Reference is hereby made to the further
provisions of this Pass Through Certificate set forth
on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth
at this place.
Unless the certificate of authentication hereon
has been executed by the Pass Through Trustee, by
manual signature, this Pass Through Certificate shall
not be entitled to any benefit under the Pass Through
Trust or be valid for any purpose.
IN WITNESS WHEREOF, the Pass Through Trustee
has caused this Pass Through Certificate to be duly
executed.
FEDERAL EXPRESS CORPORATION
PASS THROUGH TRUST, 1994-A310-A2
By: NATIONSBANK OF SOUTH CAROLINA,
NATIONAL ASSOCIATION,
as Pass Through Trustee
By: _______________________________
Authorized Signatory
[FORM OF THE PASS THROUGH TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
Dated:
This is one of the Pass Through Certificates
referred to in the within-mentioned Pass Through
Agreement and the Series Supplement.
NATIONSBANK OF GEORGIA,
NATIONAL ASSOCIATION,
as Registrar, Paying Agent
and Authenticating Agent
By: _______________________
Authorized Signatory
[Reverse of Pass Through Certificate].
The Pass Through Certificates do not
represent a direct obligation of, or an obligation
guaranteed by, or an interest in, the Company or the
Pass Through Trustee or any affiliate thereof. The
Pass Through Certificates are limited in right of
payment, all as more specifically set forth on the
face hereof and in the Pass Through Agreement and the
Series Supplement. All payments or distributions made
to Certificateholders under the Pass Through Agreement
shall be made only from the Trust Property and only to
the extent that the Pass Through Trustee shall have
sufficient income or proceeds from the Trust Property
to make such payments in accordance with the terms of
the Pass Through Agreement and the Series Supplement.
Each Certificateholder of this Pass Through
Certificate, by its acceptance hereof, agrees that it
will look solely to the income and proceeds from the
Trust Property to the extent available for
distribution to such Certificateholder as provided in
the Pass Through Agreement and the Series Supplement.
In connection with withholding taxes, under certain
circumstances the Pass Through Trustee may retain
certain amounts otherwise distributable to a
Certificateholder. The purchase by any
Certificateholder of any Pass Through Certificate
constitutes the consent of such Certificateholder to
such retention in accordance with the terms of the
Pass Through Agreement. This Pass Through Certificate
does not purport to summarize the Pass Through
Agreement and the Series Supplement and reference is
made to the Pass Through Agreement and the Series
Supplement for information with respect to the
interests, rights, benefits, obligations, proceeds and
duties evidenced hereby. A copy of the Pass Through
Agreement and the Series Supplement may be examined by
any Certificateholder upon request during normal business
hours at the principal office of the Pass Through Trustee,
and at such other places designated by the Pass Through
Trustee.
As of the date of issuance of this Pass
Through Certificate, and assuming that no prepayment,
purchase or default in respect of the Equipment Trust
Certificates shall occur, the aggregate scheduled
repayments of principal on the Equipment Trust
Certificates for the Pass Through Trust and the
resulting Pool Factors for the Pass Through Trust
after taking into account each such repayment are set
forth below:
Pass Through Trust, 1994-A310-A2
Scheduled Principal
Regular Payments
Distribution on Equipment Trust
Date Certificates Pool Factor
---- ------------ -----------
September 23, 1998 $ 8,760,614 0.9499311
March 23, 1999 9,106,219 0.8978869
September 23, 1999 9,465,461 0.8437896
March 23, 2000 8,875,637 0.7930632
September 23, 2000 7,965,068 0.7475410
March 23, 2001 6,746,087 0.7089856
September 23, 2001 5,310,105 0.6786371
March 23, 2002 5,519,588 0.6470914
September 23, 2002 5,656,004 0.6147660
March 23, 2003 2,229,482 0.6020240
September 23, 2003 4,215,533 0.5779312
March 23, 2004 4,937,828 0.5497104
September 23, 2004 5,680,745 0.5172436
March 23, 2005 8,109,529 0.4708957
September 23, 2005 8,581,389 0.4218511
March 23, 2006 10,979,645 0.3590999
September 23, 2006 14,757,075 0.2747598
March 23, 2007 16,224,717 0.1820317
September 23, 2007 12,297,292 0.1117498
March 23, 2008 10,629,912 0.0509974
September 23, 2008 8,923,070 0.0000000
The Pass Through Agreement and the Series
Supplement permit, with certain exceptions provided
therein, the amendment thereof and the modification of
the rights and obligations of the Company and the
rights of the Certificateholders under the Pass
Through Trust at any time by the Company and the Pass
Through Trustee with the consent of the Majority In
Interest of Certificateholders in the Pass Through
Trust. Any such consent by the Certificateholder of
this Pass Through Certificate shall be conclusive and
binding on such Certificateholder and upon all future
Certificateholders of this Pass Through Certificate
and of any Pass Through Certificate issued upon the
transfer hereof or in exchange hereof or in lieu
hereof whether or not notation of such consent is made
upon this Pass Through Certificate. The Pass Through
Agreement and the Series Supplement also permit the
amendment thereof, in certain limited circumstances,
without the consent of the Certificateholders of any
of the Pass Through Certificates.
As provided in the Pass Through Agreement and
the Series Supplement and subject to certain
limitations set forth therein, the transfer of this
Pass Through Certificate is registrable in the
Register upon surrender of this Pass Through
Certificate for registration of transfer to the Pass
Through Trustee in its capacity as Registrar, or by
any successor Registrar, duly endorsed or accompanied
by a written instrument of transfer in form
satisfactory to the Pass Through Trustee and the
Registrar duly executed by the Certificateholder
hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new
Pass Through Certificates of authorized denominations
evidencing the same aggregate Fractional Undivided
Interest in the Pass Through Trust will be issued to
the designated transferee or transferees.
The Pass Through Certificates are issuable
only as registered Pass Through Certificates without
coupons in minimum denominations of $1,000 Fractional
Undivided Interest and integral multiples thereof. As
provided in the Pass Through Agreement and the Series
Supplement and subject to certain limitations set
forth therein, the Pass Through Certificates are
exchangeable for new Pass Through Certificates of
authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Pass Through
Trust, as requested by the Certificateholder
surrendering the same.
No service charge will be made for any such
registration of transfer or exchange, but the Pass
Through Trustee shall require payment of a sum
sufficient to cover any tax or governmental charge
payable in connection therewith.
The Pass Through Trustee, the Registrar, and
any agent of the Pass Through Trustee or the Registrar
may treat the person in whose name this Pass Through
Certificate is registered as the owner hereof for all
purposes, and neither the Pass Through Trustee, the
Registrar, nor any such agent shall be affected by any
notice to the contrary.
The obligations and responsibilities created
by the Pass Through Agreement and the Series
Supplement and the Pass Through Trust created thereby
shall terminate upon the distribution to
Certificateholders of all amounts required to be
distributed to them pursuant to the Pass Through
Agreement and the Series Supplement and the
disposition of all property held as part of the Trust
Property.
Schedule I to
Series Supplement
Federal Express Corporation
Pass Through Trust, 1994-A310-A2
Equipment Trust Certificates;
Related Indenture Documents
1. Equipment Trust Certificates (Federal Express
Corporation Trust A)
Interest Rate: 7.89%
Maturity: March 23, 2007
Principal Amount: $17,268,693
2. Equipment Trust Certificates (Federal Express
Corporation Trust B)
Interest Rate: 7.89%
Maturity: September 23, 2007
Principal Amount: $17,782,345
3. Equipment Trust Certificates (Federal Express
Corporation Trust C)
Interest Rate: 7.89%
Maturity: September 23, 2007
Principal Amount: $18,232,902
4. Equipment Trust Certificates (Federal Express
Corporation Trust D)
Interest Rate: 7.89%
Maturity: March 23, 2007
Principal Amount: $18,109,624
5. Equipment Trust Certificates (Federal Express
Corporation Trust E)
Interest Rate: 7.89%
Maturity: September 23, 2007
Principal Amount: $16,860,707
6. Equipment Trust Certificates (Federal Express
Corporation Trust F)
Interest Rate: 7.89%
Maturity: September 23, 2008
Principal Amount: $14,620,624
7. Equipment Trust Certificates (Federal Express
Corporation Trust G)
Interest Rate: 7.89%
Maturity: March 23, 2008
Principal Amount: $12,466,618
8. Equipment Trust Certificates (Federal Express
Corporation Trust H)
Interest Rate: 7.89%
Maturity: September 23, 2008
Principal Amount: $13,528,824
9. Equipment Trust Certificates (Federal Express
Corporation Trust I)
Interest Rate: 7.89%
Maturity: September 23, 2008
Principal Amount: $10,954,314
10. Equipment Trust Certificates (Federal Express
Corporation Trust J)
Interest Rate: 7.89%
Maturity: September 23, 2008
Principal Amount: $10,101,643
11. Equipment Trust Certificates (Federal Express
Corporation Trust K)
Interest Rate: 7.89%
Maturity: September 23, 2008
Principal Amount: $9,838,871
12. Equipment Trust Certificates (Federal Express
Corporation Trust L)
Interest Rate: 7.89%
Maturity: September 23, 2008
Principal Amount: $7,583,248
13. Equipment Trust Certificates (Federal Express
Corporation Trust M)
Interest Rate: 7.89%
Maturity: September 23, 2008
Principal Amount: $7,622,587
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal
Express Corporation Trust A through M), dated as of
March 1, 1994, between First Security Bank of
Utah, National Association, as Owner Trustee and
NationsBank of Georgia, National Association, as
Indenture Trustee.*
Trust Agreement dated as of September 1, 1993, as
amended and restated as of March 1, 1994, between
LLG Aircraft Leasing, L.P., as Trustor, and First
Security Bank of Utah, National Association, as
Owner Trustee.
Participation Agreement (Federal Express Corporation
Trust A through M), dated as of March 1, 1994, among
Federal Express Corporation, as Lessee, LLG Aircraft
Leasing, L.P., as Owner Participant, NationsBank of
South Carolina, National Association, as Pass Through
Trustee, First Security Bank of Utah, National
Association, as Owner Trustee, NationsBank of Georgia,
National Association, as Indenture Trustee and
Westdeutsche Landesbank Girozentrale, New York Branch,
as LC Bank.**
Collateral Agreement (Trust A through M), dated as of
March 1, 1994, between First Security Bank of Utah,
National Association, as Owner Trustee, and
NationsBank of Georgia, National Association, as
Indenture Trustee.***
Letter of Credit to be dated the Closing Date referred
to in the related Participation Agreement, from
Westdeutsche Landesbank Girozentrale, New York Branch,
to NationsBank of Georgia, National Association, as
Indenture Trustee;****
Lease Agreement (Federal Express Corporation Trust
A through M) to be dated on or prior to the related
Commencement Date referred to in the related
Participation Agreement (or the form thereof prior
to such Commencement Date), between First Security
Bank of Utah, National Association, as Owner Trustee
and Lessor and Federal Express Corporation as
Lessee.*****
With respect to each of Trusts A through M, the other
Indenture Documents defined as such in the related Trust
Indenture.
* A separate Trust Indenture will be executed with
respect to each of Trusts A through M.
** A separate Participation Agreement will be
execution with respect to each of the Trusts
A through M.
*** A separate Collateral Agreement will be executed
with respect to each of Trusts A through M.
**** A separate Letter of Credit will be executed with
respect to each of Trusts A through M.
***** A separate Lease Agreement will be executed with
respect to each of Trusts A through M.
Exhibit 4.a.3
__________________________________________
SERIES SUPPLEMENT 1994-A310-A3
Dated March __, 1994
to
PASS THROUGH TRUST AGREEMENT
Dated as of March 1, 1994
In Each Case Between
NATIONSBANK OF SOUTH CAROLINA,
NATIONAL ASSOCIATION,
as Pass Through Trustee,
and
FEDERAL EXPRESS CORPORATION
$77,141,000
Federal Express Corporation
Pass Through Trust, 1994-A310-A3
Federal Express Corporation
1994 Pass Through Certificates,
Series A310-A3
__________________________________________
TABLE OF CONTENTS
Page
RECITALS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
DESIGNATIONS; TRUST FORMATION; ISSUANCE OF
PASS THROUGH CERTIFICATES
SECTION 2.01 Designations; Aggregate Amount . . . . . . . . . . . . 4
SECTION 2.02 Declaration of Trust; Authorization. . . . . . . . . . 4
SECTION 2.03 Issuance of Pass Through Certificates . . . . . . . . 5
SECTION 2.04 Purchase of Equipment Trust Certificates . . . . . . . 5
SECTION 2.05 Representations and Warranties of the Company. . . . . 5
SECTION 2.06 Conditions Precedent . . . . . . . . . . . . . . . . . 5
ARTICLE III
DISTRIBUTION AND RECORD DATES;
CERTIFICATE AND SPECIAL PAYMENTS ACCOUNTS
SECTION 3.01 Distribution Dates . . . . . . . . . . . . . . . . . . 6
SECTION 3.02 Record Dates . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.03 Certificate Account and Special Payments Account . . . 6
SECTION 3.04 Form of Pass Through Certificates. . . . . . . . . . . 6
SECTION 3.05 Appointment of Authenticating Agent; Paying Agent
and Registrar. . . . . . . . . . . . . . . . . . . . . 7
ARTICLE IV
MISCELLANEOUS
SECTION 4.01 Governing Law; Counterpart Form. . . . . . . . . . . . 7
SECTION 4.02 Reports by the Company . . . . . . . . . . . . . . . . 8
SECTION 4.03 Modification and Ratification of Pass Through
Agreement. . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 4.04 Termination. . . . . . . . . . . . . . . . . . . . . . 8
EXHIBIT A Form of Pass Through Certificate
SCHEDULE I Equipment Trust Certificates;
Related Indenture Documents
SERIES SUPPLEMENT 1994-A310-A3
SERIES SUPPLEMENT 1994-A310-A3, dated
March __, 1994 (this "Series Supplement"), to the Pass
Through Trust Agreement, dated as of March 1, 1994
(the "Pass Through Agreement"), in each case between
FEDERAL EXPRESS CORPORATION, a Delaware corporation
(the "Company") and NATIONSBANK OF SOUTH CAROLINA,
NATIONAL ASSOCIATION, a national banking association
organized under the laws of the United States of
America, as Pass Through Trustee (the "Pass Through
Trustee").
RECITALS
WHEREAS, capitalized terms used herein shall
have the respective meanings set forth or referred to
in Article I hereof;
WHEREAS, Section 2.01 of the Pass Through
Agreement provides, among other things, that the
Company and the Pass Through Trustee may execute and
deliver one or more series supplements, each for the
purpose of forming a separate pass through trust for
the benefit of the certificateholders of the series of
pass through certificates to be issued pursuant to
such pass through trust, establishing certain terms of
such pass through certificates, and pursuant to which
the pass through certificates of such series shall be
executed and authenticated by the Pass Through Trustee
and delivered as directed by the Company;
WHEREAS, pursuant to the Participation
Agreements, the Company has agreed to cause the
Equipment Trust Certificates to be issued and sold to
the Pass Through Trustee, and the Pass Through Trustee
has agreed to purchase the Equipment Trust
Certificates, which will be held in trust as Trust
Property for the benefit of the Certificateholders;
WHEREAS, in order to facilitate such sale,
the Company has agreed, pursuant to the Underwriting
Agreement, to cause the Pass Through Trustee to issue
and sell the Pass Through Certificates to the
Underwriters;
WHEREAS, pursuant to the Pass Through
Agreement and the terms of this Series Supplement, the
Pass Through Trustee will execute, authenticate and
deliver the Pass Through Certificates to the
Underwriters upon receipt by the Pass Through Trustee
of the purchase price therefor, which will be applied
in accordance with this Series Supplement to purchase
the Equipment Trust Certificates;
WHEREAS, the Pass Through Trustee hereby
declares the creation of this Pass Through Trust for
the benefit of the Certificateholders, and the initial
Certificateholders of such Pass Through Certificates,
as the grantors of such Pass Through Trust, by their
respective acceptances of such Pass Through
Certificates, join in the creation of such Pass
Through Trust;
WHEREAS, to facilitate the sale of the
Equipment Trust Certificates to, and the purchase of
the Equipment Trust Certificates by, the Pass Through
Trustee on behalf of this Pass Through Trust, the
Company has duly authorized the execution and delivery
of this Series Supplement as the "issuer," as such
term is defined in and solely for purposes of the
Securities Act, of the Pass Through Certificates and
as the "obligor," as such term is defined in and
solely for purposes of the Trust Indenture Act, with
respect to all such Pass Through Certificates; and
WHEREAS, this Series Supplement is subject to
the provisions of the Trust Indenture Act and shall,
to the extent applicable, be governed by such
provisions;
IT IS HEREBY COVENANTED AND AGREED by and
between the parties hereto as follows:
ARTICLE I
CERTAIN DEFINITIONS
All terms used in this Series Supplement that
are defined in the Pass Through Agreement, either
directly or by reference therein, have the meanings
assigned to them therein as supplemented by this
Article I, if applicable, except to the extent the
context clearly requires otherwise. Any such defined
term that is defined in the Pass Through Agreement as
relating to a particular Pass Through Trust or Series
rather than to any Pass Through Trust or Series
generally shall, when used in this Series Supplement,
relate solely to the Federal Express Corporation Pass
Through Trust, 1994-A310-A3, or the Federal Express
Corporation 1994 Pass Through Certificates, Series
A310-A3, as the case may be, whether or not expressly
so stated herein.
"Authenticating Agent" has the meaning set
forth in Section 3.05 hereof.
"Certificate Account" means the Certificate
Account specified in Section 3.03 hereof.
"Certificateholders" means the
Certificateholders of the Series of Pass Through
Certificates designated in Section 2.01 hereof.
"Equipment Trust Certificates" means those
Equipment Trust Certificates listed in Schedule I
hereto.
"Issuance Date" means the date defined as the
Closing Time in the Underwriting Agreement.
"Participation Agreements" means those
Participation Agreements listed in Schedule I hereto.
"Pass Through Certificates" means the Pass
Through Certificates designated in Section 2.01
hereof.
"Pass Through Trust," "this Pass Through
Trust" and other like words means the Pass Through
Trust designated in Section 2.01 hereof.
"Paying Agent" means the Person specified as
such in Section 3.05 hereof.
"Record Date" means any Record Date specified
in Section 3.02 hereof.
"Registrar" means the Person specified as
such in Section 3.05 hereof.
"Regular Distribution Date" means any Regular
Distribution Date specified in Section 3.01 hereof.
"Special Distribution Date" means, for any
Special Payment, the Special Distribution Date for
such Special Payment specified in Section 3.01 hereof.
"Special Payments Account" means the Special
Payments Account specified in Section 3.03 hereof.
"Trust Property" means all money,
instruments, including the Equipment Trust
Certificates that have been issued by the related
Owner Trustee and delivered to and accepted by the
Pass Through Trustee for the benefit of the
Certificateholders, and other property held as the
property of this Pass Through Trust, including all
distributions thereon and proceeds thereof.
"Underwriters" means the several Underwriters
named in the Underwriting Agreement.
"Underwriting Agreement" means the
Underwriting Agreement dated March 16, 1994 among the
Company, Lufthansa, the Owner Participant,
Goldman, Sachs & Co. and Merrill Lynch, Pierce,
Fenner & Smith Incorporated.
ARTICLE II
DESIGNATIONS; PASS THROUGH TRUST FORMATION; ISSUANCE
OF PASS THROUGH CERTIFICATES
SECTION 2.01. Designations; Aggregate
Amount. The Pass Through Trust created hereby shall
be designated Federal Express Corporation Pass Through
Trust, 1994-A310-A3 (herein sometimes called this
"Pass Through Trust"). The Pass Through Certificates
evidencing Fractional Undivided Interests in such Pass
Through Trust shall be designated as the Federal
Express Corporation 1994 Pass Through Certificates,
Series A310-A3 (herein sometimes called the "Series
A310-A3 Pass Through Certificates"). The Series
A310-A3 Pass Through Certificates shall be the
only instruments evidencing a fractional undivided
interest in such Pass Through Trust.
Except as provided in Section 2.09 of the
Pass Through Agreement, the aggregate amount of Series
A310-A3 Pass Through Certificates that may be
authenticated, delivered and outstanding under this
Series Supplement is limited to $77,141,000.
SECTION 2.02. Declaration of Trust;
Authorization. Each initial Certificateholder, by its
payment for and acceptance of any Series A310-A3 Pass
Through Certificate is hereby deemed (1) as grantor,
to join in the creation and declaration of this Pass
Through Trust and (2) as beneficiary of such Pass
Through Trust, to authorize and direct the Pass
Through Trustee to execute and deliver all documents
to which the Pass Through Trustee is a party that may
be necessary or desirable to consummate the
transactions contemplated hereby and to exercise its
rights and perform its duties under the Participation
Agreements, the Indentures, the Pass Through Agreement
and this Series Supplement.
The Pass Through Trustee hereby acknowledges
and accepts this grant of trust and declares that it
will hold the Trust Property as Pass Through Trustee
upon this Pass Through Trust for the use and benefit
of the Certificateholders.
SECTION 2.03. Issuance of Pass Through
Certificates. Subject to the terms set forth herein,
on the Issuance 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 by such Underwriters
pursuant to the Underwriting Agreement with respect to
the Series A310-A3 Pass Through Certificates and
(ii) the Pass Through Trustee shall deliver the Series
A310-A3 Pass Through Certificates to the
Underwriters as provided in the Underwriting Agreement
upon receipt by the Pass Through Trustee of such
proceeds.
SECTION 2.04. Purchase of Equipment Trust
Certificates. On the Issuance Date, the Pass Through
Trustee shall purchase, in accordance with Section
2.02 of the Pass Through Agreement, each of the
Equipment Trust Certificates upon the satisfaction or
waiver of the conditions for such purchase by the Pass
Through Trustee set forth in the related Participation
Agreements.
SECTION 2.05. Representations and Warranties
of the Company. All of the representations and
warranties of the Company set forth or incorporated by
reference in Section 1 of the Underwriting Agreement
are incorporated by reference in this Series
Supplement as if set forth herein and the Company
represents and warrants that such representations and
warranties are true and correct on the date hereof,
except to the extent that such representations and
warranties expressly relate solely to an earlier date
or later date (in which case such representations and
warranties were correct on and as of such earlier date
or will be correct on and as of such later date, as
the case may be).
SECTION 2.06. Conditions Precedent. The
obligations of the Pass Through Trustee to participate
in the transactions described in Sections 2.03 and
2.04 hereof are subject to (i) receipt by the Pass
Through Trustee of a certificate of the Company to the
same effect as the certificate of the Company
delivered to the Underwriters pursuant to Section 5(c)
of the Underwriting Agreement, and (ii) satisfaction or
waiver of the conditions for the purchase by the
Underwriters of the Pass Through Certificates set
forth in Section 5 of the Underwriting Agreement,
which satisfaction or waiver for the purposes hereof
shall be conclusively demonstrated by the receipt by
the Pass Through Trustee of the total proceeds payable
by such Underwriters pursuant to the Underwriting
Agreement with respect to the Series A310-A3
Pass Through Certificates.
ARTICLE III
DISTRIBUTION AND RECORD DATES;
CERTIFICATE AND SPECIAL PAYMENT ACCOUNTS
SECTION 3.01. Distribution Dates. The
Regular Distribution Dates are March 23 and
September 23, commencing on September 23, 1994. The
Special Distribution Date for any month in which a
Special Payment is to be distributed will be the twenty-third
(23rd) day of such month, except that the Special
Distribution Date for any Special Payment received by
the Pass Through Trustee in connection with a
prepayment of any Equipment Trust Certificate pursuant
to Section 6.02(a)(i) or 6.02(a)(vi) of the related
Indenture will correspond to the date of the receipt
of such Special Payment by the Pass Through Trustee.
Notice of such Special Payment shall be mailed as soon
as practicable after receipt by the Pass Through
Trustee of the notice of such prepayment.
SECTION 3.02. Record Dates. The Record
Dates for the Regular Distribution Dates are
March 8 and September 8, respectively, and the Record
Date for any Special Distribution Date is the
fifteenth day preceding such Special Distribution
Date, in any event, whether or not such date is a
Business Day.
SECTION 3.03. Certificate Account and
Special Payments Account. In accordance with Section
5.01(a) of the Pass Through Agreement and upon receipt
of any Scheduled Payment, the Pass Through Trustee
shall immediately deposit such Scheduled Payment into
the Certificate Account, a separate and non-interest
bearing account designated by the Pass Through Trustee
to be used for such purpose. In accordance with
Section 5.01(b) of the Pass Through Agreement and upon
receipt of any Special Payment, the Pass Through
Trustee shall immediately deposit such Special Payment
into the Special Payments Account, a separate and,
except as provided in Section 5.04 of the Pass Through
Agreement, non-interest bearing account designated by
the Pass Through Trustee to be used for such purpose.
SECTION 3.04. Form of Pass Through
Certificates. Subject to Section 2.07 of the Pass
Through Agreement, each of the Series A310-A3
Pass Through Certificates will be substantially in the
form of Exhibit A hereto.
SECTION 3.05. Appointment of Authenticating
Agent; Paying Agent and Registrar. (a) The Pass
Through Trustee may appoint an authenticating agent
(the "Authenticating Agent") with respect to the Pass
Through Certificates which shall be authorized to act
on behalf of the Pass Through Trustee to authenticate
the Pass Through Certificates issued upon original
issue and upon exchange or registration of transfer
thereof or pursuant to Section 2.09 of the Pass
Through Agreement. Pass Through Certificates so
authenticated shall be entitled to the benefits of the
Pass Through Agreement and this Series Supplement and
shall be valid and obligatory for all purposes as if
authenticated by the Pass Through Trustee. Whenever
reference is made in the Pass Through Agreement or
this Series Supplement to the authentication and
delivery of Pass Through Certificates by the Pass
Through Trustee or the Pass Through Trustee's
certificate of authentication, such reference shall be
deemed to include authentication and delivery on
behalf of the Pass Through Trustee by an
Authenticating Agent and a certificate of
authentication executed on behalf of the Pass Through
Trustee by an Authenticating Agent.
(b) The Paying Agent, Registrar and
Authenticating Agent for the Series A310-A3 Pass
Through Certificates initially shall be NationsBank of
Georgia, National Association ("NationsBank of
Georgia"), 600 Peachtree Street, N.E., GA1-006-09-11,
Atlanta, Georgia 30308. The Company, the Pass
Through Trustee and NationsBank of Georgia have
entered into a Registrar, Authenticating and Paying
Agency Agreement dated the date hereof which sets
forth the rights, duties and obligations of the
parties thereto with respect to the appointment of
NationsBank of Georgia as Paying Agent, Registrar and
Authenticating Agent for the Series A310-A3 Pass
Through Certificates.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Governing Law; Counterpart
Form. AS PROVIDED IN SECTION 13.14 OF THE PASS
THROUGH AGREEMENT, THIS SERIES SUPPLEMENT AND EACH
SERIES A310-A3 PASS THROUGH CERTIFICATE SHALL IN
ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE.
This Series Supplement may be executed by the
parties hereto 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 4.02. Reports by the Company. In
addition to the reports required to be provided by the
Company pursuant to Section 4.03 of the Pass Through
Agreement, the Company agrees to furnish to the Pass
Through Trustee from time to time, such other
financial information as the Pass Through Trustee may
reasonably request.
SECTION 4.03. Modification and Ratification
of Pass Through Agreement. The Pass Through Agreement
is incorporated herein by reference in its entirety,
and shall be deemed to be a part of this Series
Supplement as if set forth in full herein, and is in
all respects ratified and confirmed, as supplemented
and modified by this Series Supplement.
SECTION 4.04. Termination. In no event
shall this Pass Through Trust continue beyond the
expiration of 21 years after the death of the last
survivor of Mario Cuomo, Governor of New York State,
living on the date of this Series Supplement.
IN WITNESS WHEREOF, the parties have caused
their names to be signed hereto by their respective
officers or signatories thereunto duly authorized, all
as of the day and year first above written.
FEDERAL EXPRESS CORPORATION
By:___________________________
Name:
Title:
NATIONSBANK OF SOUTH CAROLINA,
NATIONAL ASSOCIATION,
as Pass Through Trustee
By:___________________________
Name:
Title:
Exhibit A to
Series
Supplement
FORM OF PASS THROUGH CERTIFICATE
FEDERAL EXPRESS CORPORATION PASS THROUGH TRUST,
1994-A310-A3
1994 Pass Through Certificate, Series A310-A3
Final Scheduled Regular Distribution Date: March 23, 2010
evidencing a fractional undivided interest in a
pass through trust, the property of which
includes certain Equipment Trust Certificates.
Certificate No. _______
Applicable interest rate on Equipment Trust Certificates
held in Pass Through Trust, 1994-A310-A3: 8.40%.
$___________ Fractional Undivided Interest representing
__________ of the Pass Through Trust per $1,000 face
amount.
THIS CERTIFIES THAT ______________, for value
received, is the registered owner of a $_________
(_____________ dollars) Fractional Undivided Interest
in the Federal Express Corporation Pass Through Trust,
1994-A310-A3 (the "Pass Through Trust") created and
declared by NationsBank of South Carolina, National
Association, as pass through trustee (the "Pass
Through Trustee"), pursuant to the Pass Through Trust
Agreement dated as of March 1, 1994 (the "Pass Through
Agreement"), as supplemented by Series Supplement
1994-A310-A3 thereto dated March __, 1994 (the "Series
Supplement") between the Pass Through Trustee and
Federal Express Corporation, a Delaware corporation
(the "Company"), a summary of certain of the pertinent
provisions of which is set forth below. To the extent
not otherwise defined herein, the capitalized terms
used herein have the meanings assigned to them in the
Pass Through Agreement and the Series Supplement.
This Pass Through Certificate is one of the duly
authorized Pass Through Certificates designated as
"Federal Express Corporation 1994 Pass Through
Certificates, Series A310-A3." This Pass Through
Certificate is issued under and is subject to the
terms, provisions and conditions of the Pass Through
Agreement and the Series Supplement, to which the
Certificateholder of this Pass Through Certificate by
virtue of the acceptance hereof assents and by which
such Certificateholder is bound. The property of the
Pass Through Trust (the "Trust Property") includes
certain Equipment Trust Certificates (the "Equipment
Trust Certificates"). Each series of Equipment Trust
Certificates is secured as described in the related
Indenture Documents. The Pass Through Certificates
represent fractional undivided interests in the Pass
Through Trust and the Trust Property, and have no rights,
benefits or interests in respect of any other
separate trust established pursuant to the
terms of the Pass Through Agreement for any other
Series of Pass Through Certificates issued pursuant
thereto.
Subject to and in accordance with the terms
of the Pass Through Agreement and the Series
Supplement, from funds then available to the Pass
Through Trustee, there will be distributed on each
March 23 and September 23 (a "Regular Distribution
Date"), commencing on September 23, 1994, to the Person
in whose name this Pass Through Certificate is
registered at the close of business on the 15th day
preceding the applicable Regular Distribution Date, an
amount in respect of the Scheduled Payments on the
Equipment Trust Certificates due on such Regular
Distribution Date, equal to the product of the
percentage interest in the Pass Through Trust
evidenced by this Pass Through Certificate and an
amount equal to the sum of such Scheduled Payments.
Subject to and in accordance with the terms of the
Pass Through Agreement and the Series Supplement, if
Special Payments on the Equipment Trust Certificates
are received by the Pass Through Trustee, from funds
then available to the Pass Through Trustee, there
shall be distributed on the applicable Special
Distribution Date, to the Person in whose name this
Pass Through Certificate is registered at the close of
business on the 15th day preceding such Special
Distribution Date, an amount in respect of such
Special Payments on the Equipment Trust Certificates,
equal to the product of the percentage interest in the
Pass Through Trust evidenced by this Pass Through
Certificate and an amount equal to the sum of such
Special Payments so received.
If a Distribution Date is not a Business Day,
distribution shall be made on the immediately
following Business Day with the same force and effect
as if made on such Distribution Date and no interest
shall accrue during the intervening period. The
Special Distribution Date shall be the twenty-third (23rd)
day of the month determined as provided in the Pass Through
Agreement and the Series Supplement, except in certain
circumstances, in which case it will be the date of
receipt of proceeds by the Pass Through Trustee as
provided in the Series Supplement. The Pass Through
Trustee shall mail notice of each Special Payment and
the Special Distribution Date therefor to the
Certificateholder of this Pass Through Certificate.
Distributions on this Pass Through
Certificate will be made by the Pass Through Trustee
to the Person entitled thereto, without the
presentation or surrender of this Pass Through
Certificate or the making of any notation hereon.
Except as otherwise provided in the Pass Through
Agreement and notwithstanding the above, the final
distribution on this Pass Through Certificate will be
made after notice is mailed by the Pass Through
Trustee of the pendency of such distribution and only
upon presentation and surrender of this Pass Through
Certificate at the office or agency of the Pass
Through Trustee specified in such notice.
NO 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
INTERNAL REVENUE CODE OF 1986, AS AMENDED (HEREINAFTER
COLLECTIVELY REFERRED TO AS AN "ERISA PLAN"), MAY
ACQUIRE OR HOLD ANY OF THE PASS THROUGH CERTIFICATES.
THE PURCHASE BY ANY PERSON OF ANY PASS THROUGH
CERTIFICATE CONSTITUTES A REPRESENTATION BY SUCH
PERSON TO FEDERAL EXPRESS CORPORATION, THE RELATED
OWNER PARTICIPANTS, THE RELATED OWNER TRUSTEES, THE
RELATED INDENTURE TRUSTEES AND THE PASS THROUGH
TRUSTEE OR THEIR RESPECTIVE SUCCESSORS, AS THE CASE
MAY BE, THAT SUCH PERSON IS NOT AN ERISA PLAN AND THAT
SUCH PERSON IS NOT ACQUIRING, AND HAS NOT ACQUIRED,
SUCH PASS THROUGH CERTIFICATE WITH ASSETS OF AN ERISA
PLAN.
This Pass Through Certificate shall be
governed by and construed in accordance with the laws
of the State of New York.
Reference is hereby made to the further
provisions of this Pass Through Certificate set forth
on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth
at this place.
Unless the certificate of authentication hereon
has been executed by the Pass Through Trustee, by
manual signature, this Pass Through Certificate shall
not be entitled to any benefit under the Pass Through
Trust or be valid for any purpose.
IN WITNESS WHEREOF, the Pass Through Trustee
has caused this Pass Through Certificate to be duly
executed.
FEDERAL EXPRESS CORPORATION
PASS THROUGH TRUST, 1994-A310-A3
By: NATIONSBANK OF SOUTH CAROLINA,
NATIONAL ASSOCIATION,
as Pass Through Trustee
By: _______________________________
Authorized Signatory
[FORM OF THE PASS THROUGH TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
Dated:
This is one of the Pass Through Certificates
referred to in the within-mentioned Pass Through
Agreement and the Series Supplement.
NATIONSBANK OF GEORGIA,
NATIONAL ASSOCIATION,
as Registrar, Paying Agent
and Authenticating Agent
By: _______________________
Authorized Signatory
[Reverse of Pass Through Certificate].
The Pass Through Certificates do not
represent a direct obligation of, or an obligation
guaranteed by, or an interest in, the Company or the
Pass Through Trustee or any affiliate thereof. The
Pass Through Certificates are limited in right of
payment, all as more specifically set forth on the
face hereof and in the Pass Through Agreement and the
Series Supplement. All payments or distributions made
to Certificateholders under the Pass Through Agreement
shall be made only from the Trust Property and only to
the extent that the Pass Through Trustee shall have
sufficient income or proceeds from the Trust Property
to make such payments in accordance with the terms of
the Pass Through Agreement and the Series Supplement.
Each Certificateholder of this Pass Through
Certificate, by its acceptance hereof, agrees that it
will look solely to the income and proceeds from the
Trust Property to the extent available for
distribution to such Certificateholder as provided in
the Pass Through Agreement and the Series Supplement.
In connection with withholding taxes, under certain
circumstances the Pass Through Trustee may retain
certain amounts otherwise distributable to a
Certificateholder. The purchase by any
Certificateholder of any Pass Through Certificate
constitutes the consent of such Certificateholder to
such retention in accordance with the terms of the
Pass Through Agreement. This Pass Through Certificate
does not purport to summarize the Pass Through
Agreement and the Series Supplement and reference is
made to the Pass Through Agreement and the Series
Supplement for information with respect to the
interests, rights, benefits, obligations, proceeds and
duties evidenced hereby. A copy of the Pass Through
Agreement and the Series Supplement may be examined by
any Certificateholder upon request during normal business
hours at the principal office of the Pass Through Trustee,
and at such other places designated by the Pass Through
Trustee.
As of the date of issuance of this Pass
Through Certificate, and assuming that no prepayment,
purchase or default in respect of the Equipment Trust
Certificates shall occur, the aggregate scheduled
repayments of principal on the Equipment Trust
Certificates for the Pass Through Trust and the
resulting Pool Factors for the Pass Through Trust
after taking into account each such repayment are set
forth below:
Pass Through Trust, 1994-A310-A3
Scheduled Principal
Regular Payments
Distribution on Equipment Trust
Date Certificates Pool Factor
---- ------------ -----------
March 23, 2007 $ 506,831 0.9934298
September 23, 2007 5,095,578 0.9273744
March 23, 2008 7,462,181 0.8306401
September 23, 2008 9,901,672 0.7022820
March 23, 2009 23,713,444 0.3948781
September 23, 2009 19,517,155 0.1418719
March 23, 2010 10,944,139 0.0000000
The Pass Through Agreement and the Series
Supplement permit, with certain exceptions provided
therein, the amendment thereof and the modification of
the rights and obligations of the Company and the
rights of the Certificateholders under the Pass
Through Trust at any time by the Company and the Pass
Through Trustee with the consent of the Majority In
Interest of Certificateholders in the Pass Through
Trust. Any such consent by the Certificateholder of
this Pass Through Certificate shall be conclusive and
binding on such Certificateholder and upon all future
Certificateholders of this Pass Through Certificate
and of any Pass Through Certificate issued upon the
transfer hereof or in exchange hereof or in lieu
hereof whether or not notation of such consent is made
upon this Pass Through Certificate. The Pass Through
Agreement and the Series Supplement also permit the
amendment thereof, in certain limited circumstances,
without the consent of the Certificateholders of any
of the Pass Through Certificates.
As provided in the Pass Through Agreement and
the Series Supplement and subject to certain
limitations set forth therein, the transfer of this
Pass Through Certificate is registrable in the
Register upon surrender of this Pass Through
Certificate for registration of transfer to the Pass
Through Trustee in its capacity as Registrar, or by
any successor Registrar, duly endorsed or accompanied
by a written instrument of transfer in form
satisfactory to the Pass Through Trustee and the
Registrar duly executed by the Certificateholder
hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new
Pass Through Certificates of authorized denominations
evidencing the same aggregate Fractional Undivided
Interest in the Pass Through Trust will be issued to
the designated transferee or transferees.
The Pass Through Certificates are issuable
only as registered Pass Through Certificates without
coupons in minimum denominations of $1,000 Fractional
Undivided Interest and integral multiples thereof. As
provided in the Pass Through Agreement and the Series
Supplement and subject to certain limitations set
forth therein, the Pass Through Certificates are
exchangeable for new Pass Through Certificates of
authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Pass Through
Trust, as requested by the Certificateholder
surrendering the same.
No service charge will be made for any such
registration of transfer or exchange, but the Pass
Through Trustee shall require payment of a sum
sufficient to cover any tax or governmental charge
payable in connection therewith.
The Pass Through Trustee, the Registrar, and
any agent of the Pass Through Trustee or the Registrar
may treat the person in whose name this Pass Through
Certificate is registered as the owner hereof for all
purposes, and neither the Pass Through Trustee, the
Registrar, nor any such agent shall be affected by any
notice to the contrary.
The obligations and responsibilities created
by the Pass Through Agreement and the Series
Supplement and the Pass Through Trust created thereby
shall terminate upon the distribution to
Certificateholders of all amounts required to be
distributed to them pursuant to the Pass Through
Agreement and the Series Supplement and the
disposition of all property held as part of the Trust
Property.
Schedule I to
Series Supplement
Federal Express Corporation
Pass Through Trust, 1994-A310-A3
Equipment Trust Certificates;
Related Indenture Documents
1. Equipment Trust Certificates (Federal Express
Corporation Trust A)
Interest Rate: 8.40%
Maturity: March 23, 2009
Principal Amount: $7,185,793
2. Equipment Trust Certificates (Federal Express
Corporation Trust B)
Interest Rate: 8.40%
Maturity: March 23, 2009
Principal Amount: $7,671,680
3. Equipment Trust Certificates (Federal Express
Corporation Trust C)
Interest Rate: 8.40%
Maturity: March 23, 2009
Principal Amount: $7,229,706
4. Equipment Trust Certificates (Federal Express
Corporation Trust D)
Interest Rate: 8.40%
Maturity: September 23, 2009
Principal Amount: $8,310,464
5. Equipment Trust Certificates (Federal Express
Corporation Trust E)
Interest Rate: 8.40%
Maturity: September 23, 2009
Principal Amount: $6,747,347
6. Equipment Trust Certificates (Federal Express
Corporation Trust F)
Interest Rate: 8.40%
Maturity: September 23, 2009
Principal Amount: $4,952,842
7. Equipment Trust Certificates (Federal Express
Corporation Trust G)
Interest Rate: 8.40%
Maturity: September 23, 2009
Principal Amount: $5,349,330
8. Equipment Trust Certificates (Federal Express
Corporation Trust H)
Interest Rate: 8.40%
Maturity: September 23, 2009
Principal Amount: $4,316,177
9. Equipment Trust Certificates (Federal Express
Corporation Trust I)
Interest Rate: 8.40%
Maturity: March 23, 2010
Principal Amount: $4,513,303
10. Equipment Trust Certificates (Federal Express
Corporation Trust J)
Interest Rate: 8.40%
Maturity: March 23, 2010
Principal Amount: $4,765,886
11. Equipment Trust Certificates (Federal Express
Corporation Trust K)
Interest Rate: 8.40%
Maturity: March 23, 2010
Principal Amount: $5,497,933
12. Equipment Trust Certificates (Federal Express
Corporation Trust L)
Interest Rate: 8.40%
Maturity: March 23, 2010
Principal Amount: $5,198,577
13. Equipment Trust Certificates (Federal Express
Corporation Trust M)
Interest Rate: 8.40%
Maturity: March 23, 2010
Principal Amount: $5,401,962
Related Indenture Documents:
Trust Indenture and Security Agreement (Federal
Express Corporation Trust A through M), dated as of
March 1, 1994, between First Security Bank of
Utah, National Association, as Owner Trustee and
NationsBank of Georgia, National Association, as
Indenture Trustee.*
Trust Agreement dated as of September 1, 1993, as
amended and restated as of March 1, 1994, between
LLG Aircraft Leasing, L.P., as Trustor, and First
Security Bank of Utah, National Association, as
Owner Trustee.
Participation Agreement (Federal Express Corporation
Trust A through M), dated as of March 1, 1994, among
Federal Express Corporation, as Lessee, LLG Aircraft
Leasing, L.P., as Owner Participant, NationsBank of
South Carolina, National Association, as Pass Through
Trustee, First Security Bank of Utah, National
Association, as Owner Trustee, NationsBank of Georgia,
National Association, as Indenture Trustee and
Westdeutsche Landesbank Girozentrale, New York Branch,
as LC Bank.**
Collateral Agreement (Trust A through M), dated as of
March 1, 1994, between First Security Bank of Utah,
National Association, as Owner Trustee, and
NationsBank of Georgia, National Association, as
Indenture Trustee.***
Letter of Credit to be dated the Closing Date referred
to in the related Participation Agreement, from
Westdeutsche Landesbank Girozentrale, New York Branch,
to NationsBank of Georgia, National Association, as
Indenture Trustee;****
Lease Agreement (Federal Express Corporation Trust
A through M) to be dated on or prior to the related
Commencement Date referred to in the related
Participation Agreement (or the form thereof prior
to such Commencement Date), between First Security
Bank of Utah, National Association, as Owner Trustee
and Lessor and Federal Express Corporation as
Lessee.*****
With respect to each of Trusts A through M, the other
Indenture Documents defined as such in the related Trust
Indenture.
* A separate Trust Indenture will be executed with
respect to each of Trusts A through M.
** A separate Participation Agreement will be
execution with respect to each of the Trusts
A through M.
*** A separate Collateral Agreement will be executed
with respect to each of Trusts A through M.
**** A separate Letter of Credit will be executed with
respect to each of Trusts A through M.
***** A separate Lease Agreement will be executed with
respect to each of Trusts A through M.
Exhibit 4.b.1
TRUST INDENTURE AND SECURITY AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST ____)
Dated as of
March 1, 1994
BETWEEN
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION,
Owner Trustee,
AND
NATIONSBANK OF GEORGIA, NATIONAL ASSOCIATION,
Indenture Trustee
COVERING ONE AIRBUS MODEL A310-203 AIRCRAFT
SERIAL NO. ___________
TABLE OF CONTENTS
Page
RECITALS . . . . . . . . . . . . . . . . . . . . 1
GRANTING CLAUSE . . . . . . . . . . . . . . . . . 2
HABENDUM CLAUSE . . . . . . . . . . . . . . . . . 6
Article I
DEFINITIONS
SECTION 1.01. Definitions . . . . . . . . . . . 9
Article II
ISSUE, EXECUTION, FORM AND
REGISTRATION OF CERTIFICATES
SECTION 2.01. Authentication and Delivery of
Certificates . . . . . . . . . . 9
SECTION 2.02. Execution of Certificates . . . . 9
SECTION 2.03. Certificate of Authentication . . 10
SECTION 2.04. Form and Terms of Certificates;
Payments of Principal, Make-Whole
Premium and Interest . . . . . . 10
SECTION 2.05. Payments from Trust Indenture
Estate Only . . . . . . . . . . 12
SECTION 2.06. Registration, Transfer and Exchange 13
SECTION 2.07. Mutilated, Defaced, Destroyed, Lost
and Stolen Certificates . . . . 14
SECTION 2.08. Cancellation of Certificates;
Destruction Thereof . . . . . . 16
SECTION 2.09. Temporary Certificates . . . . . . 16
SECTION 2.10. Termination of Interest in
Trust Indenture Estate . . . . . 17
SECTION 2.11. Certificates in Respect of
Replacement Engines . . . . . . 17
SECTION 2.12 Assumption of Obligations Under
Certificates and Other Operative
Agreements . . . . . . . . . . . 17
Article III
COVENANTS
SECTION 3.01. Payment of Principal, Make-Whole
Premium and Interest . . . . . . 17
SECTION 3.02. Offices for Payments, etc. . . . . 18
SECTION 3.03. Appointment to Fill a Vacancy in
Office of Indenture Trustee . . 18
SECTION 3.04. Paying Agents . . . . . . . . . . 18
SECTION 3.05. Covenants of First Security
and the Owner Trustee . . . . . 19
SECTION 3.06. Intentionally Left Blank . . . . . 20
SECTION 3.07. Disposal of Trust Indenture
Estate . . . . . . . . . . . . . 20
SECTION 3.08. No Representations or Warranties as
to Aircraft or Documents . . . . 20
SECTION 3.09. Further Assurances; Financing
Statements . . . . . . . . . . . 21
Article IV
HOLDER LISTS
SECTION 4.01. Holder Lists; Ownership
of Certificates . . . . . . . . 22
Article V
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
SECTION 5.01. Basic Rent and Other Debt
Service Distribution . . . . . . 22
SECTION 5.02. Pre-Funding Event of Loss or Event
of Loss; Prepayment . . . . . . . 23
SECTION 5.03. Payment After Indenture Event
of Default, etc. . . . . . . . . 24
SECTION 5.04. Certain Payments . . . . . . . . . 25
SECTION 5.05. Other Payments . . . . . . . . . . 25
SECTION 5.06. Payments to Owner Trustee . . . . 26
SECTION 5.07. Application of Payments . . . . . 26
SECTION 5.08. Investment of Amounts Held by
Indenture Trustee . . . . . . . 26
SECTION 5.09. Withholding Taxes . . . . . . . . 27
Article VI
PREPAYMENT OF CERTIFICATES
SECTION 6.01. No Prepayment Prior to Maturity . 28
SECTION 6.02. Prepayment of Certificates . . . . 28
SECTION 6.03. Notice of Prepayment to Holders . 30
SECTION 6.04. Deposit of Prepayment Price and
Sinking Fund Redemption Price . 30
SECTION 6.05. Certificates Payable on
Prepayment Date . . . . . . . . 31
SECTION 6.06. Mandatory Sinking Fund
Redemption . . . . . . . . . . . 31
Article VII
INDENTURE EVENTS OF DEFAULT; REMEDIES
OF INDENTURE TRUSTEE AND HOLDERS
SECTION 7.01. Indenture Event of Default . . . 33
SECTION 7.02. Remedies . . . . . . . . . . . . 37
SECTION 7.03. Return of Trust Indenture
Estate, etc. . . . . . . . . . 40
SECTION 7.04. Indenture Trustee May Prove Debt 45
SECTION 7.05. Remedies Cumulative . . . . . . . 47
SECTION 7.06. Suits for Enforcement . . . . . . 47
SECTION 7.07. Discontinuance of Proceedings . . 47
SECTION 7.08. Limitations on Suits by
Holders . . . . . . . . . . . . 48
SECTION 7.09. Unconditional Right of Holders
to Receive Principal, Interest
and Make-Whole Premium, and to
Institute Certain Suits . . . . 49
SECTION 7.10. Control by Holders . . . . . . . 49
SECTION 7.11. Waiver of Past Indenture Default 50
SECTION 7.12. Notice of Indenture Default . . . 50
SECTION 7.13. Waiver of Appraisement, etc.; Laws 50
Article VIII
RIGHTS OF THE OWNER TRUSTEE AND THE OWNER PARTICIPANT
SECTION 8.01. Certain Rights of Owner Trustee
and Owner Participant . . . . . 51
SECTION 8.02. Owner Participant's Right to Elect
to Prepay or Purchase the
Certificates . . . . . . . . . . 55
SECTION 8.03. Certain Rights of Owner Participant 57
Article IX
CONCERNING THE INDENTURE TRUSTEE
SECTION 9.01. Acceptance of Trusts . . . . . . . 59
SECTION 9.02. Duties and Responsibilities of the
Indenture Trustee; During an
Indenture Event of Default;
Prior to an Indenture
Event of Default . . . . . . . . 59
SECTION 9.03. Certain Rights of the Indenture
Trustee . . . . . . . . . . . . 62
SECTION 9.04. Indenture Trustee Not Responsible
for Recitals, Disposition of
Certificates or Application of
Proceeds Thereof . . . . . . . . 63
SECTION 9.05. Indenture Trustee and Agents May
Hold Certificates; Collections,
etc. . . . . . . . . . . . . . . 63
SECTION 9.06. Moneys Held by Indenture Trustee . 64
SECTION 9.07. Right of Indenture Trustee to Rely
on Officers' Certificate, etc. . 64
SECTION 9.08. Replacement Engines . . . . . . . 64
SECTION 9.09. Indenture and Security Agreement
Supplement for Replacements . . 66
SECTION 9.10. Effect of Replacement . . . . . . 67
SECTION 9.11. Compensation . . . . . . . . . . . 67
Article X
CONCERNING THE HOLDERS
SECTION 10.01. Evidence of Action Taken by
Holders . . . . . . . . . . . . 68
SECTION 10.02. Proof of Execution of Instruments
and of Holding of Certificates 68
SECTION 10.03. Holders to Be Treated as Owners . 68
SECTION 10.04. Certificates Owned by Owner
Trustee and the Lessee Deemed
Not Outstanding . . . . . . . . 69
SECTION 10.05. Right of Revocation of Action
Taken . . . . . . . . . . . . . 70
SECTION 10.06. ERISA Plan Prohibition . . . . . 70
Article XI
INDEMNIFICATION OF INDENTURE TRUSTEE
BY OWNER TRUSTEE . . . . . . . . . 71
Article XII
SUCCESSOR TRUSTEES
SECTION 12.01. Notice of Successor Owner Trustee 72
SECTION 12.02. Resignation and Removal of
Indenture Trustee; Appointment
of Successor . . . . . . . . . 72
SECTION 12.03. Persons Eligible for Appointment
as Indenture Trustee . . . . . 74
SECTION 12.04. Acceptance of Appointment by
Successor Trustee . . . . . . . 74
SECTION 12.05. Merger, Conversion, Consolidation
or Succession to Business of
Indenture Trustee . . . . . . . 75
SECTION 12.06. Appointment of Separate Trustees 76
Article XIII
SUPPLEMENTS AND AMENDMENTS TO THIS
TRUST INDENTURE AND OTHER DOCUMENTS
SECTION 13.01. Supplemental Indentures Without
Consent of Holders . . . . . . 78
SECTION 13.02. Supplemental Indentures With
Consent of Holders . . . . . . 80
SECTION 13.03. Effect of Supplemental Indenture 81
SECTION 13.04. Documents to Be Given to Indenture
Trustee . . . . . . . . . . . . 82
SECTION 13.05. Notation on Certificates in Respect
of Supplemental Indentures . . 82
SECTION 13.06. No Request Necessary for Lease
Supplement or Indenture and
Security Agreement Supplement . 82
Article XIV
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 14.01. Satisfaction and Discharge of
Indenture; Termination of
Indenture . . . . . . . . . . . 83
SECTION 14.02. Application by Indenture Trustee of
Funds Deposited for Payment of
Certificates . . . . . . . . . 85
SECTION 14.03. Repayment of Moneys Held by Paying
Agent . . . . . . . . . . . . . 85
SECTION 14.04. Transfer of Moneys Held by
Indenture Trustee and Paying
Agent Unclaimed for Two Years
and Eleven Months . . . . . . . 85
Article XV
MISCELLANEOUS
SECTION 15.01. Capacity in Which Acting . . . . 86
SECTION 15.02. No Legal Title to Trust Indenture
Estate in Holders . . . . . . . 86
SECTION 15.03. Sale of Trust Indenture Estate by
Indenture Trustee is Binding . 86
SECTION 15.04. Indenture for Benefit of Owner
Trustee, Indenture Trustee, Owner
Participant and Holders . . . . 86
SECTION 15.05. No Action Contrary to the Lessee's
Rights Under the Lease . . . . 86
SECTION 15.06. Notices . . . . . . . . . . . . . 87
SECTION 15.07. Officers' Certificates and Opinions
of Counsel; Statements to Be
Contained Therein . . . . . . . 88
SECTION 15.08 Severability . . . . . . . . . . 89
SECTION 15.09. No Oral Modifications or Continuing
Waivers . . . . . . . . . . . . 89
SECTION 15.10. Successors and Assigns . . . . . 89
SECTION 15.11. Headings . . . . . . . . . . . . 90
SECTION 15.12. Normal Commercial Relations . . . 90
SECTION 15.13. Governing Law; Counterpart Form . 90
EXHIBIT A - Form of Indenture and Security A-1
Agreement Supplement
EXHIBIT B - Form of Certificate A-2
Schedule I - Intentionally Left Blank
Schedule II - Definitions
Appendix A - Sinking Fund Redemption Date Information
TRUST INDENTURE AND SECURITY AGREEMENT
(Federal Express Corporation Trust ____)
TRUST INDENTURE AND SECURITY AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST _____), dated as of
March 1, 1994, between First Security Bank of Utah,
National Association, a national banking association,
not in its individual capacity, except as otherwise
specifically set forth herein (when acting in such
individual capacity, "First Security"), but solely as
owner trustee (the "Owner Trustee") under the Trust
Agreement, as defined herein, and NationsBank of
Georgia, National Association, a national banking
association, as Indenture Trustee hereunder (the
"Indenture Trustee").
W I T N E S S E T H:
WHEREAS, capitalized terms used herein shall
have the respective meanings ascribed to them in
Article I hereof;
WHEREAS, the parties hereto desire to enter
into this Indenture in order to provide, among other
things, (i) for the issuance by the Owner Trustee of
the Certificates, the proceeds of which will be used
by the Owner Trustee to pay a portion of the Purchase
Price, the Modification Cost and Parts Cost for the
Aircraft and an allocable amount of the Pass Through
Closing Expenses, and (ii) for the assignment,
mortgage and pledge by the Owner Trustee to the
Indenture Trustee, as part of the Trust Indenture
Estate hereunder of the Owner Trustee's right, title
and interest in the Liquid Collateral, Demand Note
Collateral and the Agreement to Lease, and after the
Exchange Date for the assignment, mortgage and pledge
by the Owner Trustee to the Indenture Trustee, as part
of the Trust Indenture Estate hereunder, of certain of
the Owner Trustee's right, title and interest, present
or future (so long as the Lien of this Indenture is
outstanding), in and to, among other things, the
Aircraft, the Lease and payments and other amounts
received hereunder or thereunder in accordance with
the terms hereof (other than Excepted Payments), as
security for the Owner Trustee's obligations to the
Holders and for the ratable benefit and security of
such Holders;
WHEREAS, the Owner Participant and First
Security, prior to the execution and delivery of this
Indenture, entered into the Trust Agreement whereby,
among other things, the Owner Trustee has declared a
certain trust for the use and benefit of the Owner
Participant, subject, however, to the Lien of this
Indenture, and pursuant to which, among other things,
the Owner Trustee is authorized and directed to
execute and deliver this Indenture;
WHEREAS, all things have been done to make
the Certificates, when executed, issued and delivered
by the Owner Trustee and authenticated and delivered
by the Indenture Trustee hereunder, the valid
obligations of the Owner Trustee; and
WHEREAS, all things necessary to make this
Indenture the valid, binding and legal obligation of
the Owner Trustee, enforceable in accordance with its
terms, have been done and performed and have happened;
GRANTING CLAUSE
NOW, THEREFORE, in consideration of the
mutual promises contained herein and 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 Certificates from
time to time outstanding under this Indenture and all
other amounts due hereunder or under the Collateral
Agreement and (ii) the performance and observance by
the Owner Trustee of all the agreements, covenants and
provisions for the benefit of the Holders of the
Certificates or the Indenture Trustee contained in
this Indenture, in the Certificates, in the
Participation Agreement, in the Collateral Agreement
and in the Lease, and the prompt payment of any and
all amounts from time to time owing under the
Participation Agreement by the Owner Trustee or the
Owner Participant to the Holders or the Indenture
Trustee or by the Lessee to the Indenture Trustee, as
the case may be (the obligations referred to in
clauses (i) and (ii), the "Secured Obligations"), and
for the uses and purposes and subject to the terms and
provisions of this Indenture, and in consideration of
the premises and of the covenants in this Indenture
and in the Certificates and of the purchase of the
Certificates by their Holders, and of the sum of $1
paid to the Owner Trustee by the Indenture Trustee at
or before the delivery of this Indenture, the receipt
and sufficiency of which is hereby acknowledged, the
Owner Trustee 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 and grant a security interest in and
confirm to the Indenture Trustee, its successors and
assigns, in trust for the equal and ratable security
and benefit of the Holders from time to time of the
Certificates, a first priority security interest in
and first Lien on all estate, right, title and
interest of the Owner Trustee in, to and under the
following described property, rights and privileges
other than Excepted Payments, which collectively,
excluding Excepted Payments and subject to the rights
granted to the Owner Trustee or the Owner Participant
hereunder, including without limitation, the rights of
the Owner Participant and the Owner Trustee under
Sections 2.05, 7.02, 8.01, 8.02, 8.03, 13.01 and 13.02
hereof but including all property specifically
subjected to the Lien of this Indenture by the terms
hereof, by any Indenture and Security Agreement
Supplement or any mortgage supplemental to this
Indenture, are included within the Trust Indenture
Estate:
(1) On and after the Exchange Date, the
Airframe, as the same is more particularly described
in the Indenture and Security Agreement Supplement;
the Engines, as the same are more particularly
described in the Indenture and Security Agreement
Supplement, whether or not such Engines shall be
installed in or attached to the Airframe or any other
airframe, and any Replacement Engine(s) therefor; and
all Parts in respect of the Airframe and the Engines
and all records, logs and other documents at any time
maintained with respect to the foregoing property;
(2) On and after the Exchange Date, the
Lease and all Rent thereunder, including, without
limitation, all amounts of Basic Rent and Supplemental
Rent, and payments of any kind thereunder and
including all rights of the Owner Trustee to execute
any election or option or to give or receive any
notice, consent, waiver or approval under or in
respect of the Lease or to accept any surrender of the
Aircraft or any part thereof as well as any rights,
powers or remedies on the part of the Owner Trustee,
whether arising under the Lease or by statute or at
law or in equity or otherwise arising out of any Event
of Default (except to the extent relating to Excepted
Payments);
(3) On and after the Exchange Date, rights
of the Owner Trustee under the Sales Agreement (to the
extent relating to the Aircraft), the Modification
Agreement (to the extent relating to the Aircraft),
the Parts and Services Agreement (to the extent
relating to the Aircraft), the Bills of Sale,
including all rights of the Owner Trustee under any
such documents to execute any election or option, to
make or pursue any claim, or to give or receive any
notice, consent, waiver or approval thereunder or in
respect thereof;
(4) Rights of the Owner Trustee under the
Participation Agreement (to the extent of amounts
payable to the Owner Trustee thereunder), including
all rights of the Owner Trustee to execute any
election or option or to give or receive any notice,
consent, waiver or approval under or in respect
thereof;
(5) Until the Commencement Date, rights of
the Owner Trustee under the Agreement to Lease (to the
extent relating to the Aircraft), including all rights
of the Owner Trustee to execute any election or option
or to give or receive any notice, consent, waiver or
approval thereunder or in respect thereof (except to
the extent relating to Excepted Payments);
(6) All the tolls, rents, issues, profits,
products, revenues and other income (including sales
proceeds) of the property subjected or required to be
subjected to the Lien of this Indenture, and all of
the estate, right, title and interest of the Owner
Trustee in and to the same and every part of said
property;
(7) All moneys and securities (including
Permitted Investments) now or hereafter paid or
deposited or required to be paid or deposited to or
with the Indenture Trustee by or for the account of
the Owner Trustee pursuant to any term of any
Operative Agreement, except the Tax Indemnity
Agreement, and held or required to be held by the
Indenture Trustee hereunder;
(8) On and after the Exchange Date, all
requisition proceeds with respect to the Aircraft or
any part thereof (to the extent of the Owner Trustee's
interest therein pursuant to the terms of the Lease)
and all insurance proceeds with respect to the
Aircraft or any part thereof from insurance required
to be maintained by the Lessee under Article 13 of the
Lease, but excluding any insurance maintained by the
Lessee and not required under Article 13 of the Lease;
(9) On and after the Exchange Date, all
amounts, subleases or other property from time to time
held as security for the Lessee's obligations pursuant
to the Lease;
(10) All proceeds of the foregoing; and
(11) The Liquid Collateral and the Demand
Note Collateral.
Notwithstanding the foregoing provisions:
(a) there shall be excluded from the
security interest granted by this Indenture all
Excepted Payments;
(b) (i) The Owner Trustee and the Owner
Participant shall at all times retain the right, to
the exclusion of the Indenture Trustee, (A) to
Excepted Payments and to commence an action at law to
obtain such Excepted Payments, (B) to exercise any
election or option to make any decision or
determination, or to give or receive any notice,
consent, waiver or approval, or to take any other
action in respect of, but in each case only to the
extent relating to, Excepted Payments, (C) to retain
the rights of the "Lessor" with respect to
solicitations of bids, and the election to retain the
Aircraft, pursuant to Article 10 of the Lease, (D) to
retain the right of "Lessor" to determine the Fair
Market Rental or Fair Market Value pursuant to
Article 4 of the Lease, (E) to retain all rights with
respect to insurance maintained for its own account
which Section 13.05 of the Lease specifically confers
on the "Lessor" and (F) to exercise, to the extent
necessary to enable it to exercise its rights under
Section 8.03 hereof, the rights of the "Lessor" under
Section 17.04 of the Lease;
(ii) At all times each of the Owner Trustee
and the Indenture Trustee shall have the right,
separately but not to the exclusion of the other,
(A) to receive from the Lessee all notices,
certificates, reports, filings, opinions of counsel,
copies of all documents and all information which the
Lessee is permitted or required to give or furnish to
the "Lessor" pursuant to the Lease or to the Owner
Trustee pursuant to any other Operative Agreement,
(B) to exercise inspection rights pursuant to Section
14.01 of the Lease, (C) to maintain separate insurance
pursuant to Section 13.05 of the Lease and to retain
all rights with respect to such insurance maintained
for its own account, (D) to give any notice of a
Default or an Event of Default under Section 17.01 of
the Lease, (E) to cause the Lessee to take any action
and execute and deliver such documents and assurances
as the "Lessor" may from time to time reasonably
request pursuant to Section 19.01 of the Lease; and
(F) the right to consent to changes to the list of
countries on Schedule III to the Participation
Agreement;
(iii) So long as no Indenture Event of Default
shall have occurred and be continuing (but subject to
the provisions of Section 8.01 hereof), the Owner
Trustee shall retain the right, to the exclusion of
the Indenture Trustee, and jointly with the Indenture
Trustee during the continuation of any Indenture Event
of Default (the action of both being required), to
exercise the following rights of the "Lessor" under
the Lease: the right to approve as satisfactory any
accountants, engineers, appraisers or counsel to
render services for or issue appraisals, reports,
certificates or opinions to the Owner Trustee pursuant
to express provisions of the Operative Agreements;
(c) the leasehold interest granted to the
Lessee by the Lease shall not be subject to the
security interest granted by this Indenture and
nothing in this Indenture shall affect the rights of
the Lessee under the Lease so long as no Event of
Default has occurred and is continuing; and
(d) as between the Owner Trustee and the
Indenture Trustee, nothing contained in this Granting
Clause shall, at any time on or after the Commencement
Date prevent the Owner Trustee, as the "Lessor" under
the Lease, from seeking specific performance of the
covenants of the Lessee under the Lease relating to
the protection, insurance, maintenance, possession and
use of the Aircraft and from maintaining separate
insurance with respect to the Aircraft to the extent
permitted by Article 13 of the Lease.
None of the payments and rights described in
the foregoing clauses (a), (b)(i) and (d) above shall
be included in the Trust Indenture Estate.
HABENDUM CLAUSE
TO HAVE AND TO HOLD the aforesaid property
unto the Indenture Trustee, its successors and
assigns, in trust for the equal and ratable benefit
and security of the Holders from time to time of the
Certificates, without any priority of any one
Certificate over any other and for the uses and
purposes and subject to the terms and conditions set
forth in this Indenture.
It is expressly agreed that anything
contained in this Indenture to the contrary
notwithstanding, the Owner Trustee shall remain liable
under the Indenture Documents to perform all of the
obligations assumed by it under any of those
documents, all in accordance with and pursuant to the
terms and provisions of those documents, and the
Indenture Trustee and the Holders of the Certificates
shall have no obligation or liability under the
Indenture Documents by reason of or arising out of the
assignment under this Indenture, nor shall the
Indenture Trustee or the Holders of the Certificates
be required or obligated in any manner to perform or
fulfill any obligations of the Owner Trustee under or
pursuant to the Indenture Documents or, except as
expressly provided in this Indenture, 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 Owner Trustee hereby constitutes the
Indenture Trustee the true and lawful attorney of the
Owner Trustee, irrevocably, with full power (in the
name of the Owner Trustee or otherwise), subject to
the terms and conditions of this Indenture, to ask,
require, demand, receive, compound and give
acquittance for any and all Basic Rent, Supplemental
Rent payable to the Owner Trustee, Stipulated Loss
Value and Termination Value payments, insurance
proceeds and any and all moneys and claims for moneys
due and to become due under or arising out of the
Lease (subject to Section 8.01 hereof) or the other
Indenture Documents (other than Excepted Payments), to
endorse any checks or other instruments or orders in
connection with the same and to file any claims, take
any action or institute any proceeding which the
Indenture Trustee may deem to be necessary or
advisable in the premises.
Under the Lease the Lessee will be directed
to make all payments of Rent on or after the Exchange
Date (other than Excepted Payments) payable to the
Owner Trustee and all other amounts (other than
Excepted Payments) which are required to be paid to or
deposited with the Owner Trustee pursuant to the Lease
directly to the Indenture Trustee at such address in
the United States of America as the Indenture Trustee
shall specify for application as provided in this
Indenture. The Owner Trustee agrees that if,
notwithstanding such provision, it shall have received
any such amounts, promptly on receipt of any such
payment, it will transfer to the Indenture Trustee any
and all moneys from time to time received by the Owner
Trustee constituting part of the Trust Indenture
Estate for distribution by the Indenture Trustee
pursuant to this Indenture, except that the Owner
Trustee shall accept for distribution pursuant to the
Trust Agreement (i) any amounts distributed to it by
the Indenture Trustee under this Indenture, and (ii)
any Excepted Payments.
The Owner Trustee agrees that at any time and
from time to time, upon the written request of the
Indenture Trustee, the Owner Trustee will promptly and
duly execute and deliver or cause to be duly executed
and delivered any and all such further instruments and
documents as the Indenture Trustee may reasonably deem
desirable in obtaining the full benefits of the
assignment hereunder and of the rights and powers
herein granted; provided, however, that the Owner
Trustee shall have no obligation to execute and
deliver or cause to be executed or delivered to the
Indenture Trustee any such instrument or document if
such execution and delivery would result in the
imposition of additional liabilities on the Owner
Trustee or the Owner Participant or would result in a
burden on the Owner Participant's business activities,
unless the Owner Trustee or the Owner Participant, as
the case may be, is indemnified to its reasonable
satisfaction against any losses, liabilities and
expenses incurred in connection with such execution
and delivery pursuant to any Operative Agreement.
The Owner Trustee does hereby warrant and
represent that it has not assigned or pledged, and
hereby covenants that it will not assign or pledge, so
long as the assignment hereunder shall remain in
effect, any of its right, title or interest hereby
assigned, to anyone other than the Indenture Trustee,
and that it will not, except as provided in or
permitted by this Indenture, accept any payment from
the Lessee, enter into an agreement amending or
supplementing any of the Operative Agreements, execute
any waiver or modification of, or consent under the
terms of any of the Operative Agreements, settle or
compromise any claim (other than claims in respect of
Excepted Payments) against the Lessee arising under
any of the Operative Agreements, or submit or consent
to the submission of any dispute, difference or other
matter arising under or in respect of any of the
Operative Agreements, to arbitration thereunder.
Concurrently with the delivery of this
Indenture the Owner Trustee has delivered to the
Indenture Trustee executed counterparts of the Trust
Agreement, the Agreement to Lease and the sole
original counterparts of the Demand Notes, and executed
counterparts or certified copies of the Sales
Agreement, the Modification Agreement and the Parts
and Services Agreement. On the Commencement Date, the
Owner Trustee will deliver to the Indenture Trustee
executed copies of the Trust Agreement Supplement. On
the Exchange Date, the Owner Trustee will deliver to
the Indenture Trustee in New York the chattel paper
original counterparts of the Lease and the Lease
Supplement.
It is hereby further covenanted and agreed by
and between the parties as follows: (i) subject to the
satisfaction or waiver of the conditions precedent to
commencement of the Lease and to the Indenture
Trustee's obligations set forth in Section 4 of the
Agreement to Lease and Sections 4.02 and 4.03, as the
case may be, of the Participation Agreement (such
satisfaction or waiver to be confirmed by a
certificate of the Owner Participant), on the Exchange
Date the Indenture Trustee shall release from the
Collateral Account any Demand Note Collateral then
held by the Indenture Trustee, and (ii) the Indenture
Trustee shall not demand any payment under the Demand
Notes except as under circumstances set forth in the
Collateral Agreement or as contemplated by Section
7.02 or 7.03 hereof.
Article I
DEFINITIONS
SECTION 1.01. Definitions. Unless the
context otherwise requires, capitalized terms utilized
herein shall have the meanings set forth in Schedule
II hereto for all purposes of this Indenture and shall
be equally applicable to both the singular and plural
forms of the terms defined.
Article II
ISSUE, EXECUTION, FORM AND
REGISTRATION OF CERTIFICATES
SECTION 2.01. Authentication and Delivery of
Certificates. Forthwith upon the execution and
delivery of this Indenture, and from time to time
thereafter, Certificates in an aggregate principal
amount not in excess of the amount specified in
Section 2.04 hereof (except as otherwise provided in
Sections 2.06 and 2.07 hereof) shall be executed by
the Owner Trustee and delivered to the Indenture
Trustee for authentication, and the Indenture Trustee
shall thereupon authenticate and deliver said
Certificates to or upon the oral or written order of
the Owner Trustee, signed, if written, by an
authorized officer of the Owner Trustee, without any
further action by the Owner Trustee.
SECTION 2.02. Execution of Certificates.
The Certificates shall be signed on behalf of the
Owner Trustee by an authorized officer of First
Security. Such signatures may be the manual or
facsimile signatures of such officer and minor errors
or defects in any reproduction of any such signature
shall not affect the validity or enforceability of any
Certificate which has been duly authenticated and
delivered by the Indenture Trustee.
In case any officer of First Security who
shall have signed any of the Certificates shall cease
to be such officer before the Certificate so signed
shall be authenticated and delivered by the Indenture
Trustee or disposed of by First Security, such
Certificate nevertheless may be authenticated and
delivered or disposed of as though the person who
signed such Certificate had not ceased to be such
officer of the Owner Trustee; and any Certificate may
be signed on behalf of the Owner Trustee by such
person or persons as, at the actual date of the
execution of such Certificate, shall be the proper
officers of First Security, although at the date of
the execution and delivery of this Indenture any such
person was not such an officer. Certificates bearing
the facsimile signatures of individuals who were
authorized officers of First Security at the time such
Certificates were issued shall bind the Owner Trustee,
notwithstanding that such individuals or any of them
have ceased to hold such offices prior to the
authentication and delivery of such Certificates or
did not hold such offices at the respective dates of
such Certificates.
SECTION 2.03. Certificate of Authentication.
Only such Certificates as shall bear thereon a
certificate of authentication substantially in the
form set forth in Exhibit B, executed by the Indenture
Trustee by manual signature of one of its authorized
officers, shall be entitled to the security and
benefits of this Indenture or be valid or obligatory
for any purpose. Such certificate by the Indenture
Trustee upon any Certificate executed by the Owner
Trustee shall be conclusive evidence that the Certifi-
cate so authenticated has been duly authenticated and
delivered hereunder and that the Holder, as evidenced
on the Register, is entitled to the security and
benefits of this Indenture.
SECTION 2.04. Form and Terms of
Certificates; Payments of Principal, Make-Whole
Premium and Interest. The Certificates and the
Indenture Trustee's certificate of authentication
shall be substantially in the form set forth in
Exhibit B hereto. Certificates may differ with
respect to Maturity and as to other terms. The
Certificates shall be issuable as registered
securities without coupons and shall be numbered,
lettered, or otherwise distinguished in such manner or
in accordance with such plans as the Owner Trustee
executing the same may determine with the approval of
the Indenture Trustee.
The aggregate principal amount of
Certificates that may be authenticated and delivered
under this Indenture is limited as provided in the
form of Certificate attached as Exhibit B hereto. The
Certificates shall be issued in registered form only
and in denominations of $1,000 and any integral
multiple thereof, shall be dated the Closing Date, and
shall be issued in the Maturities and principal
amounts, and shall bear interest at the rates per
annum, specified in the form of Certificate set forth
in Exhibit B.
Any of the 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
Certificates are admitted to trading, or to conform to
general usage.
Each 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 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
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 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 3.02 hereof; provided,
however, that interest may be payable at the option of
the Indenture Trustee or its Paying Agent, as defined
in Section 3.04, by mailing checks for such interest
payable to or upon 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 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.
The Holder at the close of business on any
Record Date with respect to any Interest Payment Date
shall be entitled to receive the interest if any
payable on such Interest Payment Date notwithstanding
any transfer or exchange of such Certificate
subsequent to the Record Date and prior to such
Interest Payment Date, except if and to the extent the
Owner Trustee shall default in the payment of the
interest due on such Interest 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.
SECTION 2.05. Payments from Trust Indenture
Estate Only. All payments to be made by the Owner
Trustee under this Indenture shall be made only from
the income and the proceeds from the Lessor's Estate
to the extent included in the Trust Indenture Estate
and from any other amounts (i) of the type described
in Section 5.01 hereof to the extent actually received
by the Indenture Trustee and (ii) from the Letter of
Credit, and only to the extent that the Owner Trustee
shall have sufficient income or proceeds from the
Lessor's Estate to the extent included in the Trust
Indenture Estate (and such other amounts) to enable
the Indenture Trustee to make distributions of the
amounts due in respect of the Certificates in
accordance with the terms hereof and thereof. Each
Holder by its acceptance of a Certificate agrees that
it will look solely to the income and proceeds from
the Trust Indenture Estate (and such other amounts of
the type contemplated by clause (i) and (ii) above) to
the extent actually received by the Indenture Trustee
and available for distribution to it as provided
herein and that neither the Owner Participant, the
Owner Trustee, First Security nor the Indenture
Trustee is personally liable to such Holder for any
amounts payable under this Indenture or such
Certificate or for any amounts payable or liability
under any Certificate or this Indenture, except as
expressly provided herein in the case of First
Security, the Owner Trustee or the Indenture Trustee,
or in the case of the Owner Participant, except as
expressly provided in the Participation Agreement.
First Security is not personally liable to
any Holder, the Lessee, the Owner Participant or the
Indenture Trustee for any amounts payable under this
Indenture or for any liability under this Indenture or
the Certificates, except as a result of First
Security's gross negligence or willful misconduct, or
as otherwise expressly provided herein or in the
Participation Agreement.
If (1) all or any part of the Lessor's Estate
becomes the property of a debtor subject to the
reorganization provisions of the Bankruptcy Code,
(2) pursuant to such reorganization provisions,
including Section 1111(b) of the Bankruptcy Code, the
Owner Participant is required, by reason of First
Security or the Owner Participant being held to have
recourse liability to the Indenture Trustee or any
Holder, directly or indirectly, to make payment on
account of any amount payable as principal of or
interest, Make-Whole Premium or other amounts payable
on the Certificates and (3) the Indenture Trustee
actually receives any Recourse Amount which reflects
any payment by the Owner Participant on account of (2)
above, then, to the extent permitted by applicable
law, and subject to the receipt by the Indenture
Trustee prior to its disbursement of such Recourse
Amount of written notice from the Owner Participant or
the Owner Trustee reasonably relating to the refund
obligation in this sentence, the Indenture Trustee
shall promptly refund to the Owner Participant such
Recourse Amount. The Indenture Trustee hereby waives
to the fullest extent permitted by law the benefit of
the provisions of Section 1111(b) of the Bankruptcy
Code with respect to recourse against First Security
and the Owner Participant on account of any amount
payable as principal of or interest, Make-Whole
Premium or other amounts payable on the Certificates.
Nothing contained in this paragraph shall prevent the
Indenture Trustee from enforcing any personal recourse
obligation (and retaining the proceeds thereof) of the
Owner Participant under the Participation Agreement, this
Indenture (other than referred to in clause (2) above),
the Trust Agreement (and any exhibits or annexes thereto)
or any other Operative Agreement, or from retaining any
amount paid by the Owner Participant under Sections 5.01,
8.02 and 8.03 hereof. Nothing contained herein shall be
construed as requiring any Holder to refund any amount
distributed to such Holder pursuant to this Indenture.
SECTION 2.06. Registration, Transfer and
Exchange. The Indenture Trustee will keep, on behalf
of the Owner Trustee, at each office or agency to be
maintained for the purpose as provided in Section 3.02
hereof a Register or Registers on which, subject to
such reasonable regulations as it may prescribe, it
will register, and will register the transfer of,
Certificates as provided in this Article. Such
Register shall be in written form in the English
language or in any other form capable of being
converted into such form within a reasonable time.
Upon due presentation for registration of
transfer of any Certificate at any such office or
agency, the Owner Trustee shall execute and the
Indenture Trustee shall authenticate and deliver in
the name of the transferee or transferees a new
Certificate or Certificates of the same Maturity and
interest rate and in authorized denominations for an
equal aggregate principal amount.
Any Certificate or Certificates may be
exchanged for a Certificate or Certificates of the
same Maturity and interest rate but in other
authorized denominations, in an equal aggregate
principal amount. Certificates to be exchanged shall
be surrendered at any office or agency to be
maintained by the Indenture Trustee for the purpose as
provided in Section 3.02 hereof, and the Owner Trustee
shall execute and the Indenture Trustee shall
authenticate and deliver in exchange therefor the
Certificate or Certificates which the Holder making
the exchange shall be entitled to receive, bearing
numbers not contemporaneously or previously
outstanding.
All Certificates presented for registration
of transfer, exchange, prepayment or payment shall (if
so required by the Owner Trustee or the Indenture
Trustee) be duly endorsed by, or be accompanied by a
written instrument or instruments of transfer in form
satisfactory to the Owner Trustee and the Indenture
Trustee duly executed by the Holder or its attorney
duly authorized in writing and (except in the case of
transfers pursuant to Section 15 of the Participation
Agreement) the Indenture Trustee may require evidence
satisfactory to it as to the compliance of any such
transfer with the Securities Act.
The Indenture Trustee may require payment
from the Holder of a sum sufficient to cover any tax
or other governmental charge that may be imposed in
connection with any exchange or registration of
transfer of Certificates. No service charge shall be
levied for any such transaction.
The Indenture Trustee shall not be required
to exchange or register a transfer of any Certificates
(a) for a period of fifteen (15) days immediately
preceding the first mailing of notice of prepayment of
such Certificates or (b) with respect to which notice
of prepayment has been given pursuant to Section 6.03
hereof and such notice has not been revoked.
All Certificates issued upon any transfer or
exchange of Certificates shall be valid obligations of
the Owner Trustee, evidencing the same debt, and
entitled to the same security and benefits under this
Indenture, as the Certificates surrendered upon such
transfer or exchange.
SECTION 2.07. Mutilated, Defaced, Destroyed,
Lost and Stolen Certificates. In case any temporary
or definitive Certificate shall become mutilated,
defaced or be apparently destroyed, lost or stolen,
the Owner Trustee in its discretion may execute, and
upon the oral or written request of any officer of
First Security, the Indenture Trustee shall
authenticate and deliver, a new Certificate of like
Maturity, bearing a number not contemporaneously or
previously outstanding, in exchange and substitution
for the mutilated or defaced Certificate, or in lieu
of and substitution for the Certificate so apparently
destroyed, lost or stolen. In case of any Certificate
so apparently destroyed, lost or stolen, the applicant
for a substitute Certificate shall furnish to the
Owner Trustee and to the Indenture Trustee such
security or indemnity as may be reasonably required by
them to indemnify and defend and to save each of them
harmless from issuance of such substitute Certificate
(in the case of the Pass Through Trustee, a personal
agreement to indemnify shall be sufficient for this
purpose) and, in any case of destruction, loss or
theft, evidence to their satisfaction of the apparent
destruction, loss or theft of such Certificate and of
the ownership thereof.
Upon the issuance of any substitute
Certificate, the Owner Trustee or the Indenture
Trustee may require payment from the Holder of a sum
sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any
other reasonable expenses connected therewith. In
case any Certificate which has matured or is about to
mature, or has been called for prepayment in full,
shall become mutilated or defaced or be apparently
destroyed, lost or stolen, the Owner Trustee may,
instead of issuing a substitute Certificate, pay or
authorize the payment of the same (without surrender
thereof except in the case of a mutilated or defaced
Certificate), if the applicant of any Certificate so
apparently destroyed, lost or stolen, for such payment
shall furnish to the Owner Trustee and to the
Indenture Trustee such security or indemnity as any of
them may require to save each of them harmless and the
applicant shall also furnish to the Owner Trustee and
the Indenture Trustee evidence to their satisfaction
of the apparent destruction, loss or theft of such
Certificate and of the ownership thereof.
Every substitute Certificate issued pursuant
to the provisions of this Section by virtue of the
fact that any Certificate is apparently destroyed,
lost or stolen shall constitute an original additional
contractual obligation of the Owner Trustee, whether
or not the apparently destroyed, lost or stolen
Certificate shall be enforceable at any time by anyone
and shall be entitled to all the security and benefits
of (but shall be subject to all the limitations of
rights set forth in) this Indenture equally and
proportionately with any and all other Certificates
duly authenticated and delivered hereunder. All
Certificates shall be held and owned upon the express
condition that, to the extent permitted by law, the
foregoing provisions are exclusive with respect to the
replacement or payment of mutilated, defaced, or
apparently destroyed, lost or stolen Certificates and
shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or
other securities without their surrender.
SECTION 2.08. Cancellation of Certificates;
Destruction Thereof. All Certificates surrendered for
payment, prepayment, registration of transfer or
exchange, if surrendered to the Owner Trustee or any
agent of the Owner Trustee or the Indenture Trustee,
shall be delivered to the Indenture Trustee for
cancellation or, if surrendered to the Indenture
Trustee, shall be cancelled by it; and no Certificates
shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Indenture.
The Indenture Trustee shall deliver the cancelled
Certificates to the Owner Trustee for destruction. If
the Owner Trustee shall acquire any of the
Certificates, such acquisition shall not operate as a
prepayment or satisfaction of the indebtedness
represented by such Certificates unless and until the
same are delivered to the Indenture Trustee for
cancellation.
SECTION 2.09. Temporary Certificates.
Pending the preparation of definitive Certificates,
the Owner Trustee may execute and, upon the oral or
written request of an officer of the Owner Trustee,
the Indenture Trustee shall authenticate and deliver
temporary Certificates (printed, lithographed,
typewritten or otherwise reproduced, in each case in
form satisfactory to the Indenture Trustee).
Temporary Certificates shall be issuable as registered
Certificates without coupons, of any authorized
denomination, and substantially in the form of the
definitive Certificates but with such omissions,
insertions and variations as may be appropriate for
temporary Certificates, all as may be determined by
the Owner Trustee with the concurrence of the
Indenture Trustee. Temporary Certificates may contain
such reference to any provisions of this Indenture as
may be appropriate. Every temporary Certificate shall
be executed by the Owner Trustee and, upon the oral or
written request of an authorized officer of the Owner
Trustee, be authenticated by the Indenture Trustee
upon the same conditions and in substantially the same
manner, and with like effect, as the definitive
Certificates. Without unreasonable delay the Owner
Trustee shall execute and shall furnish definitive
Certificates and thereupon temporary Certificates
shall be surrendered in exchange therefor without
charge at any office or agency to be maintained by the
Indenture Trustee for the purpose pursuant to Section
3.02 hereof, and, upon the oral or written request of
an authorized officer of the Owner Trustee, the
Indenture Trustee shall authenticate and deliver in
exchange for such temporary Certificates an equal
aggregate principal amount of definitive Certificates
of the same Maturities and interest rates and in
authorized denominations. Until so exchanged, tempo-
rary Certificates shall be entitled to the same
security and benefits under this Indenture as
definitive Certificates.
SECTION 2.10. Termination of Interest in
Trust Indenture Estate. A Holder shall not, as such,
have any further interest in, or other right with
respect to, the Trust Indenture Estate when and if the
principal amount of and Make-Whole Premium, if any,
and interest on and other amounts due under all
Certificates held by such Holder and all other sums
payable to such Holder hereunder and under such
Certificates shall have been paid in full.
SECTION 2.11. Certificates in Respect of
Replacement Engines. Upon the execution and delivery
of an Indenture and Security Agreement Supplement
covering a Replacement Engine, as provided in Section
9.09 hereof, each Certificate shall be deemed to have
been issued in connection with such Replacement Engine
and each Certificate issued thereafter upon a transfer
or exchange of, or as a replacement for, a
Certificate, shall be designated as having been issued
in connection with such Replacement Engine, but
without any other change therein except as provided
for in this Article II.
SECTION 2.12. Assumption of Obligations
Under Certificates and Other Operative Agreements.
If, in accordance with and subject to the satisfaction
of the conditions set forth in Section 7.12 of the
Participation Agreement, after the Exchange Date the
Lessee shall assume all of the obligations of the
Owner Trustee hereunder, under the Certificates and
all other Operative Agreements, the Owner Participant
and the Owner Trustee shall be released and discharged
from any further obligations hereunder and under the
Certificates and all other Operative Agreements
(except any obligations that have accrued prior to
such assumption).
Article III
COVENANTS
SECTION 3.01. Payment of Principal, Make-
Whole Premium and Interest. The Owner Trustee
covenants and agrees that it will duly and punctually
pay or cause to be paid the principal of, and interest
and Make-Whole Premium, if any, and all other amounts
due on, each of the Certificates and under this
Indenture at the place or places, at the respective
times and in the manner provided in this Indenture and
in the Certificates.
Principal and interest and other amounts due
hereunder or under the Certificates shall be payable
in Dollars on the due date thereof, to the Indenture
Trustee at the Corporate Trust Office (or such other
account at such other financial institution as the
Indenture Trustee may designate for the purpose). If
any amount payable under the Certificates or under
this Indenture falls due on a day which is not a
Business Day, then such sum shall be payable on the
next succeeding Business Day, without (provided that
payment is made on such next succeeding Business Day)
additional interest thereon for the period of such
extension.
SECTION 3.02. Offices for Payments, etc. So
long as any of the Certificates remain outstanding,
the Indenture Trustee will maintain the following:
(a) an office or agency where the Certificates may be
presented for payment or prepayment and (b) a facility
or agency in New York, New York where the Certificates
may be presented for registration of transfer and for
exchange as provided in this Indenture (the
"Registrar"). The Registrar shall keep a register
(the "Register") with respect to the Certificates and
their transfer and exchange. The Indenture Trustee
may appoint one or more co-registrars
("Co-Registrars") for the Certificates and may
terminate any such appointment at any time upon
written notice. The term "Registrar" includes any
Co-Registrar.
The Indenture Trustee shall initially act as
Registrar.
SECTION 3.03. Appointment to Fill a Vacancy
in Office of Indenture Trustee. The Owner Trustee,
whenever necessary to avoid or fill a vacancy in the
office of Indenture Trustee, will, with the consent of
the Lessee, appoint, in the manner provided in Section
12.02 hereof, an Indenture Trustee, so that there
shall at all times be an Indenture Trustee hereunder.
SECTION 3.04. Paying Agents. Whenever the
Indenture Trustee in its sole discretion shall appoint
a paying agent (the "Paying Agent"), it will cause the
Paying Agent to execute and deliver an instrument in
which the Paying Agent shall agree with the Indenture
Trustee, subject to the provisions of this Section:
(a) that it will hold all sums received by
it as such agent for the payment of the principal
of, and interest and Make-Whole Premium, if any,
on the Certificates (whether such sums have been
paid to it by the Indenture Trustee or the Owner
Trustee) in trust for the benefit of the Holders
or of the Indenture Trustee, and
(b) that it will give the Indenture Trustee
notice of any failure by the Owner Trustee to
make any payment of the principal of or interest
or Make-Whole Premium, if any, on the
Certificates when the same shall be due and
payable.
Anything in this Section to the contrary not-
withstanding, the agreements to hold sums in trust as
provided in this Section are subject to the provisions
of Sections 14.03 and 14.04 hereof.
SECTION 3.05. Covenants of First Security
and the Owner Trustee.
(a) First Security hereby covenants and
agrees as follows:
(i) First Security will perform its
covenants set forth in Sections 7.04(b) and
7.04(c) of the Participation Agreement; and
(ii) First Security will not directly or
indirectly create, incur, assume or suffer to
exist any Lessor's Liens attributable to it or to
the consolidated group of taxpayers of which it
is a part.
(b) The Owner Trustee hereby covenants and
agrees as follows:
(i) in the event a Responsible Officer of
the Owner Trustee shall have actual knowledge of
an Indenture Event of Default, an Indenture
Default, a Pre-Funding Event of Loss or an Event
of Loss, the Owner Trustee will give prompt
written notice of such Indenture Event of
Default, Indenture Default, Pre-Funding Event of
Loss or Event of Loss to the Indenture Trustee,
the Lessee and the Owner Participant;
(ii) the Owner Trustee will furnish to the
Indenture Trustee, promptly upon receipt thereof,
duplicates or copies of all reports, notices,
requests, demands, certificates, financial
statements and other instruments furnished to the
Owner Trustee under the Agreement to Lease or the
Lease, including, without limitation, a copy of
each report or notice received pursuant to
Section 11 of the Lease, to the extent that the
same shall not have been furnished to the
Indenture Trustee;
(iii) the Owner Trustee will not enter into
any business or other activity other than the
business of owning the Aircraft, the leasing
thereof to the Lessee and the carrying out of the
transactions contemplated hereby and by the
Agreement to Lease, the Lease, the Participation
Agreement, the Trust Agreement and the other
Indenture Documents; and
(iv) except as contemplated by the Operative
Agreements, the Owner Trustee will not contract
for, create, incur, assume or permit to exist any
debt, and will not guarantee (directly or
indirectly or by an instrument having the effect
of assuring another's payment or performance on
any obligation or capability of so doing, or
otherwise), endorse or otherwise be or become
contingently liable, directly or indirectly, in
connection with the debt of any other Person.
SECTION 3.06. Intentionally Left Blank.
SECTION 3.07. Disposal of Trust Indenture
Estate. At any time and from time to time any part of
the Trust Indenture Estate may be sold or disposed of
in accordance with the provisions of this Indenture
and the Lease. The Indenture Trustee shall, from time
to time, release any part of the Trust Indenture
Estate so sold or disposed of or as to which an Event
of Loss has occurred or as to which the Lease has been
terminated from the Lien of this Indenture. In
addition, to the extent that such property constitutes
an Engine, the further requirements of Section 9.08
hereof shall be complied with.
SECTION 3.08. No Representations or
Warranties as to Aircraft or Documents. NEITHER THE
LESSOR, THE INDENTURE TRUSTEE NOR THE OWNER
PARTICIPANT MAKES, HAS MADE OR SHALL BE DEEMED TO HAVE
MADE, AND EACH HAS AND WILL HAVE BEEN DEEMED TO HAVE
EXPRESSLY DISCLAIMED, ANY WARRANTY OR REPRESENTATION
EITHER EXPRESS OR IMPLIED, AS TO (A) THE TITLE
(EXCEPT, WITH RESPECT TO THE OWNER TRUSTEE, AS
EXPRESSLY SET FORTH IN SECTION 7.04(a)(vii) OF THE
PARTICIPATION AGREEMENT AND SECTION 7(c)(v) OF THE
AGREEMENT TO LEASE), AIRWORTHINESS (EXCEPT WITH
RESPECT TO THE OWNER PARTICIPANT AS EXPRESSLY SET
FORTH IN SECTION 7.03(a)(xiii) OF THE PARTICIPATION
AGREEMENT, WORKMANSHIP, CONDITION, VALUE, FITNESS FOR
ANY PARTICULAR USE OR PURPOSE, DESIGN, OPERATION OR
MERCHANTABILITY OF THE AIRFRAME, ANY ENGINE OR ANY
PART THEREOF, (B) THE ABSENCE OF LATENT OR OTHER
DEFECTS, WHETHER OR NOT DISCOVERABLE, (C) THE ABSENCE
OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR
COPYRIGHT, (D) THE ABSENCE OF OBLIGATIONS BASED ON
STRICT LIABILITY IN TORT, OR (E) ANY OTHER MATTER
WHATSOEVER. NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED IN THE FOREGOING, IT IS HEREBY AGREED AND
UNDERSTOOD BETWEEN THE PARTIES HERETO THAT, THE LESSOR
SHALL BEAR THE SOLE RESPONSIBILITY FOR ALL RISKS,
COSTS, EXPENSES AND LIABILITIES ARISING OUT OF THE
OWNERSHIP, USE, OPERATION, MAINTENANCE OR LEASE OF THE
AIRCRAFT DURING THE PERIOD PRIOR TO THE EXECUTION OF
THE LEASE SUPPLEMENT ON THE COMMENCEMENT DATE BY THE
LESSEE AND THAT THE LESSEE SHALL NOT BE RESPONSIBLE
FOR ANY SUCH RISKS, COSTS, EXPENSES AND LIABILITIES.
FOR THE AVOIDANCE OF DOUBT, IT IS FURTHER AGREED
BETWEEN THE PARTIES THAT THE LESSOR SHALL BE
RESPONSIBLE FOR ANY SUCH RISKS, COSTS, EXPENSES AND
LIABILITIES WHICH ARISE SUBSEQUENT TO THE EXECUTION OF
SUCH LEASE SUPPLEMENT BY THE LESSEE TO THE EXTENT THEY
ARISE OUT OF ANY ACT OR OMISSION PRIOR TO SUCH
EXECUTION BY THE LESSEE. First Security
further warrants that on the Closing Date, the
Commencement Date and the Exchange Date the Aircraft
shall be free and clear of Lessor's Liens attributable
to First Security. Neither First Security, the
Indenture Trustee nor the Owner Participant makes or
shall be deemed to have made any representation or
warranty as to the validity, legality or
enforceability of this Indenture, the Trust Agreement,
the Certificates or any Indenture Document or as to
the correctness of any statement contained in any
thereof, except for the representations and warranties
of First Security, the Indenture Trustee and the Owner
Participant made under this Indenture, in the
Collateral Agreement or in the Participation
Agreement.
SECTION 3.09. Further Assurances; Financing
Statements. At any time and from time to time, upon
the request of the Indenture Trustee or the Lessee,
the Owner Trustee shall promptly and duly execute and
deliver any and all such further instruments and
documents as may be specified in such request and as
are necessary or advisable to perfect, preserve or
protect the Liens and assignments created or intended
to be created hereby, or to obtain for the Indenture
Trustee the full benefit of the specific rights and
powers granted herein, including, without limitation,
the execution and delivery of Uniform Commercial Code
financing statements and continuation statements with
respect thereto, or similar instruments relating to
the perfection of the Liens or assignments created or
intended to be created hereby.
Article IV
HOLDER LISTS
SECTION 4.01. Holder Lists; Ownership of
Certificates. (a) The Indenture Trustee shall
preserve in as current a form as is reasonably
practicable the most recent list available to it of
the names and addresses of the Holders. If the
Indenture Trustee is not the Registrar, the Registrar
shall furnish to the Indenture Trustee semi-annually
not more than fifteen (15) days after each Record
Date, as of such Record Date, or at such other times
as the Indenture Trustee may request in writing, a
list, in such form and as of such date as the
Indenture Trustee may reasonably require, containing
all the information in the possession or control of
the Registrar as to the names and addresses of the
Holders and the amounts and Maturities of the
Certificates held by such Holders.
(b) Ownership of the Certificates shall be
proved by the Register kept by the Registrar.
Article V
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
SECTION 5.01. Basic Rent and Other Debt
Service Distribution. (a) Except as otherwise
provided in Section 5.03 hereof, each installment of
Basic Rent, any payment of interest on overdue
installments of Basic Rent and any payment received by
the Indenture Trustee pursuant to Section 8.03(a)
hereof shall be promptly distributed in the following
order of priority: first, so much of such installment
or payment as shall be required to pay in full the
aggregate amount of the payment or payments of
principal and interest and other amounts (as well as
any interest on overdue principal and, to the extent
permitted by law, on Make-Whole Premium, if any,
interest and other amounts) then due under all
Certificates shall be distributed to the Holders
ratably, without priority of one over the other, in
the proportion that the amount of such payment or
payments then due under each such Certificate bears to
the aggregate amount of the payments then due under
all such Certificates, and, second, the balance if any
of such installment or payment remaining thereafter
shall be distributed to the Owner Trustee, or as the
Owner Trustee may request, for distribution pursuant
to the Trust Agreement; provided, however, that if an
Indenture Default shall have occurred and be
continuing, then such balance shall not be distributed
as provided in this clause "second" but shall be held
by the Indenture Trustee as part of the Trust
Indenture Estate until whichever of the following
shall first occur: (i) all Indenture Defaults shall
have been cured, in which event such balance shall be
distributed as provided in this clause "second",
(ii) such Indenture Default shall have continued for a
period of 120 days, in which event such balance shall
be distributed as provided in this clause "second", or
(iii) Section 5.03 hereof shall be applicable, in
which event such balance shall be distributed in
accordance with the provisions thereof.
(b) Any amount received or withdrawn by the
Indenture Trustee pursuant to Section 7(a), 7(b) or
7(d) of the Collateral Agreement shall be promptly
distributed in accordance with clause "first" above.
SECTION 5.02. Pre-Funding Event of Loss or
Event of Loss; Prepayment. (a) Except as otherwise
provided in Section 5.03 hereof, any payment received
by the Indenture Trustee as the result of or in
connection with (i) a Pre-Funding Event of Loss or an
Event of Loss with respect to the Aircraft (ii) any
Deemed Event of Loss or (iii) any event under the
Lease giving rise to a prepayment pursuant to Section
6.02 hereof, shall be promptly distributed by the
Indenture Trustee in the following order of priority:
first, to reimburse the Indenture Trustee for any
costs or expenses reasonably incurred in connection
with such prepayment, second, as provided in clause
"second" of Section 5.03 hereof, and third, as
provided in clause "third" of Section 5.03 hereof.
Any amount received or withdrawn by the Indenture
Trustee pursuant to Section 7(c) of the Collateral
Agreement shall be promptly distributed by the
Indenture Trustee in accordance with clause "second"
of this Section 5.02(a).
(b) Except as otherwise provided in Section
5.03 hereof, any amounts received directly or
indirectly from any governmental authority, insurer or
other party pursuant to any provision of Articles 11
or 13 of the Lease as the result of loss or damage not
constituting an Event of Loss with respect to the
Aircraft, or as a result of such loss or damage
constituting an Event of Loss if and to the extent
that such amounts would at the time be required to be
paid to the Lessee pursuant to said Article 11 or 13
but for the fact that a Default or an Event of Default
shall have occurred and be continuing, shall be held
by the Indenture Trustee as security for the
obligations of the Lessee under the Lease and the
Participation Agreement and shall be invested in
accordance with the terms of Section 5.08 hereof and
at such time as the conditions for payment to the
Lessee specified in said Article 11 or 13, as the case
may be, shall be fulfilled and there shall not be
continuing any Default or Event of Default, such
amount, and the proceeds of any investment thereof,
shall, to the extent not theretofore applied, be paid
to the Lessee to the extent provided in the Lease.
SECTION 5.03. Payment After Indenture Event
of Default, etc. Except as otherwise provided in Sec-
tions 5.02(b), 5.04(b), 5.04(c) and 5.05(b) hereof,
all payments received and all amounts held or realized
by the Indenture Trustee (a) after an Indenture Event
of Default shall have occurred and so long as such an
Indenture Event of Default shall be continuing, and
after the Indenture Trustee has received a request in
accordance with Section 7.10 hereof, (b) after the
Certificates shall have become due and payable as
provided in Section 7.02(b) or (c) hereof, or
(c) after the Indenture Trustee shall foreclose upon
the Trust Indenture Estate shall be promptly
distributed by the Indenture Trustee in the following
order of priority:
first, so much of such payments or amounts as
shall be required to reimburse the Indenture
Trustee for any tax, expense, charge or other
loss (including, without limitation, all amounts
to be expended at the expense of, or charged upon
the tolls, rents, revenues, issues, products and
profits of, the property included in the Trust
Indenture Estate pursuant to Section 7.03(b)
hereof) incurred by the Indenture Trustee (to the
extent not previously reimbursed) (including,
without limitation, the expenses of any sale,
taking or other proceeding, attorneys' fees and
expenses, court costs, and any other expenditures
incurred or expenditures or advances made by the
Indenture Trustee in the protection, exercise or
enforcement of any right, power or remedy or any
damages sustained by the Indenture Trustee,
liquidated or otherwise, upon such Indenture
Event of Default) shall be applied by the
Indenture Trustee in reimbursement of such
expenses;
second, so much of such payments or amounts
as shall be required to pay in full the aggregate
unpaid principal amount of all outstanding
Certificates, all accrued but unpaid interest
thereon to the date of distribution and all other
amounts due hereunder and thereunder (but without
Make-Whole Premium, except to the extent
otherwise payable pursuant to Section 6.02
hereof), shall be distributed to the Holders, and
if the aggregate amount so to be distributed
shall be insufficient to pay all such amounts in
full as aforesaid, then such amount shall be
distributed ratably, without priority of one over
the other, in the proportion that the aggregate
unpaid principal amount of all Certificates held
by each such Holder, the accrued but unpaid
interest thereon to the date of distribution and
all other amounts due hereunder and thereunder
(but without Make-Whole Premium, except to the
extent otherwise payable pursuant to Section 6.02
hereof), bears to the aggregate unpaid principal
amount of all outstanding Certificates, plus
accrued but unpaid interest thereon to the date
of distribution and all other amounts due
hereunder and thereunder (but without Make-Whole
Premium, except to the extent otherwise payable
pursuant to Section 6.02 hereof); and
third, the balance, if any of such payments
or amounts remaining thereafter shall be
distributed to the Owner Trustee for distribution
pursuant to the Trust Agreement.
SECTION 5.04. Certain Payments. (a) Except
as otherwise provided in this Indenture, any payments
received by the Indenture Trustee which are to be
applied according to any provision in any other
Indenture Document shall be applied thereunder in
accordance therewith.
(b) The Indenture Trustee will distribute,
promptly upon receipt thereof, any indemnity or other
payment received by it from the Owner Trustee or the
Lessee pursuant to Article 8 or Article 9 of the
Participation Agreement or as Supplemental Rent,
directly to the Person (which may include the
Indenture Trustee) entitled thereto.
(c) Notwithstanding anything to the contrary
contained herein, any sums received by the Indenture
Trustee which constitute Excepted Payments shall be
distributed promptly upon receipt by the Indenture
Trustee directly to the Person or Persons entitled
thereto.
SECTION 5.05. Other Payments. Any payments
received by the Indenture Trustee for which no
provision as to the application thereof is made
elsewhere in this Indenture or in any other Indenture
Document shall be distributed by the Indenture Trustee
(a) to the extent received or realized at any time
prior to the payment in full of all obligations to the
Holders secured by the Lien of this Indenture, in the
order of priority specified in Section 5.01 hereof,
and (b) to the extent received or realized at any time
after payment in full of all obligations to the
Holders secured by the Lien of this Indenture, in the
following order of priority: first, in the manner
provided in clause "first" of Section 5.03 hereof and
second, in the manner provided in clause "third" of
Section 5.03 hereof.
SECTION 5.06. Payments to Owner Trustee.
Any amounts distributed hereunder by the Indenture
Trustee to the Owner Trustee shall be paid, subject to
the proviso to Section 5.01 no later than 2:00 p.m.
New York Time on the date of receipt thereof (so long
as such amounts have been received by the Indenture
Trustee in accordance with Section 3.03 of the Lease
and the time periods specified therein), to the Owner
Trustee by wire transfer of immediately available
funds of the type received by the Indenture Trustee at
such office and to such account or accounts of such
entity or entities as shall be designated by notice
from the Owner Trustee to the Indenture Trustee from
time to time. The Owner Trustee hereby notifies the
Indenture Trustee that unless and until the Indenture
Trustee receives notice to the contrary from the Owner
Trustee, all amounts to be distributed to the Owner
Trustee hereunder for distribution in accordance with
the Trust Agreement shall be distributed by wire
transfer of immediately available funds of the type
received by the Indenture Trustee to such account of
the Owner Participant as may be specified pursuant to
Section 2.06 of the Trust Agreement.
SECTION 5.07. Application of Payments. Each
payment of principal of and interest or other amounts
due on each Certificate shall, except as otherwise
provided herein, be applied, first, to the payment of
interest on such Certificate due and payable to the
date of such payment, as provided in such Certificate,
as well as any interest on overdue principal and Make-
Whole Premium, if any, and, to the extent permitted by
law, interest and other amounts due thereunder,
second, to the payment of any other amount (other than
the principal of such Certificate) due hereunder to
the Holder of such Certificate or under such
Certificate, third, to the payment of the principal of
such Certificate if then due hereunder or under such
Certificate and fourth, the balance, if any remaining
thereafter, to the payment of the principal of such
Certificate remaining unpaid (provided that such
Certificate shall not be subject to prepayment without
the consent of the affected Holder except as permitted
by Sections 6.02, 6.06 and 8.02 hereof).
SECTION 5.08. Investment of Amounts Held by
Indenture Trustee. Amounts held by the Indenture
Trustee pursuant to Section 5.02(b) hereof or pursuant
to any provision of any Indenture Document providing
for investment of sums pursuant to Section 23.01 of
the Lease or this Section 5.08 shall be invested by
the Indenture Trustee from time to time in securities
selected by (i) so long as no Event of Default shall
have occurred and be continuing, the Lessee or (ii) so
long as an Event of Default shall have occurred and be
continuing, the Indenture Trustee and in each case
shall be of the type listed in clauses (i) through
(iv) of Section 23.01 of the Lease. Unless otherwise
expressly provided in this Indenture, any income
realized as a result of any such investment, net of
the Indenture Trustee's reasonable fees and expenses
in making such investment, shall 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, net of earnings and such reasonable
fees and expenses, shall be charged against the
principal amount invested. The Lessee shall be
responsible for and will promptly pay to the Indenture
Trustee or the Lessor, as the case may be, on demand,
the amount of any loss realized as the result of any
such investment (together with any fees, commissions
and other costs and expenses, if any, incurred by the
Indenture Trustee or the Lessor in connection with
such investment), such amount to be disposed of in
accordance with the terms hereof or the Lease, as the
case may be. The Indenture Trustee shall not be
liable for any loss resulting from any investment made
by it under this Indenture in accordance with
instructions from the Lessee other than by reason of
its willful misconduct or gross negligence, and any
such investment may be sold (without regard to its
maturity) by the Indenture Trustee without
instructions whenever the Indenture Trustee reasonably
believes such sale is necessary to make a distribution
required by this Indenture.
Unless otherwise confirmed in writing, an
account statement delivered by the Indenture Trustee
to the Owner Trustee (with a copy to the Lessee) shall
be deemed written confirmation by the Owner Trustee
that the investment transactions identified therein
accurately reflect the investment directions given to
the Indenture Trustee by or on behalf of the Owner
Trustee, unless the Owner Trustee (or the Lessee on
its behalf) notifies the Indenture Trustee in writing
to the contrary within 30 days of the date of receipt
of such statement.
SECTION 5.09. Withholding Taxes. The
Indenture Trustee shall withhold any Taxes required to
be withheld, except to the extent that the Holder has
furnished evidence satisfactory to the Indenture
Trustee of any exemption from withholding claimed by
such Holder, and under no circumstances shall the
failure of any such Holder to receive any amounts so
withheld constitute an Indenture Event of Default.
Article VI
PREPAYMENT OF CERTIFICATES
SECTION 6.01. No Prepayment Prior to
Maturity. Except as provided in Sections 6.02, 6.06
and 8.02 hereof, the Certificates may not be prepaid
prior to their respective Maturities.
SECTION 6.02. Prepayment of Certificates.
(a) The outstanding Certificates shall be prepaid in
full (and not in part):
(i) If an Event of Loss occurs with respect
to the Airframe or with respect to the Airframe
and the Engines or engines then installed on the
Airframe (unless such Event of Loss relates to
the Engines and, pursuant to Section 11.04 of the
Lease and Section 9.08 hereof, Replacement
Engine(s) are substituted therefor).
(ii) If the Lessee, pursuant to Section
4.02(a)(C) or 4.02(a)(D) of the Lease, gives
notice of purchase of the Aircraft (and Section
2.12 hereof shall not be applicable in connection
with such purchase).
(iii) If the Owner Participant or the Owner
Trustee on behalf of the Owner Participant gives
notice of prepayment to the Indenture Trustee
pursuant to Section 8.02 hereof.
(iv) If the Lessee, pursuant to Section
10.01 of the Lease, gives notice of a voluntary
termination for obsolescence or surplus, but
subject to Section 6.02(c) below.
(v) [Intentionally Omitted]
(vi) If (A) a Deemed Event of Loss occurs,
or (B) a Pre-Funding Event of Loss occurs.
(b) In the event of a prepayment of the
Certificates pursuant to Section 6.02(a)(ii) or
6.02(a)(iv) above, the Owner Trustee, having received
notice from the Lessee in accordance with and subject
to the terms of Section 4.02(a) or Section 10.01 of
the Lease, shall give irrevocable written notice to
the Indenture Trustee and to the Holders of all of the
Certificates specifying the Business Day on which the
Certificates shall be prepaid. In the case of a
prepayment of the Certificates pursuant to Section
6.02(a)(i) above, the Certificates shall be prepaid in
full on the Loss Payment Date as defined in Section
11.02 of the Lease. In the case of a prepayment of
the Certificates pursuant to Section 6.02(a)(iii)
above, the Certificates shall be prepaid in full on
the Business Day so designated in the notice referred
to in Section 8.02 hereof. In the case of a
prepayment of the Certificates pursuant to
Section 6.02(a)(ii) or (iv) above, the Certificates
shall be prepaid in full on the Termination Date. In
the case of a prepayment of the Certificates pursuant
to Section 6.02(a)(vi)(A) above, the Certificates
shall be prepaid on the fourth Frankfurt Business Day
following the Cut-off Date. In the case of a
prepayment of the Certificates pursuant to
Section 6.02(a)(vi)(B) above, the Certificates shall
be prepaid (i) in the case of a Pre-Funding Event of
Loss, notice of which is received by the Indenture
Trustee at least five Frankfurt Business Days prior to
the Scheduled Commencement Date, on the Scheduled
Commencement Date, or (ii) in the case of any other
Pre-Funding Event of Loss on the fourth Frankfurt
Business Day following the Cut-off Date. The day on
which the Certificates are to be prepaid pursuant to
this Section 6.02(b) is herein referred to as the
"Prepayment Date".
On or prior to the Prepayment Date,
immediately available funds shall be deposited with
the Indenture Trustee in an amount in respect of the
Certificates equal to:
(1) in the event of a prepayment of the
Certificates pursuant to Section 6.02(a)(i),
6.02(a)(iii) (if clause (B) of Section 8.02(a)
hereof is applicable), or 6.02(a)(vi) above, the
sum of (A) the aggregate principal amount of
Certificates then outstanding, (B) accrued
interest on the Certificates to the Prepayment
Date and (C) all other aggregate sums due any
Holder or the Indenture Trustee hereunder or
under the Participation Agreement or the Lease,
or
(2) in the event of a prepayment of the
Certificates pursuant to Section 6.02(a)(ii),
6.02(a)(iii) (if clause (A) of Section 8.02(a)
hereof is applicable), or 6.02(a)(iv) above, the
sum of the amounts specified in clauses (A), (B)
and (C) of the preceding clause (1) plus any
Make-Whole Premium payable in respect of all
Certificates
(the aggregate amount required to be paid pursuant to
this sentence being herein referred to as the
"Prepayment Price").
(c) If, pursuant to the last sentence of
Section 10.01(f) of the Lease, no Termination Date
shall occur, the Owner Trustee shall give notice
thereof to the Indenture Trustee, and the prepayment
to be effected in respect of the Prepayment Date
associated with such Termination Date shall not occur.
SECTION 6.03. Notice of Prepayment to
Holders. In order to effect any prepayment set forth
in Section 6.02(a) hereof, the Indenture Trustee shall
give prompt notice by first class mail of prepayment
to each Holder of an outstanding Certificate. Such
notice may be revoked by the Owner Trustee at any time
on or before the Prepayment Date by prompt written
notice to the Holders and Indenture Trustee except as
otherwise provided in this Indenture, the Lease, or
the Participation Agreement.
All notices of prepayment shall state:
(1) the Prepayment Date,
(2) the applicable basis for determining the
Prepayment Price,
(3) that on the Prepayment Date, subject to
the provisions hereof, the Prepayment Price will
become due and payable, and that interest on the
Certificates shall cease to accrue on and after
such Prepayment Date, and
(4) the place or places where such
Certificates are to be surrendered for payment.
SECTION 6.04. Deposit of Prepayment Price
and Sinking Fund Redemption Price. On the Prepayment
Date or the Sinking Fund Redemption Date (as defined
in Section 6.06 hereof), the Owner Trustee shall, to
the extent that, after the Pre-Funding Period, an
amount equal to the Prepayment Price or the Sinking
Fund Redemption Price (as defined in Section 6.06
hereof) as the case may be, shall not then be held in
the Trust Indenture Estate, deposit with the Indenture
Trustee in immediately available funds, an amount
equal to the difference between (a) the amount then
held in the Trust Indenture Estate and (b) the
Prepayment Price or the Sinking Fund Redemption Price,
as the case may be. If there shall so be on deposit
and/or deposited the applicable Prepayment Price or
Sinking Fund Redemption Price on or prior to a
Prepayment Date or Sinking Fund Redemption Date,
interest shall cease to accrue in respect of all or,
in the case of a mandatory sinking fund redemption,
the relevant portion being prepaid of, the outstanding
Certificates on and after such Prepayment Date or such
Sinking Fund Redemption Date.
SECTION 6.05. Certificates Payable on
Prepayment Date. On the Prepayment Date, the
outstanding Certificates shall (except if the Owner
Trustee has requested the Indenture Trustee to revoke
such notice of prepayment in accordance with Section
6.03 hereof) become due and payable and from and after
such Prepayment Date (unless there shall be a default
in the payment of the Prepayment Price) such
Certificates shall cease to bear interest. Upon
surrender by any Holder of its Certificate for
prepayment in accordance with said notice, such Holder
shall be paid the principal amount of its Certificate
then outstanding, accrued interest thereon to the
Prepayment Date, all other sums due to such Holder
hereunder, under the Participation Agreement or the
Lease, plus, if a Make-Whole Premium is payable
pursuant to Section 6.02(b) hereof, the Make-Whole
Premium in respect of such Certificate.
If any Certificate called for prepayment
shall not be so paid upon surrender thereof for
prepayment, the principal shall, until paid, continue
to bear interest from the Prepayment Date at the
interest rate applicable to such Certificate.
SECTION 6.06. Mandatory Sinking Fund
Redemption. The Certificates with a Maturity of
September 23, 2006, the Certificates with a Maturity of
September 23, 2008, and the Certificates with a Maturity of
March 23, 2010 shall be subject to partial redemption,
on a pro rata basis on each date specified in this
Section (a "Sinking Fund Redemption Date"). The Owner
Trustee shall deposit funds sufficient to pay the
Sinking Fund Redemption Price with the Indenture
Trustee as provided in Section 6.04 hereof. The
Indenture Trustee shall pay from the amounts so
deposited on each applicable Sinking Fund Redemption
Date to the Holders of each Certificate then
outstanding on a pro rata basis the aggregate
principal amount set forth below, together with
accrued interest to such Sinking Fund Redemption Date,
but without Make-Whole Premium (the "Sinking Fund
Redemption Price"):
Principal Amount
------------------------------------
Certificates with Certificates with Certificates with
Sinking Fund a Maturity of a Maturity of a Maturity of
Redemption Date September 23, 2006 Sepember 23, 2008 March 23, 2010
- --------------- ------------------ ----------------- ----------------
[See Appendix A for Sinking Fund Redemption Date information
for the relating thirteen (13) Aircraft]
================== ================= ================
TOTAL
Article VII
INDENTURE EVENTS OF DEFAULT; REMEDIES
OF INDENTURE TRUSTEE AND HOLDERS
SECTION 7.01. Indenture Event of Default.
(a) "Indenture Event of Default" means any of the
following events (whatever the reason for such
Indenture Event of Default and whether it shall be
voluntary or involuntary or come about or be effected
by operation of law or pursuant to or in compliance
with any judgment, decree or order of any court or any
order, rule or regulation of any administrative or
governmental body):
(i) any Event of Default specified in
Article 16 of the Lease (other than an Event
of Default arising solely as the result of
the failure to make an Excepted Payment
unless the Owner Participant shall acquiesce
in the treatment of such failure as an Event
of Default) shall have occurred and be
continuing; or
(ii) any failure by the Owner Trustee to
observe or perform any covenant or obligation
of the Owner Trustee in this Indenture (other
than any such failure arising by reason of an
Event of Default or other than the failure of
the Owner Trustee to provide notice pursuant
to Section 3.05(b)(i) or to furnish the
Indenture Trustee documents as provided under
Section 3.05(b)(ii)) and the continuance of
such failure for a period of thirty (30) days
after written notice thereof identified as a
"Notice of Indenture Event of Default" to the
Owner Trustee and the Owner Participant by
the Indenture Trustee or by Certificate
Holders of not less than 25% in aggregate
principal amount of Outstanding Certificates
specifying such failure to so observe or
perform and requiring it to be remedied (or
if such default is curable the continuance of
such failure for up to 120 days after such
notice if during such 120-day period the
Lessor shall be diligently attempting to cure
such breach); or
(iii) (A)(i) to the extent not resulting
from an Event of Default, any failure by the
Owner Trustee to pay principal, interest or
Make-Whole Premium, if any, with respect to
any Certificate when due, or (ii) any failure
of the LC Bank to make any payment under the
Letter of Credit when such payment is due, or
(iii) any failure of Lufthansa to make (or any
failure of the named Payee or any assignee with
respect to a Demand Note (other than the
Indenture Trustee), to the extent payment has
been received by such Payee or assignee to pass
on to the Indenture Trustee) any payment, when
such payment is due, in accordance with any demand
made under any Demand Note, in each case if such
failure shall continue unremedied for a period of
five (5) Business Days or (B) to the extent
not resulting from an Event of Default, any
failure to pay any other amounts hereunder or
under the Certificates when due, if such
failure shall continue for a period of thirty
(30) days; or
(iv) (A) any representation or warranty
made by First Security, the Owner Trustee,
the Owner Participant or any Person
guaranteeing the obligations of the Owner
Participant in Article 7 of the Participation
Agreement, in Section 5.01 of the Lease or in
any certificate of First Security, the Owner
Trustee, the Owner Participant or any Person
guaranteeing the obligations of the Owner
Participant furnished to the Indenture
Trustee or any Holder in connection herewith
or therewith or pursuant hereto or thereto
shall prove to have been incorrect when made
and was and remains material in any respect
to the rights and remedies of the Holders
under this Indenture, the Certificates, the
Collateral Agreement, the Participation
Agreement, the Lease or any other Indenture
Document and if such misrepresentation is
capable of being corrected as of a subsequent
date and if such correction is being sought
diligently, such misrepresentation shall not
have been corrected within 30 days following
notice thereof identified as a "Notice of
Indenture Event of Default" being given to
First Security, the Owner Trustee and the
Owner Participant by the Indenture Trustee or
by Certificate Holders of not less than 25%
in aggregate principal amount of Outstanding
Certificates; or
(B) any covenant made by First
Security, the Owner Trustee, the Owner
Participant, or any Person guaranteeing the
obligations of the Owner Participant in
Article 7 of the Participation Agreement
shall be breached in any respect and was and
remains material to the rights and remedies
of the Holders under this Indenture, the
Certificates, the Participation Agreement or
the Lease and such breach shall remain
unremedied for a period of thirty (30) days
after there has been given to the Owner
Trustee and the Owner Participant by the
Indenture Trustee or by Certificate Holders
of not less than 25% in aggregate principal
amount of Outstanding Certificates a written
notice identified as a "Notice of Indenture
Event of Default" specifying such breach and
requiring it to be remedied; or
(v) the Owner Trustee, the Lessor's
Estate, the Owner Participant or any Person
guaranteeing the obligations of the Owner
Participant shall (i) be unable, or admit in
writing its inability, to pay its debts
generally as they become due within the
meaning of Title 11 of the United States
Code, (ii) file any petition or answer
seeking for itself or consenting to any
reorganization, arrangement, composition,
readjustment, liquidation, dissolution or
similar relief under any present or future
bankruptcy, insolvency or similar statute,
law or regulation, (iii) make an assignment
for the benefit of its creditors, or (iv)
take corporate or comparable action for the
purpose of any of the foregoing; provided
that an event referred to in this Section
7.01(v) with respect to the Owner Participant
shall not constitute an Indenture Event of
Default if (a) an order, judgment or decree
shall be entered in a proceeding by a court
or a trustee, custodian, receiver or
liquidator which is either final and non-
appealable, or (b) an opinion of counsel
satisfactory to the Indenture Trustee shall
be provided by the Owner Participant, in each
case to the effect that no part of the
Lessor's Estate (except for the Owner
Participant's beneficial interest in the
Lessor's Estate) and no right, title or
interest under the Trust Indenture Estate, is
or shall be included in, or subject to, any
declaration or adjudication of, or
proceedings with respect to, the bankruptcy,
insolvency or liquidation of the Owner
Participant referred to in this Section
7.01(v); or
(vi) the Owner Trustee, the Lessor's
Estate, the Owner Participant or any Person
guaranteeing the obligations of the Owner
Participant shall file any answer admitting
or not contesting the material allegations of
a petition filed against the Owner Trustee,
the Lessor's Estate, the Owner Participant or
any Person guaranteeing the obligations of
the Owner Participant in any proceeding
referred to in clause (vii) below or seek or
consent or acquiesce in the appointment of
any trustee, custodian, receiver or
liquidator of the Owner Trustee, the Lessor's
Estate, the Owner Participant or any Person
guaranteeing the obligations of the Owner
Participant or of all or any substantial part
of its properties; or
(vii) without the consent or acquiescence
of the Owner Trustee, the Lessor's Estate,
the Owner Participant or any Person
guaranteeing the obligations of the Owner
Participant an order shall be entered
constituting an order for relief or approving
a petition for relief or reorganization or
any other petition seeking any reorganiza-
tion, arrangement, composition, readjustment,
liquidation, dissolution or other similar
relief under any present or future
bankruptcy, insolvency or similar statute,
law or regulation, or any such petition shall
be filed against the Owner Trustee, the
Lessor's Estate, the Owner Participant or any
Person guaranteeing the obligations of the
Owner Participant and such petition shall not
be dismissed within 60 days (or 90 days in
the case of the Owner Participant), or,
without the consent or acquiescence of the
Owner Trustee, the Lessor's Estate, Owner
Participant or any Person guaranteeing the
obligations of the Owner Participant, an
order shall be entered appointing a trustee,
custodian, receiver or liquidator of the
Owner Trustee, the Lessor's Estate, the Owner
Participant or any Person guaranteeing the
obligations of the Owner Participant, or of
all or any substantial part of the properties
of the Owner Trustee, the Lessor's Estate,
the Owner Participant or any Person
guaranteeing the obligations of the Owner
Participant, and such order shall not be
dismissed within 90 days; provided that an
event referred to in this Section 7.01(vii)
with respect to the Owner Participant shall
not constitute an Indenture Event of Default
if (a) an order, judgment or decree shall be
entered in a proceeding by a court or a
trustee, custodian, receiver or liquidator
which is either final and non-appealable, or
(b) an opinion of counsel satisfactory to the
Indenture Trustee shall be provided by the
Owner Participant, in each case to the effect
that no part of the Lessor's Estate (except
for the Owner Participant's beneficial
interest in the Lessor's Estate) and no
right, title or interest under the Trust
Indenture Estate is or shall be included in,
or subject to, any declaration or
adjudication of, or proceedings with respect
to, the bankruptcy, insolvency or liquidation
of the Owner Participant referred to in this
Section 7.01(vii); or
(viii) at any time on or after the Exchange
Date while the Aircraft is registered in the
United States, the Owner Trustee, First Security,
the Owner Participant or any Person guaranteeing
the obligations of the Owner Participant shall do
or fail to do any act expressly required by the
Operative Agreements to be performed by the Owner
Trustee or the Owner Participant, as the case may
be, or shall meet or fail to meet any condition
expressly required by the Operative Agreements to
be satisfied by the Owner Trustee or the Owner
Participant, or as the case may be, and as a
result thereof the Lien of this Indenture shall
cease to be a valid first priority perfected Lien
on the Indenture Estate.
SECTION 7.02. Remedies. (a) If an
Indenture Event of Default shall have occurred and be
continuing and so long as the same shall be continuing
unremedied, then and in every such case, the Indenture
Trustee may, and when required by the provisions of
Article IX or Section 7.02(c) hereof, shall (i)
exercise any or all of the rights and powers and
pursue any and all of the remedies pursuant to this
Article VII and (ii) in the event such Indenture Event
of Default is an Indenture Event of Default referred
to in paragraph (a) of Section 7.01 hereof, exercise
any and all of the remedies pursuant to Article 17 of
the Lease. The Indenture Trustee may take possession
of all or any part of the properties covered or
intended to be covered by the Lien and security
interest created hereby or pursuant hereto and may
exclude the Owner Participant, the Owner Trustee, the
Lessee and any transferee of the Lessee and all
persons claiming under any of them wholly or partly
therefrom. In addition, the Indenture Trustee may
exercise any other right or remedy in lieu of or in
addition to the foregoing that may be available to it
under applicable law, or proceed by appropriate court
action to enforce the terms hereof, of the Lease, or
both, or to terminate or rescind the Lease. Without
limiting any of the foregoing, it is understood and
agreed that the Indenture Trustee may exercise any
right of sale of the Aircraft available to it, even
though it shall not have taken possession of the
Aircraft and shall not have possession thereof at the
time of such sale.
While an Indenture Event of Default is in
existence that is also an Event of Default and no
other Indenture Event of Default exists, the Indenture
Trustee may only exercise remedies hereunder if the
Indenture Trustee simultaneously commences the
exercise of one or more remedies under clauses (i)
through (vi) of Section 17.01(a) of the Lease (such as
commencement of suit for overdue Basic Rent);
provided, however, that such requirement to exercise
one or more of such remedies under the Lease shall not
apply in circumstances where the Indenture Trustee is,
and has been, for a continuous period in excess of 60
days or such other period as may be specified in
Section 1110(a)(1) of the Bankruptcy Code (such 60-day
or other period being the "Section 1110 Period"),
involuntarily stayed or prohibited by applicable law
or court order from exercising such remedies under the
Lease (a "Continuous Stay Period"); provided, further,
however, that the requirement to exercise one or more
of such remedies under the Lease shall nonetheless be
applicable during a Continuous Stay Period subsequent
to the expiration of the Section 1110 Period to the
extent that the continuation of such Continuous Stay
Period subsequent to the expiration of the Section
1110 Period (A) results from an agreement by the
Lessee during the Section 1110 Period with the
approval of the relevant court to perform the Lease in
accordance with Section 1110(a) of the Bankruptcy Code
or (B) is an extension of the Section 1110 Period with
the consent of the Indenture Trustee pursuant to
Section 1110(b) of the Bankruptcy Code or (C) results
from the Lessee's assumption during the Section 1110
Period with the approval of the relevant bankruptcy
court of the Lease pursuant to Section 365 of the
Bankruptcy Code or (D) is the consequence of the
Indenture Trustee's own failure to give any requisite
notice to any Person or (E) is pursuant to a judicial
stay pending the resolution of litigation with respect
to the applicability of Section 1110 of the Bankruptcy
Code and there is either no Event of Default other
than one arising solely from the Lessee's bankruptcy
or any such other Event of Default has been cured;
provided, further, however, that the requirement to
exercise one or more of such remedies under the Lease
during a Continuous Stay Period subsequent to the
expiration of the Section 1110 Period based upon a
judicial stay as provided in this clause (E) shall in
any event cease to be applicable subsequent to the
120th day of such Continuous Stay Period; it being
understood and agreed that the Indenture Trustee may
take such action and commence such processes as it may
determine are necessary or advisable to foreclose on
the Lien of this Indenture but all such actions and
processes shall, during such period, not be completed
to effect a foreclosure. If the limitation upon cures
of the Lessee's failure to pay Basic Rent as provided
in Section 8.03(a) hereof would otherwise prohibit the
Owner Participant or the Owner Trustee from making a
payment to cure an Event of Default for purposes of
clause (E) above, the Owner Participant or the Owner
Trustee shall nonetheless be entitled to make such
payment. If the Indenture Trustee shall acquire title
to the Aircraft through foreclosure during a
Continuous Stay Period without having exercised one or
more of such remedies under the Lease by virtue of the
Continuous Stay Period having continued beyond its
120th day as provided above in clause (E) and the
Indenture Trustee shall have received prior to the
183rd day subsequent to its acquisition of the title
to the Aircraft, the proceeds from its sale of the
Aircraft, the Indenture Trustee shall, notwithstanding
any other provision of this Indenture, distribute to
the Owner Trustee the amount, if any, by which such
proceeds (net of the Indenture Trustee's costs and
expenses (including the fees and expenses of counsel
and other experts and agents retained by it),
commissions and other costs and expenses with respect
to such foreclosure, the maintenance and preservation
of the Aircraft and such sale (including amounts in
respect of any thereof paid by others to whom the
Indenture Trustee has a reimbursement obligation) and
any other amounts to which the Indenture Trustee is
entitled pursuant to Section 9.11 hereof or otherwise)
exceed an amount equal to the aggregate of the
principal amount of the Certificates outstanding on
the date of such foreclosure, together with interest
accrued thereon to such foreclosure date and an amount
equal to the amount of interest that would have
accrued (at the rate per annum applicable under the
Certificates) on such principal amount from the date
of such foreclosure to the date of the distribution by
the Indenture Trustee of such proceeds for the benefit
of the Holders if such principal amount had remained
outstanding. References in this subsection (iii) to
particular sections of the Bankruptcy Code as in
effect on the date of the amendment and restatement of
this Indenture shall include any substantially similar
successor provisions.
(b) Notwithstanding Section 7.02(c) hereof,
if an Indenture Event of Default referred to in clause
(v), (vi) or (vii) of Section 7.01 hereof shall have
occurred, or an Event of Default referred to in clause
(e), (f) or (g) of Section 16.01 of the Lease shall
have occurred, then and in every such case the unpaid
principal of all outstanding Certificates, together
with interest accrued but unpaid thereon and all other
amounts due thereunder and hereunder, but without
Make-Whole Premium, shall immediately and without
further act become due and payable, without present-
ment, demand, protest or notice, all of which are
hereby waived.
(c) If any Indenture Event of Default not
described in the preceding paragraph (b) shall have
occurred and be continuing, then and in every such
case, 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
Certificates, at any time, by written notice or
notices to the Owner Trustee and, if after the
Commencement Date, the Lessee, declare the principal
of all the Certificates to be due and payable,
whereupon the unpaid principal of all outstanding
Certificates, together with accrued but unpaid
interest thereon and all other amounts due thereunder,
but without Make-Whole Premium (except to the extent a
Make-Whole Premium was theretofore payable by virtue
of Section 6.02(b) hereof), shall immediately become
due and payable without presentment, demand, protest
or other notice, all of which are hereby waived. At
any time after such declaration and prior to the sale
or disposition of the Trust Indenture Estate, however,
the Holders of a Majority in Interest of Certificate
Holders, by notice to the Indenture Trustee, the Owner
Trustee and, if after the Commencement Date, the
Lessee, may rescind such declaration, whether made by
the Indenture Trustee on its own accord or as
directed, if (x) there has been paid or deposited with
the Indenture Trustee (other than pursuant to the
Collateral Agreement) a sum sufficient to pay all
overdue installments of interest on all Certificates
(together, to the extent permitted by law, with
interest on such overdue installments of interest),
the principal on any Certificates that has become due
otherwise than by such declaration of acceleration,
all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee,
its agents and counsel, or (y) all Indenture Events of
Default (other than the nonpayment of principal that
has become due solely because of such acceleration)
have been either cured or waived as provided in
Section 7.11 hereof. No such rescission shall affect
any subsequent default or impair any right consequent
thereon.
(d) Each Holder shall be entitled at any
sale to a credit against any purchase price bid at
such sale by such Holder all or any part of the unpaid
obligations owing to such Holder secured by the Lien
of this Indenture.
SECTION 7.03. Return of Trust Indenture
Estate, etc. Subject to Section 7.02 hereof: (a) If
an Indenture Event of Default shall have occurred and
be continuing, at the request of the Indenture
Trustee, the Owner Trustee 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 all or any part of the Trust
Indenture Estate to which the Indenture Trustee shall
at the time be entitled hereunder. If the Owner
Trustee shall for any reason fail to execute and
deliver such instruments and documents after such
request by the Indenture Trustee, the Indenture
Trustee may (i) obtain a judgment conferring on the
Indenture Trustee the right to immediate possession
and requiring the Owner Trustee to execute and deliver
such instruments and documents to the Indenture
Trustee, to the entry of which judgment the Owner
Trustee hereby specifically consents, and (ii) pursue
all or part of the Trust Indenture Estate wherever
such Trust Indenture Estate may be found and may, in
the name of the Owner Trustee or otherwise, enter any
of the premises of the Lessee and search for and take
possession of and remove the Trust Indenture Estate.
All expenses of obtaining such judgment or of
pursuing, searching for and taking such property
shall, until paid, be secured by the Lien of this
Indenture.
(b) Upon every such taking of possession or
title, the Indenture Trustee may, from time to time,
at the expense of the Trust Indenture Estate, make all
such expenditures for maintenance, insurance, repairs,
replacements, alterations, additions and improvements
to and of the Trust 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 the Trust Indenture Estate
and to carry on the business and, without limiting the
express provisions of Section 8.01 hereof, to exercise
all rights and powers of the Owner Participant and the
Owner Trustee relating to the Trust Indenture Estate,
as the Indenture Trustee shall deem necessary or
appropriate, 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 the Trust Indenture
Estate or any part thereof as the Indenture Trustee
may determine; and, except for Excepted Payments
(other than Excepted Payments payable to the Indenture
Trustee), the Indenture Trustee shall be entitled to
collect and receive directly all rents (including
Rent), revenues, issues, income, products and profits
of the Trust Indenture Estate and every part thereof
without prejudice to the right of the Indenture
Trustee under any provision hereof to collect and
receive all cash held by, or required to be deposited
with, the Indenture Trustee hereunder. Such rents
(including Rent), revenues, issues, income, products
and profits shall be applied to pay the expenses of
the use, operation, storage, leasing, control,
management or disposition of the Trust Indenture
Estate and of conducting the business thereof, 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 the Trust
Indenture Estate or any part thereof (including the
employment of engineers and accountants to examine,
inspect and make reports upon the properties and books
and records of the Owner Trustee), 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.
(c) If an Indenture Event of Default shall
have occurred and be continuing and the Indenture
Trustee shall be entitled to exercise remedies
hereunder, and (other than with respect to Collateral)
subject to Article VIII hereof, the Indenture Trustee,
either with or without taking possession, and either
before or after taking possession, and without
instituting any legal proceedings whatsoever, may
sell, assign, transfer and deliver the whole or, from
time to time, to the extent permitted by law, any part
of the Trust Indenture Estate, or any part thereof, or
interest therein, at any private sale or public
auction, with or without demand, advertisement or
notice, except as expressly provided for below in this
Section 7.03(c), for cash or credit or for other
property, for immediate or future delivery, and for
such price or prices and on such terms as the
Indenture Trustee in its sole discretion may
determine; provided, that any such action shall be at
the time lawful and that all mandatory legal
requirements shall be complied with. Other than with
respect to Collateral, the Indenture Trustee shall, to
the extent permitted by law, give the Owner Trustee,
the Owner Participant and, if after the Exchange Date,
the Lessee at least 30 days' notice of any public or
private sale. Such notice, in the case of a public
sale, shall state the time and place fixed for such
sale. Any such public sale shall be held at such time
or times within ordinary business hours as the
Indenture Trustee shall fix in the notice of such
sale. At any such sale, the Trust Indenture Estate
may be sold in one lot as an entirety or in separate
lots. The Indenture Trustee shall have and may
exercise with respect to the Collateral any or all of
the rights and remedies of a secured party under the
Uniform Commercial Code in effect in the State of New
York, and as otherwise granted herein or under any
other applicable law. To the extent permitted by law,
and notwithstanding anything herein to the contrary,
the Owner Trustee expressly waives any notice of sale
or other disposition of Collateral and all other
rights or remedies of the Owner Trustee or formalities
prescribed by law relative to sale or disposition of
Collateral or exercise of any other right or remedy of
the Indenture Trustee with respect to Collateral
existing after default hereunder; and to the extent
any such notice is required and cannot be waived, the
Owner Trustee agrees that if such notice with respect
to Collateral is given at least three (3) days before
the time of the sale or disposition, such notice shall
be deemed reasonable and shall fully satisfy any
requirement for giving of said notice.
The Indenture Trustee shall not be obligated
to make any sale pursuant to notice provided as
contemplated above. The Indenture Trustee may,
without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from
time to time by announcement at the time and place
fixed for such sale, and any such sale may be made at
any time or place to which the same may be so
adjourned without further notice or publication. The
Indenture Trustee may exercise such right of sale
without possession or production of the Certificates
or proof of ownership thereof, and as representative
of the Holders may exercise such right without notice
to the Holders or without including the Holders as
parties to any suit or proceedings relating to the
foreclosure of any part of the Trust Indenture Estate.
The Owner Trustee shall execute any and all such bills
of sale, assignments and other documents, and perform
and do all other acts and things requested by the
Indenture Trustee in order to permit consummation of
any sale of the Trust Indenture Estate in accordance
with this Section 7.03(c) and to effectuate the
transfer or conveyance referred to in the first
sentence of this Section 7.03(c). Notwithstanding
any other provision of this Indenture, the Indenture
Trustee shall not sell the Trust Indenture Estate or
any part thereof unless the Certificates shall have
been accelerated.
(d) To the extent permitted by applicable
law, the Indenture Trustee or any Holder may be a
purchaser of the Trust Indenture Estate or any part
thereof or any interest therein at any sale thereof,
whether pursuant to foreclosure or power of sale or
otherwise. The Indenture Trustee may apply against
the purchase price therefor the amount then due
hereunder or under any of the Certificates secured
hereby and any Holder may apply against the purchase
price therefor the amount then due to it hereunder,
under any other Indenture Document or under the
Certificates held by such Holder to the extent that
such portion of the purchase price as it would have
received had it been entitled to share any
distribution thereof. The Indenture Trustee or any
Holder or nominee thereof shall, upon any such
purchase, acquire good title to the property so
purchased, free of the Lien of this Indenture and, to
the extent permitted by applicable law, free of all
rights of redemption in the Owner Trustee or the Owner
Participant in respect of the property so purchased.
(e) Subject to Article VIII hereof and if an
Indenture Event of Default is continuing, the Owner
Trustee hereby irrevocably appoints and constitutes
the Indenture Trustee the true and lawful
attorney-in-fact of the Owner Trustee in its name and
stead and on its behalf, for the purpose of
effectuating any sale, assignment, transfer or
delivery for the enforcement of the Lien of this
Indenture, whether pursuant to foreclosure or power of
sale or otherwise, to execute and deliver all such
bills of sale, assignments and other instruments as
the Indenture Trustee may consider necessary or
appropriate, with full power of substitution, and the
Owner Trustee hereby ratifies and confirms all that
such attorney or any substitute shall lawfully do by
virtue hereof. Nevertheless, if so requested by the
Indenture Trustee or any purchaser, the Owner Trustee
shall ratify and confirm any such sale, assignment,
transfer or delivery, by executing and delivering to
the Indenture Trustee or such purchaser all bills of
sale, assignments, releases and other proper
instruments to effect such ratification and
confirmation as may be designated in any such request.
(f) The Indenture Trustee shall, as a matter
of right, be entitled to the appointment of a receiver
(who may be the Indenture Trustee or any successor or
nominee) for all or any part of the Trust Indenture
Estate, whether such receivership be incidental to a
proposed sale of the Trust Indenture Estate or the
taking of possession thereof or otherwise, and the
Owner Trustee hereby consents to the appointment of
such receiver and will not oppose any such
appointment. Any receiver appointed for all or any
part of the Trust Indenture Estate shall be entitled
to exercise all of the rights and powers of the
Indenture Trustee with respect to the Trust Indenture
Estate.
(g) Any sale of the Trust Indenture Estate
or any part thereof or any interest therein, whether
pursuant to foreclosure or power of sale or otherwise
hereunder, shall be a perpetual bar against the Owner
Trustee after the expiration of the period, if any,
during which the Owner Trustee shall have the benefit
of prepayment laws which may not be waived pursuant to
Section 7.13 hereof.
SECTION 7.04. Indenture Trustee May Prove
Debt. If the Owner Trustee shall fail to pay any
amount payable hereunder or under the Certificates,
the Indenture Trustee, in its own name and as trustee
of an express trust, shall be entitled and empowered
to institute any action or proceedings at law or in
equity for the collection of the sums so due and
unpaid, and may prosecute any such action or proceed-
ings to judgment or final decree, and may enforce any
such judgment or final decree against the Owner
Trustee and collect in the manner provided by law out
of the property of the Owner Trustee wherever
situated, the moneys adjudged or decreed to be
payable; provided, that any sale of any portion of the
Trust Indenture Estate shall be done in accordance
with Section 7.03(c) hereof.
In case there shall be pending proceedings
relative to the Owner Trustee or the Lessor's Estate
under the Bankruptcy Code or any other applicable
federal or state bankruptcy, insolvency or other
similar law, or in case a receiver, assignee or
trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been
appointed for or taken possession of the Lessor's
Estate or the Owner Trustee or its property, or in
case of any other comparable judicial proceedings
relative to the Lessor's Estate or the Owner Trustee,
or to the creditors or property of the Lessor's Estate
or the Owner Trustee, the Indenture Trustee,
irrespective of whether the principal of the
Certificates shall then be due and payable as therein
or herein expressed or by declaration or otherwise and
irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of
this Section, shall be entitled and empowered, by
intervention in such proceedings or otherwise:
(a) to file and prove a claim or claims for
the whole amount of principal, interest and other
amounts owing and unpaid in respect of the
Certificates or hereunder, and to file such other
papers or documents as may be necessary or
advisable in order to have the claims of the
Indenture Trustee (including any claim for
reasonable compensation to the Indenture Trustee
and each predecessor Indenture Trustee, and their
respective agents, attorneys and counsel, and for
reimbursement of the Indenture Trustee and each
predecessor Indenture Trustee, except as a result
of negligence or bad faith) and of the Holders
allowed in any judicial proceedings relative to
the Owner Trustee or to the creditors or property
of the Owner Trustee,
(b) unless prohibited by applicable law and
regulations, to vote on behalf of the Holders in
any election of a trustee or a standby trustee in
arrangement, reorganization, liquidation or other
bankruptcy or insolvency proceedings or person
performing similar functions in comparable
proceedings, and
(c) to collect and receive any moneys or
other property payable or deliverable on any such
claims, and to distribute all amounts received
with respect to the claims of the Holders and of
the Indenture Trustee on their behalf;
and any trustee, receiver, or liquidator, custodian or
other similar official is hereby authorized by each of
the Holders to make payments to the Indenture Trustee,
and, in the event that the Indenture Trustee shall
consent to the making of payments directly to the
Holders, to pay to the Indenture Trustee such amounts
as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each
predecessor Indenture Trustee and their respective
agents, attorneys and counsel, and all other expenses
and liabilities incurred, and all advances made, by
the Indenture Trustee and each predecessor Indenture
Trustee except as a result of negligence or willful
misconduct.
Nothing contained herein shall be deemed to
authorize the Indenture Trustee to authorize or
consent to or vote for or accept or adopt on behalf of
any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Certificates
or the rights of any Holder thereof, or to authorize
the Indenture Trustee to vote in respect of the claim
of any Holder in any such proceeding except, as
aforesaid, to vote for the election of a trustee in
bankruptcy or similar person.
All rights of action and of asserting claims
under this Indenture, under any of the Certificates or
under the Collateral Agreement, may be prosecuted and
enforced by the Indenture Trustee without the
possession of any of the Certificates or the
production thereof in any trial or other proceedings
relative thereto, and any such action or proceedings
instituted by the Indenture Trustee shall be brought
in its own name as trustee of an express trust, and
any recovery of judgment, subject to the payment of
the expenses, disbursements and compensation of the
Indenture Trustee, each predecessor Indenture Trustee
and their respective agents and attorneys, shall be
for the ratable benefit of the Holders.
In any proceedings brought by the Indenture
Trustee (and also any proceedings involving the
interpretation of any provision of this Indenture or
the Collateral Agreement to which the Indenture
Trustee shall be a party), the Indenture Trustee shall
be held to represent all the Holders of the Certifi-
cates, and it shall not be necessary to make any
Holders parties to any such proceedings.
SECTION 7.05. Remedies Cumulative. Each and
every right, power and remedy given to the Indenture
Trustee specifically or otherwise in this Indenture or
the Collateral Agreement shall be cumulative and shall
be in addition to every other right, power and remedy
specifically given herein or in the Collateral
Agreement or now or hereafter existing at law, in
equity or by statute, and each and every right, power
and remedy whether specifically given herein or in the
Collateral Agreement 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 or the Holders, and the exercise or the
beginning of the exercise of any power or remedy shall
not constitute or 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 or of any Holder 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 Owner Trustee or the Lessee or to
be an acquiescence therein.
SECTION 7.06. Suits for Enforcement. If an
Indenture Event of Default has occurred, has not been
waived and is continuing, the Indenture Trustee may in
its discretion and subject to its rights of
appropriate indemnification under Sections 7.08 and
9.03 and Article XI hereof proceed to protect and
enforce its rights and rights of the Holders by such
appropriate judicial proceedings as the Indenture
Trustee shall deem most effectual to protect and
enforce any of such rights, either at law or in equity
or in bankruptcy or otherwise, whether for the
specific enforcement of any covenant or agreement
contained in this Indenture or in aid of the exercise
of any power granted in this Indenture or in the
Collateral Agreement or to enforce any other legal or
equitable right vested in the Indenture Trustee or the
Holders by this Indenture or the Collateral Agreement
or by law; provided, that any sale of any portion of
the Trust Indenture Estate shall be done in accordance
with Section 7.03(c) hereof.
SECTION 7.07. Discontinuance of Proceedings.
In case the Indenture Trustee or any Holder shall have
instituted any proceeding to enforce any right, power
or remedy under this Indenture or the Collateral
Agreement by foreclosure, entry or otherwise, and such
proceeding shall have been discontinued or abandoned
for any reason or shall have been determined adversely
to the Indenture Trustee or such Holder, then and in
every such case the Owner Trustee, the Indenture
Trustee, the Holders and the Lessee shall, subject to
any determination in such proceeding, be restored to
their former positions and rights hereunder with
respect to the Trust Indenture Estate, and all rights,
remedies and powers of the Indenture Trustee and the
Holders shall continue as if no such proceeding had
been instituted.
SECTION 7.08. Limitations on Suits by
Holders. No Holder of any Certificate shall have any
right by virtue or by availing of any provision of
this Indenture or the Collateral Agreement to insti-
tute any action or proceeding at law or in equity or
in bankruptcy or otherwise upon or under or with
respect to this Indenture or the Collateral Agreement,
or for the appointment of a trustee, receiver,
liquidator, custodian or other similar official or for
any other remedy hereunder or under the Collateral
Agreement, unless such Holder previously shall have
given to the Indenture Trustee written notice of an
Indenture Event of Default and of the continuance
thereof, as hereinbefore provided, and the Holders of
not less than 25% in aggregate principal amount of
Outstanding Certificates shall have made written
request upon the Indenture Trustee to institute such
action or proceedings in its own name as trustee
hereunder and shall have offered to the Indenture
Trustee such reasonable indemnity as it may require
against the costs, expenses and liabilities to be
incurred therein or thereby and the Indenture Trustee
for 60 days after its receipt of such notice, request
and offer of indemnity shall have failed to institute
any such action or proceedings and no direction
inconsistent with such written request shall have been
given to the Indenture Trustee pursuant to Section
7.10 hereof; it being understood and intended, and
being expressly covenanted by the Holder of each
Certificate with every other Holder of each other
Certificate and the Indenture Trustee, that no one or
more Holders shall have any right in any manner
whatever to affect, disturb or prejudice the rights of
any other Holder or the Lien of this Indenture or any
part of the Trust Indenture Estate or to obtain or
seek to obtain priority over or preference to any
other such Holder or to enforce any right under this
Indenture or the Collateral Agreement, except in the
manner provided herein or therein and for the equal,
ratable and common benefit of all Holders. For the
protection and enforcement of the provisions of this
Section, each and every Holder and the Indenture
Trustee shall be entitled to such relief as can be
given either at law or in equity.
SECTION 7.09. Unconditional Right of Holders
to Receive Principal, Interest and Make-Whole
Premium, and to Institute Certain Suits.
Notwithstanding any other provision in this Indenture,
in the Collateral Agreement or any Certificate, the
right of any Holder to receive payment of the
principal of and interest and Make-Whole Premium, if
any, on such Certificate on or after the respective
due dates and in the manner expressed in such
Certificate, or, subject to Section 7.08 hereof, to
institute suit for the enforcement of any such payment
on or after such respective dates as provided herein,
shall not be impaired or affected without the consent
of such Holder.
SECTION 7.10. Control by Holders. The
Majority in Interest of Certificate Holders shall have
the right to direct the Indenture Trustee as to the
time, method, and place of conducting any proceeding
for any remedy available to the Indenture Trustee, or
exercising any trust or power conferred on the
Indenture Trustee by this Indenture or the Collateral
Agreement; provided that such direction shall not be
otherwise than in accordance with law and the
provisions of this Indenture and the Indenture Trustee
shall have received, to the extent provided in
Sections 7.08 and 9.03 and Article XI hereof, such
reasonable indemnification as it may require against
the costs, expenses and liabilities to be incurred by
the Indenture Trustee; and provided further that
(subject to the provisions of Section 9.02 hereof) the
Indenture Trustee shall have the right to decline to
follow any such direction if the Indenture Trustee,
being advised by counsel, shall determine that the
action or proceeding so directed may not lawfully be
taken or if the Indenture Trustee in good faith by its
board of directors, the executive committee, or a
trust committee of directors or Responsible Officers
of the Indenture Trustee shall determine that the
action or proceedings so directed would involve the
Indenture Trustee in personal liability or if the
Indenture Trustee in good faith shall so determine
that the actions or forebearances specified in or
pursuant to such direction shall be unduly prejudicial
to the interests of Holders not joining in the giving
of said direction, it being understood that (subject
to Section 9.02 hereof) the Indenture Trustee shall
have no duty to ascertain whether or not such actions
or forebearances are unduly prejudicial to such
Holders.
Nothing in this Indenture shall impair the
right of the Indenture Trustee in its discretion to
take any action deemed proper by the Indenture Trustee
and which is not inconsistent with the direction by
the Majority in Interest of Certificate Holders or
this Indenture.
SECTION 7.11. Waiver of Past Indenture
Default. Upon written instructions from the Majority
in Interest of Certificate Holders, the Indenture
Trustee shall waive any past Indenture Default and its
consequences and upon any such waiver such Indenture
Default shall cease to exist and any Indenture 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
Indenture Default or impair any right consequent
thereon; provided, however, that in the absence of
written instructions from all Holders, the Indenture
Trustee shall not waive any Indenture Default (a) in
the payment of the principal of, or Make-Whole
Premium, if any, or interest on, or other amounts due
under, any Certificate then Outstanding, or (b) in
respect of a covenant or provision hereof which, under
Article XIII hereof, cannot be modified or amended
without the consent of each Holder.
SECTION 7.12. Notice of Indenture Default.
The Indenture Trustee shall transmit to the Owner
Trustee, the Holders and to the Owner Participant
notice of all Indenture Defaults actually known to a
Responsible Officer of the Indenture Trustee, such
notice to be transmitted by mail to the Holders within
90 days, and to the Owner Trustee and the Owner
Participant promptly after the occurrence thereof,
unless such Indenture Default shall have been cured
before the giving of such notice; provided that under
no circumstances shall the Indenture Trustee give such
notice to the Holders until the expiration of a period
of 60 days from the occurrence of such Indenture
Default; and provided further that, except in the case
of default in the payment of the principal of or
interest on or any other amount due under any of the
Certificates, the Indenture Trustee shall be protected
in withholding such notice to the Holders if and so
long as the board of directors, the executive
committee, or a trust committee of directors or
trustees and/or Responsible Officers of the Indenture
Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders.
SECTION 7.13. Waiver of Appraisement, etc.;
Laws. The Owner Trustee covenants (to the extent that
it may lawfully do so) that it will not at any time
insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any
appraisement, valuation, stay, extension, redemption
or prepayment law wherever enacted, now or at any time
hereafter in force, in order to prevent or hinder the
enforcement of this Indenture or the execution of any
power granted herein or therein to the Indenture
Trustee, or the absolute sale of the Trust Indenture
Estate, or any part thereof, or the possession thereof
by any purchaser at any sale under this Article VII;
and the Owner Trustee for itself and all who may claim
under it, so far as it or any of them now or hereafter
lawfully may, hereby waives the benefit of all such
laws. The Owner Trustee for itself and all who may
claim under it waives, to the extent that it lawfully
may, all right to have the property in the Trust
Indenture Estate marshalled upon any foreclosure
hereof, and agrees that any court having jurisdiction
to foreclose this Indenture may order the sale of the
Trust Indenture Estate as an entirety.
If any law referred to in this Section 7.13
and now in force, of which the Owner Trustee or its
successors might take advantage despite this Section
7.13, shall hereafter be repealed or cease to be in
force, such law shall not thereafter be deemed to
constitute any part of the contract herein contained
or to preclude the application of this Section 7.13.
Article VIII
RIGHTS OF THE OWNER TRUSTEE
AND THE OWNER PARTICIPANT
SECTION 8.01. Certain Rights of Owner
Trustee and Owner Participant. (a) Subject to
Section 13.01 hereof, without the consent of a
Majority in Interest of Certificate Holders, the
respective parties to the Participation Agreement, the
Lease, the Modification Agreement (to the extent
relating to timing or amounts of payment obligations),
the Parts and Services Agreement (to the extent
relating to timing or amounts of payment obligations),
the Sales Agreement (to the extent relating to timing
or amounts of payment obligations), and the Trust
Agreement may not modify, amend or supplement any of
said agreements (or the form of the Lease prior to the
Commencement Date), or give any consent, waiver,
authorization or approval thereunder, for the purpose
of adding any provisions to or changing in any manner
or eliminating any of the provisions thereof or of
modifying in any manner the rights of the respective
parties thereunder; provided, however, that the
actions specified in subsection (b) of this Section
8.01 may be taken without the consent of the Indenture
Trustee or of any Holder.
(b) Subject to the provisions of subsection
(c) of this Section 8.01, the respective parties to
the Participation Agreement, the Lease, the Trust
Agreement, the Agreement to Lease, the Sales
Agreement, the Modification Agreement and the Parts
and Services Agreement, at any time and from time to
time without the consent of the Indenture Trustee or
of any Holder may:
(1) so long as no Indenture Event of Default
shall have occurred and be continuing, modify,
amend or supplement the Lease or the form of the
Lease prior to the Commencement Date, or give any
consent, waiver, authorization or approval with
respect thereto, except that without compliance
with subsection (a) of this Section 8.01, the
parties to the Lease shall not modify, amend or
supplement, or give any consent, waiver,
authorization or approval for the purpose of
adding any provisions to or changing in any
manner or eliminating any of the provisions
thereof or of modifying in any manner the rights
of the respective parties thereunder, with
respect to the following provisions of the Lease
from and after the Commencement Date or, prior to
the Commencement Date, the form of Lease attached
to the Participation Agreement as Exhibit B:
Article 2 (provided that, if in respect of the
Term, the result thereof would not be to shorten
the Term of the Lease to a period shorter than
the period ending with the Maturity of any
Certificate), Section 3.03 (except to the extent
such Section relates to amounts payable (whether
directly or pursuant to this Indenture) to
Persons other than Holders and the Indenture
Trustee in its individual capacity, Section 5.01,
Article 6, Article 10 (except that further
restrictions may be imposed on the Lessee),
Article 11 (except that additional requirements
may be imposed on the Lessee), Article 13 (except
for Section 13.05 and except that additional
insurance requirements may be imposed on the
Lessee), Article 14 (except in order to increase
the Lessee's liabilities or enhance the Lessor's
rights thereunder), Article 15 (except in the
case of an assignment by the Lessor in
circumstances where the Aircraft shall remain
registrable under the Federal Aviation Act),
Section 16.01 (except that such consent of the
Holders or the Indenture Trustee shall not be
required to impose additional or more stringent
Events of Default), Article 17 (except to impose
additional remedies, Section 19.01 (except to
impose additional requirements on the Lessee),
Section 20.01, Article 22, Section 23.01 and any
definition of terms used in the Lease, to the
extent that any modification of such definition
would result in a modification of the Lease not
permitted pursuant to this subsection (b);
provided that in the event an Indenture Event of
Default shall have occurred and be continuing,
the Indenture Trustee shall have all rights of
the Owner Trustee as "Lessor" under the Lease to
modify, amend or supplement the Lease or give any
consent, waiver, authorization or approval
thereunder, for the purpose of adding any
provisions to or changing in any manner or
eliminating any of the provisions thereof or of
modifying in any manner the rights of the
"Lessor" thereunder; provided further that
without the prior consent of the Owner Trustee,
and whether or not an Indenture Event of Default
shall have occurred and be continuing, no such
action shall be taken with respect to any of the
provisions of Article 1 (to the extent any
modification of a definition contained therein
would result in a modification of the Lease not
permitted by this proviso), Section 3.04,
Articles 4, 5, 6 (to the extent such action would
reduce the Lessee's obligations), 7, 8, 9, 10,
11, 12, 13, 14, 15, 16, 17, 19 (insofar as it
relates to Lessor), 20, 21 and 22 of the Lease,
or any other Article or Section of the Lease to
the extent such action shall affect the amount or
timing of any amounts payable by the Lessee under
the Lease whether contained in the form of Lease
attached to the Participation Agreement as
Exhibit B or in the Lease executed on the
Commencement Date (as it may be subsequently
modified with the consent of the Owner Trustee)
which, absent the occurrence and continuance of
an Indenture Event of Default, will be
distributable to the Owner Trustee under
Article 5; and provided further that the parties
to the Lease may take any such action without the
consent of the Indenture Trustee or any Holder to
the extent such action relates to the payment of
amounts constituting, or the Owner Trustee's, the
Owner Participant's or the Lessee's rights or
obligations with respect to, Excepted Payments;
(2) modify, amend or supplement the Trust
Agreement, or give any consent, waiver,
authorization or approval with respect thereto,
in each case only to the extent any such action
shall not adversely impact the interests of the
Holders;
(3) modify, amend or supplement the
Participation Agreement, or give any consent,
waiver, authorization or approval with respect
thereto, except that without compliance with
subsection (a) of this Section 8.01 the parties
to the Participation Agreement shall not modify,
amend or supplement, or give any consent, waiver
authorization or approval for the purpose of
adding provisions to or changing in any manner or
eliminating any of the provisions thereof or of
modifying in any manner the rights of the
respective parties thereunder, with respect to
the following provisions of the Participation
Agreement as originally executed: Articles 6, 8
and 9 (insofar as such Articles 6, 8 and 9 relate
to the Indenture Trustee and the Holders); and
Article 7; and any definition of terms used in
the Participation Agreement, to the extent that
any modification of such definition would result
in a modification of the Participation Agreement
not permitted pursuant to this subsection (b);
(4) modify, amend or supplement the Sales
Agreement, Modification Agreement or the Parts
and Services Agreement or give any consent,
waiver, authorization or approval with respect
thereto, except to the extent relating to timing
or amounts of payment obligations thereunder; and
(5) modify, amend or supplement any of said
agreements in order to cure any ambiguity, to
correct or supplement any provisions thereof
which may be defective or inconsistent with any
other provision thereof or of any provision of
this Indenture, or to make any other provision
with respect to matters or questions arising
thereunder or under this Indenture which shall
not be inconsistent with the provisions of this
Indenture, provided the making of any such other
provision shall not adversely affect the
interests of the Holders.
(c) No modification, amendment, supplement,
consent, waiver, authorization or approval with
respect to the Lease or the Participation Agreement,
whether effected pursuant to subsection (a) or
pursuant to subsection (b) of this Section 8.01 and
anything in such subsections or elsewhere in this
Indenture to the contrary notwithstanding, shall,
without the consent of the Holder of each outstanding
Certificate affected thereby,
(1) modify, amend or supplement the Lease in
such a way as to extend the time of payment of
Basic Rent, Stipulated Loss Value or any other
amounts payable to the Indenture Trustee for its
own account or for the account of the Holders
upon the occurrence of an Event of Loss or
Termination Value and any other amounts payable
to the Indenture Trustee for its own account or
for the account of the Holders upon termination
of the Lease with respect to the Aircraft payable
under, or as provided in, the Lease as originally
executed, or reduce the amount of any installment
of Basic Rent or Supplemental Rent so that the
same is less than the payment of principal of,
and interest on the Certificates and Make-Whole
Premium, if any, as the case may be, to be made
from such installment of Basic Rent or
Supplemental Rent, or reduce the aggregate amount
of Stipulated Loss Value, or any other amounts
payable under, or as provided in, the Lease (or
the form thereof prior to the Commencement Date)
upon the occurrence of an Event of Loss so that
the same is less than the accrued interest on and
the principal as of the Loss Payment Date, of the
Certificates at the time Outstanding or reduce
the amount of Termination Value and any other
amounts payable under, or as provided in, the
Lease as originally executed upon termination of
the Lease with respect to the Aircraft so that
the same is less than the accrued interest on and
principal as of the Lease Termination Date and
Make-Whole Premium, if any, of Certificates at
the time outstanding, or
(2) modify, amend or supplement the Lease in
such a way as to, or consent to any assignment of
the Lease or give any consent, waiver,
authorization or approval which would, release
the Lessee from its obligations in respect of
payment of Basic Rent or Supplemental Rent, or
Stipulated Loss Value and any other amounts
payable to the Indenture Trustee for its own
account or the account of the Holders upon the
occurrence of an Event of Loss, or Termination
Value and any other amounts payable to the
Indenture Trustee for its own account or the
account of the Holders of the Lease with respect
to the Aircraft, payable under, or as provided
in, the Lease as originally executed (or the form
thereof prior to the Commencement Date), except
for any such assignment pursuant to Section 2.12
hereof.
SECTION 8.02. Owner Participant's Right to
Elect to Prepay or Purchase the Certificates. (a) In
the event that (A) at any time one or more Events of
Default shall have occurred and be continuing for a
period of 180 days or more but less than one year (or
a period of less than 180 days if any such Event of
Default shall be an Event of Default under Section
16.01(a) of the Lease) and the Certificates shall not
have been accelerated or (B) the Certificates shall
have been accelerated pursuant to Section 7.02(b) or
7.02(c) hereof or after one or more Events of Default
shall have occurred and be continuing for a period of
one year or more (or a period of 180 days or more if
such Event of Default shall be an Event of Default
under Section 16.01(a) of the Lease), the Owner
Participant (or the Owner Trustee on behalf of the
Owner Participant) may, but shall be under no
obligation to, do either of the following:
(1) direct the Owner Trustee to cause the
prepayment of all, but not less than all, of the
Certificates then Outstanding by notifying the
Indenture Trustee of such election, which notice
in order to be effective shall state that it is
irrevocable and shall designate a Prepayment Date
which shall be a Rent Payment Date or monthly
anniversary thereof and which shall be not less
than 30 days after the date of such notice on
which the Owner Trustee shall, in the manner
provided for in Section 6.04 hereof, deposit the
sum of amounts contemplated by paragraph "first"
under Section 5.03 and the aggregate Prepayment
Price of all such Certificates with the Indenture
Trustee. If such payment by the Owner Trustee to
the Indenture Trustee is made, the Certificates
shall cease to accrue interest from and after the
Prepayment Date, and after distribution of such
payment to the Holders, the Indenture Trustee
shall release the Trust Indenture Estate from the
Lien of this Indenture; or
(2) purchase all, but not less than all, of
the Outstanding Certificates by notifying the
Indenture Trustee of such election, which notice
in order to be effective shall state that it is
irrevocable and shall designate a date which
shall be a Rent Payment Date or monthly
anniversary thereof and which shall be not less
than 30 days after the date of such notice on
which the Owner Trustee shall pay to the
Indenture Trustee an amount equal to the
aggregate unpaid principal amount of all
Outstanding Certificates, together with accrued
interest on such amount to the date of purchase,
the aggregate amount of any Make-Whole Premium in
the case of a purchase pursuant to clause (A)
above, plus all other sums due any Holder or the
Indenture Trustee hereunder or under the
Participation Agreement or the Lease. Upon
receipt by the Indenture Trustee of such amount,
each Holder will be deemed, whether or not
Certificates shall have been delivered to the
Indenture Trustee on such date, to have thereupon
sold, assigned, transferred and conveyed (and, if
such Holder is the Pass Through Trustee, shall
promptly take such actions as the Owner
Participant shall reasonably request to evidence
such sale, assignment, transfer and conveyance)
to the Owner Participant (without recourse or
warranty of any kind except for its own acts),
all of the right, title and interest of such
Holder in and to the Trust Indenture Estate, this
Indenture, and the Participation Agreement and
all Certificates held by such Holder and the
former Holders shall not be entitled to receive
any interest on the principal amount of such
Certificates after the date on which such
purchase is effected (and payment of the purchase
price is made), and the Owner Participant shall
be deemed to have assumed (and shall promptly
take such actions as any Holder shall reasonably
request to evidence such assumption) all of such
Holder's obligations under the Participation
Agreement, the Certificates and this Indenture
arising upon or subsequent to such sale. If the
Owner Trustee shall so request, such Holder will
comply with all the provisions of Section 2.06 of
this Indenture to enable new Certificates to be
issued to the Owner Participant in such
authorized denominations as the Owner Participant
shall request. All charges and expenses required
pursuant to Section 2.06 hereof in connection
with the issuance of any such new Certificates
shall be borne by the Owner Participant.
(b) From and after the deposit by the Owner
Trustee of the applicable Prepayment Price or purchase
price with the Indenture Trustee pursuant to Section
8.02(a) hereof, the Owner Trustee shall be entitled to
exercise all remedies of the Indenture Trustee under
Article VII hereof as well as of the Lessor under the
Lease.
SECTION 8.03. Certain Rights of Owner
Participant. (a) If (A) there shall occur an Event
of Default under the Lease as a result of the Lessee's
failure to make any payment of an installment of Basic
Rent, and (B) the Owner Trustee shall have paid or
caused to be paid at any time prior to the day which
is the later of (x) the 11th day subsequent to notice
of such failure by the Indenture Trustee to the Owner
Trustee or the Owner Participant and (y) the sixth day
subsequent to the expiration of the grace period
provided for in Section 16.01(a) of the Lease all
principal and interest on the Certificates then due
(as well as any interest on overdue principal and (to
the extent permitted by applicable law) interest), but
not including any principal or interest becoming due
on account of such Event of Default, then the failure
of the Lessee to make the payment of such installment
of Basic Rent or of interest on account of such
installment's being overdue shall not, constitute an
Indenture Event of Default under Section 7.01(a)
hereof and any declaration based solely on the same
shall be deemed to be automatically rescinded.
Nothing contained in the preceding sentence shall be
deemed to entitle the Owner Trustee to declare the
Lease to be in default or to exercise any rights and
powers or pursue any remedies pursuant to Article 17
of the Lease or otherwise, except that the Owner
Trustee or the Owner Participant may attempt to
recover any amount paid by it or them under this
Indenture by demanding of the Lessee payment of such
amount, or by commencing an action at law against the
Lessee for the payment of such amount or taking
appropriate action in a pending action at law against
the Lessee pursuant to Section 17.01(a)(v), but only
said Section 17.01(a)(v), of the Lease. Upon curing
any such Event of Default pursuant to this Section
8.03, the Owner Trustee or the Owner Participant, as
the case may be, shall, so long as no Indenture Event
of Default shall have occurred and be continuing, be
subrogated on an unsecured basis to all the rights of
the Indenture Trustee under the Lease in respect of
the payment giving rise to such cured Event of
Default, and any right to any interest in respect of
the same, and shall be entitled to any payment of
Basic Rent (or interest thereon) actually made by the
Lessee in respect of such cured payment upon receipt
by the Indenture Trustee; provided that no such amount
shall be paid to the Owner Trustee or the Owner
Participant until all amounts then due and payable to
each Certificate Holder hereunder and thereunder shall
have been paid in full and no Indenture Event of
Default shall have occurred and be continuing.
Notwithstanding anything in this Indenture or the
Lease to the contrary, the Owner Participant and the
Owner Trustee collectively, shall not be entitled to
cure more than six (6) Events of Default (no more than
three (3) of which may be consecutive) occasioned by
defaults in the payment of Basic Rent.
(b) If (A) there shall occur an Event of
Default under the Lease for any reason other than the
Lessee's failure to make any payment of an installment
of Basic Rent, (B) such Event of Default is curable by
the payment of money and (C) the Owner Trustee shall
have taken or caused to be taken such action necessary
to cure and shall have cured such Event of Default
prior to the day which is the later of (x) the 11th
day subsequent to notice of such failure by the
Indenture Trustee to the Owner Trustee or the Owner
Participant and (y) the sixth day subsequent to the
expiration of the grace period, if any, provided with
respect to such failure on the part of the Lessee in
Section 16.01 of the Lease then the failure of the
Lessee to perform such covenant, condition or
agreement, the observance or performance of which was
accomplished by the Owner Trustee hereunder, shall not
constitute an Indenture Event of Default under Sec-
tion 7.01(a)(ii) hereof and any declaration based
solely on the same shall be deemed to be automatically
rescinded. Nothing contained in the preceding
sentence shall be deemed to entitle the Owner Trustee
or the Owner Participant to declare the Lease to be in
default or to exercise any rights and powers or pursue
any remedies pursuant to Article 17 of the Lease or
otherwise, except that the Owner Trustee or the Owner
Participant may attempt to recover any amount paid by
it or them in effecting such cure by demanding of the
Lessee payment of such amount, or by commencing an
action at law against the Lessee for the payment of
such amount or taking appropriate action in a pending
action at law against the Lessee pursuant to Sec-
tion 17.01(a)(v), but only said Section 17.01(a)(v),
of the Lease. Upon curing any such Event of Default
pursuant to this Section 8.03(b), the Owner Trustee or
the Owner Participant, as the case may be, shall be
subrogated to all the rights of the Indenture Trustee
under the Lease in respect of the payment, agreement
or covenant giving rise to such Event of Default, and
any right to any interest in respect of the same, and
shall be entitled to any payment or other performance
upon receipt by the Indenture Trustee; provided that
no such amount shall be paid to the Owner Trustee or
the Owner Participant until all amounts then due and
payable to each Certificate Holder hereunder and
thereunder shall have been paid in full and no
Indenture Event of Default shall have occurred and be
continuing.
Article IX
CONCERNING THE INDENTURE TRUSTEE
SECTION 9.01. Acceptance of Trusts. The
Indenture Trustee hereby accepts the trusts imposed
upon it by this Indenture, and covenants and agrees to
perform the same as expressed herein and agrees to
receive and disburse all moneys constituting part of
the Trust Indenture Estate in accordance with the
terms hereof.
SECTION 9.02. Duties and Responsibilities
of the Indenture Trustee; During an Indenture Event of
Default; Prior to an Indenture Event of Default. (a)
The Indenture Trustee, prior to the occurrence of an
Indenture Event of Default and after the curing or
waiving of all Indenture Events of Default which may
have occurred, undertakes to perform such duties and
only such duties as are specifically set forth in this
Indenture. In case an Indenture Event of Default has
occurred (which has not been cured or waived) the
Indenture Trustee shall exercise such of the rights
and powers vested in it by this Indenture, and use the
same degree of care and skill in their exercise, as a
prudent man would exercise or use under the
circumstances in the conduct of his own affairs. No
provision of this Indenture shall be construed to
relieve the Indenture Trustee from liability for its
own negligent action, its own negligent failure to act
or its own willful misconduct, except that:
(i) prior to the occurrence of an Indenture
Event of Default and after the curing or waiving
of all Indenture Events of Default which may have
occurred:
(x) the duties and obligations of the
Indenture Trustee shall be determined solely
by the express provisions of this Indenture,
and the Indenture Trustee shall not be liable
except for the performance of such duties and
obligations as are specifically set forth in
this Indenture, and no implied covenants or
obligations shall be read in to this
Indenture against the Indenture Trustee; and
(y) in the absence of bad faith on the
part of the Indenture Trustee, the Indenture
Trustee may conclusively rely, as to the
truth of the statements and the correctness
of the opinions expressed therein, upon any
statements, certificates or opinions
furnished to the Indenture Trustee and
conforming to the requirements of this
Indenture; but in the case of any such
statements, certificate or opinions which by
any provision hereof are specifically
required to be furnished to the Indenture
Trustee, the Indenture Trustee shall be under
a duty to examine the same to determine
whether or not they conform to the
requirements of this Indenture;
(ii) the Indenture Trustee shall not be
liable for any error of judgment made in good
faith by a Responsible Officer or Responsible
Officers of the Indenture Trustee, unless it
shall be proved that the Indenture Trustee was
negligent in ascertaining the pertinent facts;
and
(iii) the Indenture Trustee shall not be
liable with respect to any action taken or not
taken by it in good faith in accordance with the
direction of the Holders of not less than a
majority in aggregate principal amount of
Outstanding Certificates relating to the time,
method and place of conducting any proceeding for
any remedy available to the Indenture Trustee, or
exercising any trust or power conferred upon the
Indenture Trustee, under this Indenture.
None of the provisions contained in this
Indenture shall require the Indenture Trustee to
expend or risk its own funds or otherwise incur
personal financial liability in the performance of any
of its duties or in the exercise of any of its rights
or powers, if the Indenture Trustee shall have
determined in good faith that the repayment of such
funds or adequate indemnity against such liability is
not reasonably assured to it.
The Indenture Trustee will execute and the
Owner Trustee will file or cause to be filed such
continuation statements with respect to financing
statements relating to the security interest created
hereunder in the Trust Indenture Estate as may be
specified from time to time in written instructions of
the Holders of not less than 25% in aggregate
principal amount of Outstanding Certificates (which
instructions may, by their terms, be operative only at
a future date and which shall be accompanied by the
execution form of such continuation statement so to be
filed); provided that, notwithstanding the foregoing,
the Indenture Trustee may execute and file or cause to
be filed any financing statement which it from time to
time deems appropriate.
(b) If any Event of Default shall have
occurred and be continuing and on request of the
Holders of not less than 25% in aggregate principal
amount of Outstanding Certificates and subject to
indemnification, to the extent provided in Sections
7.08 and 9.03 and Article XI hereof, as it may require
against the costs, expenses and liabilities to be
incurred, the Indenture Trustee shall exercise such
remedies under Article 17 of the Lease as shall be
specified in such request.
(c) The Indenture Trustee agrees that it
will, in its individual capacity and at its own cost
and expense (but without any right of indemnity in
respect of any such cost or expense under Article XI
hereof) promptly take such action as may be necessary
duly to discharge all Liens on any part of the Trust
Indenture Estate which result from claims against it
in its individual capacity not related to the
administration of the Trust Indenture Estate or any
other transaction pursuant to this Indenture or any
document included in the Trust Indenture Estate.
(d) The Indenture Trustee will execute and
deliver to the Lessee for filing in accordance with
Section 18 of the Lease any properly presented
document, instrument or financing or continuation
statement specified in any opinion delivered pursuant
to Section 6.03(e) of the Participation Agreement.
The Indenture Trustee may rely on the act of
presentation of any such document, instrument,
financing or continuation statement as evidencing the
fact that it is properly prepared and presented,
provided that the Indenture Trustee shall promptly
correct any error in any such document, instrument,
financing or continuation statement of which a
Responsible Officer of the Indenture Trustee has
actual knowledge.
(e) 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 fur-
nished by the Lessee directly to such Holder.
SECTION 9.03. Certain Rights of the
Indenture Trustee. Subject to Section 9.02 hereof:
(a) the Indenture Trustee may rely and
shall be protected in acting or refraining from
acting upon any resolution, officer's certificate
or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order,
bond, debenture, note, coupon, security or other
paper or document believed by it to be genuine
and to have been signed or presented by the
proper party or parties;
(b) any request, direction, order or demand
of the Owner Trustee mentioned herein shall be
sufficiently evidenced by an officer's
certificate (unless other evidence in respect
thereof be herein specifically prescribed) upon
which the Indenture Trustee may rely to prove or
establish a matter set forth therein;
(c) the Indenture Trustee may consult with
counsel and any advice or opinion of counsel
shall be full and complete authorization and
protection in respect of any action taken,
suffered or omitted to be taken by it hereunder
in good faith and in accordance with such advice
or opinion of counsel;
(d) the Indenture Trustee shall be under no
obligation to exercise any of the trusts or
powers vested in it by this Indenture at the
request, order or direction of any of the Holders
pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the
Indenture Trustee reasonable security or
indemnity against the costs, expenses and
liabilities which might be incurred therein or
thereby;
(e) the Indenture Trustee shall not be
liable for any action taken or omitted by it in
good faith and believed by it to be authorized or
within the discretion, rights or powers conferred
upon it by this Indenture;
(f) prior to the occurrence of an Indenture
Event of Default hereunder and after the curing
or waiving of all Indenture Events of Default,
the Indenture Trustee shall not be bound to make
any investigation into the facts or matters
stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request,
consent, order, approval, appraisal, bond,
debenture, note, coupon, security, or other paper
or document unless requested in writing to do so
by the Majority in Interest of Certificate
Holders; provided that, if the payment within a
reasonable time to the Indenture Trustee of the
costs, expenses or liabilities likely to be
incurred by it in the making of such inves-
tigation is, in the opinion of the Indenture
Trustee, not reasonably assured to the Indenture
Trustee by the security afforded to it by the
terms of this Indenture, the Indenture Trustee
may require reasonable indemnity against such
expenses or liabilities as a condition to
proceeding; the reasonable expenses of every such
examination shall be paid by the Owner Trustee
or, if paid by the Indenture Trustee or any
predecessor trustee, shall be repaid by the Owner
Trustee upon demand; and
(g) the Indenture Trustee may execute any
of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through
agents or attorneys not regularly in its employ
and the Indenture Trustee shall not be
responsible for any misconduct or negligence on
the part of any such agent or attorney appointed
with due care by it hereunder.
SECTION 9.04. Indenture Trustee Not
Responsible for Recitals, Disposition of Certificates
or Application of Proceeds Thereof. The Indenture
Trustee assumes no responsibility for the correctness
of the recitals contained herein and in the
Certificates, except the Indenture Trustee's
certificates of authentication. The Indenture
Trustee makes no representation as to the validity or
sufficiency of this Indenture or of the Certificates.
The Indenture Trustee shall not be accountable for the
use or application by the Owner Trustee of any of the
Certificates or of the proceeds thereof.
SECTION 9.05. Indenture Trustee and Agents
May Hold Certificates; Collections, etc. The
Indenture Trustee or any agent of the Indenture
Trustee in its individual or any other capacity may
become the owner or pledgee of Certificates with the
same rights it would have if it were not the Indenture
Trustee or such agent and may otherwise deal with the
Owner Trustee and receive, collect, hold and retain
collections from the Owner Trustee with the same
rights it would have if it were not the Indenture
Trustee or such agent.
SECTION 9.06. Moneys Held by Indenture
Trustee. Subject to Sections 5.08 hereof and 14.04
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. Neither the Owner Trustee nor, subject to
Section 5.08 hereof, the Indenture Trustee nor any
agent thereof shall be under any liability for
interest on any moneys received by it hereunder.
SECTION 9.07. Right of Indenture Trustee to
Rely on Officers' Certificate, etc. Subject to
Sections 9.02 and 9.03 hereof, whenever in the
administration of the trusts of this Indenture the
Indenture Trustee shall deem it necessary or desirable
that a matter be proved or established prior to taking
or suffering or omitting any action hereunder, such
matter (unless other evidence in respect thereof be
specifically prescribed herein) may, in the absence of
bad faith on the part of the Indenture Trustee, be
deemed to be conclusively proved and established by an
officer's certificate delivered to the Indenture
Trustee, and such certificate, in the absence of bad
faith on the part of the Indenture Trustee, shall be
full warrant to the Indenture Trustee for any action
taken, suffered or omitted by it under the provisions
of this Indenture upon the faith thereof.
SECTION 9.08. Replacement Engines. At any
time and from time to time any Engine which has been
subject to an Event of Loss and which may, or which is
required to, be replaced under Section 10.03, or 11.04
of the Lease by a Replacement Engine, shall be
replaced in accordance with the provisions of this
Section 9.08 and the provisions of said Sections of
the Lease, the Owner Trustee shall, from time to time,
direct the Indenture Trustee to execute and deliver to
or as directed in writing by the Owner Trustee an
appropriate instrument releasing such Engine as
appropriate from the Lien of this Indenture and the
Indenture Trustee shall execute and deliver such
instrument as aforesaid without recourse or warranty,
but only upon receipt by or deposit with the Indenture
Trustee of the following:
(1) A written request from the Owner Trustee
requesting such release and specifically
describing the Engine(s) to be so released.
(2) A certificate signed by a duly
authorized officer of the Lessee stating the
following:
(i) a description of the Engine subject
to the Event of Loss including the
manufacturer's serial number;
(ii) a description of the Replacement
Engine including the manufacturer's name, the
engine model and serial number;
(iii) that on the date of the Indenture
and Security Agreement Supplement relating to
the Replacement Engine the Owner Trustee will
be the legal owner of such Replacement Engine
free and clear of all Liens except Liens
permitted under Section 6.01 of the Lease,
and that such Replacement Engine will on such
date be in at least as good operating
condition and repair as required by the terms
of the Lease;
(iv) that the value of the Replacement
Engine as of the date of such certificate is
not less than the value of the Engine to be
released (assuming such Engine was in the
condition and repair required to be
maintained under the Lease);
(v) that the release of the Engine
subject to the Event of Loss will not impair
the security of the Indenture in
contravention of any of the provisions of
this Indenture;
(vi) that upon such replacement, the
Lien of this Indenture will apply to the
Replacement Engine; and
(vii) that each of the conditions
specified in Section 10.03 or 11.04 of the
Lease with respect to such Replacement Engine
has been satisfied.
(3) The appropriate instruments (i)
transferring to the Owner Trustee title to the
Replacement Engine to be received as
consideration for the Engine to be released and
(ii) assigning to the Owner Trustee the benefit
of all manufacturer's and vendor's warranties, if
any, generally available with respect to such
Replacement Engine, and an Indenture and Security
Agreement Supplement subjecting such Replacement
Engine to the Trust Agreement and to the Lien of
this Indenture.
(4) The opinion of Davis Polk & Wardwell,
special counsel to the Lessee, or other counsel
reasonably satisfactory to the Indenture Trustee,
stating that:
(i) the certificates, opinions and
other instruments and/or property which have
been or are therewith delivered to and
deposited with the Indenture Trustee conform
to the requirements of this Indenture and the
Lease and, upon the basis of such
application, the property so sold or disposed
of may be properly released from the Lien of
this Indenture and all conditions precedent
herein provided for relating to such release
have been complied with; and
(ii) the Replacement Engine has been
validly subjected to the Lien of this
Indenture and covered by the Lease, the
instruments subjecting such Replacement
Engine to the Lease and to the Lien of this
Indenture, as the case may be, have been duly
filed for recordation pursuant to the Avia-
tion Act or any other law then applicable to
the registration of the Aircraft, and no
further action, filing or recording of any
document is necessary or advisable in order
to establish and perfect the title of the
Owner Trustee to, and to establish and
perfect the Lien of this Indenture on, such
Replacement Engine and the Indenture Trustee
should be entitled to the benefits of Section
1110 of the Bankruptcy Code with respect to
such Replacement Engine, provided, that such
opinion need not be to the effect specified
in the foregoing clause to the extent that
the benefits of such Section 1110 would not
have been, by reason of a change in law or
governmental interpretation thereof after the
date hereof, available to the Indenture
Trustee with respect to the Aircraft
immediately prior to such substitution had
such Event of Loss not occurred.
SECTION 9.09. Indenture and Security
Agreement Supplement for Replacements. In the event
of the substitution of a Replacement Engine as
contemplated by Section 10.03 or Article 11 of the
Lease, the Owner Trustee and the Indenture Trustee
agree for the benefit of the Holders and the Lessee,
subject to fulfillment of the conditions precedent and
compliance by the Lessee with its obligations set
forth in Section 10.03 or Article 11 of the Lease, to
execute and deliver an Indenture and Security
Agreement Supplement as contemplated by Sec-
tion 9.08(3) hereof and, provided no Event of Default
shall have occurred and be continuing, execute and
deliver to the Lessee an appropriate instrument
releasing the Engine being replaced from the Lien of
this Indenture.
SECTION 9.10. Effect of Replacement. In
the event of the substitution of a Replacement Engine
as contemplated by Section 10.01 or Article 11 of the
Lease and Section 9.08 hereof, all provisions of this
Indenture relating to the Engine or Engines being
replaced shall be applicable to such Replacement
Engine or Engines with the same force and effect as if
such Replacement Engine or Engines were the same
engine or engines, as the case may be, as the Engine
or Engines being replaced but for the Event of Loss
with respect to the Engine being replaced.
SECTION 9.11. Compensation. The Owner
Trustee covenants and agrees to pay, and the Indenture
Trustee shall be entitled to receive, reasonable fees,
compensation and payment or reimbursement for its
reasonable advances, expenses and disbursements
(including the reasonable compensation and expenses
and disbursements of its counsel, agents and other
persons not regularly in its employ) in connection
with its services rendered hereunder or in any way
relating to or arising out of the administration of
the Trust Indenture Estate and shall have a priority
claim on the Trust Indenture Estate for the payment of
such compensation, advances, expenses and
disbursements to the extent that such compensation,
advances, expenses and disbursements shall not be paid
by the Lessee or the Owner Participant, and shall have
the right to use or apply any moneys held by it
hereunder in the Trust Indenture Estate toward such
payments; provided that, so long as the Lease is in
effect, the Indenture Trustee shall not make any claim
for payment under this Section 9.11 against the Owner
Trustee without first making demand on the Lessee for
payment of such claim. The Indenture Trustee agrees
that it shall have no right against any Holder, First
Security or (except as provided in the Participation
Agreement) to the Owner Participant for any fee as
compensation for its services as trustee under this
Indenture.
Article X
CONCERNING THE HOLDERS
SECTION 10.01. Evidence of Action Taken by
Holders. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed
by such Holders in person or by an agent duly
appointed in writing, and, except as otherwise
expressly provided herein, such action shall become
effective when such instrument or instruments are
delivered to the Indenture Trustee and, if expressly
required herein, to the Owner Trustee. Proof of
execution of any instrument or of a writing appointing
any such agent shall be sufficient for any purpose of
this Indenture and (subject to Sections 9.02 and 9.03
hereof) conclusive in favor of the Indenture Trustee
and the Owner Trustee, if made in the manner provided
in this Article.
(b) For the purpose of determining the
Holders entitled to vote or consent to any direction,
waiver or other action of such Holders under
Section 7.10 or 7.11 hereof, the Lessee may set a
record date for such vote or consent by specifying
such record date in an Officer's Certificate delivered
to the Indenture Trustee. Such record date shall be a
date not more than 15 days prior to the first
solicitation of such vote or consent.
SECTION 10.02. Proof of Execution of
Instruments and of Holding of Certificates. Subject
to Sections 9.02 and 9.03 hereof, the execution of any
instrument by a Holder or his agent or proxy may be
proved in accordance with such reasonable rules and
regulations as may be prescribed by the Indenture
Trustee. The holding of Certificates shall be proved
by the Register or by a certificate of the Registrar.
SECTION 10.03. Holders to Be Treated as
Owners. Prior to due presentment for registration of
transfer of any Certificate, the Owner Trustee, the
Indenture Trustee, any agent of the Owner Trustee or
the Indenture Trustee, the Paying Agent, if any, the
Registrar and the Lessee may deem and treat the Person
in whose name such Certificate shall be registered
upon the Register as the absolute owner of such
Certificate (whether or not such Certificate shall be
overdue and notwithstanding any notation of ownership
or other writing thereon) for the purpose of receiving
payment of or on account of the principal of and,
subject to the provisions of this Indenture, interest
on such Certificate and for all other purposes; and
neither the Owner Trustee nor the Indenture Trustee
(nor any agent of the Owner Trustee or the Indenture
Trustee) nor the Paying Agent, if any, nor the
Registrar nor the Lessee shall be affected by any
notice to the contrary. All such payments so made to
any such person, or upon his order, shall be valid,
and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for
moneys payable upon any such Certificate.
SECTION 10.04. Certificates Owned by Owner
Trustee, Owner Participant and the Lessee Deemed Not
Outstanding. In determining whether the Holders of
the requisite aggregate principal amount of
Certificates have concurred in any direction, consent
or waiver under this Indenture, Certificates which are
owned by the Owner Trustee, the Owner Participant,
First Security, the Lessee or by any person directly
or indirectly controlling or controlled by or under
direct or indirect common control with the Owner
Trustee, the Owner Participant, First Security or the
Lessee shall be disregarded and deemed not to be
Outstanding for the purpose of any such determination;
provided that for the purpose of determining whether
the Indenture Trustee shall be protected in relying on
any such direction, consent or waiver, only if a
Responsible Officer of the Indenture Trustee has
actual knowledge that certain Certificates are so
owned by any person directly or indirectly controlling
or controlled by or under direct or indirect common
control with the Owner Trustee, the Owner Participant,
First Security shall such Certificates be so
disregarded; and provided further that if all
Certificates which would be deemed Outstanding in the
absence of the foregoing provision are owned by the
Owner Trustee, the Owner Participant, First Security
or the Lessee or by any Person directly or indirectly
controlling or controlled by or under direct or
indirect common control with the Owner Trustee, the
Owner Participant, First Security or the Lessee, then
such Certificates shall be deemed Outstanding for the
purpose of any such determination. Certificates so
owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to
the satisfaction of the Indenture Trustee the
pledgee's right so to act with respect to such
Certificates and that the pledgee is not the Owner
Trustee, the Owner Participant, First Security or the
Lessee or any Person directly or indirectly
controlling or controlled by or under direct or
indirect common control with the Owner Trustee, the
Owner Participant, First Security or the Lessee. In
case of a dispute as to such right, the advice of
counsel shall be full protection in respect of any
decision made by the Indenture Trustee in accordance
with such advice, unless the Lessee, the Owner
Trustee, First Security, or the Owner Participant are
actually named in the Register. Upon request of the
Indenture Trustee, the Owner Trustee, the Owner
Participant, First Security and the Lessee shall
furnish to the Indenture Trustee promptly an officer's
certificate listing and identifying all Certificates,
if any, known by the Owner Trustee, the Owner
Participant, First Security or the Lessee to be owned
or held by or for the account of any of the
above-described persons; and, subject to Sections 9.02
and 9.03 hereof, the Indenture Trustee shall be
entitled to accept such officer's certificate as
conclusive evidence of the facts set forth therein and
of the fact that all Certificates not listed therein
are outstanding for the purpose of any such
determination.
SECTION 10.05. Right of Revocation of
Action Taken. At any time prior to (but not after)
the evidencing to the Indenture Trustee, as provided
in Section 10.01, of the taking of any action by the
Holders of the percentage in aggregate principal
amount of the Certificates specified in this Indenture
in connection with such action, any Holder of a
Certificate, the serial number of which is shown by
the evidence to be included among the serial numbers
of the Certificates the Holders of which have
consented to such action, may, by filing written
notice at the Corporate Trust Office and upon proof of
holding as provided in this Article, revoke such
action so far as concerns such Certificate. Except as
aforesaid, any such action taken by the Holder shall
be conclusive and binding upon such Holder and upon
all future Holders and owners of such Certificate and
of any Certificates issued in exchange or substitution
therefor, irrespective of whether or not any notation
in regard thereto is made upon any such Certificate or
otherwise. Any action taken by the Holders of the
percentage in aggregate principal amount of the
Certificates specified in this Indenture in connection
with such action shall be conclusively binding upon
the Owner Trustee, the Indenture Trustee and the
Holders of all the Certificates.
SECTION 10.06. ERISA Plan Prohibition. No
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 Internal Revenue
Code of 1986, as amended, 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 Certificates. The purchase
by any person of any Certificate constitutes a
representation by such person to the Lessee, the Owner
Participant, the Owner Trustee and the Indenture
Trustee that such person is not an ERISA Plan and that
such person is not acquiring, and has not acquired,
such Certificate with assets of an ERISA Plan.
Article XI
INDEMNIFICATION OF INDENTURE
TRUSTEE BY OWNER TRUSTEE
The Owner Trustee, not individually but
solely in its capacity as Owner Trustee under the
Trust Agreement, hereby agrees, whether or not any of
the transactions contemplated hereby shall be
consummated, to assume liability for, and does hereby
indemnify, protect, save and keep harmless the
Indenture Trustee, in its individual capacity, and its
successors, assigns, agents and servants solely from
the Lessor's Estate, with respect to the claims of the
Indenture Trustee for payment or reimbursement under
Section 9.11 hereof and from and against any and all
liabilities, obligations, losses, damages, penalties,
taxes (excluding any taxes payable by the Indenture
Trustee on or measured by any compensation received by
the Indenture Trustee for its services under this
Indenture), claims, actions, suits, costs, expenses or
disbursements (including legal fees and expenses) of
any kind and nature whatsoever which may be imposed
on, incurred by or asserted against the Indenture
Trustee (whether or not also agreed to be indemnified
against by any other person under any other document)
in any way relating to or arising out of this
Indenture, or any other Indenture Documents or the
enforcement of any of the terms of any thereof, or in
any way relating to or arising out of the manufacture,
purchase, acceptance, nonacceptance, rejection,
ownership, delivery, lease, possession, use,
operation, condition, modification, maintenance, sale,
return or other disposition of the Aircraft or any
Engine (including, without limitation, latent and
other defects, whether or not discoverable, and any
claim for patent, trademark or copyright
infringement), or in any way relating to or arising
out of the administration of the Trust Indenture
Estate or the action or inaction of the Indenture
Trustee hereunder, except only (a) in the case of
willful misconduct or gross negligence of the
Indenture Trustee in the performance of its duties
hereunder, (b) as may result from the inaccuracy of
any representation or warranty of the Indenture
Trustee in the Participation Agreement, (c) as other-
wise provided in Section 9.02(c) hereof or (d) as
otherwise excluded by the terms of Article 8 or
Article 9 of the Participation Agreement from the
Lessee's general indemnity to the Indenture Trustee
under said Section; provided that so long as the Lease
is in effect, the Indenture Trustee shall not make any
claim under this Article XI for any claim or expense
indemnified by the Lessee under the Participation
Agreement without first making demand on the Lessee
for payment of such claim or expense. The Indenture
Trustee shall be entitled to indemnification, from the
Trust Indenture Estate, for any liability, obligation,
loss, damage, penalty, claim, action, suit, cost,
expense or disbursement indemnified against pursuant
to this Article XI to the extent not reimbursed by the
Lessee or others, but without releasing any of them
from their respective agreements of reimbursement; and
to secure the same the Indenture Trustee shall have a
prior Lien on the Trust Indenture Estate. The
indemnities contained in this Article XI shall survive
the termination of this Indenture and the resignation
or removal of the Indenture Trustee. Upon payment in
full by the Owner Trustee of any indemnity pursuant to
this Article XI, the Owner Trustee shall, so long as
no Indenture Event of Default shall have occurred and
be continuing, be subrogated to the rights of the
Indenture Trustee, if any, in respect of the matter as
to which the indemnity was paid.
Article XII
SUCCESSOR TRUSTEES
SECTION 12.01. Notice of Successor Owner
Trustee. In the case of any appointment of a
successor to the Owner Trustee pursuant to the Trust
Agreement or any merger, conversion, consolidation or
sale of substantially all of the corporate trust
business of the Owner Trustee pursuant to the Trust
Agreement, the successor Owner Trustee shall give
prompt written notice thereof to the Indenture
Trustee.
SECTION 12.02. Resignation and Removal of
Indenture Trustee; Appointment of Successor. (a) The
Indenture Trustee or any successor thereto may resign
at any time without cause by giving at least 30 days'
prior written notice to the Owner Trustee, the Owner
Participant, the Lessee and each Holder, such
resignation to be effective upon the acceptance of the
trusteeship by a successor Indenture Trustee. In
addition, the Majority in Interest of the Certificate
Holders or the Owner Trustee, with the consent of the
Lessee and the Majority in Interest of the Certificate
Holders may at any time remove the Indenture Trustee
without cause by an instrument in writing delivered to
the Lessee, the Owner Trustee, the Owner Participant,
and the Indenture Trustee, and the Indenture Trustee
shall promptly notify each Holder thereof in writing,
such removal to be effective upon the acceptance of
the trusteeship by a successor Indenture Trustee. In
the case of the resignation or removal of the
Indenture Trustee, the Majority in Interest of the
Certificate Holders, or the Owner Trustee, with the
consent of the Lessee and the Majority in Interest of
the Certificate Holders, may appoint a successor
Indenture Trustee by an instrument signed by such
Holders. If a successor Indenture Trustee shall not
have been appointed within 90 days after such notice
of resignation or removal, the Indenture Trustee, the
Owner Trustee, the Lessee, the Owner Participant, 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 provided above. The successor
Indenture Trustee so appointed by such court shall
immediately and without further act be superseded by
any successor Indenture Trustee appointed as provided
above.
(b) In case at any time any of the following
shall occur:
(i) the Indenture Trustee shall cease to be
eligible in accordance with the provisions of
Section 12.03 hereof and shall fail to resign
after written request therefor by the Owner
Trustee or by any such Holder; or
(ii) 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;
then the Owner Trustee may remove the Indenture
Trustee and, with the consent of the Lessee, appoint a
successor trustee by written instrument, in duplicate,
executed by a Responsible Officer of the Owner
Trustee, one copy of which instrument shall be
delivered to the Indenture Trustee so removed and one
copy to the successor trustee, or, subject to the
provisions of Section 7.13 hereof, the Pass Through
Trustee (if it is a Holder) or any other Holder who
has been a bona fide Holder for at least six months
may, on behalf of himself 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. Such court may
thereupon, after such notice, if any, as it may deem
proper and prescribe, remove the Indenture Trustee and
appoint a successor trustee, which removal and
appointment shall become effective upon acceptance of
appointment by the successor trustee as provided in
Section 12.04 hereof. The successor Indenture Trustee
so appointed by such court shall immediately and
without further act be superseded by any successor
Indenture Trustee appointed as provided above within
one year from the date of appointment by such court.
SECTION 12.03. Persons Eligible for
Appointment as Indenture Trustee. There shall at all
times be an Indenture Trustee hereunder which shall be
a corporation organized and doing business under the
laws of the United States of America or of any State
or the District of Columbia having a combined capital
and surplus of at least $100,000,000, or a direct or
indirect subsidiary of such a corporation, or a member
of a bank holding company group, having a combined
capital and surplus of at least $100,000,000 and such
subsidiary or member itself having a capital and
surplus, in the case of the original Indenture Trustee
or an affiliate of the original Indenture Trustee, of
at least $10,000,000 and in any other case of at least
$75,000,000, if there is such an institution willing,
able and legally qualified to perform the duties of
the Indenture Trustee hereunder upon reasonable or
customary terms. Such corporate trustee shall be a
citizen of the United States as defined in Section
101(16) of the Aviation Act, and shall be authorized
under such laws to exercise corporate trust powers and
shall be subject to supervision of examination by
Federal, State or District of Columbia authority. If
such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority,
then for the purposes of this Section, the combined
capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set
forth in its most recent report of condition so
published. In case at any time the Indenture Trustee
shall cease to be eligible in accordance with the
provisions of this Section, the Indenture Trustee
shall resign immediately in the manner and with the
effect specified in Section 12.02 hereof.
SECTION 12.04. Acceptance of Appointment by
Successor Trustee. Any successor trustee appointed as
provided in Section 12.02 hereof shall execute and
deliver to the Owner Trustee, the Lessee, and to its
predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation
or removal of the predecessor trustee shall become
effective and such successor trustee, without any
further act, deed or conveyance, shall become vested
with all rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if
originally named as trustee herein; but, nevertheless,
on the written request of the Owner Trustee or of the
successor trustee, upon payment of its charges then
unpaid, the trustee ceasing to act shall, subject to
Section 14.04 hereof, pay over to the successor
trustee all moneys at the time held by it hereunder
and shall execute and deliver an instrument
transferring to such successor trustee all such
rights, powers, duties and obligations. Upon request
of any such successor trustee, the Owner Trustee shall
execute any and all instruments in writing for more
fully and certainly vesting in and confirming to such
successor trustee all such rights and powers. Any
trustee ceasing to act shall, nevertheless, retain a
prior claim upon all property or funds held or
collected by such trustee to secure any amounts then
due it pursuant to the provisions of Article XI
hereof.
No successor trustee shall accept appointment
as provided in this Section 12.04 unless at the time
of such acceptance such successor trustee shall be
eligible under the provisions of Section 12.03 hereof.
Upon acceptance of appointment by a successor
trustee as provided in this Section 12.04, the
successor trustee shall mail notice thereof by
first-class mail to the Holders at their last
addresses as they shall appear in the Register, and
shall mail a copy of such notice to the Lessee and the
Owner Trustee. If the acceptance of appointment is
substantially contemporaneous with the resignation,
then the notice called for by the preceding sentence
may be combined with the notice called for by Section
12.02 hereof.
SECTION 12.05. Merger, Conversion,
Consolidation or Succession to Business of Indenture
Trustee. 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
succeeding to the corporate trust business of the
Indenture Trustee, shall be the successor to the
Indenture Trustee hereunder, provided that, anything
herein to the contrary notwithstanding, such
corporation shall be eligible under the provisions of
Section 12.03 hereof, without the execution or filing
of any paper or any further act on the part of any of
the parties hereto.
In case at the time such successor to the
Indenture Trustee shall succeed to the trusts created
by this Indenture any of the Certificates shall have
been authenticated but not delivered, any such
successor to the Indenture Trustee may adopt the
certificate of authentication of any predecessor
Indenture Trustee and deliver such Certificates so
authenticated; and, in case at that time any of the
Certificates shall not have been authenticated, any
successor to the Indenture Trustee may authenticate
such Certificates either in the name of any
predecessor hereunder or in the name of the successor
Indenture Trustee; and in all such cases such
certificate shall have the full force which it is
anywhere in the Certificates or in this Indenture
provided that the certificate of the Indenture Trustee
shall have; provided, that the right to adopt the
certificate of authentication of any predecessor
Indenture Trustee or to authenticate Certificates in
the name of any predecessor Indenture Trustee shall
apply only to its successor or successors by merger,
conversion or consolidation.
SECTION 12.06. 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 Trust 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 Trust 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 Owner Trustee,
shall execute, acknowledge and deliver all such
instruments as may be required by the legal
requirements of any jurisdiction or by any such
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 Trust
Indenture Estate or any part thereof, and with such
rights, powers, duties and obligations, as shall be
specified in the instrument of appointment, and such
rights, powers, duties and obligations shall be
conferred or imposed upon and exercised or performed
by the Indenture Trustee, or the Indenture Trustee and
such separate trustee or separate trustees or
co-trustee jointly with the Indenture Trustee subject
to all the terms of this Indenture, 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 shall be
exercised and performed by such separate trustee or
separate trustees or co-trustee, as the case may be.
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 Trust Indenture Estate and
all assets, property, rights, powers, duties and
obligations 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 unless and until a successor is appointed.
(c) All provisions of this Indenture which
are for the benefit of the Indenture Trustee
(including without limitation Article XI hereof) shall
extend to and apply to each separate trustee or
co-trustee appointed pursuant to the foregoing
provisions of this Section 12.06.
(d) Every additional trustee and separate
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, investment and
payment of moneys shall be exercised solely by
the Indenture Trustee;
(ii) all other rights, powers, duties and
obligations conferred or imposed upon the
Indenture Trustee shall be conferred or imposed
and exercised or performed by the Indenture
Trustee and such additional trustee or trustees
and separate trustee or trustees 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 Trust Indenture Estate in any such
jurisdiction) shall be exercised and performed by
such additional trustee or trustees or separate
trustee or trustees;
(iii) no power hereby given to, or
exercisable 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.
If at any time the Indenture Trustee shall deem it no
longer necessary or prudent in order to conform to any
such law, the Indenture Trustee shall execute and
deliver an indenture supplemental hereto and all other
instruments and agreements necessary or proper to
remove any additional trustee or separate trustee.
(e) Any request, approval or consent in
writing by the Indenture Trustee to any additional
trustee or separate trustee shall be sufficient
warrant to such additional trustee or separate
trustee, as the case may be, to take such action as
may be so requested, approved or consented to.
(f) Notwithstanding any other provision of
this Section 12.06, the powers of any additional
trustee or separate trustee shall not exceed those of
the Indenture Trustee hereunder.
Article XIII
SUPPLEMENTS AND AMENDMENTS TO THIS
TRUST INDENTURE AND OTHER DOCUMENTS
SECTION 13.01. Supplemental Indentures
Without Consent of Holders. The Owner Trustee (when
authorized by the Owner Participant) and the Indenture
Trustee, without consent of the Holders, may enter
into an indenture or indentures supplemental hereto
for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or
pledge any property or assets to the Indenture
Trustee as security for the Certificates;
(b) to evidence the succession of another
corporation to the Owner Trustee or successive
successions, and the assumption by the successor
corporation of the covenants, agreements and
obligations of the Owner Trustee herein and in
the Certificates;
(c) to add to the covenants of the Owner
Trustee such further covenants, restrictions,
conditions or provisions as it and the Indenture
Trustee shall consider to be for the protection
of the Holders, and to make the occurrence, or
the occurrence and continuance, of a default in
any such additional covenants, restrictions,
conditions or provisions an Indenture Event of
Default permitting the enforcement of all or any
of the several remedies provided herein;
provided, that in respect of any such additional
covenant, restriction, condition or provision
such supplemental indenture may provide for a
particular period of grace after default (which
period may be shorter or longer than that allowed
in the case of other defaults) or may provide for
an immediate enforcement upon such an Indenture
Event of Default or may limit the remedies
available to the Indenture Trustee upon such an
Indenture Event of Default or may limit the right
of not less than the Majority in Interest of
Certificate Holders to waive such an Indenture
Event of Default;
(d) to surrender any rights or power
conferred herein upon the Owner Trustee or the
Owner Participant;
(e) to cure any ambiguity or to correct or
supplement any provision contained herein or in
any supplemental indenture which may be defective
or inconsistent with any other provision
contained herein or in any supplemental
indenture; or to make such other provisions in
regard to matters or questions arising under this
Indenture or under any supplemental indenture as
the Owner Trustee may deem necessary or desirable
and which shall not adversely affect the
interests of the Holders;
(f) 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 Replacement Engines
to the Lien of this Indenture in accordance with
the provisions hereof or with the Lease or to
release from the Lien of this Indenture property
that has been substituted on or removed from the
Aircraft as contemplated in Section 3.07 hereof;
provided that supplements to this Indenture
entered into for the purpose of subjecting
Replacement Engines to the Lien of this Indenture
need only be executed by the Owner Trustee and
the Indenture Trustee;
(g) to provide for the issuance under this
Indenture of Certificates in coupon form
(including Certificates registrable as to
principal only) and to provide for
exchangeability of such Certificates with
Certificates issued hereunder in fully registered
form, and to make all appropriate changes for
such purpose;
(h) to effect the re-registration of the
Aircraft pursuant to Section 6.03(b) of the
Participation Agreement; and
(i) to add, eliminate or change any
provision hereunder so long as such action shall
not adversely affect the interests of the
Holders.
The Indenture Trustee is hereby authorized to
join in the execution of any such supplemental
indenture, to make any further appropriate agreements
and stipulations which may be contained therein and to
accept the conveyance, transfer, assignment, mortgage
or pledge of any property thereunder, but the
Indenture Trustee shall not be obligated to enter into
any such supplemental indenture which adversely
affects the Indenture Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 13.02. Supplemental Indentures With
Consent of Holders. With the consent (evidenced as
provided in Article X) of the Majority in Interest of
Certificate Holders, the Owner Trustee (when
authorized by the Owner Participant) and the Indenture
Trustee may, from time to time and at any 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 any supplemental
indenture or of modifying in any manner the rights of
the Holders; provided, however, that, without the
consent of each Holder, no such amendment of or
supplement to this Indenture or any indenture
supplemental hereto, or modification of the terms of,
or consent under, any thereof, shall (a) modify any of
the provisions of Section 7.11 hereof or this Section
13.02, (b) reduce the amount or extend the time of
payment of any amount owing or payable under any
Certificate or reduce the interest payable on any
Certificate (except that only the consent of the
Holder of a Certificate shall be required for any
decrease in any amounts of or the rate of interest
payable on such Certificate or any extension for the
time of payment of any amount payable under such
Certificate), or alter or modify the provisions of
Article V hereof with respect to the order of
priorities in which distributions thereunder shall be
made as between the Holder and the Owner Trustee or
the Owner Participant or with respect to the amount or
time of payment of any such distribution, or alter or
modify the circumstances under which a Make-Whole
Premium shall be payable, or alter the currency in
which any amount payable under any Certificate is to
be paid, or impair the right of any Holder to commence
legal proceedings to enforce a right to receive
payment hereunder, (c) reduce, modify or amend any
indemnities in favor of any Holder or in favor of or
to be paid by the Owner Participant or Owner Trustee
(except as consented to by each Person adversely
affected thereby), or (d) create or permit the
creation of any Lien on the Trust Indenture Estate or
any part thereof prior to or pari passu with the Lien
of this Indenture, except as expressly permitted
herein (or, with respect to Collateral as defined in
the Collateral Agreement or the Letter of Credit, in
the Collateral Agreement), or deprive any Holder of
the benefit of the Lien of this Indenture or the
Collateral Agreement on the Trust Indenture Estate,
except as provided in Section 7.02 hereof or in
connection with the exercise of remedies under
Article VII. This Section 13.02 shall not apply to
any indenture or indentures supplemental hereto
permitted by, and complying with the terms of, Section
13.06 hereof.
Upon the request of the Owner Trustee (at the
direction of the Owner Participant) and upon the
filing with the Indenture Trustee of evidence of the
consent of Holders and other documents, if any,
required by Section 10.01, the Indenture Trustee shall
join with the Owner Trustee and the Lessee in the
execution of such supplemental indenture unless such
supplemental indenture affects the Indenture Trustee's
own rights, duties or immunities under this Indenture
or otherwise, in which case the Indenture Trustee may
in its discretion, but shall not be obligated to,
enter into such supplemental indenture.
It shall not be necessary for the consent of
the Holders under this Section to approve the
particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
Promptly after the execution by the Owner
Trustee, the Indenture Trustee and the Lessee of any
supplemental indenture pursuant to the provisions of
this Section, the Indenture Trustee shall mail a
notice thereof by first-class mail to the Holders at
their addresses as they shall appear on the registry
books of the Registrar, setting forth in general terms
the substance of such supplemental indenture. Any
failure of the Indenture Trustee to mail such notice,
or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental
indenture.
SECTION 13.03. Effect of Supplemental
Indenture. Upon the execution of any supplemental
indenture pursuant to the provisions hereof, this
Indenture shall be and be deemed to be modified and
amended in accordance therewith and the respective
rights, limitations of rights, obligations, duties and
immunities under this Indenture of the Indenture
Trustee, the Owner Trustee, the Lessee and the Holders
shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such
modifications and amendments, and all the terms and
conditions of any such supplemental indenture shall be
and be deemed to be part of the terms and conditions
of this Indenture for any and all purposes.
SECTION 13.04. Documents to Be Given to
Indenture Trustee. The Indenture Trustee, subject to
the provisions of Sections 9.02 and 9.03, may receive
an officer's certificate and an opinion of counsel as
conclusive evidence that any such supplemental
indenture complies with the applicable provisions of
this Indenture.
SECTION 13.05. Notation on Certificates in
Respect of Supplemental Indentures. Certificates
authenticated and delivered after the execution of any
supplemental indenture pursuant to the provisions of
this Article may bear a notation in form approved by
the Indenture Trustee as to any matter provided for by
such supplemental indenture. If the Owner Trustee or
the Indenture Trustee shall so determine, new
Certificates so modified as to conform, in the opinion
of the Owner Trustee and the Indenture Trustee, to any
modification of this Indenture contained in any such
supplemental indenture may be prepared by the Owner
Trustee, authenticated by the Indenture Trustee and
delivered in exchange for the Outstanding
Certificates.
SECTION 13.06. No Request Necessary for
Lease Supplement or Indenture and Security Agreement
Supplement. Notwithstanding anything contained in
Section 13.02 hereof, no written request or consent of
the Indenture Trustee, any Holder or the Owner
Participant pursuant to Section 13.02 hereof shall be
required to enable the Owner Trustee to enter into any
supplement to the Lease with the Lessee pursuant to
the terms of the Lease to subject a Replacement Engine
thereto or to execute and deliver an Indenture and
Security Agreement Supplement pursuant to the terms
hereof.
Article XIV
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 14.01. Satisfaction and Discharge of
Indenture; Termination of Indenture. If at any time
after (a) the Owner Trustee shall have paid or caused
to be paid the principal of and interest and Make-
Whole Premium (if any) on all the Certificates
outstanding hereunder, as and when the same shall have
become due and payable, or (b) the Owner Trustee shall
have delivered to the Indenture Trustee for
cancellation all Certificates theretofore
authenticated (other than any Certificates which shall
have been destroyed, lost or stolen and which shall
have been replaced or paid as provided in Section 2.07
hereof) or (c) (i) all such Certificates not
theretofore delivered to the Indenture Trustee for
cancellation shall have become due and payable, or are
by their terms to become due and payable within one
year or are to be called for prepayment within one
year under arrangements satisfactory to the Indenture
Trustee for the giving of notice of prepayment by the
Indenture Trustee in the name and at the expense of
the Owner Trustee, and (ii) the Owner Trustee shall
have irrevocably deposited or caused to be irrevocably
deposited with the Indenture Trustee as trust funds
(other than pursuant to the Collateral Agreement) the
entire amount in cash (other than moneys repaid by the
Indenture Trustee or any paying agent to the Owner
Trustee in accordance with Section 14.04 hereof) or
Government obligations maturing as to principal and
interest in such amounts and at such times as will
insure the availability of cash sufficient to pay at
maturity all such Certificates not theretofore
delivered to the Indenture Trustee for cancellation,
including principal and interest and Make-Whole
Premium (if any) due or to become due to such date of
maturity as the case may be, and if, in any such case,
the Owner Trustee shall also pay or cause to be paid
all other sums then payable hereunder by the Owner
Trustee, then this Indenture shall cease to be of
further effect (except as to (A) rights of registration
of transfer and exchange, and the Owner Trustee's
right of optional prepayment pursuant to
Section 6.02(a)(ii) hereof, (B) substitution of
mutilated, defaced, destroyed, lost or stolen
Certificates, (C) rights of Holders to receive
payments of principal thereof and interest thereon,
upon the original stated due dates therefor (but not
upon acceleration), (D) the rights, obligations,
indemnities and immunities of the Indenture Trustee
hereunder and (E) the rights of the Holders as
beneficiaries hereof with respect to the property so
deposited with the Indenture Trustee payable to all or
any of them), and the Indenture Trustee, on demand of
the Owner Trustee accompanied by an officer's
certificate and an opinion of counsel and at the cost
and expense of the Owner Trustee, shall execute proper
instruments acknowledging such satisfaction of and
discharging this Indenture. The Owner Trustee agrees
to reimburse and indemnify the Indenture Trustee for
any costs or expenses thereafter reasonably and
properly incurred and to compensate the Indenture
Trustee for any services thereafter reasonably and
properly rendered by the Indenture Trustee in
connection with this Indenture or the Certificates.
Upon (or at any time after) payment in full
to the Indenture Trustee, as trust funds, of the
principal of and interest on and Make-Whole Premium,
if any, and all other amounts due hereunder and under
all Certificates and provided that there shall then be
no other amounts due to the Holders and the Indenture
Trustee hereunder, under the Collateral Agreement or
under the Participation Agreement, or otherwise
secured hereby, the Owner Trustee shall direct the
Indenture Trustee to execute and deliver to or as
directed in writing by the Owner Trustee an
appropriate instrument releasing the Aircraft from the
Lien of this Indenture and releasing the Indenture
Documents from the assignment thereof hereunder, and
the Indenture Trustee shall execute and deliver such
instrument as aforesaid and, at the Owner Trustee's
expense, will execute and deliver such other
instruments or documents as may be reasonably
requested by the Owner Trustee to give effect to such
release; provided, however, that this Indenture and
the trusts created hereby shall terminate earlier and
this Indenture shall be of no further force or effect
upon any sale or other final disposition by the
Indenture Trustee of all property forming a part of
the Trust Indenture Estate and the final distribution
by the Indenture Trustee of all moneys or other
property or proceeds constituting part of the Trust
Indenture Estate in accordance with the terms hereof.
Except as aforesaid otherwise provided, this Indenture
and the trusts created hereby shall continue in full
force and effect in accordance with the terms hereof.
If, in connection with any purchase of the
Aircraft by the Lessee pursuant to the Lease, the
Lessee shall pay any Secured Obligation owed by the
Owner Participant pursuant to the Participation
Agreement to the Holders or the Indenture Trustee in
order to release the Lien of this Indenture with
respect to the Aircraft, upon payment in full to the
Holders and the Indenture Trustee of all Secured
Obligations, the Lessee shall be subrogated to the
position of the Holders or the Indenture Trustee, as
the case may be, with respect to such Person's rights
to recover the amounts paid from the Owner
Participant.
SECTION 14.02. Application by Indenture
Trustee of Funds Deposited for Payment of
Certificates. Subject to Section 14.04 hereof, all
moneys deposited with the Indenture Trustee pursuant
to Section 14.01 hereof shall be held in trust and
applied by it to the prompt payment, either directly
or through any Paying Agent, to the Holders of the
particular Certificates for the payment or prepayment
of which such moneys have been deposited with the
Indenture Trustee, of all sums due and to become due
thereon for principal, interest and Make-Whole
Premium, if any, but such money need not be segregated
from other funds except to the extent required by law.
SECTION 14.03. Repayment of Moneys Held by
Paying Agent. Upon the satisfaction and discharge of
this Indenture all moneys then held by any Paying
Agent under the provisions of this Indenture shall,
upon demand of the Owner Trustee, be repaid to it or
paid to the Indenture Trustee and thereupon such
Paying Agent shall be released from all further
liability with respect to such moneys.
SECTION 14.04. Transfer of Moneys Held by
Indenture Trustee and Paying Agent Unclaimed for Two
Years and Eleven Months. Any moneys deposited with or
paid to the Indenture Trustee or any Paying Agent for
the payment of the principal of or interest or Make-
Whole Premium on any Certificate and not applied but
remaining unclaimed for two years and eleven months
after the date upon which such principal, interest or
Make-Whole Premium shall have become due and payable,
shall, unless otherwise required by mandatory
provisions of applicable escheat or abandoned or
unclaimed property law, be paid to the Owner Trustee
by the Indenture Trustee or such Paying Agent and the
Holder of such Certificate, as a general unsecured
creditor, shall, unless otherwise required by
mandatory provisions of applicable escheat or
abandoned or unclaimed property laws, thereafter look
only to the Owner Trustee for any payment which such
Holder may be entitled to collect, and all liability
of the Indenture Trustee, or any Paying Agent with
respect to such moneys shall thereupon cease.
ARTICLE XV
MISCELLANEOUS
SECTION 15.01. Capacity in Which Acting.
Each of First Security (or its permitted successors or
assigns) and the Indenture Trustee acts hereunder not
in its individual capacity but solely as trustee
except as expressly provided herein and in the other
Operative Agreements, and, in the case of First
Security (or its permitted successors or assigns), in
the Trust Agreement.
SECTION 15.02. No Legal Title to Trust
Indenture Estate in Holders. No Holder shall have
legal title to any part of the Trust Indenture Estate.
No transfer, by operation of law or otherwise, of any
Certificate or other right, title and interest of any
Holder in and to the Trust Indenture Estate or
hereunder shall operate to terminate this Indenture or
entitle such Holder or any successor or transferee of
such Holder to an accounting or to the transfer to it
of legal title to any part of the Trust Indenture
Estate.
SECTION 15.03. Sale of Trust Indenture
Estate by Indenture Trustee is Binding. Any sale or
other conveyance of all or any part of the Trust
Indenture Estate by the Indenture Trustee made
pursuant to the terms of this Indenture or of the
Lease shall bind the Lessee, the Owner Trustee, the
Holders and the Owner Participant and shall be
effective to transfer or convey all right, title and
interest of the Indenture Trustee, the Owner Trustee,
the Owner Participant and such Holders therein and
thereto. 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 with respect thereto by the Indenture
Trustee.
SECTION 15.04. Indenture for Benefit of
Owner Trustee, Indenture Trustee, Owner Participant
and Holders. Nothing in this Indenture, whether
express or implied, shall be construed to give to any
person other than First Security, the Owner Trustee,
the Lessee, the Indenture Trustee, as trustee and in
its individual capacity, the Owner Participant, and
the Holders any legal or equitable right, remedy or
claim under or in respect of this Indenture.
SECTION 15.05. No Action Contrary to the
Lessee's Rights Under the Lease. Notwithstanding any
of the provisions of this Indenture or the Trust
Agreement to the contrary, after the Commencement Date
and so long as no Event of Default shall have occurred
and be continuing, neither the Indenture Trustee nor
the Owner Trustee will take any affirmative acts that
interfere with the peaceful and quiet possession and
enjoyment of the Aircraft by the Lessee.
SECTION 15.06. Notices. Unless otherwise
expressly specified or permitted by the terms hereof,
all notices, requests, demands, authorizations,
directions, consents, waivers or documents provided or
permitted by this Indenture to be made, given,
furnished or filed shall be in writing, mailed by
certified mail, postage prepaid, or by confirmed telex
or telecopy, and (a) if to the Owner Trustee,
addressed to it at its office at 79 South Main Street,
Salt Lake City, Utah 84111, Attention, Corporate Trust
Department (with a copy to the Owner Participant at
the address provided for notice pursuant to Section
14.01 of the Participation Agreement), (b) if
personally delivered to the Indenture Trustee,
addressed to it at its office at Suite 900, 600
Peachtree Street, N.E., Atlanta, Georgia 30308
(telecopier (404) 607-6362), Attention: Corporate
Trust Lease Administration or (c) if to the Owner
Participant or the Lessee, addressed to such party at
such address as such party shall have furnished by
notice to the Owner Trustee and the Indenture Trustee,
or, until an address is so furnished, addressed to the
address of such party if any, set forth on the
signature pages of the Participation Agreement. Any
party hereto 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.
Where this Indenture provides for notice to
Holders, such notice shall be sufficiently given
(unless otherwise expressly provided herein) if in
writing and mailed, first-class postage prepaid, to
each Holder entitled thereto, at his last address as
it appears in the Register. In any case where notice
to Holders is given by mail, neither the failure to
mail such notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other
Holders. Where this Indenture provides for notice in
any manner, such notice may be waived in writing by
the person entitled to receive such notice, either
before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by
Holders shall be filed with the Indenture Trustee, but
such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such
waiver.
In case, by reason of the suspension of or
irregularities in regular mail service, it shall be
impracticable to mail notice to the Owner Trustee and
Holders when such notice is required to be given
pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be satisfactory
to the Indenture Trustee shall be deemed to be a
sufficient giving of such notice.
SECTION 15.07. Officer's Certificates and
Opinions of Counsel; Statements to Be Contained
Therein. Upon any application or demand by the Lessee
or the Owner Trustee to the Indenture Trustee to take
any action under any of the provisions of this
Indenture, the Lessee or the Owner Trustee, as the
case may be, shall furnish to the Indenture Trustee
upon request (a) an officer's certificate stating that
all conditions precedent provided for in this
Indenture relating to the proposed action have been
complied with and that the proposed action is in
conformity with the requirements of this Indenture,
and (b) an opinion of counsel reasonably satisfactory
to the Indenture Trustee stating that in the opinion
of such counsel all such conditions precedent, if any,
have been complied with, except that in the case of
any such application or demand as to which the
furnishing of such documents is specifically required
by any provision of this Indenture relating to such
particular application or demand, no additional
certificate or opinion need be furnished.
Any certificate, statement or opinion of an
officer of First Security may be based, insofar as it
relates to legal matters, upon a certificate or
opinion of or representations by counsel, unless such
officer knows that the certificate or opinion or
representations with respect to the matters upon which
his certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are
erroneous. Any certificate, statement or opinion of
counsel may be based, insofar as it relates to factual
matters information with respect to which is in the
possession of the Lessee or First Security, upon the
certificate, statement or opinion of or
representations by an officer or officers of the
Lessee or First Security, as the case may be, unless
such counsel knows that the certificate, statement or
opinion or representations with respect to the matters
upon which his certificate, statement or opinion may
be based as aforesaid are erroneous, or in the
exercise of reasonable care should know that the same
are erroneous.
Any certificate, statement or opinion of an
officer of the Lessee or First Security or of counsel
thereto may be based, insofar as it relates to
accounting matters, upon a certificate or opinion of
or representations by an accountant or firm of
accountants employed by the Lessee or the Owner
Trustee, as the case may be, unless such officer or
counsel, as the case may be, knows that the
certificate or opinion or representations with respect
to the accounting matters upon which his certificate,
statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care
should know that the same are erroneous.
Any certificate or opinion of any independent
firm of public accountants filed with the Indenture
Trustee shall contain a statement that such firm is
independent.
SECTION 15.08. 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 hereof, and any such prohibition or
unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in
any other jurisdiction.
SECTION 15.09. No Oral Modifications or
Continuing Waivers. No terms or provisions of this
Indenture or the Certificates may be changed, waived,
discharged or terminated orally, but only by an
instrument in writing signed by the party or other
person against whom enforcement of the change, waiver,
discharge or termination is sought; and any waiver of
the terms hereof or of any Certificate shall be
effective only in the specific instance and for the
specific purpose given.
SECTION 15.10. Successors and Assigns. All
covenants and agreements contained herein shall be
binding upon, and inure to the benefit of, each of the
parties hereto and the successors and permitted
assigns of each, all as herein provided. Any request,
notice, direction, consent, waiver or other instrument
or action by any Holder shall bind the successors and
assigns of such Holder. This Indenture and the Trust
Indenture Estate shall not be affected by any
amendment or supplement to the Trust Agreement or by
any other action taken under or in respect of the
Trust Agreement, except that each reference in this
Indenture to the Trust Agreement shall mean the Trust
Agreement as amended and supplemented from time to
time to the extent permitted hereby and thereby.
SECTION 15.11. Headings. The headings of
the various Articles and Sections herein and in the
table of contents hereto are for the convenience of
reference only and shall not define or limit any of
the terms or provisions hereof.
SECTION 15.12. Normal Commercial Relations.
Anything contained in this Indenture to the contrary
notwithstanding, the Owner Participant, the Indenture
Trustee and any Holder, or any bank or other affiliate
of any such party, may conduct any banking or other
financial transactions, and have banking or other
commercial relationships, with the Lessee 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 to the Lessee for any
purpose whatsoever, whether related to any of the
transactions contemplated hereby or otherwise.
SECTION 15.13. Governing Law; Counterpart
Form. THIS INDENTURE AND EACH CERTIFICATE SHALL IN
ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE. This Indenture may be executed by the
parties hereto 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.
IN WITNESS WHEREOF, the parties hereto have
caused this Indenture to be duly executed this ____
day of __________, 1994 by their respective officers
thereunto duly authorized and acknowledge that this
Indenture has been made and delivered in The City of
New York, and this Indenture shall be effective only
upon such execution and delivery.
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION,
not in its individual capacity,
except as otherwise expressly
provided herein, but solely as
Owner Trustee
By: ________________________________
Title:
NATIONSBANK OF GEORGIA,
NATIONAL ASSOCIATION,
not in its individual capacity,
except as otherwise expressly
provided herein, but solely
as Indenture Trustee
By: ________________________________
Title:
Exhibit A to
Trust Indenture and
Security Agreement
Indenture and Security Agreement Supplement
Indenture and Security Agreement Supplement
(FEDERAL EXPRESS CORPORATION TRUST [______]) dated
________ __, 199_, of FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION, not in its individual capacity
but solely as owner trustee (herein called the "Owner
Trustee") under the Trust Agreement dated as of
September 1, 1993 as amended and restated as of
March 1, 1994 (as at any time further amended, herein
called the "Trust Agreement"), between First Security
Bank of Utah, National Association and the Owner
Participant named therein.
W I T N E S E T H :
WHEREAS, the Trust Agreement provides for the
execution and delivery of this Indenture and Security
Agreement Supplement which shall particularly describe
the Aircraft and any replacement airframe or
Replacement Engine included in the property covered by
the Trust Agreement.
WHEREAS, the Trust Indenture and Security
Agreement (Federal Express Corporation Trust
[_______]) dated as of March 1, 1994 (herein called
the "Indenture") between the Owner Trustee and
NationsBank of Georgia, National Association, as
Indenture Trustee (herein called the "Indenture
Trustee"), provides for the execution and delivery of
a supplement thereto substantially in the form hereof
which shall particularly describe the Aircraft (such
term and other defined terms in the Indenture being
used herein with the same meanings) and any
Replacement Engine included in the Trust Indenture
Estate, and shall specifically mortgage such Aircraft
or Replacement Engine, as the case may be, to the
Indenture Trustee.
WHEREAS, the Indenture has been duly
recorded pursuant to the Federal Aviation Act of 1958,
as amended, on _______ __, 199_, as one document and
has been assigned Conveyance No. ______;
NOW, THEREFORE, this Supplement witnesseth,
that, to secure 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 outstanding
Certificates under the Indenture and all other amounts
due hereunder and the performance and observance by
the Owner Trustee of all the agreements, covenants and
provisions for the benefit of the Holders and the
Indenture Trustee contained in the Indenture, in the
Lease, in the Participation Agreement and the
Certificates, and the prompt payment of any and all
amounts from time to time owing under the
Participation Agreement by the Owner Trustee, the
Owner Participant or the Lessee to the Holders or the
Indenture Trustee and for the uses and purposes and
subject to the terms and provisions of the Indenture
and the Certificates, and in consideration of the
premises and of the covenants contained in the
Indenture, and of the purchase of the Certificates by
the Holders, and of the sum of $1 paid to the Owner
Trustee by the Indenture Trustee at or before the
delivery of the Indenture, the receipt of which is
hereby acknowledged, the Owner Trustee 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
security interest in, and confirm, unto the Indenture
Trustee, its successors and assigns, in trust for the
equal and ratable security and benefit of the Holders,
in the trust created by the Indenture, a first
priority security interest in and mortgage lien on all
estate, right, title and interest of the Owner Trustee
in, to and under the following described property:
Airframe
--------
One (1) Airframe identified as follows:
FAA Manufacturer's
Registration Serial
Manufacturer Model Number Number
- ------------ ----- ------------ --------------
together with all appliances, equipment, instruments
and accessories (including, without limitation, radio
and radar) from time to time belonging thereto, owned
by the Owner Trustee and installed in or appurtenant
to said aircraft.
Aircraft Engines
----------------
Two (2) Engines, each such engine having 750 or more
rated takeoff horsepower or the equivalent thereof,
identified as follows:
Manufacturer's
Serial
Manufacturer Model Number
- ------------ ----- --------------
together with all equipment and accessories belonging
thereto, by whomsoever manufactured, owned by the
Owner Trustee and installed in or appurtenant to said
engines.
Together with all substitutions, replacements
and renewals of the property described above, and all
property which shall hereafter become physically
attached to or incorporated in the property described
above, whether the same are now owned by the Owner
Trustee or shall hereafter be acquired by it.
As further security for the obligations
referred to above and secured by the Indenture and
hereby, the Owner Trustee 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, its successors
and assigns, for the security and benefit of the
Holders, in the trust created by the Indenture, all of
the estate, right, title and interest of the Owner
Trustee in, to and under the Lease and Lease
Supplement (other than Excepted Payments, if any)
covering the property described above.
TO HAVE AND TO HOLD all and singular the
aforesaid property unto the Indenture Trustee, its
successors and assigns, for the benefit and security
of the Holders for the uses and purposes and subject
to the terms and provisions set forth in 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 herein and is hereby ratified, approved and
confirmed.
This Supplement is being delivered in the
State of New York.
AND, FURTHER, the Owner Trustee hereby
acknowledges that the Aircraft/Engines referred to in
this Supplement and the aforesaid Lease Supplement has
been delivered to the Owner Trustee and is included in
the property of the Owner Trustee and covered by all
the terms and conditions of the Trust Agreement,
subject to the Lien of the Indenture.
IN WITNESS WHEREOF, the Owner Trustee has
caused this Supplement to be duly executed as of the
date first written above by one of its officers
thereunto duly authorized.
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION,
not in its individual capacity
but solely as Owner Trustee
By __________________________
Title:
Exhibit B to
Trust Indenture and
Security Agreement
[Form of Certificate]
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD OR OFFERED FOR SALE IN CONTRAVENTION OF SAID ACT
No. ______ $ _______________
EQUIPMENT TRUST CERTIFICATE
(FEDERAL EXPRESS CORPORATION TRUST [_____])
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION,
not in its individual capacity but solely as
OWNER TRUSTEE UNDER TRUST AGREEMENT
DATED AS OF SEPTEMBER 1, 1993, AS AMENDED AND RESTATED
AS OF MARCH 1, 1994
Interest Rate Maturity
- ------------- --------
First Security Bank of Utah, National
Association, not in its individual capacity but solely
as Owner Trustee (herein in such capacity called the
"Owner Trustee") under that certain Trust Agreement
dated as of September 1, 1993, between the Owner
Participant named therein and First Security Bank of
Utah, National Association as amended and restated as
of March 1, 1994 (herein as such Trust Agreement may
be further amended or supplemented from time to time
called the "Trust Agreement"), hereby promises to pay
to NationsBank of South Carolina, National
Association, as Pass Through Trustee, or registered
assigns, the principal sum of
_______________________________ Dollars, payable as
set forth below for the Maturity specified above, in
such coin or currency of the United States of America
as at the time of payment shall be legal tender for
the payment of public and private debts, and to pay
interest on the principal outstanding from time to
time, semiannually on each March 23 and September 23, on
said principal sum in like coin or currency at the rate per
annum set forth above from the March 23 or the September
23, as the case may be, next preceding the date of this
Certificate to which interest on the Certificates has
been paid or duly provided for, unless the date hereof
is a date to which interest on the Certificates has
been paid or duly provided for, in which case from the
date of this Certificate. Notwithstanding the foregoing,
if the date hereof is after any March 8 or September 8
and before the following March 23 or September 23, as the
case may be, this Certificate shall bear interest from
such March 23 and September 23; provided that, if the
Owner Trustee shall default in the payment of interest
due on such March 23 or September 23, then this Certificate
shall bear interest from the next preceding March 23 or
September 23 to which interest on this Certificate has been
paid or duly provided for. The interest so payable on
any March 23 or September 23 will, except as otherwise
provided in the Indenture referred to below, be paid
to the person in whose name this Certificate is
registered at the close of business on the March 8 or
September 8 preceding such March 23 or September 23,
whether or not such day is a Business Day.
This Certificate shall bear interest at the
Past Due Rate on any principal hereof and on any other
amount payable hereunder or under the Indenture 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 date
thereof to but excluding the date the same is paid in
full, payable from time to time on demand of the
Indenture Trustee.
Principal and interest and other amounts due
hereunder shall be payable at the office or agency of
NationsBank of Georgia, National Association (the
"Indenture Trustee") for such purpose; provided that,
at the option of the Indenture Trustee, interest may
be paid by mailing a check therefor payable to the
registered holder entitled thereto at his last address
as it appears on the Register. If any amount payable
under this Certificate, or under the Indenture, falls
due on a day that is not a Business Day, then such sum
shall be payable on the next succeeding Business Day,
without (provided that payment is made on such next
succeeding Business Day) additional interest thereon
for the period of such extension.
No 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
Internal Revenue Code of 1986, as amended, 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 Certificates.
The acquiring by any person of any Certificate shall
be deemed to constitute a representation by such
person to the Lessee, the Owner Participant, the Owner
Trustee and the Indenture Trustee or their respective
successors, as the case may be, that such person is
not an ERISA Plan and that such person is not
acquiring, and has not acquired, such Certificate with
assets of an ERISA Plan.
First Security and NationsBank of Georgia,
National Association are not acting individually
hereunder, but solely as Owner Trustee and Indenture
Trustee, respectively.
This Certificate is one of a duly authorized
issue of Certificates issued and to be issued under
the Trust Indenture and Security Agreement (Federal
Express Corporation Trust [__]) dated as of March 1,
1994 (herein as amended, supplemented or modified from
time to time called the "Indenture"), between the
Owner Trustee and the Indenture Trustee, designated as
Equipment Trust Certificates (Federal Express
Corporation Trust [__]) limited in aggregate initial
principal amount to $________________ consisting of
the following aggregate principal amounts of
Certificates with the interest rates per annum and
maturities shown:
Initial
Aggregate
Principal
Maturity Amount Interest Rate
- -------- --------- -------------
$ 7.53%
$ 7.89%
$ 8.40%
Reference is made to the Indenture and all
supplements and amendments thereto (a copy of which is
on file with the Indenture Trustee at its principal
corporate trust office) for a more complete statement
of the terms and provisions thereof, including a
statement of the properties conveyed, pledged and
assigned thereby, the nature and extent of the
security, the respective rights of the Owner Trustee,
the Owner Participant, the Lessee, the Indenture
Trustee and the Holders, and the terms upon which the
Certificates are, and are to be, executed and
delivered, to all of which terms and conditions in the
Indenture each Holder hereof agrees by its acceptance
of this Certificate.
Capitalized terms not otherwise defined
herein shall have the meanings ascribed to them in the
Indenture.
The principal amounts of the Certificates are
payable as follows. The Certificates with a Maturity
of September 23, 2006 are subject to redemption in part,
pro rata (based on the face amount hereof) commencing on
_________, ____, the Certificates with a Maturity of September
23, 2008 are subject to redemption in part, pro rata,
commencing on _________, ____, and the Certificates with a
Maturity of March 23, 2010 are subject to redemption in part,
pro rata commencing on __________, ____ in each case
through mandatory sinking fund redemptions providing for the
redemption on the Sinking Fund Redemption Dates of the
aggregate principal amounts set forth below, together
with interest accrued thereon to the applicable
Sinking Fund Redemption Date, but without Make-Whole
Premium.
Principal Amount
----------------
Certificates with Certificates with Certificates with
Sinking Fund a Maturity of a Maturity of a Maturity of
Redemption Date September 23, 2006 September 23, 2008 March 23, 2010
- --------------- ------------------ ----------------- -----------------
[See Appendix A for Sinking Fund Redemption Date information
for the relating thirteen (13) Aircraft]
================== ================= =================
TOTAL
Except as expressly provided in the
Indenture, all payments of principal, Make-Whole
Premium, if any, and interest and other amounts to be
made to the Holder hereof by or at the behest of the
Owner Trustee hereunder or under the Indenture shall
be made only from the income and proceeds from the
Lessor's Estate to the extent included in the Trust
Indenture Estate and only to the extent that the Owner
Trustee shall have sufficient income or proceeds from
the Lessor's Estate to the extent included in the
Trust Indenture Estate to enable the Indenture Trustee
to make such distributions in accordance with the
terms of the Indenture; provided that under the Lease,
the Lessee is obligated to pay or cause to be paid, to
the extent such payments are not required to be made
from the assets subject to the Lien of this Indenture
or the income and proceeds received by the Indenture
Trustee therefrom, any net loss arising from the
investment of funds held by the Indenture Trustee
which but for an Event of Default would be payable to
Lessee, and each Holder hereof, by its acceptance of
this Certificate, agrees that it will (except as
aforesaid) look solely to the income and proceeds from
the Trust Indenture Estate to the extent available for
distribution to the Holder hereof as provided above
and that none of the Owner Participant, First Security
Bank of Utah, National Association or the Indenture
Trustee is personally liable to the Holder hereof for
any amounts payable or any liability under this
Certificate or under the Indenture, except as
expressly provided in the Indenture (in the case of
First Security Bank of Utah, National Association, the
Owner Trustee and the Indenture Trustee) or as
expressly provided in the Participation Agreement (in
the case of the Owner Participant).
The Certificates are subject to prepayment in
the following circumstances at the price determined as
set forth below.
(i) If an Event of Loss occurs with respect
to the Airframe or with respect to the Airframe
and the Engines or engines then installed on the
Airframe (unless such Event of Loss relates to
the Engines and, pursuant to Section 11.04 of the
Lease and Section 9.08 of the Indenture,
Replacement Engine(s) are substituted therefor).
(ii) If the Lessee, pursuant to Section
4.02(a)(C) or 4.02(a)(D) of the Lease, gives
notice of purchase of the Aircraft (and Section
2.12 of the Indenture shall not be applicable in
connection with such purchase).
(iii) If the Owner Participant or the Owner
Trustee on behalf of the Owner Participant, gives
notice of prepayment to the Indenture Trustee
pursuant to Section 8.02 of the Indenture.
(iv) If the Lessee, pursuant to Section
10.01 of the Lease, gives notice of a voluntary
termination for obsolescence or surplus, but
subject to Section 6.02(c) of Indenture.
[(v) Intentionally Omitted]
(vi) If (A) a Deemed Event of Loss occurs
or (B) a Pre-Funding Event of Loss occurs.
In the case of a prepayment of the
Certificates pursuant to clause (ii) or (iv) above,
the Lessee, in accordance with and subject to the
terms (including timing of notice) of Section 4.02(a)
or Section 10.01 of the Lease or Section 15 of the
Participation Agreement, as the case may be, shall
give irrevocable written notice to the Owner Trustee
and the Indenture Trustee and to the Holders of all of
the Certificates specifying the Business Day on which
the Owner Trustee is directed to prepay the
Certificates. In the case of a prepayment pursuant to
clause (i) above, the Certificates shall be prepaid on
the Loss Payment Date as defined in Section 11.02 of
the Lease. In the case of a prepayment pursuant to
clause (iii) above, the Certificates shall be prepaid
on the date designated in the notice of prepayment
required by Section 8.02 of the Indenture. In the case
of a prepayment of the Certificates pursuant to
clauses (ii) and (iv) above, the Certificates shall be
prepaid in full on the Termination Date. In the case
of a prepayment of the Certificates pursuant to
Section 6.02(a)(vi)(A) above, the Certificates shall
be prepaid on the fourth Frankfurt Business Day after
the Cut-off Date. In the case of a prepayment of the
Certificates pursuant to Section 6.02(a)(vi)(B) above,
the Certificates shall be prepaid (i) in the case of a
Pre-Funding Event of Loss, notice of which is received
by the Indenture Trustee at least five Frankfurt
Business Days prior to the Scheduled Commencement
Date, on the Scheduled Commencement Date, or (ii) in
the case of any other Pre-Funding Event of Loss, on
the fourth Frankfurt Business Day after the Cut-off
Date. The day on which the Certificates are to be
prepaid is herein referred to as the "Prepayment
Date". On or prior to the Prepayment Date,
immediately available funds shall be deposited with
the Indenture Trustee in an amount in respect of the
Certificates equal to:
(1) in the event of a prepayment of the
Certificates (1) pursuant to clause (i), clause (iii)
(if clause (B) of Section 8.02(a) of the Indenture is
applicable), or clause (vi) above, the sum of (i) the
aggregate principal amount of such Certificates then
outstanding, (ii) accrued interest on the Certificates
to the Prepayment Date and (iii) all other aggregate
sums due any Certificate Holder or the Indenture
Trustee under the Indenture or under the Participation
Agreement or the Lease, or the sum of (2) in the event
of a prepayment of the Certificates pursuant to clause
(ii), (iii) (if clause (A) of Section 8.02(a) of the
Indenture is applicable), or (iv) above, the sum of
the amounts specified in clauses (i), (ii) and (iii)
of the preceding clause (1) plus the Make-Whole
Premium in respect of all Certificates (the aggregate
amount required to be paid pursuant to this sentence
being herein referred to as the "Prepayment Price").
If, in accordance with and subject to the
satisfaction of the conditions set forth in Section
7.11 of the Participation Agreement, the Lessee shall
assume all of the obligations of the Owner Trustee
hereunder, under the Certificates and all other
Operative Agreements, the Owner Participant and the
Owner Trustee shall (except for prior acts) be
released and discharged from any further obligations
hereunder and under the Certificates and all other
Operative Agreements (except any obligations that have
accrued prior to such assumption).
If an Indenture Event of Default under the
Indenture shall occur and be continuing, the principal
of the Certificates may be declared due and payable in
the manner and with the effect provided in the
Indenture. The Indenture provides that in certain
events such declaration and its consequences may be
waived the Majority in Interest of Holders. Any such
consent or waiver shall be conclusive and binding upon
the Holder of this Certificate and upon all future
Holders and owners of this Certificate and any
Certificate that may be issued in exchange or
substitution therefor, whether or not any notation
thereof is made upon this Certificate or such other
Certificates. Moreover, if, and only if, an Event of
Default shall occur, the Indenture Trustee may declare
the Lease to be in default, and may, to the exclusion
of the Owner Trustee, exercise one or more of the
remedies of the Owner Trustee provided in the Lease.
The Owner Trustee or the Owner Participant
may cure a default by the Lessee under the Lease
arising from the failure of the Lessee to make any
Basic Rent payments under the Lease if such failure of
the Lessee to make such payment of Basic Rent shall
not constitute the fourth consecutive such failure or
seventh subsequent cumulative such failure. The
Owner Trustee or the Owner Participant may cure any
other default by the Lessee in the performance of its
obligations under the Lease which can be cured by the
payment of money by making such payment on behalf of
the Lessee.
At any time (A) one or more Events of Default
shall have occurred and be continuing for a period of
180 days or more but less than one year (or a period
of less than 180 days if such Event of Default shall
be an Event of Default under Section 16.01 of the
Lease) and the Certificates shall not have been
accelerated or (B) the Certificates have been
accelerated pursuant to Section 7.02(b) or 7.02(c) of
the Indenture or after one or more Events of Default
shall have occurred and be continuing for a period of
one year or more (or a period of 180 days or more if
such Event of Default shall be an Event of Default
under Section 16.01 of the Lease), the Owner
Participant (or the Owner Trustee on behalf of the
Owner Participant) may:
(1) direct the Owner Trustee to cause the
prepayment of all the Certificates by
notifying the Indenture Trustee of such
election and depositing the sum of amounts
contemplated by paragraph "first" under
Section 5.03 of the Indenture and the
aggregate Prepayment Price of all such
Certificates with the Indenture Trustee for
distribution to the Holders; or
(2) purchase all of the Outstanding
Certificates by paying to the Indenture
Trustee an amount equal to the aggregate
unpaid principal amount of all Outstanding
Certificates, plus accrued interest to the
date of purchase and any Make-Whole Premium
(in the case of a purchase pursuant to clause
(A) of Section 8.02(a) of the Indenture) plus
all other sums due any Holder or the
Indenture Trustee under the Indenture, the
Participation Agreement or the Lease.
The right of the Holder hereof to institute
an action for any remedy under the Indenture is
subject to certain restrictions specified in the
Indenture, except that the right of the Holder of this
Certificate to receive payment of the principal of and
interest and Make-Whole Premium, if any, on this
Certificate on or after the respective due dates, or
to institute suit for the enforcement of any such
payment, shall not be impaired or affected without the
consent of such Holder.
The Certificates are issuable only as
registered Certificates without coupons in
denominations of $1,000 and integral multiples
thereof. So long as any of the Certificates remain
Outstanding, the Indenture Trustee will maintain an
office or agency where the Certificates may be
presented for payment and a facility or agency in New
York, New York where the Certificates may be presented
for registration of transfer and for exchange as
provided in the Indenture. As provided in the
Indenture and subject to certain limitations therein,
this Certificate is transferable, and upon surrender
of this Certificate for registration of transfer at
the principal corporate trust office of the Indenture
Trustee, or at the office or agency maintained for
such purposes, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to
the Owner Trustee and the Indenture Trustee duly
executed by, the Holder or his attorney duly
authorized in writing, one or more new Certificates of
the same Maturity and interest rate and of authorized
denominations and for the same aggregate principal
amount will be issued to the designated transferee or
transferees.
As provided in the Indenture and subject to
certain limitations therein, the Certificates are
exchangeable for an equal aggregate principal amount
of Certificates of the same Maturity and interest rate
and of authorized denominations, as requested by the
Holder surrendering the same, upon presentation
thereof for such purpose at the principal corporate
trust office of the Indenture Trustee, or at an office
or agency maintained for such purpose.
No service charge shall be levied for any
such registration of transfer or exchange, but the
Indenture Trustee may require payment of a sum
sufficient to cover any tax or other governmental
charge payable in connection therewith.
Prior to the due presentment for registration
of transfer of this Certificate, the Owner Trustee,
the Indenture Trustee, any agent of the Owner Trustee
or the Indenture Trustee, the Paying Agent, if any,
the Registrar and the Lessee may deem and treat the
person in whose name this Certificate is registered as
the absolute owner hereof for all purposes whether or
not this Certificate is overdue, and neither the Owner
Trustee, the Indenture Trustee (nor any agent of the
Owner Trustee or the Indenture Trustee), nor the
Paying Agent, if any, the Registrar nor the Lessee
shall be affected by notice to the contrary.
As provided in the Indenture, the Indenture
and the Certificates shall be construed in accordance
with and governed by the laws of the State of New
York.
This Certificate shall not be secured by or
be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose unless
authenticated by the Indenture Trustee as evidenced by
the manual signature of one of its authorized officers
on the certificate below.
IN WITNESS WHEREOF, the Owner Trustee has
caused this Equipment Trust Certificate (Federal
Express Corporation Trust [_____]) to be duly executed
in its corporate name by its officer thereunto duly
authorized.
Dated:
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION,
not in its individual capacity
but solely as Owner Trustee
By _____________________________
Authorized Officer
[FORM OF INDENTURE TRUSTEE'S
CERTIFICATE OF AUTHENTICATION]
This is one of the Equipment Trust
Certificates (Federal Express Corporation Trust
[_____]) referred to in the within-mentioned
Indenture.
Dated:
NATIONSBANK OF GEORGIA,
NATIONAL ASSOCIATION,
not in its individual capacity
but solely as Indenture Trustee
By ______________________________
Authorized Signatory
SCHEDULE I
[Intentionally left blank.]
SCHEDULE II
DEFINITIONS
GENERAL PROVISIONS
The following terms shall have the following
meanings for all purposes of each Operative Agreement
which specifically incorporates this Schedule,
referred to below, unless otherwise defined in such
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 such 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 or Federal Aviation Act. The Federal
Aviation Act of 1958, as amended from time to time,
and the regulations promulgated pursuant thereto.
Additional Insureds. As defined in
Article 13 of the Lease.
Aeronautics Authority or FAA. 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
located in the United States succeeding to the
functions of any of the foregoing.
Affiliate. With respect to any Person, any
partner of such Person or 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 or such partner 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 federal, state, local and foreign
income taxes resulting from the receipt or accrual of
such payments, shall be equal to the payment received
or deemed to have been received. In the case of
amounts payable to the Lessor, the Owner Participant
or any partner of the Owner Participant, or any
corporate affiliate of any partner of the Owner
Participant, it shall be presumed that such Person is
at all times subject to federal income tax at the
maximum marginal rate generally applicable to
corporations from time to time and actual state, local
and foreign income taxes.
Agreement to Lease. The Original Agreement
to Lease, as amended and restated as of March 1, 1994,
among Lufthansa, the Lessee and the Lessor.
Air Carrier. Any air carrier which is a
United States "domestic air carrier" as defined in
Part 121 of the Federal Aviation Regulations, and any
"foreign air carrier" (as defined in the Act) as to
which there is in force a permit granted under
Section 402 of the Act.
Aircraft. The Airframe together with the two
Engines whether or not any of such Engines may from
time to time be installed on such Airframe or may be
installed on any other airframe or on any other
aircraft.
Aircraft Cost. The amount specified as the
Aircraft Cost for the Aircraft on Schedule I to the
Agreement to Lease (as in effect on the Closing Date).
Airframe. The Airbus Model A310-203 aircraft
(excluding the Engines or engines from time to time
installed thereon) contemplated by the Participation
Agreement to be leased on the Commencement Date by the
Lessor to the Lessee pursuant to the Lease, and having
the manufacturer's serial number ________________ and,
on and after the Commencement Date, the United States
FAA Registration Number specified in the initial Lease
Supplement, including all Parts.
Ancillary Agreements. Any written agreement
between parties to the Agreement to Lease Operative
Agreements or Operative Agreements entered into on the
Closing Date or at any time thereafter in connection
with the transactions contemplated by the Operative
Agreements, as amended from time to time.
Appraisal. The appraisal delivered pursuant
to Section 4.01(l) of the Participation Agreement.
Bankruptcy Code. The Federal Bankruptcy Code
of 1978, as amended, and any successor thereto.
Bankruptcy Default. An event specified in
Section 16.01(e), (f) or (g) of the Lease which with
the giving of notice or lapse of time or both would
constitute an Event of Default.
Basic Rent. The aggregate periodic rent
payable throughout the Basic Term pursuant to
Section 3.01 of the Lease.
Basic Term. The period commencing at the
beginning of the day on the Commencement Date and
ending at the end of the day on the day immediately
preceding the date 15 years from the Commencement
Date, or such earlier date on which the Lease shall be
terminated as provided therein.
Beneficial Interest. The interest of the
Owner Participant under the Trust Agreement.
Bills of Sale. Has the meaning set forth in
Section 4.02(d)(v) of the Participation Agreement.
Business Day. Any day on which commercial
banks are not authorized or required to close in New
York City and Memphis, Tennessee, and so long as the
Lien of the Indenture is in effect, in Atlanta,
Georgia, and Columbia, South Carolina, and thereafter
in Salt Lake City, Utah.
Certificates or Equipment Trust Certificates.
The Equipment Trust Certificates (Federal Express
Corporation Trust ___) issued by the Owner Trustee
pursuant to the Indenture and any certificate issued
in exchange therefor or replacement thereof pursuant
to the Indenture.
Citizen of the United States. A citizen of
the United States as defined in Section 101(16) of the
Act, or any analogous part of any successor or
substituted legislation or regulation at the time in
effect.
Closing Date. The Business Day on which the
sale of the Pass Through Certificates to the
Underwriters occurs pursuant to the Underwriting
Agreement.
Closings. The closing with respect to the
acquisition of the Pass Through Certificates by the
Underwriters and the closing with respect to the
acquisition of the Certificates by the Pass Through
Trusts.
Code. Except as otherwise provided,
references to the Code shall mean the Internal Revenue
Code of 1986, as amended from time to time.
Collateral. Has the meaning set forth in the
Collateral Agreement.
Collateral Agreement. The Collateral
Agreement (Trust ______), dated as of March 1, 1994,
between the Owner Trustee and the Indenture Trustee,
as amended or modified from time to time.
Commencement Date. The date on which the
Aircraft is leased by the Lessor to the Lessee under
the Lease, which date shall also be the date of the
initial Lease Supplement.
Commission or SEC. The Securities and
Exchange Commission, as from time to time constituted,
created under the Exchange Act, or if at any time
after the execution and delivery of the Participation
Agreement such Commission is not existing and
performing the duties now assigned to it under the
Exchange Act, then the body performing such duties on
such date.
Company. Federal Express Corporation, a
Delaware corporation, and its permitted successors and
assigns hereunder.
Corporate Base Rate. The rate announced from
time to time by The Chase Manhattan Bank, N.A. or any
successors thereto at its head office at New York, New
York, as its Corporate Base Rate.
Corporate Trust Office. The office of the
Indenture Trustee at which the Indenture Trustee's
corporate trust business shall be administered which
the Indenture Trustee shall have specified by notice
in writing to the Lessee, the Owner Trustee and the
Holders.
Cut-off Date. The earlier to occur of (i)
the date which is 365 days after the Scheduled
Commencement Date, or any earlier Business Day (but in
no event earlier than the Scheduled Commencement Date)
specified as the Cut-off Date by the Owner Trustee in
an irrevocable written notice (including, without
limitation, in any such notice contemplated by Section
12 of the Agreement to Lease) given to the Indenture
Trustee not less than 30 days prior thereto and (ii)
30 days after the date of any Pre-Funding Termination
Notice in accordance with Section 3 of the Agreement
to Lease.
DA. Deutsche Aerospace Airbus GmbH, a German
corporation, its successor and permitted assigns.
Debt Portion. The amount specified as such
on Schedule IV to the Participation Agreement.
Debt Rate. The weighted average rate of
interest applicable from time to time to the
Certificates, but in no event less than 8% per annum.
Deemed Event of Loss. If the Exchange Date
does not occur on or prior to the Cut-off Date.
Default. Any event or condition, which with
the lapse of time or the giving of notice, or both,
would constitute an Event of Default.
Delivery Notice. Notice of the Aircraft's
Commencement Date, given by the Owner Participant as
provided in Section 3.01 of the Participation
Agreement and including any notice with respect to a
postponed Commencement Date given by the Owner
Participant pursuant to Section 3.02 of the
Participation Agreement.
Demand Note. Each of the Promissory Notes
(D-_______), dated the Closing Date, from Lufthansa in
the form of Exhibit E to the Participation Agreement,
and in an aggregate principal amount specified under
"Demand Note Principal Amount" in Schedule IV to the
Participation Agreement.
Demand Note Collateral. Has the meaning set
forth in the Collateral Agreement.
Dollars and $. The lawful currency of the
United States of America.
Engine. Each of the two General Electric
CF6-80A3 engines, more fully described in the initial
Lease Supplement (or, prior to the Commencement Date,
in Exhibit A to the Agreement to Lease opposite the
Airframe), 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 7.02(a)(vii), 10.03,
11.03, 11.04 or 12.02 of the Lease, together with all
Parts. 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 Lease.
ERISA. The Employee Retirement Income
Security Act of 1974, as amended.
Event of Default. Each of the events
specified in Article 16 of the Lease.
Event of Loss. Event of Loss means any of
the following events on or after the Commencement Date
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 120 days or to the end of the
Term, if less, due to theft or disappearance, or
(B) for a period in excess of 60 days or to the end of
the Term, if less, due to the destruction, damage
beyond economic repair or rendition of such property
permanently unfit for normal use by Lessee 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) (1) condemnation, confiscation or seizure of, or
requisition of title to such property by the
Government, any foreign government or purported
government or any agency or instrumentality thereof,
such Event of Loss being deemed to occur on the date
of any such condemnation, confiscation, seizure or
requisition of title, or (2) requisition of use of
such property (A) by 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 (or such shorter period
ending on the earlier of the expiration of the Term or
on the date on which an insurance settlement with
respect to such property on the basis of a total loss
or constructive or compromised total loss shall
occur), or (B) by the Government for a period
extending beyond the Term, provided that no Event of
Loss shall be deemed to have occurred, and the Term
shall be extended automatically for a period of up to
six months beyond the end of the Term in the event
that the Aircraft, the Airframe or Engine is
requisitioned by the Government pursuant to an
activation as part of the Civil Reserve Air Fleet
Program described in Section 7.02(a)(iv) of the Lease;
and (iv) 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 Airbus Model
A310-203 aircraft equipped with engines of the same
make and model as the Engines for a period of six (6)
consecutive months, unless the Lessee, prior to the
expiration of such six (6) 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 one (1)
year, unless the Lessee, prior to the expiration of
such one (1) year period shall have conformed the
Aircraft 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 Lessee; provided,
that if there is a conflict between the operation of
clause (iv) above and Section 12.05 of the Lease (by
reference to Section 12.04(ix) thereof), such
Section 12.05 of the Lease shall control. The date of
such Event of Loss shall be the date of (i) loss of
such property or its use thereof for a period in
excess of 120 days, or to the end of the Term, if less
due to theft or disappearance, or loss for a period in
excess of 60 days, or to the end of the Term, if less
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 or to the end of the Term),
(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 (iv) above. On or
after the Commencement Date, 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.
Exchange Act. The Securities Exchange Act of
1934, as amended.
Exchange Date. The date, on or after the
Commencement Date, on which the Indenture Trustee
releases the Debt Portion pursuant to Section 7(e) of
the Collateral Agreement.
Excepted Payments. Collectively, (i) all
right, title and interest of the Owner Participant or
the Owner Trustee in, to and under the Tax Indemnity
Agreement and any moneys due or to become due under
the Tax Indemnity Agreement and payments of
Supplemental Rent or other payments by the Lessee in
either case solely in respect of the Tax Indemnity
Agreement, (ii) indemnity payments and interest
thereon and other amounts paid or payable by the
Lessee to the Owner Participant or to the Owner
Trustee in its individual capacity or any of their
respective Affiliates (other than the Owner Trustee in
its capacity as trustee and the trust created pursuant
to the Trust Agreement), successors, assigns,
directors, officers, employees, agents or servants
pursuant to Articles 8, 9 or 10 of the Participation
Agreement or any corresponding payment of Supplemental
Rent under the Lease; (iii) proceeds of public
liability insurance or governmental indemnities in
lieu thereof in respect of the Aircraft payable to the
Owner Participant or the Owner Trustee, in its
individual capacity, or any of their Affiliates (other
than the Owner Trustee in its capacity as trustee and
the trust created pursuant to the Trust Agreement),
successors or assigns, as a result of insurance claims
made, or losses suffered, by, or amounts in respect of
such indemnities paid for the benefit of, the Owner
Participant or the Owner Trustee in its individual
capacity or any of their Affiliates (other than the
Owner Trustee in its capacity as trustee and the trust
created pursuant to the Trust Agreement), successors
or assigns, directors, officers, employees, agents or
servants, either pursuant to the Lease (which shall
include proceeds of any self-insurance by the Lessee)
or maintained by the Owner Trustee or the Owner
Participant and not required to be maintained under
the Lease; (iv) proceeds of any insurance in respect
of the Aircraft (not required by Section 13 of the
Lease) which is separately acquired and paid for by
the Owner Participant (directly or through the Owner
Trustee) or the Lessor in accordance with Section
13.05 of the Lease); (v) indemnity payments payable by
the Owner Participant to the Owner Trustee in its
individual capacity pursuant to Section 6.01 of the
Trust Agreement; (vi) Transaction Costs or other
expenses paid or payable by the Lessee to, or for the
benefit of, the Indenture Trustee, First Security or
the Owner Participant pursuant to Section 10.01 of the
Participation Agreement; (vii) if the Lessee has
assumed the obligations of the Owner Trustee pursuant
to Section 7.12 of the Participation Agreement and
Section 2.12 of the Indenture, the amount payable as
purchase price pursuant to Section 4.02(a), (c) or (d)
of the Lease; (viii) the right to enforce, and the
proceeds of any such enforcement of, any right to
receive the proceeds of any of the amounts referred to
in clauses (i) through (vii) above, and the right to
declare an Event of Default under the Lease in respect
of any of the foregoing amounts, but not including the
right to exercise any remedies under the Lease except
for those specifically provided for in this clause
(viii); and (ix) any payments in respect of interest
to the extent attributable to the payments referred to
in clauses (i) through (vii) above.
Expense and Expenses. Have the meanings
specified in Section 9.01(a) of the Participation
Agreement.
FAA Bill of Sale. Has the meaning set forth
in Section 4.02(d)(iv) of the Participation Agreement.
Fair Market Rental. An amount determined on
the basis of, and equal in amount to, the rental which
would be obtained in an arm's-length transaction
between an informed and willing lessee and an informed
and willing lessor unaffiliated with such lessee,
neither being under any compulsion to lease. In such
determination, it shall be assumed that the Aircraft
is in the condition required under the Lease in the
case of return of the Aircraft pursuant to Article 12
of the Lease. Fair Market Rental shall be determined
in accordance with the provisions of Section 4.03 of
the Lease.
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. Unless otherwise provided in the
applicable provisions of any Operative Agreement, in
such determination it shall be assumed that the
Aircraft is in the condition required under the Lease
in the case of return of the Aircraft pursuant to
Article 12 of the Lease. Fair Market Value shall be
determined in accordance with the provisions of
Section 4.03 of the Lease.
Frankfurt Business Day. A day which is a
Business Day and is a day (other than a Saturday or
Sunday) on which commercial banks in Frankfurt,
Germany are generally open for the conduct of
business.
Geneva Convention. The International
Convention on the Recognition of Rights in Aircraft
(Geneva 1948).
Government. The United States of America or
an agency or instrumentality thereof.
Government Obligations. Direct obligations
of the United States of America which are not
callable, redeemable or payable prior to maturity, in
whole or in part, directly or indirectly, by any
Person.
Holder of a Certificate; Holder. As of any
particular time, the Person in whose name a
Certificate shall be registered as payee with the
Indenture Trustee.
Indemnification Agreement. The
Indemnification Agreement, dated the date of the
Underwriting Agreement, among the Lessee, Lufthansa,
the LC Bank and the Underwriters.
Indemnitee. Each of the Owner Trustee, in
its individual capacity and as Owner Trustee and
Lessor, the Owner Participant, the Indenture Trustee
(after the Exchange Date), in its individual capacity
and as Indenture Trustee and any successor (including
any trustee which may succeed to the Lessor's interest
under the Lease), Affiliate, assign, officer,
director, employee, agent and servant of any of the
foregoing, the Lessor's Estate (except to the extent
comprised prior to the Exchange Date of the Trust
Indenture Estate) and (after the Exchange Date) the
Trust Indenture Estate and the officers, directors,
employees, agents and servants of Lufthansa and
the General Partner of the Owner Participant.
Indenture. The Trust Indenture and Security
Agreement (Federal Express Corporation Trust _____) dated
as of March 1, 1994, between the Owner Trustee and the
Indenture Trustee, as supplemented by the Indenture
and Security Agreement Supplement No. 1, and any
amendment or supplement thereto entered from time to
time.
Indenture and Security Agreement Supplement;
Indenture Supplement. A supplement to the Indenture,
substantially in the form of Exhibit A to the
Indenture.
Indenture Default. Any event which, with the
giving of notice or lapse of time, or both, would be
an Indenture Event of Default.
Indenture Documents. The Indenture, the
Collateral Agreement, the Letter of Credit, the
Demand Notes, the Sales Agreement (to the extent
relating to the Aircraft), the Parts and Services
Agreement (to the extent relating to the Aircraft),
the Bills of Sale, the Modification Agreement (to the
extent relating to the Aircraft), the Lease, the
Participation Agreement, the Agreement to Lease
(to the extent relating to the Aircraft), the Trust
Agreement (to the extent relating to the Aircraft
or the Lessor's Estate) and the Certificates.
Indenture Event of Default. Each of the
events specified in Section 7.01 of the Indenture.
Indenture Trustee. NationsBank of Georgia,
National Association, a national banking association,
not in its individual capacity but solely as Indenture
Trustee under the Indenture and each other Person
which may from time to time be acting as successor
trustee under the Indenture.
Indenture Trustee's Liens. Any Lien on the
Trust Indenture Estate resulting from (i) claims
against the Indenture Trustee not related to the
administration of the Trust Indenture Estate or any
transactions pursuant to the Indenture or any
Indenture Document or (ii) any act or omission of the
Indenture Trustee which is not related to the
transactions contemplated by the Operative Agreements
or is in violation of any of the terms of the
Operative Agreements.
Independent Appraisal. An appraisal
conducted pursuant to Section 4.03 of the Lease.
Independent Investment Banker. An
independent investment banking institution of national
standing appointed by the Lessee that is independent
in fact, does not have any direct financial interests,
or any material indirect financial interest, in the
Lessee or any Affiliate of the Lessee, and is not
connected with the Lessee or any Affiliate of the
Lessee, 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 purchase 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.
Interest Payment Date. Each March 23 and
September 23, commencing September 23, 1994.
Issuance Date. For any Pass Through Trust,
the date of the issuance of the related Pass Through
Certificates.
LC Bank. Westdeutsche Landesbank
Girozentrale, New York Branch.
Lease. The Lease Agreement (Federal Express
Corporation Trust _____), in the form of Exhibit B to
the Participation Agreement, dated as of the
Commencement Date or prior thereto, between the Lessor
and the Lessee, as said Lease may from time to time be
supplemented or amended, or its terms waived or
modified, to the extent permitted by, and in
accordance with, the terms of the Indenture,
including, without limitation, supplementation by the
Lease Supplement.
Lease Supplement. The Lease Supplement,
substantially in the form of Exhibit A to the Lease,
entered into between the Lessor and the Lessee.
Lessee. Federal Express Corporation, a
Delaware corporation, and any successors or permitted
assigns in its capacity as lessee under the Lease.
Lessee Documents. Each of the Operative
Agreements and Ancillary Agreements to which the
Lessee is or is to be a party; provided, however, that
for purposes of Section 6.01 of the Participation
Agreement, Lessee Documents shall not include the
Lease or any Lease Supplement prior to the
Commencement Date.
Lessor. First Security Bank of Utah,
National Association, a national banking association,
not in its individual capacity but solely as Owner
Trustee under the Trust Agreement, and its successors
and permitted assigns.
Lessor's Estate. All estate, right, title
and interest of the Owner Trustee in and to any
Additional Collateral, the Aircraft, the Lease, any
Lease Supplement, the Participation Agreement and the
other Indenture Documents, any warranty with respect
to the Airframe and the Engines, all amounts of Basic
Rent and Supplemental Rent, including without
limitation, insurance proceeds (other than insurance
proceeds payable to or for the benefit of the Owner
Trustee, for its own account or in its individual
capacity, the Owner Participant or the Indenture
Trustee), and requisition, indemnity or other payments
of any kind for or with respect to the Aircraft
(except amounts owing to the Owner Participant, to the
Indenture Trustee, to the Owner Trustee in its
individual capacity or to any of their respective
directors, officers, employees and agents pursuant to
Articles 8 and 9 of the Participation Agreement).
Notwithstanding the foregoing, "Lessor's Estate" shall
(i) include all items of property purported to be
covered by the Trust Indenture Estate and (ii) not
include any Excepted Payment.
Lessor's Liens. Liens on the Lessor's Estate
or the Trust Indenture Estate, arising as a result of
(i) claims against or liabilities of the Lessor, in
its individual capacity or as Owner Trustee, or the
Owner Participant, in each case not related to the
transactions contemplated by the Operative Agreements,
(ii) any act or omission of the Lessor in its
individual capacity or as Owner Trustee, and, in the
case of the Lessor in its individual capacity, arising
from its gross negligence or willful misconduct either
not related to the transactions contemplated by or
expressly prohibited under the Operative Agreements
and any act or omission of the Owner Participant which
is not related to the transactions contemplated by the
Operative Agreements or is in violation of any of the
terms of the Operative Agreements, (iii) Taxes or
Expenses imposed against the Lessor, in its individual
capacity or as Owner Trustee, the Owner Participant,
Lessor's Estate or the trust created by the Trust
Agreement which are not indemnified against by the
Lessee pursuant to the Tax Indemnity Agreement or the
Participation Agreement, (iv) claims against the
Lessor or the Owner Participant arising from the
voluntary transfer by the Lessor or the Owner
Participant of its interests in the Aircraft or the
Lessor's Estate other than a transfer of the Aircraft
or the Lessor's Estate pursuant to Section 4.02(a) or
Articles 10 or 11 of the Lease and other than a
transfer pursuant to the exercise of the remedies set
forth in Article 17 of the Lease or (v) claims against
the Lessor or the Owner Participant (or any Affiliate
of either) relating to the Modification Agreement, the
Agreement to Lease, the Sales Agreement, the Demand
Note, the Collateral Agreement, the Sub-subcontract
(as defined in the Agreement to Lease) or the Parts
and Services Agreement.
Letter of Credit. The Irrevocable Letter of
Credit, dated the Closing Date, in the form of
Exhibit G to the Participation Agreement and with a
Stated Amount equal to the amount specified under
"Letter of Credit Stated Amount" on Schedule IV to the
Participation Agreement, from the LC Bank to the
Indenture Trustee.
Lien. Any mortgage, pledge, lien, charge,
encumbrance, lease or security interest or other
similar interest.
Liquid Collateral. Has the meaning set forth
in the Collateral Agreement.
Lufthansa. Deutsche Lufthansa
Aktiengesellschaft.
Lufthansa Side Letter. The letter, dated the
Closing Date, substantially in the form of Exhibit J
to the Participation Agreement, among Lufthansa, the
Indenture Trustee and the Pass Through Trustee.
Majority in Interest of Certificate Holders.
As of a particular date of determination, the Holders
of more than 50% of the aggregate unpaid principal
amount of all Certificates outstanding as of such date
excluding for purposes of this definition any
Certificates held by (i) the Owner Participant unless
all Certificates then outstanding shall be held by the
Owner Participant, (ii) the Lessee or (iii) any
Affiliate of either.
Make-Whole Premium. An amount determined as
of the Business Day before the applicable Prepayment
Date or date of purchase, as the case may be, which an
Independent Investment Banker determines to be equal
to the excess of (i) the present values of all
remaining scheduled payments of principal on the
Certificate to be prepaid or purchased and interest
thereon (excluding interest accrued from the
immediately preceding Payment Date to such Prepayment
Date or date of purchase, as the case may be) to the
Maturity of such 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 Certificate.
Maturity. With respect to any Certificate,
the date on which the final principal amount of such
Certificate is scheduled to be due and payable.
Modification Agreement. The Original
Modification Agreement, as amended by Amendment No. 1
thereto, dated as of March 1, 1994, among the Lessor,
the Owner Participant, Lufthansa and DA.
Modification Cost. The amount set forth in
the "Total" column for the Aircraft in the Rate
Schedule on Exhibit E to the Modification Agreement.
Moody's. Moody's Investors Service, Inc.
Net Proceeds. The amount specified as such
on Schedule IV to the Participation Agreement.
Non-U.S. Person. Any Person other than (i) a
citizen or resident of the United States, as defined
in section 7701(a)(30) of the Code (for purposes of
this definition, the "United States"), (ii) a
corporation, partnership or other entity created or
organized in or under the laws of the United States or
any political subdivision thereof or therein, or
(iii) any estate or trust that is subject to United
States federal income taxation regardless of the
source of its income.
Obsolete Parts. Parts which the Lessee in
good faith determines to be obsolete or no longer
suitable or appropriate for use on the Airframe or any
Engine.
OP Guarantee. The Guarantee, if any, by
Lufthansa in the form of Exhibit I to the
Participation Agreement.
Operative Agreements. The Modification
Agreement, the Agreement to Lease, the Participation
Agreement, the Trust Agreement, the Trust Agreement
Supplement, the Bills of Sale, the Lease, any Lease
Supplement, any Ancillary Agreement which by its terms
is an Operative Agreement, the Certificates outstanding
at the time of reference, the Indenture, any Indenture
and Security Agreement Supplement, the Collateral
Agreement, the Demand Note, the Parts and Services
Agreement, the Indemnification Agreement, the Pass
Through Agreement and the Series Supplements, the Pass
Through Certificates outstanding at the time of reference,
the Sales Agreement, the OP Guarantee (if any) and the
Tax Indemnity Agreement, each as amended from time to
time.
Options Agreement. The letter agreement
dated September 1, 1993 between DA and the Lessee
relating, inter alia, to the sale by DA to the Lessee
of certain cargo conversion kits and the
acknowledgement and agreement by DA of certain rights
of the Lessee under the Modification Agreement.
Outstanding. When used with respect to
Certificates, as of the date of determination and
subject to the provisions of Section 10.04 of the
Indenture, all Certificates theretofore executed and
delivered under the Indenture, with the exception of
the following:
(i) Certificates theretofore cancelled by
the Indenture Trustee or delivered to the
Indenture Trustee for cancellation pursuant to
Section 2.08 of the Indenture or otherwise;
(ii) Certificates for which prepayment money
in the necessary amount has been theretofore
deposited with the Indenture Trustee in trust for
the Holders of such Certificates pursuant to
Section 14.01 of the Indenture; provided, that if
such Certificates are to be prepaid, notice of
such prepayment has been duly given pursuant to
the Indenture or provision therefor satisfactory
to the Indenture Trustee has been made; and
(iii) Certificates in exchange for or in lieu
of which other Certificates have been executed
and delivered pursuant to Article II of the
Indenture.
Original Agreement to Lease. The Agreement
to Lease, dated as of September 1, 1993 among
Lufthansa, the Lessee and the Lessor.
Original Agreements. The Original Agreement
to Lease, the Original Modification Agreement, the
Original Parts and Services Agreement, the Original
Sales Agreement and the Original Trust Agreement.
Original Modification Agreement. The
Aircraft Modification and Maintenance Agreement, dated
as of September 1, 1993, among the Lessor, Lufthansa
and DA.
Original Parts and Services Agreement. The
Parts and Services Agreement, dated as of September 1,
1993, between the Owner Trustee and Lufthansa.
Original Sales Agreement. The Sales
Agreement for Aircraft, dated as of September 1, 1993,
between the Owner Trustee and Lufthansa.
Original Trust Agreement. The Trust
Agreement, dated as of September 1, 1993, between the
Owner Participant and the Owner Trustee in its
individual capacity.
Owner Participant. The trustor originally
named in the Trust Agreement and any successor
thereto, and any Person to which Owner Participant
transfers, in accordance with the Trust Agreement and
the Participation Agreement, its right, title and
interest in and to the Operative Agreements and the
Lessor's Estate.
Owner Trustee. First Security Bank of Utah,
National Association, a national banking association,
not in its individual capacity except as otherwise
expressly stated, but solely as Owner Trustee under
the Trust Agreement, and its successors and permitted
assigns.
Participation Agreement. The Participation
Agreement (Federal Express Corporation Trust _____),
dated as of March 1, 1994, among the Lessee, the Owner
Trustee, not in its individual capacity except as
otherwise expressly stated therein, but solely as,
Owner Trustee, the Owner Participant, the Pass Through
Trustee, not in its individual capacity except as
otherwise expressly stated therein, but solely as Pass
Through Trustee, the Indenture Trustee, not in its
individual capacity except as otherwise expressly
stated therein but solely as Indenture Trustee and the
LC Bank, as amended, modified or supplemented, or the
terms thereof waived.
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, so long as title
thereto shall be vested in the Lessor, prior to
replacement thereof in accordance with the Lease,
which may be removed therefrom.
Parts and Services Agreement. The Original
Parts and Services Agreement, as amended by Amendment
No. 1 thereto, dated as of March 1, 1994, between the
Owner Trustee and Lufthansa.
Parts Cost. The cost of the parts and
services with respect to the Aircraft pursuant to
Article 4 of the Parts and Services Agreement.
Pass Through Agreement. The Pass Through
Trust Agreement dated as of March 1, 1994 between the
Lessee 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 1994
Pass Through Certificates, Series A310-A1, 1994 Pass
Through Certificates, Series A310-A2, or 1994 Pass
Through Certificates, Series A310-A3, in each case 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 Excess Amount. The
excess of the principal amount of the Certificates
issued on the Closing Date over the Net Proceeds.
Pass Through Trust. The Federal Express Pass
Through Trust, 1994-A310-A1, Federal Express Pass
Through Trust, 1994-A310-A2 or Federal Express Pass
Through Trust, 1994-A310-A3, in each case formed
pursuant to the related Series Supplement in
accordance with the Pass Through Agreement; and "Pass
Through Trusts" means all of such Pass Through
Trusts.
Pass Through Trustee. NationsBank of South
Carolina, National Association, 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 permitted assigns as
Pass Through Trustee thereunder.
Past Due Rate. In respect of (A) any amount
payable to the Owner Participant or the Owner Trustee
a rate per annum during the period from and including
the due date to but excluding the date on which such
amount is paid in full equal to 2.5% plus the Debt
Rate and (B) any principal of or interest on any
Certificate or any other amount payable under the
Indenture, any Certificate or any other Operative
Agreement that is not paid when due (whether at
Maturity, by acceleration, by optional or mandatory
prepayment or otherwise) to any Holder, the Indenture
Trustee or the Pass Through Trustee, a rate per annum
during the period from and including the due date to
but excluding the date on which such amount is paid in
full equal to (i) in the case of any such amount
payable to the Holder of any Certificate, 2.5% plus
the interest rate applicable to such Certificate and
(ii) in the case of any other such amount, 2.5% plus
the weighted average rate of interest from time to
time payable with respect to the Certificates (or if
no Certificates are then outstanding, such weighted
average rate at the time immediately preceding the
final payment with respect thereto).
Paying Agent. Has the meaning set forth in
Section 3.04 of the Indenture.
Payment Date. Any Interest Payment Date or
Sinking Fund Redemption Date.
Payment Default. Any event specified in
Section 16.01(a) or 16.01(b) of the Lease which with
the giving of notice or lapse of time or both would
constitute an Event of Default.
Permitted Investments. Those investments
enumerated in Section 23.01(a) (i), (ii), (iii) and
(iv) of the Lease.
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).
Pre-Funding Event of Loss. Any of the
following events prior to the Exchange Date 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 120 days or to the Cut-off Date, if less,
due to theft or disappearance, or (B) for a period in
excess of 60 days or to the Cut-off Date, if less, due
to the destruction, damage beyond economic repair or
rendition of such property permanently unfit for
normal use by Lessee for any reason whatsoever
(provided, however, that failure to properly complete
any work contemplated by the Modification Agreement
shall not constitute the basis for a Pre-Funding Event
of Loss); (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) (1) condemnation, confiscation or seizure of, or
requisition of title to such property by the
Government, any foreign government or purported
government or any agency or instrumentality thereof,
such Pre-Funding Event of Loss being deemed to occur
on the date of any such condemnation, confiscation,
seizure or requisition of title, or (2) requisition of
use of such property (A) by 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 (or such shorter period
ending on the earlier of the Cut-off Date or on the
date on which an insurance settlement with respect to
such property on the basis of a total loss or
constructive or compromised total loss shall occur),
or (B) by the Government for a period extending beyond
the Cut-off Date; and (iv) 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 Airbus Model A310-203 aircraft
equipped with engines of the same make and model as
the Engines for a period ending on or after the Cut-
off Date. The date of such Pre-Funding Event of Loss
shall be the date of (i) loss of such property or its
use thereof for a period in excess of 120 days, or to
the Cut-off Date, if less, due to theft or
disappearance; or loss for a period in excess of 60
days, or to the Cut-off Date, if less, 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 or as otherwise contemplated by clause
(iii)(2)(A) above), (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 (iv) above. A
Pre-Funding Event of Loss with respect to the Aircraft
shall be deemed to have occurred if any Pre-Funding
Event of Loss occurs with respect to the Airframe.
Pre-Funding Prepayment Date. Has the meaning
as set forth in Section 6(c) of the Collateral
Agreement.
Pre-Funding Termination Notice. Has the
meaning set forth in Section 3 of the Agreement to
Lease.
Prepayment Date. Has the meaning specified
in Section 6.02(b) of the Indenture.
Prepayment Price. Has the meaning specified
in Section 6.02(b) of the Indenture.
Proposed Termination Date. The proposed date
of termination of the Lease as specified by the Lessee
in its notice given pursuant to Section 10.01 thereof.
Purchase Price. The amount set forth in the
"Purchase Price in U.S. Dollars" column for the
Aircraft on Exhibit B to the Sales Agreement.
Record Date. With respect to any payment
under the Indenture means the 15th calendar day prior
to the date such payment is due.
Recourse Amount. Has the meaning specified
in Section 16.10 of the Participation Agreement.
Register. Has the meaning set forth in
Section 3.02 of the Indenture.
Registrar. Has the meaning set forth in
Section 3.02 of the Indenture.
Remaining Weighted Average Life. For any
Certificate, as of any determination date, the number
of years obtained by dividing (a) the sum of the
products obtained by multiplying (i) the amount of
each then remaining mandatory sinking fund redemption
payment of principal, including the payment due on the
Maturity of such Certificate, by (ii) the number of
years (calculated to the nearest one-twelfth) which
will elapse between such determination date, and the
date on which such payment is scheduled to be made, by
(b) the then outstanding principal amount of such
Certificate.
Renewal Rent. The amount payable by the
Lessee as rent in accordance with Section 4.01 of the
Lease during any Renewal Term.
Renewal Term. One term of two years with
respect to which the Lessee has exercised its option
to renew the Lease pursuant to Section 4.01(a)
thereof.
Rent. All payments due from the Lessee under
the Lease as Basic Rent, Renewal Rent and Supplemental
Rent, collectively.
Rent Payment Date. Each March 23 and
September 23, commencing on the first such date
after the Commencement Date, and continuing thereafter
during the Term.
Replacement Engine. A General Electric
CF6-80A3 engine of the same or of equal or greater
value and utility as the Engine being replaced,
together with all Parts relating to such engine;
provided, however, that such Engine shall be of the
same model as other Engines then subject to the Lease.
Responsible Officer. With respect to the
Owner Trustee (except for purposes of the Trust
Agreement) or 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 party, any corporate officer or other employee
of a party 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.
Sales Agreement. The Original Sales
Agreement as amended by Amendment No. 1 thereto, dated
as of March 1, 1994, between the Owner Trustee and
Lufthansa.
Scheduled Commencement Date. ______________,
199_.
Securities Act. The Securities Act of 1933,
as amended.
Secured Obligations. Has the meaning set
forth in the Granting Clause of the Indenture.
Series Supplement. The Series Supplement
1994-A310-A1 to be executed and delivered by the Lessee
and the Pass Through Trustee, the Series Supplement
1994-A310-A2 to be executed and delivered by the Lessee and
the Pass Through Trustee or the Series Supplement 1994-A310-A3
to be executed and delivered by the Lessee and the
Pass Through Trustee, in each case as such Series
Supplement may be modified, supplemented or amended
from time to time in accordance with the provisions
thereof and "Series Supplements" means all of such
Series Supplements.
Sinking Fund Redemption Date. Has the
meaning specified in Section 6.06 of the Indenture.
Sinking Fund Redemption Price. Has the
meaning specified in Section 6.06 of the Indenture.
Special Aviation Counsel. Daugherty, Fowler
& Peregrin.
S&P. Standard & Poor's Corporation.
Stipulated Loss Value. As of any Stipulated
Loss Value Determination Date during the Basic Term,
the greater of (i) the amount determined by multiplying
the Aircraft Cost by the percentage set forth in
Schedule III to the Lease under the heading
"Stipulated Loss Value Factor" opposite such date, and
(ii) an amount at least sufficient to pay in full, as
of the date of payment thereof, the aggregate unpaid
principal amount of the Certificates outstanding on such
date of payment, together with the accrued and unpaid interest
thereon; and during any Renewal Term, the amount
determined pursuant to Section 4.01(b) of the Lease.
Stipulated Loss Value Determination Date.
Each date set forth on Schedule III of the Lease under
the heading "Stipulated Loss Value Factors".
Supplemental Rent. All amounts, liabilities
and obligations which the Lessee assumes or agrees to
perform or pay under the Lease or under the
Participation Agreement or Tax Indemnity Agreement or
an Ancillary Agreement to the Lessor or others,
including, without limitation, payment of any Make-
Whole Premium payable by the Lessor under the
Indenture that is required to be paid by the Lessee
pursuant to Section 3.02 of the Lease, payments of
Stipulated Loss Value and amounts calculated by
reference to Termination Value and all amounts
required to be paid by the Lessee under the
agreements, covenants and indemnities contained in the
Lease or in the Participation Agreement or the Tax
Indemnity Agreement or other Ancillary Agreement, but
excluding (i) Basic Rent and (ii) any such amounts,
liabilities and obligations to the extent such
amounts, liabilities or obligations arise out of or
relate to the period prior to execution of the Lease
Supplement with respect to the Aircraft.
Tax. Has the meaning set forth in Section
8.01(a) of the Participation Agreement.
Tax Attribute Period. The period commencing
on the first day of the taxable year of the Owner
Participant in which the Commencement Date occurs and
ending on the last day of the seventh succeeding
taxable year of the Owner Participant; provided,
however, that if the Lessee breaches its
representation set forth in Section 4(a) of the Tax
Indemnity Agreement and as a result it is required to
pay an indemnity pursuant to said Agreement the Tax
Attribute Period shall be the period over which the
Owner Participant is required to depreciate the
Aircraft for purposes of calculating the indemnity
payable pursuant to Section 5 of the Tax Indemnity
Agreement.
Tax Indemnity Agreement. The Tax Indemnity
Agreement, dated as of the Commencement Date, among
the Lessee, and the Owner Participant and the partners
listed on the Schedule A thereto, as from time to time
modified, amended or supplemented pursuant to its
applicable provisions.
Term. The Basic Term and, if renewed
pursuant to Section 4.01 of the Lease, the Renewal
Term, or the period commencing on the Commencement
Date and ending on such earlier date on which the
Lease is terminated pursuant to its terms.
Termination Date. A Rent Payment Date during
the Basic Term that is on or after the end of the Tax
Attribute Period in the case of Article 10 of the
Lease and in the case of Section 4.02 of the Lease,
the date specified in the notice from the Lessee given
pursuant to such Section.
Termination Value. As of any Termination Date,
the greater of (i) the amount determined by multiplying
the Aircraft Cost by the percentage set forth in Schedule
IV to the Lease under the heading "Termination Value Factor"
opposite such Termination Date, and (ii) an amount at least
sufficient to pay in full, as of the date of payment
thereof, the aggregate unpaid principal amount of the
Certificates outstanding on such date of payment, together
with the accrued and unpaid interest thereon.
Transaction Costs. Those costs and expenses
set forth in Section 10.01(a) of the Participation
Agreement.
Treasury Yield. (i) In the case of a
Certificate having a Maturity within one year after
the Prepayment Date or purchase date, as the case may
be, 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
Certificate, and (ii) in the case of a Certificate
having a Maturity one year or more after the
Prepayment Date or purchase date, as the case may be,
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 Lessee) corresponding in maturity to the Remaining
Weighted Average Life of such 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 or purchase date, as the
case may be.
Trust Agreement. The Original Trust
Agreement, as amended and restated as of March 1,
1994, and as amended or supplemented pursuant to its
applicable provisions and in accordance with the other
Operative Agreements (including, without limitation,
as supplemented by any Trust Agreement Supplement).
Trust Agreement Supplement. The Trust
Agreement Supplement (as defined in the Trust
Agreement) relating to the Aircraft.
Trust Indenture Act. The Trust Indenture Act
of 1939, as amended.
Trust Indenture Estate; Indenture Estate.
The property, rights and privileges described in the
Granting Clause of the Indenture, other than
(A) Excepted Payments, including, without limitation
all right, title and interest of the Owner Participant
in, to and under the Tax Indemnity Agreement and any
moneys due and to become due under the Tax Indemnity
Agreement, all as provided in the Indenture, and
(B) rights granted to the Owner Trustee or the Owner
Participant under the Indenture, including without
limitation under Section 2.05, 7.02, 8.01, 8.02, 8.03,
13.01 and 13.02 thereof, and the Letter of Credit and
any rights thereunder.
Underwriters. The several Underwriters named
in the Underwriting Agreement.
Underwriting Agreement. The Underwriting
Agreement dated March 16, 1994 among the Lessee,
Lufthansa, the Owner Participant, Goldman, Sachs &
Co. and Merrill Lynch, Pierce, Fenner & Smith.
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 401 or Section 418 of the
Federal Aviation Act, and as to which there is in
force an air carrier operating certificate issued
pursuant to 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.
<TABLE>
APPENDIX A
SINKING FUND REDEMPTION DATE INFORMATION
<CAPTION>
Federal Express Corporation Trust A
Certificates Certificates Certificates
Sinking Fund with a Maturity with a Maturity with a Maturity
Redemption Date of March 23, 1998 of March 23, 2007 of March 23, 2009
--------------- ----------------- ----------------- -----------------
<C> <C> <C> <C>
March 23, 1995 531,256 0 0
September 23, 1995 551,258 0 0
March 23, 1996 572,013 0 0
September 23, 1996 593,549 0 0
March 23, 1997 615,897 0 0
September 23, 1997 639,085 0 0
March 23, 1998 663,136 0 0
September 23, 1998 0 688,114 0
March 23, 1999 0 715,260 0
September 23, 1999 0 743,477 0
March 23, 2000 0 772,808 0
September 23, 2000 0 803,295 0
March 23, 2001 0 834,985 0
September 23, 2001 0 867,925 0
March 23, 2002 0 902,165 0
September 23, 2002 0 937,755 0
March 23, 2003 0 974,750 0
September 23, 2003 0 1,013,204 0
March 23, 2004 0 1,053,174 0
September 23, 2004 0 1,094,722 0
March 23, 2005 0 1,137,909 0
September 23, 2005 0 1,182,799 0
March 23, 2006 0 1,229,461 0
September 23, 2006 0 1,277,963 0
March 23, 2007 0 1,038,927 289,419
September 23, 2007 0 0 1,381,521
March 23, 2008 0 0 1,439,545
September 23, 2008 0 0 1,500,006
March 23, 2009 0 0 2,575,302
September 23,2009 0 0 0
March 23, 2010 0 0 0
--------- ---------- ---------
Total 4,166,194 17,268,693 7,185,793
</TABLE>
<TABLE>
APPENDIX A
SINKING FUND REDEMPTION DATE INFORMATION
<CAPTION>
Federal Express Corporation Trust B
Certificates Certificates Certificates
Sinking Fund with a Maturity with a Maturity with a Maturity
Redemption Date of March 23, 2003 of September 23, 2007 of March 23, 2009
--------------- ----------------- --------------------- ---------------------
<C> <C> <C> <C>
March 23, 1995 562,121 0 0
September 23, 1995 583,285 0 0
March 23, 1996 605,246 0 0
September 23, 1996 628,033 0 0
March 23, 1997 651,679 0 0
September 23, 1997 676,214 0 0
March 23, 1998 701,674 0 0
September 23, 1998 0 728,092 0
March 23, 1999 0 756,815 0
September 23, 1999 0 786,672 0
March 23, 2000 0 817,706 0
September 23, 2000 0 849,964 0
March 23, 2001 0 883,495 0
September 23, 2001 0 918,349 0
March 23, 2002 0 954,578 0
September 23, 2002 0 992,236 0
March 23, 2003 794,071 237,295 0
September 23, 2003 0 1,070,639 0
March 23, 2004 0 1,112,875 0
September 23, 2004 0 1,156,778 0
March 23, 2005 0 1,202,413 0
September 23, 2005 0 1,249,848 0
March 23, 2006 0 1,299,155 0
September 23, 2006 0 1,350,407 0
March 23, 2007 0 1,403,680 0
September 23, 2007 0 11,348 1,447,674
March 23, 2008 0 0 1,520,307
September 23, 2008 0 0 1,584,160
March 23, 2009 0 0 3,119,539
September 23,2009 0 0 0
March 23, 2010 0 0 0
--------- ---------- ---------
Total 5,202,323 17,782,345 7,671,680
</TABLE>
<TABLE>
APPENDIX A
SINKING FUND REDEMPTION DATE INFORMATION
<CAPTION>
Federal Express Corporation Trust C
Certificates Certificates Certificates
Sinking Fund with a Maturity with a Maturity with a Maturity
Redemption Date of March 23, 2003 of September 23, 2007 of March 23, 2009
--------------- ----------------- --------------------- ---------------------
<C> <C> <C> <C>
March 23, 1995 564,171 0 0
September 23, 1995 585,413 0 0
March 23, 1996 607,453 0 0
September 23, 1996 630,324 0 0
March 23, 1997 654,056 0 0
September 23, 1997 678,681 0 0
March 23, 1998 704,233 0 0
September 23, 1998 0 730,748 0
March 23, 1999 0 759,576 0
September 23, 1999 0 789,541 0
March 23, 2000 0 820,688 0
September 23, 2000 0 853,065 0
March 23, 2001 0 886,718 0
September 23, 2001 0 921,699 0
March 23, 2002 0 958,060 0
September 23, 2002 0 995,856 0
March 23, 2003 1,035,128 0 0
September 23, 2003 0 1,074,115 0
March 23, 2004 0 1,116,489 0
September 23, 2004 0 1,160,535 0
March 23, 2005 0 1,206,318 0
September 23, 2005 0 1,253,907 0
March 23, 2006 0 1,303,374 0
September 23, 2006 0 1,354,792 0
March 23, 2007 0 1,408,238 0
September 23, 2007 0 639,183 824,576
March 23, 2008 0 0 1,523,643
September 23, 2008 0 0 1,587,636
March 23, 2009 0 0 3,293,851
September 23,2009 0 0 0
March 23, 2010 0 0 0
--------- ---------- ---------
Total 5,459,459 18,232,902 7,229,706
</TABLE>
<TABLE>
APPENDIX A
SINKING FUND REDEMPTION DATE INFORMATION
<CAPTION>
Federal Express Corporation Trust D
Certificates Certificates Certificates
Sinking Fund with a Maturity with a Maturity with a Maturity
Redemption Date of March 23, 1998 of March 23, 2007 of September 23, 2009
--------------- ----------------- ----------------- ---------------------
<C> <C> <C> <C>
March 23, 1995 302,984 0 0
September 23, 1995 575,400 0 0
March 23, 1996 597,063 0 0
September 23, 1996 619,543 0 0
March 23, 1997 642,879 0 0
September 23, 1997 667,073 0 0
March 23, 1998 692,177 0 0
September 23, 1998 0 718,249 0
March 23, 1999 0 746,584 0
September 23, 1999 0 776,037 0
March 23, 2000 0 806,651 0
September 23, 2000 0 838,474 0
March 23, 2001 0 871,551 0
September 23, 2001 0 905,934 0
March 23, 2002 0 941,673 0
September 23, 2002 0 978,822 0
March 23, 2003 0 1,017,437 0
September 23, 2003 0 1,057,575 0
March 23, 2004 0 1,099,296 0
September 23, 2004 0 1,142,663 0
March 23, 2005 0 1,187,741 0
September 23, 2005 0 1,234,598 0
March 23, 2006 0 1,283,303 0
September 23, 2006 0 1,333,929 0
March 23, 2007 0 1,169,107 217,412
September 23, 2007 0 0 1,441,807
March 23, 2008 0 0 1,502,362
September 23, 2008 0 0 1,565,462
March 23, 2009 0 0 1,631,211
September 23,2009 0 0 1,952,210
March 23, 2010 0 0 0
--------- ---------- ---------
Total 4,097,109 18,109,624 8,310,464
</TABLE>
<TABLE>
APPENDIX A
SINKING FUND REDEMPTION DATE INFORMATION
<CAPTION>
Federal Express Corporation Trust E
Certificates Certificates Certificates
Sinking Fund with a Maturity with a Maturity with a Maturity
Redemption Date of March 23, 2004 of September 23, 2007 of September 23, 2009
--------------- ----------------- --------------------- ---------------------
<C> <C> <C> <C>
March 23, 1995 91,178 0 0
September 23, 1995 569,564 0 0
March 23, 1996 591,008 0 0
September 23, 1996 613,260 0 0
March 23, 1997 636,349 0 0
September 23, 1997 660,308 0 0
March 23, 1998 685,168 0 0
September 23, 1998 0 710,965 0
March 23, 1999 0 739,012 0
September 23, 1999 0 768,166 0
March 23, 2000 0 798,471 0
September 23, 2000 0 829,970 0
March 23, 2001 0 862,713 0
September 23, 2001 0 896,747 0
March 23, 2002 0 932,123 0
September 23, 2002 81,332 887,563 0
March 23, 2003 1,006,972 0 0
September 23, 2003 1,044,885 0 0
March 23, 2004 528,213 555,994 0
September 23, 2004 0 1,126,047 0
March 23, 2005 0 1,170,469 0
September 23, 2005 0 1,216,644 0
March 23, 2006 0 1,264,641 0
September 23, 2006 0 1,314,531 0
March 23, 2007 0 1,366,389 0
September 23, 2007 0 1,420,262 0
March 23, 2008 0 0 1,476,324
September 23, 2008 0 0 1,538,329
March 23, 2009 0 0 1,602,939
September 23,2009 0 0 2,129,755
March 23, 2010 0 0 0
--------- ---------- ---------
Total 6,508,237 16,860,707 6,747,347
</TABLE>
<TABLE>
APPENDIX A
SINKING FUND REDEMPTION DATE INFORMATION
<CAPTION>
Federal Express Corporation Trust F
Certificates Certificates Certificates
Sinking Fund with a Maturity with a Maturity with a Maturity
Redemption Date of September 23, 2004 of September 23, 2008 of September 23, 2009
--------------- --------------------- --------------------- ---------------------
<C> <C> <C> <C>
March 23, 1995 0 0 0
September 23, 1995 569,081 0 0
March 23, 1996 590,507 0 0
September 23, 1996 612,739 0 0
March 23, 1997 635,809 0 0
September 23, 1997 659,747 0 0
March 23, 1998 684,587 0 0
September 23, 1998 0 710,362 0
March 23, 1999 0 738,385 0
September 23, 1999 0 767,515 0
March 23, 2000 0 797,793 0
September 23, 2000 0 829,266 0
March 23, 2001 0 861,981 0
September 23, 2001 895,986 0 0
March 23, 2002 929,720 0 0
September 23, 2002 964,724 0 0
March 23, 2003 1,001,046 0 0
September 23, 2003 1,038,735 0 0
March 23, 2004 1,077,843 0 0
September 23, 2004 1,118,395 0 0
March 23, 2005 0 1,160,533 0
September 23, 2005 0 1,206,316 0
March 23, 2006 0 1,253,905 0
September 23, 2006 0 1,303,372 0
March 23, 2007 0 1,354,790 0
September 23, 2007 0 1,408,236 0
March 23, 2008 0 1,463,791 0
September 23, 2008 0 764,379 757,132
March 23, 2009 0 0 1,583,493
September 23,2009 0 0 2,612,217
March 23, 2010 0 0 0
--------- ---------- ---------
Total 10,778,919 14,620,624 4,952,842
</TABLE>
APPENDIX A
SINKING FUND REDEMPTION DATE INFORMATION
<TABLE>
<CAPTION>
Federal Express Corporation Trust G
Certificates Certificates Certificates
Sinking Fund with a Maturity with a Maturity with a Maturity
Redemption Date of September 23, 2004 of March 28, 2008 of September 23, 2009
--------------- --------------------- ----------------- ---------------------
<C> <C> <C> <C>
March 23, 1995 0 0 0
September 23, 1995 512,009 0 0
March 23, 1996 531,287 0 0
September 23, 1996 551,290 0 0
March 23, 1997 572,046 0 0
September 23, 1997 593,583 0 0
March 23, 1998 615,932 0 0
September 23, 1998 0 639,121 0
March 23, 1999 0 664,335 0
September 23, 1999 0 690,543 0
March 23, 2000 0 717,785 0
September 23, 2000 0 746,101 0
March 23, 2001 0 775,535 0
September 23, 2001 806,130 0 0
March 23, 2002 836,481 0 0
September 23, 2002 867,974 0 0
March 23, 2003 900,654 0 0
September 23, 2003 934,563 0 0
March 23, 2004 969,750 0 0
September 23, 2004 1,006,235 0 0
March 23, 2005 0 1,044,146 0
September 23, 2005 0 1,085,338 0
March 23, 2006 0 1,128,155 0
September 23, 2006 0 1,172,660 0
March 23, 2007 0 1,218,922 0
September 23, 2007 0 1,267,008 0
March 23, 2008 0 1,316,969 0
September 23, 2008 0 0 1,368,947
March 23, 2009 0 0 1,426,443
September 23,2009 0 0 2,553,940
March 23, 2010 0 0 0
--------- ---------- ---------
Total 9,697,934 12,466,618 5,349,330
</TABLE>
<TABLE>
APPENDIX A
SINKING FUND REDEMPTION DATE INFORMATION
<CAPTION>
Federal Express Corporation Trust H
Certificates Certificates Certificates
Sinking Fund with a Maturity with a Maturity with a Maturity
Redemption Date of March 23, 2006 of September 23, 2008 of September 23, 2009
--------------- ----------------- --------------------- ---------------------
<C> <C> <C> <C>
March 23, 1995 0 0 0
September 23, 1995 507,767 0 0
March 23, 1996 526,885 0 0
September 23, 1996 546,722 0 0
March 23, 1997 567,306 0 0
September 23, 1997 588,665 0 0
March 23, 1998 610,828 0 0
September 23, 1998 0 633,826 0
March 23, 1999 0 658,831 0
September 23, 1999 0 684,821 0
March 23, 2000 0 711,838 0
September 23, 2000 0 739,920 0
March 23, 2001 0 769,109 0
September 23, 2001 0 799,451 0
March 23, 2002 0 830,989 0
September 23, 2002 0 863,772 0
March 23, 2003 897,848 0 0
September 23, 2003 931,652 0 0
March 23, 2004 966,728 0 0
September 23, 2004 1,003,126 0 0
March 23, 2005 1,040,893 0 0
September 23, 2005 1,080,083 0 0
March 23, 2006 581,643 539,079 0
September 23, 2006 0 1,163,915 0
March 23, 2007 0 1,209,831 0
September 23, 2007 0 1,257,559 0
March 23, 2008 0 1,307,170 0
September 23, 2008 0 1,358,713 0
March 23, 2009 0 0 1,412,340
September 23, 2009 0 0 2,903,837
March 23, 2010 0 0 0
--------- ---------- ---------
Total 9,850,146 13,528,824 4,316,177
</TABLE>
<TABLE>
APPENDIX A
SINKING FUND REDEMPTION DATE INFORMATION
<CAPTION>
Federal Express Corporation Trust I
Certificates Certificates Certificates
Sinking Fund with a Maturity with a Maturity with a Maturity
Redemption Date of September 23, 2005 of September 23, 2008 of March 23, 2010
--------------- --------------------- --------------------- -----------------
<C> <C> <C> <C>
March 23, 1995 0 0 0
September 23, 1995 386,443 0 0
March 23, 1996 526,836 0 0
September 23, 1996 546,672 0 0
March 23, 1997 567,254 0 0
September 23, 1997 588,611 0 0
March 23, 1998 610,772 0 0
September 23, 1998 0 633,768 0
March 23, 1999 0 658,770 0
September 23, 1999 0 684,759 0
March 23, 2000 0 711,772 0
September 23, 2000 0 739,852 0
March 23, 2001 769,039 0 0
September 23, 2001 797,993 0 0
March 23, 2002 828,038 0 0
September 23, 2002 859,214 0 0
March 23, 2003 891,563 0 0
September 23, 2003 925,130 0 0
March 23, 2004 959,961 0 0
September 23, 2004 996,104 0 0
March 23, 2005 1,033,607 0 0
September 23, 2005 920,551 151,939 0
March 23, 2006 0 1,113,177 0
September 23, 2006 0 1,157,092 0
March 23, 2007 0 1,202,739 0
September 23, 2007 0 1,250,187 0
March 23, 2008 0 1,299,507 0
September 23, 2008 0 1,350,752 0
March 23, 2009 0 0 1,404,060
September 23,2009 0 0 1,463,031
March 23, 2010 0 0 1,646,212
--------- ---------- ---------
Total 12,207,788 10,954,314 4,513,303
</TABLE>
<TABLE>
APPENDIX A
SINKING FUND REDEMPTION DATE INFORMATION
<CAPTION>
Federal Express Corporation Trust J
Certificates Certificates Certificates
Sinking Fund with a Maturity with a Maturity with a Maturity
Redemption Date of March 23, 2006 of September 23, 2008 of March 23, 2010
--------------- ------------------ --------------------- -----------------
<C> <C> <C> <C>
March 23, 1995 0 0 0
September 23, 1995 98,583 0 0
March 23, 1996 523,496 0 0
September 23, 1996 543,206 0 0
March 23, 1997 563,658 0 0
September 23, 1997 584,879 0 0
March 23, 1998 606,900 0 0
September 23, 1998 0 629,750 0
March 23, 1999 0 654,593 0
September 23, 1999 0 680,417 0
March 23, 2000 0 707,260 0
September 23, 2000 0 735,161 0
March 23, 2001 764,163 0 0
September 23, 2001 792,934 0 0
March 23, 2002 822,788 0 0
September 23, 2002 853,766 0 0
March 23, 2003 885,910 0 0
September 23, 2003 919,265 0 0
March 23, 2004 953,875 0 0
September 23, 2004 989,789 0 0
March 23, 2005 1,027,054 0 0
September 23, 2005 1,065,723 0 0
March 23, 2006 624,327 481,486 0
September 23, 2006 0 1,148,349 0
March 23, 2007 0 1,193,651 0
September 23, 2007 0 1,240,741 0
March 23, 2008 0 1,289,688 0
September 23, 2008 0 1,340,547 0
March 23, 2009 0 0 1,393,452
September 23,2009 0 0 1,451,977
March 23, 2010 0 0 1,920,457
---------- ---------- ---------
Total 12,620,316 10,101,643 4,765,886
</TABLE>
<TABLE>
APPENDIX A
SINKING FUND REDEMPTION DATE INFORMATION
<CAPTION>
Federal Express Corporation Trust K
Certificates Certificates Certificates
Sinking Fund with a Maturity with a Maturity with a Maturity
Redemption Date of March 23, 2006 of September 23, 2008 of March 23, 2010
--------------- ----------------- --------------------- -----------------
<C> <C> <C> <C>
March 23, 1995 0 0 0
September 23, 1995 0 0 0
March 23, 1996 575,706 0 0
September 23, 1996 597,381 0 0
March 23, 1997 619,873 0 0
September 23, 1997 643,211 0 0
March 23, 1998 667,428 0 0
September 23, 1998 0 692,556 0
March 23, 1999 0 719,878 0
September 23, 1999 0 748,277 0
March 23, 2000 0 777,797 0
September 23, 2000 808,481 0 0
March 23, 2001 838,920 0 0
September 23, 2001 870,505 0 0
March 23, 2002 903,280 0 0
September 23, 2002 937,288 0 0
March 23, 2003 972,577 0 0
September 23, 2003 1,009,195 0 0
March 23, 2004 1,047,191 0 0
September 23, 2004 1,086,618 0 0
March 23, 2005 1,127,529 0 0
September 23, 2005 1,169,980 0 0
March 23, 2006 1,130,081 83,909 0
September 23, 2006 0 1,259,890 0
March 23, 2007 0 1,309,592 0
September 23, 2007 0 1,361,256 0
March 23, 2008 0 1,414,957 0
September 23, 2008 0 1,470,759 0
March 23, 2009 0 0 1,528,799
September 23,2009 0 0 1,593,009
March 23, 2010 0 0 2,376,125
---------- --------- ---------
Total 15,005,244 9,838,871 5,497,933
</TABLE>
<TABLE>
APPENDIX A
SINKING FUND REDEMPTION DATE INFORMATION
<CAPTION>
Federal Express Corporation Trust L
Certificates Certificates Certificates
Sinking Fund with a Maturity with a Maturity with a Maturity
Redemption Date of September 23, 2006 of September 23, 2008 of March 23, 2010
--------------- --------------------- --------------------- -----------------
<C> <C> <C> <C>
March 23, 1995 0 0 0
September 23, 1995 0 0 0
March 23, 1996 519,250 0 0
September 23, 1996 538,799 0 0
March 23, 1997 599,085 0 0
September 23, 1997 580,135 0 0
March 23, 1998 601,977 0 0
September 23, 1998 0 624,641 0
March 23, 1999 0 649,283 0
September 23, 1999 0 674,898 0
March 23, 2000 701,522 0 0
September 23, 2000 727,935 0 0
March 23, 2001 755,342 0 0
September 23, 2001 783,780 0 0
March 23, 2002 813,289 0 0
September 23, 2002 843,910 0 0
March 23, 2003 875,683 0 0
September 23, 2003 908,653 0 0
March 23, 2004 942,863 0 0
September 23, 2004 978,362 0 0
March 23, 2005 1,015,198 0 0
September 23, 2005 1,053,420 0 0
March 23, 2006 1,093,081 0 0
September 23, 2006 498,350 635,846 0
March 23, 2007 0 1,178,084 0
September 23, 2007 0 1,224,559 0
March 23, 2008 0 1,272,868 0
September 23, 2008 0 1,323,069 0
March 23, 2009 0 0 1,375,279
September 23,2009 0 0 1,433,040
March 23, 2010 0 0 2,390,258
---------- --------- ---------
Total 14,790,634 7,583,248 5,198,577
</TABLE>
<TABLE>
APPENDIX A
SINKING FUND REDEMPTION DATE INFORMATION
<CAPTION>
Federal Express Corporation Trust M
Certificates Certificates Certificates
Sinking Fund with a Maturity with a Maturity with a Maturity
Redemption Date of September 23, 2006 of September 23, 2008 of March 23, 2010
--------------- --------------------- --------------------- -----------------
<C> <C> <C> <C>
March 23, 1995 0 0 0
September 23, 1995 0 0 0
March 23, 1996 515,742 0 0
September 23, 1996 535,160 0 0
March 23, 1997 555,308 0 0
September 23, 1997 576,216 0 0
March 23, 1998 597,910 0 0
September 23, 1998 0 620,422 0
March 23, 1999 0 644,897 0
September 23, 1999 0 670,338 0
March 23, 2000 261,715 435,068 0
September 23, 2000 723,800 0 0
March 23, 2001 751,051 0 0
September 23, 2001 779,328 0 0
March 23, 2002 808,670 0 0
September 23, 2002 839,117 0 0
March 23, 2003 870,709 0 0
September 23, 2003 903,492 0 0
March 23, 2004 937,508 0 0
September 23, 2004 972,805 0 0
March 23, 2005 1,009,431 0 0
September 23, 2005 1,047,437 0 0
March 23, 2006 1,086,873 0 0
September 23, 2006 843,425 284,329 0
March 23, 2007 0 1,170,767 0
September 23, 2007 0 1,216,953 0
March 23, 2008 0 1,264,962 0
September 23, 2008 0 1,314,851 0
March 23, 2009 0 0 1,366,736
September 23,2009 0 0 1,424,139
March 23, 2010 0 0 2,611,087
---------- --------- ---------
Total 14,615,697 7,622,587 5,401,962
========== ========= =========
</TABLE>
Exhibit 4.c.1
======================================================
PARTICIPATION AGREEMENT
(Federal Express Corporation Trust ____)
Dated as of March 1, 1994
among
FEDERAL EXPRESS CORPORATION,
Lessee
LLG AIRCRAFT LEASING, L.P.,
Owner Participant
NATIONSBANK OF SOUTH CAROLINA, NATIONAL ASSOCIATION,
Pass Through Trustee
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION,
Owner Trustee
NATIONSBANK OF GEORGIA, NATIONAL ASSOCIATION,
Indenture Trustee
WESTDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH,
LC Bank
LEVERAGED LEASE OF ONE AIRBUS MODEL A310-203 AIRCRAFT
SERIAL NO. ____________
======================================================
TABLE OF CONTENTS
Page
Initial Recitals . . . . . . . . . . . . . . . . . . 1
ARTICLE 1
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 2
ISSUANCE OF PASS THROUGH CERTIFICATES;
ISSUANCE AND PURCHASE OF CERTIFICATES
Section 2.01. Transfer of Funds and Collateral . . . 3
Section 2.02. Transaction Costs and Fees;
Pass Through Closing Costs . . . . . 5
Section 2.03 Closings . . . . . . . . . . . . . . . 5
Section 2.04 Obligation to Lease . . . . . . . . . 5
ARTICLE 3
DELIVERY OF AIRCRAFT; POSTPONEMENT
Section 3.01. Notice of Commencement Date . . . . . 6
Section 3.02. Postponement of Proposed Commencement
Date . . . . . . . . . . . . . . . . 6
Section 3.03 Payment on Commencement Date . . . . . 7
ARTICLE 4
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent to Closings . . . 7
Section 4.01A Condition Precedent to Obligations
of the LC Bank . . . . . . . . . . . 18
Section 4.02 Conditions Precedent to Lease on the
Commencement Date . . . . . . . . . 18
Section 4.03 Conditions Precedent to Release of
Debt Portion from the Collateral
Account . . . . . . . . . . . . . . 25
Section 4.04 Opinion of Special Aviation Counsel
Upon Registration . . . . . . . . . 34
ARTICLE 5
CONDITIONS PRECEDENT
TO LESSEE'S OBLIGATIONS
Section 5.01. Conditions Precedent to
Lessee's Obligations . . . . . . . . 35
ARTICLE 6
LESSEE'S REPRESENTATIONS,
WARRANTIES AND COVENANTS
Section 6.01. Lessee's Representations and
Warranties . . . . . . . . . . . . . 35
Section 6.02. Certain Covenants of Lessee . . . . . 41
Section 6.03. Survival of Representations
and Warranties . . . . . . . . . . . 49
ARTICLE 7
OTHER PARTIES' REPRESENTATIONS,
WARRANTIES AND COVENANTS
Section 7.01. Acquisitions and Offerings
of Interests in Lessor's Estate . . 50
Section 7.02. Citizenship . . . . . . . . . . . . . 50
Section 7.03. Representations, Warranties and
Covenants of Owner Participant . . . 53
Section 7.04. Representations, Warranties and
Covenants of Owner Trustee . . . . . 57
Section 7.05. Representations and Warranties
of the Indenture Trustee . . . . . . 59
Section 7.06. Representations and Warranties
of Pass Through Trustee and LC Bank. 61
Section 7.07. Intentionally Omitted . . . . . . . . 63
Section 7.08. Indenture Trustee's Notice of Default 63
Section 7.09. Releases from Indenture . . . . . . . 63
Section 7.10. Covenant of Quiet Enjoyment . . . . . 64
Section 7.11. Survival of Representations
Warranties and Covenants . . . . . . 64
Section 7.12. Lessee's Assumption of the
Certificates . . . . . . . . . . . . 64
Section 7.13. Indebtedness of Owner Trustee . . . . 67
Section 7.14. Compliance with Trust Agreement, Etc. 67
ARTICLE 8
TAXES
Section 8.01. Lessee's Obligation to Pay Taxes . . . 68
Section 8.02. After-Tax Basis . . . . . . . . . . . 74
Section 8.03. Time of Payment . . . . . . . . . . . 75
Section 8.04. Contests . . . . . . . . . . . . . . . 76
Section 8.05. Refunds . . . . . . . . . . . . . . . 78
Section 8.06. Lessee's Reports . . . . . . . . . . . 78
Section 8.07. Survival of Obligations . . . . . . . 79
Section 8.08. Payment of Taxes . . . . . . . . . . . 79
Section 8.09. Reimbursements by Indemnitees
Generally . . . . . . . . . . . . . 80
ARTICLE 9
GENERAL INDEMNITY
Section 9.01. Generally . . . . . . . . . . . . . . 80
Section 9.02. After-Tax Basis . . . . . . . . . . . 85
Section 9.03. Subrogation . . . . . . . . . . . . . 86
Section 9.04. Notice and Payment . . . . . . . . . . 86
Section 9.05. Refunds . . . . . . . . . . . . . . . 86
Section 9.06. Defense of Claims . . . . . . . . . . 87
Section 9.07. Survival of Obligations . . . . . . . 88
Section 9.08. Effect of Other Indemnities . . . . . 88
Section 9.09. Interest . . . . . . . . . . . . . . . 89
ARTICLE 10
CERTAIN COSTS
Section 10.01. Trustee Expenses and Other Costs . . 89
ARTICLE 11
SUCCESSOR OWNER TRUSTEE
Section 11.01. Appointment of Successor Owner
Trustee . . . . . . . . . . . . . . 90
ARTICLE 12
LIABILITIES AND INTERESTS OF THE OWNER PARTICIPANT
AND THE PASS THROUGH TRUSTEE
Section 12.01. Liabilities of the Owner Participant. 92
Section 12.02. Interest of Pass Through Trustee. . . 92
ARTICLE 13
OTHER DOCUMENTS
Section 13.01. Consent of Lessee to Other Documents 92
Section 13.02. Further Assurances . . . . . . . . . 93
ARTICLE 14
NOTICES
Section 14.01. Notices . . . . . . . . . . . . . . 93
ARTICLE 15
[INTENTIONALLY OMITTED]
ARTICLE 16
MISCELLANEOUS
Section 16.01. Owner for Federal Tax Purposes . . . 95
Section 16.02. Intentionally Omitted . . . . . . . 95
Section 16.03. Counterparts . . . . . . . . . . . . 95
Section 16.04. No Oral Modifications . . . . . . . 95
Section 16.05. Captions . . . . . . . . . . . . . . 96
Section 16.06. Successors and Assigns . . . . . . . 96
Section 16.07. Concerning the Owner Trustee,
Pass Through Trustee and Indenture
Trustee . . . . . . . . . . . . . . 96
Section 16.08. Severability . . . . . . . . . . . . 97
Section 16.09. Public Release of Information . . . 97
Section 16.10. Certain Limitations on Reorganization 97
Section 16.11. Governing Law . . . . . . . . . . . 98
Section 16.12. Section 1110 Compliance . . . . . . 98
ARTICLE 17
CONFIDENTIALITY
Section 17.01. Confidentiality . . . . . . . . . . 99
SCHEDULE I Certificate Information
SCHEDULE II Definitions
SCHEDULE III Permitted Country List
SCHEDULE IV Certain Amounts
EXHIBIT A [Intentionally Omitted]
EXHIBIT B Form of Lease Agreement
EXHIBIT C Form of Indenture
EXHIBIT D Form of Trust Agreement
EXHIBIT E Form of Demand Note
EXHIBIT F [Intentionally Omitted]
EXHIBIT G Form of Letter of Credit
EXHIBIT H Form of Collateral Agreement
EXHIBIT I Form of OP Guarantee
EXHIBIT J Form of Lufthansa Side Letter
EXHIBIT K-1 Closing Date Opinion of Counsel to
the Lessee
EXHIBIT K-2 Commencement Date Opinion of Counsel
to the Lessee
EXHIBIT L-1 Closing Date Opinion of Counsel to
the Owner Participant, its General
Partner and Lufthansa
EXHIBIT L-2 Commencement Date and Exchange Date
Opinion of Counsel to the Owner
Participant, its General Partner and
Lufthansa
EXHIBIT M-1 Closing Date Opinion of German
Counsel to Lufthansa
EXHIBIT M-2 Commencement Date Opinion of German
Counsel to Lufthansa
EXHIBIT N-1 Closing Date Opinion of Special
Counsel to the Indenture Trustee
EXHIBIT N-2 Exchange Date Opinion of Special Counsel
to the Indenture Trustee
EXHIBIT O Closing Date Opinion of Special
Counsel to the Pass Through Trustee
EXHIBIT P-1 Closing Date Opinion of Special
Counsel to the Owner Trustee
EXHIBIT P-2 Commencement Date and Exchange Date
Opinion of Special Counsel to the
Owner Trustee
EXHIBIT Q-1 Closing Date Opinion of Special
Counsel to the Lessee
EXHIBIT Q-2 Commencement Date and Exchange Date
Opinion of Special Counsel to the
Lessee
EXHIBIT R Closing Date Opinion of Counsel to
the LC Bank
EXHIBIT S Closing Date Opinion of Special
Counsel to the LC Bank
EXHIBIT T Commencement Date and Exchange Date
Opinion of Daugherty, Fowler &
Peregrin
PARTICIPATION AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST _________)
PARTICIPATION AGREEMENT (FEDERAL EXPRESS
CORPORATION TRUST _________) dated as of March 1, 1994
(this "Agreement") among FEDERAL EXPRESS CORPORATION,
a Delaware corporation (herein, together with its
successors and permitted assigns, "Lessee"), LLG
AIRCRAFT LEASING, L.P., a Delaware limited partnership
(herein, together with its successors and permitted
assigns, "Owner Participant"), NATIONSBANK OF SOUTH
CAROLINA, NATIONAL ASSOCIATION, a national banking
association, not in its individual capacity, except as
otherwise expressly stated herein, but solely as pass
through trustee under the Pass Through Agreement and
each Pass Through Trust (in such capacity as pass
through trustee herein, together with its successors
and permitted assigns, "Pass Through Trustee"), FIRST
SECURITY BANK OF UTAH, NATIONAL ASSOCIATION, a
national banking association, not in its individual
capacity, except as otherwise expressly stated herein,
but solely as Owner Trustee under the Trust Agreement
referred to below (in such capacity as trustee, "Owner
Trustee"), NATIONSBANK OF GEORGIA, NATIONAL
ASSOCIATION, a national banking association, not in
its individual capacity, except as otherwise expressly
stated herein, but solely as trustee under the
Indenture referred to below (in such capacity as
trustee herein, together with its successors and
permitted assigns, "Indenture Trustee"), and
WESTDEUTSCHE LANDESBANK GIROZENTRALE, a German
corporation, acting through its NEW YORK BRANCH ("LC
Bank").
W I T N E S S E T H :
WHEREAS, the Owner Participant entered into
the Original Trust Agreement with the Owner Trustee in
its individual capacity, pursuant to which Original
Trust Agreement the Owner Trustee agreed, among other
things, to hold the Lessor's Estate for the benefit of
the Owner Participant on the terms specified in the
Original Trust Agreement, subject, upon execution of
the Indenture, to the Lien thereof.
WHEREAS, concurrently with the execution of
the Original Trust Agreement (and in accordance with
authorizations granted thereby), the Owner Trustee (1)
entered into the Original Sales Agreement with
Lufthansa, pursuant to which the Owner Trustee
purchased the Aircraft from Lufthansa on November 15,
1993, (2) entered into the Original Modification
Agreement with Lufthansa and DA, pursuant to which the
Aircraft is to be converted from passenger
configuration to cargo configuration, (3) entered into
the Original Parts and Services Agreement with
Lufthansa, pursuant to which Lufthansa will perform
described services with respect to the Aircraft, and
(4) entered into the Original Agreement to Lease with
Lufthansa and the Lessee, pursuant to which, subject
to the terms and conditions set forth therein, the
Owner Trustee agreed to lease to the Lessee, and the
Lessee agreed to lease from the Owner Trustee, the
Aircraft on the Commencement Date.
WHEREAS, Section 13 of the Original Agreement
to Lease permits a Nonrecourse Financing (as defined
therein), subject to certain conditions.
WHEREAS, in order to facilitate such a
Nonrecourse Financing, the Lessee is concurrently
entering into an Underwriting Agreement, which relates
to three Series of Pass Through Certificates to be
issued by the Pass Through Trusts formed to acquire,
among other securities, the Certificates bearing a
particular interest rate and having a particular
Maturity that will be issued under the Indenture.
WHEREAS, in connection with the foregoing,
the Owner Trustee will enter into amendments to each
of the Original Modification Agreement, the Original
Sales Agreement and the Parts and Services Agreement,
and the Original Agreement to Lease will be amended
and restated.
WHEREAS, on the Closing Date, a closing will
occur with respect to the public offering of the Pass
Through Certificates issued by each Pass Through
Trust, the proceeds from which will be used by the
Pass Through Trustee to purchase for each such Pass
Through Trust the Certificates of the interest rate
and Maturity applicable thereto which proceeds will in
turn be applied by the Owner Trustee to pay, among
other things, a portion of the Lessor's investment in
the Aircraft.
WHEREAS, prior to the Exchange Date, the
Certificates will be secured by the Liquid Collateral
and the Demand Note Collateral (as each such term is
defined in the Collateral Agreement) and/or the Letter
of Credit.
WHEREAS, subject to the terms and conditions
hereof, the Lessee proposes to lease, on the
Commencement Date, the Aircraft from the Owner Trustee
pursuant to the Lease.
NOW, THEREFORE, in consideration of the
mutual covenants contained in this Agreement, the
parties agree as follows:
ARTICLE 1
DEFINITIONS
Unless the context otherwise requires, the
terms defined in Schedule II hereto are incorporated
herein for all purposes of this Agreement and shall be
equally applicable to both the singular and the plural
forms of the terms so defined.
ARTICLE 2
ISSUANCE OF PASS THROUGH CERTIFICATES;
ISSUANCE AND PURCHASE OF CERTIFICATES
Section 2.01. Transfer of Funds and
Collateral.
(a) On or before the Closing Date, the Pass
Through Trustee and the Lessee shall enter into the
Pass Through Agreement and the Series Supplements,
and, subject to the terms and conditions set forth
therein, on the Closing Date (i) the Lessee 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, on the Closing Date
the following events shall occur in the order set
forth below:
(i) On behalf of each Pass Through Trust,
from an allocable amount of the proceeds of the
sale of the related Pass Through Certificates,
the Pass Through Trustee shall purchase the
Certificates specified for such Pass Through
Trust on Schedule I hereto. For each Pass
Through Trust, the Pass Through Trustee shall pay
an amount equal to the principal amount of the
Certificate of the Maturity and having the
interest rate that relates to such Pass Through
Trust, which amounts in the aggregate shall equal
the aggregate principal amount of the
Certificates as specified in the form of the
Certificates as set forth in the Indenture. The
aggregate amount payable by the Pass Through
Trustee pursuant to this Section 2.01(b)(i) shall
be payable by wire transfer or intra-bank
transfer to the Indenture Trustee on behalf of
the Owner Trustee.
(ii) The Indenture Trustee shall, on behalf
of the Owner Trustee, apply the amounts received
by it pursuant to Section 2.01(b)(i) (and only
such amounts) as follows: (A) an amount equal to
the Net Proceeds shall be sent, by wire transfer
or intra-bank transfer, for deposit in the
Collateral Account (as defined in the Collateral
Agreement) pursuant to the Collateral Agreement
and (B) an amount equal to the Pass Through
Closing Excess Amount shall be paid, on behalf of
the Owner Participant, by wire transfer or intra-
bank transfer, in accordance with Section 2.02(a)
hereof (and, if the fees and expenses listed in
Section 2.02(a) hereof exceed the Pass Through
Closing Excess Amount, in the order of priority
listed therein).
(iii) (A) The Owner Participant shall
deliver, or cause to be delivered, to the Owner
Trustee one or more Demand Notes, in the
aggregate principal amount set forth on Schedule
IV hereto, and the Owner Trustee shall deliver
the same to the Indenture Trustee, and (B) the LC
Bank shall issue to the Indenture Trustee the
Letter of Credit.
(iv) The Owner Trustee shall cause the
Certificates to be issued to the Pass Through
Trustee for the applicable Pass Through Trusts in
accordance with Section 2.01(c) hereof.
(c) Concurrently with the purchase and
payment contemplated by Section 2.01(b)(i) above, the
Owner Trustee shall execute, issue and deliver to the
Indenture Trustee, and the Indenture Trustee shall
authenticate and deliver, upon the request of the
Owner Trustee, to the Pass Through Trustee for each
Pass Through Trust, the Certificate specified for such
Pass Through Trust on Schedule I attached hereto,
which (i) shall be issued in the principal amount and
in the Maturity set forth for such Certificate in
Schedule I hereto, (ii) shall bear interest at the
interest rate set forth for such Certificate in
Schedule I hereto, (iii) shall be issued in such form
and on such terms as are specified in the Indenture,
(iv) shall be dated and authenticated on the Closing
Date and shall bear interest therefrom, and (v) shall
be registered in the name of the Pass Through Trustee
on behalf of such Pass Through Trust.
Section 2.02. Transaction Costs and Fees;
Pass Through Closing Excess Amount. (a) The Owner
Participant shall pay all fees and expenses of the
following persons relating to the public offering of
the Pass Through Certificates contemplated by the
Underwriting Agreement or the Indemnification
Agreement and related to the transactions contemplated
hereby and thereby: (i) any commissions and discounts
payable to the Underwriters pursuant to the
Underwriting Agreement; (ii) the fees and expenses of
Moody's and S&P; (iii) the amounts contemplated by
Section 4.01(m) hereof and the fees and expenses
associated with the appraisal contemplated by Section
4.01(l) hereof, (iv) the fees and expenses of counsel
for the Owner Trustee, the Indenture Trustee, the Pass
Through Trustee and the Underwriters and any other
expenses (other than those covered by Section 10.01
hereof) of the Owner Trustee, the Indenture Trustee
and the Pass Through Trustee; (v) the fees of any
printer of the Pass Through Certificates; (vi) the
fees and expenses incurred in connection with printing
the Registration Statement, the Prospectus comprising
part of the Registration Statement and the Prospectus
Supplement for the offering of the Pass Through
Certificates; and (vii) the filing fees with respect
to the filing of the Registration Statement on Form S-
3 bearing Registration No. 33-51623 (the "Registration
Statement") filed by the Lessee with the SEC in
connection with the public offering of the Pass
Through Certificates (or the reimbursement of
Lufthansa therefor).
(b) The Owner Participant agrees to bear all
fees and expenses of Dewey Ballantine and the Lessee
agrees to pay all fees and expenses of Davis Polk &
Wardwell and First Chicago Leasing Corporation, in
each case in connection with the execution and
delivery of this Agreement and the other Operative
Agreements.
Section 2.03 Closings. (a) The Closings
will be at the offices of Sullivan & Cromwell at 125
Broad Street, New York, New York.
(b) The closings with respect to
commencement of the Lease on the Commencement Date and
the release of the Debt Portion on the Exchange Date
will be at the offices of Davis, Polk & Wardwell at
450 Lexington Avenue, New York, New York.
(c) All payments pursuant to this Section 2
shall be made in immediately available funds.
Section 2.04 Obligation to Lease. If the
Closings shall fail to occur for any reason, the Owner
Trustee will nevertheless be obligated to lease the
Aircraft to the Lessee and the Lessee will be
obligated to lease the Aircraft from the Owner Trustee
upon satisfaction or waiver of the conditions
precedent relating to such leasing set forth in
Section 4 of the Agreement to Lease and Section 4.02
hereof in the case of the Owner Trustee, and in
Section 4 of the Agreement to Lease and in Article 5
hereof in the case of the Lessee.
ARTICLE 3
DELIVERY OF AIRCRAFT; POSTPONEMENT
Section 3.01. Notice of Commencement Date.
The Owner Participant agrees to give the Owner
Trustee, the Lessee, the Pass Through Trustee and the
Indenture Trustee at least four (4) Frankfurt Business
Days' written or facsimile notice prior to the
Commencement Date (which notice shall be effective
only if received prior to 10:00 a.m. (New York City
time) on the date that is at least four (4) Frankfurt
Business Days prior to such Commencement Date), which
Delivery Notice shall specify such Commencement Date,
the serial number of the Airframe and each Engine, and
the Aeronautics Authority registration number for the
Aircraft.
Section 3.02. Postponement of Proposed
Commencement Date.
(a) Postponement. The Commencement Date
proposed pursuant to Section 3.01 hereof may be
postponed from time to time in accordance with the
Agreement to Lease. If the Commencement Date is
postponed, the Owner Participant shall give the Owner
Trustee, the Indenture Trustee, the Pass Through
Trustee and the Lessee confirmed telex or facsimile
notice (or telephone notice followed by written
confirmation) of such postponement and notice of the
date to which the Commencement Date has been
postponed, such notice of postponement to be received
by each party no later than 11:00 a.m. (New York City
time) on the Business Day preceding the proposed
Commencement Date being postponed.
(b) Prepayment of Certificates. Neither (i)
any prepayment of the Certificates nor (ii) any
refusal or inability of the Indenture Trustee to
release the Debt Portion from the Collateral Account
on the Commencement Date, shall affect the obligation
of the Owner Trustee to lease the Aircraft to the
Lessee and the obligation of the Lessee to lease the
Aircraft from the Owner Trustee when the conditions
precedent to such leasing set forth in Section 4 of
the Agreement to Lease, and Section 4.02 and
Section 5.02 hereof are satisfied or waived.
Section 3.03 Payment on Commencement Date.
Subject to the terms and conditions of this Agreement,
(i) the Owner Participant hereby agrees to make
available to the Owner Trustee, on or prior to the
Commencement Date, an amount equal to the difference
between (A) the sum of the Purchase Price,
Modification Cost (or such greater amount as is then
payable pursuant to the Modification Agreement) and
Parts Cost and (B) the Debt Portion (or such lesser
amount that is actually available to be released from
the Collateral Account on the Commencement Date
pursuant to Section 7(e) of the Collateral Agreement),
and (ii) the Owner Trustee hereby agrees to, on the
Commencement Date, pay an amount equal to the Purchase
Price pursuant to the Sales Agreement, an amount equal
to the Modification Cost (or such greater amount as is
then payable pursuant to the Modification Agreement)
pursuant to the Modification Agreement and an amount
equal to the Parts Cost pursuant to the Parts and
Services Agreement.
ARTICLE 4
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent to
Closings. The obligations of the Lessee, the Owner
Trustee, the Owner Participant, the Indenture Trustee
and the Pass Through Trustee on behalf of each Pass
Through Trust to participate in the transactions
contemplated hereby on the Closing Date are subject to
the fulfillment to the satisfaction of such party,
prior to or on the Closing Date, of the following
conditions precedent; provided, however, that the
conditions precedent set forth in this Section 4.01
shall not affect the Owner Trustee's obligation to
lease the Aircraft to the Lessee, or the Lessee's
obligation to lease the Aircraft from the Owner
Trustee, on the Commencement Date, if the conditions
precedent with respect to such leasing set forth in
Section 4 of the Agreement to Lease and in Section
4.02 and Section 5.01 below have been satisfied or
have been waived by the Owner Participant or the
Lessee, as the case may be.
(a) The Certificates. (i) On the Closing
Date, one Certificate shall have been duly issued by
the Owner Trustee and delivered to the Pass Through
Trustee for each Pass Through Trust against payment
for such Certificate as described in Section 2.01(b)
hereof. (ii) The Pass Through Certificates shall be
registered under the Securities Act, any applicable
state securities laws shall have been complied with,
and the Pass Through Agreement shall have been
qualified under the Trust Indenture Act.
(b) Legal Investment. On the Closing Date,
no fact or condition shall exist under applicable laws
or regulations, or interpretations of any such laws or
regulations by applicable regulatory authorities,
which, in the opinion of the Owner Participant or its
special counsel, the Pass Through Trustee, the Lessee
or the Indenture Trustee, would make it illegal for
the Owner Participant, the Lessee, the Owner Trustee,
the Pass Through Trustee or the Indenture Trustee, and
no change in circumstances outside the control of such
party shall have occurred which would otherwise make
it illegal for the Owner Participant, the Lessee, the
Owner Trustee, the Pass Through Trustee or the
Indenture Trustee, to participate in the transactions
contemplated to be consummated on the Closing Date or
Commencement Date; and no action or proceeding shall
have been instituted nor shall governmental action
before any court, governmental authority or agency be
threatened which in the opinion of counsel for the
Owner Participant, the Lessee, the Pass Through
Trustee or the Indenture Trustee, is not frivolous,
nor shall any order have been issued or proposed to be
issued by any court, or governmental authority or
agency, as of the Closing Date, to set aside,
restrain, enjoin or prevent the consummation of any of
the transactions contemplated by this Agreement or by
any of the other Operative Agreements.
(c) Underwriters. The Underwriters shall
have transferred the funds specified in Section
2.01(a) hereof and all conditions under the
Underwriting Agreement shall have been satisfied or
waived.
(d) Other Commitments; Approvals. All
approvals and consents of any trustees or holders of
any indebtedness or obligations of the Lessee, which
in the opinion of the Owner Participant, the Pass
Through Trustee or the Indenture Trustee, are required
in connection with any transaction contemplated by
this Agreement, shall have been duly obtained.
(e) Documents. This Agreement and the
following documents shall have been duly authorized,
executed and delivered by the respective party or
parties thereto, shall each be satisfactory in form
and substance to the Indenture Trustee, the Pass
Through Trustee, the Lessee and the Owner Participant
(each acting directly or by authorization to its
special counsel), and shall each be in full force and
effect; there shall not have occurred any default
thereunder, or any event which with the lapse of time
or the giving of notice or both would be a default
thereunder, and copies executed or certified as
requested by the Indenture Trustee, the Pass Through
Trustee, the Lessee or the Owner Participant, as the
case may be, of such documents shall have been
delivered to the Owner Participant, the Indenture
Trustee, the Pass Through Trustee, the Lessee and the
Owner Trustee:
(i) the Agreement to Lease;
(ii) the Indenture;
(iii) the Collateral Agreement;
(iv) in the case of the Pass Through Trustee,
the Lessee and the Indenture Trustee only, the
Demand Notes, together with any other documents
or instruments required by Section 4(b) of the
Collateral Agreement, and the Letter of Credit
(the original of each of such documents or
instruments to be delivered to the Indenture
Trustee only);
(v) the Trust Agreement;
(vi) the Sales Agreement and the full
warranty bill of sale covering the Aircraft
(specifically referring to each Engine) executed
by Lufthansa in favor of the Owner Trustee
pursuant to the Sales Agreement;
(vii) the Modification Agreement;
(viii) the Parts and Services Agreement;
(ix) the Sub-subcontract (as defined in the
Agreement to Lease); and
(x) any Ancillary Agreement dated on or
prior to the Closing Date (delivered to the
parties thereto).
(f) Financing Statements. (i) Uniform
Commercial Code ("UCC") financing statements covering
all the security interests (and other interests)
intended to be created by or pursuant to the Indenture
(whether intended to be created as of the Closing Date
or on or after the Exchange Date) shall have been
executed and delivered by the Owner Trustee, as
debtor, and by the Indenture Trustee, as secured
party, for and on behalf of the Holders, and such
financing statements shall have been duly filed or
submitted for filing in the State of Utah and any
other jurisdiction specified by the Indenture Trustee,
Pass Through Trustee or Underwriters (or special
counsel for any of them); and (ii) all other actions
shall have been taken which, in the opinion of the
Indenture Trustee, the Pass Through Trustee or the
Underwriters (or special counsel for any of them), are
necessary or advisable as of the Closing Date to
perfect and maintain the perfection of the security
interest intended to be created by or pursuant to the
Indenture (whether intended to be created as of the
Closing Date or on or after the Exchange Date).
(g) Corporate Documents. Except when such
Person is the delivering party, the Owner Participant,
the Owner Trustee, the Indenture Trustee, the Pass
Through Trustee (acting directly or by authorization
to its counsel) and the Lessee shall have received the
following, in each case in form and substance
satisfactory to it:
(i) copies, certified as of the Closing Date
by the Secretary or an Assistant Secretary of the
Lessee, of the certificate of incorporation and
bylaws of the Lessee and of the resolutions of
the Board of Directors of the Lessee duly
authorizing the lease by the Lessee of the
Aircraft under the Lease and the execution,
delivery and performance by the Lessee of this
Agreement, the Lease, the Tax Indemnity
Agreement, the Pass Through Agreement, the Series
Supplements, the other Operative Agreements to
which the Lessee is or is to be a party and each
other document to be executed and delivered by
the Lessee in connection with the transactions
contemplated hereby together with an incumbency
certificate of the Lessee as to the Person or
Persons authorized to execute and deliver said
documents on behalf of the Lessee and the
signatures of such Person or Persons;
(ii) a copy of the constituent documents of
the Owner Participant and of the certificate of
incorporation and by-laws of the General Partner
thereof, in each case certified as of the Closing
Date by the Secretary or Assistant Secretary of
the General Partner of the Owner Participant, and
a copy of the resolutions of the board of
directors of the General Partner of the Owner
Participant, or other satisfactory evidence of
authority, certified as such by such Secretary
or Assistant Secretary, authorizing the
execution, delivery and performance by such
General Partner, on behalf of the Owner
Participant, of the Operative Agreements to which
the Owner Participant is a party and the taking
of such action duly to authorize the Owner
Participant's participation in the transactions
contemplated hereby and by the other Operative
Agreements, together with an incumbency
certificate of an officer of such General Partner
as to such Person's authority to execute and
deliver said documents on behalf of such General
Partner and the signatures of such Person;
(iii) a copy of the charter and bylaws and
other instruments of First Security Bank of Utah,
National Association, certified as of the Closing
Date by the Secretary or Assistant Secretary of
First Security Bank of Utah, National
Association, and a copy of the resolutions of the
board of directors of First Security Bank of
Utah, National Association, certified as such by
such Secretary or Assistant Secretary as of the
Closing Date, authorizing the execution and
delivery by First Security Bank of Utah, National
Association or the Owner Trustee, as the case may
be, of the Trust Agreement and each of the other
Operative Agreements to which it is or is to be a
party, whether in its individual capacity or as
Owner Trustee, together with an incumbency
certificate of First Security Bank of Utah,
National Association as to the Person or Persons
authorized to execute and deliver said documents
on behalf of First Security Bank of Utah,
National Association (either individually or as
Owner Trustee) and the signatures of such Person
or Persons;
(iv) a copy of the articles of association
and bylaws and other instruments of Nationsbank
of Georgia, National Association, certified as of
the Closing Date by the Secretary or Assistant
Secretary of Nationsbank of Georgia, National
Association which bylaws include a provision,
authorizing the execution and delivery by
Nationsbank of Georgia, National Association or
the Indenture Trustee, as the case may be, of
each of the Operative Agreements to which it is
or is to be a party, together with an incumbency
certificate of Nationsbank of Georgia, National
Association as to the Person or Persons
authorized to execute and deliver said documents
on behalf of Nationsbank of Georgia, National
Association (either individually or as Indenture
Trustee) and the signatures of such Person or
Persons;
(v) a copy of the articles of association
and by-laws of NationsBank of South Carolina,
National Association ("NBSC") certified by the
Secretary or an Assistant Secretary of NBSC as of
the Closing Date, which by-laws include a
provision duly authorizing the execution,
delivery and performance by NBSC or the Pass
Through Trustee, as the case may be, of this
Agreement, the Pass Through Agreement, the Series
Supplements and any other document executed or
authenticated by or on behalf of the Pass Through
Trustee in connection with the transactions
contemplated hereby, together with an incumbency
certificate as to the Person or Persons
authorized to execute and deliver such documents
on behalf of NBSC (either individually or as Pass
Through Trustee), and the signature of such
Person or Persons;
(vi) a copy of the license issued to the LC
Bank by the Superintendent of Banks of the State
of New York, and evidence as to the Person or
Persons authorized to execute and deliver the
Letter of Credit on behalf of the LC Bank and the
signatures of such Person or Persons; and
(vii) such other documents, evidences,
materials, and information with respect to the
Lessee, the Owner Trustee, the Indenture Trustee,
the Owner Participant and the Pass Through
Trustee as the Pass Through Trustee, the
Indenture Trustee, the Lessee, the LC Bank or the
Owner Participant may reasonably request in order
to establish the consummation of the transactions
contemplated by this Agreement.
(h) Officer's Certificate of the Lessee. On
the Closing Date, the following statements shall be
true, and the Pass Through Trustee, the Owner
Participant, the LC Bank, the Owner Trustee and the
Indenture Trustee shall have received a certificate
signed by the Vice President and Treasurer or any
other duly authorized signatory of the Lessee, dated
the Closing Date, stating that:
(i) the representations and warranties of
the Lessee contained in the Lessee Documents
(excluding the Tax Indemnity Agreement, the
Lease, any Lease Supplement and any other Lessee
Document that is not executed and delivered on or
prior to the Closing Date) and in any certificate
delivered pursuant hereto or thereto are true and
correct on and as of the Closing Date as though
made on and as of such date (except to the extent
that such representations and warranties relate
solely to an earlier date, in which case such
certificate shall state that such representations
and warranties were true and correct on and as of
such earlier date);
(ii) except for the matters described under
"Legal Proceedings" in the Lessee's Annual Report
on Form 10-K for the fiscal year ended May 31,
1993 (as updated by Note 7 to the financial
statements included in the Lessee's Quarterly
Reports on Form 10-Q for the fiscal quarters
ended August 31, 1993 and November 30, 1993), as
to which such officer will make no certification
concerning the liability of the Lessee (if any)
or the effect of any adverse determination upon
the consolidated financial condition, business or
operations of the Lessee, no material adverse
change has occurred in the financial condition,
business or operations of the Lessee from that
shown in the unaudited financial statements of
the Lessee as of November 30, 1993 and nothing
has occurred which will, in the judgment of such
officer, materially adversely affect the ability
of the Lessee to carry on its business or to
perform its obligations under this Agreement and
each other Operative Agreement to which it is or
is to be a party.
(i) Officer's Certificate of Owner
Participant. On the Closing Date, the following
statements shall be true, and the Pass Through
Trustee, the Owner Trustee, the Indenture Trustee, the
LC Bank and the Lessee shall have received a
certificate from the Owner Participant, signed by a
duly authorized officer of the Owner Participant,
dated the Closing Date, stating that:
(i) the representations and warranties of
the Owner Participant and any General Partner
thereof contained in this Agreement, the Trust
Agreement, the Agreement to Lease or in any other
Operative Agreement to which the Owner
Participant is a party (excluding the Tax
Indemnity Agreement and any other Operative
Agreement that is not required to be executed on
or prior to the Closing Date), and in any
certificate delivered on or prior to the Closing
Date pursuant hereto or thereto, are true and
correct on and as of the Closing Date as though
made on and as of such date (except to the extent
that such representations and warranties relate
solely to an earlier date, in which case such
certificate shall state that such representations
and warranties were true and correct on and as of
such earlier date);
(ii) there are no Lessor's Liens
attributable to the Owner Participant; and
(iii) no event has occurred and is continuing
which constitutes or, with notice or lapse of
time or both would constitute, a Pre-Funding
Event of Loss or which constitutes or would
constitute, due to any action or inaction on the
part of the Owner Participant or the LC Bank, as
the case may be, an Indenture Default or
Indenture Event of Default.
(j) Other Officer's Certificates.
(i) On the Closing Date, the following
statements shall be true, and the Owner
Participant, the Owner Trustee, the LC Bank, the
Pass Through Trustee, the Indenture Trustee and
the Lessee shall have received a certificate from
each of the Owner Trustee (in the case of the
Lessee, the Owner Participant, the LC Bank, the
Pass Through Trustee and the Indenture Trustee),
the Indenture Trustee (in the case of the Lessee,
Owner Participant, the LC Bank, the Pass Through
Trustee and the Owner Trustee) and the Pass
Through Trustee (in the case of the Owner
Participant, the LC Bank, the Lessee, the Owner
Trustee and the Indenture Trustee), signed by a
duly authorized officer, dated the Closing Date,
stating with respect to the Owner Trustee, the
Pass Through Trustee and the Indenture Trustee,
as the case may be, that:
(A) the representations and warranties
of the Owner Trustee in its individual
capacity and as trustee, the Pass Through
Trustee in its individual capacity and as
trustee, the Indenture Trustee in its
individual capacity and as trustee, and
contained in this Agreement, the Collateral
Agreement and the Indenture, and in any
certificate delivered pursuant hereto or
thereto, are true and correct on and as of
the Closing Date as though made on and as of
such date (except to the extent that such
representations and warranties relate solely
to an earlier date, in which case such
certificate shall state that representations
and warranties were true and correct on and
as of such earlier date);
(B) to the best of its knowledge, no
event has occurred and is continuing, which
constitutes or which, but for the lapse of
time or the giving of notice, or both, would
constitute an Indenture Event of Default; and
(C) with respect to the Owner Trustee,
there are no Lessor's Liens attributable to
First Security Bank of Utah, National
Association or the Owner Trustee.
(ii) On the Closing Date, the representations
and warranties of the LC Bank contained in this
Agreement and in any certificate delivered
pursuant hereto shall be true and correct on and
as of the Closing Date as though made on and as
of such date (except to the extent that such
representations and warranties relate solely to
an earlier date, in which case such certificate
shall state that such representations and
warranties were true and correct on and as of
such earlier date), and the Indenture Trustee,
the Pass Through Trustee and the Lessee shall
have received a certificate from the LC Bank,
signed by a duly authorized officer, dated the
Closing Date, to that effect.
(k) Legal Opinions. Each of the Owner
Participant, the Owner Trustee, the Lessee, the LC
Bank, the Pass Through Trustee, the Underwriters and
the Indenture Trustee (acting directly or by
authorization to its special counsel) shall have
received from the following counsel their respective
legal opinions in each case dated the Closing Date and
reasonably satisfactory to the recipient, as to scope
and substance (and covering such other matters as any
such recipient may reasonably request):
(i) Kenneth Masterson, Esq., Senior Vice
President and General Counsel of the Lessee, in
the form of Exhibit K-1 hereto, addressed to the
Owner Participant, the Owner Trustee, the Pass
Through Trustee, the Underwriters and the Indenture
Trustee;
(ii) Dewey Ballantine, special counsel for
the Owner Participant, its General Partner and
Lufthansa, and Christian Rehm, German counsel to
Lufthansa, in the form of Exhibit L and M-1
hereto, respectively, each addressed to the
Indenture Trustee, the Owner Trustee, the LC
Bank, the Pass Through Trustee, the Underwriters
and the Lessee;
(iii) Powell, Goldstein, Frazer & Murphy,
special counsel for the Indenture Trustee, in the
form of Exhibit N-1 hereto, addressed to the
Owner Participant, the Indenture Trustee, the
Owner Trustee, the LC Bank, the Pass Through
Trustee, the Underwriters and the Lessee;
(iv) Powell, Goldstein, Frazer & Murphy,
special counsel for the Pass Through Trustee, in
the form of Exhibit O hereto, addressed to the
Pass Through Trustee, the Indenture Trustee, the
LC Bank, the Lessee and the Underwriters;
(v) in the case of the Owner Participant,
Dewey Ballantine, tax counsel for the Owner
Participant, addressed to the Owner Participant,
with respect to certain tax matters;
(vi) Ray, Quinney & Nebeker, special counsel
for the Owner Trustee, in the form of Exhibit P-1
hereto, addressed to the Owner Participant, the
Indenture Trustee, the Owner Trustee, the LC
Bank, the Pass Through Trustee, the Underwriters
and the Lessee;
(vii) Davis Polk & Wardwell, special counsel
for the Lessee, in the form of Exhibit Q-1
hereto, addressed to the Owner Participant, the
Indenture Trustee, the Owner Trustee, the Pass
Through Trustee, the Underwriters and the
Lessee; and
(viii) German counsel to the LC Bank and
Milbank, Tweed, Hadley & McCloy, special counsel
for the LC Bank, in the form of Exhibit R and S
hereto, respectively, each addressed to the
Indenture Trustee, the Pass Through Trustee, the
Underwriters and the Lessee.
(l) Appraisal. Each of the Owner
Participant, Indenture Trustee, Pass Through Trustee
and the Underwriters shall have received an appraisal
in form and substance satisfactory to it from a
qualified independent expert satisfactory to it to the
effect that, assuming modification in accordance with
the Original Statement of Work specified in the
Agreement to Lease and the Modification Agreement
(without regard to any Additional Services or any
other optional deviations or variations), the Aircraft
is reasonably estimated to have (i) on the Scheduled
Commencement Date a remaining economic useful life of
at least 125% of the Basic Term, (ii) a fair
market value on each of the Closing Date and (without
including in such value any increase or decrease for
inflation or deflation) the Scheduled Commencement
Date in no event less than the Aircraft Cost, and
(iii) a residual value at the end of the Basic Term of
at least 20% of Aircraft Cost (without considering the
effects of inflation or deflation and assuming the
Aircraft is in compliance with Article 12 of the
Lease); in addition, the appraisal shall state that
the Aircraft is not limited use property. The Lessee
shall have received a copy of such appraisal.
(m) Payment of Taxes.
(i) All taxes, fees, charges, assessments,
costs and other expenses then due and payable in
connection with the execution, delivery,
recording and filing of all financing statements
and the other documents and instruments referred
to in subparagraphs (f) of this Section 4.01 and
the issuance of the Certificates and Pass Through
Certificates shall have been duly paid or caused
to be paid in full by the Owner Participant.
(ii) All taxes, fees, customs and duties then
payable or requested to be paid pursuant to
Section 6 of the Sales Agreement, and all sales
and use taxes relating to the sale of the
Aircraft to the Owner Trustee, shall have been
paid.
(n) No Indenture Default. No Indenture
Default or Indenture Event of Default has occurred and
is continuing.
(o) Pre-Funding Event of Loss. No Pre-
Funding Event of Loss with respect to the Aircraft or
event which with the passage of time or if continued
unremedied or unaltered would constitute a Pre-Funding
Event of Loss with respect to the Aircraft, shall have
occurred and be in existence.
(p) Governmental Compliance. All
appropriate action required to have been taken by the
Federal Aviation Administration, or any governmental
or political agency, subdivision or instrumentality of
the United States, prior to the Closing Date in
connection with the transactions contemplated by this
Agreement shall have been taken, and all orders,
permits, waivers, authorizations, exemptions and
approvals (collectively "permits") of such entities
required to be in effect on the Closing Date in
connection with the transactions contemplated by this
Agreement shall have been issued, and all such permits
shall be in full force and effect on the Closing Date.
(q) Other Agreements. The Lessee and the
Pass Through Trustee shall have entered into the Pass
Through Agreement and the Series Supplements, all
conditions to the effectiveness of each thereof shall
have been satisfied or waived, and the Pass Through
Certificates shall have been issued pursuant to the
Series Supplements. The Lessee shall have entered
into the Underwriting Agreement, all conditions to the
effectiveness thereof shall have been satisfied or
waived, and the Pass Through Certificates shall have
been delivered pursuant to the Underwriting Agreement.
(r) Title. The Owner Trustee shall have
received from Lufthansa good and marketable title to
the Aircraft, subject to no Liens other than any Liens
permitted by the Sales Agreement and any Liens created
by the Agreement to Lease and the Modification
Agreement.
Section 4.01A. Condition Precedent to
Obligations of LC Bank. In addition to any applicable
condition set forth in Section 4.01 hereof, the
obligation of the LC Bank to deliver the Letter of
Credit on the Closing Date pursuant to
Section 2.01(a)(iii) hereof is subject only to its
receipt, on or prior to the Closing Date, of the
Indemnification Agreement executed by each of the
parties thereto other than the LC Bank.
Section 4.02 Conditions Precedent to Lease
on the Commencement Date. The obligations of the
Owner Trustee to lease the Aircraft to the Lessee on
the Commencement Date pursuant to the Lease, and of
the Owner Participant to (x) cause such lease by the
Owner Trustee and (y) make available any amount
pursuant to Section 3.03 hereof, are subject to the
fulfillment to the satisfaction of such party, as of
the Commencement Date, of the following conditions
precedent:
(a) Legal Investment. No change shall have
occurred after the date of this Agreement in
applicable laws or regulations, or interpretations of
any such laws or regulations by applicable regulatory
authorities, which, in the opinion of the Owner
Participant or its special counsel or the Lessee,
would make it illegal for the Owner Participant, the
Lessee or the Owner Trustee, and no change in
circumstances outside the control of the Owner
Participant or the Lessee, shall have occurred which
would otherwise make it illegal for the Owner
Participant, the Lessee or the Owner Trustee, to
participate in the transaction to be consummated on
the Commencement Date (other than the release of the
Debt Portion as contemplated hereby and by the
Collateral Agreement); and no action or proceeding
shall have been instituted nor shall governmental
action before any court, governmental authority or
agency be threatened which in the opinion of counsel
for the Owner Participant or the Lessee, is not
frivolous, nor shall any order have been issued or
proposed to be issued by any court, or governmental
authority or agency, as of the Commencement Date, to
set aside, restrain, enjoin or prevent the
consummation of any of the transactions contemplated
by this Agreement or by any of the other Operative
Agreements (other than the release of the Debt Portion
as contemplated hereby and by the Collateral
Agreement).
(b) Documents. Each of the agreements set
forth in Section 4.01(e) and each of the following
documents shall have been duly authorized, executed
and delivered by the respective party or parties
thereto, shall each be satisfactory in form and
substance to the Lessee and the Owner Participant
(each acting directly or by authorization to its
special counsel), and shall each be in full force and
effect; there shall not have occurred any default
thereunder, or any event which with the lapse of time
or the giving of notice or both would be a default
thereunder, and copies executed or certified as
requested by the Lessee or the Owner Participant, as
the case may be, of such documents shall have been
delivered to the Owner Participant, the Lessee and the
Owner Trustee (provided that the sole original
counterpart of the Lease and the Lease Supplement
shall be delivered in New York, New York, to the
Indenture Trustee on the Exchange Date):
(i) the Lease;
(ii) the Lease Supplement covering the
Aircraft, dated the Commencement Date;
(iii) the Trust Agreement Supplement covering
the Aircraft, dated the Commencement Date;
(iv) an AC Form 8050-2 Bill of Sale covering
the Aircraft (the "FAA Bill of Sale"), executed
by Lufthansa in favor of the Owner Trustee and
dated on or prior to the Commencement Date (the
full warranty bill of sale referred to in Section
4.01(e)(vi) above, together with the FAA Bill of
Sale, are collectively called the "Bills of
Sale");
(v) the Aircraft Acceptance Receipt covering
the Aircraft;
(vi) in the case of the Owner Participant
only, the Tax Indemnity Agreement; and
(vii) any Ancillary Agreement not covered by
Section 4.01(e)(x) hereof (delivered to the
parties thereto).
(c) Insurance. Each of the Owner
Participant and the Owner Trustee shall have received
such evidence as it deems appropriate, including,
without limitation, an independent insurance broker's
report, together with certificates of insurance from
such broker, dated the Commencement Date, in form and
substance satisfactory to each of the Owner
Participant and the Owner Trustee to establish that
the insurance required by Article 13 of the Lease is
in effect.
(d) Financing Statements. With respect to
the Owner Participant only, a notice filing describing
the Lease as a lease shall have been executed and
delivered by the Owner Trustee, as lessor, and the
Lessee, as lessee (which filing shall name the
Indenture Trustee as assignee of the Owner Trustee as
of the Exchange Date), and shall have been duly filed
in the State of Tennessee and any other jurisdiction
specified by the Owner Trustee or the Indenture
Trustee; and all other actions shall have been taken
which, in the opinion of special counsel for the Owner
Participant are necessary or advisable to perfect and
protect security interests and other interests
intended to be created by or pursuant to the Operative
Agreements.
(e) Title, Airworthiness and Registration.
On the Commencement Date, the following statements
shall be true and the Lessee and Owner Trustee shall
have received evidence from the Owner Participant (in
the case of clauses (i) and (ii)), and the Owner
Participant and the Owner Trustee shall have received
evidence from the Lessee (in the case of clauses (iii)
and (iv)), in each case reasonably satisfactory to
each such Person to the effect that:
(i) the Owner Trustee has good and
marketable title to the Aircraft, free and clear
of Liens, except for Liens (other than Lessor's
Liens) permitted by Section 6.01 of the Lease;
(ii) the Aircraft has been duly certified by
the Aeronautics Authority as to type and
airworthiness in accordance with the terms of the
Operative Agreements;
(iii) the Lease and the Lease Supplement
covering the Aircraft and the Trust Agreement and
Trust Agreement Supplement (with affidavits
attached thereto) shall have been duly filed for
recordation (or shall be in the process of being
so duly filed for recordation) with the
Aeronautics Authority pursuant to the Act; and
(iv) application to the Aeronautics Authority
for registration of the Aircraft in the name of
the Owner Trustee shall have been duly made and
the Lessee shall have temporary or permanent
authority to operate the Aircraft pursuant to the
Lease.
(f) Corporate Documents. Except when such
Person is the delivering party, the Owner Participant,
the Owner Trustee (acting directly or by authorization
to its counsel) and the Lessee shall have received the
following, in each case in form and substance
satisfactory to it:
(i) copies, certified as of the Commencement
Date by the Secretary or an Assistant Secretary
of the Lessee, of the certificate of
incorporation and bylaws of the Lessee and the
resolutions of the Board of Directors of the
Lessee duly authorizing the lease by the Lessee
of the Aircraft under the Lease and the
execution, delivery and performance by the Lessee
of the Lease, the Lease Supplement covering the
Aircraft, the Tax Indemnity Agreement and each
other document to be executed and delivered by
the Lessee in connection with the transactions
contemplated hereby, and a statement that the
resolutions of the Board of Directors delivered
pursuant to Section 4.01(g)(i) hereof remain in
full force and effect together with an
incumbency certificate of the Lessee as to the
Person or Persons authorized to execute and
deliver said documents on behalf of the Lessee
and the signatures of such Person or Persons;
(ii) a copy of the constituent documents of
the Owner Participant and of the certificate of
incorporation and by-laws of the General Partner
thereof, in each case certified as of the
Commencement Date by the Secretary or Assistant
Secretary of the General Partner of the Owner
Participant, and a copy of the resolutions of the
board of directors of the General Partner of the
Owner Participant, or other satisfactory evidence
of authority, certified as such by such Secretary
or Assistant Secretary, authorizing the
execution, delivery and performance by such
General Partner, on behalf of the Owner
Participant, of the Operative Agreements to which
the Owner Participant is a party and the taking
of such action duly to authorize the Owner
Participant's participation in the transactions
contemplated hereby and by the other Operative
Agreements, together with an incumbency
certificate as the officer of such General
Partner as to such Person's authority to execute
and deliver said documents on behalf of such
General Partner and the signatures of such
Person;
(iii) a copy of the charter and bylaws and
other instruments of First Security Bank of Utah,
National Association, certified as of the
Commencement Date by the Secretary or Assistant
Secretary of First Security Bank of Utah,
National Association, and a copy of the
resolutions of the board of directors of First
Security Bank of Utah, National Association,
certified as such by such Secretary or Assistant
Secretary as of the Commencement Date,
authorizing the execution and delivery by First
Security Bank of Utah, National Association or
the Owner Trustee, as the case may be, of the
Trust Agreement, the Trust Agreement Supplement
covering the Aircraft and each of the other
Operative Agreements to which it is or is to be a
party, whether in its individual capacity or as
Owner Trustee, together with an incumbency
certificate of First Security Bank of Utah,
National Association as to the Person or Persons
authorized to execute and deliver said documents
on behalf of First Security Bank of Utah,
National Association (either individually or as
Owner Trustee) and the signatures of such Person
or Persons; and
(iv) such other documents, evidences,
materials, and information with respect to the
Lessee, the Owner Trustee and the Owner
Participant as the Lessee, the Owner Trustee or
the Owner Participant may reasonably request in
order to establish the consummation of the
transactions contemplated by this Agreement.
(g) Officer's Certificate of Lessee. On the
Commencement Date, the following statements shall be
true, and the Owner Participant and the Owner Trustee
shall have received a certificate signed by the Vice
President and Treasurer or any other duly authorized
signatory of the Lessee, dated the Commencement Date,
stating that:
(i) the representations and warranties of
the Lessee contained in this Agreement and the
other Lessee Documents (excluding the Tax
Indemnity Agreement) and in any certificate
delivered pursuant hereto or thereto are true and
correct on and as of the Commencement Date as
though made on and as of such date (except to the
extent that such representations and warranties
relate solely to an earlier date, in which case
such certificate shall state that such
representations and warranties were true and
correct on and as of such earlier date);
(ii) except for the matters described under
"Legal Proceedings" in the Lessee's Annual Report
on Form 10-K for the most recently ended fiscal
year for which such Annual Report is available
(as updated by Note 7 to the financial statements
included in the Lessee's Quarterly Reports on
Form 10-Q filed for each fiscal quarter, if any,
subsequent to such Annual Report), as to which
such officer will make no certification
concerning the liability of the Lessee (if any)
or the effect of any adverse determination upon
the consolidated financial condition, business or
operations of the Lessee, no material adverse
change has occurred in the financial condition,
business or operations of the Lessee from that
shown in the audited or unaudited, as the case
may be, financial statements of the Lessee as of
the Lessee's most recently filed Annual Report or
Quarterly Report, as the case may be, and nothing
has occurred which will, in the judgment of such
officer, materially adversely affect the ability
of the Lessee to carry on its business or to
perform its obligations under this Agreement and
each other Operative Agreement to which it is or
is to be a party.
(iii) no event has occurred and is continuing
which constitutes an Event of Loss (or event
which with the passage of time would become an
Event of Loss) with respect to the Airframe or
any Engine, or a Default or Event of Default
under the Lease.
(h) Officer's Certificate of Owner
Participant. On the Commencement Date, the following
statements shall be true, and the Pass Through
Trustee, the Owner Trustee and the Lessee shall have
received a certificate from the Owner Participant
signed by a duly authorized officer of the Owner
Participant, dated the Commencement Date, stating
that:
(i) the representations and warranties of
the Owner Participant and any General Partner
thereof contained in this Agreement, the Trust
Agreement, the Agreement to Lease or in any other
Operative Agreement to which the Owner
Participant is a party (excluding the Tax
Indemnity Agreement), and in any certificate
delivered on or prior to the Commencement Date
pursuant hereto or thereto, are true and correct
on and as of the Commencement Date as though made
on and as of such date (except to the extent that
such representations and warranties relate solely
to an earlier date, in which case such
certificate shall state that such representations
and warranties were true and correct on and as of
such earlier date);
(ii) there are no Lessor's Liens
attributable to the Owner Participant; and
(iii) no event has occurred and is continuing
which constitutes or, with notice or lapse of
time or both would constitute, an Event of Loss.
(i) Other Officer's Certificates. On the
Commencement Date, the following statements shall be
true, and the Owner Participant and the Lessee shall
have received a certificate from the Owner Trustee,
signed by a duly authorized officer, dated the
Commencement Date, stating with respect to the Owner
Trustee that:
(i) the representations and warranties of
the Owner Trustee in its individual capacity and
as trustee, and contained in this Agreement, the
Lease, the Collateral Agreement and the
Indenture, and in any certificate delivered
pursuant hereto or thereto, are true and correct
on and as of the Commencement Date as though made
on and as of such date (except to the extent that
such representations and warranties relate solely
to an earlier date, in which case such
certificate shall state that representations and
warranties were true and correct on and as of
such earlier date);
(ii) to the best of its knowledge, no event
has occurred and is continuing, which constitutes
or which, but for the lapse of time or the giving
of notice, or both, would constitute, an Event of
Default; and
(iii) there are no Lessor's Liens attributable
to it (in its individual capacity or as trustee).
(j) Legal Opinions. Each of the Owner
Participant, the Owner Trustee and the Lessee (acting
directly or by authorization to its special counsel)
shall have received from the following counsel their
respective legal opinions in each case reasonably
satisfactory to the recipient, as to scope and
substance (and covering such other matters as any such
recipient may reasonably request) and dated the
Commencement Date:
(i) Kenneth Masterson, Esq., Senior Vice
President and General Counsel of the Lessee, in
the form of Exhibit K-2 hereto, addressed to the
Owner Participant and the Owner Trustee;
(ii) Dewey Ballantine, special counsel for
the Owner Participant and Lufthansa, in the form
of Exhibit L-2 hereto, and (if an OP Guarantee is
required pursuant hereto) an opinion from German
counsel to Lufthansa, in the form of Exhibit M-2
hereto, each addressed to the Owner Trustee and
the Lessee;
(iii) Daugherty, Fowler & Peregrin, in the
form of Exhibit T hereto, addressed to the Owner
Participant, the Owner Trustee and the Lessee;
(iv) Ray, Quinney & Nebeker, special counsel
for the Owner Trustee, in the form of Exhibit P-2
hereto, addressed to the Owner Participant, the
Owner Trustee and the Lessee; and
(v) Davis Polk & Wardwell, special counsel
for the Lessee, in the form of Exhibit Q-2
hereto, addressed to the Owner Participant, the
Owner Trustee and the Lessee.
(k) Event of Default, Default; Event of
Loss. No Default or Event of Default shall exist upon
execution of the Lease, and no Event of Loss or event
which with the passage of time or if continued
unremedied or unaltered would constitute an Event of
Loss, shall have occurred or be in existence.
(l) Payment of Taxes. In the case of the
Lessee only, all taxes, fees, charges, assessments,
costs and other expenses then due and payable in
connection with obtaining the certification referred
to in Section 4.02(e)(ii) shall have been paid in full
by the Owner Participant. In the case of the Owner
Participant and Owner Trustee only, all taxes, fees,
assessments costs and other expenses then due and
payable in connection with the execution, delivery,
recording and filing of all financing statements and
the other documents and instruments referred to in
Section 4.02(d), Section 4.02(e)(iii) and
Section 4.02(e)(iv) hereof shall have been paid in
full by the Lessee.
(m) Other Commitments; Approvals. All
approvals and consents of any trustees or holders of
any indebtedness or obligations of the Lessee, which
in the opinion of the Owner Participant are required
in connection with any transaction contemplated by
this Agreement, shall have been duly obtained.
(n) Governmental Compliance. All
appropriate action required to have been taken by the
Federal Aviation Administration, or any governmental
or political agency, subdivision or instrumentality of
the United States, prior to the Commencement Date in
connection with the transactions contemplated by this
Agreement shall have been taken, and all orders,
permits, waivers, authorizations, exemptions and
approvals (collectively "permits") of such entities
required to be in effect on the Commencement Date in
connection with the transactions contemplated by this
Agreement shall have been issued, and all such permits
shall be in full force and effect on the Commencement
Date.
Section 4.03 Conditions Precedent to Release
of Debt Portion from the Collateral Account. The
obligations of the Indenture Trustee to release the
Debt Portion (or such lesser amount as may be in the
Collateral Account) pursuant to Section 7(e) of the
Collateral Agreement, are subject to the fulfillment
to the satisfaction of the Indenture Trustee, as of
the Exchange Date, of the following conditions
precedent; provided, however, that to the extent that
any of the conditions set forth below shall have been
satisfied by the delivery of documents on the
Commencement Date pursuant to Section 4.02 hereof,
such conditions (to such extent) shall be deemed
satisfied for purposes of this Section 4.03:
(a) Notice and Lease Commencement. (i) The
Indenture Trustee shall have received at least four
(4) Frankfurt Business Days' notice of the
Commencement Date in accordance with Section 3.01
hereof and (ii) all of the conditions precedent set
forth in Sections 4.02 and 5.01 hereof shall have been
satisfied or waived by the Owner Trustee, the Owner
Participant or the Lessee, as appropriate.
(b) Certificates. (i) The Certificates
shall not have been prepaid or accelerated, (ii)
notice of prepayment of the Certificates shall not
have been given and no Deemed Event of Loss or Pre-
Funding Event of Loss with respect to the Aircraft
shall have occurred, (iii) the Cut-off Date shall not
have occurred, (iv) no Indenture Default or Indenture
Event of Default shall be continuing and (v) the Owner
Participant shall have paid to the Owner Trustee the
amount required pursuant to Section 3.03 hereof.
(c) Legal Investment. No change shall have
occurred after the date of this Agreement in
applicable laws or regulations, or interpretations of
any such laws or regulations by applicable regulatory
authorities, which, in the opinion of the Indenture
Trustee or its special counsel, would make it illegal
for the Indenture Trustee, and no change in
circumstances outside the control of the Indenture
Trustee, shall have occurred which would otherwise
make it illegal for the Indenture Trustee, to
participate in the transaction to be consummated on
the Exchange Date; and no action or proceeding shall
have been instituted nor shall governmental action
before any court, governmental authority or agency be
threatened which in the opinion of counsel for the
Indenture Trustee, is not frivolous, nor shall any
order have been issued or proposed to be issued by any
court, or governmental authority or agency, as of the
Exchange Date, to set aside, restrain, enjoin or
prevent the consummation of any of the transactions
contemplated by this Agreement or by any of the other
Operative Agreements.
(d) Documents. Each of the agreements set
forth in Section 4.01(e) and each of the following
documents shall have been duly authorized, executed
and delivered by the respective party or parties
thereto, shall each be satisfactory in form and
substance to the Indenture Trustee (acting directly or
by authorization to its special counsel), and shall
each be in full force and effect; there shall not have
occurred any default thereunder, or any event which
with the lapse of time or the giving of notice or both
would be a default thereunder, and copies executed or
certified as requested by the Indenture Trustee of
such documents shall have been delivered to the
Indenture Trustee (provided that the sole original
counterpart of the Lease and the Lease Supplement
shall be delivered in New York, New York, to the
Indenture Trustee on the Exchange Date):
(i) the Lease;
(ii) the Lease Supplement and the Trust
Agreement Supplement covering the Aircraft, each
dated the Commencement Date;
(iii) the Indenture and Security Agreement
Supplement covering the Aircraft, dated the
Exchange Date;
(iv) the FAA Bill of Sale, executed by
Lufthansa in favor of the Owner Trustee and dated
on or prior to the Commencement Date;
(v) the Aircraft Acceptance Receipt covering
the Aircraft; and
(vi) any Ancillary Agreement not covered by
Section 4.01(e)(x) hereof (delivered to the
parties thereto).
(e) Insurance. The Indenture Trustee shall
have received such evidence as it deems appropriate,
including, without limitation, an independent
insurance broker's report, together with certificates
of insurance from such broker, dated the Commencement
Date, in form and substance satisfactory to the
Indenture Trustee to establish that the insurance
required by Article 13 of the Lease is in effect.
(f) Financing Statements. (i) The UCC
financing statements referred to in Section 4.01(f)(i)
shall have been filed in accordance therewith and
shall continue to be in full force and effect; and all
other actions shall have been taken which, in the
opinion of the Indenture Trustee (or its special
counsel) are necessary or advisable to perfect and
protect the security interests and other interests
intended to be created by or pursuant to the Indenture
(whether intended to be created as of the Closing Date
or on or after the Exchange Date); and (ii) the notice
filing referred to in Section 4.02(d) hereof shall
have been executed and delivered by the Owner Trustee,
as lessor, and the Lessee, as lessee (which filing
shall name the Indenture Trustee as assignee of the
Owner Trustee), and shall have been duly filed in the
State of Tennessee and any other jurisdiction
specified by the Indenture Trustee; and (iii) all
other actions shall have been taken which, in the
opinion of special counsel for the Indenture Trustee
are necessary or advisable to perfect and protect
security interests and other interests intended to be
created by or pursuant to the Operative Agreements.
(g) Title, Airworthiness and Registration.
On the Exchange Date, the following statements shall
be true and the Indenture Trustee shall have received
evidence from the Owner Participant (in the case of
clauses (i) and (ii)), and from the Lessee (in the
case of clauses (iii) and (iv)), in each case
reasonably satisfactory to each such Person to the
effect that:
(i) the Owner Trustee has good and
marketable title to the Aircraft, free and clear
of Liens, except for Liens (other than Lessor's
Liens) permitted by Section 6.01 of the Lease;
(ii) the Aircraft has been duly certified by
the Aeronautics Authority as to type and
airworthiness in accordance with the terms of the
Operative Agreements;
(iii) the Lease and the Lease Supplement
covering the Aircraft, the Trust Agreement and
Trust Agreement Supplement covering the Aircraft
(with affidavits attached thereto) and the
Indenture and the Indenture and Security
Agreement covering the Aircraft, shall have been
duly filed for recordation (or shall be in the
process of being so duly filed for recordation)
with the Aeronautics Authority pursuant to the
Act; and
(iv) application to the Aeronautics Authority
for registration of the Aircraft in the name of
the Owner Trustee shall have been duly made and
the Lessee shall have temporary or permanent
authority to operate the Aircraft pursuant to the
Lease.
(h) Corporate Documents. The Owner
Participant, the Owner Trustee and the Lessee shall
have received the following, in each case in form and
substance satisfactory to it:
(i) copies, certified as of the Exchange
Date by the Secretary or an Assistant Secretary
of the Lessee, of the certificate of
incorporation and bylaws of the Lessee and the
resolutions of the Board of Directors of the
Lessee duly authorizing the lease by the Lessee
of the Aircraft under the Lease and the
execution, delivery and performance by the Lessee
of the Lease, the Lease Supplement covering the
Aircraft, the Tax Indemnity Agreement and each
other document to be executed and delivered by
the Lessee in connection with the transactions
contemplated hereby together with (A) an
incumbency certificate of the Lessee as to the
Person or Persons authorized to execute and
deliver said documents on behalf of the Lessee
and the signatures of such Person or Persons and
(B) a statement that the resolutions of the Board
of Directors of the Lessee delivered pursuant to
Section 4.01(g)(i) hereof remain in full force
and effect;
(ii) a copy of the constituent documents of
the Owner Participant and of the certificate of
incorporation and by-laws of the General Partner
thereof, in each case certified as of the
Exchange Date by the Secretary or Assistant
Secretary of the General Partner of the Owner
Participant, and a copy of the resolutions of the
board of directors of the General Partner of the
Owner Participant, or other satisfactory evidence
of authority, certified as such by such
Secretary or Assistant Secretary, authorizing the
execution, delivery and performance by such
General Partner, on behalf of the Owner
Participant, of the Operative Agreements to which
the Owner Participant is a party and the taking
of such action duly to authorize the Owner
Participant's participation in the transactions
contemplated hereby and by the other Operative
Agreements, together with an incumbency
certificate as the officer of such General
Partner as to such Person's authority to execute
and deliver said documents on behalf of such
General Partner and the signatures of such
Person;
(iii) a copy of the charter and bylaws and
other instruments of First Security Bank of Utah,
National Association, certified as of the
Exchange Date by the Secretary or Assistant
Secretary of First Security Bank of Utah,
National Association, and a copy of the
resolutions of the board of directors of First
Security Bank of Utah, National Association,
certified as such by such Secretary or Assistant
Secretary as of the Exchange Date, authorizing
the execution and delivery by First Security Bank
of Utah, National Association or the Owner
Trustee, as the case may be, of the Trust
Agreement and each of the other Operative
Agreements to which it is or is to be a party,
whether in its individual capacity or as Owner
Trustee, together with an incumbency certificate
of First Security Bank of Utah, National
Association as to the Person or Persons
authorized to execute and deliver said documents
on behalf of First Security Bank of Utah,
National Association (either individually or as
Owner Trustee) and the signatures of such Person
or Persons; and
(iv) such other documents, evidences,
materials, and information with respect to the
Lessee, the Owner Trustee and the Owner
Participant as the Indenture Trustee may
reasonably request in order to establish the
consummation of the transactions contemplated by
this Agreement.
(i) Officer's Certificate of Lessee. On the
Exchange Date, the following statements shall be true,
and the Indenture Trustee shall have received a
certificate signed by the Vice President and Treasurer
or any other duly authorized signatory of the Lessee,
dated the Commencement Date, stating that:
(i) the representations and warranties of
the Lessee contained in this Agreement and the
other Lessee Documents (excluding the Tax
Indemnity Agreement) and in any certificate
delivered pursuant hereto or thereto are true and
correct on and as of the Exchange Date as though
made on and as of such date (except to the extent
that such representations and warranties relate
solely to an earlier date, in which case such
certificate shall state that such representations
and warranties were true and correct on and as of
such earlier date);
(ii) except for the matters described under
"Legal Proceedings" in the Lessee's Annual Report
on Form 10-K for the most recently ended fiscal
year for which such Annual Report is available
(as updated by Note 7 to the financial statements
included in the Lessee's Quarterly Reports on
Form 10-Q filed for each fiscal quarter, if any,
subsequent to such Annual Report), as to which
such officer will make no certification
concerning the liability of the Lessee (if any)
or the effect of any adverse determination upon
the consolidated financial condition, business or
operations of the Lessee, no material adverse
change has occurred in the financial condition,
business or operations of the Lessee from that
shown in the audited or unaudited, as the case
may be, financial statements of the Lessee as of
the Lessee's most recently filed Annual Report or
Quarterly Report, as the case may be, and nothing
has occurred which will, in the judgment of such
officer, materially adversely affect the ability
of the Lessee to carry on its business or to
perform its obligations under this Agreement and
each other Operative Agreement to which it is or
is to be a party.
(iii) no event has occurred and is continuing
which constitutes an Event of Loss (or event
which with the passage of time would become an
Event of Loss) with respect to the Airframe or
any Engine, or a Default or Event of Default
under the Lease.
(j) Officer's Certificates of Owner
Participant. On the Exchange Date, the following
statements shall be true, and the Indenture Trustee
shall have received a certificate from the Owner
Participant signed by a duly authorized officer of the
Owner Participant, dated the Commencement Date,
stating that:
(i) the representations and warranties of
the Owner Participant and any General Partner
thereof contained in this Agreement, the Trust
Agreement, the Agreement to Lease or in any other
Operative Agreement to which the Owner
Participant is a party (excluding the Tax
Indemnity Agreement), and in any certificate
delivered on or prior to the Exchange Date
pursuant hereto or thereto, are true and correct
on and as of the Exchange Date as though made on
and as of such date (except to the extent that
such representations and warranties relate solely
to an earlier date, in which case such
certificate shall state that such representations
and warranties were true and correct on and as of
such earlier date);
(ii) there are no Lessor's Liens
attributable to the Owner Participant; and
(iii) no event has occurred and is continuing
which constitutes or, with notice or lapse of
time or both would constitute, an Event of Loss
or which constitutes or would constitute, an
Indenture Default or Indenture Event of Default
attributable to the Owner Participant.
(k) Other Officer's Certificates. On the
Exchange Date, the following statements shall be true,
and the Indenture Trustee shall have received a
certificate from the Owner Trustee, signed by a duly
authorized officer, dated the Exchange Date, stating
with respect to the Owner Trustee, that:
(i) the representations and warranties of
the Owner Trustee in its individual capacity and
as trustee, and contained in this Agreement, the
Lease, the Indenture and the Collateral
Agreement, and in any certificate delivered
pursuant hereto or thereto, are true and correct
on and as of the Commencement Date as though made
on and as of such date (except to the extent that
such representations and warranties relate solely
to an earlier date, in which case such
certificate shall state that representations and
warranties were true and correct on and as of
such earlier date);
(ii) to the best of its knowledge, no event
has occurred and is continuing, which constitutes
or which, but for the lapse of time or the giving
of notice, or both, would constitute, an Event of
Default or an Indenture Event of Default; and
(iii) with respect to the Owner Trustee, there
are no Lessor's Liens attributable to it (in its
individual capacity or as trustee).
(l) Legal Opinions. The Indenture Trustee
(acting directly or by authorization to its special
counsel) shall have received from the following
counsel their respective legal opinions in each case
reasonably satisfactory to the recipient, as to scope
and substance (and covering such other matters as any
such recipient may reasonably request):
(i) Kenneth Masterson, Esq., Senior Vice
President and General Counsel of the Lessee, in
the form of Exhibit K-2 hereto, addressed to the
Indenture Trustee and dated the Commencement
Date;
(ii) Dewey Ballantine, special counsel for
the Owner Participant and Lufthansa, in the form
of Exhibit L-2 hereto, and (if an OP Guarantee is
required pursuant hereto) an opinion of German
counsel to Lufthansa, in the form of Exhibit M-2
hereto, each addressed to the Indenture Trustee
and dated the Exchange Date.
(iii) Powell, Goldstein, Frazer & Murphy,
special counsel for the Indenture Trustee, in the
form of Exhibit N-2 hereto, addressed to the
Indenture Trustee and dated the Exchange Date;
(iv) Daugherty, Fowler & Peregrin, in the
form of Exhibit T hereto, addressed to the
Indenture Trustee and dated the Exchange Date;
(v) Ray, Quinney & Nebeker, special counsel
for the Owner Trustee, in the form of Exhibit P-2
hereto, addressed to the Indenture Trustee and
dated the Exchange Date; and
(vi) Davis Polk & Wardwell, special counsel
for the Lessee, in the form of Exhibit Q-2
hereto, addressed to the Indenture Trustee and
dated the Exchange Date.
Except to the extent otherwise provided in any form of
opinion referred to in this Section 4.03(l), if the
Exchange Date does not occur on the Commencement Date,
any condition precedent requiring that an opinion
referred to be dated the Exchange Date pursuant to
this Section 4.03(l) shall be deemed satisfied by
delivery of such opinion dated the Commencement Date.
(m) Event of Default, Default; Event of
Loss. No Default or Event of Default shall exist upon
execution of the Lease, and no Event of Loss or event
which with the passage of time or if continued
unremedied or unaltered would constitute an Event of
Loss, shall have occurred or be in existence.
(n) Payment of Taxes. All taxes, fees,
charges, assessments, costs and other expenses then
due and payable (i) in connection with the execution,
delivery, recording and filing of all financing
statements and the other documents and instruments
referred to in Section 4.01(f) hereof and in
connection with obtaining the certification referred
to in Section 4.02(e)(ii) shall have been paid in full
by the Owner Participant; (ii) in connection with the
execution, delivery, recording and filing of all
financing statements and the other documents and
instruments referred to in Section 4.02(d),
Section 4.02(e)(iii) and Section 4.02(e)(iv) hereof
shall have been paid in full by the Lessee; and (iii)
in connection with the issuance of the Certificates
and Pass Through Certificates shall have been duly
paid or caused to be paid in full by the Owner
Participant.
(o) Other Commitments; Approvals. All
approvals and consents of any trustees or holders of
any indebtedness or obligations of the Lessee, which
in the opinion of the Indenture Trustee are required
in connection with any transaction contemplated by
this Agreement, shall have been duly obtained.
(p) Governmental Compliance. All
appropriate action required to have been taken by the
Federal Aviation Administration, or any governmental
or political agency, subdivision or instrumentality of
the United States, on or prior to the Exchange Date in
connection with the transactions contemplated by this
Agreement shall have been taken, and all orders,
permits, waivers, authorizations, exemptions and
approvals (collectively "permits") of such entities
required to be in effect on the Exchange Date in
connection with the transactions contemplated by this
Agreement shall have been issued, and all such permits
shall be in full force and effect on the Exchange
Date.
Section 4.04. Opinion of Special Aviation
Counsel Upon Registration. Promptly upon the
registration of the Aircraft, the filing pursuant to
the Act of the Trust Agreement and Trust Agreement
Supplement and the recording pursuant to the Act of
the Lease (with the Lease Supplement covering the
Aircraft, the Indenture and the Indenture and Security
Agreement Supplement covering the Aircraft attached as
exhibits) and the Indenture (with the Indenture and
Security Agreement Supplement covering the Aircraft
attached as an exhibit), the Lessee shall cause
Special Aviation Counsel to deliver to the Owner
Participant, the Lessee, the Owner Trustee, the Pass
Through Trustee and the Indenture Trustee an opinion
as to (i) the due registration of the Aircraft in the
name of the Owner Trustee and (ii) the due recording
pursuant to the Act of the Lease (with such Lease
Supplement, the Indenture and such Indenture and
Security Agreement Supplement attached as exhibits)
and the Indenture (with such Indenture and Security
Agreement Supplement attached as an exhibit);
provided, however, that if the Exchange Date does not
occur on the Commencement Date, the opinion required
by this Section 4.04, to the extent relating to the
Indenture and the Indenture and Security Agreement
Supplement, need not be provided until the Exchange
Date.
ARTICLE 5
CONDITIONS PRECEDENT TO LESSEE'S OBLIGATIONS
Section 5.01. Conditions Precedent to
Lessee's Obligations on the Commencement Date. The
Lessee's obligation to lease the Aircraft on the
Commencement Date from the Owner Trustee pursuant to
the Lease is subject only to satisfaction of the
conditions set forth in the Agreement to Lease with
respect to the Aircraft and to the satisfaction of the
conditions that, prior to or on the Commencement Date,
the Lessee shall have received the certificates and
other documents which are referred to in, or the
opinions to be addressed to it under, paragraphs
(e)(i) and (ii); (f)(ii), (iii) and, except to the
extent relating to documents of the Lessee, (iv); (h);
(i); (j); (k) (to the extent relating to an Event of
Loss); and (l) of Section 4.02 hereof.
ARTICLE 6
LESSEE'S REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 6.01. Lessee's Representations and
Warranties. The Lessee represents and warrants to the
Owner Participant, the Owner Trustee (in its
individual capacity and as Owner Trustee), the Pass
Through Trustee (in its individual capacity and as
Pass Through Trustee) and the Indenture Trustee (in
its individual capacity and as Indenture Trustee)
that, except as otherwise specified in paragraphs (e),
(o), (r) and (s) of this Section 6.01, on the date
hereof and as of the Closing Date, the Commencement
Date and, if the Exchange Date does not occur on the
Commencement Date, the Exchange Date:
(a) the Lessee 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 Lessee require such
qualification;
(b) the Lessee 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 this Agreement and the
other Operative Agreements to which it is or is to be
a party;
(c) the Lessee is an "air carrier" within
the meaning of the Act and a holder of a certificate
under Sections 401 and 418 of the Act and an "air
carrier operating certificate" issued under Section
604 of the Act and each such certificate is in full
force and effect;
(d) the Lessee possesses all necessary
certificates, franchises, licenses, permits, rights
and concessions and consents (collectively "permits")
which are material to the operation of the routes
flown by it and the conduct of its business and
operations as currently conducted and each such permit
is in full force and effect;
(e) (i) the execution, delivery and
performance of the Lessee Documents have been duly
authorized by all necessary corporate action on the
part of the Lessee, and do not require any stockholder
approval, or approval or consent of any trustee or
holder of any indebtedness or obligations of the
Lessee; (ii) each of the Lessee Documents (excluding
the Lease, the Lease Supplement and any other Lessee
Document that is not required to be executed by the
Lessee on or before the Closing Date) has been duly
executed and delivered by the Lessee and constitutes
the legal, valid and binding obligations of the Lessee
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 or equitable principles of
general application to or affecting the enforcement of
creditors' rights generally; (iii) in the case of the
Commencement Date and Exchange Date only, each of the
Lease, the Lease Supplement and each other Lessee
Document not required to be executed by the Lessee on
or before the Closing Date has been duly executed and
delivered by the Lessee and constitutes the legal,
valid and binding obligations of the Lessee
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 or equitable principles of
general application to or affecting the enforcement of
creditors' rights generally;
(f) no authorization, consent or approval of
or other action by, and no notice to or filing with,
any United States federal or state governmental
authority or regulatory body is required for the
execution, delivery or performance by the Lessee of
this Agreement or any other Operative Agreement to
which it is or is to be a party or for the use and
maintenance of the Aircraft, except for such
registrations, applications and recordings referred to
in the opinions of Special Aviation Counsel delivered
or to be delivered pursuant to Sections 4.02(d)(ii)
and 4.04 hereof;
(g) neither the execution, delivery or
performance by the Lessee of this Agreement or any of
the other Operative Agreements to which it is or is to
be a party, nor compliance with the terms and
provisions hereof or thereof, conflicts or will
conflict with or results 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 Lessee or any order, writ, injunction or decree
of any court or governmental authority against the
Lessee 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 Lessee is a party
or by which it or any of its properties is bound, or
constitutes or will constitute a default thereunder or
results or will result in the imposition of any Lien
upon any of its properties;
(h) except for the matters described under
"Legal Proceedings" in the Lessee's Annual Report on
Form 10-K for the most recent fiscal year for which
such Annual Report is available (as updated by Note 7
to the financial statements included in the Lessee's
Quarterly Reports on Form 10-Q filed for each fiscal
quarter, if any, subsequent to such Annual Report), as
to which no representation is made concerning the
Lessee's liability (if any) or the effect of any
adverse determination upon the consolidated financial
condition, business or operations of the Lessee, there
are no pending or, to the knowledge of the Lessee,
threatened actions, suits, investigations or
proceedings (whether or not purportedly on behalf of
the Lessee) against or affecting the Lessee or any of
its property before or by any court or administrative
agency which (A) involve the Agreement to Lease or the
Aircraft or (B) if adversely determined would
materially and adversely affect the consolidated
financial condition, business or operations of the
Lessee, or adversely affect the ability of the Lessee
to perform its obligations under the Operative
Agreements to which it is or is to be a party;
(i) the Lessee has filed or caused to be
filed all tax returns which are required to be filed
and has paid or caused to be paid all taxes shown to
be due and payable pursuant to such returns or
pursuant to any assessment received by the Lessee
(other than assessments the payment of which is being
contested in good faith by the Lessee), and the Lessee
has no knowledge of any related actual or proposed
deficiency or additional assessment which either in
any case or in the aggregate would materially
adversely affect the Lessee's consolidated financial
condition (other than, in any such case, assessments
the payment of which is being contested in good faith
by the Lessee and other than the federal
transportation excise tax assessments the protests
against which are described in the Lessee's Annual
Report on Form 10-K or Quarterly Report on Form 10-Q
for the most recently ended fiscal period for which
such Annual Report or Quarterly Report, as the case
may be, is available, as to which no representation is
made concerning the Lessee's liability (if any) or the
effect of any adverse determination upon the Lessee's
consolidated financial condition, which assessments
are being contested in good faith by the Lessee);
(j) the Lessee has heretofore delivered to
the Owner Participant true and correct copies of the
Lessee's Annual Reports on Form 10-K for the most
recently ended fiscal year and Quarterly Report on
Form 10-Q for the most recently ended quarter, and of
the audited consolidated balance sheets of the Lessee
for the most recently ended fiscal year and the
unaudited consolidated balance sheet of the Lessee as
of the most recent accounting period, and the related
consolidated statements of income, changes in common
stockholders' investment and cash flows for the fiscal
years and interim reporting period ended on such
dates, accompanied (except in the case of such interim
reporting period) by reports 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 Lessee as of such
dates and the results of its operations and cash flows
for such periods;
(k) with respect to ERISA, except as
otherwise disclosed:
(i) none of the Pension Plans nor their
related trusts have been terminated in a distress
termination pursuant to Section 4041(c) of ERISA
or by the PBGC pursuant to Section 4042 of ERISA,
nor have any actions been taken to so terminate
any Pension Plan or related trust and neither the
Lessee nor any ERISA Affiliate has incurred or
could reasonably be expected to incur any
material liability with respect to a Pension Plan
under Section 4062, 4063, 4064 or 4069 of ERISA;
(ii) there have been no "reportable events"
(as such term is defined in Section 4043(b) of
ERISA) with respect to any Pension Plan which
have resulted or could reasonably be expected to
result in any material liability of the Lessee;
(iii) no "accumulated funding deficiency" (as
such term is defined in Section 302 of ERISA or
Section 412 of the Code) exists with respect to
any Pension Plan, whether or not waived, nor has
any request for a waiver under Section 412(d) of
the Code been, or is reasonably likely to be,
filed with respect to any of the Pension Plans;
(iv) neither the Lessee nor any ERISA
Affiliate has failed to make any contribution or
payment to any Pension Plan which has resulted or
could reasonably be expected to result in the
imposition of a Lien under Section 302(f) of
ERISA or Section 412(n) of the Code;
(v) all Pension Plans are in compliance in
all material respects with all applicable
provisions of ERISA and the Code;
(vi) neither the Lessee nor any ERISA
Affiliate has incurred or is reasonably likely to
incur any material withdrawal liability pursuant
to Section 4201 or 4204 of ERISA or any material
liability under Section 515 of ERISA;
(vii) neither the Lessee nor any ERISA
Affiliate has received notice that any Multi-
employer Plan (as defined in 3(37) of ERISA) with
respect to which the Lessee or any ERISA
Affiliate has an obligation to contribute is in
reorganization, insolvent or is terminating;
(viii) to the best of the Lessee's knowledge,
neither the Lessee nor any ERISA Affiliate has
engaged in a "prohibited transaction" (within the
meaning of Section 4975 of the Code or Section
406 of ERISA) which could reasonably be expected
to subject the Lessee to the tax or penalties on
prohibited transactions imposed by Section 4975
of the Code or Section 502 of ERISA; and
(ix) assuming the truth of the representa-
tions contained in Sections 7.03(a)(viii) hereof
and compliance with the relevant provisions of
the Indenture, the execution and delivery of this
Agreement and the other Operative Agreements and
the consummation of the transactions contemplated
hereby and thereby will not involve any transac-
tion which is prohibited by Section 406 of ERISA
or in connection with which a tax could be
imposed pursuant to Section 4975 of the Code. No
part of the funds to be used by the Lessee in
satisfaction of its obligation under this
Agreement or any other of the Operative
Agreements to which the Lessee is a party or to
which the Lessee is bound are the assets of any
employee benefit plan subject to Title I of
ERISA, or any individual retirement account or a
plan subject to Section 4975 of the Code.
As used in this Section 6.01(k), the term
"Pension Plan" means an employee pension benefit plan
as defined in Section 3(2) of ERISA (other than a
multiemployer plan as defined in Section 4001(a)(3) of
ERISA) which is covered by Title IV of ERISA or
subject to the minimum funding standards under Section
412 of the Code and which is maintained, or
contributed to, by the Lessee or any ERISA Affiliate,
and the term "ERISA Affiliate" means any entity which
together with the Lessee would be treated as a single
employer under Section 414(b), (c), (m) or (o) of the
Code;
(l) the Lessee is a Citizen of the United
States;
(m) no governmental approval of any kind is
required of the Owner Participant for its execution of
or performance under this Agreement or the other
Operative Agreements by reason of any fact or
circumstance of the Lessee, the nature of the Aircraft
or the Lessee's proposed operations or use of the
Aircraft;
(n) the Lessee is not in default under any
mortgage, deed of trust, indenture, lease or other
instrument or agreement to which the Lessee 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 Lessee or its ability to perform any
of its obligations under the Operative Agreements to
which it is or is to be a party;
(o) in the case of the Commencement Date and
Exchange Date only, no Default or Event of Default or
Event of Loss or event, which with the passage of time
or if continued unremedied or unaltered would
constitute an Event of Loss, has occurred or exists;
(p) neither the Lessee nor any subsidiary of
the Lessee is an "investment company" or a company
"controlled by an investment company" within the
meaning of the Investment Company Act of 1940, as
amended;
(q) the Lessee has not retained any broker
and, except for the Underwriters, is not aware of any
underwriter that has been retained in connection with
the transactions contemplated by the Operative
Agreements;
(r) (i) in the case of the Commencement Date
only, except for (A) the registration of the Aircraft
in the Owner Trustee's name pursuant to the Act, (B)
the filing for recordation pursuant to the Act of the
Trust Agreement and Trust Agreement Supplement
covering the Aircraft, and the Lease and Lease
Supplement covering the Aircraft and (C) the filing of
the financing statements referred to in
Section 4.02(d) hereof, no further action, including
any filing or recording of any document, is necessary
or advisable in order to establish the Owner Trustee's
title to and interest in the Aircraft and the Lessor's
Estate as against the Lessee and any third parties;
and (ii) in the case of the Exchange Date only, except
for (A) the actions specified in clauses (i)(A) (B)
and (C) above, (B) the filing for recordation pursuant
to the Act of the Indenture and the Indenture and
Security Agreement Supplement covering the Aircraft,
(C) the filing of the financing statements referred to
in Section 4.03(f) hereof and (D) the taking of
possession by the Indenture Trustee of the original
counterpart of the Lease and maintaining possession of
the original counterpart of the Lease Supplement
delivered on the Commencement Date, no further action,
including any filing or recording of any document, is
necessary or advisable in order to establish the Owner
Trustee's title to and interest in the Aircraft and
the Lessor's Estate as against the Lessee and any
third parties, or to perfect the first security
interest in and Lien on the Trust Indenture Estate (as
it exists on the Commencement Date) in favor of the
Indenture Trustee; and
(s) in the case of the Commencement Date and
the Exchange Date only, all premiums with respect to
the insurance required to be provided by the Lessee on
or prior to the Commencement Date under Article 13 of
the Lease shall have been paid by the Lessee.
Section 6.02. Certain Covenants of Lessee.
The Lessee covenants and agrees with the Owner
Participant, the Owner Trustee (in its individual
capacity and as Owner Trustee), the Pass Through
Trustee (in its individual capacity and as Pass
Through Trustee) and the Indenture Trustee (in its
individual capacity and as Indenture Trustee) as
follows:
(a) The Lessee will cause to be done,
executed, acknowledged and delivered all such further
acts, conveyances and assurances as the Owner Trustee,
the Indenture Trustee or the Owner Participant shall
reasonably require for accomplishing the purposes of
this Agreement, the Tax Indemnity Agreement, the Lease
and the other Operative Agreements to which it is or
is to be a party. Without limiting the generality of
this Section 6.02(a), on and after the Commencement
Date the Lessee will take, or cause to be taken, at
the Lessee's cost and expense, such action with
respect to the recording, filing, re-recording and re-
filing of the Indenture, each Indenture and Security
Agreement Supplement, the Lease, each Lease
Supplement, the Trust Agreement and any financing
statements or other instruments as are necessary, or
as requested by the Indenture Trustee and appropriate,
to maintain the perfection of the first security
interest and the Lien created by the Indenture, and
the Owner Trustee's title to and interest in the
Aircraft and the Lessor's Estate as against the Lessee
and any third parties, or will furnish to the
Indenture Trustee and the Owner 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 Lessee's cost and expense in a
timely manner.
(b) After the Commencement Date, the Lessee
shall maintain the certificates with respect to the
Aircraft referred to in Section 7.01 of the Lease and,
on the Commencement Date, shall cause the Aircraft to
be duly registered, and at all times to remain duly
registered, in the name of the Owner Trustee, under
the Act, and shall furnish to the Owner Trustee such
information as may be required to enable the Owner
Trustee to make application for such registration;
provided, however, that the Owner Participant, the
Owner Trustee and the Indenture Trustee agree that if,
in connection with a permitted sublease to a carrier
domiciled outside the United States, upon 30 days'
prior written notice, the Lessee has requested their
consent to the registration of the Aircraft, in the
name of the Owner Trustee (or, if appropriate, in the
name of the Lessee or a sublessee as a "lessee" or a
"sublessee"), at the Lessee's expense, in a country
listed in Schedule III hereto with which the United
States then maintains normal and full diplomatic
relations, the Owner Participant and the Indenture
Trustee, upon receipt by the Owner Participant, the
Owner Trustee and the Indenture Trustee of the
assurances and opinion described below, shall not
unreasonably withhold their consent to such change in
registration (it being agreed, without limitation,
that the inability of the Lessee to deliver such
assurances or such opinion shall constitute reasonable
grounds to withhold such consent).
As a condition to any change in the
registration of the Aircraft, the Owner Participant,
the Owner Trustee in its individual capacity, and the
Indenture Trustee shall have received:
(i) assurances satisfactory to them:
(A) to the effect that the insurance
provisions of the Lease have been and will be
complied with upon such change of registry;
(B) that the Lessee shall have effected
or caused to be effected at the Lessee's own
cost and expense all recordings and filings
that are required to perfect the Lien of the
Indenture; and as to the continuation of the
corresponding Lien of the Indenture as a
first priority, duly perfected lien on the
Aircraft;
(C) that the Owner Trustee's right,
title and interest in and to the Aircraft is
recognized and fully enforceable in the new
jurisdiction of registry, that the rights of
the Owner Trustee in and to the Aircraft will
not be impaired in such new jurisdiction of
registry and that the new jurisdiction of
registry will give effect to the title and
registry of the Aircraft therein
substantially to the same extent as does the
Government;
(D) that such new country of registry
(x) would provide substantially equivalent
protection for the rights of owner
participants, lessors or 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;
(E) that import and export
certificates, if required, shall have been
procured at the Lessee's own cost and expense
by the Lessee;
(F) to the effect that the original
indemnities (and any additional indemnities
for which the Lessee is then willing to enter
into a binding agreement to indemnify) in
favor of the Owner Participant, the Owner
Trustee (in its individual capacity and as
trustee under the Trust Agreement), the
Indenture Trustee (in its individual
capacity, and as trustee under the
Indenture), the other Indemnitees under this
Agreement, the Indenture and the Tax
Indemnity Agreement (in the case of the Owner
Participant only), and the Pass Through
Trustee (in its individual capacity and as
Trustee under the Pass Through Agreement),
afford each such party substantially the same
protection as provided prior to such change
of registry;
(G) that such change will not result in
the imposition of, or increase in the amount
of, any tax for which the Lessee is not
required to indemnify the Owner Participant,
the Indenture Trustee, the Owner Trustee (or
any successor, assign or affiliate thereof)
or the Trust Indenture Estate pursuant to
Article 8 hereof;
(H) that any value added tax, customs
duty, tariff or similar governmental charge
relating to the change in jurisdiction of
registration of the Aircraft shall have been
paid in full or adequately provided for by
the Lessee to the satisfaction of the Owner
Trustee, the Indenture Trustee and the Owner
Participant; and
(I) of the payment by the Lessee of any
reasonable expenses of the Owner Participant,
the Owner Trustee, the Indenture Trustee and
the Pass Through Trustee in connection with
such change of registry.
(ii) a favorable opinion of counsel
(reasonably satisfactory to the Owner Trustee,
the Indenture Trustee and the Owner Participant)
in the new jurisdiction of registry, addressed
and reasonably satisfactory to such parties in
form and substance, to the effect:
(A) that the terms (including, without
limitation, the governing law,
service-of-process and jurisdictional-
submission provisions thereof) of the Lease
and the Indenture are legal, valid, binding
and enforceable in such jurisdiction against
the Lessee, the Owner Trustee and the
Indenture Trustee, respectively;
(B) that it is not necessary for the
Owner Participant, the Owner Trustee, the
Indenture Trustee or the Pass Through Trustee
to register or qualify to do business in such
jurisdiction in connection with the
registration in the new jurisdiction (and the
filing and/or recordation therein of the
Indenture or Lease) and the exercise of any
rights or remedies with respect to the
Aircraft pursuant to the Lease or the
Indenture;
(C) that the courts of such
jurisdiction would provide substantially
equivalent protection to the Lessor, the
Owner Participant and the Indenture Trustee
as provided under United States law (with the
exception described in paragraph (b)(i)(D) of
this Section 6.02) in respect of the
transactions contemplated hereby, including,
without limitation, the remedies provided in
the Indenture and the Lease;
(D) that there is no tort liability of
the beneficial owner, record owner, lessor or
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 owner, lessor or
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 Owner
Participant and the Indenture Trustee, such
opinion shall be waived, if insurance
reasonably satisfactory to the Owner
Participant, the Indenture Trustee and the
Owner Trustee, in its individual capacity, is
provided, at Lessee's expense, to cover such
risk and the Lessee undertakes to keep such
insurance in full force and effect); and
(E) (unless the Lessee shall have
agreed to provide insurance reasonably
satisfactory to the Indenture Trustee and the
Owner Participant 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) From and after the Commencement Date,
the Lessee shall promptly file any reports, or furnish
to the Owner Trustee and the Owner Participant such
information as may be required to enable the Owner
Trustee and the Owner Participant timely to file any
reports required to be filed with respect to the
Aircraft by the Owner Trustee as the Lessor and the
Owner Participant under the Lease with any
governmental authority.
(d) On the Commencement Date, the Lessee
will cause the Special Aviation Counsel to properly
file for recording, to the extent permitted by
applicable law, the Lease, the Lease Supplement, the
Trust Agreement, the Trust Agreement Supplement, the
Indenture and the Indenture and Security Agreement
Supplement in the following order of priority: first,
the application for registration in the Owner
Trustee's name, second, the Indenture with the
Indenture and Security Agreement Supplement, the Trust
Agreement and Trust Agreement Supplement covering the
Aircraft and the Lease Supplement attached thereto,
and third, the Lease with the Lease Supplement, with
the Indenture and the Indenture and Security Agreement
Supplement attached thereto; provided, however, that
if the Exchange Date does not occur on the
Commencement Date, the Indenture and the Indenture and
Security Agreement Supplement need not be so filed
until the Exchange Date (at which time it will be
filed for recording).
(e) After the Commencement Date, the Lessee,
at its own expense, will furnish to the Owner
Participant, the Owner Trustee and the Indenture
Trustee annually after the execution of this
Agreement, by March 15 of each year, commencing with
the calendar year following the year in which the
Aircraft was leased to the Lessee under the Lease, an
opinion, reasonably satisfactory to the Owner
Participant and the Indenture Trustee, of Special
Aviation Counsel, or other counsel specified from time
to time by the Lessee acceptable to the Lessor and the
Indenture Trustee: (i) stating either (1) that in the
opinion of such counsel such action has been taken
with respect to the recording, filing, re-recording
and re-filing of the Lease, the Indenture, the Trust
Agreement, and any supplements to any of them and any
financing statements, continuation statements or other
instruments, and all other action has been taken, as
is necessary to maintain the perfection of the
security interests with respect to the Aircraft
created by said documents and reciting the details of
such action, or (2) that in the opinion of such
counsel no such action is necessary to maintain the
perfection of such security interests; (ii) specifying
all other action which needs to be taken during the
succeeding 14 months in order to maintain the
perfection of such security interests; and (iii)
stating that the Owner Trustee is the owner of legal
title to the Aircraft, and the Aircraft is free and
clear of all Liens, except the security interest
created by the Indenture and such as are permitted by
the Lease and the Indenture.
(f) The Lessee shall at all times maintain
its corporate existence except as permitted by Section
6.02(g) 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.
(g) The Lessee 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 Lessee
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 and the Owner Trustee all of the
Lessee's obligations hereunder and under the other
Operative Agreements, and each other document
contemplated hereby or thereby and the Lessee delivers
such instrument to the Indenture Trustee, the Owner
Participant and the Owner Trustee, (v) provides an
opinion from counsel to the Lessee which counsel shall
be reasonably satisfactory to the Owner Participant
and the Indenture Trustee and which opinion shall be
reasonably satisfactory to the Owner Participant and
the Indenture Trustee and an officer's certificate,
each stating that such merger, consolidation,
conveyance, transfer or lease and the instrument noted
in clause (iv) above comply with this Section 6.02(g),
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 Agreement and the Lease and each other Operative
Agreement and each other document contemplated hereby
or thereby; 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 Lessee and the satisfaction
of the conditions specified in this Section 6.02(g),
the successor corporation formed by such consolidation
or into which the Lessee 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 Lessee under this
Agreement and the Lease and each other Operative
Agreement and any other document contemplated hereby
and thereby to which the Lessee is a party with the
same effect as if such successor corporation had been
named as the Lessee herein and therein. No such
conveyance, transfer or lease of all or substantially
all of the assets of the Lessee as an entirety shall
have the effect of releasing the Lessee or any
successor corporation which shall theretofore have
become such in the manner prescribed in this Section
6.02(g) from its liability hereunder or under the
other Operative Agreements. Nothing contained herein
shall permit any lease, sublease, or other arrangement
for the use, operation or possession of the Aircraft
except in compliance with the applicable provisions of
the Lease.
(h) The Lessee agrees to give prompt written
notice to the Owner Participant and the Indenture
Trustee of any change in the address of its chief
executive office (as such term is used in Section
9-103(3) of the Tennessee Uniform Commercial Code) or
of any change in its corporate name.
(i) The Lessee agrees to furnish to the
Owner Participant, the Lessor and the Indenture
Trustee:
(A) as soon as available, but in any
event within one hundred twenty (120) days
after the end of each fiscal year of the
Lessee, a consolidated balance sheet as of
the end of such fiscal year, and the related
consolidated statements of income, common
stockholders' equity retained earnings and
cash flows of the Lessee for the fiscal year
then ended as prepared and certified by the
Lessee's independent certified public
accountants, including their opinion;
(B) within sixty (60) days after the
end of the first, second and third quarterly
accounting periods in each fiscal year of the
Lessee, a consolidated balance sheet of the
Lessee prepared by it as of the close of the
accounting period then ended, together with
the related consolidated statements of
income, retained earnings and cash flows for
such accounting period certified by the chief
accounting officer or a financial vice
president of the Lessee;
(C) promptly upon their general
transmission, copies of all regular and
periodic reports furnished by the Lessee to
its stockholders;
(D) promptly after filing with the SEC,
copies of the Lessee's Annual Reports on Form
10-K (including all corresponding annual
reports to shareholders), Quarterly Reports
on Form 10-Q and, if requested, any
registration statement or prospectus filed by
the Lessee with any securities exchange or
with the SEC;
(E) promptly upon any officer of the
Lessee 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 Lessee has taken or is
taking or proposes to take with respect
thereto; and
(F) from time to time, such other
financial information as the Lessor, the
Owner Participant or the Indenture Trustee,
may reasonably request.
Concurrently with the delivery of the
financial statements referred to in clause (A) above,
the Lessee shall deliver to the Lessor, the Owner
Participant and the Indenture Trustee a certificate of
the Lessee, signed by any one of the President, the
Chief Financial Officer, the General Counsel, the
Treasurer or the principal accounting officer of the
Lessee, stating that the signer, or an officer
reporting to same, is familiar with the relevant terms
of this Agreement and the Lease and the signer has
reviewed, or has caused to be made under such Person's
supervision a review, of the activities of the Lessee
and that, to the best of his or her knowledge, there
does not exist an Event of Default or if an Event of
Default exists or did exist, specifying the nature
thereof, the period of existence thereof and what
action the Lessee has taken or proposes to take with
respect thereto.
Section 6.03. Survival of Representations
and Warranties. The representations and warranties of
the Lessee provided in Sections 6.01 and 6.02 hereof
and in any other Operative Agreement shall survive the
lease of the Aircraft and the expiration or other
termination of this Agreement and the other Operative
Agreements.
ARTICLE 7
OTHER PARTIES' REPRESENTATIONS, WARRANTIES AND
COVENANTS
Section 7.01. Acquisitions and Offerings of
Interests in Lessor's Estate. (a) Owner Participant.
The Owner Participant represents and warrants that its
interest in the Lessor's Estate and the Trust
Agreement was acquired by it for its own account and
not with a view to sale or distribution thereof;
provided, however, that the disposition by the Owner
Participant of its interest in the Lessor's Estate and
the Trust Agreement shall, subject to the terms and
provisions of Section 7.03(d) hereof, at all times be
within its control and the foregoing representation
shall not limit the Owner Participant's right to
transfer or sell such interests pursuant to the terms
of this Agreement. The Owner Participant represents
and warrants that neither it nor anyone authorized to
act on its behalf (including, without limitation,
Lufthansa) has directly or indirectly offered any
interest in the Lessor's Estate or the Trust
Agreement, or in any similar security, for sale to, or
solicited any offer to acquire any of the same from,
anyone. The Owner Participant covenants that neither
it nor anyone authorized to act on its behalf
(including, without limitation, Lufthansa) will make
any offer, solicitation or sale of any interest in the
Lessor's Estate or the Trust Agreement in violation of
the provisions of Section 5 of the Securities Act.
(b) Owner Trustee. The Owner Trustee
represents and warrants and covenants, both in its
individual capacity and as trustee, that neither it
nor anyone acting on its behalf (i) has directly or
indirectly offered or will directly or indirectly
offer any interest in the Lessor's Estate, or in any
similar security, for sale to, or solicited any offer
to acquire any of the same from anyone (other than the
Owner Participant) and (ii) shall own any
Certificates.
Section 7.02. Citizenship. (a) Generally.
On the Closing Date and on the Commencement Date, the
Owner Trustee, in its individual capacity and as Owner
Trustee, represents and warrants that it is a Citizen
of the United States. If the Owner Trustee in its
individual capacity does not comply with the
requirements of this Section 7.02, the Owner Trustee,
the Indenture Trustee and the Owner Participant hereby
agree that a Default or an Event of Default shall not
be deemed to have occurred and be continuing under the
Lease due to non-compliance by the Lessee with the
registration requirements in the Lease occasioned by
the noncompliance of the Owner Trustee.
(b) Owner Trustee. The Owner Trustee, in
its individual capacity, covenants that if at any time
it shall have actual knowledge that it has ceased to
be a Citizen of the United States, it will resign
immediately as the Owner Trustee if such citizenship
is necessary under the Act as in effect at such time
or, if it is not necessary under the Act as in effect
at such time, if it is informed in writing by the
Lessee, the Owner Participant or the Indenture Trustee
that such lack of United States citizenship would have
any adverse effect on the Lessee, the Owner
Participant or any Holder. The Owner Trustee, in its
individual capacity, further covenants that if at any
time it appears reasonably probable that it will cease
to be a Citizen of the United States based on
information that is (i) known to a Responsible Officer
or (ii) generally known to the public, it will
promptly so notify, to the extent permitted by law,
all parties to this Agreement.
(c) Owner Participant. The Owner Participant
represents, warrants and covenants that (i) although
it is not a Citizen of the United States, pursuant to
the Trust Agreement it has transferred to the Owner
Trustee, to the extent set forth in the Trust
Agreement, the power to manage and control the
Beneficial Interest of the Aircraft to ensure, as more
fully set forth therein, that such Beneficial Interest
will be controlled by a Citizen of the United States
and that the Owner Participant shall have no power to
influence or limit the exercise of the Owner Trustee's
authority in respect thereof under the Trust
Agreement; (ii) it will fully and faithfully comply
with the provisions of the Trust Agreement as long as
it remains in effect, and in furtherance thereof will
maintain the Trust Agreement in effect with an Owner
Trustee that is a Citizen of the United States;
(iii) if the Owner Participant shall become a Citizen
of the United States, its obligations to maintain
Section 7 of the Trust Agreement shall cease, except
that Section 7 of the Trust Agreement may not be
terminated unless prior thereto the Lessee and, so
long as the Indenture remains in effect, the Indenture
Trustee receives such opinions of counsel (of the same
scope and substance as the opinions of counsel to be
delivered hereunder on the Commencement Date of the
Aircraft) and such amendments of documents and such
other things as they shall reasonably request in
connection with maintaining the validity, perfection
and priority of the Lien of the Indenture on the
Aircraft and the valid and continued registration of
the Aircraft pursuant to Section 501(b)(1)(A)(i) of
the Act; and (iv) if the Owner Participant fails with
respect to its obligations above or in Section 7 of
the Trust Agreement and, as a result of such failure,
the Aircraft is subject to deregistration under the
Act, the Owner Participant shall promptly at its own
expense comply with any of clauses (x), (y) or (z) of
the next sentence. If the Owner Participant shall, at
any time while the Aircraft is registered in the
United States and after Section 7 of the Trust
Agreement has been terminated pursuant to clause (iii)
of the preceding sentence, cease to be a Citizen of
the United States and the Aircraft shall or would
therefore become ineligible for registration in the
name of the Owner Trustee under the Act and
regulations then applicable thereunder, then the Owner
Participant shall give notice thereof to the Lessee
and the Indenture Trustee and shall (at its own
expense and without any reimbursement or indemni-
fication from the Lessee) within 30 days (x) effect a
voting trust or other similar arrangement, (y)
transfer in accordance with the terms of this
Agreement and the Trust Agreement all its rights,
title and interest in and to such Trust Agreement, the
Lessor's Estate and this Agreement, or (z) take any
other alternative action that would prevent any
deregistration, or maintain the United States
registration, of the Aircraft. It is agreed that the
Owner Participant shall be liable to pay promptly on
request (A) to each of the other parties hereto and to
each Holder any damages actually suffered by any such
other party or Holder as the result of the
representations and warranties of the Owner
Participant in Sections 7.02(c)(i) and (ii) proving to
be untrue as of the Closing Date and the Commencement
Date; and (B) to the Lessee, the Pass Through Trustee,
the Indenture Trustee or any Holder for any damages
which may be actually incurred by the Lessee (it being
understood that the Lessee shall be obligated to
mitigate such damages by using other aircraft in which
the Owner Participant does not have an interest, if it
can do so without undue burden on the Lessee's
operations), the Pass Through Trustee, the Indenture
Trustee or any Holder as a result of the Owner
Participant's failure to comply with clauses (x), (y)
and (z) of the preceding sentence within the 30 day
period referred to therein. Each party hereto agrees,
upon the request and at the sole expense of the Owner
Participant, to cooperate with the Owner Participant
in complying with its obligations under the provisions
of the second sentence of this Section 7.02(c).
Section 7.03. Representations, Warranties
and Covenants of Owner Participant.
(a) Representations, Warranties and
Covenants of Owner Participant. In addition to and
without limiting its other representations and
warranties provided for in this Article 7, the Owner
Participant represents, warrants and covenants that:
(i) it is a limited partnership duly
organized and validly existing in good standing
under the laws of Delaware and it has full
partnership power, authority and legal right to
carry on its present business and operations, to
own or lease its properties and to enter into and
to carry out the transactions contemplated by
this Agreement and each of the other Operative
Agreements to which it is or is to be a party;
(ii) the execution, delivery and performance
by it of this Agreement and each of the other
Operative Agreements to which it is or is to be a
party, have been duly authorized by all necessary
partnership action on its part and, assuming the
accuracy of the Lessee's representations in
Section 6.01(m) hereof, do not require any
governmental approvals that would be required to
be obtained by the Owner Participant;
(iii) based on the representations,
warranties and covenants contained in Section
6.01(k)(ix) and 7.01(b) hereof and compliance
with the relevant provisions of the Indenture,
neither the execution, delivery or performance by
the Owner Participant of this Agreement and each
of the other Operative Agreements to which it is
or is to be a party, nor compliance with the
terms and provisions hereof or thereof, conflicts
or will conflict with or results 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 applicable to the Owner
Participant or the charter documents, as amended,
or bylaws, as amended, of the Owner Participant
or any order, writ, injunction or decree of any
court or governmental authority against the Owner
Participant 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 Owner Participant is a party or by
which it or any of its properties is bound, or
constitutes or will constitute a default
thereunder or results or will result in the
imposition of any Lien upon any of its
properties;
(iv) this Agreement and the Trust Agreement
have been duly authorized, executed and delivered
by the Owner Participant; on or prior to the
Closing Date, the Modification Agreement, and on
or prior to the Commencement Date, the Tax
Indemnity Agreement and the Trust Agreement
Supplement covering the Aircraft, will have been
duly authorized, executed and delivered by the
Owner Participant; upon such execution and
delivery, each of such agreements will constitute
the legal, valid and binding obligation of the
Owner Participant enforceable against it in
accordance with their terms except as such
enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganization or other
similar laws or equitable principles of general
application to or affecting the enforcement of
creditors' rights;
(v) it is not in default under any mortgage,
deed of trust, indenture, lease or other
instrument or agreement to which the Owner
Participant is a party or by which it or any of
its properties 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 Owner Participant or an adverse effect on the
ability of the Owner Participant to perform its
obligations under this Agreement and the other
Operative Agreements to which it is or is to be a
party;
(vi) there are no pending or, to the
knowledge of the Owner Participant, threatened
actions, suits, investigations or proceedings
against or affecting the Owner Participant or any
of its property before or by any court or
administrative agency which (A) involve the
Aircraft or (B) if adversely determined would
materially adversely affect the financial
condition, business or operations of the Owner
Participant or adversely affect the ability of
the Owner Participant to perform its obligations
under this Agreement or any other Operative
Agreement to which it is or is to be a party;
(vii) neither the execution and delivery by
it of this Agreement and the other Operative
Agreements to which it is or is to be a party nor
the performance of its obligations hereunder or
thereunder requires the consent or approval of or
the giving of notice to, the registration with,
or the taking of any other action in respect of,
any governmental authority or agency that would
be required to be obtained or taken by the Owner
Participant except for filings contemplated by
this Agreement;
(viii) no part of the funds to be used by it to
acquire the interests to be acquired by it under
this Agreement constitutes assets (within the
meaning of ERISA and any applicable rules and
regulations) of any employee benefit plan subject
to Title I of ERISA or of any plan or individual
retirement account subject to Section 4975 of the
Code;
(ix) on the Commencement Date, it will have a
consolidated tangible net worth of not less than
$40,000,000 or the OP Guarantee will be executed
and delivered by Lufthansa;
(x) on November 15, 1993 the Owner Trustee
received good and marketable title to the
Aircraft, free and clear of all Liens (other than
the rights of the parties under the Original
Modification Agreement, the Original Trust
Agreement, the Original Sales Agreement and the
Original Agreement to Lease), and, assuming the
accuracy of the representation set forth in
Section 7.04(a)(vii) below, on the Commencement
Date the Owner Trustee will have good and
marketable title to the Aircraft, free and clear
of all Liens, except for Liens (other than
Lessor's Liens attributable to the Owner
Participant) permitted by Section 6.01 of the
Lease);
(xi) on the Closing Date, except for the
filing of the financing statements referred to in
Sections 4.01(f) hereof, no further action,
including any filing or recording of any
document, will be necessary or advisable in order
(i) to establish the Owner Trustee's title to and
interest in the Lessor's Estate as against any
third parties, or (ii) to perfect the first
security interest in and Lien on the Trust
Indenture Estate in favor of the Indenture
Trustee;
(xii) on the Commencement Date, all sales or
use taxes relating to the sale of the Aircraft by
Lufthansa to the Owner Trustee will have been
paid; and
(xiii) on the Commencement Date, the Aircraft
shall have been duly certified by the FAA as to
type and airworthiness, and there shall be in
effect with respect to the Aircraft a current and
valid airworthiness certificate issued by the FAA
pursuant to the Act.
Notwithstanding the foregoing or anything
else contained in this Agreement, the Owner
Participant makes no representation or warranty in
this Agreement with respect to laws, rules or
regulations relating to aviation or to the nature or
use of the equipment owned by the Owner Trustee.
(b) Lessor's Liens. The Owner Participant
further represents, warrants and covenants that there
are no, and will not be any, Lessor's Lien
attributable to it or any of its Affiliates against,
on or with respect to the Aircraft or the Lessor's
Estate or the Trust Indenture Estate. The Owner
Participant agrees with and for the benefit of the
Lessee, the Indenture Trustee and the Pass Through
Trustee that the Owner Participant will, at its own
cost and expense, take such action as may be necessary
(by bonding or otherwise, so long as the Lessee's
operation and use of the Aircraft is not impaired) to
duly discharge and satisfy in full, promptly after the
same first becomes known to the Owner Participant, any
Lessor's Lien against, on or with respect to the
Aircraft or the Lessor's Estate or the Trust Indenture
Estate attributable to the Owner Participant (or an
Affiliate thereof), provided, however, that the Owner
Participant shall not be required to discharge or
satisfy such Lessor's Lien which is being contested by
the Owner Participant in good faith and by appropriate
proceedings so long as such proceedings do not involve
any material danger of the sale, forfeiture or loss of
the Aircraft or the Lessor's Estate or the Trust
Indenture Estate or any interest in any thereof.
(c) Indemnity for Lessor's Liens. The Owner
Participant agrees to indemnify and hold harmless the
Lessee, the Indenture Trustee and the Pass Through
Trustee from and against any loss, cost, expense or
damage which may be suffered by the Lessee, the
Indenture Trustee or the Pass Through Trustee as the
result of the failure of the Owner Participant to
discharge and satisfy any Lessor's Liens attributable
to the Owner Participant and required to be discharged
as described in Section 7.03(b) hereof.
(d) Assignment of Interests of Owner
Participant. The Owner Participant agrees that it
will not assign, convey or otherwise transfer any of
its right, title or interest in and to the Operative
Agreements or the Lessor's Estate except in accordance
with the provisions of Article 5 of the Trust
Agreement and Section 10 of the Agreement to Lease, as
in effect on the date hereof.
(e) Actions with Respect to Lessor's Estate,
Etc. The Owner Participant agrees that it will not
voluntarily take any action to subject the Lessor's
Estate or the trust established by the Trust
Agreement, as debtor, to the reorganization or
liquidation provisions of the Bankruptcy Code or any
other applicable bankruptcy or insolvency statute.
Section 7.04. Representations, Warranties
and Covenants of Owner Trustee. (a) In addition to
and without limiting its other representations and
warranties provided for in this Article 7, the Owner
Trustee represents and warrants, in its individual
capacity with respect to items (i), (ii), (iv), (v),
(vi) and (vii) below, and as the Owner Trustee with
respect to items (iii), (iv) and (viii), in each case
as of the date of execution hereof, as of the Closing
Date, as of the Commencement Date and, if the Exchange
Date does not occur on the Commencement Date, as of
the Exchange Date, that:
(i) it is a national banking association
duly organized and validly existing in good
standing under the federal laws of the United
States with its principal place of business and
chief executive office (as such terms are used in
Article 9 of the Uniform Commercial Code) at 79
South Main Street, Salt Lake City, Utah 84111,
Attention: Corporate Trust Department and,
assuming the Trust Agreement has been duly
authorized, executed and delivered by the Owner
Participant, has full corporate power and
authority, in its individual capacity or as the
Owner Trustee, as the case may be, to execute,
deliver and perform the Operative Agreements to
which it is or is to be a party;
(ii) the execution, delivery and performance
by the Owner Trustee, either in its individual
capacity or as the Owner Trustee, as the case may
be, of the Operative Agreements to which it is or
is to be a party have been duly authorized by all
necessary corporate action on its part, and do
not contravene its articles of association or
by-laws; this Agreement and the Trust Agreement
have been, on the Closing Date each of the other
Operative Agreements to which it is or is to be a
party (other than the Lease, the Lease
Supplement, the Indenture and Security Agreement
Supplement and the Trust Agreement Supplement)
will have been, on the Commencement Date the
Lease, the Lease Supplement and the Trust
Agreement Supplement will have been, and on the
Exchange Date the Indenture and Security
Agreement Supplement will have been, duly
authorized, executed and delivered by the Owner
Trustee, either in its individual capacity or as
the Owner Trustee, as the case may be; and
neither the execution and delivery thereof nor
the Owner Trustee's performance of or compliance
with any of the terms and provisions thereof
violate or will violate any federal or Utah law
or regulation governing the Owner Trustee's
banking or trust powers;
(iii) assuming due authorization, execution
and delivery by each other party thereto, upon
execution thereof by the Owner Trustee, each of
the Operative Agreements to which it is or is to
be a party when duly executed and delivered will
constitute the legal, valid and binding
obligation of the Owner Trustee in its individual
capacity or as Owner Trustee, as the case may be,
enforceable against such party in accordance with
its respective terms, except as such
enforceability may be limited in bankruptcy,
insolvency, moratorium, reorganization or other
similar laws or equitable principles of general
application to or affecting the enforcement of
creditors' rights and the performance by the
Owner Trustee in its individual capacity or as
Owner Trustee, as the case may be, of any of its
obligations thereunder does not and will not
contravene any lease, regulation or contractual
restriction binding on the Owner Trustee in its
individual capacity or as Owner Trustee, as the
case may be;
(iv) there are no pending or, to its
knowledge, threatened actions or proceedings
against the Owner Trustee before any court or
administrative agency which would materially and
adversely affect the ability of the Owner
Trustee, either in its individual capacity or as
the Owner Trustee, as the case may be, to perform
its obligations under the Operative Agreements to
which it is or is to be a party;
(v) it shall give the Lessee, the Indenture
Trustee and the Owner Participant at least thirty
(30) days' prior written notice in the event of
any change in its chief executive office;
(vi) neither the execution and delivery by
it, either in its individual capacity or as the
Owner Trustee, as the case may be, of any of the
Operative Agreements to which it is or is to be a
party, requires on the part of the Owner Trustee
in its individual capacity or any of its
Affiliates the consent or approval of or the
giving of notice to, the registration with, or
the taking of any other action in respect of, any
federal or Utah governmental authority or agency
governing its banking or trust powers;
(vii) on the date hereof the Owner Trustee
has, and on the Closing Date, on the Commencement
Date and on the Exchange Date the Owner Trustee
shall have, whatever title to the Aircraft was
conveyed to it by Lufthansa, the Aircraft shall
be free of Lessor's Liens attributable to the
Owner Trustee in its individual capacity and the
Owner Trustee in its individual capacity is a
Citizen of the United States; and
(viii) each of the Owner Trustee's
representations and warranties in the other
Operative Agreements is true and correct.
(b) Lessor's Liens. The Owner Trustee, in
its individual capacity, further represents, warrants
and covenants that there are no, and will not be, any
Lessor's Liens attributable to it in its individual
capacity (or to the consolidated group of taxpayers of
which it (in such capacity) is a part) against, on or
with respect to the Aircraft or the Lessor's Estate or
the Trust Indenture Estate. The Owner Trustee, in its
trust capacity, and at the cost and expense of the
Lessee, covenants that it will in its trust capacity
promptly take such action as may be necessary to
discharge duly any Lessor's Liens attributable to it
in its trust capacity. The Owner Trustee, in its
individual capacity, covenants and agrees that it will
at its own expense take such action as may be
necessary to duly discharge and satisfy in full,
promptly after the same shall first become known to
it, any Lessor's Liens against, on or with respect to
the Aircraft or the Lessor's Estate or the Trust
Indenture Estate attributable to it in its individual
capacity (or to the consolidated group of taxpayers of
which it (in such capacity) is a part) which may arise
at any time after the date of this Agreement.
(c) Indemnity for Lessor's Liens. The Owner
Trustee, in its individual capacity, agrees to
indemnify and hold harmless the Lessee, the Indenture
Trustee, the Owner Participant, the Pass Through
Trustee and the Owner Trustee from and against any
loss, cost, expense or damage which may be suffered by
the Lessee, the Indenture Trustee, the Owner
Participant, the Pass Through Trustee or the Owner
Trustee as a result of the failure of the Owner
Trustee to discharge and satisfy any Lessor's Liens
attributable to it in its individual capacity, as
described in Section 7.04(b) hereof.
Section 7.05. Representations and Warranties
of the Indenture Trustee. (a) The Indenture Trustee in
its individual capacity represents and warrants as
follows in each case as of its execution hereof, as of
the Closing Date as of the Commencement Date and, if
the Exchange Date does not occur on the Commencement
Date, as of the Exchange Date:
(i) it is a national banking association duly
organized and validly existing in good standing
under the laws of the United States of America
and has the corporate power and authority to
enter into and perform its obligations under the
Indenture, the Collateral Agreement and this
Agreement and to authenticate the Certificates to
be delivered on the Closing Date;
(ii) the Indenture, the Collateral Agreement
and this Agreement, and the authentication of the
Certificates to be delivered on the Closing Date,
have been duly authorized by all necessary
corporate action on its part, and neither the
execution and delivery thereof nor its
performance of any of the terms and provisions
thereof will violate any federal law or
regulation relating to its banking or trust
powers or contravene or result in any breach of,
or constitute any default under, its articles of
association or by-laws;
(iii) this Agreement has been, on the Closing
Date each of the Indenture and the Collateral
Agreement will have been duly executed and
delivered by it and, assuming that each such
agreement is the legal, valid and binding
obligation of each other party thereto, is (or,
in the case of each of the Indenture and the
Collateral Agreement, will be on the Closing
Date, the Commencement Date and the Exchange
Date) the legal, valid and binding obligation of
the Indenture Trustee, enforceable against the
Indenture Trustee in accordance with its terms
except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or other
similar laws or equitable principles of general
application to or affecting the enforcement of
creditors' rights; and
(iv) neither the execution and delivery by
it of this Agreement, the Collateral Agreement,
the Indenture and the other Operative Agreements
to which it is or is to be a party, nor the
performance by it of any of the transactions
contemplated hereby or thereby, requires the
consent or approval of, the giving of notice to,
the registration with, or the taking of any other
action in respect of, any federal or state
governmental authority or agency governing its
banking and trust powers.
(b) The Indenture Trustee, in its individual
capacity, further represents, warrants and covenants
that there are no, and will not be, any Indenture
Trustee's Liens against, on or with respect to the
Aircraft or the Lessor's Estate or the Trust Indenture
Estate. The Indenture Trustee, in its individual
capacity, covenants and agrees that it will at its own
expense take such action as may be necessary to duly
discharge and satisfy in full, promptly after the same
shall first become known to it, any Indenture
Trustee's Liens against, on or with respect to the
Aircraft or the Lessor's Estate or the Trust Indenture
Estate.
(c) Indemnity for Indenture Trustee's Liens.
The Indenture Trustee, in its individual capacity,
agrees to indemnify and hold harmless the Lessee, the
Owner Participant, the Pass Through Trustee and the
Owner Trustee from and against any loss, cost, expense
or damage which may be suffered by the Lessee, the
Indenture Trustee, the Owner Participant, the Pass
Through Trustee or the Owner Trustee as a result of
the failure of the Indenture Trustee to discharge and
satisfy any Indenture Trustee's Liens attributable to
it in its individual capacity, as described in Section
7.05(b).
Section 7.06. Representations and Warranties
of Pass Through Trustee and LC Bank.
(a) The Pass Through Trustee, in its
individual capacity (except for clause (iii) hereof)
represents and warrants as follows, in each case as of
its execution hereof and as of the Closing Date:
(i) it is a national banking association
duly organized and in good standing under the
laws of the United States of America and has the
corporate power and authority to enter into and
perform its obligations under the Pass Through
Agreement, each Series Supplement and this
Agreement and to execute and authenticate the
Pass Through Certificates to be delivered on the
Closing Date;
(ii) the execution, delivery and
performance of this Agreement, the Pass Through
Agreement and each Series Supplement and the
performance of its obligations thereunder
(including the execution and authentication of
the Pass Through Certificates to be delivered on
the Closing Date) have been duly authorized by
all necessary corporate action on its part, and,
subject to (A) the registration of the issuance
and sale of the Pass Through Certificates under
the Securities Act, (B) compliance with any
applicable state securities laws and (C) the
qualification of the Pass Through Agreement under
the Trust Indenture Act, neither the execution
and delivery thereof nor its performance of any
of the terms and provisions thereof will
(x) violate any federal or South Carolina law or
regulation relating to its banking or trust
powers or contravene or result in any breach of,
(y) constitute any default under, its articles of
association, or by-laws or the provisions of any
indenture, mortgage, contract or other agreement
to which it is a party or by which it or its
properties may be bound or affected, or
(z) require the Pass Through Trustee to obtain
the consent or approval of, give notice to, or
register with, or take any other action with
respect to, any state or federal agency or
authority;
(iii) this Agreement has been, and as of the
Closing Date, the Pass Through Agreement and each
of the Series Supplements will have been, duly
executed and delivered by it and, assuming that
each such agreement is the legal, valid and
binding obligation of each other party thereto,
is or will be, as the case may be, the legal,
valid and binding obligation of the Pass Through
Trustee, enforceable in accordance with its terms
except as such enforceability may be limited by
bankruptcy, insolvency, moratorium,
reorganization, or other similar laws or
equitable principles of general application to or
affecting the enforcement of creditors' rights;
(iv) the performance by the Pass Through
Trustee of its obligations under this Agreement
and the Pass Through Agreement will not subject
the Aircraft, the Lessor's Estate or the Trust
Indenture Estate to any Lien (other than the
Liens created by the Indenture); and
(v) there are no pending or, to the
knowledge of the Pass Through Trustee, threatened
actions or proceedings against the Pass Through
Trustee before any court, administrative agency
or tribunal which, if determined adversely to the
Pass Through Trustee, would materially adversely
affect the ability of the Pass Through Trustee to
perform its obligations under any of the
Operative Agreements to which it is or will be a
party, and the Pass Through Trustee has no actual
knowledge of any pending or threatened actions or
proceedings before any court, administrative
agency or tribunal involving it in its capacity
as Pass Through Trustee.
(b) The LC Bank represents and warrants to
the Indenture Trustee, the Pass Through Trustee and
the Lessee as of its execution hereof and as of the
Closing Date that:
(i) Westdeutsche Landesbank Girozentrale is
a German public law banking institution duly
organized and validly existing under the laws of
the Federal Republic of Germany and has been duly
licensed by the Superintendent of Banks of the
State of New York to maintain a branch in New
York City; the LC Bank has the power and
authority to enter into and perform its
obligations under this Agreement and the Letter
of Credit;
(ii) this Agreement, the Indemnification
Agreement and the Letter of Credit have been duly
authorized by all necessary corporate action on
its part, and neither the execution and delivery
thereof nor its performance of any of the terms
and provisions thereof will violate any federal
banking law or regulation applicable to it or
contravene or result in any breach of, or
constitute any default under its charter or by-
laws;
(iii) this Agreement, the Indemnification
Agreement and the Letter of Credit have been duly
executed and delivered by the LC Bank, and
constitute the legal, valid and binding
obligation of the LC Bank, enforceable in
accordance with their terms except as limited by
bankruptcy, insolvency, reorganization or other
similar laws or equitable principles of general
application to or affecting the enforcement of
creditors' rights generally from time to time in
effect; and
(iv) neither the Lessee nor the Owner Trustee
is obligated to reimburse the LC Bank for any
drawing made under the Letter of Credit.
Section 7.07. [Intentionally Omitted].
Section 7.08. Indenture Trustee's Notice of
Default. The Indenture Trustee agrees to give the
Owner Participant notice of any Payment Default
promptly upon a Responsible Officer of the Indenture
Trustee having actual knowledge thereof.
Section 7.09. Releases from Indenture. The
Indenture Trustee covenants and agrees, for the
benefit of the Lessee and the Owner Participant, to
execute and deliver the instruments of release from
each Lien of the Indenture which it is required to
execute and deliver in accordance with the provisions
of Article 7 of the Indenture, and the Owner
Participant agrees, for the benefit of the Lessee, to
cause the Owner Trustee to request the Indenture
Trustee to execute and deliver such instruments of
release.
Section 7.10. Covenant of Quiet Enjoyment.
Each of the Owner Participant, the Indenture Trustee,
the Pass Through Trustee and the Owner Trustee
covenants and agrees as to itself only that, so long
as no Event of Default under the Lease has occurred
and is continuing, neither the Owner Participant (or
the Owner Trustee, the Pass Through Trustee or the
Indenture Trustee, as the case may be) nor any Person
lawfully claiming through the Owner Participant (or
the Owner Trustee, the Pass Through Trustee or the
Indenture Trustee, as the case may be) shall interfere
with the Lessee's right quietly to enjoy the Aircraft
during the Term without hindrance or disturbance by
the Owner Participant (or the Owner Trustee or the
Indenture Trustee, as the case may be).
Section 7.11. Survival of Representations,
Warranties and Covenants. The representations,
warranties and covenants of the Owner Participant, the
Owner Trustee, the Pass Through Trustee, the Indenture
Trustee and, the LC Bank provided for in this
Article 7, and their respective obligations under any
and all of them, shall survive the making available by
the Owner Participant and the Indenture Trustee of
their respective payments contemplated by Articles 2
and 3 hereof, the sale and lease of the Aircraft and
the expiration or other termination of this Agreement
and the other Operative Agreements.
Section 7.12. Lessee's Assumption of the
Certificates. (a) On or after the Commencement Date,
and subject to compliance by the Lessee with all of
its obligations under the Operative Agreements, each
of the Owner Participant, the Owner Trustee, the
Indenture Trustee, the Pass Through Trustee and the
Lessee covenants and agrees that if the Lessee elects
to terminate the Lease as it relates to the Aircraft
and to purchase the Aircraft pursuant to Section
4.02(a)(C) or (D) of the Lease, and so long as no
Default or Event of Default shall have occurred and be
continuing then, upon compliance with the applicable
provisions of said Section 4.02(a) of the Lease, the
Owner Trustee will transfer to the Lessee, without
recourse or warranty (except as to the absence of
Lessor's Liens) but subject to the applicable Lien of
the Indenture, all of the Owner Trustee's right, title
and interest in and to the Aircraft, and if the
Lessee, in connection with such purchase, elects
pursuant to Section 4.02(a)(C) or (D) of the Lease to
assume the obligations of the Owner Trustee to the
Indenture Trustee and the Holders under the Indenture,
the Certificates and hereunder (which assumption,
notwithstanding anything to the contrary in the Lease,
shall not be permitted prior to the Exchange Date),
each of the parties shall execute and deliver
appropriate documentation permitting the Lessee to
assume such obligations on the basis of full recourse
to the Lessee, maintaining for the benefit of the
Holders the security interest in the Aircraft created
by the Indenture, and upon compliance with the
provisions of this Section 7.12, releasing the Owner
Participant and the Owner Trustee from all obligations
in respect of the Certificates except any obligations
which shall have occurred prior to such assumption,
the Indenture and all other Operative Agreements and
take all such other actions as are reasonably
necessary to permit such assumption by the Lessee.
(b) In connection with such assumption:
(i) the Lessee shall execute and deliver an
instrument satisfactory in form and substance to
the Indenture Trustee (A) pursuant to which the
Lessee irrevocably and unconditionally assumes
and undertakes, with full recourse to the Lessee,
to pay, satisfy and discharge when and as due (at
the stated maturity thereof, by acceleration or
otherwise) the principal of, interest, Make-Whole
Premium, if any, and all other sums owing on all
Certificates then outstanding (or on the Lessee's
substituted obligations) in accordance with their
terms and to punctually perform and observe all
of the covenants and obligations hereunder and
under the Indenture and the Certificates (as the
same may be amended in connection with such
assumption) to be performed or observed by the
Owner Trustee and (B) which contains amendments
to the Indenture, in form and substance
satisfactory to the Indenture Trustee, that
incorporate therein such provisions from the
Lease and this Agreement as may be appropriate,
including, without limitation, events of default
substantially identical in scope and effect to
those set forth in the Lease and covenants
substantially identical to the covenants of the
Lessee under the Lease;
(ii) the instrument referred to in paragraph
(i) of this Section 7.12(b), any Uniform
Commercial Code financing statements relating
thereto, and any other documents which shall be
necessary (or reasonably requested by the
Indenture Trustee) to establish the Lessee's
title to and interest in the Aircraft or to
reflect the substitution of the Lessee for the
Owner Trustee under the Operative Agreements or
to continue the perfection of the security
interests in the Aircraft and the other rights,
property and interests included in the Trust
Indenture Estate for the benefit of the Holders
and the Indenture Trustee shall be filed in such
form, manner and places as are necessary or, in
the reasonable opinion of the Indenture Trustee,
advisable for such purpose;
(iii) the Indenture Trustee shall have
received an insurance report dated the effective
date of such assumption of an independent
insurance broker and certificates of insurance,
each in form and substance satisfactory to the
Indenture Trustee, as to the due compliance as of
the effective date of such assumption with the
terms of Article 13 of the Lease (as it relates
to the Indenture Trustee) relating to the
insurance with respect to the Aircraft;
(iv) the Indenture Trustee shall have
received evidence that as of the effectiveness of
the assignment on the date of such assumption the
Aircraft is free and clear of all Liens other
than the Lien of the Indenture and other
Permitted Liens;
(v) the Indenture Trustee shall have
received a certificate from the Lessee that no
Event of Default shall have occurred and be
continuing as of the effective date of such
assumption; and
(vi) the Indenture Trustee shall have
received (A) from counsel for the Lessee (who may
be the Lessee's General Counsel) a legal opinion,
in form and substance satisfactory to the
Indenture Trustee (w) with respect to the
compliance of the assumption contemplated hereby
with the terms, provisions and conditions hereof,
(x) with respect to the due authorization,
execution, delivery, validity and enforceability
of the instrument referred to in paragraph (i) of
this Section 7.12(b), (y) with respect to the
continued perfection of the first and prior Lien
and security interest in the Aircraft for the
benefit of the Holders and the Indenture Trustee
referred to in paragraph (ii) of this Section
7.12(b), and (z) with respect to the continued
availability of the benefits of Section 1110 of
the Bankruptcy Code to the Indenture Trustee for
the benefit of the Holders with respect to the
Aircraft after giving effect to such assumption,
(B) from counsel to the Indenture Trustee and
Special Aviation Counsel, a legal opinion
comparable to the respective opinions delivered
on the Closing Date and Commencement Date with
such changes therein as may be appropriate in
light of such assumption, and (C) in the case of
each opinion described in clause (A) or (B)
above, covering such additional matters as the
Indenture Trustee shall reasonably request.
(c) The Lessee shall pay all reasonable
expenses (including reasonable fees of expenses of
counsel) of the Indenture Trustee, the Owner Trustee
and the Owner Participant in connection with such
assumption.
Section 7.13. Indebtedness of Owner Trustee.
So long as the Indenture is in effect, the Owner
Trustee, not in its individual capacity, but solely as
trustee under the Trust Agreement, shall not incur any
indebtedness for borrowed money except as expressly
contemplated herein or in any other Operative
Agreement (excluding the Tax Indemnity Agreement and
the Modification Agreement) and shall not engage in
any business or other activity other than the
transactions contemplated herein or in any other
Operative Agreement (excluding the Tax Indemnity
Agreement and the Modification Agreement) and all
necessary or appropriate activity related thereto.
Section 7.14. Compliance with Trust
Agreement, Etc. Each of the Owner Participant, First
Security Bank of Utah, National Association and the
Owner Trustee agrees with the Lessee, the Pass Through
Trustee and the Indenture Trustee (i) to comply with
all of the terms of the Trust Agreement (as the same
may hereafter be amended or supplemented from time to
time in accordance with the terms thereof) applicable
to it in its respective capacity, the noncompliance
with which would materially adversely affect any such
party and (ii) not to take any action, or cause any
action to be taken, to amend, modify or supplement any
provision of the Trust Agreement in a manner that
would adversely affect such party without the prior
written consent of such party. The Owner Trustee
confirms for the benefit of the Lessee, the Pass
Through Trustee and the Indenture Trustee that it will
comply with the provisions of Article 2 of the Trust
Agreement. So long as the Lease remains in effect,
the Owner Participant agrees not to terminate or
revoke the trusts created by the Trust Agreement
without the consent of the Lessee (except in
connection with the exercise of remedies pursuant to
Section 17 of the Lease) or the Indenture Trustee.
The Owner Participant further agrees not to remove the
institution acting as Owner Trustee, and not to
replace the institution acting as Owner Trustee in the
event that such institution resigns as Owner Trustee,
without in either case having obtained the prior
written consent of the Lessee (except in connection
with the exercise of remedies pursuant to Section 17
of the Lease) and (so long as the Indenture shall not
have been discharged) the Indenture Trustee. The
Owner Trustee and the Owner Participant agree that no
co-trustee or separate trustee shall be appointed
pursuant to Section 3.14 of the Trust Agreement
without the Lessee's and the Indenture Trustee's prior
written consent; provided that the Lessee's consent
shall not be required if an Event of Default shall
have occurred and be continuing.
ARTICLE 8
TAXES
Section 8.01. Lessee's Obligation to Pay
Taxes.
(a) Generally. The Lessee agrees promptly to
pay when due, and to indemnify and hold each
Indemnitee harmless from the net after tax cost of all
license, recording, documentary, registration and
other fees and all taxes (including, without
limitation, income, gross receipts, sales, rental,
use, value added, property (tangible and intangible),
ad valorem, excise and stamp taxes), fees, levies,
imposts, recording duties, charges, assessments or
withholdings of any nature whatsoever, together with
any assessments, penalties, fines, additions to tax or
interest thereon (individually, a "Tax," and
collectively called "Taxes"), however imposed (whether
imposed upon any Indemnitee, the Lessee, all or any
part of the Aircraft, Airframe, any Engine or any Part
or otherwise), by any Federal, state or local
government or taxing authority in the United States,
or by any government or taxing authority of a foreign
country or of any political subdivision or taxing
authority thereof or by a territory or possession of
the United States or an international taxing
authority, upon or with respect to, based upon or
measured by:
(i) the Aircraft, the Airframe, any Engine
or any Part;
(ii) the assembly, manufacture,
construction, substitution, location,
replacement, conditioning, control, purchase,
reregistration, repossession, improvement,
maintenance, redelivery, manufacture,
acquisition, purchase, financing, mortgaging,
ownership, acceptance, rejection, delivery,
non-delivery, leasing, subleasing, transport,
insuring, inspection, registration,
reregistration, assembly, abandonment,
preparation, installment, possession,
repossession, use, operation, return, presence,
storage, repair, transfer of title, modification,
rebuilding, import, export, alteration, addition,
replacement, assignment, overhaul, transfer of
registration, imposition of any Lien, sale or
other disposition of the Aircraft, Airframe, any
Engine or any Part or any part thereof or
interest therein;
(iii) the rentals (including Basic Rent and
Supplemental Rent), receipts or earnings arising
from the Operative Agreements or from the
purchase, financing, ownership, delivery,
leasing, possession, use, operation, return,
storage, transfer of title, sale or other
disposition of the Aircraft, the Airframe, any
Engine, any Part, or any part thereof;
(iv) any or all of the Operative Agreements;
(v) the property, or the income or other
proceeds received with respect to the property,
held by the Owner Trustee under the Trust
Agreement or after an Event of Default under the
Lease, by the Indenture Trustee under the
Indenture;
(vi) otherwise with respect to or by reason
of the transactions described in or contemplated
by the Operative Agreements;
(vii) the payment of the principal or
interest or other amounts payable with respect to
the Certificates;
(viii) the beneficial interests in the Trust
Estate or the creation thereof under the Trust
Agreement; or
(ix) any assumption by the Lessee pursuant
to Section 7.12 of this Agreement and Section
2.11 of the Indenture.
(b) Exceptions. The indemnity provided for
in Section 8.01(a) shall not extend to any of the
following:
(i) Taxes imposed on or measured by the net
or gross income or excess profits, receipts,
minimum tax from tax preferences, alternative
minimum tax, capital, franchise, net worth or
conduct of business Taxes (including any
unincorporated business tax) of such Indemnitee
(other than any Taxes in the nature of sales,
use, transfer, excise, rental, license, ad
valorem, value-added or property Taxes) (the
"Income Taxes") except if such Income Tax is
imposed on an Indemnitee by (I) a state or local
jurisdiction in which such Indemnitee otherwise
would not be subject to tax, and such tax is
imposed solely as a result of (A) the operation,
registration, location, presence, or use of the
Aircraft, Airframe any Engine or any Part
thereof, in such jurisdiction or (B) the place of
incorporation, principal office, corporate
domicile or the activities of the Lessee or any
sublessee in such jurisdiction (each such item
referenced in this (A) and (B) called an "Income
Event") or (II) any foreign country or any
political subdivision or taxing authority thereof
in which the Indemnitee is subject to tax as a
result of any Income Event, provided, however,
that if the Indemnitee is a Non-U.S. Person, then
clause (II) shall only apply to the extent such
Indemnitee is subject to tax in such foreign
jurisdiction solely as a result of an Income
Event; provided, however, that the provisions of
this paragraph (b)(i) relating to Income Taxes
shall not exclude from the indemnity described in
Section 8.01(a) (x) any Income Taxes for which
the Lessee would be required to indemnify an
Indemnitee so that any payment under the
Operative Agreements, otherwise required to be
made on an After-Tax Basis, is made on an
After-Tax Basis or (y) any Income Tax with
respect to which the Lessee would be required to
indemnify an Indemnitee pursuant to the last
sentence of Section 8.02, 8.05, 9.02 or 9.05 of
this Agreement;
(ii) Taxes arising out of or measured by
acts, omissions, events or periods (or portions
thereof), or any combination of the foregoing
which occur before the Aircraft is leased under
the Lease or after (and not attributable to acts,
omissions or events occurring contemporaneously
with or prior to) the payment in full of all
amounts payable by the Lessee pursuant to and in
accordance with the Operative Agreements, or the
earlier discharge in full of the Lessee's payment
obligations with respect to the Aircraft under
and in accordance with the Lease and the
Operative Agreements (and the Certificates in the
case of the Indenture Trustee or the Trust
Indenture Estate if the Lessee shall have assumed
the Certificates pursuant to Section 7.12 of this
Agreement), and the earliest of (x) the
expiration of the Term and return of the Aircraft
in accordance with Article 12 of the Lease, (y)
the termination of the Lease in accordance with
the applicable provisions of the Lease and return
of the Aircraft in accordance with the Lease, or
(z) the termination of the Lease in accordance
with the applicable provisions of the Lease and
the transfer of all right, title and interest in
the Aircraft to the Lessee pursuant to its
exercise of any of its purchase options set forth
in Section 4.02(a) of the Lease, except that,
notwithstanding anything in this Section 8.01(b)
to the contrary, Taxes incurred in connection
with the exercise of any remedies pursuant to
Article 17 of the Lease following the occurrence
of an Event of Default shall not be excluded from
the indemnity described in Section 8.01(a);
(iii) As to the Owner Trustee, Taxes imposed
against the Owner Trustee upon or with respect to
any fees for services rendered in its capacity as
trustee under the Trust Agreement or, as to the
Indenture Trustee, Taxes imposed against the
Indenture Trustee upon or with respect to any
fees received by it for services rendered in its
capacity as trustee under the Indenture;
(iv) Taxes imposed on an Indemnitee that
would not have been imposed but for the willful
misconduct or gross negligence of such Indemnitee
(other than gross negligence or willful
misconduct not actually committed by but instead
imputed to such Indemnitee by reason of such
Indemnitee's participation in the transactions
contemplated by the Operative Agreements) or the
breach by such Indemnitee of any representation,
warranty or covenant contained in the Operative
Agreements or any document delivered in
connection therewith (unless attributable to a
breach of representation, warranty or covenant of
the Lessee);
(v) Taxes imposed on the Owner Trustee or
the Owner Participant or any successor, assign or
Affiliate thereof which became payable by reason
of any voluntary or involuntary transfer or
disposition by such Indemnitee subsequent to the
Commencement Date (it being understood that a
transfer or disposition pursuant to Article 4
(other than a sale at fair market value at the
end of any Renewal Term) or Sections 7, 8, 9, 10,
or 11 or Sections 12.01, 12.02 and 12.03 of the
Lease is not a transfer or disposition for this
purpose), including revocation of the Trust, of
any interest in some or all of the Aircraft,
Airframe, Engines or Parts thereof or its
interest in the Partnership or the Lessor's
Estate other than Taxes that result from
transfers or dispositions which occur while an
Event of Default under the Lease has occurred and
is continuing at the time of such transfer or
disposition;
(vi) Taxes imposed on the Owner Participant
or any Partner for which the Lessee is obligated
to indemnify the Owner Participant or any partner
thereof pursuant to the Tax Indemnity Agreement;
(vii) Notwithstanding anything herein to the
contrary, Taxes imposed on a successor, assign or
other transferee of any entity or Person which on
the Commencement Date is an Indemnitee (for
purposes of this clause (vii), an original
Indemnitee) or such original Indemnitee to the
extent that such Taxes exceed the amount of Taxes
that would have been imposed and would have been
indemnifiable pursuant to Section 8.01(a) had
there not been a succession, assignment or other
transfer by such original Indemnitee of any such
interest of such Indemnitee in the Aircraft or
any part thereof, any interest in or under any
Operative Agreement, or any proceeds thereunder
(it being understood that for purposes of
determining the amount of indemnification that
would have been due to such original Indemnitee
with respect to a net income Tax, it shall be
assumed that such original Indemnitee would be
subject to taxation on its income at the highest
marginal statutory rate imposed on corporations
in the United States) and; provided, however,
that the exclusion provided by this clause (vii)
shall not apply in the case of a transfer or
disposition as a result of the exercise of any
remedies provided in the Lease or the Indenture
in connection with an Event of Default under
either such document; provided further, however,
that the exclusion from the indemnity described
in Section 8.01(a) provided by this paragraph
(b)(vii) shall not apply to any Taxes to the
extent such Taxes are directly attributable to
the failure by the Lessee to take administrative
actions as have been reasonably requested of it
in writing in a timely manner (such as the filing
of forms or documents) and as to which
arrangements have been made to the Lessee's
reasonable satisfaction such that the Lessee
shall bear no cost or risk;
(viii) any U.S. federal withholding or backup
withholding taxes imposed on the payment or
receipt of any amounts payable with respect to
any Certificates of any Holder;
(ix) intentionally omitted;
(x) any Taxes which would not have been
imposed but for a Lessor's Lien with respect to
the Owner Participant or an Indenture Trustee's
Lien with respect to the Indenture Trustee;
(xi) taxes imposed on the Owner Participant
or on any person who is a "disqualified person",
within the meaning of Section 4975(e)(2) of the
Code, or a "party in interest", within the
meaning of Section 3(14) of ERISA, by virtue of
such person's relationship to the Owner
Participant as the result of any prohibited
transaction, within the meaning of Section 406 of
ERISA or Section 4975(c)(1) of the Code,
occurring with respect to the purchase or holding
of any Certificate (i) over which purchase or
holding the Owner Participant (or any Affiliate
thereof, which for purposes of this clause (xi)
shall also include any affiliate within the
meaning of the first sentence of Part V(c)(3) of
Prohibited Transaction Exemption 84-14) has
discretion or control, or (ii) by an employee
benefit plan, within the meaning of Section 3(3)
of ERISA, or an individual retirement account or
plan subject to Section 4975 of the Code with
respect to which the Owner Participant (or any
Affiliate thereof) has the power, directly or
indirectly, to appoint or terminate, or to
negotiate the terms of the management agreement
with the person or persons having discretion or
control over such purchase or holding provided,
however, that such exclusion shall occur only in
the event that the Owner Participant or any
Affiliate thereof which has the discretion or
control described in subclause (i) above or which
has the power described in subclause (ii) above,
as the case may be, knows or reasonably should
have known that such purchase, or holding of the
Certificates may constitute a prohibited
transaction, within the meaning of Section
4975(c)(1) of the Code. For purposes of this
clause (xi) the words "reasonably should have
known" shall mean that the Owner Participant or
any Affiliate thereof shall take such steps as a
reasonable prudent person would take acting in a
like capacity to determine if such purchase, or
holding of the Certificates, may constitute a
prohibited transaction within the meaning of
Section 4975(c)(1) of the Code;
(xii) Taxes arising out of or otherwise
attributable to the formation of the trust
described in the Trust Agreement, or the
contribution or transfer of the Aircraft or other
property to such trust;
(xiii) any U.S. federal withholding taxes
imposed on Rent payable to any Indemnitee which
is a Non-U.S. Person;
(xiv) any Taxes arising out of or in
connection with a Demand Note, the Letter of
Credit or the Collateral Agreement; and
(xv) any Taxes payable by the Owner
Participant or Owner Trustee (as contemplated by
Section 4.01(m) hereof or by Lufthansa pursuant
to the Sales Agreement.
(c) Withholding. The Pass Through Trustee
shall withhold any Taxes required to be withheld on
payments to any holder of a Pass Through Certificate
except to the extent that such holder has furnished
evidence to the Pass Through Trustee sufficient under
applicable law to entitle such holder to any exemption
from or reduction in the rate of withholding claimed
by such holder. The Indenture Trustee shall withhold
any Taxes required to be withheld on any payment to a
Holder pursuant to Section 5.09 of the Indenture. If
the Indenture Trustee or the Pass Through Trustee
fails to withhold any U.S. Federal withholding or
backup withholding Tax required to be withheld with
respect to any Holder of a Certificate or Pass Through
Certificate, as the case may be, and a claim is asserted
by a taxing authority against the Owner Trustee, the Owner
Participant or any Affiliate of either with respect to
such Tax, the Lessee will indemnify the Owner Trustee
and the Owner Participant and any Affiliate of either
thereof (without regard to the exclusion set forth in
Section 8.01(b)(viii) hereof), and the Indenture
Trustee or the Pass Through Trustee, as the case may
be, in turn in its individual capacity (and without
recourse to the Trust Indenture Estate) agrees to
indemnify the Lessee, against any such Taxes required
to be withheld and any interest and penalties with
respect thereto. If, with respect to any Holder of a
Certificate or a holder of a Pass Through Certificate,
the Indenture Trustee or the Pass Through Trustee, as the
case may be, fails to withhold any amount required to be
withheld pursuant to Section 5.09 of the Indenture or
hereunder, the Indenture Trustee or the Pass Through
Trustee shall be entitled to withhold from any future
payments otherwise distributable to such Holder of a
Certificate or holder of a Pass Through Certificate,
as the case may be, until such amounts shall have been
recovered in full by the Indenture Trustee or the Pass
Through Trustee, in their respective individual capacities,
to the extent of any indemnity payments made, as the case
may be.
Section 8.02. After-Tax Basis. The amount
which the Lessee shall be required to pay with respect
to any Tax indemnified against under Section 8.01
shall be an amount sufficient to restore the
Indemnitee, on an After-Tax Basis, to the same
position such party would have been in had such Tax
not been incurred. If any Indemnitee actually
realizes a permanent tax benefit by reason of the
payment of any Tax paid or indemnified against by the
Lessee, such Indemnitee shall within 30 days of filing
a tax return which reflects such permanent tax benefit
pay to the Lessee to the extent such tax benefit was
not previously taken into account in computing such
payment, but not before the Lessee shall have made all
payments then due to such Indemnitee from the Lessee
under this Agreement, the Tax Indemnity Agreement and
any other Operative Agreement, an amount equal to the
lesser of (x) the sum of such permanent tax benefit
plus any other tax benefit actually realized by such
Indemnitee that would not have been realized but for
any payment made by such Indemnitee pursuant to this
sentence and not already paid to the Lessee (with the
amount of such benefit to be determined by assuming
full utilization of such benefit); and (y) the amount
of all prior payments made under Sections 8.01 and
8.02 by the Lessee to such Indemnitee less the amounts
of all prior payments made by such Indemnitee to the
Lessee pursuant to this Section 8.02 (and the excess,
if any, of the amount described in clause (x) above
over the amount described in clause (y) above shall be
carried forward and applied to reduce pro tanto any
subsequent obligations of the Lessee to make payments
pursuant to Section 8.01); provided, however, that
notwithstanding the foregoing portions of this
sentence, such Indemnitee shall not be obligated to
make any payment to the Lessee pursuant to this
sentence as long as an Event of Default shall have
occurred and be continuing under the Lease. The
Lessee shall reimburse on an After-Tax Basis such
Indemnitee for any payment of a tax benefit pursuant
to the preceding sentence (or a tax benefit otherwise
taken into account in calculating the Lessee's
indemnity obligation hereunder) to the extent that
such tax benefit is disallowed or reduced in a taxable
year subsequent to the year of such payment (including
the expiration of any tax credit carryovers or
carrybacks of such Indemnitee that would not otherwise
have expired).
Section 8.03. Time of Payment. Any amount
payable to an Indemnitee pursuant to this Article 8
shall be paid within 30 days after receipt of a
written demand therefor from such Indemnitee
accompanied by a written statement describing in
reasonable detail the basis for such indemnity and the
computation of the amount so payable, provided that in
the case of amounts which are being contested by the
Lessee in good faith or by the Indemnitee in either
case pursuant to Section 8.04, such amount shall be
payable 30 days after the time such contest is finally
resolved.
Section 8.04. Contests. If a written claim
is made against any Indemnitee for Taxes with respect
to which the Lessee is liable for a payment or
indemnity hereunder, such Indemnitee shall promptly
give the Lessee notice in writing of such claim and
shall furnish the Lessee with copies of any requests
for information from any taxing authority relating to
such Taxes with respect to which the Lessee may be
required to indemnify hereunder; provided, however,
that the failure of an Indemnitee to give such notice
or furnish such copy shall not terminate any of the
rights of such Indemnitee under this Article 8, except
to the extent that the Lessee's contest rights have
been materially adversely impaired by the failure to
provide such notice. The Indemnitee shall in good
faith, with due diligence and at the Lessee's expense,
if timely requested in writing by the Lessee, contest
(or, at the Indemnitee's option, require the Lessee to
contest in the name of the Lessee, if permitted by
law) the validity, applicability or amount of such
Taxes by:
(i) resisting payment thereof if lawful and
practicable or not paying the same except under
protest if protest is necessary and proper in
each case so long as non-payment will not result
in a material risk of the sale, forfeiture or
loss of, or the creation of a Lien other than a
Lien permitted under Section 6.01 of the Lease on
the Aircraft, Airframe or any Engine or any risk
or criminal liability; or
(ii) if the payment be made, using
reasonable efforts to obtain a refund thereof in
appropriate administrative and judicial
proceedings.
If the Indemnitee, after reasonable discussion with
the Lessee and consideration in good faith of any
suggestion made by the Lessee as to the method of
pursuing such contest, elects to conduct the contest,
such Indemnitee shall determine the manner in which to
contest such Taxes, and shall periodically or upon the
Lessee's request advise the Lessee of the progress of
such contest. Notwithstanding the preceding sentences
of this Section 8.04, such Indemnitee shall not be
required to take or continue any action unless the
Lessee shall have (i) agreed in writing to pay and
shall pay the Indemnitee on demand and on an After-Tax
Basis for any liability or reasonable expense which
such Indemnitee may incur as a result of contesting
such Taxes including without limitation (y) reasonable
attorneys' and accountants' fees and (z) the amount of
any interest, penalty or additions to tax which may
ultimately be payable as the result of contesting such
Taxes, (ii) delivered to the Indemnitee a written
acknowledgment of the Lessee's obligation to such
Indemnitee pursuant to this Agreement to the extent
that the contest is not successful and of the
inapplicability of any exclusion or defenses thereto,
provided, however, that such acknowledgment shall not
preclude the Lessee from raising defenses to liability
under this Agreement if a decision in such contest is
rendered which clearly articulates the cause of such
Tax and the cause, as so articulated, is not one for
which the Lessee is responsible to pay an indemnity
hereunder, (iii) made all payments and indemnities
(other than contested payments and indemnities) then
due to the Indemnitee hereunder or with respect to any
of the transactions contemplated by or under the
Operative Agreements. In no event shall such
Indemnitee be required or the Lessee permitted to
contest pursuant to this Section 8.04 the imposition
of any Tax for which the Lessee is obligated to
indemnify any Indemnitee hereunder unless (i) such
Indemnitee shall have received an opinion of
independent tax counsel, at the Lessee's expense,
selected by such Indemnitee and reasonably
satisfactory to the Lessee ("Tax Counsel") to the
effect that a reasonable basis exists for contesting
such claim, (ii) such Indemnitee shall have determined
that such contest will not result in any material risk
of loss, sale or forfeiture of, or the creation of a
Lien (other than Lessor's Liens) on, the Aircraft or
any part thereof or interest thereon or in a risk of
criminal liability, or adversely affect the Trust
Indenture Estate, (iii) if an Event of Default shall
have occurred and be continuing, the Lessee shall have
provided security for its obligations hereunder
reasonably satisfactory to the Indemnitee (iv) if such
contest shall be conducted in a manner requiring
payment of the claim in advance, the Lessee shall have
advanced sufficient funds, on an interest free basis
to make the payment required, and agreed to indemnify
the Indemnitee against any additional net adverse tax
consequences on an After-Tax Basis to such Indemnitee
of such advance and (v) the issue shall not be the
same as an issue previously contested hereunder and
decided adversely, unless the Indemnitee shall have
received, at the Lessee's sole expense, a written
opinion, in form and substance reasonably satisfactory
to such Indemnitee, of Tax Counsel, to the effect that
the applicable law has changed and, in light thereof,
there is substantial authority within the meaning of
Section 6662 of the Code, as interpreted by the
Treasury regulations thereunder, or under similar
principles of state or foreign law (as the case may
be) for contesting such claim and (vi) the amount of
such adjustment, when aggregated with related and
correlative adjustments, is at least $25,000.
The Indemnitee shall not be required to
appeal any judicial decision unless it receives an
opinion of Tax Counsel, at the Lessee's sole expense,
to the effect that it is more likely than not that
such decision will be reversed on appeal.
Nothing contained in this Section 8.04 shall
require any Indemnitee to contest or continue to
contest, or permit the Lessee to contest, a claim
which such Indemnitee would otherwise be required to
contest pursuant to this Section 8.04, if such
Indemnitee shall waive payment by the Lessee of any
amount that might otherwise be payable by the Lessee
under this Article 8 in connection with such claim.
Section 8.05. Refunds. Upon receipt by an
Indemnitee of a refund of all or any part of any Taxes
which the Lessee shall have paid for such Indemnitee
or for which the Lessee shall have reimbursed or
indemnified such Indemnitee, and provided there shall
not have occurred and be continuing any Event of
Default by the Lessee hereunder or under the Lease (in
which case payment shall not be made to the Lessee
until such Event of Default shall have been cured),
such Indemnitee shall pay to the Lessee an amount
equal to the amount of such refund less (x) reasonable
expenses not previously reimbursed, (y) all payments
then due to such Indemnitee under this Article 8 and
(z) Taxes imposed with respect to the accrual or
receipt thereof, including interest received
attributable thereto, plus any net tax benefit
actually realized by such Indemnitee as a result of
any payment by such Indemnitee made pursuant to this
sentence; provided, however, that such amount shall
not be payable (a) before such time as the Lessee
shall have made all payments or indemnities then due
and payable to such Indemnitee under this Article 8 or
(b) to the extent that the amount of such payment
would exceed (i) the amount of all prior payments by
the Lessee to such Indemnitee pursuant to this Article
8 less (ii) the amount of all prior payments by such
Indemnitee to the Lessee pursuant to this Article 8.
Any subsequent loss of such refund or tax
benefit shall be treated as a Tax subject to
indemnification under the provisions of this Article
8.
Section 8.06. Lessee's Reports. With
respect to the Aircraft, in case any report or return
is required to be made with respect to any obligation
of the Lessee under this Article 8, the Lessee shall
make such report or return, except for any such report
or return that the Owner Trustee or the Owner
Participant has notified the Lessee that it intends to
file, in such manner as will show the ownership of the
Aircraft in the Owner Trustee and shall send a copy of
the applicable portions of such report or return to
the Indemnitee and the Owner Trustee or will notify
the Indemnitee of such requirement and make such
report or return in such manner as shall be
satisfactory to such Indemnitee and the Owner Trustee.
The Lessee will provide such information reasonably
available to the Lessee as the Owner Trustee or the
Owner Participant may reasonably request from the
Lessee to enable the Owner Trustee or the Owner
Participant to fulfill its tax filing requirements
with respect to the transactions contemplated by the
Operative Agreements (without duplication of the
requirements of Section 3 of Tax Indemnity Agreement)
and any audit information request arising from any
such filing. The Owner Trustee or the Owner
Participant will provide such information as the
Lessee may reasonably request from the Owner
Participant to enable the Lessee to fulfill its tax
filing requirements with respect to the transactions
contemplated by the Operative Agreements and any audit
information request arising from such filing. The
Lessee shall hold the Owner Trustee and the Owner
Participant harmless on an After-Tax Basis from and
against any net after tax cost for liabilities,
including penalties, additions to tax, fines and
interest, imposed upon the Owner Trustee or the Owner
Participant to the extent directly attributable to any
insufficiency or inaccuracy in any return, statement,
or report prepared by the Lessee or information
supplied by the Lessee, or directly attributable to
the Lessee's failure to supply reasonably available
information to the Owner Trustee or Owner Participant
as required by this Section 8.06.
Section 8.07. Survival of Obligations. The
representations, warranties, indemnities and
agreements of the Lessee provided for in this Article
8 and the Lessee's obligations under any and all of
them shall survive the expiration or other termination
of the Operative Agreements.
Section 8.08. Payment of Taxes. With
respect to any Tax otherwise indemnifiable hereunder
by the Lessee and applicable to the Aircraft,
Airframe, any Engine or Parts, to the extent permitted
by the applicable state, local or foreign law, the
Lessee shall pay such tax directly to the relevant
taxing authority and file any returns or reports
required with respect thereto; provided, however, that
the Lessee shall not make any statements or take any
action which would indicate that the Lessee or any
Person other than the Owner Trust or Owner Participant
is the owner of the Aircraft, the Airframe, any Engine
or any Part or would otherwise be inconsistent with
the terms of the Lease and the position thereunder of
the Owner Trustee and the Owner Participant. Copies
of such returns or reports, together with evidence of
payment of any Tax due, shall be sent by the Lessee to
the Owner Participant within thirty (30) days after
the date of each payment by the Lessee of any Tax.
Section 8.09. Reimbursements by Indemnitees
Generally. If, for any reason, the Lessee is required
to make any payment with respect to any Taxes imposed
on any Indemnitee in respect of the transactions
contemplated by the Operative Agreements or on the
Aircraft, the Airframe, the Engines, the Parts or any
part thereof, which Taxes are not the responsibility
of the Lessee under Section 8.01 hereof, then such
Indemnitee shall pay to the Lessee an amount which
equals the amount paid by the Lessee with respect to
such Taxes.
ARTICLE 9
GENERAL INDEMNITY
Section 9.01. Generally. (a) The Lessee
agrees to indemnify each Indemnitee against and agrees
to protect, defend, save and keep harmless each
Indemnitee from any and all liabilities, obligations,
losses, damages (including if, as a result of an
Indenture Default described in Section 7.01(a)(i) of
the Indenture, the Indenture Trustee shall have sold
all or any portion of the Indenture Estate and the
proceeds thereof were less than an amount equal to
accrued and unpaid Basic Rent on the date of sale plus
the Stipulated Loss Value as of such date, damages
equal to such shortfall together with interest thereon
to the extent permitted by law at the Debt Rate until
such shortfall is paid in full), penalties, claims,
actions, suits, costs, disbursements and expenses
(including, except as otherwise provided in the
Operative Agreements, reasonable legal fees and
expenses and all other costs and expenses relating to
amendments, supplements, adjustments, waivers and
consents under the Operative Agreements, in each case
requested by the Lessee unless such amendment,
supplement, adjustment or waiver is made during the
continuance of an Event of Default and any amounts
payable under the indemnification provisions of the
Indenture or the Trust Agreement and any amounts
payable under the Indenture in respect of Make-Whole
Premium (to the extent payable under Section 3.02 of
the Lease)) whether or not any of the transactions
contemplated by this Agreement are consummated
(individually, an "Expense," collectively,
"Expenses"), which may be imposed on, incurred or
suffered by or asserted against any Indemnitee, in any
way relating to, based on or arising out of:
(i) this Agreement, the Lease, the
Indenture, the Trust Agreement, or any other
Operative Agreement (including any action or
inaction of the Owner Trustee or the Indenture
Trustee, in each case in their capacity as
trustees) or any other document entered into in
connection herewith or any sublease or any
transactions contemplated hereby or thereby;
(ii) the operation, possession, use,
non-use, maintenance, storage, overhaul,
delivery, non-delivery, control, repair or
testing of the Aircraft, Airframe, or any Engine
or any engine used in connection with the
Airframe, or any part thereof by the Lessee any
sublessee or any other Person whatsoever, whether
or not such operation, possession, use, non-use,
maintenance, storage, overhaul, delivery,
non-delivery, control, repair or testing is in
compliance with the terms of the Lease, including
without limitation, claims for death, personal
injury or property damage or other loss or harm
to any Person whatsoever, including, without
limitation, any passengers, shippers or other
Persons wherever located, and claims relating to
any laws, rules or regulations, including,
without limitation, environmental control, noise
and pollution laws, rules or regulation;
(iii) the manufacture, design, return,
acceptance, rejection, condition, repair,
modification, servicing, rebuilding,
airworthiness, registration, reregistration,
performance, non-performance, sublease,
merchantability, fitness for use, alteration,
substitution or replacement of the Aircraft, the
Airframe, any Engine or any Part including,
without limitation, latent and other defects,
whether or not discoverable, strict tort
liability, and any claims for patent, trademark
or copyright infringement;
(iv) any breach of or failure to perform or
observe, or any other non-compliance with, any
condition, covenant or agreement to be performed,
or other obligations of the Lessee under any of
the Operative Agreements, or the falsity or
inaccuracy of any representation or warranty of
the Lessee in any of the Operative Agreements
(other than representations and warranties in the
Tax Indemnity Agreement);
(v) with respect to the Indenture Trustee,
the enforcement of the terms of the Operative
Agreements and the administration of the Trust
Indenture Estate; and
(vi) the offer, issuance, sale or
delivery of any Certificate or any Pass Through
Certificate, or in any way relating to or arising
out of the Indenture or the Trust Indenture
Estate or, with respect to the Indenture Trustee
only, of any interest in the Lessor's Estate or
the Trust Agreement or in any way relating to or
arising out of the Trust Agreement and the
Lessor's Estate and with respect to the Owner
Participant and the Owner Trustee, of any
interest in the Lessor's Estate or the Trust
Agreement or in any way relating to or arising
out of the Trust Agreement or the Lessor's Estate
at a time when an Event of Default is continuing,
during a period following an Event of Loss, or in
connection with the termination of the Lease or
action or direction of the Lessee with respect to
the Aircraft pursuant to Section 4.02 (other than
any sale at fair market value) or Article 10 of
the Lease (including, in each such case set forth
in this clause (vi), without limitation, any
claim arising out of the Securities Act, the
Exchange Act or any other federal or state
statute, law or regulation, or at common law or
otherwise relating to securities), or the action
or inaction of the Owner Trustee, the Pass
Through Trustee or Indenture Trustee as trustees,
in the manner contemplated by this Agreement, the
Indenture, the Indenture and Security Agreement
Supplement, the Trust Agreement, the Trust
Agreement Supplement covering the Aircraft and in
the case of the Owner Participant, its
obligations arising under Section 6.01 of the
Trust Agreement.
The foregoing indemnity by the Lessee is intended to
include and cover, but is not limited to, any Expense
to which the Indemnitees may be subject as a result of
their respective ownership or leasing of any interest
in the Aircraft, Airframe, any Engine or Part during
the Term, whether or not in the Lessee's possession or
control, insofar as such Expense relates to any
activity or event whatsoever involving such item while
it is under lease to the Lessee (or after termination
of the Lease in connection with the exercise of
remedies thereunder to the extent that such Expense is
attributable to the transactions contemplated hereby
and by the other Operative Agreement), and such
Expense does not fall within any of the exceptions
listed in Section 9.01(b) hereof.
(b) Exceptions. The indemnity provided for
in Section 9.01(a) shall not extend to any Expense of
any Indemnitee:
(i) which would not have occurred but for
the willful misconduct or gross negligence of
such Indemnitee;
(ii) to the extent attributable to acts or
events which occur prior to the date on which the
Aircraft is leased under the Lease or after the
Aircraft is no longer leased under the Lease or
after the expiration of the Term (other than, in
each such case, pursuant to Article 17 of the
Lease, in which case the indemnity provided in
Section 9.01(a) hereof shall survive for so long
as the Lessor shall be entitled to exercise
remedies under such Article 17), or to acts or
events which occur after return of possession of
the Aircraft by the Lessee in accordance with the
provisions of the Lease but in any such case only
to the extent not fairly attributable to acts or
omissions of the Lessee prior to expiration of
the Term, including without limitation the
Lessee's failure to fully discharge all of its
obligations under the Lease or other Operative
Agreements;
(iii) which is a Tax, whether or not the
Lessee is required to indemnify therefor pursuant
to Article 8 hereof or pursuant to the Tax
Indemnity Agreement other than Taxes necessary to
hold an Indemnitee harmless on an After-Tax Basis
in accordance with Section 9.02 hereof;
(iv) which is a cost, expense or payment
that this Agreement or any other Operative
Agreement expressly requires be paid by the Owner
Participant or the Lessor or any other Person;
(v) which would not have been incurred by
such Indemnitee if such Indemnitee had not been
in breach of its representations or warranties,
or had not defaulted in the observance and
performance of the terms and provisions provided
to be observed and performed by it, in this
Agreement, the Lease, the Indenture, the Trust
Agreement or any other Operative Agreement to
which it is a party unless such breach or default
shall be a result of the breach or default of any
of the foregoing by the Lessee or another
Indemnitee;
(vi) [Intentionally Omitted];
(vii) in the case of the Owner Participant,
Lessor's Liens to the extent attributable to the
Owner Participant; in the case of the Owner
Trustee, Lessor's Liens to the extent
attributable to the Owner Trustee; and in the
case of the Indenture Trustee, Indenture
Trustee's Liens;
(viii) in the case of the Owner Participant or
the Owner Trustee, to the extent attributable to
the offer or sale by such Indemnitee after the
Commencement Date of any interest in the
Aircraft, the Lessor's Estate or the Trust
Agreement or any similar interest (including an
offer or sale resulting from bankruptcy or other
proceedings for the relief of debtors in which
such Indemnitee is the debtor), unless in each
case such offer or sale shall occur (x) during a
period when an Event of Default has occurred and
is continuing, (y) during a period when an Event
of Loss has occurred or (z) in connection with
the termination of the Lease or action or
direction of the Lessee with respect to the
Aircraft pursuant to Section 4.02 (other than any
sale at fair market value) or Article 10 of the
Lease;
(ix) in the case of the Owner Participant
or any person who is a "disqualified person",
within the meaning of Section 4975(e)(2) of the
Code, or a "party in interest", within the
meaning of Section 3(14) of ERISA, by virtue of
such person's relationship to the Owner
Participant, resulting from any prohibited
transaction, within the meaning of Section 406 of
ERISA or Section 4975(c)(1) of the Code,
occurring with respect to the purchase or holding
of any Certificate (i) over which purchase or
holding the Owner Participant (or any Affiliate
thereof, which for purposes of this clause (ix)
shall also include any affiliate within the
meaning of the first sentence of Part V(c)(3) of
Prohibited Transaction Exemption 84-14) has
discretion or control, or (ii) by an employee
benefit plan, within the meaning of Section 3(3)
of ERISA, or an individual retirement account or
plan subject to Section 4975 of the Code with
respect to which the Owner Participant (or any
Affiliate thereof) has the power, directly or
indirectly, to appoint or terminate, or to
negotiate the terms of the management agreement
with the person or persons having discretion or
control over such purchase or holding provided,
however, that such exclusion shall occur only in
the event that the Owner Participant or any
Affiliate thereof which has the discretion or
control described in subclause (i) above or which
has the power described in subclause (ii) above,
as the case may be, knows or reasonably should
have known that such purchase, or holding of the
Certificates may constitute a prohibited
transaction, within the meaning of Section
4975(c)(1) of the Code. For purposes of this
clause (ix) the words "reasonably should have
known" shall mean that the Owner Participant or
any Affiliate thereof shall take such steps as a
reasonably prudent person would take acting in a
like capacity to determine if such purchase, or
holding of the Certificates, may constitute a
prohibited transaction, within the meaning of
Section 4975(c)(1) of the Code;
(x) for (i) costs and expenses incurred in
connection with Lufthansa's efforts to raise
Nonrecourse Financing (as defined in the
Agreement to Lease) in respect of which the
Lessee is not liable under Section 13 of the
Agreement to Lease and (ii) any other liability
in connection with such Nonrecourse Financing for
which the Lessee is not responsible under such
Section 13;
(xi) with respect to the Lessor, any Expense
indemnified by DA under the Modification
Agreement; and
(xii) which is an Expense relating to (1) (A)
the Collateral Agreement, (B) any Demand Note,
(C) the Letter of Credit, (D) to the extent
incurred prior to the Exchange Date,the Indenture
or the Trust Indenture Estate, or (2) any of the
transactions contemplated as occurring prior to
the Exchange Date pursuant to the documents
referred to in this clause (xii).
(xiii) which is an Expense that, pursuant to
the Indemnification Agreement or the Underwriting
Agreement, is to be borne by Lufthansa.
Section 9.02. After-Tax Basis. The amount
which the Lessee shall be required to pay with respect
to any Expense indemnified against under Section 9.01
shall be an amount sufficient to restore the
Indemnitee, on an After-Tax Basis, to the same
position such party would have been in had such
Expense not been incurred. If any Indemnitee actually
realizes a permanent tax benefit by reason of the
payment of such Expense paid or indemnified against by
the Lessee which was not considered in the computation
thereof, such Indemnitee shall promptly pay to the
Lessee, but not before the Lessee shall have made all
payments theretofore due such Indemnitee from the
Lessee under this Agreement, the Tax Indemnity
Agreement and any other Operative Agreement, an amount
equal to the lesser of (x) the sum of such permanent
tax benefit plus any other tax benefit actually
realized by such Indemnitee as the result of any
payment made by such Indemnitee pursuant to this
sentence and (y) the amount of such payment pursuant
to this Section 9.02 by the Lessee to such Indemnitee
plus the amount of any other payments by the Lessee to
such Indemnitee theretofore made pursuant to this
Section 9.02 less the amount of any payments by such
Indemnitee to the Lessee theretofore made pursuant to
this Section 9.02 (and the excess, if any, of the
amount described in clause (x) above over the amount
described in clause (y) above shall be carried forward
and applied to reduce pro tanto any subsequent
obligations of the Lessee to make payments pursuant to
this Section 9.02), provided, however, that
notwithstanding the foregoing portions of this
sentence, such Indemnitee shall not be obligated to
make any payment to the Lessee pursuant to this
sentence so long as an Event of Default shall have
occurred and be continuing. Any taxes that are
imposed on any Indemnitee as a result of the
disallowance or reduction of such tax benefit referred
to in the next preceding sentence in a taxable year
subsequent to the year of allowance and utilization by
such Indemnitee (including the expiration of any tax
credit carryovers or carrybacks of such Indemnitee
that would not otherwise have expired) shall be
indemnifiable pursuant to the provisions of Section
8.01 hereof.
Section 9.03. Subrogation. Upon the payment
in full of any indemnity pursuant to this Article 9 by
the Lessee (but not earlier), the Lessee shall be
subrogated to any right of the Indemnitee, other than
with respect to any of such Indemnitee's insurance
policies or in connection with any indemnity claim the
Person indemnified may have against any other
Indemnitee in respect of the matter against which such
indemnity has been made.
Section 9.04. Notice and Payment. Each
Indemnitee and the Lessee shall give prompt written
notice one to the other of any liability of which such
party has knowledge for which the Lessee is, or may
be, liable under this Article 9; provided, however,
that failure to give such notice shall not terminate
any of the rights of Indemnitees under this Article 9,
except to the extent that the Lessee has been
materially prejudiced by the failure to provide such
notice. Unless otherwise provided in the Operative
Agreements, any amount payable to an Indemnitee
pursuant to this Article 9 shall be paid within 30
days after receipt of a written demand therefor from
such Indemnitee accompanied by a written statement
describing in reasonable detail the basis for such
indemnity and the computation of the amount so
payable.
Section 9.05. Refunds. If any Indemnitee
shall obtain a recovery of all or any part of any
amount which the Lessee shall have paid to such
Indemnitee or for which the Lessee shall have
reimbursed such Indemnitee under this Article 9, and
provided there shall not have occurred a Payment
Default or an Event of Default (in which case payment
shall not be made to the Lessee until such Payment
Default or Event of Default shall have been cured)
such Indemnitee shall pay to the Lessee the amount of
any such recovery, including interest received with
respect to the recovery, net of any Taxes paid or
payable as a result of the receipt of the recovery and
interest, plus any net additional permanent income tax
benefits actually realized by Indemnitee as the result
of any payment made pursuant to this sentence less any
reasonable costs and expense of any Indemnitee not
reimbursed by the Lessee; provided, however, that such
amount shall not be payable (a) before such time as
the Lessee shall have made all payments or indemnities
then due and payable to such Indemnitee under this
Article 9 or (b) to the extent that the amount of such
payment would exceed the amount of all prior payments
by the Lessee to such Indemnitee pursuant to this
Article 9, less the amount of all prior payments by
such Indemnitee to the Lessee pursuant to this Article
9. Any subsequent loss of such recovery or tax
benefit shall be subject to indemnification under
Article 8 or this Article 9, as the case may be.
Section 9.06. Defense of Claims. The Lessee
or its insurers shall have the right (in each such
case at the Lessee's sole expense) to investigate or,
provided that (i) the Lessee or the Lessee's insurers
shall not reserve the right to dispute liability with
respect to any insurance policies pursuant to which
coverage is sought, (ii) in the case of defense by the
Lessee, no Event of Default shall have occurred and be
continuing and (iii) the Lessee shall have first
acknowledged in writing to such Indemnitee the
Lessee's liability to such Indemnitee hereunder in
respect of such claim, provided, however, that such
acknowledgment shall not preclude the Lessee from
raising defenses to such liability if the judgement
rendered on termination of the applicable legal
proceedings articulates the cause of such claim and
the cause, as so articulated, is not one for which the
Lessee is responsible to pay an indemnity hereunder
(and either (i) the judgment is one from which no
appeal is allowable or (ii) if such appeal is
allowable, the applicable Indemnitee shall not have
made a timely appeal), defend any claim covered by
insurance for which indemnification is sought pursuant
to this Article 9 and each Indemnitee with respect to
the applicable Aircraft shall cooperate with the
Lessee or its insurers with respect thereto, and
provided, further, the Lessee shall not be entitled to
assume and control the defense of any such claim if
and to the extent such Indemnitee reasonably objects
to such control on the ground that an actual or
potential material conflict of interest exists where
it is advisable for such Indemnitee to be represented
by separate counsel. Subject to the immediately
foregoing sentence, where the Lessee or the insurers
under a policy of insurance maintained by the Lessee
undertake the defense of an Indemnitee with respect to
such a claim, no additional legal fees or expenses of
such Indemnitee 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 Lessee or such insurers. Subject to the
requirement of any policy of insurance applicable to a
claim, an Indemnitee may participate at its own
expense at any judicial proceeding controlled by the
Lessee 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 Lessee 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 9.06. No
Indemnitee shall enter into any settlement or other
compromise with respect to any claim described in this
Section 9.06 without the prior written consent of the
Lessee, which consent shall not unreasonably be
withheld or delayed, unless (i) such Indemnitee waives
its right to be indemnified under this Article 9 with
respect to such claim or (ii) the Lessee has not,
within 30 Business Days following receipt of notice by
such Indemnitee, acknowledged in writing its liability
to such Indemnitee hereunder (as provided above) in
respect of such claim.
Section 9.07. Survival of Obligations. The
representations, warranties, indemnities and
agreements of the Lessee provided for in this Article
9 and the Lessee's obligations under any and all of
them shall survive the expiration or other termination
of this Agreement, the Tax Indemnity Agreement, the
Trust Agreement, the Indenture, the Lease and the
other Operative Agreements but, as to such indemni-
ties, only with respect to Expenses caused by events
occurring or existing prior to or incurred in the
process of (i) the return or disposition of the
Aircraft under Article 12 or Article 17 of the Lease,
or (ii) the termination of the Lease or the Indenture
as it relates to the Aircraft or, if later, the return
of the Aircraft.
Section 9.08. Effect of Other Indemnities.
The Lessee's obligations under the indemnities
provided for in this Agreement shall be those of a
primary obligor whether or not the Person indemnified
shall also be indemnified with respect to the same
matter under the terms of this Agreement, the Lease,
the Indenture, the Trust Agreement, or any other
document or instrument, and the Person seeking
indemnification from the Lessee pursuant to any
provision of this Agreement may proceed directly
against the Lessee without first seeking to enforce
any other right of indemnification.
Section 9.09. Interest. The Lessee will pay
to each Indemnitee on demand, to the extent permitted
by applicable law, interest on any amount of indemnity
not paid when due pursuant to this Article 9 until the
same shall be paid, at the Past Due Rate.
ARTICLE 10
CERTAIN COSTS
Section 10.01. Trustee Expenses and Other
Costs. (a) Initial Fees and Continuing Expenses.
The initial fees of the Owner Trustee, Indenture
Trustee and Pass Through Trustee, and the continuing
fees, expenses and disbursements (including reasonable
counsel fees and expenses and initial fees relating to
the establishment of any replacement trustee) of the
Owner Trustee, of the Indenture Trustee, and of the
Pass Through Trustee, shall be paid as Supplemental
Rent by the Lessee, including without limitation any
amounts payable to the Indenture Trustee, the Pass
Through Trustee or the Owner Trustee under the
indemnification provisions of the Indenture, the Trust
Agreement or the Pass Through Agreement, as the case
may be.
(b) Amendments, Supplements and Appraisal.
Without limitation of the foregoing, the Lessee
agrees:
(i) to pay as Supplemental Rent to the Owner
Trustee, the Owner Participant, the Indenture
Trustee and the Pass Through Trustee all costs
and expenses (including reasonable legal fees and
expenses) incurred by any of them in connection
with any Default or Event of Default and any
enforcement or collection proceedings resulting
therefrom or in connection with the negotiation
of any restructuring or "work-out" (whether or
not consummated), or the obligations of the
Lessee hereunder or under the other Operative
Agreements and the enforcement of this Section
10.01, including, without limitation, the
entering into or giving or withholding of any
amendments or supplements or waivers or consents,
including without limitation, any amendment,
waiver, modification or consent resulting from
any work-out, restructuring or similar proceeding
relating to the performance or nonperformance by
the Lessee of its obligations under the Operative
Agreements; with respect to this Agreement, the
Lease, the Indenture, the Certificates, the Tax
Indemnity Agreement, or any other Operative
Agreement (other than the Collateral Agreement,
any Demand Note and the Letter of Credit, with
respect to which the Owner Participant shall be
responsible) or document or instrument delivered
pursuant to any of them, which amendment,
supplement, waiver or consent is required by any
provision of any Operative Agreement (other than
the Collateral Agreement, any Demand Note and the
Letter of Credit, with respect to which the Owner
Participant shall be responsible) or is requested
by the Lessee or necessitated by the action or
inaction of the Lessee; provided, however, that
the Lessee shall not be responsible for fees and
expenses incurred by any party in connection with
the offer, sale or other transfer (whether
pursuant to Article 5 of the Trust Agreement or
otherwise) by the Owner Participant or the Owner
Trustee of any interest in the Aircraft, the
Lessor's Estate or the Trust Agreement or any
similar interest unless such offer, sale or
transfer shall occur after the Commencement Date
(A) during a period when an Event of Default has
occurred and is continuing under the Lease, (B)
during a period following an Event of Loss or (C)
in connection with the termination of the Lease
or action or direction of Lessee with respect to
the Aircraft pursuant to Section 4.02 (other than
any sale at fair market value) or Article 7, 8, 9 or
10 of the Lease (with the Owner Participant being
responsible for any such fees and expenses in the
case of any other offer, sale or transfer); and
(ii) to pay the fees, costs and expenses of
all appraisers involved in an independent
appraisal of the Aircraft to the extent required
under Section 4.03 of the Lease.
ARTICLE 11
SUCCESSOR OWNER TRUSTEE
Section 11.01. Appointment of Successor
Owner Trustee. (a) Resignation and Removal. The
Owner Trustee or any successor Owner Trustee may
resign or may be removed by the Owner Participant, a
successor Owner Trustee may be appointed and a
corporation may become Owner Trustee under the Trust
Agreement only in accordance with the provisions of
Section 3.11 of the Trust Agreement and the provision
of paragraphs (b) and (c) of this Section 11.01.
(b) Conditions to Appointment. The
appointment in any manner of a successor Owner Trustee
pursuant to Section 3.11 of the Trust Agreement shall
be subject to the following conditions:
(i) Such successor Owner Trustee shall be a
Citizen of the United States;
(ii) Such successor Owner Trustee shall be a
bank or a trust company having combined capital,
surplus and undivided profits of at least
$100,000,000;
(iii) Such appointment shall not violate any
provisions of 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 or create a
relationship which would be in violation of 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
(iv) Such successor Owner Trustee shall
enter into an agreement or agreements, in form
and substance satisfactory to the Lessee, the
Owner Participant, the Pass Through Trustee and
the Indenture Trustee whereby such successor
Owner Trustee confirms that it shall be deemed a
party to this Agreement, the Trust Agreement, the
Lease, the Lease Supplements, the Indenture and
the Indenture and Security Agreement Supplements,
and any other Operative Agreements to which the
Owner Trustee is named as a party, and agrees to
be bound by all the terms of such documents
applicable to the Owner Trustee and makes the
representations and warranties contained in
Section 7.04 hereof (except that it may be duly
incorporated, validly existing and in good
standing under the laws of the United States of
America or any State thereof).
(c) Appointment. For so long as the
Aircraft remains registered under the Act, the Owner
Participant agrees to appoint promptly a successor
Owner Trustee meeting the requirements of Section
11.01(b) in the event the Owner Participant has
knowledge that the Owner Trustee at any time shall not
be a Citizen of the United States.
(d) Revocation. The Owner Participant
agrees not to revoke and terminate the Trust Agreement
except in accordance with Section 4.01(a) of the Trust
Agreement, as in effect on the date hereof.
ARTICLE 12
LIABILITIES AND INTERESTS OF THE OWNER PARTICIPANT
AND THE PASS THROUGH TRUSTEE
Section 12.01. Liabilities of the Owner
Participant. The Owner Participant shall have no
obligation or duty to the Lessee or to any Holder with
respect to the transactions contemplated by this
Agreement, except those obligations or duties
expressly set forth in this Agreement, the Indenture,
the Trust Agreement, the Tax Indemnity Agreement, the
Lease or any other Operative Agreement to which the
Owner Participant is a party, and the Owner
Participant shall not be liable for the performance by
any party hereto of such other party's obligations or
duties hereunder. Under no circumstances shall the
Owner Participant as such be liable to the Lessee, nor
shall the Owner Participant be liable to any Holder
for any action or inaction on the part of the Owner
Trustee or the Indenture Trustee in connection with
this Agreement, the Indenture, the Lease, the Trust
Agreement, any other Operative Agreement, the
ownership of the Aircraft, the administration of the
Lessor's Estate or the Trust Indenture Estate or
otherwise, whether or not such action or inaction is
caused by the willful misconduct or gross negligence
of the Owner Trustee or the Indenture Trustee.
Section 12.02. Interest of Pass Through
Trustee. The Pass Through Trustee shall have no
further interest in, or other right with respect to,
the Trust Indenture Estate when and if the principal,
any Make-Whole Premium, interest on all Certificates
and all other sums payable to the Pass Through Trustee
under this Agreement, under the Indenture and under
the Certificates shall have been paid in full.
ARTICLE 13
OTHER DOCUMENTS
Section 13.01. Consent of Lessee to Other
Documents. The Lessee hereby consents in all respects
to the execution and delivery of the Trust Agreement
and the Indenture and to all of the terms of said
documents, and the Lessee acknowledges receipt of an
executed counterpart of the Trust Agreement, the
Collateral Agreement and the Indenture; it being
agreed that such consent shall not be construed to
require the Lessee's consent to any future supplement
to, or amendment, waiver or modification of the terms
of the Trust Agreement, the Collateral Agreement, the
Indenture or the Certificates, except that prior to
the occurrence and continuance of an Event of Default,
no section of the Indenture, the Certificates, the
Collateral Agreement, any Demand Note, the Letter of
Credit or the Trust Agreement shall be amended or
modified in any manner (i) materially adverse to the
Lessee or (ii) which increases payments or changes
timing of payments by the Lessee, in either case
without its consent.
Section 13.02. Further Assurances. The
Lessee hereby confirms to the Owner Participant its
covenants set forth in and obligations under the
Lease; provided, however, that such covenants and
obligations will not be applicable until the
Commencement Date. The Lessee agrees that, except as
otherwise provided in the Indenture, the Owner Trustee
may not enter into any amendment, modification or
supplement of, or give any waiver or consent with
respect to, or approve any matter or document as being
satisfactory under the Lease without the prior consent
of the Indenture Trustee and the Owner Participant and
that, except as otherwise provided in the Indenture,
upon an Indenture Default, the Indenture Trustee may
act as the Lessor under the Lease to the exclusion of
the Owner Trustee. The Lessee further agrees to
deliver to the Indenture Trustee and the Owner
Participant a copy of each notice, statement, request,
report or other communication given or required to be
given to the Owner Trustee under the Lease.
ARTICLE 14
NOTICES
Section 14.01. Notices. All notices,
demands, declarations and other communications
required by this Agreement shall be in writing and
shall be deemed received (i) if given by telecopier
when transmitted and the appropriate telephonic
confirmation received if transmitted on a Business Day
or during normal business hours of the recipient, and
otherwise on the next Business Day following
transmission, provided that in such case, such notice
by telecopy shall be confirmed by international
certified or registered air mail promptly thereafter
(ii) if given by certified international air mail or
registered international air mail, upon receipt, by
the addressee (iii) if given by telex, upon receipt by
the party transmitting the telex of such party's
callback code at the end of such telex (receipt of
confirmation in writing not being necessary to the
effectiveness of any telex), provided that in such
case, such notice by telex shall be confirmed by
international certified or registered air mail
promptly thereafter and (iv) if given by Federal
Express service or other means, when received or
personally delivered, addressed:
(a) If to the Lessee, to its office at 2005
Corporate Avenue, Memphis, Tennessee 38132, Attention:
Senior Vice President and Chief Financial Officer with
a copy to Senior Vice President and General Counsel;
telephone (901) 395-3388, telecopier (901) 395-4758;
or at such other address as the Lessee shall from time
to time designate in writing to the Lessor, the
Indenture Trustee, the Pass Through Trustee and the
Owner Participant;
(b) If to the Lessor or the Owner Trustee,
to its office at 79 South Main Street, Salt Lake City,
Utah 84111, Attention: Corporate Trust Department;
telephone (801) 246-5630, telecopier (801) 246-5053,
or to such other address as Lessor shall from time to
time designate in writing to the Lessee, the Indenture
Trustee, the Pass Through Trustee, with a copy to
Owner Participant at the Owner Participant's address
as provided in subsection (c) below;
(c) If to the Owner Participant, to its
office at 1209 Orange Street, Wilmington, DE, 19801
Attention: President, (c/o Junaid Chida),
telephone 212-259-6308, telecopier 212-259-6333,
or to such other address as the Owner Participant may
from time to time designate in writing to the Lessee,
the Pass Through Trustee and the Indenture Trustee;
(d) If to the Pass Through Trustee, to its
office at 1301 Gervis Street, Fourth Floor, Columbia,
South Carolina 29201, Attention: Corporate Trust
Manager, telephone (803) 929-5905, telecopier (803)
929-5922, or to such other address as the Pass Through
Trustee shall from time to time designate in writing
to the Lessor, the Lessee, the Indenture Trustee, and
the Owner Participant (with a copy to the Indenture
Trustee at the address set forth in (e) below);
(e) If to the Indenture Trustee, to its
office at Suite 900, 600 Peachtree Street, N.E.,
Atlanta, Georgia 30308, Attention: Corporate Trust
Lease Administration, telephone (404) 607-4681,
telecopier (404) 607-6362, or to such other address as
the Indenture Trustee shall from time to time
designate in writing to the Lessor, the Lessee, the
Pass Through Trustee and the Owner Participant; and
(f) If to the LC Bank, to its office at 1211
Avenue of the Americas, 24th Floor, New York, New York
10036, Attention: Trade Services Group/Corporate Finance,
telephone: 212-852-6000, telecopier: 212-852-6300, or to
such other address as the LC Bank shall from time to
time designate in writing to the Lessee, the Lessor, the
Indenture Trustee, the Pass Through Trustee, and the
Owner Participant or to such other address as the LC
Bank shall from time to time designate in writing to
the Lessee, the Lessor, the Lessee, the Indenture
Trustee, the Pass Through Trustee and the Owner
Participant.
If any such notice is received on a day which is not a
Business Day at the place of delivery, such notice
shall be deemed to have been received on the
immediately following Business Day at the place of
delivery; provided, that if tender of any notice is
refused by the addressee thereof, such notice shall be
deemed to have been delivered upon such tender.
ARTICLE 15
[INTENTIONALLY OMITTED]
ARTICLE 16
MISCELLANEOUS
Section 16.01. Owner for Federal Tax
Purposes. It is hereby agreed between the Owner
Participant and the Lessee (but the Lessee makes no
representation to such effect) that for federal income
tax purposes the Owner Participant will be the owner
of the Aircraft and the Lessee will be the lessee of
the Aircraft.
Section 16.02. [Intentionally Omitted.]
Section 16.03. Counterparts. This Agreement
may be executed by the parties 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 16.04. No Oral Modifications.
Neither this Agreement nor any of its terms may be
terminated, amended, supplemented, waived or modified
orally, but only by an instrument in writing signed by
the party against which the enforcement of the
termination, amendment, supplement, waiver or
modification is sought. No such written termination,
amendment, supplement, waiver or modification shall be
effective unless a signed copy shall have been
delivered to the Owner Trustee, the Indenture Trustee
and the Pass Through Trustee. A copy of each such
termination, amendment, supplement, waiver or
modification shall also be delivered to each other
party to this Agreement.
The consent of the Pass Through Trustee, in
its capacity as a party to this Agreement and not as a
Holder, shall not be required to modify, amend or
supplement this Agreement or to give any consent,
waiver, authorization or approval with respect to this
Agreement under the circumstances in which the consent
of the Indenture Trustee would not be required for
such modification, amendment, supplement, consent,
waiver or approval in accordance with Section 8.01(b)
of the Indenture, provided that the Pass Through
Trustee shall be entitled to receive any Officers'
Certificate (as defined in the Pass Through Agreement)
or Opinion of Counsel (as defined in the Pass Through
Agreement) necessary ,in its sole discretion, to
establish that the Indenture Trustee's consent would
not be required under such circumstances.
Section 16.05. Captions. The table of
contents preceding this Agreement and the headings of
the various Articles and Sections of this Agreement
are for convenience of reference only and shall not
modify, define, expand or limit any of the terms or
provisions of this Agreement.
Section 16.06. Successors and Assigns. The
terms of this Agreement shall be binding upon, and
shall inure to the benefit of, the Lessee and its
successors and assigns, the Owner Participant and its
successors and assigns, the Owner Trustee and its
successors as Owner Trustee (and any additional
trustee appointed), and the Indenture Trustee and its
successors as Indenture Trustee (and any additional
Indenture Trustee appointed) under the Indenture, the
Pass Through Trustee and its successor as Pass Through
Trustee (and any additional Pass Through Trustee
appointed) and the LC Bank and its successors and
assigns.
Section 16.07. Concerning the Owner Trustee,
Pass Through Trustee and Indenture Trustee. Each of
First Security Bank of Utah, National Association,
NationsBank of South Carolina, National Association,
and Nationsbank of Georgia, National Association is
entering into this Agreement solely in their
respective capacities, in the case of First Security
Bank of Utah, National Association, not in its
individual capacity but solely as trustee under the
Trust Agreement, in the case of NationsBank of South
Carolina, National Association, not in its individual
capacity but solely as pass through trustee under the
Pass Through Agreement and in the case of Nationsbank
of Georgia, National Association, as indenture trustee
under the Indenture, and except as otherwise expressly
provided in this Agreement, the Pass Through Agreement
or in the Lease, the Indenture or the Trust Agreement,
none of First Security Bank of Utah, National
Association, NationsBank of South Carolina, National
Association, or Nationsbank of Georgia, National
Association, shall be personally liable for or on
account of its statements, representations,
warranties, covenants or obligations under this
Agreement; provided, however, that each of First
Security Bank of Utah, National Association,
NationsBank of South Carolina, National Association,
and Nationsbank of Georgia, National Association
accepts the benefits running to it under this
Agreement, and each agrees that (except as otherwise
expressly provided in this Agreement or any other
Operative Agreement to which it is a party) it shall
be liable in its individual capacity for its own gross
negligence or willful misconduct (whether in its
capacity as trustee or in its individual capacity),
and for any negligence in connection with any
inaccuracy of representations and warranties or any
breach of covenants (which covenants, in the case of
the Indenture Trustee shall be those set forth in
Sections 7.05(b) and 7.05(c) hereof and Section 5.05
of the Indenture) made in its individual capacity
pursuant to or in connection with this Agreement or
the other Operative Agreements to which it is a party.
Section 16.08. Severability. Any provision
of this Agreement 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, and any such prohibition or
unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in
any other jurisdiction.
Section 16.09. Public Release of
Information. Subject to applicable legal requirements
(including, without limitation, securities laws
requirements, other regulatory requirements and other
legally compelled disclosures), so long as there shall
not have occurred an Event of Default or Indenture
Event of Default, each party shall in each instance
obtain the prior written approval of each other party
concerning the exact text and timing of news releases,
articles and other information releases to the public
media concerning any Operative Agreements.
Section 16.10. Certain Limitations on
Reorganization. The Indenture Trustee agrees that, if
(1) all or any part of the Lessor's Estate becomes the
property of a debtor subject to the reorganization
provisions of the Bankruptcy Code, (2) pursuant to
such reorganization provisions the Owner Participant
is required, by reason of the Owner Participant being
held to have recourse liability to the debtor or the
trustee of the debtor, directly or indirectly, to make
payment on account of any amount payable as principal
of or interest, Make-Whole Premium or other amounts
payable on the Certificates (other than as
contemplated by the Operative Agreements), and (3) the
Indenture Trustee actually receives any Recourse
Amount which reflects any payment by the Owner
Participant on account of (2) above, then, to the
extent permitted by applicable law, and subject to the
receipt by the Indenture Trustee prior to its
disbursement of such Recourse Amount of written notice
from the Owner Participant or the Owner Trustee
reasonably relating to the refund obligation in this
sentence, the Indenture Trustee shall promptly refund
to the Owner Participant such Recourse Amount. For
purposes of this Section 16.10, "Recourse Amount"
means the amount by which the payment by the Owner
Participant on account of clause (ii) above received
by the Indenture Trustee exceeds the amount which
would have been received by the Indenture Trustee if
the Owner Participant had not become subject to the
recourse liability referred to in (ii) above. Nothing
contained in this paragraph shall prevent the
Indenture Trustee from enforcing any personal recourse
obligation (and retaining the proceeds thereof) of the
Owner Participant under this Agreement, the Indenture
(other than referred to in clause (2) above), any
Demand Note or the Trust Agreement (and any exhibits
or annexes thereto), or from retaining any amount paid
by the Owner Participant under Sections 5.01, 8.02 and
8.03 of the Indenture. Nothing contained herein shall
be construed as requiring any Holder to refund any
amount distributed to such Holder pursuant to the
Indenture.
SECTION 16.11. 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 MATTERS OF CONSTRUCTION, VALIDLY
AND PERFORMANCE, WITHOUT GIVING EFFECT TO PRINCIPLES
OF CONFLICTS OF LAWS.
Section 16.12. 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 Participation Agreement, the
Lease, the Agreement to Lease, the Indenture 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 11 U.S.C. Section 1110
as amended form time to time and any successor provision
thereto.
ARTICLE 17
CONFIDENTIALITY
Section 17.01. Confidentiality. Each party
hereto agrees (on behalf of itself and each of its
affiliates, agents, directors, officers, employees and
representatives) to use reasonable precautions to keep
confidential, in accordance with its customary
procedures for handling confidential information of
this nature, any non-public information supplied to it
pursuant to this Agreement which is identified by the
Person supplying the same as being confidential at the
time the same is delivered to such party, provided
that nothing herein shall limit the disclosure of any
such information (i) to the extent required by
statute, rule, regulation or judicial process, (ii) to
counsel for any of the parties hereto who have been
instructed and have agreed to hold such information
confidential, (iii) to bank examiners, auditors or
accountants, (iv) in the case of the Pass Through
Trustee, in accordance with the provisions of the Pass
Through Agreement, (v) in connection with any
litigation to which any one or more of the parties
hereto is a party relating to the transactions
contemplated hereby or by any of the Operative
Agreements, (vi) to a subsidiary or affiliate of the
parties hereto, or (vii) to any assignee or
participant (or prospective assignee or participant)
so long as such assignee or participant (or
prospective assignee or participant) first executes
and delivers to the respective party making such
assignment or participation an agreement in writing to
be bound by the provisions of this Section 17.01.
IN WITNESS WHEREOF, the parties have caused
this Agreement to be executed by their respective,
duly authorized officers or signatories and this
Agreement shall be effective this _____ day of March,
1994.
LESSEE:
FEDERAL EXPRESS CORPORATION
By ___________________________
Title:
OWNER PARTICIPANT:
LLG AIRCRAFT LEASING, L.P.,
By LLG OF DELAWARE, INC.
Its General Partner
By ___________________________
Title:
OWNER TRUSTEE:
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION,
not in its individual
capacity, but solely
as Owner Trustee,
By ___________________________
Title:
INDENTURE TRUSTEE:
NATIONSBANK OF GEORGIA,
NATIONAL ASSOCIATION,
not in its individual
capacity, but solely as
Indenture Trustee,
By ___________________________
Title:
PASS THROUGH TRUSTEE:
NATIONSBANK OF SOUTH CAROLINA,
NATIONAL ASSOCIATION,
not in its individual
capacity, but solely as
Pass Through Trustee,
By ___________________________
Title:
LC BANK:
WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK
BRANCH
By ___________________________
Title:
By ___________________________
Title:
SCHEDULE I
CERTIFICATE INFORMATION
1. Federal Express Corporation Pass Through Trust, 1994-A310-A1
Federal Express Corporation Trust A
Principal Amount: $4,166,194
Maturity: March 23, 1998
Interest Rate: 7.53%
2. Federal Express Corporation Pass Through Trust, 1994-A310-A2
Federal Express Corporation Trust A
Principal Amount: $17,268,693
Maturity: March 23, 2007
Interest Rate: 7.89%
3. Federal Express Corporation Pass Through Trust, 1994-A310-A3
Federal Express Corporation Trust A
Principal Amount: $7,185,793
Maturity: March 23, 2009
Interest Rate: 8.40%
1. Federal Express Corporation Pass Through Trust, 1994-A310-A1
Federal Express Corporation Trust B
Principal Amount: $5,202,323
Maturity: March 23, 2003
Interest Rate: 7.53%
2. Federal Express Corporation Pass Through Trust, 1994-A310-A2
Federal Express Corporation Trust B
Principal Amount: $17,782,345
Maturity: September 23, 2007
Interest Rate: 7.89%
3. Federal Express Corporation Pass Through Trust, 1994-A310-A3
Federal Express Corporation Trust B
Principal Amount: $7,671,680
Maturity: March 23, 2009
Interest Rate: 8.40%
1. Federal Express Corporation Pass Through Trust, 1994-A310-A1
Federal Express Corporation Trust C
Principal Amount: $5,459,459
Maturity: March 23, 2003
Interest Rate: 7.53%
2. Federal Express Corporation Pass Through Trust, 1994-A310-A2
Federal Express Corporation Trust C
Principal Amount: $18,232,902
Maturity: September 23, 2007
Interest Rate: 7.89%
3. Federal Express Corporation Pass Through Trust, 1994-A310-A3
Federal Express Corporation Trust C
Principal Amount: $7,229,706
Maturity: March 23, 2009
Interest Rate: 8.40%
1. Federal Express Corporation Pass Through Trust, 1994-A310-A1
Federal Express Corporation Trust D
Principal Amount: $4,097,109
Maturity: March 23, 1998
Interest Rate: 7.53%
2. Federal Express Corporation Pass Through Trust, 1994-A310-A2
Federal Express Corporation Trust D
Principal Amount: $18,109,624
Maturity: March 23, 2007
Interest Rate: 7.89%
3. Federal Express Corporation Pass Through Trust, 1994-A310-A3
Federal Express Corporation Trust D
Principal Amount: $8,310,464
Maturity: September 23, 2009
Interest Rate: 8.40%
1. Federal Express Corporation Pass Through Trust, 1994-A310-A1
Federal Express Corporation Trust E
Principal Amount: $6,508,237
Maturity: March 23, 2004
Interest Rate: 7.53%
2. Federal Express Corporation Pass Through Trust, 1994-A310-A2
Federal Express Corporation Trust E
Principal Amount: $16,860,707
Maturity: September 23, 2007
Interest Rate: 7.89%
3. Federal Express Corporation Pass Through Trust, 1994-A310-A3
Federal Express Corporation Trust E
Principal Amount: $6,747,347
Maturity: September 23, 2009
Interest Rate: 8.40%
1. Federal Express Corporation Pass Through Trust, 1994-A310-A1
Federal Express Corporation Trust F
Principal Amount: $10,778,919
Maturity: September 23, 2004
Interest Rate: 7.53%
2. Federal Express Corporation Pass Through Trust, 1994-A310-A2
Federal Express Corporation Trust F
Principal Amount: $14,620,624
Maturity: September 23, 2008
Interest Rate: 7.89%
3. Federal Express Corporation Pass Through Trust, 1994-A310-A3
Federal Express Corporation Trust F
Principal Amount: $4,952,842
Maturity: September 23, 2009
Interest Rate: 8.40%
1. Federal Express Corporation Pass Through Trust, 1994-A310-A1
Federal Express Corporation Trust G
Principal Amount: $9,697,934
Maturity: September 23, 2004
Interest Rate: 7.53%
2. Federal Express Corporation Pass Through Trust, 1994-A310-A2
Federal Express Corporation Trust G
Principal Amount: $12,466,618
Maturity: March 23, 2008
Interest Rate: 7.89%
3. Federal Express Corporation Pass Through Trust, 1994-A310-A3
Federal Express Corporation Trust G
Principal Amount: $5,349,330
Maturity: September 23, 2009
Interest Rate: 8.40%
1. Federal Express Corporation Pass Through Trust, 1994-A310-A1
Federal Express Corporation Trust H
Principal Amount: $9,850,146
Maturity: March 23, 2006
Interest Rate: 7.53%
2. Federal Express Corporation Pass Through Trust, 1994-A310-A2
Federal Express Corporation Trust H
Principal Amount: $13,528,824
Maturity: September 23, 2008
Interest Rate: 7.89%
3. Federal Express Corporation Pass Through Trust, 1994-A310-A3
Federal Express Corporation Trust H
Principal Amount: $4,316,177
Maturity: September 23, 2009
Interest Rate: 8.40%
1. Federal Express Corporation Pass Through Trust, 1994-A310-A1
Federal Express Corporation Trust I
Principal Amount: $12,207,788
Maturity: September 23, 2005
Interest Rate: 7.53%
2. Federal Express Corporation Pass Through Trust, 1994-A310-A2
Federal Express Corporation Trust I
Principal Amount: $10,954,314
Maturity: September 23, 2008
Interest Rate: 7.89%
3. Federal Express Corporation Pass Through Trust, 1994-A310-A3
Federal Express Corporation Trust I
Principal Amount: $4,513,303
Maturity: March 23, 2010
Interest Rate: 8.40%
1. Federal Express Corporation Pass Through Trust, 1994-A310-A1
Federal Express Corporation Trust J
Principal Amount: $12,620,316
Maturity: March 23, 2006
Interest Rate: 7.53%
2. Federal Express Corporation Pass Through Trust, 1994-A310-A2
Federal Express Corporation Trust J
Principal Amount: $10,101,643
Maturity: September 23, 2008
Interest Rate: 7.89%
3. Federal Express Corporation Pass Through Trust, 1994-A310-A3
Federal Express Corporation Trust J
Principal Amount: $4,765,886
Maturity: March 23, 2010
Interest Rate: 8.40%
1. Federal Express Corporation Pass Through Trust, 1994-A310-A1
Federal Express Corporation Trust K
Principal Amount: $15,005,244
Maturity: March 23, 2006
Interest Rate: 7.53%
2. Federal Express Corporation Pass Through Trust, 1994-A310-A2
Federal Express Corporation Trust K
Principal Amount: $9,838,871
Maturity: September 23, 2008
Interest Rate: 7.89%
3. Federal Express Corporation Pass Through Trust, 1994-A310-A3
Federal Express Corporation Trust K
Principal Amount: $5,497,933
Maturity: March 23, 2010
Interest Rate: 8.40%
1. Federal Express Corporation Pass Through Trust, 1994-A310-A1
Federal Express Corporation Trust L
Principal Amount: $14,790,634
Maturity: September 23, 2006
Interest Rate: 7.53%
2. Federal Express Corporation Pass Through Trust, 1994-A310-A2
Federal Express Corporation Trust L
Principal Amount: $7,583,248
Maturity: September 23, 2008
Interest Rate: 7.89%
3. Federal Express Corporation Pass Through Trust, 1994-A310-A3
Federal Express Corporation Trust L
Principal Amount: $5,198,577
Maturity: March 23, 2010
Interest Rate: 8.40%
1. Federal Express Corporation Pass Through Trust, 1994-A310-A1
Federal Express Corporation Trust M
Principal Amount: $14,615,697
Maturity: September 23, 2006
Interest Rate: 7.53%
2. Federal Express Corporation Pass Through Trust, 1994-A310-A2
Federal Express Corporation Trust M
Principal Amount: $7,622,587
Maturity: September 23, 2008
Interest Rate: 7.89%
3. Federal Express Corporation Pass Through Trust, 1994-A310-A3
Federal Express Corporation Trust M
Principal Amount: $5,401,962
Maturity: March 23, 2010
Interest Rate: 8.40%
SCHEDULE II
DEFINITIONS
GENERAL PROVISIONS
The following terms shall have the following
meanings for all purposes of each Operative Agreement
which specifically incorporates this Schedule,
referred to below, unless otherwise defined in such
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 such 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 or Federal Aviation Act. The Federal
Aviation Act of 1958, as amended from time to time,
and the regulations promulgated pursuant thereto.
Additional Insureds. As defined in
Article 13 of the Lease.
Aeronautics Authority or FAA. 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
located in the United States succeeding to the
functions of any of the foregoing.
Affiliate. With respect to any Person, any
partner of such Person or 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 or such partner 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 federal, state, local and foreign
income taxes resulting from the receipt or accrual of
such payments, shall be equal to the payment received
or deemed to have been received. In the case of
amounts payable to the Lessor, the Owner Participant
or any partner of the Owner Participant, or any
corporate affiliate of any partner of the Owner
Participant, it shall be presumed that such Person is
at all times subject to federal income tax at the
maximum marginal rate generally applicable to
corporations from time to time and actual state, local
and foreign income taxes.
Agreement to Lease. The Original Agreement
to Lease, as amended and restated as of March 1, 1994,
among Lufthansa, the Lessee and the Lessor.
Air Carrier. Any air carrier which is a
United States "domestic air carrier" as defined in
Part 121 of the Federal Aviation Regulations, and any
"foreign air carrier" (as defined in the Act) as to
which there is in force a permit granted under
Section 402 of the Act.
Aircraft. The Airframe together with the two
Engines whether or not any of such Engines may from
time to time be installed on such Airframe or may be
installed on any other airframe or on any other
aircraft.
Aircraft Cost. The amount specified as the
Aircraft Cost for the Aircraft on Schedule I to the
Agreement to Lease (as in effect on the Closing Date).
Airframe. The Airbus Model A310-203 aircraft
(excluding the Engines or engines from time to time
installed thereon) contemplated by the Participation
Agreement to be leased on the Commencement Date by the
Lessor to the Lessee pursuant to the Lease, and having
the manufacturer's serial number ________________ and,
on and after the Commencement Date, the United States
FAA Registration Number specified in the initial Lease
Supplement, including all Parts.
Ancillary Agreements. Any written agreement
between parties to the Agreement to Lease Operative
Agreements or Operative Agreements entered into on the
Closing Date or at any time thereafter in connection
with the transactions contemplated by the Operative
Agreements, as amended from time to time, including,
without limitation, Ancillary Agreement No. 1.
Ancillary Agreement No. 1. The agreement,
dated as of the Commencement Date, among the Lessee,
the Owner Trustee and the Indenture Trustee.
Appraisal. The appraisal delivered pursuant
to Section 4.01(l) of the Participation Agreement.
Bankruptcy Code. The Federal Bankruptcy Code
of 1978, as amended, and any successor thereto.
Bankruptcy Default. An event specified in
Section 16.01(e), (f) or (g) of the Lease which with
the giving of notice or lapse of time or both would
constitute an Event of Default.
Basic Rent. The aggregate periodic rent
payable throughout the Basic Term pursuant to
Section 3.01 of the Lease.
Basic Term. The period commencing at the
beginning of the day on the Commencement Date and
ending at the end of the day on the day immediately
preceding the date 15 years from the Commencement
Date, or such earlier date on which the Lease shall be
terminated as provided therein.
Beneficial Interest. The interest of the
Owner Participant under the Trust Agreement.
Bills of Sale. Has the meaning set forth in
Section 4.02(d)(v) of the Participation Agreement.
Business Day. Any day on which commercial
banks are not authorized or required to close in New
York City and Memphis, Tennessee, and so long as the
Lien of the Indenture is in effect, in Atlanta,
Georgia, and Columbia, South Carolina, and thereafter
in Salt Lake City, Utah.
Certificates or Equipment Trust Certificates.
The Equipment Trust Certificates (Federal Express
Corporation Trust ___) issued by the Owner Trustee
pursuant to the Indenture and any certificate issued
in exchange therefor or replacement thereof pursuant
to the Indenture.
Citizen of the United States. A citizen of
the United States as defined in Section 101(16) of the
Act, or any analogous part of any successor or
substituted legislation or regulation at the time in
effect.
Closing Date. The Business Day on which the
sale of the Pass Through Certificates to the
Underwriters occurs pursuant to the Underwriting
Agreement.
Closings. The closing with respect to the
acquisition of the Pass Through Certificates by the
Underwriters and the closing with respect to the
acquisition of the Certificates by the Pass Through
Trusts.
Code. Except as otherwise provided,
references to the Code shall mean the Internal Revenue
Code of 1986, as amended from time to time.
Collateral. Has the meaning set forth in the
Collateral Agreement.
Collateral Agreement. The Collateral
Agreement (Trust ______), dated as of March 1, 1994,
between the Owner Trustee and the Indenture Trustee,
as amended or modified from time to time.
Commencement Date. The date on which the
Aircraft is leased by the Lessor to the Lessee under
the Lease, which date shall also be the date of the
initial Lease Supplement.
Commission or SEC. The Securities and
Exchange Commission, as from time to time constituted,
created under the Exchange Act, or if at any time
after the execution and delivery of the Participation
Agreement such Commission is not existing and
performing the duties now assigned to it under the
Exchange Act, then the body performing such duties on
such date.
Company. Federal Express Corporation, a
Delaware corporation, and its permitted successors and
assigns hereunder.
Corporate Base Rate. The rate announced from
time to time by The Chase Manhattan Bank, N.A. or any
successors thereto at its head office at New York, New
York, as its Corporate Base Rate.
Corporate Trust Office. The office of the
Indenture Trustee at which the Indenture Trustee's
corporate trust business shall be administered which
the Indenture Trustee shall have specified by notice
in writing to the Lessee, the Owner Trustee and the
Holders.
Cut-off Date. The earlier to occur of (i)
the date which is 365 days after the Scheduled
Commencement Date, or any earlier Business Day (but in
no event earlier than the Scheduled Commencement Date)
specified as the Cut-off Date by the Owner Trustee in
an irrevocable written notice (including, without
limitation, in any such notice contemplated by Section
12 of the Agreement to Lease) given to the Indenture
Trustee not less than 30 days prior thereto and (ii)
30 days after the date of any Pre-Funding Termination
Notice in accordance with Section 3 of the Agreement
to Lease.
DA. Deutsche Aerospace Airbus GmbH, a German
corporation, its successor and permitted assigns.
Debt Portion. The amount specified as such
on Schedule IV to the Participation Agreement.
Debt Rate. The weighted average rate of
interest applicable from time to time to the
Certificates, but in no event less than 8% per annum.
Deemed Event of Loss. If the Exchange Date
does not occur on or prior to the Cut-off Date.
Default. Any event or condition, which with
the lapse of time or the giving of notice, or both,
would constitute an Event of Default.
Delivery Notice. Notice of the Aircraft's
Commencement Date, given by the Owner Participant as
provided in Section 3.01 of the Participation
Agreement and including any notice with respect to a
postponed Commencement Date given by the Owner
Participant pursuant to Section 3.02 of the
Participation Agreement.
Demand Note. Each of the Promissory Notes
(D-_______), dated the Closing Date, from Lufthansa in
the form of Exhibit E to the Participation Agreement,
and in an aggregate principal amount specified under
"Demand Note Principal Amount" in Schedule IV to the
Participation Agreement.
Demand Note Collateral. Has the meaning set
forth in the Collateral Agreement.
Dollars and $. The lawful currency of the
United States of America.
Engine. Each of the two General Electric
CF6-80A3 engines, more fully described in the initial
Lease Supplement (or, prior to the Commencement Date,
in Exhibit A to the Agreement to Lease opposite the
Airframe), 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 7.02(a)(vii), 10.03,
11.03, 11.04 or 12.02 of the Lease, together with all
Parts. 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 Lease.
ERISA. The Employee Retirement Income
Security Act of 1974, as amended.
Event of Default. Each of the events
specified in Article 16 of the Lease.
Event of Loss. Event of Loss means any of
the following events on or after the Commencement Date
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 120 days or to the end of the
Term, if less, due to theft or disappearance, or
(B) for a period in excess of 60 days or to the end of
the Term, if less, due to the destruction, damage
beyond economic repair or rendition of such property
permanently unfit for normal use by Lessee 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) (1) condemnation, confiscation or seizure of, or
requisition of title to such property by the
Government, any foreign government or purported
government or any agency or instrumentality thereof,
such Event of Loss being deemed to occur on the date
of any such condemnation, confiscation, seizure or
requisition of title, or (2) requisition of use of
such property (A) by 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 (or such shorter period
ending on the earlier of the expiration of the Term or
on the date on which an insurance settlement with
respect to such property on the basis of a total loss
or constructive or compromised total loss shall
occur), or (B) by the Government for a period
extending beyond the Term, provided that no Event of
Loss shall be deemed to have occurred, and the Term
shall be extended automatically for a period of up to
six months beyond the end of the Term in the event
that the Aircraft, the Airframe or Engine is
requisitioned by the Government pursuant to an
activation as part of the Civil Reserve Air Fleet
Program described in Section 7.02(a)(iv) of the Lease;
and (iv) 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 Airbus Model
A310-203 aircraft equipped with engines of the same
make and model as the Engines for a period of six (6)
consecutive months, unless the Lessee, prior to the
expiration of such six (6) 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 one (1)
year, unless the Lessee, prior to the expiration of
such one (1) year period shall have conformed the
Aircraft 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 Lessee; provided,
that if there is a conflict between the operation of
clause (iv) above and Section 12.05 of the Lease (by
reference to Section 12.04(ix) thereof), such
Section 12.05 of the Lease shall control. The date of
such Event of Loss shall be the date of (i) loss of
such property or its use thereof for a period in
excess of 120 days, or to the end of the Term, if less
due to theft or disappearance, or loss for a period in
excess of 60 days, or to the end of the Term, if less
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 or to the end of the Term),
(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 (iv) above. On or
after the Commencement Date, 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.
Exchange Act. The Securities Exchange Act of
1934, as amended.
Exchange Date. The date, on or after the
Commencement Date, on which the Indenture Trustee
releases the Debt Portion pursuant to Section 7(e) of
the Collateral Agreement.
Excepted Payments. Collectively, (i) all
right, title and interest of the Owner Participant or
the Owner Trustee in, to and under the Tax Indemnity
Agreement and any moneys due or to become due under
the Tax Indemnity Agreement and payments of
Supplemental Rent or other payments by the Lessee in
either case solely in respect of the Tax Indemnity
Agreement, (ii) indemnity payments and interest
thereon and other amounts paid or payable by the
Lessee to the Owner Participant or to the Owner
Trustee in its individual capacity or any of their
respective Affiliates (other than the Owner Trustee in
its capacity as trustee and the trust created pursuant
to the Trust Agreement), successors, assigns,
directors, officers, employees, agents or servants
pursuant to Articles 8, 9 or 10 of the Participation
Agreement or any corresponding payment of Supplemental
Rent under the Lease; (iii) proceeds of public
liability insurance or governmental indemnities in
lieu thereof in respect of the Aircraft payable to the
Owner Participant or the Owner Trustee, in its
individual capacity, or any of their Affiliates (other
than the Owner Trustee in its capacity as trustee and
the trust created pursuant to the Trust Agreement),
successors or assigns, as a result of insurance claims
made, or losses suffered, by, or amounts in respect of
such indemnities paid for the benefit of, the Owner
Participant or the Owner Trustee in its individual
capacity or any of their Affiliates (other than the
Owner Trustee in its capacity as trustee and the trust
created pursuant to the Trust Agreement), successors
or assigns, directors, officers, employees, agents or
servants, either pursuant to the Lease (which shall
include proceeds of any self-insurance by the Lessee)
or maintained by the Owner Trustee or the Owner
Participant and not required to be maintained under
the Lease; (iv) proceeds of any insurance in respect
of the Aircraft (not required by Section 13 of the
Lease) which is separately acquired and paid for by
the Owner Participant (directly or through the Owner
Trustee) or the Lessor in accordance with Section
13.05 of the Lease); (v) indemnity payments payable by
the Owner Participant to the Owner Trustee in its
individual capacity pursuant to Section 6.01 of the
Trust Agreement; (vi) Transaction Costs or other
expenses paid or payable by the Lessee to, or for the
benefit of, the Indenture Trustee, First Security or
the Owner Participant pursuant to Section 10.01 of the
Participation Agreement; (vii) if the Lessee has
assumed the obligations of the Owner Trustee pursuant
to Section 7.12 of the Participation Agreement and
Section 2.12 of the Indenture, the amount payable as
purchase price pursuant to Section 4.02(a), (c) or (d)
of the Lease; (viii) the right to enforce, and the
proceeds of any such enforcement of, any right to
receive the proceeds of any of the amounts referred to
in clauses (i) through (vii) above, and the right to
declare an Event of Default under the Lease in respect
of any of the foregoing amounts, but not including the
right to exercise any remedies under the Lease except
for those specifically provided for in this clause
(viii); and (ix) any payments in respect of interest
to the extent attributable to the payments referred to
in clauses (i) through (vii) above.
Expense and Expenses. Have the meanings
specified in Section 9.01(a) of the Participation
Agreement.
FAA Bill of Sale. Has the meaning set forth
in Section 4.02(d)(iv) of the Participation Agreement.
Fair Market Rental. An amount determined on
the basis of, and equal in amount to, the rental which
would be obtained in an arm's-length transaction
between an informed and willing lessee and an informed
and willing lessor unaffiliated with such lessee,
neither being under any compulsion to lease. In such
determination, it shall be assumed that the Aircraft
is in the condition required under the Lease in the
case of return of the Aircraft pursuant to Article 12
of the Lease. Fair Market Rental shall be determined
in accordance with the provisions of Section 4.03 of
the Lease.
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. Unless otherwise provided in the
applicable provisions of any Operative Agreement, in
such determination it shall be assumed that the
Aircraft is in the condition required under the Lease
in the case of return of the Aircraft pursuant to
Article 12 of the Lease. Fair Market Value shall be
determined in accordance with the provisions of
Section 4.03 of the Lease.
Frankfurt Business Day. A day which is a
Business Day and is a day (other than a Saturday or
Sunday) on which commercial banks in Frankfurt,
Germany are generally open for the conduct of
business.
Geneva Convention. The International
Convention on the Recognition of Rights in Aircraft
(Geneva 1948).
Government. The United States of America or
an agency or instrumentality thereof.
Government Obligations. Direct obligations
of the United States of America which are not
callable, redeemable or payable prior to maturity, in
whole or in part, directly or indirectly, by any
Person.
Holder of a Certificate; Holder. As of any
particular time, the Person in whose name a
Certificate shall be registered as payee with the
Indenture Trustee.
Indemnification Agreement. The
Indemnification Agreement, dated the date of the
Underwriting Agreement, among the Lessee, Lufthansa,
the LC Bank and the Underwriters.
Indemnitee. Each of the Owner Trustee, in
its individual capacity and as Owner Trustee and
Lessor, the Owner Participant, the Indenture Trustee
(after the Exchange Date), in its individual capacity
and as Indenture Trustee and any successor (including
any trustee which may succeed to the Lessor's interest
under the Lease), Affiliate, assign, officer,
director, employee, agent and servant of any of the
foregoing, the Lessor's Estate (except to the extent
comprised prior to the Exchange Date of the Trust
Indenture Estate) and (after the Exchange Date) the
Trust Indenture Estate and the officers, directors,
employees, agents and servants of Lufthansa and
the General Partner of the Owner Participant.
Indenture. The Trust Indenture and Security
Agreement (Federal Express Corporation Trust _____) dated
as of March 1, 1994, between the Owner Trustee and the
Indenture Trustee, as supplemented by the Indenture
and Security Agreement Supplement No. 1, and any
amendment or supplement thereto entered from time to
time.
Indenture and Security Agreement Supplement;
Indenture Supplement. A supplement to the Indenture,
substantially in the form of Exhibit A to the
Indenture.
Indenture Default. Any event which, with the
giving of notice or lapse of time, or both, would be
an Indenture Event of Default.
Indenture Documents. The Indenture, the
Collateral Agreement, the Letter of Credit, the
Demand Notes, the Sales Agreement (to the extent
relating to the Aircraft), the Parts and Services
Agreement (to the extent relating to the Aircraft),
the Bills of Sale, the Modification Agreement (to the
extent relating to the Aircraft), the Lease, the
Participation Agreement, the Agreement to Lease
(to the extent relating to the Aircraft), the Trust
Agreement (to the extent relating to the Aircraft
or the Lessor's Estate) and the Certificates.
Indenture Event of Default. Each of the
events specified in Section 7.01 of the Indenture.
Indenture Trustee. NationsBank of Georgia,
National Association, a national banking association,
not in its individual capacity but solely as Indenture
Trustee under the Indenture and each other Person
which may from time to time be acting as successor
trustee under the Indenture.
Indenture Trustee's Liens. Any Lien on the
Trust Indenture Estate resulting from (i) claims
against the Indenture Trustee not related to the
administration of the Trust Indenture Estate or any
transactions pursuant to the Indenture or any
Indenture Document or (ii) any act or omission of the
Indenture Trustee which is not related to the
transactions contemplated by the Operative Agreements
or is in violation of any of the terms of the
Operative Agreements.
Independent Appraisal. An appraisal
conducted pursuant to Section 4.03 of the Lease.
Independent Investment Banker. An
independent investment banking institution of national
standing appointed by the Lessee that is independent
in fact, does not have any direct financial interests,
or any material indirect financial interest, in the
Lessee or any Affiliate of the Lessee, and is not
connected with the Lessee or any Affiliate of the
Lessee, 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 purchase 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.
Interest Payment Date. Each March 23 and
September 23, commencing September 23, 1994.
Issuance Date. For any Pass Through Trust,
the date of the issuance of the related Pass Through
Certificates.
LC Bank. Westdeutsche Landesbank
Girozentrale, New York Branch.
Lease. The Lease Agreement (Federal Express
Corporation Trust _____), in the form of Exhibit B to
the Participation Agreement, dated as of the
Commencement Date or prior thereto, between the Lessor
and the Lessee, as said Lease may from time to time be
supplemented or amended, or its terms waived or
modified, to the extent permitted by, and in
accordance with, the terms of the Indenture,
including, without limitation, supplementation by the
Lease Supplement.
Lease Supplement. The Lease Supplement,
substantially in the form of Exhibit A to the Lease,
entered into between the Lessor and the Lessee.
Lessee. Federal Express Corporation, a
Delaware corporation, and any successors or permitted
assigns in its capacity as lessee under the Lease.
Lessee Documents. Each of the Operative
Agreements and Ancillary Agreements to which the
Lessee is or is to be a party; provided, however, that
for purposes of Section 6.01 of the Participation
Agreement, Lessee Documents shall not include the
Lease or any Lease Supplement prior to the
Commencement Date.
Lessor. First Security Bank of Utah,
National Association, a national banking association,
not in its individual capacity but solely as Owner
Trustee under the Trust Agreement, and its successors
and permitted assigns.
Lessor's Estate. All estate, right, title
and interest of the Owner Trustee in and to any
Additional Collateral, the Aircraft, the Lease, any
Lease Supplement, the Participation Agreement and the
other Indenture Documents, any warranty with respect
to the Airframe and the Engines, all amounts of Basic
Rent and Supplemental Rent, including without
limitation, insurance proceeds (other than insurance
proceeds payable to or for the benefit of the Owner
Trustee, for its own account or in its individual
capacity, the Owner Participant or the Indenture
Trustee), and requisition, indemnity or other payments
of any kind for or with respect to the Aircraft
(except amounts owing to the Owner Participant, to the
Indenture Trustee, to the Owner Trustee in its
individual capacity or to any of their respective
directors, officers, employees and agents pursuant to
Articles 8 and 9 of the Participation Agreement).
Notwithstanding the foregoing, "Lessor's Estate" shall
(i) include all items of property purported to be
covered by the Trust Indenture Estate and (ii) not
include any Excepted Payment.
Lessor's Liens. Liens on the Lessor's Estate
or the Trust Indenture Estate, arising as a result of
(i) claims against or liabilities of the Lessor, in
its individual capacity or as Owner Trustee, or the
Owner Participant, in each case not related to the
transactions contemplated by the Operative Agreements,
(ii) any act or omission of the Lessor in its
individual capacity or as Owner Trustee, and, in the
case of the Lessor in its individual capacity, arising
from its gross negligence or willful misconduct either
not related to the transactions contemplated by or
expressly prohibited under the Operative Agreements
and any act or omission of the Owner Participant which
is not related to the transactions contemplated by the
Operative Agreements or is in violation of any of the
terms of the Operative Agreements, (iii) Taxes or
Expenses imposed against the Lessor, in its individual
capacity or as Owner Trustee, the Owner Participant,
Lessor's Estate or the trust created by the Trust
Agreement which are not indemnified against by the
Lessee pursuant to the Tax Indemnity Agreement or the
Participation Agreement, (iv) claims against the
Lessor or the Owner Participant arising from the
voluntary transfer by the Lessor or the Owner
Participant of its interests in the Aircraft or the
Lessor's Estate other than a transfer of the Aircraft
or the Lessor's Estate pursuant to Section 4.02(a) or
Articles 10 or 11 of the Lease and other than a
transfer pursuant to the exercise of the remedies set
forth in Article 17 of the Lease or (v) claims against
the Lessor or the Owner Participant (or any Affiliate
of either) relating to the Modification Agreement, the
Agreement to Lease, the Sales Agreement, the Demand
Note, the Collateral Agreement, the Sub-subcontract
(as defined in the Agreement to Lease) or the Parts
and Services Agreement.
Letter of Credit. The Irrevocable Letter of
Credit, dated the Closing Date, in the form of
Exhibit G to the Participation Agreement and with a
Stated Amount equal to the amount specified under
"Letter of Credit Stated Amount" on Schedule IV to the
Participation Agreement, from the LC Bank to the
Indenture Trustee.
Lien. Any mortgage, pledge, lien, charge,
encumbrance, lease or security interest or other
similar interest.
Liquid Collateral. Has the meaning set forth
in the Collateral Agreement.
Lufthansa. Deutsche Lufthansa
Aktiengesellschaft.
Lufthansa Side Letter. The letter, dated the
Closing Date, substantially in the form of Exhibit J
to the Participation Agreement, among Lufthansa, the
Indenture Trustee and the Pass Through Trustee.
Majority in Interest of Certificate Holders.
As of a particular date of determination, the Holders
of more than 50% of the aggregate unpaid principal
amount of all Certificates outstanding as of such date
excluding for purposes of this definition any
Certificates held by (i) the Owner Participant unless
all Certificates then outstanding shall be held by the
Owner Participant, (ii) the Lessee or (iii) any
Affiliate of either.
Make-Whole Premium. An amount determined as
of the Business Day before the applicable Prepayment
Date or date of purchase, as the case may be, which an
Independent Investment Banker determines to be equal
to the excess of (i) the present values of all
remaining scheduled payments of principal on the
Certificate to be prepaid or purchased and interest
thereon (excluding interest accrued from the
immediately preceding Payment Date to such Prepayment
Date or date of purchase, as the case may be) to the
Maturity of such 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 Certificate.
Maturity. With respect to any Certificate,
the date on which the final principal amount of such
Certificate is scheduled to be due and payable.
Modification Agreement. The Original
Modification Agreement, as amended by Amendment No. 1
thereto, dated as of March 1, 1994, among the Lessor,
the Owner Participant, Lufthansa and DA.
Modification Cost. The amount set forth in
the "Total" column for the Aircraft in the Rate
Schedule on Exhibit E to the Modification Agreement.
Moody's. Moody's Investors Service, Inc.
Net Proceeds. The amount specified as such
on Schedule IV to the Participation Agreement.
Non-U.S. Person. Any Person other than (i) a
citizen or resident of the United States, as defined
in section 7701(a)(30) of the Code (for purposes of
this definition, the "United States"), (ii) a
corporation, partnership or other entity created or
organized in or under the laws of the United States or
any political subdivision thereof or therein, or
(iii) any estate or trust that is subject to United
States federal income taxation regardless of the
source of its income.
Obsolete Parts. Parts which the Lessee in
good faith determines to be obsolete or no longer
suitable or appropriate for use on the Airframe or any
Engine.
OP Guarantee. The Guarantee, if any, by
Lufthansa in the form of Exhibit I to the
Participation Agreement.
Operative Agreements. The Modification
Agreement, the Agreement to Lease, the Participation
Agreement, the Trust Agreement, the Trust Agreement
Supplement, the Bills of Sale, the Lease, any Lease
Supplement, any Ancillary Agreement which by its terms
is an Operative Agreement, the Certificates outstanding
at the time of reference, the Indenture, any Indenture
and Security Agreement Supplement, the Collateral
Agreement, the Demand Note, the Parts and Services
Agreement, the Indemnification Agreement, the Pass
Through Agreement and the Series Supplements, the Pass
Through Certificates outstanding at the time of reference,
the Sales Agreement, the OP Guarantee (if any) and the
Tax Indemnity Agreement, each as amended from time to
time.
Options Agreement. The letter agreement
dated September 1, 1993 between DA and the Lessee
relating, inter alia, to the sale by DA to the Lessee
of certain cargo conversion kits and the
acknowledgement and agreement by DA of certain rights
of the Lessee under the Modification Agreement.
Outstanding. When used with respect to
Certificates, as of the date of determination and
subject to the provisions of Section 10.04 of the
Indenture, all Certificates theretofore executed and
delivered under the Indenture, with the exception of
the following:
(i) Certificates theretofore cancelled by
the Indenture Trustee or delivered to the
Indenture Trustee for cancellation pursuant to
Section 2.08 of the Indenture or otherwise;
(ii) Certificates for which prepayment money
in the necessary amount has been theretofore
deposited with the Indenture Trustee in trust for
the Holders of such Certificates pursuant to
Section 14.01 of the Indenture; provided, that if
such Certificates are to be prepaid, notice of
such prepayment has been duly given pursuant to
the Indenture or provision therefor satisfactory
to the Indenture Trustee has been made; and
(iii) Certificates in exchange for or in lieu
of which other Certificates have been executed
and delivered pursuant to Article II of the
Indenture.
Original Agreement to Lease. The Agreement
to Lease, dated as of September 1, 1993 among
Lufthansa, the Lessee and the Lessor.
Original Agreements. The Original Agreement
to Lease, the Original Modification Agreement, the
Original Parts and Services Agreement, the Original
Sales Agreement and the Original Trust Agreement.
Original Modification Agreement. The
Aircraft Modification and Maintenance Agreement, dated
as of September 1, 1993, among the Lessor, Lufthansa
and DA.
Original Parts and Services Agreement. The
Parts and Services Agreement, dated as of September 1,
1993, between the Owner Trustee and Lufthansa.
Original Sales Agreement. The Sales
Agreement for Aircraft, dated as of September 1, 1993,
between the Owner Trustee and Lufthansa.
Original Trust Agreement. The Trust
Agreement, dated as of September 1, 1993, between the
Owner Participant and the Owner Trustee in its
individual capacity.
Owner Participant. The trustor originally
named in the Trust Agreement and any successor
thereto, and any Person to which Owner Participant
transfers, in accordance with the Trust Agreement and
the Participation Agreement, its right, title and
interest in and to the Operative Agreements and the
Lessor's Estate.
Owner Trustee. First Security Bank of Utah,
National Association, a national banking association,
not in its individual capacity except as otherwise
expressly stated, but solely as Owner Trustee under
the Trust Agreement, and its successors and permitted
assigns.
Participation Agreement. The Participation
Agreement (Federal Express Corporation Trust _____),
dated as of March 1, 1994, among the Lessee, the Owner
Trustee, not in its individual capacity except as
otherwise expressly stated therein, but solely as,
Owner Trustee, the Owner Participant, the Pass Through
Trustee, not in its individual capacity except as
otherwise expressly stated therein, but solely as Pass
Through Trustee, the Indenture Trustee, not in its
individual capacity except as otherwise expressly
stated therein but solely as Indenture Trustee and the
LC Bank, as amended, modified or supplemented, or the
terms thereof waived.
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, so long as title
thereto shall be vested in the Lessor, prior to
replacement thereof in accordance with the Lease,
which may be removed therefrom.
Parts and Services Agreement. The Original
Parts and Services Agreement, as amended by Amendment
No. 1 thereto, dated as of March 1, 1994, between the
Owner Trustee and Lufthansa.
Parts Cost. The cost of the parts and
services with respect to the Aircraft pursuant to
Article 4 of the Parts and Services Agreement.
Pass Through Agreement. The Pass Through
Trust Agreement dated as of March 1, 1994 between the
Lessee 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 1994
Pass Through Certificates, Series A310-A1, 1994 Pass
Through Certificates, Series A310-A2, or 1994 Pass
Through Certificates, Series A310-A3, in each case 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 Excess Amount. The
excess of the principal amount of the Certificates
issued on the Closing Date over the Net Proceeds.
Pass Through Trust. The Federal Express Pass
Through Trust, 1994-A310-A1, Federal Express Pass
Through Trust, 1994-A310-A2 or Federal Express Pass
Through Trust, 1994-A310-A3, in each case formed
pursuant to the related Series Supplement in
accordance with the Pass Through Agreement; and "Pass
Through Trusts" means all of such Pass Through
Trusts.
Pass Through Trustee. NationsBank of South
Carolina, National Association, 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 permitted assigns as
Pass Through Trustee thereunder.
Past Due Rate. In respect of (A) any amount
payable to the Owner Participant or the Owner Trustee
a rate per annum during the period from and including
the due date to but excluding the date on which such
amount is paid in full equal to 2.5% plus the Debt
Rate and (B) any principal of or interest on any
Certificate or any other amount payable under the
Indenture, any Certificate or any other Operative
Agreement that is not paid when due (whether at
Maturity, by acceleration, by optional or mandatory
prepayment or otherwise) to any Holder, the Indenture
Trustee or the Pass Through Trustee, a rate per annum
during the period from and including the due date to
but excluding the date on which such amount is paid in
full equal to (i) in the case of any such amount
payable to the Holder of any Certificate, 2.5% plus
the interest rate applicable to such Certificate and
(ii) in the case of any other such amount, 2.5% plus
the weighted average rate of interest from time to
time payable with respect to the Certificates (or if
no Certificates are then outstanding, such weighted
average rate at the time immediately preceding the
final payment with respect thereto).
Paying Agent. Has the meaning set forth in
Section 3.04 of the Indenture.
Payment Date. Any Interest Payment Date or
Sinking Fund Redemption Date.
Payment Default. Any event specified in
Section 16.01(a) or 16.01(b) of the Lease which with
the giving of notice or lapse of time or both would
constitute an Event of Default.
Permitted Investments. Those investments
enumerated in Section 23.01(a) (i), (ii), (iii) and
(iv) of the Lease.
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).
Pre-Funding Event of Loss. Any of the
following events prior to the Exchange Date 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 120 days or to the Cut-off Date, if less,
due to theft or disappearance, or (B) for a period in
excess of 60 days or to the Cut-off Date, if less, due
to the destruction, damage beyond economic repair or
rendition of such property permanently unfit for
normal use by Lessee for any reason whatsoever
(provided, however, that failure to properly complete
any work contemplated by the Modification Agreement
shall not constitute the basis for a Pre-Funding Event
of Loss); (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) (1) condemnation, confiscation or seizure of, or
requisition of title to such property by the
Government, any foreign government or purported
government or any agency or instrumentality thereof,
such Pre-Funding Event of Loss being deemed to occur
on the date of any such condemnation, confiscation,
seizure or requisition of title, or (2) requisition of
use of such property (A) by 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 (or such shorter period
ending on the earlier of the Cut-off Date or on the
date on which an insurance settlement with respect to
such property on the basis of a total loss or
constructive or compromised total loss shall occur),
or (B) by the Government for a period extending beyond
the Cut-off Date; and (iv) 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 Airbus Model A310-203 aircraft
equipped with engines of the same make and model as
the Engines for a period ending on or after the Cut-
off Date. The date of such Pre-Funding Event of Loss
shall be the date of (i) loss of such property or its
use thereof for a period in excess of 120 days, or to
the Cut-off Date, if less, due to theft or
disappearance; or loss for a period in excess of 60
days, or to the Cut-off Date, if less, 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 or as otherwise contemplated by clause
(iii)(2)(A) above), (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 (iv) above. A
Pre-Funding Event of Loss with respect to the Aircraft
shall be deemed to have occurred if any Pre-Funding
Event of Loss occurs with respect to the Airframe.
Pre-Funding Prepayment Date. Has the meaning
as set forth in Section 6(c) of the Collateral
Agreement.
Pre-Funding Termination Notice. Has the
meaning set forth in Section 3 of the Agreement to
Lease.
Prepayment Date. Has the meaning specified
in Section 6.02(b) of the Indenture.
Prepayment Price. Has the meaning specified
in Section 6.02(b) of the Indenture.
Proposed Termination Date. The proposed date
of termination of the Lease as specified by the Lessee
in its notice given pursuant to Section 10.01 thereof.
Purchase Price. The amount set forth in the
"Purchase Price in U.S. Dollars" column for the
Aircraft on Exhibit B to the Sales Agreement.
Record Date. With respect to any payment
under the Indenture means the 15th calendar day prior
to the date such payment is due.
Recourse Amount. Has the meaning specified
in Section 16.10 of the Participation Agreement.
Register. Has the meaning set forth in
Section 3.02 of the Indenture.
Registrar. Has the meaning set forth in
Section 3.02 of the Indenture.
Remaining Weighted Average Life. For any
Certificate, as of any determination date, the number
of years obtained by dividing (a) the sum of the
products obtained by multiplying (i) the amount of
each then remaining mandatory sinking fund redemption
payment of principal, including the payment due on the
Maturity of such Certificate, by (ii) the number of
years (calculated to the nearest one-twelfth) which
will elapse between such determination date, and the
date on which such payment is scheduled to be made, by
(b) the then outstanding principal amount of such
Certificate.
Renewal Rent. The amount payable by the
Lessee as rent in accordance with Section 4.01 of the
Lease during any Renewal Term.
Renewal Term. One term of two years with
respect to which the Lessee has exercised its option
to renew the Lease pursuant to Section 4.01(a)
thereof.
Rent. All payments due from the Lessee under
the Lease as Basic Rent, Renewal Rent and Supplemental
Rent, collectively.
Rent Payment Date. Each March 23 and
September 23, commencing on the first such date
after the Commencement Date, and continuing thereafter
during the Term.
Replacement Engine. A General Electric
CF6-80A3 engine of the same or of equal or greater
value and utility as the Engine being replaced,
together with all Parts relating to such engine;
provided, however, that such Engine shall be of the
same model as other Engines then subject to the Lease.
Responsible Officer. With respect to the
Owner Trustee (except for purposes of the Trust
Agreement) or 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 party, any corporate officer or other employee
of a party 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.
Sales Agreement. The Original Sales
Agreement as amended by Amendment No. 1 thereto, dated
as of March 1, 1994, between the Owner Trustee and
Lufthansa.
Scheduled Commencement Date. ______________,
199_.
Securities Act. The Securities Act of 1933,
as amended.
Secured Obligations. Has the meaning set
forth in the Granting Clause of the Indenture.
Series Supplement. The Series Supplement
1994-A310-A1 to be executed and delivered by the Lessee
and the Pass Through Trustee, the Series Supplement
1994-A310-A2 to be executed and delivered by the Lessee and
the Pass Through Trustee or the Series Supplement 1994-A310-A3
to be executed and delivered by the Lessee and the
Pass Through Trustee, in each case as such Series
Supplement may be modified, supplemented or amended
from time to time in accordance with the provisions
thereof and "Series Supplements" means all of such
Series Supplements.
Sinking Fund Redemption Date. Has the
meaning specified in Section 6.06 of the Indenture.
Sinking Fund Redemption Price. Has the
meaning specified in Section 6.06 of the Indenture.
Special Aviation Counsel. Daugherty, Fowler
& Peregrin.
S&P. Standard & Poor's Corporation.
Stipulated Loss Value. As of any Stipulated
Loss Value Determination Date during the Basic Term,
the greater of (i) the amount determined by multiplying
the Aircraft Cost by the percentage set forth in
Schedule III to the Lease under the heading
"Stipulated Loss Value Factor" opposite such date, and
(ii) an amount at least sufficient to pay in full, as
of the date of payment thereof, the aggregate unpaid
principal amount of the Certificates outstanding on such
date of payment, together with the accrued and unpaid interest
thereon; and during any Renewal Term, the amount
determined pursuant to Section 4.01(b) of the Lease.
Stipulated Loss Value Determination Date.
Each date set forth on Schedule III of the Lease under
the heading "Stipulated Loss Value Factors".
Supplemental Rent. All amounts, liabilities
and obligations which the Lessee assumes or agrees to
perform or pay under the Lease or under the
Participation Agreement or Tax Indemnity Agreement or
an Ancillary Agreement to the Lessor or others,
including, without limitation, payment of any Make-
Whole Premium payable by the Lessor under the
Indenture that is required to be paid by the Lessee
pursuant to Section 3.02 of the Lease, payments of
Stipulated Loss Value and amounts calculated by
reference to Termination Value and all amounts
required to be paid by the Lessee under the
agreements, covenants and indemnities contained in the
Lease or in the Participation Agreement or the Tax
Indemnity Agreement or other Ancillary Agreement, but
excluding (i) Basic Rent and (ii) any such amounts,
liabilities and obligations to the extent such
amounts, liabilities or obligations arise out of or
relate to the period prior to execution of the Lease
Supplement with respect to the Aircraft.
Tax. Has the meaning set forth in Section
8.01(a) of the Participation Agreement.
Tax Attribute Period. The period commencing
on the first day of the taxable year of the Owner
Participant in which the Commencement Date occurs and
ending on the last day of the seventh succeeding
taxable year of the Owner Participant; provided,
however, that if the Lessee breaches its
representation set forth in Section 4(a) of the Tax
Indemnity Agreement and as a result it is required to
pay an indemnity pursuant to said Agreement the Tax
Attribute Period shall be the period over which the
Owner Participant is required to depreciate the
Aircraft for purposes of calculating the indemnity
payable pursuant to Section 5 of the Tax Indemnity
Agreement.
Tax Indemnity Agreement. The Tax Indemnity
Agreement, dated as of the Commencement Date, among
the Lessee, and the Owner Participant and the partners
listed on the Schedule A thereto, as from time to time
modified, amended or supplemented pursuant to its
applicable provisions.
Term. The Basic Term and, if renewed
pursuant to Section 4.01 of the Lease, the Renewal
Term, or the period commencing on the Commencement
Date and ending on such earlier date on which the
Lease is terminated pursuant to its terms.
Termination Date. A Rent Payment Date during
the Basic Term that is on or after the end of the Tax
Attribute Period in the case of Article 10 of the
Lease and in the case of Section 4.02 of the Lease,
the date specified in the notice from the Lessee given
pursuant to such Section.
Termination Value. As of any Termination Date,
the greater of (i) the amount determined by multiplying
the Aircraft Cost by the percentage set forth in Schedule
IV to the Lease under the heading "Termination Value Factor"
opposite such Termination Date, and (ii) an amount at least
sufficient to pay in full, as of the date of payment
thereof, the aggregate unpaid principal amount of the
Certificates outstanding on such date of payment, together
with the accrued and unpaid interest thereon.
Transaction Costs. Those costs and expenses
set forth in Section 10.01(a) of the Participation
Agreement.
Treasury Yield. (i) In the case of a
Certificate having a Maturity within one year after
the Prepayment Date or purchase date, as the case may
be, 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
Certificate, and (ii) in the case of a Certificate
having a Maturity one year or more after the
Prepayment Date or purchase date, as the case may be,
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 Lessee) corresponding in maturity to the Remaining
Weighted Average Life of such 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 or purchase date, as the
case may be.
Trust Agreement. The Original Trust
Agreement, as amended and restated as of March 1,
1994, and as amended or supplemented pursuant to its
applicable provisions and in accordance with the other
Operative Agreements (including, without limitation,
as supplemented by any Trust Agreement Supplement).
Trust Agreement Supplement. The Trust
Agreement Supplement (as defined in the Trust
Agreement) relating to the Aircraft.
Trust Indenture Act. The Trust Indenture Act
of 1939, as amended.
Trust Indenture Estate; Indenture Estate.
The property, rights and privileges described in the
Granting Clause of the Indenture, other than
(A) Excepted Payments, including, without limitation
all right, title and interest of the Owner Participant
in, to and under the Tax Indemnity Agreement and any
moneys due and to become due under the Tax Indemnity
Agreement, all as provided in the Indenture, and
(B) rights granted to the Owner Trustee or the Owner
Participant under the Indenture, including without
limitation under Section 2.05, 7.02, 8.01, 8.02, 8.03,
13.01 and 13.02 thereof, and the Letter of Credit and
any rights thereunder.
Underwriters. The several Underwriters named
in the Underwriting Agreement.
Underwriting Agreement. The Underwriting
Agreement dated March 16, 1994 among the Lessee,
Lufthansa, the Owner Participant, Goldman, Sachs &
Co. and Merrill Lynch, Pierce, Fenner & Smith.
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 401 or Section 418 of the
Federal Aviation Act, and as to which there is in
force an air carrier operating certificate issued
pursuant to 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 III
PERMITTED COUNTRY LIST
Australia Italy
Austria Japan
Belgium Luxembourg
Canada Netherlands
Denmark New Zealand
Finland Norway
France Spain
Germany Sweden
Iceland Switzerland
Ireland United Kingdom
SCHEDULE IV
CERTAIN AMOUNTS
Demand Note Letter of
Debt Principal Credit Net
Aircraft Trust Portion Amount Stated Amount Proceeds
-------- ----- ------- ----------- ------------- ----------
1 1994-D-AICH A $28,033,980.40 $1,146,307.12 $3,098,100 $28,223,830.74
2 1994-D-AICR B 29,778,925.95 1,222,131.29 3,432,500 30,241,968.71
3 1994-D-AICL C 29,894,112.48 1,229,640.45 3,548,400 30,505,935.36
4 1994-D-AICS D 29,545,837.57 1,222,131.30 3,619,200 30,103,085.41
5 1994-D-AICP E 29,226,512.41 1,207,039.72 3,637,100 29,707,753.01
6 1994-D-AICN F 29,286,149.48 1,207,039.72 3,730,100 29,944,702.38
7 1994-D-AICA G 26,381,631.17 1,093,111.78 3,483,100 27,129,659.93
8 1994-D-AICB H 26,344,727.50 1,093,111.78 3,586,800 27,310,455.38
9 1994-D-AICC I 26,315,423.50 1,093,111.78 3,636,100 27,291,273.47
10 1994-D-AICD J 26,256,454.46 1,093,111.78 3,696,400 27,105,158.28
11 1994-D-AICM K 28,963,763.84 1,207,039.72 4,117,700 29,934,964.74
12 1994-D-AICF L 26,162,882.15 1,093,111.78 3,806,800 27,189,162.95
13 1994-D-AICK M 26,119,489.68 1,093,111.78 3,844,700 27,256,126.64
--------------- ------------- ------------- --------------
TOTAL $362,309,890.59 $15,000,000.00 $47,237,000 $371,944,077
============== ============= ============= ==============
EXHIBIT A
[INTENTIONALLY OMITTED]
EXHIBIT B
[FORM OF LEASE AGREEMENT]
[See Exhibit 4.e]
EXHIBIT C
[FORM OF INDENTURE]
[See Exhibit 4.b.1]
EXHIBIT D
[FORM OF TRUST AGREEMENT]
[See Exhibit 4.d]
EXHIBIT E
PROMISSORY NOTE (D-AIC )
$ ___________ [Closing Date]
Deutsche Lufthansa Aktiengesellschaft, a
German corporation ("Lufthansa"), for value received,
hereby promises to pay to the order of _______________
(the "Payee"), at the office of Lufthansa at
______________, or to such bank account as the Payee,
or any assignee of the Payee, may from time to time
designate, on demand from time to time, an amount
in lawful money of the United States and in immediately
available funds, not to exceed in the aggregate the
principal sum of _______________________ Dollars
Dollars ($_____________). This Note shall not bear
interest.
If any amount of principal evidenced by this
Note becomes due and payable on a day on which banks
in New York are authorized or required to close,
such amount shall be due and payable on the next
succeeding business day.
All payments of the principal hereof shall
be recorded by the Payee or its assignee, as the case
may be, and, prior to any transfer hereof, shall be
endorsed by the Payee or its assignee, as the case may
be, on the schedule attached hereto, or on a
continuation of such schedule attached to and made a
part hereof.
This Note shall be governed by, and construed
and interpreted in accordance with, the laws of the
State of New York.
DEUTSCHE LUFTHANSA
AKTIENGESELLSCHAFT
By:
__________________________
Name:
Title:
By:
__________________________
Name:
Title:
SCHEDULE
PAYMENTS OF PRINCIPAL
Amount of Unpaid
Principal Principal Notation
Date Paid Balance Made By
---- --------- --------- --------
ASSIGNMENT
_______________________________, for good and
valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, hereby assigns, sets
over and bargains unto _____________________________,
its successors and assigns, all of its right, title
and interest in, to and under Promissory Note
(D-AIC ), dated March __, 1994, from Deutsche
Lufthansa Aktiengesellschaft.
[ASSIGNOR]
By
__________________________
Name:
Title:
EXHIBIT F
[INTENTIONALLY OMITTED]
EXHIBIT G
[FORM OF LETTER OF CREDIT]
[See Exhibit 4.f]
EXHIBIT H
[FORM OF COLLATERAL AGREEMENT]
[See Exhibit 4.g]
EXHIBIT I
OP GUARANTEE
OP GUARANTEE, dated as of __________ __, ____, by
__________, a __________ [corporation] (the "Guarantor"), to
the Owner Trustee, the Indenture Trustee, the Pass Through
Trustee and the Lessee referred to in the Participation
Agreement described below (collectively, together with their
successors and assigns, the "Beneficiaries" and, each
individually, a "Beneficiary").
W I T N E S S E T H :
WHEREAS, reference is hereby made to the
Participation Agreement, dated as of March 1, 1994 (as
amended, modified or supplemented from time to time, the
"Participation Agreement"), among Federal Express
Corporation, as Lessee, LLG Aircraft Leasing, L.P., as Owner
Participant, First Security Bank of Utah, National
Association, as Owner Trustee ("FSBU"), NationsBank of
Georgia, National Association, as Indenture Trustee,
NationsBank of South Carolina, National Association, as Pass
Through Trustee, and Westdeutsche Landesbank Girozentrale,
New York Branch; and
[WHEREAS, this Guarantee is being delivered by the
Guarantor with respect to the obligations of LLG Aircraft
Leasing, L.P., (the "Obligor") as contemplated by Section
7.03(ix) of the Participation Agreement; and]*
[WHEREAS, [LLG Aircraft Leasing, L.P.] [Insert
name of subsequent transferor] (the "Transferor"), wishes to
transfer to ___________ (the "Obligor"), inter alia, [all][a
portion] of the Transferor's right, title and interest in
and to the Participation Agreement, the Trust Agreement (as
defined in the Participation Agreement) and each other
Operative Agreement (as defined in the Participation
Agreement) to which the Transferor is a party or by which it
is bound pursuant to the Assignment and Assumption
Agreement, dated as of ______________ __, 199_, between the
Transferor and the Obligor; and]**
- --------------
* Insert in the case of a guarantee by Lufthansa.
** Insert in the case of a guarantee in connection with a
transfer.
[WHEREAS, the terms of the Trust Agreement provide
that the aforementioned transfer is conditioned upon the
execution and delivery of this Guarantee by the Guarantor;]*
NOW, THEREFORE, [in order that the Transferor may
make the aforementioned transfer to the Obligor,]* the
Guarantor hereby agrees with and for the benefit of the
Beneficiaries as follows:
1. Definitions. As used in this Guarantee, terms
defined in the Participation Agreement are used herein as
therein defined, unless otherwise defined herein.
2. Guarantee. a. The Guarantor hereby
unconditionally and irrevocably guarantees as primary
obligor and not merely as a surety to the Beneficiaries and
their respective successors, endorsees, transferees and
assigns, the prompt and complete payment by the Obligor when
due (whether at the stated due date thereof, by acceleration
or otherwise) of, and the faithful performance of, and
compliance with, all payment obligations of the Obligor
under the Operative Agreements or any related documents owed
to such Beneficiary, strictly in accordance with the terms
thereof and the timely performance of all other obligations
of the Obligor owed to such Beneficiary thereunder strictly
in accordance with the terms thereof (such payment and other
obligations, the "Obligations"), and the Guarantor further
agrees to pay any and all expenses (including, without
limitation, all reasonable fees and disbursements of
counsel) that may be paid or incurred by the Beneficiaries
in enforcing, or obtaining advice of counsel in respect of,
any rights with respect to, or collecting, any or all of the
Obligations and/or enforcing any rights with respect to, or
collecting against, the Guarantor under this Guarantee.
b. No payment or payments made by the Obligor,
the Guarantor, any other guarantor or any other Person or
received or collected by any Beneficiary from the Obligor,
the Guarantor, any other guarantor or any other person by
virtue of any action or proceeding or any set-off or
appropriation or application at any time or from time to
time in reduction of or in payment of the Obligations shall
be deemed to modify, reduce, release or otherwise affect the
liability of the Guarantor hereunder until the Obligations
are paid and performed in full.
- --------------
* Insert in the case of a guarantee in connection with a
transfer.
c. If for any reason any Obligation to be
performed or observed by the Obligor (whether affirmative or
negative in character) shall not be observed or performed
strictly in accordance with the terms thereof, or if any
amount payable by the Obligor in connection with any
Obligation shall not be paid promptly when due and payable,
the Guarantor shall perform or observe or cause to be
performed or observed each such Obligation or undertaking
and shall pay such amount at the place and to the person or
entity entitled thereto pursuant to the Operative Agreements
regardless of whether or not any Beneficiary or anyone
acting on behalf of any of them shall have instituted any
suit, action or proceeding or exhausted its remedies or
taken any steps to enforce any rights against the Obligor or
any other person or entity to compel any such performance or
to collect all or any part of such amount pursuant to the
provisions of the Operative Agreements or at law or in
equity, or otherwise, and regardless of any other condition
or contingency.
d. The Guarantor irrevocably waives promptness,
diligence, demand, and all notices whatsoever as to the
Obligations and covenants guaranteed hereby, and any other
circumstances which might otherwise constitute a defense
available to it, or a discharge of it (other than the
defense of payment or performance) and agrees that it shall
not be required to consent to or receive any notice of any
amendment or modification of, or waiver, consent or
extension with respect to, the Participation Agreement, the
Trust Agreement or the other Operative Agreements to which
the Obligor is a party that may be made or given as provided
herein or otherwise.
e. The Guarantor further agrees to pay all
expenses (including, without limitation, all reasonable fees
and disbursements of counsel) that may be paid or incurred
by the beneficiaries hereof in enforcing any rights with
respect to, or collecting, any or all of the Obligations
and/or enforcing any rights with respect to, or collecting
against, the Guarantor under this Guarantee.
f. The Guarantor understands and agrees that its
Obligations hereunder shall be construed as continuing,
absolute and unconditional without regard to (a) the
validity, regularity or enforceability of any Operative
Agreement, any of the Obligations or any collateral security
therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by any
Beneficiary, (b) any defense, set-off or counterclaim (other
than a defense of full payment or performance) that may at
any time be available to or be asserted by the Obligor
against any Beneficiary, or (c) any other circumstances
whatsoever (with or without notice to or knowledge of the
Obligor or the Guarantor) that constitutes, or might be
construed to constitute, an equitable or legal discharge of
the Obligor for the Obligations, or of the Guarantor under
this Guarantee, in bankruptcy or in any other instance.
g. The obligation of the Guarantor hereunder
will not be discharged by: (a) any extension or renewal
with respect to any obligation of the Obligor under the
Operative Agreements; (b) any modification of, or amendment
or supplement to, any such Operative Agreement; (c) any
furnishing or acceptance of additional security or any
release of any security; (d) any waiver, consent or other
action or inaction or any exercise or non-exercise of any
right, remedy or power with respect to the Obligor or any
change in the structure of the Obligor; (e) any insolvency,
bankruptcy, reorganization, arrangement, composition,
liquidation, dissolution or similar proceedings with respect
to the Obligor; (f) except as provided in Section 14 hereof,
any change in ownership of the shares of capital stock of
the Guarantor or the Obligor; or (g) any other occurrence
whatsoever, except payment in full of all amounts payable by
the Obligor under the Operative Agreements and performance
in full of all Obligations of the Obligor in accordance with
the terms and conditions of the Operative Agreements.
3. No Subrogation, Contribution, Reimbursement or
Indemnity. Notwithstanding anything to the contrary in this
Guarantee, the Guarantor hereby agrees not to assert any
rights which may have arisen in connection with this
Guarantee to be subrogated to any of the rights (whether
contractual, under the Bankruptcy Code, including Section
509 thereof, under common law or otherwise) of any
Beneficiary against the Obligor or against any Beneficiary
for the payment of the Obligations until indefeasible
payment or performance in full of the Obligations. The
Guarantor hereby further agrees not to assert any
contractual, common law, statutory or other rights of
reimbursement, contribution, exoneration or indemnity (or
any similar right) from or against the Obligor or any other
Person which may have arisen in connection with this
Guarantee if any payment under this Guarantee is outstanding
at such time. So long as any payment under this Guarantee
is outstanding, if any amount shall be paid by or on behalf
of the Obligor to the Guarantor on account of any of the
rights referred to above in this paragraph, such amount
shall be held by the Guarantor in trust, segregated from
other funds of such Guarantor, and shall, forthwith upon
receipt by such Guarantor, be turned over to the applicable
Beneficiary in the exact form received by the Guarantor
(duly endorsed by the Guarantor to the applicable
Beneficiary, if required).
4. Amendment with Respect to the Obligations;
Waiver of Rights. The Guarantor shall remain fully
obligated hereunder notwithstanding that, without any
reservation of rights against the Guarantor and without
notice to or further assent by the Guarantor, any demand for
payment or performance of any of the Obligations made by any
Beneficiary may be rescinded by such party and any of the
Obligations continued, and the Obligations, or the liability
of any other party upon or for any part thereof, or any
collateral security or guaranty therefor or right of offset
with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by any
Beneficiary and any Operative Agreement and/or any
collateral security document or other guaranty or document
in connection therewith, may be amended, modified,
supplemented or terminated, in whole or in part, in
accordance with the provisions thereof from time to time,
and any collateral security, guaranty or right of offset at
any time held by any Beneficiary for the payment or
performance of the Obligations may be sold, exchanged,
waived, surrendered or released. No Beneficiary shall have
any obligation to protect, secure, perfect or insure any
Lien at any time held by it as security for the Obligations
or for this Guarantee or any property subject thereto. When
making any demand hereunder against the Guarantor, a
Beneficiary may, but shall be under no obligation to, make a
similar demand on the Obligor or any other guarantor, and
any failure by a Beneficiary to make any such demand or to
collect any payments from the Obligor or any such other
guarantor or any release of the Obligor or such other
guarantor shall not relieve the Guarantor of its obligations
or liabilities hereunder, and shall not impair or affect the
rights and remedies, express or implied, or as a matter of
law, of any Beneficiary against the Guarantor. For the
purposes hereof, "demand" shall include, but not be limited
to, the commencement and continuance of any legal
proceedings. [The Guarantor represents and warrants that it
owns, directly or indirectly, 100% of the capital stock of
the Obligor and that its obligations hereunder shall
continue unimpaired, even if the Guarantor no longer owns,
directly or indirectly, all or any portion of the capital
stock of the Obligor.]*
- --------------
* Insert in the case of a guarantee in connection with a
transfer.
5. Guarantee Absolute and Unconditional. The
Guarantor waives any and all notice of the creation,
renewal, extension or accrual of any of the Obligations and
notice of or proof of reliance by any Beneficiary upon this
Guarantee or acceptance of this Guarantee; the Obligations,
and any of them, shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended,
amended or waived, in reliance upon this Guarantee; and all
dealings between the Obligor or the Guarantor and any
Beneficiary shall likewise be conclusively presumed to have
been had or consummated in reliance upon this Guarantee.
The Guarantor waives diligence, presentment, protest, demand
for payment and notice of default or nonpayment to or upon
the Transferee or the Guarantor with respect to the
Obligations. The Guarantor understands and agrees that this
Guarantee shall be construed as a continuing, absolute and
unconditional guaranty of payment and performance (and not
merely of collectability) without regard to (a) the
validity, regularity or enforceability of any Operative
Agreement or any related agreement, any of the Obligations
or any collateral security therefor or guaranty or right of
offset with respect thereto at any time or from time to time
held by any Beneficiary, (b) any defense, set-off or
counterclaim (other than a defense of full payment or
performance) that may at any time be available to or be
asserted by the Obligor against any Beneficiary, or (c) any
other circumstance whatsoever (with or without notice to or
knowledge of the Obligor or the Guarantor) that constitutes,
or might be construed to constitute, an equitable or legal
discharge of the Obligor for the Obligations, or of the
Guarantor under this Guarantee, in bankruptcy or in any
other instance. When pursuing its rights and remedies
hereunder against the Guarantor, any Beneficiary may, but
shall be under no obligation to, pursue such rights and
remedies as it may have against the Obligor or any other
person or entity or against any collateral security or
guaranty for the Obligations or any right of offset with
respect thereto, and any failure by any Beneficiary to
pursue such other rights or remedies or to collect any
payments from the Obligor or any such other person or entity
or to realize upon any such collateral security or guaranty
or to exercise any such right of offset, or any release of
the Obligor or any such other person or entity or any such
collateral security, guaranty or right of offset, shall not
relieve the Guarantor of any liability hereunder, and shall
not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of any
Beneficiary against the Guarantor. This Guarantee shall
remain in full force and effect and be binding in accordance
with and to the extent of its terms upon the Guarantor and
the successors and assigns thereof, and shall inure to the
benefit of the Beneficiaries, and their respective
successors, indorsees, transferees and assigns, until the
earlier of (x) all of the Obligations and the obligations of
the Guarantor under this Agreement shall have been satisfied
by payment and performance in full, (y) the right, title and
interest of the Obligor shall have been transferred to a
Person meeting the requirements of Article 5 of the Trust
Agreement, it being understood that this Guarantee shall
remain in effect with respect to obligations of the Obligor
arising prior to such transfer and (z) the Obligor obtaining
a tangible net worth equalling or exceeding [$50,000,000
(Fifty Million Dollars)].* The Guarantor further agrees
that, without limiting the generality of this Guarantee, if
any Beneficiary (or any assignee thereof) shall be prevented
by applicable law from exercising its remedies (or any of
them) against the Obligor under any Operative Agreement such
Beneficiary (or any assignee thereof) shall be entitled to
receive hereunder from the Guarantor the sums that would
have otherwise been due from the Obligor had such remedies
been able to be exercised.
6. Reinstatement. This Guarantee shall continue
to be effective, or be reinstated, as the case may be, if at
any time payment, or any part thereof, of any of the
Obligations is rescinded or must otherwise be restored or
returned by any Beneficiary upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Obligor or
the Guarantor, or upon or as a result of the appointment of
a receiver, intervenor or conservator of, or trustee or
similar officer for, the Obligor or the Guarantor or any
substantial part of its property, or otherwise, all as
though such payments had not been made. The Guarantor shall
not commence any "case" (as defined in Title 11 of the
United States Code) against the Obligor.
7. Payments. The Guarantor hereby guarantees
that payments hereunder shall be paid without set-off,
counterclaim, deduction or withholding, and shall be made in
U.S. Dollars.
8. Representations and Warranties. The Guarantor
hereby represents and warrants that:
a. the Guarantor is a corporation duly organized,
validly existing and in good standing under the laws of
the jurisdiction of its incorporation and has the
corporate power and authority and the legal right to
own and operate its property, to lease the property it
operates and to conduct the business in which it is
currently engaged;
- --------------
* $40,000,000 (Forty Million Dollars) if the Obligor is
an Affiliate of, or one of the partners of, LLG
Aircraft Leasing, L.P.
b. the Guarantor has the corporate power and
authority and the legal right to execute and deliver,
and to perform its obligations under, this Guarantee,
has taken all necessary corporate action to authorize
its execution, delivery and performance of this
Guarantee, and this Guarantee has been duly executed
and delivered by the Guarantor and does not require any
approval not already obtained of its stockholders or
any approval or consent not already obtained of any
trustee or holders of any of its indebtedness or
obligations;
c. this Guarantee constitutes a legal, valid and
binding obligation of the Guarantor enforceable in
accordance with its terms, except as such
enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganization, or other
similar laws or equitable principals of general
application to or affecting the enforcement of
creditor's rights generally;
d. neither the execution and delivery of this
Guarantee nor compliance by the Guarantor with any of
the terms and provisions hereof will contravene any
United States Federal or state law, judgment,
governmental rule, regulation or order applicable to or
binding on the Guarantor (assuming, with respect to
ERISA, the continuing accuracy of the representations
and warranties set forth in Sections 6.01(k)(ix) and
7.01(b) of the Participation Agreement) or contravene
or result in any breach of or constitute any default
under, or result in the creation of any lien on any
property of the Guarantor or, any indenture, mortgage,
chattel mortgage, deed of trust, conditional sales
contract, bank loan or credit agreement, corporate
charter, by-law or other agreement or instrument to
which the Guarantor is a party or by which it or its
properties may be bound or affected;
e. no consent or authorization of, filing with,
or other act by or in respect of, any arbitrator or
governmental authority and no consent of any other
person (including, without limitation, any stockholder
or creditor of the Guarantor) is required in connection
with the execution, delivery, performance, validity or
enforceability of this Guarantee;
f. no litigation, investigation or proceeding of
or before any arbitrator or governmental authority is
pending or, to the knowledge of the Guarantor,
threatened by or against the Guarantor or against any
of its properties or revenues (i) with respect to this
Guarantee or any of the transactions contemplated
hereby or (ii) that could have a material adverse
effect on the business, operations, property or
financial or other condition of the Guarantor;
g. the balance sheet of the Guarantor as at
_______ and the related statement of income and
retained earnings for the fiscal year then ended
(copies of which have heretofore been furnished to each
Beneficiary) have been prepared in accordance with
generally accepted accounting principles applied
consistently throughout the period involved, are
complete and correct and present fairly the financial
condition of the Guarantor as at such date and the
results of its operations for such fiscal year; since
such date there has been no material adverse change in
the business, operations, property or financial or
other condition of the Guarantor; the Guarantor has no
material contingent obligation, contingent liability or
liability for taxes, long-term lease or unusual forward
or long-term commitment that is not reflected in the
foregoing statements or in the notes thereto; and
h. the Guarantor is a [bank or other financial
institution with a combined capital, surplus and
undivided profits of at least $50,000,000]*
[corporation whose tangible net worth is at least
$50,000,000]*, exclusive of goodwill, as of the
proposed date of transfer, as determined in accordance
with generally accepted accounting principles.
9. Severability. Any provision of this Guarantee
that 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 hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other
jurisdiction.
10. Section Headings. The Section headings used in
this Guarantee are for convenience of reference only and are
not to affect the construction hereof or be taken into
consideration in the interpretation hereof.
- --------------
* Replace with $40,000,000 if Obligor is an Affiliate of,
or a partner of, LLG Aircraft Leasing, L.P.
11. No Waiver; Cumulative Remedies. No Beneficiary
shall by any act (except by a written instrument pursuant to
Section 13 hereof), delay, indulgence, omission or otherwise
be deemed to have waived any right or remedy hereunder or to
have acquiesced in any breach of any of the terms and
conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of any Beneficiary, any right, power
or privilege hereunder shall operate as a waiver thereof.
No single or partial exercise of any right, power or
privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power
or privilege. A waiver by a Beneficiary of any right or
remedy hereunder on any one occasion shall not be construed
as a bar to any right or remedy that such Beneficiary would
otherwise have on any future occasion. The rights and
remedies herein provided are cumulative, may be exercised
singly or concurrently and are not exclusive of any rights
or remedies provided by law.
12. Integration. This Guarantee represents the
entire agreement of the Guarantor with respect to the
subject matter hereof and there are no promises or
representations by any Beneficiary relative to the subject
matter hereof not reflected herein.
13. Amendments and Waivers. None of the terms or
provisions of this Guarantee may be waived, amended or
supplemented or otherwise modified except by a written
instrument executed by the Guarantor and each Beneficiary.
14. Transfer of Interest in the Obligor or of this
Guarantee. The Guarantor may assign, convey or otherwise
transfer (a) any of its interest in the Obligor or (b) its
obligations hereunder, in either case to any other person
(hereinafter referred to as the "the Subsequent Guarantor");
provided that the Subsequent Guarantor enters into an
agreement substantially in the form of this Guarantee
Agreement; and, provided, further, that, if the Subsequent
Guarantor is not a bank or a lending institution with a
combined capital, surplus and undivided profits of at least
[$50,000,000]*, or is not a corporation with a net worth of
at least [$50,000,000]*, the Guarantor shall enter into an
agreement, substantially in the form of this Guarantee,
guaranteeing the Obligations of the Obligor under the
Operative Agreements or provide such a guarantee from such a
bank, lending institution or corporation satisfactory to
each Beneficiary, so that there will then be existing both
such guaranty agreement as well as the guaranty agreement
executed by the Subsequent Guarantee; in such event, the
Beneficiaries shall have the right to enforce the
obligations of the Guarantor under such guaranty agreement
without first proceeding against the Subsequent Guarantor
under its guaranty referred to above.
- --------------
* Replace with $40,000,000 if the Obligor is an Affiliate
of, or a partner of, LLG Aircraft Leasing, L.P.
15. Successors and Assigns. This Guarantee shall
be binding upon the successors and permitted assigns of the
Guarantor and shall inure to the benefit of the
Beneficiaries and their respective successors and permitted
assigns.
16. GOVERNING LAW. THIS GUARANTEE SHALL BE
GOVERNED BY AND BE CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK BUT WITHOUT GIVING
EFFECT TO ANY PROVISION OF NEW YORK LAW THAT WOULD REQUIRE
THE APPLICATION OF THE LAWS OF ANOTHER STATE.
17. Notices. All notices, requests and demands to
or upon the Guarantor or any Beneficiary to be effective
shall be in writing or by telegraph, facsimile or telex and,
unless otherwise expressly provided herein, shall be deemed
to have been duly given or made when delivered by hand, or,
in the case of mail, five days after deposit in the postal
system, certified mail prepaid, or, in the case of
telegraphic notice, when sent, answerback received,
addressed to (a) in the case of the Guarantor [address,
telex and fax information to be provided] and (b) in the
case of any Beneficiary, the address, telex or telecopy
number provided for such party in the Participation
Agreement.
IN WITNESS WHEREOF, the undersigned has caused
this Guarantee to be duly executed and delivered by its duly
authorized officer as of the day and year first above
written.
[NAME OF GUARANTOR]
By:________________________
Name:
Title:
By:_________________________
Name:
Title:
EXHIBIT J
DEUTSCHE LUFTHANSA AKTIENGESELLSCHAFT
[Closing Date]
NationsBank of Georgia,
National Association,
Not individually, but solely as
Indenture Trustee under the
Indenture referred to in the
Participation Agreement defined below,
600 Peachtree Street, N.E.
Atlanta, Georgia 30308
Attn: Corporate Trust Administration
Ladies and Gentlemen:
Reference is hereby made to the Participation
Agreement (Federal Express Corporation Trust ______),
dated as of March 1, 1994 (the "Participation
Agreement"), among Federal Express Corporation, First
Security Bank of Utah, National Association (not
individually, except as provided therein, but solely
as Owner Trustee), NationsBank of South Carolina,
National Association (not individually, except as
provided therein, but solely as Pass Through Trustee),
LLG Aircraft Leasing, L.P., Westdeutsche Landesbank
Girozentrale, New York Branch, and you. Capitalized
terms used but not defined in this letter shall have
the meaning set forth in the Participation Agreement.
In order to induce you to enter into the
transactions contemplated to occur on the Closing
Date, the undersigned ("Lufthansa") hereby represents,
warrants and agrees with you as follows:
1. Lufthansa represents and warrants that
the representations and warranties made by it in
the Agreement to Lease, the Sales Agreement, the
bill of sale referred to in Section 4.01(e)(vi)
of the Participation Agreement, the Modification
Agreement and the Parts and Services Agreement
(together, the "Lufthansa Agreements"), are true
and correct as of the date hereof (except to the
extent any such representation or warranty
specifically relates to an earlier date, in which
case such representation or warranty shall have
been true and correct as of such date).
2. Lufthansa agrees to perform (i) all of
its obligations under the Lufthansa Agreements in
favor of the Owner Trustee or (ii) any such
obligation that, if not performed by Lufthansa,
would require performance by the Owner Trustee
under the terms of the Lufthansa Agreements.
3. Lufthansa agrees to indemnify the
Indenture Trustee for any Taxes which are
excepted from the Lessee's indemnity pursuant to
Section 8.01(b)(xiv) or (xv) of the Participation
Agreement. Lufthansa agrees to indemnify the
Indenture Trustee or the Trust Indenture Estate,
as the case may be, for any expenses incurred by
the Indenture Trustee or the Trust Indenture
Estate which are excepted from the Lessee's
indemnity pursuant to Section 9.01(b)(x) or
9.01(b)(xii) of the Participation Agreement, as
the case may be. Lufthansa agrees to indemnify
the Lessor's Estate and the Trust Indenture
Estate with respect to any Taxes or Expenses as
to which, but for the third and fourth
parentheticals to the definition of "Indemnitee",
the Lessee would have been required to indemnify
the Lessor's Estate or the Trust Indenture
Estate, as the case may be, pursuant to Article 8
or Article 9 of the Participation Agreement.
This letter agreement may be executed 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 letter agreement.
This letter shall be governed by and
construed in accordance with New York law, without
respect to choice of law provisions.
DEUTSCHE LUFTHANSA
AKTIENGESELLSCHAFT
By: ____________________
Title
By: ____________________
Title
Accepted and agreed as of the
date first above written.
NATIONSBANK OF GEORGIA,
NATIONAL ASSOCIATION,
not in its individual
capacity, but solely as
Indenture Trustee.
By: ____________________
Title
Letterhead of Federal Express of March 16, 1994
Exhibit K-1
Closing Date
To the Addressees Listed on Schedule A Attached
Re: Federal Express Corporation Trust
Ladies and Gentlemen:
I am the Senior Vice President and General
Counsel of Federal Express Corporation, a Delaware
corporation ("Federal"), and am familiar with the
transactions contemplated by the Participation
Agreement (Federal Express Corporation Trust ______),
dated as of March 1, 1994 (the "Participation Agree-
ment"), among Federal, as Lessee, LLG Aircraft
Leasing, L.P., as Owner Participant, First Security
Bank of Utah, National Association, a national banking
association, as Owner Trustee, NationsBank of Georgia,
National Association, a national banking association,
as Indenture Trustee, NationsBank of South Carolina,
National Association, a national banking association,
as Pass Through Trustee, and Westdeutsche Landesbank
Girozentrale, New York Branch. This opinion is being
delivered pursuant to Section 4.01(k)(i) of the
Participation Agreement. Capitalized terms shall have
the meanings assigned in the Participation Agreement.
The Participation Agreement provides, among
other things, for the financing of a portion of the
Owner Trustee's payment of the Purchase Price,
Modification Cost, Parts Cost and related expenses
with respect to one Airbus Model A310-203 aircraft
(the "Aircraft") using the proceeds from the public
offering of Pass Through Certificates. Three Series
of Pass Through Certificates will be issued by three
Pass Through Trusts formed to acquire, among other
securities, the Certificates bearing a particular
interest rate and having a particular Maturity that
will be issued under the Trust Indenture and Security
Agreement (Federal Express Corporation Trust ______),
dated as of March 1, 1994 ("Indenture"), between First
Security Bank of Utah, National Association, as Owner
Trustee, and NationsBank of Georgia, National
Association, as Indenture Trustee.
In connection with the opinions expressed
below, I have examined or caused to be examined by
attorneys under my supervision, the Operative
Agreements (or, in the case of the Lease and the Lease
Supplement, the forms thereof attached as Exhibit B to
the Participation Agreement). We have relied upon
originals or copies, certified or otherwise identified
to our satisfaction, of such corporate records,
documents and other instruments as in our judgment are
relevant to rendering the opinions expressed below.
As to any facts material to the opinions expressed
below, we have relied upon the representations and
warranties made in the Operative Agreements, the
accuracy of which we have not independently
investigated or verified. In such examination, we
have assumed the genuineness of all signatures (other
than the signatures of Federal) 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 assumed that
each of the parties to each of the Operative
Agreements, other than Federal, has or had, at the
time of execution thereof, full power, authority and
legal right to enter into the Operative Agreements,
and that each Operative Agreement has or had, at the
time of execution thereof, been duly authorized by
each of such parties, and that each of the Operative
Agreements (other than the Lease, the Lease
Supplement, the Indenture and Security Agreement
Supplement and any other Operative Agreement not
required to be executed on or prior to the Closing
Date (the "Commencement Documents")) has been duly
executed and delivered by each of such parties.
Based on the foregoing, it is my opinion
that:
1. Federal is a corporation duly
incorporated, validly existing and in good standing
under the laws of the State of Delaware, is a "citizen
of the United States" within the meaning of
Section 101(16) of the Federal Aviation Act of 1958,
as amended (the "Act"), and has or had, on the date of
execution thereof, the corporate power and authority
to carry on its business as currently conducted and to
enter into and perform its obligations under the
Operative Agreements to which it is or is to be a
party. Federal is duly qualified to do business and
is in good standing in the State of Tennessee and each
other state of the United States in which its
operations or the nature of its business requires
Federal to so qualify, except where the failure to so
quality would not have a material adverse impact on
Federal or its business.
2. Federal 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,
and each such certificate, franchise, license, permit,
right and concession and consent is in full force and
effect.
3. Each of the Operative Agreements to which
Federal is or is to be a party has been duly
authorized by Federal. Each of such Operative
Agreements to which Federal is a party, other than any
Commencement Documents, has been duly executed and
delivered by Federal and together constitute the
legal, valid and binding obligations of Federal
enforceable against Federal in accordance with its and
their terms.
4. Neither the execution and delivery by
Federal of the Operative Agreements to which Federal
is a party (other than the Commencement Documents),
nor the consummation of any of the transactions by
Federal contemplated thereby, nor the performance of
the obligations thereunder by Federal, did at the time
of execution and delivery, or does currently,
(a) require any stockholder approval or violate the
Certificate of Incorporation or By-laws of Federal or
(b) conflict with or contravene the provisions of, or
constitute a default under, or result in the creation
of any Lien upon the property of Federal, under any
law, governmental rule or regulation, or the
Certificate of Incorporation or By-laws of Federal or
any order, writ, injunction or decree of any court of
governmental authority against Federal or by which any
of its properties may be bound or any indenture,
mortgage, contract or other agreement known to me to
which Federal is a party or by which it may be bound
or required the approval or consent of any trustee or
the holders of any indebtedness or obligations of
Federal.
5. Neither the execution and delivery by
Federal of the Operative Agreements to which it is a
party (other than the Commencement Documents), nor the
consummation of any transactions by Federal
contemplated thereby, nor the performance of the
obligations thereunder by Federal, did or does, as the
case may be, (a) require the consent or approval of,
the giving of notice to, or (except as described or
contemplated in the Participation Agreement and the
Lease, all of which are required to be performed on or
prior to the Closing Date or Commencement Date, as
specified in the Participation Agreement or the Lease,
and which shall have been accomplished on or prior to
the Closing Date or Commencement Date, as so
specified) the registration with, or the taking of any
other action in respect of, the FAA or any other
authority or agency of the federal government or of
the State of Tennessee, or (b) contravene any judgment
or order applicable to or binding on Federal or any
law or governmental rule or regulation of the United
States or of the State of Tennessee.
6. Except for the matters described under
"Legal Proceedings" in Federal's Annual Report on Form
10-K for the fiscal year ended May 31, 1993 (as
updated by Note 7 to the financial statements included
in Federal's Quarterly Reports on Form 10-Q for the
fiscal quarters ended August 31, 1993 and November 30,
1993), as to which I can express no opinion at this
time concerning Federal's liability (if any) or the
effect of any adverse determination upon the business,
condition (financial or otherwise) or operations of
Federal, there is no pending or to my knowledge
threatened action or proceeding before any court or
administrative agency which individually (or in the
aggregate in the case of any group of related
lawsuits) is expected to have a material adverse
effect on the financial condition of Federal or the
ability of Federal to perform its obligations under
the Operative Agreements.
7. Federal is a duly certificated "air
carrier" within the meaning of the Act, and a holder
of a certificate under Section 401 of the Act, an all-
cargo certificate under Section 418 of the Act and an
"air carrier operating certificate" issued pursuant to
Section 604 of the Act, and each such certificate is
in full force and effect.
8. Federal is not, and is not directly or
indirectly controlled by or acting on behalf of any
Person which is, an "investment company" within the
meaning of the Investment Company Act of 1940, as
amended.
The opinions expressed in paragraph 3 above
are based upon the assumption for purposes of such
opinions and without independent analysis that,
notwithstanding the respective choice of laws clauses
in the Operative Agreements, the governing law with
respect to each of the Operative Agreements is
identical in all relevant respects to the law of the
State of Tennessee. Insofar as the foregoing opinion
relates to the enforceability of any instrument, such
enforceability is subject to applicable bankruptcy,
insolvency and other similar laws affecting the
enforcement of creditors' rights generally (whether
such enforceability is considered in a proceeding in
equity or at law).
I do not express any opinion as to matters
governed by any law other than the federal laws of the
United States of America, the corporation law of the
State of Delaware and the laws of the State of
Tennessee.
This opinion is delivered to you solely for
your use in connection with the transactions described
herein, and may not be used for any other purpose, and
may not be relied upon by any other person, with the
exception of your successors and permitted assigns,
without my prior written consent.
I rendered an opinion dated September 1, 1993
(the "Agreement to Lease Opinion"), a copy of which is
attached hereto. I hereby consent and agree that the
addressees hereto who were not addressees to the
Agreement to Lease Opinion may rely on the Agreement
to Lease Opinion as fully and with the same force and
effect as if such addressees were originally named
therein on the date of the Agreement to Lease Opinion.
Very truly yours,
Kenneth R. Masterson
SCHEDULE A
Owner Trustee
First Security Bank of Utah, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Administration
Indenture Trustee
NationsBank of Georgia, National Association
Corporate Trust Administration
GA1-006-09-11
600 Peachtree Street, N.E.
Atlanta, Georgia 30308
Pass Through Trustee
NationsBank of South Carolina, National Association
1301 Gervis Street
Fourth Floor
Columbia, South Carolina 29201
Attention: Corporate Trust Administration
Owner Participant
LLG Aircraft Leasing, L.P.
1209 Orange Street
Wilmington, Delaware 19801
Underwriters
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Letterhead of Federal Express of March 16, 1994
Exhibit K-2
Commencement Date
To the Addressees Listed on Schedule A Attached
Re: Federal Express Corporation Trust
Ladies and Gentlemen:
I am the Senior Vice President and General
Counsel of Federal Express Corporation, a Delaware
corporation ("Federal"), and am familiar with the
transactions contemplated by the Participation
Agreement (Federal Express Corporation Trust ______),
dated as of March 1, 1994 (the "Participation Agree-
ment"), among Federal, as Lessee, LLG Aircraft
Leasing, L.P., as Owner Participant, First Security
Bank of Utah, National Association, a national banking
association, as Owner Trustee, NationsBank of Georgia,
National Association, a national banking association,
as Indenture Trustee, NationsBank of South Carolina,
National Association, a national banking association,
as Pass Through Trustee, and Westdeutsche Landesbank
Girozentrale, New York Branch. This opinion is being
delivered pursuant to Section 4.02(j)(i) and
4.03(l)(i) of the Participation Agreement.
Capitalized terms shall have the meanings assigned in
the Participation Agreement.
The Participation Agreement provides, among
other things, for the financing of a portion of the
Owner Trustee's payment of the Purchase Price,
Modification Cost, Parts Cost and related expenses
with respect to one Airbus Model A310-203 aircraft
(the "Aircraft") using the proceeds from the public
offering of Pass Through Certificates. Two Series of
Pass Through Certificates were issued by two Pass
Through Trusts formed to acquire, among other
securities, the Certificates bearing a particular
interest rate and having a particular Maturity that
were issued under the Trust Indenture and Security
Agreement (Federal Express Corporation Trust ______),
dated as of March 1, 1994 ("Indenture"), between First
Security Bank of Utah, National Association, as Owner
Trustee, and NationsBank of Georgia, National
Association, as Indenture Trustee.
In connection with the opinions expressed
below, I have examined or caused to be examined by
attorneys under my supervision, the Operative
Agreements. We have relied upon originals or copies,
certified or otherwise identified to our satisfaction,
of such corporate records, documents and other
instruments as in our judgment are relevant to
rendering the opinions expressed below. As to any
facts material to the opinions expressed below, we
have relied upon the representations and warranties
made in the Operative Agreements, the accuracy of
which we have not independently investigated or
verified. In such examination, we have assumed the
genuineness of all signatures (other than the
signatures of Federal) 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 assumed that
each of the parties to each of the Operative
Agreements, other than Federal, has or had, on the
date of execution thereof, full power, authority and
legal right to enter into the Operative Agreements,
and that each Operative Agreement has been duly
authorized, executed and delivered by each of such
parties.
Based on the foregoing, it is my opinion
that:
1. Federal is a corporation duly
incorporated, validly existing and in good standing
under the laws of the State of Delaware, is a "citizen
of the United States" within the meaning of
Section 101(16) of the Federal Aviation Act of 1958,
as amended (the "Act"), and has or had, on the date of
execution thereof, the corporate power and authority
to carry on its business as currently conducted and to
enter into and perform its obligations under the
Operative Agreements to which it is a party. Federal
is duly qualified to do business and is in good
standing in the State of Tennessee and each other
state of the United States in which its operations or
the nature of its business requires Federal to so
qualify, except where the failure to so quality would
not have a material adverse impact on Federal or its
business.
2. Federal 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,
and each such certificate, franchise, license, permit,
right and concession and consent is in full force and
effect.
3. Each of the Operative Agreements to which
Federal is a party has been duly authorized, executed
and delivered by Federal and together constitute the
legal, valid and binding obligations of Federal
enforceable against Federal in accordance with its and
their terms.
4. Neither the execution and delivery by
Federal of the Operative Agreements to which Federal
is a party, nor the consummation of any of the
transactions by Federal contemplated thereby, nor the
performance of the obligations thereunder by Federal,
did at the time of execution and delivery, or does
currently, (a) require any stockholder approval or
violate the Certificate of Incorporation or By-laws of
Federal or (b) conflict with or contravene the
provisions of, or constitute a default under, or
result in the creation of any Lien upon the property
of Federal, under any law, governmental rule or
regulation, or the Certificate of Incorporation or By-
laws of Federal or any order, writ, injunction or
decree of any court of governmental authority against
Federal or by which any of its properties may be bound
or any indenture, mortgage, contract or other
agreement known to me to which Federal is a party or
by which it may be bound or required the approval or
consent of any trustee or the holders of any
indebtedness or obligations of Federal.
5. Neither the execution and delivery by
Federal of the Operative Agreements to which it is a
party, nor the consummation of any transactions by
Federal contemplated thereby, nor the performance of
the obligations thereunder by Federal, did or does, as
the case may be, (a) require the consent or approval
of, the giving of notice to, or (except as described
or contemplated in the Participation Agreement and the
Lease, all of which were or are required to be
performed on or prior to the Closing Date or
Commencement Date, as specified in the Participation
Agreement or the Lease, and which were or shall have
been accomplished on or prior to the Closing Date or
Commencement Date, so specified) the registration
with, or the taking of any other action in respect of,
the FAA or any other authority or agency of the
federal government or of the State of Tennessee, or
(b) contravene any judgment or order applicable to or
binding on Federal or any law or governmental rule or
regulation of the United States or of the State of
Tennessee.
6. Except for the matters described under
"Legal Proceedings" in Federal's Annual Report on Form
10-K for the most recent fiscal year for which such
Report is available (as updated by Note 7 to the
financial statements included in Federal's Quarterly
Reports on Form 10-Q for any more recent fiscal
quarter for which such Report is available), as to
which I can express no opinion at this time concerning
Federal's liability (if any) or the effect of any
adverse determination upon the business, condition
(financial or otherwise) or operations of Federal,
there is no pending or to my knowledge threatened
action or proceeding before any court or
administrative agency which individually (or in the
aggregate in the case of any group of related
lawsuits) is expected to have a material adverse
effect on the financial condition of Federal or the
ability of Federal to perform its obligations under
the Operative Agreements.
7. Except for the filing for recordation
pursuant to the Act of the Indenture, the Indenture
and Security Agreement Supplement, the Lease and the
Lease Supplement, the Trust Agreement and the Trust
Agreement Supplement covering the Aircraft, no further
action, including any filing or recording of any
document is necessary or advisable in order to
establish and perfect the Owner Trustee's title to and
interest in the Aircraft as against Federal and any
third parties, or to perfect any security interest in
the Aircraft in favor of the Indenture Trustee, as
assignee of the Owner Trustee, except for the filing
of continuation statements at periodic intervals as
required, in each case with respect to such portion of
the Aircraft as is covered by the recording system
established by the Act.
8. Federal is a duly certificated "air
carrier" within the meaning of the Act, and a holder
of a certificate under Section 401 of the Act, an all-
cargo certificate under Section 418 of the Act and an
"air carrier operating certificate" issued pursuant to
Section 604 of the Act, and each such certificate is
in full force and effect.
9. Federal is not, and is not directly or
indirectly controlled by or acting on behalf of any
Person which is, an "investment company" within the
meaning of the Investment Company Act of 1940, as
amended.
10. Federal, as Lessee, duly accepted the
Aircraft under the Lease and the Lease Supplement and
the Term commenced.
11. Federal's principal place of business
and chief executive office (as such term is defined in
the Uniform Commercial Code in effect in the State of
Tennessee) are located at 2005 Corporate Avenue,
Memphis, Shelby County, Tennessee.
The opinions expressed in paragraph 3 above
are based upon the assumption for purposes of such
opinions and without independent analysis that,
notwithstanding the respective choice of laws clauses
in the Operative Agreements, the governing law with
respect to each of the Operative Agreements is
identical in all relevant respects to the law of the
State of Tennessee. Insofar as the foregoing opinion
relates to the enforceability of any instrument, such
enforceability is subject to applicable bankruptcy,
insolvency and other similar laws affecting the
enforcement of creditors' rights generally (whether
such enforceability is considered in a proceeding in
equity or at law). The enforceability of certain
remedies provided under the Lease may also be limited
by applicable laws which may affect the remedies
provided therein but which do not in my opinion affect
the validity of the Lease or make such remedies
inadequate for the practical realization of the
benefits intended to be provided thereby.
I do not express any opinion as to matters
governed by any law other than the federal laws of the
United States of America, the corporation law of the
State of Delaware and the laws of the State of
Tennessee.
As to the matters referred to in paragraph 3,
I have relied on the opinion of Daugherty, Fowler &
Peregrin of even date herewith, to the extent such
matters are addressed in such counsel's opinion.
This opinion is delivered to you solely for
your use in connection with the transactions described
herein, and may not be used for any other purpose, and
may not be relied upon by any other person, with the
exception of your successors and permitted assigns,
without my prior written consent.
Very truly yours,
Kenneth R. Masterson
SCHEDULE A
Owner Trustee
First Security Bank of Utah, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Administration
Indenture Trustee
NationsBank of Georgia, National Association
Corporate Trust Administration
GA1-006-09-11
600 Peachtree Street, N.E.
Atlanta, Georgia 30308
Owner Participant
LLG Aircraft Leasing, L.P.
1209 Orange Street
Wilmington, Delaware 19801
Exhibit L-1
Letterhead of Dewey Ballantine
Closing Date
To Each of the Addressees
Listed in Schedule A
Attached Hereto
Re: Federal Express Corporation Trust
Ladies and Gentlemen:
We have acted as special counsel for LLG Aircraft
Leasing, L.P., a Delaware limited partnership (the
"Owner Participant"), LLG of Delaware, Inc., a
Delaware corporation (the "General Partner") and
Deutsche Lufthansa Aktiengesellschaft, a German
corporation ("Lufthansa"), in connection with the
transactions contemplated by (i) the Participation
Agreement (Federal Express Corporation Trust ______),
dated as of March 1, 1994 (the "Participation
Agreement"), among Federal Express Corporation, as
Lessee (the "Lessee"), the Owner Participant, First
Security Bank of Utah, National Association, as Owner
Trustee (the "Owner Trustee"), NationsBank of Georgia,
National Association, as Indenture Trustee (the
"Indenture Trustee"), NationsBank of South Carolina,
National Association, as Pass Through Trustee (the
"Pass Through Trustee"), and Westdeutsche Landesbank
Girozentrale, New York Branch, as LC Bank, and (ii)
the Agreement to Lease referred to in the
Participation Agreement. This opinion is delivered
pursuant to Section 4.01(k)(ii) of the Participation
Agreement. Unless otherwise defined herein, all
capitalized terms used herein shall have the
respective meanings set forth or referred to in the
Participation Agreement.
In connection with our opinions expressed
herein, we have examined executed counterparts of the
Operative Agreements (other than the Lease, the Lease
Supplement, the Trust Agreement Supplement covering
the Aircraft and the Indenture and Security Agreement
Supplement (the "Commencement Documents"), the forms
of which we have examined). We have further examined
and relied upon the accuracy of original, certified,
conformed, photographic or telecopied copies of such
records, agreements, certificates and other documents
as we have deemed necessary or appropriate to enable
us to render the opinions expressed herein. In all
such examinations, we have assumed the genuineness of
signatures on original documents and the conformity to
such original documents of all copies submitted to us
as certified, conformed, photographic or telecopied
copies, and as to certificates and telegraphic and
telephonic confirmations given by public officials, we
have assumed the same to have been properly given and
to be accurate. As to all matters of fact material to
our opinions, we have relied upon the accuracy of the
statements, representations and warranties made in the
Operative Agreements and certificates furnished to us,
and we have made no independent investigation or
verification with respect to such factual matters.
We have assumed (without making any
independent investigation or verification with respect
thereto) the due authorization, execution and delivery
of the Operative Agreements (other than the
Commencement Documents) and the other documents
executed in connection with the transactions
contemplated by the Operative Agreements (other than
the Commencement Documents) by each of the parties to
each such document (other than the Owner Participant
and the General Partner) and that each such document
constitutes the legal, valid and binding obligation of
each of such parties (other than the Owner
Participant, the General Partner and Lufthansa),
enforceable against each such party (other than the
Owner Participant, the General Partner and Lufthansa)
in accordance with its terms, that each such party
(other than the Owner Participant and the General
Partner) has or had, at the time of its execution
thereof, the requisite power, authority and legal
right to execute, deliver and perform each Operative
Agreement (other than any Commencement Document) to
which it is a party, and that the execution, delivery
and performance thereof by each such party (other than
the Owner Participant and the General Partner) do not
violate its respective partnership agreement, or
charter or by-laws, or any laws or governmental rules
or regulations (federal, state or otherwise) that may
be applicable to it, in any capacity in which it may
be acting, and that the transactions provided for in
the Operative Agreements are not within the
prohibition of Section 406 of the Employee Retirement
Income Security Act of 1974, as amended.
Based upon and subject to the foregoing and
the matters hereinafter set forth, we are of the
opinion that:
(1) The Owner Participant is a duly
organized and validly existing limited
partnership in good standing under the laws of
the State of Delaware. The General Partner is a
duly incorporated and validly existing
corporation in good standing under the laws of
the State of Delaware. Each of the Owner
Participant and the General Partner has or had,
on the respective dates of execution thereof, the
requisite partnership or corporate power and
authority to execute, deliver and perform its
obligations under the Operative Agreements to
which it is a party.
(2) Each Operative Agreement to which the
Owner Participant or the General Partner is a
party, and each assignment of a Demand Note, has
been duly authorized, executed and delivered by
the Owner Participant, the General Partner or the
assignor, as the case may be.
(3) Each Operative Agreement to which the
Owner Participant, the General Partner or
Lufthansa is a party, and each assignment of a
Demand Note, constitutes a legal, valid and
binding obligation of the Owner Participant, the
General Partner, Lufthansa or the assignor, as
the case may be, enforceable against it in
accordance with its terms, except as limited by
applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws
affecting the rights and remedies of creditors
generally and public policy considerations (in
the case of the indemnity provisions contained
therein), and subject to general principles of
equity (regardless of whether considered in a
proceeding in equity or at law).
(4) Assuming the due authorization,
execution and delivery of the Indenture and the
Collateral Agreement by each of the parties to
each such document then: (A) each such document
constitutes a legal, valid and binding agreement
of each party thereto enforceable against each
such party in accordance with its terms; (B) the
Indenture creates, for the benefit of the
Holders, the security interest in the Collateral
that it purports to create as of the Closing
Date; and (C) the beneficial interest of the
Owner Participant under the Trust Agreement in
and to the properties which are part of the Trust
Indenture Estate is subject, to the extent
provided in the Indenture, to the Lien of the
Indenture in favor of the Holders.
(5) Neither the execution and delivery of
any of the Operative Agreements to which the
Owner Participant, the General Partner or
Lufthansa is a party, by the Owner Participant,
the General Partner or Lufthansa, as the case may
be, nor the consummation by the Owner
Participant, the General Partner or Lufthansa, as
the case may be, of the transactions contemplated
thereby, (A) required or requires the consent or
approval of, the giving of notice to, the
registration with, or the taking of any other
action with respect to, any governmental
authority or agency of the State of New York or
the federal government of the United States of
America; (B) contravened or contravenes any law,
governmental rule or regulation of the State of
New York or the federal government of the United
States of America; (C) results in the breach of
any of the terms, conditions or provisions of the
partnership agreement, or charter or by-laws, of
the Owner Participant or the General Partner, as
the case may be; or (D) is in violation of any
law, judgment or order applicable to or binding
upon the Owner Participant or the General
Partner, as the case may be, or its properties,
or, to the best of our knowledge, would violate
or would subject the Lessor's Estate to any Lien
under any indenture, mortgage, bank credit
agreement, note or bond purchase agreement, long-
term lease, license or contract or any other
agreement or instrument to which the Owner
Participant or the General Partner is a party or
by which the Owner Participant or the General
Partner is bound.
(6) There are no actions, suits or
proceedings pending or, to the best of our
knowledge, threatened against or affecting the
Owner Participant or the General Partner in any
court or before any administrative agency or
arbitrator, which, if adversely determined, would
materially and adversely affect the ability of
the Owner Participant or the General Partner to
perform its obligations under any of the
Operative Agreements to which it is a party, and
we are not aware of any pending or threatened
actions or proceedings before any court,
administrative agency or tribunal involving the
Owner Participant or the General Partner in
connection with the transactions contemplated by
the Operative Agreements.
We express no opinions herein as to the laws
of any state or jurisdiction other than the laws of
the State of New York and the federal laws of the
United States of America. In addition, no opinion is
expressed herein as to (i) any state or federal
securities laws, (ii) any state or federal tax laws,
(iii) except as provided in paragraph (4) above, the
perfection or priority of any security interest
created by any of the Operative Agreements or the
right, title or interest in or to the Lessor's Estate
on the part of any Person, or (iv) matters governed by
the Federal Aviation Act of 1958, as amended, or by
any other aviation law or law, statute, rule or
regulation of the United States of America relating to
the acquisition, ownership, leasing, registration,
use, operation, maintenance, repair, replacement, sale
or particular nature of the Aircraft, Airframe or
Engines.
In rendering the opinions expressed herein,
with respect to all matters of German law we have
relied (without making any independent investigation
with respect thereto) upon the opinion, dated today
and delivered to you, of Christian Rehm, in house
legal counsel of Lufthansa, and nothing has come to
our attention which would cause us to believe that you
and we are not justified in relying thereon. This
opinion is furnished by us at the request of the Owner
Participant, the General Partner and Lufthansa for
your sole benefit, and we agree that you may rely on
the opinions expressed herein. No other person or
entity shall be entitled to rely on the opinions
expressed herein without our express written consent.
This opinion shall not be published or
reproduced in any manner or distributed or circulated
to any person or entity without our express written
consent. This opinion is limited to the matters
stated herein and no opinion is implied or may be
inferred beyond the matters expressly stated herein.
We rendered an opinion dated September 1,
1993 (the "Agreement to Lease Opinion"), a copy of
which is attached hereto. We hereby consent and agree
that the addressees hereto who were not addressees to
the Agreement to Lease Opinion may rely on the
Agreement to Lease Opinion as fully and with the same
force and effect as if such addressees were originally
named therein on the date of the Agreement to Lease
Opinion.
Very truly yours,
SCHEDULE A
Lessee
Federal Express Corporation
2007 Corporate Plaza
Memphis, Tennessee 38132-2140
Owner Trustee
First Security Bank of Utah, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Administration
Indenture Trustee
NationsBank of Georgia, National Association
Corporate Trust Administration
GA1-006-09-11
600 Peachtree Street, N.E.
Atlanta, Georgia 30308
Pass Through Trustee
NationsBank of South Carolina, National Association
1301 Gervis Street
Fourth Floor
Columbia, South Carolina 29201
Attention: Corporate Trust Administration
Owner Participant
LLG Aircraft Leasing, L.P.
1209 Orange Street
Wilmington, Delaware 19801
Underwriters
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
LC Bank
Westdeutsche Landesbank Girozentrale,
New York Branch
1211 Avenue of the Americas
New York, New York 10036-8701
Exhibit L-2
Letterhead of Dewey Ballantine
Commencement Date
(Exchange Date)*
To Each of the Addressees
Listed in Schedule A
Attached Hereto
Re: Federal Express Corporation Trust
Ladies and Gentlemen:
We have acted as special counsel for LLG Aircraft
Leasing, L.P., a Delaware limited partnership (the
"Owner Participant"), and LLG of Delaware, Inc., a
Delaware corporation (the "General Partner") (and
Deutsche Lufthansa Aktiengesellschaft, a German
corporation ("Lufthansa"),)** in connection with
the transactions contemplated by (i) the Participation
Agreement (Federal Express Corporation Trust ______),
dated as of March 1, 1994 (the "Participation
Agreement"), among Federal Express Corporation, as
Lessee (the "Lessee"), the Owner Participant, First
Security Bank of Utah, National Association, as Owner
Trustee (the "Owner Trustee"), NationsBank of Georgia,
National Association, as Indenture Trustee (the
"Indenture Trustee"), NationsBank of South Carolina,
National Association, as Pass Through Trustee (the
"Pass Through Trustee"), and Westdeutsche Landesbank
Girozentrale, New York Branch, as LC Bank, and (ii)
the Agreement to Lease referred to in the
Participation Agreement. This opinion is delivered
pursuant to Sections 4.02(j)(ii) and 4.03(l)(ii) of
the Participation Agreement. Unless otherwise defined
herein, all capitalized terms used herein shall have
the respective meanings set forth or referred to in
the Participation Agreement.
- --------------
* If the Exchange Date does not occur on the
Commencement date, a separate opinion, dated
the Exchange Date, shall be provided as to
all matters below, except as specifically
noted.
** Insert if an OP Guarantee is required
pursuant to the Participation Agreement.
In connection with our opinions expressed
herein, we have examined executed counterparts of the
Operative Agreements ((other than the Indenture and
Security Agreement Supplement, the form of which we
have examined))*. We have further examined and
relied upon the accuracy of original, certified,
conformed, photographic or telecopied copies of such
records, agreements, certificates and other documents
as we have deemed necessary or appropriate to enable
us to render the opinions expressed herein. In all
such examinations, we have assumed the genuineness of
signatures on original documents and the conformity to
such original documents of all copies submitted to us
as certified, conformed, photographic or telecopied
copies, and as to certificates and telegraphic and
telephonic confirmations given by public officials, we
have assumed the same to have been properly given and
to be accurate. As to all matters of fact material to
our opinions, we have relied upon the accuracy of the
statements, representations and warranties made in the
Operative Agreements and certificates furnished to us,
and we have made no independent investigation or
verification with respect to such factual matters.
We have assumed (without making any
independent investigation or verification with respect
thereto) the due authorization, execution and delivery
of the Operative Agreements ((other than the Indenture
and Security Agreement Supplement))* and the other
documents executed in connection with the transactions
contemplated by the Operative Agreements ((other than
the Indenture and Security Agreement Supplement))* by
each of the parties to each such document (other than
the Owner Participant and the General Partner) and
that each such document constitutes the legal, valid
and binding obligation of each of such parties (other
than the Owner Participant and the General Partner
(and Lufthansa)**), enforceable against each such
party (other than the Owner Participant and the
General Partner (and Lufthansa)**) in accordance with
its terms, that each such party (other than the Owner
- -------------
* Insert in Commencement Date opinion only if
the Exchange Date does not occur on the
Commencement Date.
** Insert if an OP Guarantee is required
pursuant to the Participation Agreement.
Participant and the General Partner) has or had, at
the time of its execution thereof, the requisite
power, authority and legal right to execute, deliver
and perform each Operative Agreement (other than any
Indenture and Security Agreement Supplement))* to
which it is a party, and that the execution, delivery
and performance thereof by each such party (other than
the Owner Participant and the General Partner) do not
violate its respective partnership agreement, or
charter or by-laws, or any laws or governmental rules
or regulations (federal, state or otherwise) that may
be applicable to it, in any capacity in which it may
be acting, and that the transactions provided for in
the Operative Agreements are not within the
prohibition of Section 406 of the Employee Retirement
Income Security Act of 1974, as amended.
Based upon and subject to the foregoing and
the matters hereinafter set forth, we are of the
opinion that:
(1) The Owner Participant is a duly
organized and validly existing limited
partnership in good standing under the laws of
the State of Delaware. The General Partner is a
duly incorporated and validly existing
corporation in good standing under the laws of
the State of Delaware. Each of the Owner
Participant and the General Partner has or had,
on the respective dates of execution thereof, the
requisite partnership or corporate power and
authority to execute, deliver and perform its
obligations under the Operative Agreements to
which it is a party.
(2) Each Operative Agreement to which the
Owner Participant or the General Partner is a
party has been duly authorized, executed and
delivered by the Owner Participant or the General
Partner, as the case may be.
(3) Each Operative Agreement to which the
Owner Participant or the General Partner (or
Lufthansa)* is a party constitutes a legal,
valid and binding obligation of the Owner
Participant or the General Partner (or
- -------------
* Insert if an OP Guarantee is required
pursuant to the Participation Agreement.
Lufthansa)*, as the case may be, enforceable
against it in accordance with its terms, except
as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws
affecting the rights and remedies of creditors
generally and public policy considerations (in
the case of the indemnity provisions contained
therein), and subject to general principles of
equity (regardless of whether considered in a
proceeding in equity or at law).
(4) Lufthansa has conveyed to the Owner
Trustee, good and marketable title to the
Aircraft, free and clear of all Liens other than
(i) the rights of the Lessee under the Lease,
(ii) the rights of the Owner Participant under
the Trust Agreement (and (iii) the rights of the
Indenture Trustee under the Indenture)* .
(5) Neither the execution and delivery of
any of the Operative Agreements to which the
Owner Participant or the General Partner (or
Lufthansa)** is a party, by the Owner Participant
or the General Partner (or Lufthansa)**, as the
case may be, nor the consummation by the Owner
Participant, the General Partner (or
Lufthansa)**, as the case may be, of the
transactions contemplated thereby, (A) required
or requires the consent or approval of, the
giving of notice to, the registration with, or
the taking of any other action with respect to,
any governmental authority or agency of the State
of New York or the federal government of the
United States of America; (B) contravened or
contravenes any law, governmental rule or
regulation of the State of New York or the
federal government of the United States of
America; (C) results in the breach of any of the
terms, conditions or provisions of the
partnership agreement, or charter or by-laws, of
- -----------
* If the Exchange Date does not occur on the
Commencement Date, this clause (iii) may be
omitted from the Commencement Date opinion
only.
** Insert if an OP Guarantee is required
pursuant to the Participation Agreement.
the Owner Participant or the General Partner, as
the case may be; or (D) is in violation of any
law, judgment or order applicable to or binding
upon the Owner Participant or the General
Partner, as the case may be, or its properties,
or, to the best of our knowledge, would violate
or would subject the Lessor's Estate to any Lien
under any indenture, mortgage, bank credit
agreement, note or bond purchase agreement, long-
term lease, license or contract or any other
agreement or instrument to which the Owner
Participant or the General Partner is a party or
by which the Owner Participant or the General
Partner is bound.
(6) There are no actions, suits or
proceedings pending or, to the best of our
knowledge, threatened against or affecting the
Owner Participant or the General Partner in any
court or before any administrative agency or
arbitrator, which, if adversely determined, would
materially and adversely affect the ability of
the Owner Participant or the General Partner to
perform its obligations under any of the
Operative Agreements to which it is a party, and
we are not aware of any pending or threatened
actions or proceedings before any court,
administrative agency or tribunal involving the
Owner Participant or the General Partner in
connection with the transactions contemplated by
the Operative Agreements.
We express no opinions herein as to the laws
of any state or jurisdiction other than the laws of
the State of New York and the federal laws of the
United States of America. In addition, no opinion is
expressed herein as to (i) any state or federal
securities laws, (ii) any state or federal tax laws,
(iii) the perfection or priority of any security
interest created by any of the Operative Agreements
or, except as provided in paragraph (4) above, as to
the right, title or interest in or to the Lessor's
Estate on the part of any Person, or (iv) except as
provided in paragraph (4) above, matters governed by
the Federal Aviation Act of 1958, as amended, or by
any other aviation law or law, statute, rule or
regulation of the United States of America relating to
the acquisition, ownership, leasing, registration,
use, operation, maintenance, repair, replacement, sale
or particular nature of the Aircraft, Airframe or
Engines.
As to the matters referred to in paragraph
(4), we have relied on the opinion of Daugherty,
Fowler & Peregrin of even date herewith, to the extent
such matters are addressed in such counsel's opinion.
Insofar as our opinions expressed herein
relate to the Tax Indemnity Agreement, such opinions
are being rendered solely to the Lessee.
(In rendering the opinions expressed herein,
with respect to all matters of German law we have
relied (without making any independent investigation
with respect thereto) upon the opinion, dated today
and delivered to you, a copy of which is attached
hereto, of (_______________), counsel to Lufthansa,
and nothing has come to our attention which would
cause us to believe that you and we are not justified
in relying thereon.)* This opinion is furnished by
us at the request of the Owner Participant, the
General Partner and Lufthansa for your sole benefit,
and we agree that you may rely on the opinions
expressed herein. No other person or entity shall be
entitled to rely on the opinions expressed herein
without our express written consent.
This opinion shall not be published or
reproduced in any manner or distributed or circulated
to any person or entity without our express written
consent. This opinion is limited to the matters
stated herein and no opinion is implied or may be
inferred beyond the matters expressly stated herein.
Very truly yours,
- ------------
(*) Insert if an OP Guarantee is required
pursuant to the Participation Agreement.
SCHEDULE A
Lessee
Federal Express Corporation
2007 Corporate Plaza
Memphis, Tennessee 38132-2140
Owner Trustee
First Security Bank of Utah, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Administration
Indenture Trustee
NationsBank of Georgia, National Association
Corporate Trust Administration
GA1-006-09-11
600 Peachtree Street, N.E.
Atlanta, Georgia 30308
Owner Participant
LLG Aircraft Leasing, L.P.
1209 Orange Street
Wilmington, Delaware 19801
Exhibit M-1
Closing Date
To Each of the Persons
Listed on Schedule A
Attached Hereto
Gentlemen:
I am in-house legal counsel of Deutsche Lufthansa
Aktiengesellschaft ("Lufthansa") and have acted as legal
counsel for Lufthansa Leasing Projekt Nr. 7 GmbH ("LLP") and
as such have reviewed Promissory Note (ED-AICA), Promissory
Note (ED-AICB), Promissory Note (ED-AICC), Promissory Note
(ED-AICD), Promissory Note (ED-AICF), Promissory Note (ED-
AICH), Promissory Note (ED-AICK), Promissory Note (ED-AICL),
Promissory Note (ED-AICM), Promissory Note (ED-AICN),
Promissory Note (ED-AICP, Promissory Note (ED-AICR), and
Promissory Note (ED-AICS) (each, a "Demand Note" and
collectively, the "Demand Notes") as well as the assignment
of LLP's right, title and interest , to and under each
Demand Note (each, an "Assignment" and collectively, the
"Assignments").
I have examined originals or copies of such
company and corporate records of LLP and certificates of
public officials and of representatives of LLP as I have
deemed appropriate or necessary hereto.
In connection with my opinions expressed herein, I
have examined executed the Demand Notes. In my examination,
I have assumed the genuineness of all signatures, the
authenticity of all documents and other materials submitted
to me as originals and the conformity with the originals
thereof of all documents and other materials submitted to me
as copies.
Likewise, and for the purposes of the opinions set
forth below, I have assumed that (i) each of the Demand
Notes has been duly authorized and has been duly executed
and delivered by Lufthansa, (ii) Lufthansa is duly organized
and validly existing under the laws of its jurisdiction of
incorporation or organization, and has full power, authority
and legal right to make and perform its obligations under
each of the Demand Notes and (iii) each of the Demand Notes
is enforceable against Lufthansa.
Based on and in reliance upon the foregoing, I am
of the opinion that:
1. LLP is a company duly organized and validly
existing under the laws of Germany and has all requisite
power and authority to carry on its business as now
conducted and has all requisite power and authority to enter
into and perform its obligations under the Assignments.
2. Neither the execution and delivery by LLP of
the Assignments nor the performance by LLP of its
obligations thereunder requires the consent or approval of,
the giving of notice to, or the registration or filing with,
or the taking of any other action in respect of, any German
government authority or agency.
3. The execution and delivery by LLP of the
Assignments and the performance by LLP of its obligations
thereunder have been approved and authorized by LLP and do
not require any approval or consent of any stockholder of
LLP.
4. Neither the execution and delivery by LLP of
the Assignments nor the consummation by LLP of the
transactions contemplated thereunder violates any law,
governmental rule or regulation of Germany applicable to
LLP.
5. The choice of New York law to govern the
Lufthansa Agreemeents is valid and binding as against
Lufthansa under the laws of Germany and all political
subdivisions thereof, and a German court would uphold such
choice of law in a legal proceeding to enforce the
Agreements brough in such court.
I am permitted to practice law in the Federal
Republic of Germany and do not express any opinion as to any
law other than the law of the Federal Republic of Germany.
Very truly yours,
Christian Rehm
SCHEDULE A
Lessee
Federal Express Corporaton
2005 Corporate Avenue
Memphis, Tennessee 38132
Owner Trustee
First Security Bank of Utah,
National Association, as Owner Trustee
79 South Main Street
Salt Lake City, UT 84111
Indenture Trustee
NationsBank of Utah, National Association
Corporate Trust Administration
GA1-006-09-11
600 Peachtree Street, N.E.
Atlanta, Georgia 30308
Pass Through Trustee
NationsBank of South Carolina, National Association
1301 Gervis Street
Fourth Floor
Columbia, South Carolina 29201
Attention: Corporate Trust Admininstration
Owner Participant
LLG Aircraft Leasing, L.P.
c/o Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
Underwriters
Goldman, Sachs & Co.
Merrill, Lynch, Pierce, Fenner & Smith Incorporated
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
LC Bank
Westdeutsche Landesbank Girozentrale, New York Branch
1211 Avenue of the Americas
New York, New York 10036-8701
Exhibit M-2
Commencement Date
To Each of the Persons
Listed on Schedule A
Attached Hereto
Gentlemen:
I am in-house legal counsel of Deutsche Lufthansa
Aktiengesellschaft ("Lufthansa") in connection with the
transactions contemplated by (i) the Participation Agreement
(Federal Express Corporation Trust No. ____), dated as of
_______ __, 1994 (the "Participation Agreement"),among
Federal Express Corporation, as Lessee (the "Lessee"), LLG
Aircraft Leasing, L.P., as Owner Participant (the "Owner
Participant"), First Security Bank of Utah, National
Association, as Owner Trustee (the "Owner Trustee"),
NationsBank of Georgia, National Association, as Indenture
Trustee (the "Indenture Trustee"), NationsBank of South
Carolina, National Association, as Pass Through Trustee (the
"Pass Through Trustee"), and Westdeutsche Landesbank
Girozentrale, New York Branch, as LC Bank (the "LC Bank"),
and (ii) the Agreement to Lease referred to in the
Participation Agreement. This opinion is delivered pursuant
to Section 4.01(k)(ii) of the Participation Agreement.
Capitalized terms used in this opinion and not otherwise
defined herein shall have the respective meanings assigned
thereto in the Participation Agreement (whether through
incorporation by reference or otherwise).
I have examined originals or copies of such
company and corporate records of Lufthansa and certificates
of public officials and of representatives of Lufthansa as I
have deemed appropriate or necessary hereto.
In connection with my opinions expressed herein, I
have examined executed counterparts of the Operative
Agreements other than the Lease, the Lease Supplement and
the Indenture and Security Agreement Supplement (the
"Commencement Documents"), the forms of which I have
examined. In my examination, I have assumed the genuineness
of all signatures (other than those of Lufthansa), the
authenticity of all documents and other materials submitted
to me as originals and the conformity with the originals
thereof of all documents and other materials submitted to me
as copies.
Likewise, and for the purposes of the opinions set
forth below, I have assumed that (i) each of the Operative
Agreements has been duly authorized and has been duly
executed and delivered by the parties thereto (other than
Lufthansa), (ii) each party (other than Lufthansa) is duly
organized and validly existing under the laws of its
jurisdiction of incorporation or organization, and has full
power, authority and legal right to make and perform its
obligations under each of the Operative Agreements to which
it is a party and (iii) each of the Operative Agreements is
enforceable against each of the parties thereto (other than
Lufthansa).
Based on and in reliance upon the foregoing, I am
of the opinion that:
1. Lufthansa is a company duly organized and
validly existing under the laws of Germany and has all
requisite power and authority to carry on its business as
now conducted and has all requisite power and authority to
enter into and perform its obligations under the Agreements.
2. Neither the execution and delivery by
Lufthansa of the Modification Agreement, the Agreement to
Lease, the Bills of Sale, the Demand Notes, the Parts and
Services Agreement, the Sales Agreement, the OP Guarantee
(if any), the Indemnification Agreement, the Underwriting
Agreement or the Lufthansa Side Letter (the "Lufthansa
Agreements") nor the performance by Lufthansa of its
obligations thereunder requires the consent or approval of,
the giving of notice to, or the registration or filing with,
or the taking of any other action in respect of, any German
government authority or agency.
3. The execution and delivery by Lufthansa of the
Lufthansa Agreements and the performance by Lufthansa of its
obligations thereunder have been approved and authorized by
Lufthansa and do not require any approval or consent of any
stockholder of Lufthansa.
4. Neither the execution and delivery by
Lufthansa of the Lufthansa Agreements nor the consummation
by Lufthansa of the transactions contemplated thereunder
violates any law, governmental rule or regulation of Germany
applicable to Lufthansa.
5. The choice of New York law to govern the
Lufthansa Agreements is valid and binding as against
Lufthansa under the laws of Germany and all political
subdivisions thereof, and a German court would uphold such
choice of law in a legal proceeding to enforce the
Agreements brought in such court.
I am permitted to practice law in the Federal
Republic of Germany and do not express any opinion as to any
law other than the law of the Federal Republic of Germany.
Very truly yours,
Christian Rehm
SCHEDULE A
Lessee
Federal Express Corporaton
2005 Corporate Avenue
Memphis, Tennessee 38132
Owner Trustee
First Security Bank of Utah,
National Association, as Owner Trustee
79 South Main Street
Salt Lake City, UT 84111
Indenture Trustee
NationsBank of Utah, National Association
Corporate Trust Administration
GA1-006-09-11
600 Peachtree Street, N.E.
Atlanta, Georgia 30308
Pass Through Trustee
NationsBank of South Carolina, National Association
1301 Gervis Street
Fourth Floor
Columbia, South Carolina 29201
Attention: Corporate Trust Admininstration
Owner Participant
LLG Aircraft Leasing, L.P.
c/o Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
Underwriters
Goldman, Sachs & Co.
Merrill, Lynch, Pierce, Fenner & Smith Incorporated
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
LC Bank
Westdeutsche Landesbank Girozentrale, New York Branch
1211 Avenue of the Americas
New York, New York 10036-8701
Exhibit N-1
Powell, Goldstein, Frazer & Murphy Letterhead
Closing Date
To the Persons Listed in Schedule A Attached Hereto
Re: Federal Express Corporation Trust
Gentlemen:
We are counsel for NationsBank of Georgia,
National Association, a national banking association
(the "Indenture Trustee"). In such capacity, we have
advised the Indenture Trustee with respect to
authorization, execution and delivery by the Indenture
Trustee of the Trust Indenture and Security Agreement
(Federal Express Corporation Trust ______) dated as of
March 1, 1994 (the "Indenture") between First Security
Bank of Utah, National Association, as Owner Trustee
(the "Owner Trustee"), and the Indenture Trustee, and
the Participation Agreement (Federal Express
Corporation Trust ______) dated as of March 1, 1994
(the "Participation Agreement"), among Federal Express
Corporation ("Federal Express"), LLG Aircraft Leasing,
L.P. (the "Owner Participant"), the Owner Trustee,
NationsBank of South Carolina, National Association,
as Pass Through Trustee, the Indenture Trustee and
Westdeutsche Landesbank Girozentrale, New York Branch,
as LC Bank. Further, we have advised the Indenture
Trustee with respect to the authentication of one or
more Equipment Trust Certificates (the "Certificates")
referred to in the Indenture issued on the date
hereof.
This opinion is being delivered pursuant to
Section 4.01(k)(iii) of the Participation Agreement.
Unless otherwise defined herein, capitalized terms
used herein shall have the meanings set forth or
referred to in the Participation Agreement.
In rendering this opinion, we have reviewed
the Operative Agreements to which the Indenture
Trustee is a party and such other documents as we have
deemed to be appropriate and relevant as a basis for
the opinions hereinafter set forth, including, without
limitation, certified copies of the By-laws of the
Indenture Trustee, a certificate of an officer of the
Indenture Trustee as to certain matters, including the
incumbency of the Officer of the Indenture Trustee who
executed the Indenture, the Collateral Agreement and
the Participation Agreement and who authenticated the
Certificates issued in connection therewith and a
certificate of the Comptroller of the Currency,
Washington, D.C. dated _________, as to the Indenture
Trustee's existence and authority to do business as a
national banking association and to act in a fiduciary
capacity.
In all such examinations we have assumed the
authenticity and completeness of all documents
submitted to us as original documents and the
conformity to original documents and completeness of
all documents submitted to us as photostatic, notarial
or certified copies. Based on the foregoing, it is
our opinion that:
1. The Indenture 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 banking
and trust powers, is a Citizen of the United
States as that term is defined in the Federal
Aviation Act of 1958, as amended (the "Act"),
and has the corporate power and authority to
execute, deliver and perform its obligations
under the Indenture and the Collateral
Agreement and to authenticate the
Certificates delivered on the date hereof and
had on the date of execution thereof the
corporate power and authority to execute,
deliver and perform its obligations under the
Participation Agreement.
2. The Indenture Trustee, in its
individual and trust capacities, has duly
authorized, executed and delivered the
Indenture, the Collateral Agreement and the
Participation Agreement. Assuming the other
parties thereto are legally bound, each of
the Indenture, the Collateral Agreement and
the Participation Agreement constitutes, a
legal, valid and binding obligation of the
Indenture Trustee in its trust capacity (and,
to the extent provided in each such document,
in its individual capacity) enforceable
against the Indenture Trustee in its trust
capacity (and, to the extent provided in each
such document, in its individual capacity) in
accordance with its terms, except as the
provisions thereof may be limited by bank-
ruptcy, reorganization, insolvency,
fraudulent conveyance, moratorium or other
similar laws generally affecting creditors'
rights from time to time in effect.
3. The Certificates delivered on the
date hereof have been duly authenticated and
delivered by the Indenture Trustee in
accordance with the terms of the Indenture.
4. The execution, delivery and
performance by the Indenture Trustee of the
Indenture, the Collateral Agreement and the
Participation Agreement are not in violation
of the Articles of Association or By-laws of
the Indenture Trustee or any law,
governmental rule or regulation of the United
States or the State of Georgia governing the
banking or trust powers of the Indenture
Trustee or, to our knowledge, any judgment,
order, indenture, mortgage, bank credit
agreement, note or bond purchase agreement,
long-term lease, license or other agreement
or instrument to which it is a party or by
which it or its properties may be bound.
5. Neither the execution and delivery
by the Indenture Trustee in its individual or
trust capacity, as the case may be, of the
Indenture, the Collateral Agreement and the
Participation Agreement, nor the consummation
by the Indenture Trustee, in its individual
or trust capacity, as the case may be, of any
of the transactions contemplated in any of
those documents, requires or required on the
date of execution thereof consent or approval
of, giving of notice to, or registration
with, or taking of any other action with
respect to, any federal or state governmental
authority or agency having jurisdiction over
the Indenture Trustee.
6. (a) Subject to the assumptions and
qualifications set forth herein and in sub-
paragraph 6(b) below and except to the extent
the Indenture Trustee forecloses on any
property which constitutes the Trust
Indenture Estate and any of such property is
located in Georgia, or to the extent the
Indenture Trustee engages in business in
Georgia as a result of such foreclosure,
(i) there are no fees, taxes or other charges
payable by the Holders, the Owner Trustee or
the Indenture Trustee (except taxes imposed
on fees payable to the Indenture Trustee) to
the State of Georgia or any political
subdivision thereof in connection with the
execution, delivery or performance of any of
the Pass Through Agreement, the Series
Supplements or the Operative Agreements or in
connection with the issuance and acquisition
of the Certificates or the beneficial
interests of the Holders in the Trust
Indenture Estate; (ii) neither the Indenture
Trustee nor the trust created under the
Indenture will be subject to any fee, tax or
other governmental charge under the laws of
the State of Georgia or any political
subdivision thereof in existence on the date
hereof, on, based on or measured by, directly
or indirectly, the gross receipts, net income
or value of the Trust Indenture Estate; and
(iii) there is no fee, tax or other
governmental charge under the laws of the
State of Georgia or any political subdivision
thereof in existence on the date hereof, on,
based on or measured by any payments under
the Certificates issued to the Holders by
reason of the creation of the trust under the
Indenture pursuant to the laws of the State
of New York or the Indenture Trustee's
performance of its duties under the Indenture
within the State of Georgia. We express no
opinion, however, as to whether or not any
fees, taxes or other charges are now or
hereafter may be payable by the Owner
Participant to the State of Georgia or any
political subdivision thereof in connection
with (x) the execution, delivery or
performance of the Indenture, the Collateral
Agreement, the Participation Agreement, the
Pass Through Agreement, any Series Supplement
or any of the other Operative Agreements or
(y) the making by the Owner Participant of
its investment in the Aircraft.
(b) The opinions set forth in the
immediately preceding subparagraph 6(a) are
subject in relevant part to and qualified by
the following assumptions, which we have made
with your knowledge:
(i) for purposes of taxes which
might be imposed upon the Owner
Trustee or the Lessor's Estate under
Chapter 5, Ad Valorem Taxation of
Property, or Chapter 6, Taxation of
Intangibles, Title 48, Revenue and
Taxation, Official Code of Georgia
Annotated ("O.C.G.A."), we have
assumed that (x) the Lessee will
make, in a timely manner, an annual
property tax return relating to the
Aircraft, in accordance with
Chapter 5, Article 12, Ad Valorem
Taxation of Airline Companies,
Title 48, Revenue and Taxation,
O.C.G.A., and (y) the return will
reflect that a tangible property tax
is due with respect to the Aircraft;
(ii) for purposes of taxes which
might be imposed upon the Lessor's
Estate or the Owner Trustee under
Chapter 6, Taxation of Intangibles,
Title 48, Revenue and Taxation,
O.C.G.A., we have assumed that as of
January 1 of each year there will be
no undistributed funds held in
either the Lessor's Estate or the
Trust Indenture Estate, except such
funds as shall be invested in those
types of obligations or evidences of
debt as are described in
Section 48-6-22(1), O.C.G.A.;
(iii) for purposes of taxes which
might be imposed upon the Lessor's
Estate or the Owner Trustee under
Chapter 7, Income Taxes, Title 48,
Revenue and Taxation, O.C.G.A., we
have assumed that (x) the Lessor's
Estate is a "Grantor Trust" for
Federal income tax purposes (i.e.,
the Owner Participant will be
treated as the owner of the Lessor's
Estate under Subpart E of Part I of
Subchapter J of the Internal Revenue
Code) and (y) the Owner Trustee and
the Owner Participant will report on
that basis for Federal income tax
purposes; and
(iv) for purposes of taxes which
might be imposed upon the Holders
under Chapter 6, Taxation of
Intangibles or Chapter 7, Income
Taxes, Title 48, Revenue and
Taxation, O.C.G.A., neither the
Certificates held by such Holders
nor the interest income thereon nor
any interest of such Holders in and
to the Trust Indenture Estate has
been derived from or has been or
will be acquired in the conduct of
or used incident to business carried
on by such Holders or property of
such Certificate Holders located in
the State of Georgia.
We express no opinion as to the correctness
of the foregoing assumptions but we are not aware of
any fact that causes us to believe that any such
assumption is incorrect; however, we have conducted no
independent investigation in this regard.
We are members of the Bar of the State of
Georgia and the opinions set forth herein are limited
to the laws of Georgia and, subject to the limitations
set forth herein, the federal laws of the United
States of America. With respect to the opinions set
forth above in paragraph 2 as to the validity, binding
effect and enforceability of the Indenture, the
Collateral Agreement and the Participation Agreement,
the governing law of which is expressly stated to be
that of the State of New York, we have assumed with
your permission that the Indenture, the Collateral
Agreement, and the Participation Agreement constitute
legal, valid, binding and enforceable documents or
instruments under the laws of the State of New York
(as to which assumption we express no opinion).
Further, without limiting the generality of the
foregoing, we express no opinion with respect to
(i) except as set forth in paragraph 1 of this opinion
with respect to the citizenship of the Indenture
Trustee, the Act and the regulations promulgated
thereunder, the impact of the Act upon matters set
forth in this opinion or any other aviation or other
laws, rules or regulations applicable to the
particular nature of the equipment to be acquired by
the Owner Trustee; (ii) federal securities laws,
including, without limitation, the Securities Act of
1933, as amended, and the Trust Indenture Act of 1939,
as amended, or state securities or blue sky laws;
(iii) title to any property, real or personal, or the
priority or perfection of any liens or security
interests; (iv) the authority or power of the
Indenture Trustee to exercise any rights or remedies
set forth in the Operative Agreements or to perform
any duties or obligations on its part to be performed
other than those that can be performed in the State of
Georgia; or (v) ERISA.
This opinion is being furnished only to the
parties to whom this opinion is addressed and is
solely for their benefit, and no other person or
entity shall be entitled to rely on this opinion
without our express prior written consent. This
opinion may not be used, circulated, quoted, published
or otherwise referred to for any purpose without our
express prior written consent. Our opinion is limited
to the matters stated herein, and no opinion is
implied or may be inferred beyond the opinions
expressly stated herein.
Very truly yours,
POWELL, GOLDSTEIN, FRAZER & MURPHY
SCHEDULE A
Lessee
Federal Express Corporation
2007 Corporate Plaza
Memphis, Tennessee 38132-2140
Owner Trustee
First Security Bank of Utah, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Administration
Indenture Trustee
NationsBank of Georgia, National Association
Corporate Trust Administration
GA1-006-09-11
600 Peachtree Street, N.E.
Atlanta, Georgia 30308
Pass Through Trustee
NationsBank of South Carolina, National Association
1301 Gervis Street
Fourth Floor
Columbia, South Carolina 29201
Attention: Corporate Trust Administration
Owner Participant
LLG Aircraft Leasing, L.P.
1209 Orange Street
Wilmington, Delaware 19801
Underwriters
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
LC Bank
Westdeutsche Landesbank Girozentrale,
New York Branch
1211 Avenue of the Americas
New York, New York 10036-8701
Exhibit N-2
Powell, Goldstein, Frazer & Murphy Letterhead
Exchange Date
To the Persons Listed in Schedule A Attached Hereto
Re: Federal Express Corporation Trust
Gentlemen:
We are counsel for NationsBank of Georgia,
National Association, a national banking association
(the "Indenture Trustee"). In such capacity, we have
advised the Indenture Trustee with respect to
authorization, execution and delivery by the Indenture
Trustee of the Trust Indenture and Security Agreement
(Federal Express Corporation Trust ______) dated as of
March 1, 1994, (the "Indenture") between First
Security Bank of Utah, National Association, as Owner
Trustee (the "Owner Trustee"), and the Indenture
Trustee, and the Participation Agreement (Federal
Express Corporation Trust ______) dated as of March 1,
1994 (the "Participation Agreement"), among Federal
Express Corporation ("Federal Express"), LLG Aircraft
Leasing, L.P. (the "Owner Participant"), the Owner
Trustee, NationsBank of South Carolina, National
Association, as Pass Through Trustee, the Indenture
Trustee and Westdeutsche Landesbank Girozentrale, New
York Branch. Further, we have advised the Indenture
Trustee with respect to the authentication of one or
more Equipment Trust Certificates (the "Certificates")
referred to in the Indenture issued on the date
hereof.
This opinion is being delivered pursuant to
Section 4.03(l)(iii) of the Participation Agreement.
Unless otherwise defined herein, capitalized terms
used herein shall have the meanings set forth or
referred to in the Participation Agreement.
In rendering this opinion, we have reviewed
the Operative Agreements to which the Indenture
Trustee is a party and such other documents as we have
deemed to be appropriate and relevant as a basis for
the opinions hereinafter set forth, including, without
limitation, certified copies of the By-laws of the
Indenture Trustee, a certificate of an officer of the
Indenture Trustee as to certain matters, including the
incumbency of the Officer of the Indenture Trustee who
executed the Indenture and the Participation Agreement
and who authenticated the Certificates issued in
connection therewith and a certificate of the
Comptroller of the Currency, Washington, D.C. dated
_________, as to the Indenture Trustee's existence and
authority to do business as a national banking
association and to act in a fiduciary capacity.
In all such examinations we have assumed the
authenticity and completeness of all documents
submitted to us as original documents and the
conformity to original documents and completeness of
all documents submitted to us as photostatic, notarial
or certified copies. Based on the foregoing, it is
our opinion that:
1. The Indenture 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 banking
and trust powers, is a Citizen of the United
States as that term is defined in the Federal
Aviation Act of 1958, as amended (the "Act"),
and has the corporate power and authority to
execute, deliver and perform its obligations
under the Indenture.
2. The Indenture Trustee, in its
individual and trust capacities, has duly
authorized, executed and delivered the
Indenture, the Collateral Agreement and the
Participation Agreement. Assuming the other
parties thereto are legally bound, each of
the Indenture, the Collateral Agreement and
the Participation Agreement constitutes a
legal, valid and binding obligation of the
Indenture Trustee in its trust capacity (and,
to the extent provided in each such document,
in its individual capacity) enforceable
against the Indenture Trustee in its trust
capacity (and, to the extent provided in each
such document, in its individual capacity) in
accordance with its terms, except as the
provisions thereof may be limited by bank-
ruptcy, reorganization, insolvency,
fraudulent conveyance, moratorium or other
similar laws generally affecting creditors'
rights from time to time in effect.
3. The execution, delivery and
performance by the Indenture Trustee of the
Indenture, the Collateral Agreement and the
Participation Agreement are not, or were not
on the date of execution, in violation of the
Articles of Association or By-laws of the
Indenture Trustee or any law, governmental
rule or regulation of the United States or
the State of Georgia governing the banking or
trust powers of the Indenture Trustee or, to
our knowledge, any judgment, order,
indenture, mortgage, bank credit agreement,
note or bond purchase agreement, long-term
lease, license or other agreement or
instrument to which it is a party or by which
it or its properties may be bound.
4. Neither the execution and delivery
by the Indenture Trustee, in its individual
or trust capacity, as the case may be, of the
Indenture, the Collateral Agreement and the
Participation Agreement, nor the consummation
by the Indenture Trustee, in its individual
or trust capacity, as the case may be, of any
of the transactions contemplated in any of
those documents, requires or required on the
date of execution thereof consent or approval
of, giving of notice to, or registration
with, or taking of any other action with
respect to, any federal or state governmental
authority or agency having jurisdiction over
the Indenture Trustee.
We express no opinion as to the correctness
of the foregoing assumptions but we are not aware of
any fact that causes us to believe that any such
assumption is incorrect; however, we have conducted no
independent investigation in this regard.
We are members of the Bar of the State of
Georgia and the opinions set forth herein are limited
to the laws of the State of Georgia and, subject to
the limitations set forth herein, the federal laws of
the United States of America. With respect to the
opinions set forth above in paragraph 2 as to the
validity, binding effect and enforceability of the
Indenture, the Collateral Agreement and the
Participation Agreement, the governing law of which is
expressly stated to be that of the State of New York,
we have assumed with your permission that the
Indenture, the Collateral Agreement and the
Participation Agreement constitute legal, valid,
binding and enforceable documents or instruments under
the laws of the State of New York (as to which
assumption we express no opinion). Further, without
limiting the generality of the foregoing, we express
no opinion with respect to (i) except as set forth in
paragraph 1 of this opinion with respect to the
citizenship of the Indenture Trustee, the Act and the
regulations promulgated thereunder, the impact of the
Act upon matters set forth in this opinion or any
other aviation or other laws, rules or regulations
applicable to the particular nature of the equipment
to be acquired by the Owner Trustee; (ii) federal
securities laws, including, without limitation, the
Securities Act of 1933, as amended, and the Trust
Indenture Act of 1939, as amended, or state securities
or blue sky laws; (iii) title to any property, real or
personal, or the priority or perfection of any liens
or security interests; (iv) the authority or power of
the Indenture Trustee to exercise any rights or
remedies set forth in the Operative Agreements or to
perform any duties or obligations on its part to be
performed other than those that can be performed in
the State of Georgia; or (v) ERISA.
This opinion is being furnished only to the
parties to whom this opinion is addressed and is
solely for their benefit, and no other person or
entity shall be entitled to rely on this opinion
without our express prior written consent. This
opinion may not be used, circulated, quoted, published
or otherwise referred to for any purpose without our
express prior written consent. Our opinion is limited
to the matters stated herein, and no opinion is
implied or may be inferred beyond the opinions
expressly stated herein.
Very truly yours,
POWELL, GOLDSTEIN, FRAZER & MURPHY
SCHEDULE A
Lessee
Federal Express Corporation
2007 Corporate Plaza
Memphis, Tennessee 38132-2140
Owner Trustee
First Security Bank of Utah, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Administration
Indenture Trustee
NationsBank of Georgia, National Association
Corporate Trust Administration
GA1-006-09-11
600 Peachtree Street, N.E.
Atlanta, Georgia 30308
Owner Participant
LLG Aircraft Leasing, L.P.
1209 Orange Street
Wilmington, Delaware 19801
Exhibit O
LETTERHEAD OF POWELL, GOLDSTEIN, FRAZER & MURPHY
Closing Date
To the Persons Listed
On Schedule A Attached Hereto
Re: Federal Express Corporation
Pass Through Certificates
Series 1994-A310-A1 and 1994-A310-A2
Ladies and Gentlemen:
We are counsel for NationsBank of South
Carolina, National Association, a national banking
association (herein referred to as the "Association"),
acting as Pass Through Trustee (the "Pass Through
Trustee") with respect to the Pass Through Trust
Agreement, dated as of March 1, 1994 (the "Pass
Through Trust Agreement"), as supplemented by the
Series Supplements dated the date hereof, designated
as Series Supplement 1994-A310-A1, 1994-A310-A2 and
1994-A310-A3, respectively (the "Series Supplements").
We have advised the Association with respect to the
Pass Through Trust Agreement, the Series Supplements
and the Participation Agreements relating to the Pass
Through Trust Agreement and each designated Series
Supplement (the "Participation Agreements") among the
parties listed therein. Further, we have advised the
Pass Through Trustee with respect to the Pass Through
Certificates (the "Pass Through Certificates") issued
on the date hereof. Further, we are counsel for
NationsBank of Georgia, National Association, a
national banking association, an affiliate of the
Association, acting as Registrar, Paying Agent and
Authenticating Agent (the "Agent") with respect to the
Pass Through Certificates pursuant to the Registrar,
Authenticating and Paying Agency Agreement dated as of
the date hereof (the "Agency Agreement") among Federal
Express Corporation ("Federal Express"), the
Association and the Agent. The Association has
requested that we deliver this opinion to you pursuant
to the Participation Agreements and the Underwriting
Agreement among Federal Express and the Underwriters
and we understand and agree that you may rely on the
opinions expressed herein.
Unless otherwise defined herein, capitalized
terms used herein shall have the meanings set forth or
referred to in the Participation Agreements, the Pass
Through Trust Agreement or the Series Supplements, as
applicable.
In rendering this opinion, we have reviewed
the Pass Through Trust Agreement, the Series
Supplements and the Operative Agreements in existence
on the date hereof and such other documents as we have
deemed to be appropriate and relevant as a basis for
the opinions hereinafter set forth, including, without
limitation, certified copies of the By-Laws of the
Association and a certificate of an officer of the
Association as to certain matters, including the
incumbency of the officer of the Association who, on
behalf of the Pass Through Trustee executed the
Participation Agreement, the Pass Through Trust
Agreement, the Series Supplements and the Pass Through
Certificates and certificates of the Comptroller of
the Currency, Washington, D.C. dated _____ as to the
Association's existence and authority to do business
as a national banking association and to act in a
fiduciary capacity. Additionally, as to certain facts
material to the opinions expressed herein, we have
relied upon representations and warranties contained
in the Pass Through Trust Agreement, the Series
Supplements, the Operative Agreements and upon the
certificates above described, without further
investigation.
In all such examinations we have assumed the
authenticity and completeness of all documents
submitted to us as original documents and the
conformity to original documents and completeness of
all documents submitted to us as photostatic,
facsimile, notarial or certified copies. Further, we
have assumed (x) the due authorization, execution and
delivery by each of the parties thereto, other than
the Association and the Pass Through Trustee, of the
Pass Through Trust Agreement, the Series Supplements
and the Operative Agreements to which each is a party,
(y) that each such other party has the power,
authority and legal right to execute, deliver and
perform each such document and (z) that the Operative
Agreements constitute the legal, valid, binding and
enforceable obligations of each such other party.
Based on the foregoing and subject to the assumptions
and qualifications herein contained, it is our opinion
that:
1. The Association is a national banking
association validly existing and holding a valid
certificate to do business as a national banking
association, with trust powers, is a Citizen of the
United States as that term is defined in the Federal
Aviation Act of 1958, as amended, and, in its
individual capacity (to the extent provided therein)
or as Pass Through Trustee, has full corporate power
and authority to execute, deliver and carry out the
terms of the Participation Agreements, the Pass
Through Trust Agreement, the Series Supplements, the
Pass Through Certificates and the other Operative
Agreements to which it is a party.
2. The Association (in its individual
capacity, to the extent provided therein), or the Pass
Through Trustee, has duly authorized, executed and
delivered the Participation Agreements, the Pass
Through Trust Agreement and the Series Supplements,
and the Participation Agreements, the Pass Through
Trust Agreement and the Series Supplements constitute
the legal, valid, binding and enforceable obligations
of the Association (in its individual capacity, to the
extent provided therein), or the Pass Through Trustee,
enforceable against the Association (in its individual
capacity, to the extent provided therein), or the Pass
Through Trustee, in accordance with their respective
terms, except as limited by bankruptcy, insolvency,
moratorium, receivership, fraudulent conveyance or
other similar laws affecting creditor's rights
generally, and except as enforcement thereof is
subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in
equity or at law).
3. The Pass Through Certificates have been
duly authorized and validly executed, issued, and
delivered by the Pass Through Trustee and
authenticated by the Pass Through Trustee, acting
through the Agent, pursuant to the respective Pass
Through Trust Agreement, the Series Supplements and
the Agency Agreement, and the Pass Through
Certificates acquired by the Underwriters under the
Underwriting Agreement are enforceable against the
Pass Through Trustee and are entitled to the benefits
of the Pass Through Trust Agreement and the related
Series Supplements.
4. The authorization, execution, delivery
and performance by the Association (in its individual
capacity, to the extent provided therein), or the Pass
Through Trustee, of the Participation Agreements, the
Pass Through Trust Agreement, the Series Supplements
and the other Operative Agreements to which it is a
party and the consummation of the transactions therein
contemplated and compliance with the terms thereof,
and the issuance of the Pass Through Certificates
thereunder do not and will not result in the violation
of the provisions of the Articles of Association or
By-Laws of the Association, and do not and will not
conflict with, or result in a breach of any terms or
provisions of, or constitute a default under, or
result in the creation or the imposition of any Lien
upon any property or assets of the Pass through
Trustee, under any indenture, mortgage or other
agreement or instrument known to us to which the Pass
Through Trustee is a party or by which it or any of
its property is bound, or any South Carolina or
Federal law, rule or regulation governing the
Association's banking or trust powers, or of any
judgment, order or decree known to us to be applicable
to the Association or the Pass Through Trustee, of any
court, regulatory body, administrative agency,
government or governmental body having jurisdiction
over the Association or the Pass Through Trustee or
its properties.
5. No authorization, approval, consent,
license or order of, giving of notice to, registration
with, or taking of any other action in respect of, any
Federal or state governmental authority or agency
pursuant to any Federal or South Carolina law
governing the banking or trust powers of the
Association, is required for the authorization, execu-
tion, delivery and performance by the Association (in
its individual capacity to the extent provided
therein), or the Pass Through Trustee, of the
Participation Agreements, the Pass Through Trust
Agreement, the Series Supplements, the Pass Through
Certificates and the other Operative Agreements to
which it is a party or the consummation of any of the
transactions by the Association or the Pass Through
Trustee contemplated thereby or the issuance of the
Pass Through Certificates under the Pass Through Trust
Agreement and the Series Supplements (except such as
shall have been duly obtained, given or taken); and
such authorization, execution, delivery, performance,
consummation, and issuance do not conflict with or
result in a breach of the provisions of any such law.
6. There are no proceedings pending, or to
the best of our knowledge, threatened, and to the best
of our knowledge there is no existing basis for any
such proceeding against or affecting the Association
before any governmental authority which would, either
in any one case or in the aggregate, if adversely
determined, materially and adversely affect the
Association's ability to perform its obligations under
any of the Operative Agreements to which it is a
party. To the best of our knowledge, the Association
is not in default with respect to any order of any
governmental authority which default would, either in
any one case or in the aggregate, materially adversely
affect the Association's ability to perform its
obligations under any of the Operative Agreements to
which it is a party.
7. There are no taxes, fees or other
governmental charges payable under the laws of the
State of South Carolina or any political subdivision
thereof in connection with the execution and delivery
by the Association (in its individual capacity, to the
extent provided therein) or the Pass Through Trustee,
of the Participation Agreements, the Pass Through
Trust Agreement, the Series Supplements and the other
Operative Agreements to which it is a party or in
connection with the execution, issuance and delivery
of the Pass Through Certificates by the Pass Through
Trustee, pursuant to the Pass Through Trust Agreement
and the Series Supplements.
8. None of the trusts created by the Pass
Through Trust Agreement and the Series Supplements,
the Pass Through Trustee or the Association, or the
Affiliates, successors or assigns of any such Person,
will 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 (other than taxes
imposed on the fees received by the Association for
acting as Pass Through Trustee under the Pass Through
Trust Agreement and the Series Supplements). Pass
Through Certificate holders who 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. There are no applicable taxes
under the laws of the State of South Carolina or any
political subdivision thereof upon or with respect to
(a) the construction, mortgaging, financing,
refinancing, purchase, acquisition, acceptance,
rejection, delivery, nondelivery, transport, location,
ownership, insurance, control, assembly, possession,
repossession, operation, use, condition, maintenance,
repair, sale, return, abandonment, replacement,
preparation, installation, storage, redelivery,
manufacture, leasing, subleasing, modification,
rebuilding, importation, transfer of title, transfer
of registration, exportation or other application or
disposition of the Aircraft or any interest in any
thereof, (b) payments of Rent or other receipts,
income or earnings arising therefrom or received with
respect to the Aircraft or any interest in any thereof
or payable pursuant to the Lease, (c) any amount paid
or payable pursuant to any Operative Agreements or
Agreement to Lease Operative Agreements (as defined in
the Agreement to Lease), (d) the Aircraft or any
interest therein or the applicability of the Lease to
the Aircraft or any interest in any thereof, (e) any
or all of the Pass Through Trust Agreement, the Series
Supplements and the Operative Agreements, any or all
of the Pass Through Certificates or any interest in
any or all thereof or the offering, registration,
reregistration, issuance, acquisition, modification,
assumption, reissuance, refinancing or refunding of
any or all thereof, and any other documents
contemplated thereby and amendments or supplements
thereto, (f) the payment of the principal of, or
interest or premium on, or other amounts payable with
respect to, any or all of the Pass Through
Certificates, whether as originally issued or pursuant
to any refinancing, refunding, assumption,
modification or reissuance, or any other obligation
evidencing any loan in replacement of the loan
evidenced by any or all of the Pass Through Cer-
tificates, or (g) otherwise with respect to or in
connection with the transactions contemplated by the
Pass Through Trust Agreement, the Series Supplements
and the Operative Agreements, which would not have
been imposed if the Pass Through Trustee had not had
its principal place of business in, had not performed
(either in its individual capacity or as Pass Through
Trustee) any or all of its administrative duties under
the Pass Through Trust Agreement, the Series
Supplements and the Operative Agreements in, and had
not engaged in any activities unrelated to the
transactions contemplated by the Operative Agreements
in, the State of South Carolina.
With respect to the opinions set forth in
paragraphs 7 and 8 above, with your permission we have
relied upon, and this opinion is limited by, the
assumptions set forth in the discussion entitled
"Certain South Carolina Taxes" in the Prospectus
forming part of Registration Statement No. 33-51623,
as amended (the "Registration Statement") for the
registration of the Pass Through Certificates with the
Securities and Exchange Commission. In addition, we
have assumed that each Pass Through Trust (as defined
in the Registration Statements) will constitute a
grantor trust under Subpart E, Part I of Subchapter J
of the Internal Revenue Code of 1986, as amended (the
"Code"), and will not be classified as a corporation
or as a Partnership (as defined in Section 7701 of the
Code), and each Pass Through Trust does not otherwise
engage in business in South Carolina. We express no
opinion as to the correctness of the foregoing
assumptions and we have conducted no independent
investigation in this regard.
The opinions set forth herein are limited to
federal laws of the United States of America and laws
of South Carolina governing taxation and the banking
and trust powers of the Association. With respect to
the opinions set forth above in paragraph 2 as to the
legality, validity, binding effect and enforceability
of the Participation Agreements, the Pass Through
Trust Agreement and the Series Supplements, the
governing law of which is expressly stated to be that
of the State of New York, we have assumed with your
permission that the Participation Agreements, the Pass
Through Trust Agreement, and the Series Supplements
constitute legal, valid, binding and enforceable
documents or instruments under the laws of the State
of New York (as to which assumption we express no
opinion) and those opinions are expressed as if the
laws of South Carolina were to govern those documents
or instruments. Further, without limiting the
generality of the foregoing, we express no opinion as
to (i) federal or state securities laws or blue sky
laws and assume that the Pass Through Certificates
have been registered, issued and sold in compliance
with all applicable federal and state securities and
blue sky laws and that the Pass Through Trust
Agreement and the Series Supplements have been duly
qualified under the provisions of the Trust Indenture
Act of 1939, as amended; (ii) any laws, rules or
regulations applicable to the particular nature of the
equipment acquired by the Owner Trustee except as set
forth in paragraph 1 above with respect to the
citizenship of the Pass Through Trustee; (iii) the
perfection or priority of security interests or;
ERISA.
This opinion is being furnished only to the
parties to which it is addressed and is solely for
their benefit. No other Person shall be entitled to
rely on this opinion without our express prior written
consent. This opinion may not be used, circulated,
quoted, published or otherwise referred to for any
purpose without our express prior written consent.
Our opinion is limited to the matters stated herein,
and no opinion is implied or may be inferred beyond
the opinions expressly stated herein.
Very truly yours,
POWELL, GOLDSTEIN, FRAZER & MURPHY
SCHEDULE A
Lessee
Federal Express Corporation
2007 Corporate Plaza
Memphis, Tennessee 38132-2140
Owner Trustee
First Security Bank of Utah, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Administration
Indenture Trustee
NationsBank of Georgia, National Association
Corporate Trust Administration
GA1-006-09-11
600 Peachtree Street, N.E.
Atlanta, Georgia 30308
Pass Through Trustee
NationsBank of South Carolina, National Association
1301 Gervis Street
Fourth Floor
Columbia, South Carolina 29201
Attention: Corporate Trust Administration
Owner Participant
LLG Aircraft Leasing, L.P.
1209 Orange Street
Wilmington, Delaware 19801
Underwriters
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
LC Bank
Westdeutsche Landesbank Girozentrale,
New York Branch
1211 Avenue of the Americas
New York, New York 10036-8701
Exhibit P-1
Letterhead of Ray, Quinney & Nebeker
Closing Date
To Each of the Persons
Listed on Schedule A
Attached Hereto
Re: Federal Express Corporation Trust
Ladies and Gentlemen:
We have acted as special counsel to First
Security Bank of Utah, National Association, a
national banking association ("First Security"), in
connection with the Trust Agreement dated as of
September 1, 1993, as amended and restated as of March
1, 1994 (the "Trust Agreement"), between First
Security and LLG Aircraft Leasing, L.P., a Delaware
limited partnership (the "Owner Participant"). This
opinion is furnished pursuant to Section 4.01(k)(v) of
the Participation Agreement, dated as of March 1,
1994, (the "Participation Agreement"), among Federal
Express Corporation, as Lessee, the Owner Participant,
First Security, not in its individual capacity except
as specifically set forth therein but solely as Owner
Trustee (the "Owner Trustee") under the Trust
Agreement, NationsBank of Georgia, National
Association, as Indenture Trustee, NationsBank of
South Carolina, National Association, as Pass Through
Trustee, and Westdeutsche Landesbank Girozentrale, New
York Branch. Capitalized terms used herein and not
otherwise defined are used as defined in or by
reference in Schedule II to the Participation
Agreement.
We have examined executed counterparts or
copies otherwise identified to our satisfaction of the
Operative Agreements (other than the Lease, the Lease
Supplement, the Trust Agreement Supplement covering
the Aircraft and the Indenture and Security Agreement
Supplement (the "Commencement Documents") the forms of
which we have examined). We have also examined
originals or copies of such other documents, such
corporate records, certificates and other statements
of governmental officials and corporate officers and
other representatives of the corporations or entities
referred to herein and such other instruments as we
have deemed necessary or appropriate for the purposes
of this opinion. Moreover, as to certain facts
material to the opinions expressed herein, we have
relied upon representations and warranties contained
in the Operative Agreements (other than the
Commencement Documents).
Based upon the foregoing and upon an
examination of such questions of law as we have
considered necessary or appropriate, and subject to
the assumptions, exceptions and qualifications set
forth below, we advise you that, in our opinion:
1. First Security is a national banking
association organized and validly existing
under the laws of the United States of
America holding a valid certificate to do
business as a national banking association,
with banking and trust powers, is a Citizen
of the United States as that term is defined
in the Federal Aviation Act of 1958, as
amended, (the "Act"), and each of First
Security and the Owner Trustee, as the case
may be, has full corporate power, authority
and legal right to execute, deliver and
perform each of the Operative Agreements to
which it is or is to be a party (other than
the Certificates) and to issue, execute,
deliver and perform the Certificates.
2. Each of First Security and the Owner
Trustee, as the case may be, has duly
authorized, executed and delivered each
Operative Agreement (other than any
Commencement Document) to which it is a
party; each such document constitutes a
legal, valid and binding obligation of the
Owner Trustee (and, to the extent set forth
in the respective Operative Agreement, of
First Security) enforceable against the Owner
Trustee (and, to the extent set forth in the
respective Operative Agreement, against First
Security) in accordance with its terms; and
the Trust Agreement constitutes a legal,
valid and binding obligation of the Owner
Participant enforceable against the Owner
Participant in accordance with its terms.
The Certificates have been duly issued,
executed and delivered by the Owner Trustee,
pursuant to authorization contained in the
Trust Agreement, and constitute the legal,
valid and binding obligations of the Owner
Trustee enforceable against the Owner Trustee
in accordance with their terms and the terms
of the Indenture; and the Certificates are
entitled to the benefits and security
afforded by the Indenture in accordance with
their terms and the terms of the Indenture.
3. On November 15, 1993, the Owner
Trustee received from Lufthansa such title to
the Aircraft as Lufthansa conveyed to the
Owner Trustee, subject to the rights of (a)
Lufthansa under the Sales Agreement, (b) DA
under the Modification Agreement and (c) the
Owner Trustee and the Lessee under the
Agreement to Lease; and to our knowledge,
there exist no Liens affecting the title of
the Owner Trustee to the Lessor's Estate
resulting from claims against First Security
not related to the ownership of the Lessor's
Estate or the administration of the Lessor's
Estate or any other transaction pursuant to
the Indenture or any document included in the
Trust Indenture Estate.
4. All the properties which are part of
the Trust Indenture Estate (but not including
those properties which are not to be part of
the Trust Indenture Estate until the Exchange
Date) have been pledged and mortgaged with
the Indenture Trustee as part of the Trust
Indenture Estate, and the beneficial interest
of the Owner Participant under the Trust
Agreement in and to such properties is
subject, to the extent provided in the
Indenture and the Collateral Agreement, to
the Lien of the Indenture in favor of the
Holders of the Certificates.
5. To the extent the Uniform Commercial
Code of the State of Utah (the "UCC") is
applicable, except for the Indenture
Trustee's taking of possession of all monies
and securities (including instruments)
constituting part of the Trust Indenture
Estate, no action, including the filing or
recording of any document, is necessary
(i) to create under the UCC the security
interest in the Trust Indenture Estate which
the Indenture by its terms purports to create
in favor of the Indenture Trustee as of the
Closing Date (the "Security Interest"), and
(ii) to perfect in the State of Utah the
Security Interest, except for the filing of a
UCC financing statement complying with the
formal requisites of Section 9-402 of the UCC
in the office of the Secretary of State of
the State of Utah with respect to the
Security Interest, which filing has been duly
effected, and the filing of continuation
statements with respect thereto required to
be filed at periodic intervals under the UCC.
6. The Trust Agreement duly creates a
legal and valid trust under Utah law, the
trust created by the Trust Agreement has been
duly created and exists for the benefit of
the Owner Participant, and the Trust
Agreement creates for the benefit of the
Owner Participant the interest in the
Lessor's Estate which the Trust Agreement by
its terms purports to create, subject,
however, to the Trust Indenture Estate acting
as security for the Certificates issued under
the Indenture, for the use and benefit of the
Holders from time to time thereof, as
provided in the Indenture and the Collateral
Agreement.
7. Neither the execution and delivery
by the Owner Trustee or First Security, as
the case may be, of the Operative Agreements,
nor the issuance, execution and delivery by
the Owner Trustee of the Certificates nor the
consummation of any of the transactions by
the Owner Trustee or First Security, as the
case may be, contemplated thereby, requires
the consent or approval of, the giving of
notice to, the registration with, or the
taking of any other action in respect of, any
governmental authority or agency of the State
of Delaware or the United States of America
governing the banking or trust powers of
First Security.
8. Assuming that the trust created by
the Trust Agreement is treated as a grantor
trust for federal income tax purposes within
the contemplation of Sections 671 through 678
of the Internal Revenue Code of 1986, there
are no fees, taxes, or other charges (except
taxes imposed on fees payable to the Owner
Trustee) payable to the State of Utah or any
political subdivision thereof in connection
with the execution, delivery or performance
by the Owner Trustee, the Indenture Trustee,
the Lessee or the Owner Participant, as the
case may be, of the Operative Agreements or
in connection with the making by the Owner
Participant of its investment in the Aircraft
or its acquisition of the beneficial interest
in the Lessor's Estate or in connection with
the issuance and acquisition of the
Certificates or the investment of Liquid
Collateral (as defined in the Collateral
Agreement) in Specified Investments (as
defined in the Collateral Agreement), and
neither the Owner Trustee, the Lessor's
Estate nor the trustee created by the Trust
Agreement will be subject to any fee, tax or
other governmental charge (except taxes on
fees payable to the Owner Trustee) under the
laws of the State of Utah or any political
subdivision thereof on, based on or measured
by, directly or indirectly, the gross
receipts, net income or value of the Lessor's
Estate by reason of the creation or continued
existence of the trust under the terms of the
Trust Agreement pursuant to the laws of the
State of Utah or the Owner Trustee's
performance of its duties under the Trust
Agreement.
9. The execution, delivery and
performance by the Owner Trustee or First
Security, as the case may be, of each of the
Operative Agreements and the issuance,
execution, delivery and performance of the
Certificates by the Owner Trustee are not in
violation of the Articles of Association or
by-laws of First Security or of any law,
governmental rule, or regulation of the State
of Utah or the United States of America
governing the banking or trust powers of
First Security or, to our knowledge, of any
indenture, mortgage, bank credit agreement,
note or bond purchase agreement, long-term
lease, license or other agreement or
instrument to which it is a party or by which
it is bound or, to our knowledge, or any
judgment or order of the State of Utah or the
United States of America relating to the
banking or trust powers of First Security.
10. There is no fee, tax or other
governmental charge under the laws of the
State of Utah or any political subdivision
thereof in existence on the date hereof on,
based on or measured by any payments under
the Certificates or the beneficial interests
in the Lessor's Estate, by reason of the
creation of the trust under the Trust
Agreement pursuant to the laws of the State
of Utah or the Owner Trustee's performance of
its duties under the Trust Agreement within
the State of Utah, which would not have been
imposed if First Security did not have its
principal place of business and did not
perform its obligations under the Operative
Agreements in the State of Utah.
11. Neither a Utah Court nor a Federal
Court applying Utah law, if properly
presented with the issue and after having
properly considered such issue, would permit
the Owner Participant to terminate the Trust
Agreement, except in accordance with its
terms or with the consent of the Indenture
Trustee, so long as the Lien of the Indenture
on the Trust Indenture Estate has not been
released or payment of the principal of, and
premium, if any, and interest on, the
Certificates has not been made in full.
Under the laws of the State of Utah, so long
as the Trust Agreement has not been
terminated in accordance with its terms or
with the consent of the Indenture Trustee,
creditors of any person that is an Owner
Participant, holders of a Lien against the
assets of any such person and representatives
of creditors of any such person, such as
trustees, receivers or liquidators (whether
or not an insolvency proceeding has been
commenced) (collectively, the "Creditors")
may acquire valid claims and liens, as to the
Lessor's Estate, only against the rights of
such Owner Participant under the Trust
Agreement or in the Lessor's Estate, and do
not have, and may not through the enforcement
of such Creditors' rights acquire, any
greater rights than such Owner Participant
with respect to the Trust Agreement or the
Lessor's Estate.
The foregoing opinions are subject to the
following assumptions, exceptions and qualifications:
A. The foregoing opinions are limited to
the laws of the State of Utah and the federal laws of
the United States of America governing the banking and
trust powers of First Security. In addition, we
express no opinion with respect to (i) federal
securities laws, including the Securities Act of 1933,
as amended, the Securities Exchange Act of 1934, as
amended, and the Trust Indenture Act of 1939, as
amended, (ii) the Federal Aviation Act of 1958, as
amended (except with respect to the opinion set forth
in paragraph 1 above concerning the citizenship of
First Security), or (iii) state securities or blue sky
laws. Insofar as the foregoing opinions relate to the
validity and enforceability in Utah of the
Certificates and the other Operative Agreements
expressed to be governed by the laws of the State of
New York, we have assumed that the Certificates and
such other Operative Agreements constitute legal,
valid, binding and enforceable documents or
instruments under such laws (as to which we express no
opinion).
B. The foregoing opinions regarding
enforceability of any document or instrument are
subject to (i) applicable bankruptcy, insolvency,
moratorium, reorganization, receivership and similar
laws affecting the rights and remedies of creditors
generally, and (ii) general principles of equity
(regardless of whether such enforceability is
considered in a proceeding in equity or at law).
C. We have assumed the due authorization,
execution and delivery by each of the parties thereto,
other than First Security and the Owner Trustee, of
the Operative Agreements to which each is a party and
that each of such parties has the full power,
authority and legal right to execute and deliver each
such document.
D. The opinion set forth in paragraph 1
above concerning the citizenship of First Security is
based upon facts contained in an affidavit of First
Security, made by its _____________, the facts set
forth in which we have not independently verified.
E. We have assumed the due authentication
of the Certificates by the Indenture Trustee.
F. We have assumed that all signatures on
documents and instruments examined by us are genuine,
that all documents and instruments submitted to us as
originals are authentic, and that all documents and
instruments submitted to us as copies conform with the
originals, which facts we have not independently
verified.
G. We do not purport to be experts in
respect of, or express any opinion concerning,
aviation law or other laws, rules or regulations
applicable to the particular nature of the equipment
to be acquired by the Owner Trustee.
H. We have made no investigation of, and,
except as expressly provided in paragraph 3 above, we
express no opinion concerning, the nature of the title
to any part of the Lessor's Estate or the priority of
any mortgage or security interest.
I. We have assumed that the Participation
Agreement and the transactions contemplated thereby
are not within the prohibitions of Section 406 of the
Employee Retirement Income Security Act of 1974.
J. The opinions expressed in paragraph 11
are subject to principles of equity.
This opinion is rendered solely for your
benefit and may not be furnished or quoted to or
relied upon by any other person or entity for any
purpose without our prior written consent, except that
the law firm of David Polk & Wardwell may rely on this
opinion in connection with the rendering of its
opinion dated the date hereof in connection with the
financing described herein.
We rendered an opinion dated September 1,
1993 (the "Agreement to Lease Opinion"), a copy of
which is attached hereto. We hereby consent and agree
that the addressees hereto who were not addressees to
the Agreement to Lease Opinion may rely on the
Agreement to Lease Opinion as fully and with the same
force and effect as if such addressees were originally
named therein on the date of the Agreement to Lease
Opinion.
Very truly yours,
SCHEDULE A
Lessee
Federal Express Corporation
2007 Corporate Plaza
Memphis, Tennessee 38132-2140
Owner Trustee
First Security Bank of Utah, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Administration
Indenture Trustee
NationsBank of Georgia, National Association
Corporate Trust Administration
GA1-006-09-11
600 Peachtree Street, N.E.
Atlanta, Georgia 30308
Pass Through Trustee
NationsBank of South Carolina, National Association
1301 Gervis Street
Fourth Floor
Columbia, South Carolina 29201
Attention: Corporate Trust Administration
Owner Participant
LLG Aircraft Leasing, L.P.
1209 Orange Street
Wilmington, Delaware 19801
Underwriters
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
LC Bank
Westdeutsche Landesbank Girozentrale,
New York Branch
1211 Avenue of the Americas
New York, New York 10036-8701
Exhibit P-2
Letterhead of Ray, Quinney & Nebeker
Commencement Date
(Exchange Date)*
To Each of the Persons
Listed on Schedule A
Attached Hereto
Re: Federal Express Corporation Trust
Ladies and Gentlemen:
We have acted as special counsel to First
Security Bank of Utah, National Association, a
national banking association ("First Security"), in
connection with the Trust Agreement dated as of
September 1, 1993, as amended and restated as of March
1, 1994 (the "Trust Agreement"), between First
Security and LLG Aircraft Leasing, L.P., a Delaware
limited partnership (the "Owner Participant"). This
opinion is furnished pursuant to Section 4.02(j)(iv)
and Section 4.03(l)(v) of the Participation Agreement,
dated as of March 1, 1994, (the "Participation
Agreement"), among Federal Express Corporation, as
Lessee, the Owner Participant, First Security, not in
its individual capacity except as specifically set
forth therein but solely as Owner Trustee (the "Owner
Trustee") under the Trust Agreement, NationsBank of
Georgia, National Association, as Indenture Trustee,
NationsBank of South Carolina, National Association,
as Pass Through Trustee, and Westdeutsche Landesbank
Girozentrale, New York Branch. Capitalized terms used
herein and not otherwise defined are used as defined
in or by reference in Schedule II to the Participation
Agreement.
We have examined executed counterparts or
copies otherwise identified to our satisfaction of the
Operative Agreements ((other than the Indenture and
Security Agreement Supplement, the form of which we
- ------------
* If the Exchange Date does not occur on the
Commencement Date, a separate opinion, dated
the Exchange Date, shall be provided as to
all matters below, except as specifically
noted.
have examined))*. We have also examined originals
or copies of such other documents, such corporate
records, certificates and other statements of
governmental officials and corporate officers and
other representatives of the corporations or entities
referred to herein and such other instruments as we
have deemed necessary or appropriate for the purposes
of this opinion. Moreover, as to certain facts
material to the opinions expressed herein, we have
relied upon representations and warranties contained
in the Operative Agreements.
Based upon the foregoing and upon an
examination of such questions of law as we have
considered necessary or appropriate, and subject to
the assumptions, exceptions and qualifications set
forth below, we advise you that, in our opinion:
1. First Security is a national banking
association organized and validly existing
under the laws of the United States of
America holding a valid certificate to do
business as a national banking association,
with banking and trust powers, is a Citizen
of the United States as that term is defined
in the Federal Aviation Act of 1958, as
amended, (the "Act"), and each of First
Security and the Owner Trustee, as the case
may be, has or had, on the date of execution
thereof, full corporate power, authority and
legal right to execute, deliver and perform
each of the Operative Agreements to which it
is a party (other than the Certificates) and
to issue, execute, deliver and perform the
Certificates.
2. Each of First Security and the Owner
Trustee, as the case may be, has duly
authorized, executed and delivered each
Operative Agreement ((other than the
- -----------
* Insert in Commencement Date opinion only if
Exchange Date does not occur on the
Commencement Date.
Indenture and Security Agreement
Supplement))* to which it is a party; each
such document constitutes a legal, valid and
binding obligation of the Owner Trustee (and,
to the extent set forth in the respective
Operative Agreement, of First Security)
enforceable against the Owner Trustee (and,
to the extent set forth in the respective
Operative Agreement, against First Security)
in accordance with its terms; and the Trust
Agreement, as supplemented by the Trust
Agreement Supplement covering the Aircraft,
constitutes a legal, valid and binding
obligation of the Owner Participant
enforceable against the Owner Participant in
accordance with its terms. The Certificates
have been duly issued, executed and delivered
by the Owner Trustee, pursuant to
authorization contained in the Trust
Agreement, and constitute the legal, valid
and binding obligations of the Owner Trustee
enforceable against the Owner Trustee in
accordance with their terms and the terms of
the Indenture; and the Certificates are
entitled to the benefits and security
afforded by the Indenture in accordance with
their terms and the terms of the Indenture.
3. On November 15, 1993, the Owner
Trustee received from Lufthansa such title to
the Aircraft as Lufthansa conveyed to the
Owner Trustee, subject to the rights of (a)
Lufthansa under the Sales Agreement, (b) DA
under the Modification Agreement and (c) the
Owner Trustee and the Lessee under the
Agreement to Lease; and to our knowledge,
there exist no Liens affecting the title of
the Owner Trustee to the Lessor's Estate
resulting from claims against First Security
not related to the ownership of the Lessor's
Estate or the administration of the Lessor's
Estate or any other transaction pursuant to
the Indenture or any document included in the
Trust Indenture Estate.
- --------------
* Insert in the Commencement Date opinion only
if the Exchange Date does not occur on the
Commencement Date.
(4. All the properties which are part of
the Trust Indenture Estate have been pledged
and mortgaged with the Indenture Trustee as
part of the Trust Indenture Estate, and the
beneficial interest of the Owner Participant
under the Trust Agreement in and to such
properties is subject, to the extent provided
in the Indenture and the Collateral
Agreement, to the Lien of the Indenture in
favor of the Holders of the
Certificates.)*
(5. To the extent the Uniform Commercial
Code of the State of Utah (the "UCC") is
applicable, except for the Indenture
Trustee's taking of possession of all monies
and securities (including instruments)
constituting part of the Trust Indenture
Estate, no action, including the filing or
recording of any document, is necessary
(i) to create under the UCC the security
interest in the Trust Indenture Estate which
the Indenture by its terms purports to create
in favor of the Indenture Trustee on or prior
to the Exchange Date (the "Security
Interest"), and (ii) to perfect in the State
of Utah the Security Interest, except for the
filing of a UCC financing statement complying
with the formal requisites of Section 9-402
of the UCC in the office of the Secretary of
State of the State of Utah with respect to
the Security Interest, which filing has been
duly effected, and the filing of continuation
statements with respect thereto required to
be filed at periodic intervals under the
UCC.)**
- -------------
* Insert if the Exchange Date occurs on the
Commencement Date. If the Exchange Date does
not occur on the Commencement Date, this
paragraph need be provided in the Exchange
Date opinion only.
** Insert if Exchange Date occurs on the
Commencement Date. If the Exchange Date does
not occur on the Commencement Date, this
paragraph need be provided in the Exchange
Date opinion only.
6. The Trust Agreement, as supplemented
by the Trust Agreement Supplement covering
the Aircraft, duly creates a legal and valid
trust under Utah law, the trust created by
the Trust Agreement, as so supplemented, has
been duly created and exists for the benefit
of the Owner Participant, and the Trust
Agreement, as so supplemented, creates for
the benefit of the Owner Participant the
interest in the Lessor's Estate which the
Trust Agreement, as so supplemented, by its
terms purports to create, subject, however,
to the Trust Indenture Estate acting as
security for the Certificates issued under
the Indenture, for the use and benefit of the
Holders from time to time thereof, as
provided in the Indenture and the Collateral
Agreement.
7. Neither the execution and delivery
by the Owner Trustee or First Security, as
the case may be, of the Operative Agreements
((other than the Indenture and Security
Agreement Supplement))*, nor the issuance,
execution and delivery by the Owner Trustee
of the Certificates nor the consummation of
any of the transactions by the Owner Trustee
or First Security, as the case may be,
contemplated thereby, requires or required,
as of the date of execution thereof, the
consent or approval of, the giving of notice
to, the registration with, or the taking of
any other action in respect of, any
governmental authority or agency of the State
of Delaware or the United States of America
governing the banking or trust powers of
First Security.
8. Assuming that the trust created by
the Trust Agreement, as supplemented by the
Trust Agreement Supplement covering the
Aircraft, is treated as a grantor trust for
federal income tax purposes within the
contemplation of Sections 671 through 678 of
the Internal Revenue Code of 1986, there are
- ------------
* Insert in Commencement Date opinion only if
the Exchange Date does not occur on the
Commencement Date.
no fees, taxes, or other charges (except
taxes imposed on fees payable to the Owner
Trustee) payable to the State of Utah or any
political subdivision thereof in connection
with the execution, delivery or performance
by the Owner Trustee, the Indenture Trustee,
the Lessee or the Owner Participant, as the
case may be, of the Operative Agreements
((other than the Indenture and Security
Agreement Supplement))* or in connection
with the making by the Owner Participant of
its investment in the Aircraft or its
acquisition of the beneficial interest in the
Lessor's Estate or in connection with the
issuance and acquisition of the Certificates
or the investment of Liquid Collateral (as
defined in the Collateral Agreement) in
Specified Investments (as defined in the
Collateral Agreement), and neither the Owner
Trustee, the Lessor's Estate nor the trustee
created by the Trust Agreement, as so
supplemented, will be subject to any fee, tax
or other governmental charge (except taxes on
fees payable to the Owner Trustee) under the
laws of the State of Utah or any political
subdivision thereof on, based on or measured
by, directly or indirectly, the gross
receipts, net income or value of the Lessor's
Estate by reason of the creation or continued
existence of the trust under the terms of the
Trust Agreement, as so supplemented, pursuant
to the laws of the State of Utah or the Owner
Trustee's performance of its duties under the
Trust Agreement, as so supplemented.
9. The execution, delivery and
performance by the Owner Trustee or First
Security, as the case may be, of each of the
Operative Agreements ((other than the
Indenture and Security Agreement
- ------------
* Insert in Commencement Date opinion only if
the Exchange Date does not occur on the
Commencement Date.
Supplement))* and the issuance, execution,
delivery and performance of the Certificates
by the Owner Trustee are not or were not, on
the date of execution thereof, in violation
of the Articles of Association or by-laws of
First Security or of any law, governmental
rule, or regulation of the State of Utah or
the United States of America governing the
banking or trust powers of First Security or,
to our knowledge, of any indenture, mortgage,
bank credit agreement, note or bond purchase
agreement, long-term lease, license or other
agreement or instrument to which it is a
party or by which it is bound or, to our
knowledge, or any judgment or order of the
State of Utah or the United States of America
relating to the banking or trust powers of
First Security.
10. There is no fee, tax or other
governmental charge under the laws of the
State of Utah or any political subdivision
thereof in existence on the date hereof on,
based on or measured by any payments under
the Certificates or the beneficial interests
in the Lessor's Estate, by reason of the
creation of the trust under the Trust
Agreement, as supplemented by the Trust
Agreement Supplement covering the Aircraft,
pursuant to the laws of the State of Utah or
the Owner Trustee's performance of its duties
under the Trust Agreement, as so
supplemented, within the State of Utah, which
would not have been imposed if First Security
did not have its principal place of business
and did not perform its obligations under the
Operative Agreements in the State of Utah.
11. Neither a Utah Court nor a Federal
Court applying Utah law, if properly
presented with the issue and after having
properly considered such issue, would permit
the Owner Participant to terminate the Trust
Agreement, as supplemented by the Trust
Agreement Supplement covering the Aircraft,
- ------------
* Insert in Commencement Date opinion only if
the Exchange Date does not occur on the
Commencement Date.
except in accordance with its terms or with
the consent of the Indenture Trustee, so long
as the Lien of the Indenture on the Trust
Indenture Estate has not been released or
payment of the principal of, and premium, if
any, and interest on, the Certificates has
not been made in full. Under the laws of the
State of Utah, so long as the Trust
Agreement, as so supplemented, has not been
terminated in accordance with its terms or
with the consent of the Indenture Trustee,
creditors of any person that is an Owner
Participant, holders of a Lien against the
assets of any such person and representatives
of creditors of any such person, such as
trustees, receivers or liquidators (whether
or not an insolvency proceeding has been
commenced) (collectively, the "Creditors")
may acquire valid claims and liens, as to the
Lessor's Estate, only against the rights of
such Owner Participant under the Trust
Agreement, as so supplemented, or in the
Lessor's Estate, and do not have, and may not
through the enforcement of such Creditors'
rights acquire, any greater rights than such
Owner Participant with respect to the Trust
Agreement, as so supplemented, or the
Lessor's Estate.
The foregoing opinions are subject to the
following assumptions, exceptions and qualifications:
A. The foregoing opinions are limited to
the laws of the State of Utah and the federal laws of
the United States of America governing the banking and
trust powers of First Security. In addition, we
express no opinion with respect to (i) federal
securities laws, including the Securities Act of 1933,
as amended, the Securities Exchange Act of 1934, as
amended, and the Trust Indenture Act of 1939, as
amended, (ii) the Federal Aviation Act of 1958, as
amended (except with respect to the opinion set forth
in paragraph 1 above concerning the citizenship of
First Security), or (iii) state securities or blue sky
laws. Insofar as the foregoing opinions relate to the
validity and enforceability in Utah of the
Certificates and the other Operative Agreements
expressed to be governed by the laws of the State of
New York, we have assumed that the Certificates and
such other Operative Agreements constitute legal,
valid, binding and enforceable documents or
instruments under such laws (as to which we express no
opinion).
B. The foregoing opinions regarding
enforceability of any document or instrument are
subject to (i) applicable bankruptcy, insolvency,
moratorium, reorganization, receivership and similar
laws affecting the rights and remedies of creditors
generally, and (ii) general principles of equity
(regardless of whether such enforceability is
considered in a proceeding in equity or at law).
C. We have assumed the due authorization,
execution and delivery by each of the parties thereto,
other than First Security and the Owner Trustee, of
the Operative Agreements to which each is a party and
that each of such parties has the full power,
authority and legal right to execute and deliver each
such document.
D. The opinion set forth in paragraph 1
above concerning the citizenship of First Security is
based upon facts contained in an affidavit of First
Security, made by its ____________, the facts set
forth in which we have not independently verified.
E. We have assumed the due authentication
of the Certificates by the Indenture Trustee.
F. We have assumed that all signatures on
documents and instruments examined by us are genuine,
that all documents and instruments submitted to us as
originals are authentic, and that all documents and
instruments submitted to us as copies conform with the
originals, which facts we have not independently
verified.
G. We do not purport to be experts in
respect of, or express any opinion concerning,
aviation law or other laws, rules or regulations
applicable to the particular nature of the equipment
to be acquired by the Owner Trustee.
H. We have made no investigation of, and,
except as expressly provided in paragraph 3 above, we
express no opinion concerning, the nature of the title
to any part of the Lessor's Estate or the priority of
any mortgage or security interest.
I. We have assumed that the Participation
Agreement and the transactions contemplated thereby
are not within the prohibitions of Section 406 of the
Employee Retirement Income Security Act of 1974.
J. The opinions expressed in paragraph 11
are subject to principles of equity.
This opinion is rendered solely for your
benefit and may not be furnished or quoted to or
relied upon by any other person or entity for any
purpose without our prior written consent, except that
the law firm of David Polk & Wardwell may rely on this
opinion in connection with the rendering of its
opinion dated the date hereof in connection with the
financing described herein.
Very truly yours,
SCHEDULE A
Lessee
Federal Express Corporation
2007 Corporate Plaza
Memphis, Tennessee 38132-2140
Owner Trustee
First Security Bank of Utah, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Administration
Indenture Trustee
NationsBank of Georgia, National Association
Corporate Trust Administration
GA1-006-09-11
600 Peachtree Street, N.E.
Atlanta, Georgia 30308
Owner Participant
LLG Aircraft Leasing, L.P.
1209 Orange Street
Wilmington, Delaware 19801
Exhibit Q-1
Letterhead of Davis Polk & Wardwell
Closing Date
To Each of the Parties
Named on Schedule A Hereto
Re: Federal Express Corporation Trust
Ladies and Gentlemen:
We have acted as special counsel for Federal
Express Corporation, a Delaware corporation ("Federal
Express"), in connection with the transaction
contemplated by the Participation Agreement (Federal
Express Corporation Trust ______), dated as of March
1, 1994, (the "Participation Agreement"), among
Federal Express, as Lessee, LLG Aircraft Leasing,
L.P., as Owner Participant, First Security Bank of
Utah, National Association, as Owner Trustee,
NationsBank of Georgia, National Association, as
Indenture Trustee, NationsBank of South Carolina, as
Pass Through Trustee, and Westdeutsche Landesbank
Girozentrale, New York Branch, as LC Bank. Unless
otherwise defined herein, capitalized terms used
herein shall have the meanings assigned thereto in
Schedule II to the Participation Agreement.
References herein to "Commencement Documents" are to
the Lease, any Lease Supplement, the Trust Agreement
Supplement covering the Aircraft, any Indenture and
Security Agreement Supplement and any other Operative
Agreement not required to be executed on or prior to
the Closing Date. References herein to the "Pre-
Funding Documents" are to the Collateral Agreement,
the Demand Notes and the Letter of Credit. This
opinion is being delivered pursuant to Section
4.01(k)(vii) of the Participation Agreement.
The Participation Agreement provides, among
other things, for the financing of the Owner Trustee's
payment of the Purchase Price, Modification Cost,
Parts Cost and related expenses with respect to the
Aircraft using the proceeds from the public offering
of Pass Through Certificates. Three Series of Pass
Through Certificates will be issued by separate Pass
Through Trusts, each formed to acquire, among other
securities, the Certificates bearing a particular
interest rate and having a particular maturity that
will be issued under the Indenture.
In connection with the opinions expressed
below, we have examined the Participation Agreement,
the Original Trust Agreement, the form of Trust
Agreement Supplement, the form of Lease and Lease
Supplement, the Indenture, the form of Indenture and
Security Agreement Supplement, the Collateral
Agreement, the Sales Agreement, the Agreement to
Lease, the Modification Agreement, the Parts and
Services Agreement, the Certificates, the Pass Through
Certificates, the Pass Through Agreement and each
Series Supplement. We have also examined originals,
or copies certified to our satisfaction, of such other
agreements, documents, certificates and statements of
governmental officials and corporate officers as we
have deemed necessary or advisable as a basis for such
opinions. In 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.
As to any facts material to our opinions
expressed below, we have, with your consent, relied on
the representations and warranties made in or
pursuant to the Participation Agreement and the other
documents referred to therein, the accuracy of which
we have not independently verified. In addition, we
have, when relevant facts were not independently
established by us, relied, to the extent we deemed
such reliance proper, upon certificates of public
officials and certificates, telegrams and other
written or oral statements of officers of the parties
referred to herein.
Based on the foregoing, it is our opinion
that:
1. The execution, delivery and performance
by the Owner Trustee, in its individual or trust
capacity, as the case may be, of the Operative
Agreements (other than the Certificates, the
Commencement Documents, the Sales Agreement and
the Pre-Funding Documents) to which it is a
party, and the issuance, execution, delivery and
performance of the Certificates by the Owner
Trustee in its trust capacity do not, or did not
on the date of execution thereof, violate, and
fully comply, or did fully comply on the date of
execution thereof, with, any laws and
governmental rules and regulations of the State
of New York that may be applicable to the Owner
Trustee in its individual or trust capacity, as
the case may be. The opinion set forth in this
paragraph 1 is rendered without regard to the
effect, if any, on such issuance (in the case of
the Certificates), execution, delivery,
performance of the taking of any other action,
the conduct of any other business or the exercise
of any other powers by First Security Bank of
Utah, National Association in its individual or
in a trust capacity in the State of New York not
related to the transactions contemplated by the
Operative Agreements.
2. The execution, delivery and performance
of the Participation Agreement, the Pass Through
Agreement and each Series Supplement by the Pass
Through Trustee in its individual or trust
capacity, as the case may be, and the issuance,
execution, delivery and performance of the Pass
Through Certificates by the Pass Through Trustee
in its trust capacity do not contravene any laws
and governmental rules and regulations of the
State of New York that may be applicable to the
Pass Through Trustee in its individual or trust
capacity, as the case may be. The opinion set
forth in this paragraph 2 is rendered without
regard to the effect, if any, on such issuance
(in the case of the Pass Through Certificates),
execution, delivery or performance of the taking
of any other action, the conduct of any other
business or the exercise of any other powers by
NationsBank of South Carolina, National
Association, in its individual or in a trust
capacity in the State of New York not related to
the transactions contemplated by the Operative
Agreements.
3. (a) Each of the Pass Through Agreement,
the Series Supplements and the other Operative
Agreements to which Federal Express is or is to
be a party has been duly authorized by Federal
Express. Each of the Pass Through Agreement, the
Series Supplements and the other Operative
Agreements (other than the Commencement
Documents) to which Federal Express is a party
has been duly executed and delivered by Federal
Express.
(b) The execution, delivery and performance
of each of the Pass Through Agreement, the Series
Supplements and the other Operative Agreements to
which Federal Express is or is to be a party do
not violate, and fully comply with, any laws and
governmental rules and regulations of the State
of New York that may be applicable to Federal
Express. The opinion set forth in this paragraph
3(b) is rendered without regard to the taking of
any other action or the conduct of any other
business by Federal Express in the State of New
York not related to the transactions contemplated
by the Operative Agreements.
4. Assuming (i) the due authorization,
execution and delivery of the Pass Through
Agreement, each Series Supplement and each other
Operative Agreement by each of the parties to
each such document (other than Federal Express),
(ii) the due authorization, execution, issue and
delivery by the Owner Trustee, and the due
authentication by the Indenture Trustee, of the
Certificates to be issued under the Indenture in
accordance with the terms of the Indenture, (iii)
the due authorization, execution, issuance,
delivery and authentication by the Pass Through
Trustee of the Pass Through Certificates to be
issued under the Pass Through Agreement and the
Series Supplement relating to such Pass Through
Certificates, in each case in accordance with the
terms of the Pass Through Agreement and such
Series Supplement, and (iv) that the form of each
such document is in compliance with all
applicable laws and governmental rules and
regulations (other than Federal laws and the laws
of the State of New York) then: (A) each such
document (other than the Commencement Documents,
the Sales Agreement and the Pre-Funding
Documents) constitutes a legal, valid and binding
agreement of each party thereto enforceable
against each such party in accordance with its
terms; (B) the Indenture creates, for the benefit
of the Holders, the security interest in the
Trust Indenture Estate that it purports to create
as of the Closing Date, except that no opinion is
given with respect to perfection of such security
interest on the date hereof; (C) the
Certificates, when issued to and acquired by the
Pass Through Trustee, will be legal, valid and
binding obligations of the Owner Trustee
enforceable against the Owner Trustee in
accordance with their terms and the terms of the
Indenture and will be entitled to the benefits of
the Indenture, including the benefit of the
security interest created thereby, except that no
opinion is given with respect to the perfection
of such security interest on the date hereof; (D)
the Pass Through Certificates, when issued to and
acquired by the Underwriters in accordance with
the Underwriting Agreement, will be legal, valid
and binding obligations of the Pass Through
Trustee enforceable against the Pass Through
Trustee in accordance with their terms and will
be entitled to the benefits of the Pass Through
Agreement and the Series Supplement relating
thereto; and (E) the beneficial interest of the
Owner Participant under the Trust Agreement in
and to the properties which are part of the Trust
Indenture Estate is subject, to the extent
provided in the Indenture, to the Lien of the
Indenture in favor of the Holders.
5. Federal Express's participation in the
transactions contemplated by the Operative
Agreements does not and will not constitute a
violation of Section 7 of the Securities Exchange
Act of 1934.
6. It is not necessary, in connection with
the creation of the beneficial interest of the
Owner Participant in the Trust Indenture Estate
under the circumstances contemplated by the
Participation Agreement to register such
beneficial interest under the Securities Act of
1933, as amended, or to qualify the Trust
Agreement under the Trust Indenture Act of 1939,
as amended.
7. On the Commencement Date, the provisions
of Section 1110 of the United States Bankruptcy
Code will be applicable to the Aircraft for the
benefit of the Lessor, as lessor under and by
reason of the Lease. Upon assignment of the
Lease as provided for in the Indenture upon the
Exchange Date, the aforesaid rights under Section
1110 will have been assigned to the Indenture
Trustee pursuant to the Indenture as part of the
collateral for the Certificates.
The foregoing opinions are subject to the
following qualifications:
(a) For purposes of the matters stated in
paragraph 3(a) above and as to matters of
Tennessee law, we have relied on the opinion
dated the date hereof of Kenneth R. Masterson,
Senior Vice President and General Counsel
of the Lessee. Such Opinion is satisfactory to
to us in form and scope and we believe that you
and we are justified in relying thereon.
(b) For the purposes of the opinion provided
in paragraph 7 above, (i) we have assumed that
there will be no change in any applicable law on
or prior to the Commencement Date or Exchange
Date as of which such opinion speaks; (ii) we
have assumed that there will be no amendments or
modifications to the forms of the Lease or Lease
Supplement (other than the insertion of
information as provided for; and (iii) as to
matters of fact relevant to such opinion we have
relied without independent investigation on the
conclusions relating to the Aircraft expressed in
the appraisal as of the date hereof by BK
Associates, Inc.
(c) We are qualified to practice law in the
State of New York, and 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 and the General Corporation Law of the
State of Delaware.
(d) The opinion as to enforceability
contained in paragraph 4 above is subject, as to
enforceability of rights and remedies, to
(i) applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights
generally and (ii) recognized equitable
principles which may affect the remedies provided
in the agreements referred to in said opinions,
which laws and principles, however, do not in our
opinion make the remedies provided in said
agreements inadequate for the practical
realization of the benefits of the security
intended to be provided thereby.
(e) This opinion is rendered solely to you
at Federal Express's request in connection with
the above matter. This opinion may not be relied
upon by you for any other purpose or relied upon
by or furnished to any other person, other than
your successors and permitted assigns, without
our prior written consent.
(f) We rendered an opinion dated September
1, 1993 (the "Agreement to Lease Opinion"), a
copy of which is attached hereto. We hereby
consent and agree that the addressees hereto who
were not addressees to the Agreement to Lease
Opinion may rely on the Agreement to Lease
Opinion as fully and with the same force and
effect as if such addressees were originally
named therein on the date of the Agreement to
Lease Opinion.
Very truly yours,
SCHEDULE A
Lessee
Federal Express Corporation
2007 Corporate Plaza
Memphis, Tennessee 38132-2140
Owner Trustee
First Security Bank of Utah, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Administration
Indenture Trustee
NationsBank of Georgia, National Association
Corporate Trust Administration
GA1-006-09-11
600 Peachtree Street, N.E.
Atlanta, Georgia 30308
Pass Through Trustee
NationsBank of South Carolina, National Association
1301 Gervis Street
Fourth Floor
Columbia, South Carolina 29201
Attention: Corporate Trust Administration
Owner Participant
LLG Aircraft Leasing, L.P.
1209 Orange Street
Wilmington, Delaware 19801
Underwriters
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Exhibit Q-2
Letterhead of Davis Polk & Wardwell
Commencement Date
(Exchange Date)*
To Each of the Parties
Named on Schedule A Hereto
Re: Federal Express Corporation Trust
Ladies and Gentlemen:
We have acted as special counsel for Federal
Express Corporation, a Delaware corporation ("Federal
Express"), in connection with the transaction
contemplated by the Participation Agreement (Federal
Express Corporation Trust ______), dated as of March
1, 1994 (the "Participation Agreement"), among Federal
Express, as Lessee, LLG Aircraft Leasing, L.P., as
Owner Participant, First Security Bank of Utah,
National Association, as Owner Trustee, NationsBank of
Georgia, National Association, as Indenture Trustee,
NationsBank of South Carolina, as Pass Through
Trustee, and Westdeutsche Landesbank Girozentrale, New
York Branch. Unless otherwise defined herein,
capitalized terms used herein shall have the meanings
assigned thereto in Schedule II to the Participation
Agreement. This opinion is being delivered pursuant
to Section 4.02(j)(v) and Section 4.03(l)(vi) of the
Participation Agreement.
The Participation Agreement provides, among
other things, for the financing of the Owner Trustee's
payment of the Purchase Price, Modification Cost,
Parts Cost and related expenses with respect to the
Aircraft using the proceeds from the public offering
of Pass Through Certificates. Two Series of Pass
Through Certificates have been issued by separate Pass
Through Trusts, each formed to acquire, among other
securities, the Certificates bearing a particular
interest rate and having a particular maturity issued
under the Indenture.
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* If the Exchange Date does not occur on the
Commencement Date a separate opinion, dated
the Exchange Date, shall be provided as to
all matters below, except as otherwise
specified.
In connection with the opinions expressed
below, we have examined the Participation Agreement,
the Original Trust Agreement, the Trust Agreement
Supplement covering the Aircraft, the Lease and Lease
Supplement, the Indenture, the (form of)* Indenture
and Security Agreement Supplement, the Collateral
Agreement, the Sales Agreement, the Agreement to
Lease, the Modification Agreement, the Parts and
Services Agreement, the Certificates, the Pass Through
Certificates, the Pass Through Agreement and each
Series Supplement. We have also examined originals,
or copies certified to our satisfaction, of such other
agreements, documents, certificates and statements of
governmental officials and corporate officers as we
have deemed necessary or advisable as a basis for such
opinions. In 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.
As to any facts material to our opinions
expressed below, we have, with your consent, relied on
the representations and warranties made in or
pursuant to the Participation Agreement and the other
documents referred to therein, the accuracy of which
we have not independently verified. In addition, we
have, when relevant facts were not independently
established by us, relied, to the extent we deemed
such reliance proper, upon certificates of public
officials and certificates, telegrams and other
written or oral statements of officers of the parties
referred to herein.
Based on the foregoing, it is our opinion
that:
1. With respect to that portion, if any, of
the Aircraft and the other property included in
the Lessor's Estate as may not be covered by the
recording system established by the Federal
Aviation Administration (the "FAA") pursuant to
Section 503(a) of the Federal Aviation Act of
1958, as amended the "Act"), no filing or
recording of any document or other action was or
- ------------
* Insert in Commencement Date opinion only if
Exchange Date does not occur on the
Commencement Date.
is necessary in order to establish the Owner
Trustee's title thereto and interest therein as
against Federal Express and any third parties.
(2. The Lease creates a valid leasehold
interest in the Aircraft, the entitlement thereof
to the benefits of recordation under the Act
being subject to the due and timely filing for
recording of (A) the Lease(, with the Indenture
(as supplemented by the Indenture and Security
Agreement Supplement) attached as an exhibit, (B)
the Indenture)* and ((B)/(C)) the Trust
Agreement as supplemented by the Trust Agreement
Supplement covering the Aircraft.)*
(3. The execution, delivery and performance
by the Owner Trustee, in its individual or trust
capacity, as the case may be, of the Operative
Agreements (other than the Certificates, the
Sales Agreement and the Collateral Agreement) to
which it is a party, and the issuance, execution,
delivery and performance of the Certificates by
the Owner Trustee in its trust capacity do not,
or did not as of the date of execution thereof,
violate, and fully comply, or did fully comply as
of the date of execution thereof, with, any laws
and governmental rules and regulations of the
State of New York that may be applicable to the
Owner Trustee in its individual or trust
capacity, as the case may be. The opinion set
forth in this paragraph 3 is rendered without
regard to the effect, if any, on such issuance
(in the case of the Certificates), execution,
delivery, performance of the taking of any other
action, the conduct of any other business or the
exercise of any other powers by First Security
Bank of Utah, National Association in its
individual or in a trust capacity in the State of
- ------------
* This paragraph shall be provided in the
Commencement Date and Exchange Date opinions,
except that, if the Exchange Date does not
occur on the Commencement Date, the bracketed
language within this paragraph may be omitted
from the Commencement Date opinion.
New York not related to the transactions
contemplated by the Operative Agreements.)*
(4. (a) Each of the Operative Agreements to
which Federal Express is a party has been duly
authorized, executed and delivered by Federal
Express.
(b) The execution, delivery and performance
of each of the Operative Agreements to which
Federal Express is a party do not, or did not on
the date of execution thereof, violate, and fully
comply, or did fully comply on the date of
execution thereof, with, any laws and
governmental rules and regulations of the State
of New York that may be applicable to Federal
Express. The opinion set forth in this paragraph
4(b) is rendered without regard to the taking of
any other action or the conduct of any other
business by Federal Express in the State of New
York not related to the transactions contemplated
by the Operative Agreements.)**
(5. Assuming (i) the due authorization,
execution and delivery of the Operative
Agreements by each of the parties to each such
document (other than Federal Express), (ii) the
due authorization, execution, issue and delivery
by the Owner Trustee, and the due authentication
by the Indenture Trustee, of the Certificates
issued under the Indenture in accordance with the
terms of the Indenture, (iii) the due
authorization, execution, issuance, delivery and
authentication by the Pass Through Trustee of the
Pass Through Certificates issued under the Pass
Through Agreement and the Series Supplement
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* Insert if the Exchange Date occurs on the
Commencement Date. If the Exchange Date does
not occur on the Commencement Date, this
paragraph need be provided in the Exchange
Date opinion only.
** Insert if the Exchange Date occurs on the
Commencement Date. If the Exchange Date does
not occur on the Commencement Date, this
paragraph need be provided in the
Commencement Date opinion only.
relating to such Pass Through Certificates, in
each case in accordance with the terms of the
Pass Through Agreement and such Series
Supplement, and (iv) that the form of each such
document is in compliance with all applicable
laws and governmental rules and regulations
(other than Federal laws and the laws of the
State of New York) then: (A) each such document
(other than the Collateral Agreement, the Demand
Notes and the Letter of Credit (the "Pre-Funding
Documents") and the Sales Agreement) constitutes
a legal, valid and binding agreement of each
party thereto enforceable against each such party
in accordance with its terms; (B) the Indenture,
as supplemented by the Indenture and Security
Agreement Supplement, creates, for the benefit of
the Holders, the security interest in the Trust
Indenture Estate that it purports to create as of
the Exchange Date; (C) the Certificates are
legal, valid and binding obligations of the Owner
Trustee enforceable against the Owner Trustee in
accordance with their terms and the terms of the
Indenture and are entitled to the benefits of the
Indenture, including the benefit of the security
interest created thereby as of the Exchange Date;
and (D) the beneficial interest of the Owner
Participant under the Trust Agreement, as
supplemented by the Trust Agreement Supplement
covering the Aircraft, in and to the properties
which are part of the Trust Indenture Estate is
subject, to the extent provided in the Indenture,
as supplemented by the Indenture and Security
Agreement Supplement, to the Lien of the
Indenture in favor of the Holders. The opinions
set forth in this paragraph 5 are subject to the
due recording with the FAA of the Indenture, the
Indenture and Security Agreement Supplement and
the Trust Agreement Supplement covering the
Aircraft.)*
(6. All the properties which are part of the
Trust Indenture Estate as of the Exchange Date
(including all right, title and interest of the
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* Insert if the Exchange Date occurs on the
Commencement Date. If the Exchange Date does
not occur on the Commencement Date, this
paragraph need be provided in the Exchange
Date opinion only.
Owner Trustee pledged and mortgaged by it
pursuant to the Indenture, as supplemented by the
Indenture and Security Agreement Supplement, in
and to the Aircraft and the Lease) have been
pledged and mortgaged with the Indenture Trustee
as part of the Trust Indenture Estate (subject
(a) to the due recording or filing of those
documents referred to in paragraph 2 above and
the financing statements referred to in Section
4.03(f) of the Participation Agreement and (b) at
the time of the recording of the Indenture and
Security Agreement Supplement covering the
Aircraft, to the absence of any mortgages, liens,
security interests, charges or other encumbrances
in or upon the property covered by the Indenture
and Security Agreement Supplement).)*
(7. The Indenture creates, as security for
all of the Certificates duly issued and to be
issued under the Indenture, the first priority
security interest in the Aircraft it purports to
create, the perfection and rank thereof being
subject to the registration with the FAA of the
Aircraft in the name of the Owner Trustee and the
due and timely filing for recording in accordance
with the Act of the documents referred to in
paragraph 2 above. We express no opinion
pursuant to this paragraph with respect to the
status of any security interest in any portion of
the Aircraft which does not constitute an
"aircraft" or "aircraft engine", as defined in
paragraphs (5) and (6) of Section 101 of the
Aviation Act.)*
8. Federal Express's participation in the
transactions contemplated by the Operative
Agreements does not and will not constitute a
violation of Section 7 of the Securities Exchange
Act of 1934.
(9. The provisions of Section 1110 of the
United States Bankruptcy Code are applicable to
the Aircraft for the benefit of the Lessor, as
lessor under and by reason of the Lease(, and the
Lease, including the aforesaid rights under
Section 1110, have been assigned to the Indenture
Trustee pursuant to the Indenture as part of the
collateral for the Certificates).)*
The foregoing opinions are subject to the
following qualifications:
(a) For purposes of the matters stated in
paragraph 4(a) above and as to matters of
Tennessee law, we have relied on the opinion
dated the date hereof of Kenneth R. Masterson,
Senior Vice President and General Counsel of
of the Lessee. Such opinion is satisfactory
to us in form and scope and we believe that
you and we are justified in relying thereon.
(b) As to matters of fact relevant to the
opinion in paragraph (9) above, we have relied
without independent investigation on the
conclusions relating to the Aircraft expressed in
the appraisal as of March __, 1994 by BK
Associates, Inc.
(c) We are qualified to practice law in the
State of New York, and 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 and the General Corporation Law of the
State of Delaware.
(d) The opinion as to enforceability
contained in paragraph 5 above is subject, as to
enforceability of rights and remedies, to
(i) applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights
generally and (ii) recognized equitable
principles which may affect the remedies provided
in the agreements referred to in said opinions,
which laws and principles, however, do not in our
opinion make the remedies provided in said
agreements inadequate for the practical
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* This paragraph shall be provided in the
Commencement Date and Exchange Date opinions,
except that, if the Exchange Date does not
occur on the Commencement Date, the bracketed
language within this paragraph may be omitted
from the Commencement Date opinion.
realization of the benefits of the security
intended to be provided thereby.
(e) This opinion is rendered solely to you
at Federal Express's request in connection with
the above matter. This opinion may not be relied
upon by you for any other purpose or relied upon
by or furnished to any other person, other than
your successors and permitted assigns, without
our prior written consent.
Very truly yours,
SCHEDULE A
Lessee
Federal Express Corporation
2007 Corporate Plaza
Memphis, Tennessee 38132-2140
Owner Trustee
First Security Bank of Utah, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Administration
Indenture Trustee
NationsBank of Georgia, National Association
Corporate Trust Administration
GA1-006-09-11
600 Peachtree Street, N.E.
Atlanta, Georgia 30308
Owner Participant
LLG Aircraft Leasing, L.P.
1209 Orange Street
Wilmington, Delaware 19801
Exhibit R
(Closing Date)
TO EACH OF THE PARTIES
LISTED ON SCHEDULE A
ATTACHED HERETO.
Re: Letters of Credit Nos. (LIST ALL 13)
collectively, the "Letters of Credit")
Ladies and Gentlemen:
We, the undersigned, are members of the Central
Legal Department of Westdeutsche Landesbank
Girozentrale ("WestLB") and have advised WestLB and
its New York Branch (the "Branch") in connection with
the Letters of Credit referenced above, each dated as
of the date of this opinion. Capitalized terms herein
which are undefined have the meanings assigned to them
in the Letters of Credit.
In connection with the opinions hereinafter
given, we have examined a copy of (a) the Letters of
Credit, (b) each Participation Agreement (as defined
in each of the Letters of Credit, collectively, the
"Participation Agreements" and (c) each Indemnification
Agreement (as defined in each of the Participation
Agreements, together with the Letters of Credit and
Participation Agreements, the "Agreements"), and such
other certificates, documents, agreements and instruments
as we have deemed necessary as a basis for the opinions
expressed below.
In such examination, we have assumed the
genuiness of all signatures, the authenticity of all
agreements, certificates, instruments and documents
submitted to us as originals, and the conformity to
the originals of all agreements, certificates,
instruments and documents submitted to us as copies.
As to questions of fact material to the opinions
expressed below, we have, when relevant facts were not
independently established by us, examined and relied
upon representations of officers of WestLB.
Based upon the foregoing examination and
assumptions, and subject to the qualifications set
forth below, we are of the opinion that:
1) WestLB is duly organized and validly existing
as a German public law banking institution
under the law of the State of North Rhine-
Westphalia and has full power and authority
(corporate and otherwise) to execute, deliver
and perform each of the Agreements.
2) Any two of Sharon M. Maharg, Carmen Rances,
Donald F. Wolf, August Kumbier and Horst
Fuellenkemper, if acting jointly for and on
behalf of the Branch, are duly authorized by
WestLB to execute and deliver the Agreements
for and on behalf of the Branch. Assuming
the Agreements have been duly executed and
delivered for and on behalf of the Branch by
any two of such aforementioned persons acting
jointly, no further authorization by or any
corporate action of WestLB (including the
Branch) is required in connection with the
execution, delivery and performance of the
Agreements.
3) (i) The governing law clause of each Letter
of Credit, subjecting such Letter of Credit
to the Uniform Customs and Practice for
Documentary Credits (revision effective
January 1, 1994) International Chamber of
Commerce Publication No. 500, and, as to
matters not covered therein, to New York law,
is valid under German law. The governing law
clause of each other Agreement subjecting
such Agreement to New York law, is valid
under German law.
(ii) Under German law, New York law will be
applied to an agreement such as the
Agreements, which under German law has been
validly subjected to New York law, except to
the extent that (a) any of the terms of such
agreement or any of the provisions of New
York law applicable to such agreement are
obviously irreconcilable with important
principles of German law, (b) there are
mandatory provisions of German law which must
be applied to the transaction covered by such
agreement irrespective of the law which
governs such agreement or (c) all elements of
the transaction covered by such agreement,
other than the choice of law, are connected
with only one country at the time of the
choice of law and there are mandatory
provisions of the law of such country
applicable to such transaction.
(iii) (a) None of the terms of the
Agreements is irreconcilable with important
principles of German law, (b) there are no
mandatory provisions of German law which must
be applied to the transactions covered by the
Agreements irrespective of the law which
governs the Agreements and (c) the
transactions covered by the Agreements were
not connected with only one country at the
time the choice of law was made.
(iv) Each Agreement is enforceable against
WestLB in accordance with its terms and,
subject to the opinion contained in paragraph
(3)(i) through (iii), the applicable
provisions of the chosen law of New York.
4) No authorization, consent, approval or other
action by, and no notice to or filing with,
any governmental, administrative or other
authority or court of Germany or of the State
of North Rhine-Westphalia is required for the
execution or delivery of any Agreement by
WestLB through the Branch or for the
performance by WestLB or by the Branch of any
Agreement.
5) The execution, delivery and performance of
the Agreements by WestLB or the Branch will
not result in any violation by WestLB or by
the Branch of any law of Germany or the State
of North Rhine-Westphalia.
6) The contractual obligations incurred by
virtue of the execution and delivery of the
Agreements for and on behalf of the Branch
are the obligations of WestLB, and WestLB has
no defenses against the performance of such
obligations which are based on the fact that
WestLB had acted through the Branch in
executing and delivering the Agreements.
7) Any final and conclusive judgment of a court
of the State of New York, New York County, or
of the United States District Court for the
Souther District of New York for a definite
sum for the recovery of the amounts due and
unpaid under the Agreements will be held
enforceable against WestLB in the appropriate
courts of Germany without re-examination or
re-litigation of the matters adjudicated,
except that such judgment is not so
enforceable if any of the reasons for
excluding enforceability set forth in Section
328(1) of the German Code of Civil Procedure
is present, in particular (i) under the law
of Germany said New York or federal court
does not have jurisdiction, (ii) WestLB has
not been served with process in a proper and
timely fashion and therefore WestLB has not
been able to defend itself against the claim
in the court, (iii) the judgment conflicts
with a prior judgment of a court of Germany
or a prior judgment of a foreign court that
is to be recognized in Germany, or the
litigation resulting in the judgment to be
enforced conflicts with litigation previously
commenced in Germany, (iv) recognition of the
judgment would be contrary to basic
principles of the law of Germany, in
particular but not limited to the
constitutional human rights, or (v)
reciprocity is not insured.
With respect to the condition set forth in
clause (v), reciprocity exists today with
respect to the recognition of final and
conclusive judgments of the courts of Germany
by the relevant courts of the State of New
York or the United States of America located
within the County of New York, State of New
York, as the case may be.
The foregoing opinions are subject to the
following qualifications:
(i) The opinion in paragraph (3)(iv) is subject
to the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium,
liquidation or similar laws affecting
creditors' rights generally, as the same may
be applied in the event of a bankruptcy,
insolvency, reorganization, liquidation or
similar situation involving WestLB.
(ii) In giving the opinions in paragraphs
(3)(iv) and (6), we have assumed, with
your consent, that the Agreements are
legal, valid, binding and enforceable
under New York law, all as set forth
more fully in the opinion dated the date
of this opinion of Milbank, Tweed,
Hadley & McCloy, issued in connection
with the Agreements.
(iii) No opinion is expressed with respect to
the law of any jurisdiction other than
the law of Germany and the State of
North Rhine-Westphalia.
(iv) With respect to the condition set forth
in clause 7(v) above, in giving the
opinion that such reciprocity today
exists, we have, with your approval,
relied upon the opinion, dated the date
of this opinion, of Milbank, Tweed,
Hadley & McCloy, issued in connection
with the Agreements.
Very truly yours,
________________________ ________________________
Peter Foller Dr. Klaus Poggemann
Legal Counsel Legal Counsel
SCHEDULE A
NationsBank of Georgia, National Association,
as Indenture Trustee
NationsBank of South Carolina, National Association,
as Pass Through Trustee
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Federal Express Corporation, as Lessee
Moody's Investors Service, Inc.
Standard & Poor's Corporation
Draft of March 16, 1994
Exhibit S
(Form of Opinion of Special Counsel to the LC Bank)
(CLOSING DATE)
TO EACH OF THE PARTIES
LISTED ON SCHEDULE A
ATTACHED HERETO
Ladies and Gentlemen:
We have acted as special New York counsel to
Westdeutsche Landesbank Girozentrale ("WestLB"), New York
Branch (the "Branch"), in connection with the
transactions contemplated by the Participation
Agreement (Federal Express Corporation Trust ______)
dated as of March 1, 1994 (the "Participation
Agreement") among Federal Express Corporation, LLG
Aircraft Leasing, L.P., NationsBank of South Carolina,
National Association, First Security Bank of Utah,
National Association, NationsBank of Georgia, National
Association and WestLB. This opinion is delivered to
you pursuant to Section 4.01(k) of the Participation
Agreement. For convenience of reference, all
capitalized terms used herein and not otherwise
defined herein have the meanings attributed thereto in
the Participation Agreement.
In acting as special New York counsel to
WestLB, we participated in the drafting and
negotiation of the Letter of Credit, in the
negotiation of the Participation Agreement and the
Indemnification Agreement and assisted in the
execution and delivery of the Letter of Credit, the
Participation Agreement and the Indemnification
Agreement and the related documents and instruments.
In connection with the opinions hereinafter
given, we have examined forms of the Letter of Credit,
the Participation Agreement and the Indemnification
Agreement, as well as executed originals, or copies
certified to our satisfaction, of certificates and
other statements of public officials, or officers and
representatives of WestLB and of other persons, and
such agreements, instruments and documents as we have
deemed necessary as a basis for the opinions
hereinafter expressed. As to questions of fact
material to such opinions, we have, when relevant
facts were not independently established by us, relied
upon the documents we have examined or upon
certificates of the Branch of its officers or of
public officials or other persons. In our examination
of the documents referred to above we have assumed the
genuineness of all signatures, the authenticity of
documents submitted to us as originals, the conformity
with the originals of all documents submitted to us as
copies, the authenticity of the originals of such
latter documents and (except with respect to the
Branch in the case of the Letter of Credit, the
Participation Agreement and the Indemnification
Agreement) the due execution and delivery of each
such document by the parties thereto and, in the
case of the Participation Agreement and the
Indemnfication Agreement, that each such document
is the legal, valid and binding obligation of each
party thereto other than the Branch.
Based on the foregoing and on review of such
other matters as we consider necessary or appropriate
for purposes of this opinion, and having regard to
legal considerations we deem relevant and subject to
the comments and qualifications set forth below, we
are of the opinion that:
1. WestLB is licensed by the
Superintendent of Banks of the State of New York
(the "Superintendent") to maintain a branch at
1211 Avenue of the Americas, New York, New York,
in accordance with the provisions of Article V of
the Banking Law of the State of New York (the
"Banking Law"), and the Branch has the full
power, authority and legal right under the laws
of the State of New York to execute, deliver and
perform the Participation Agreement and the
Indemnification Agreement and to issue and
perform the Letter of Credit.
2. The Letter of Credit has been duly
authorized by all necessary corporate action on
the part of the Branch, and neither the execution
and delivery thereof nor its performance of any
of the terms and provisions thereof will violate
any United States Federal banking law or
regulation applicable to it.
3. The Letter of Credit has been duly
executed and delivered by the Branch, and
constitutes the legal, valid and binding
obligation of WestLB, enforceable in accordance
with its terms except as limited by bankruptcy,
insolvency, reorganization or other similar laws
and equitable principals of general application
to or affecting the enforcement of creditors'
rights generally from time to time in effect, as
the same may be applied in the event of a
bankruptcy, insolvency, reorganization,
liquidation or similar situation involving
WestLB.
4. If any judgment against WestLB or the Branch
which is final, conclusive, enforceable in, and rendered
by a court of a competent jurisdiction in the
Federal Republic of Germany (a "German
Judgment"), in respect of any suit, action or
proceeding against WestLB for the enforcement of
the Letter of Credit, such German Judgment would
be recognized and enforced by the courts of the
State of New York and the United States of
America located within the County of New York,
State of New York to the extent and in the manner
set forth in, and except as limited by, Article
53 of the Civil Practice Law and Rules of the
State of New York or similar common law
principles.
The foregoing opinions are subject to the
following qualifications:
(i) We express no opinion herein as to the
availability of equitable remedies, including
specific performance and injunctive relief,
against WestLB in an action to enforce the
Participation Agreement or the Letter of Credit;
(ii) In connection with the matters stated in
paragraph 3, we call your attention to Wysko
Investment Co. v. Great American Bank, 131 Bankr.
146 (D. Ariz. 1991), which holds that a
bankruptcy court may enjoin payment under a
letter of credit pursuant to Section 105 of the
U.S. Bankruptcy Code, 11 U.S.C. section105, in unusual
circumstances. Id. at 147. In that case, the
unusual circumstance was a bankruptcy court
finding that the injunction was necessary for the
reorganization. Id. at 148. In re Delaware
River Stevedores, Inc., 129 Bankr. 28 (Bkrtcy. E.D.
Pa. 1991), also suggests that "an injunction
prohibiting payment on a L/C could conceivably be
appropriate" if certain factors relating to
issuing Section 105(a) injunctions "generally
weighed in the debtor's favor". Id. at 42,
citing In re Guy C. Long, Inc., 74 Bankr. 939
(Bkrtcy. E.D. Pa. 1987). To the extent that the
rationale of Wysko Investment Co. or Delaware
River Stevedores would support the issuance of a
permanent injunction against payment under the
Letter of Credit, we are of the opinion that
those cases do not reflect a correct statement of
the law and are not controlling precedent in any
court exercising bankruptcy jurisdiction outside
of Arizona or the Eastern District of
Pennsylvania, as the case may be. No opinion is
expressed on whether a court exercising
bankruptcy jurisdiction might issue a temporary
restraining order or other interim relief in
order to preserve the status quo concerning the
Letter of Credit pending a review of the merits
of any request to enjoin payment under the Letter
of Credit; and
(iii) We express no opinion as to Section
16.08 of the Participation Agreement.
We are members of the Bar of the State of New
York and we do not herein intend to express any
opinion as to matters governed by any laws other than
the Federal law of the United States of America and
the law of the State of New York. We are not licensed
to practice or advise on the law of the Federal
Republic of Germany and we do not herein intend to
express any opinion as to the law of the Federal
Republic of Germany.
Insofar as (i) the full power, authority
and legal right of the Branch, (ii) the taking of
all necessary corporate action on the part of the
Branch and (iii) the obligation of WestLB for the
obligations of the Branch are dependent upon the
law of the Federal Republic of Germany, we have
relied, with your permission and without independent
investigation, exclusively on the accompanying
opinion of Messrs. Peter Foller and Klaus
Neuper, members of the Central Legal Department of
WestLB, and with respect to such matters this opinion
is subject to the same assumptions, qualifications and
limitations as are therein set forth as if set forth
herein.
This opinion is furnished to you in
connection with the transactions contemplated by the
Participation Agreement and may not be published or
otherwise communicated by you to any other party and
referred to or relied upon for any other purpose
without our specific prior written approval in each
instances.
Very truly yours,
Schedule A
NationsBank of Georgia, National Association,
As Indenture Trustee
NationsBank of South Carolina, National Association,
As Pass Through Trustee
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Federal Express Corporation,
As Lessee
Moody's Investors Service, Inc.
Standard & Poor's Corporation
Exhibit T
Daugherty, Fowler & Peregrin Letterhead
Commencement Date
(Exchange Date)*
To the Parties Named on
Schedule A attached hereto
Ladies and Gentlemen:
This opinion is furnished to you pursuant to
Section 4.02(j)(iii) of the Participation Agreement
(Federal Express Corporation Trust ______), dated as
of March 1, 1994 (the "Participation Agreement") among
Federal Express Corporation, as Lessee (the "Lessee"),
LLG Aircraft Leasing, L.P., as Owner Participant (the
"Owner Participant"), First Security Bank of Utah,
National Association, as Owner Trustee (the "Owner
Trustee"), NationsBank of Georgia, National
Association, as Indenture Trustee (the "Indenture
Trustee"), NationsBank of South Carolina, National
Association, as Pass Through Trustee (the "Pass
Through Trustee") and Westdeutsche Landesbank
Girozentrale, New York Branch.
The capitalized terms herein shall, unless
otherwise defined, have the same meanings given them
in Annex I attached hereto or in the Participation
Agreement.
We have examined and filed on (the
Commencement Date and on)** this date with the
Federal Aviation Administration (the "FAA") the
following described instruments at the respective
times listed below:
(a) Trust Agreement, dated as of
September 1, 1993, as amended and restated as
- -------------
* If the Exchange Date does not occur on the
Commencement Date, a separate opinion, dated
the Exchange Date, shall be provided as to
all matters below, except as otherwise
specifically noted.
** Insert in Exchange Date opinion only if the
Exchange Date does not occur on the
Commencement Date.
of March 1, 1994 (the "Trust Agreement"),
between the Owner Participant and the Owner
Trustee;
((b) Trust Indenture and Security
Agreement (Federal Express Corporation Trust
______) dated as of March 1, 1994 and
executed on the Closing Date (the
"Indenture"), between the Owner Trustee and
the Indenture Trustee with the Definitions
attached thereto, which Indenture with the
Definitions attached was filed at __ a.m.,
C.S.T. on ______, 199_;)* and
((c) Lease Agreement (Federal
Express Corporation Trust ______) dated as of
_________ __, 199_ and executed on the
Commencement Date (the "Lease"), between the
Owner Trustee, as lessor, and the Lessee, as
lessee, with the following attached thereto:
(i) the Definitions and (ii) the Indenture,
which Lease with the foregoing attachments
(collectively, the "Lease Attachments")
attached was filed at __ a.m., C.S.T. on
_________ __, 199_.)**
- ------------
* Insert if the Exchange Date occurs on the
Commencement Date. If the Exchange Date does
not occur on the Commencement Date, this need
be provided only in the Exchange Date
opinion.
** Insert if the Exchange Date occurs on the
Commencement Date. If the Exchange Date does
not occur on the Commencement Date, (A) this
paragraph shall be given in the Commencement
Date opinion, except that clause (ii) may be
omitted therefrom, and (B) the following
shall be given in the Exchange Date opinion:
(c) Lease Agreement (Federal Express
Corporation Trust _____) dated as of ______ __,
199_ and executed on the Commencement Date (the
"Lease"), between the Owner Trustee, as lessor,
and the Lessee, as lessee, with the Definitions
attached thereto, was filed at ___ a.m., C.S.T.,
on _______ __, 199_, and the Indenture was filed
as an additional attachment to the Lease at ___
a.m., C.S.T. on ______, 199_ (the Definitions and
Indenture are collectively referred to herein as
the "Lease Attachments").
References to the Trust Agreement(, the
Indenture) and the Lease hereafter appearing in this
opinion shall be deemed to include the Definitions
attached thereto.
The Confidential Omissions were intentionally
omitted from the FAA filing counterpart of the Lease
as containing confidential financial information.
Based upon our examination of the above
described instruments and of such records of the FAA
as we deemed necessary to render this opinion, it is
our opinion that:
1. AC Form 8050-2 Aircraft Bill of Sale
date ___________ __, 199_ (the "FAA
Bill of Sale") from the Lessee, as
Seller, conveying title to the
Airframe to the Owner Trustee, has
been duly recorded by the FAA on
_________ __, 199_ pursuant to and
in accordance with the provisions of
the Act and assigned Conveyance
No. ____________.
2. the (Indenture and the) Lease with
the Lease Attachments attached are
in due form for recordation by and
have been duly filed for recordation
with the FAA pursuant to and in
accordance with the provisions of
the Act;
3. the Trust Agreement is in due form
for filing and has been duly filed
with the FAA pursuant to and in
accordance with the provisions of
the Act;
4. the Trust Agreement Supplement was
duly filed with the FAA on
_________ __, 199_ pursuant to and
in accordance with the provisions of
the Act;
5. (the Indenture has been duly filed
with and duly recorded by the FAA
pursuant to and in accordance with
the provisions of the Act;)*
6. the Lease and the Lease Attachments
have been duly filed with and duly
recorded by the FAA pursuant to and
in accordance with the provisions of
the Act;
7. the Airframe is duly registered in
the name of the Owner Trustee
pursuant to and in accordance with
the provisions of the Act;
8. the Owner Trustee has valid legal
title to the Airframe and the
Aircraft is free and clear of all
Liens, except ((i) the security
interest created by the Indenture
and (ii))** the rights of the
parties under the Lease, as
supplemented by the Lease
Supplement;
9. (the Indenture constitutes a duly
perfected first priority security
interest in the Aircraft and a duly
perfected first assignment of all
the right, title and interest of the
Owner Trustee in, to and under the
Lease, as supplemented by the Lease
- ------------
* Insert if the Exchange Date occurs on the
Commencement Date. If the Exchange Date does
not occur on the Commencement Date, this need
be provided only in the Exchange Date
opinion.
** Insert if the Exchange Date occurs on the
Commencement Date. If the Exchange Date does
not occur on the Commencement Date, this need
be provided only in the Exchange Date
opinion.
Supplement (insofar as such
assignment affects an interest
covered by the recording system
established by the FAA pursuant to
Section 503(a) of the Act), and no
other registration of the Airframe
or filings other than filings with
the FAA (which have been duly
effected) are necessary in order to
perfect in any applicable
jurisdiction in the United States
(A) the Owner Trustee's title to the
Airframe or (B) such security
interest and assignment (insofar as
such assignment affects an interest
covered by the recording system
established by the FAA pursuant to
Section 503(a) of the Act), it being
understood that no opinion is
expressed as to the validity,
priority or enforceability of such
security interest and assignment
under local law or as against third
parties in respect of the Airframe
and the Engines at a time when the
same, or any of them, are outside
the United States;)*
10. no authorization, approval, consent,
license or order of, or registration
with, or the giving of notice to,
the FAA is required for the valid
authorization, delivery and
performance of the Lease, (the
Indenture,)* the Trust Agreement
or the Trust Agreement Supplement
covering the Aircraft, except for
such filings as are referred to in
our opinion dated ______________ __,
199_ (which have been duly effected)
and the filings referred to in
clauses (a), (b) and (c) above; and
- ------------
* Insert if the Exchange Date occurs on the
Commencement Date. If the Exchange Date does
not occur on the Commencement Date, this need
be provided only in the Exchange Date
opinion.
11. neither the authorization, issuance
and delivery of the Certificates,
the execution and delivery by the
parties thereto of the Trust
Agreement, or the Trust Agreement
Supplement covering the Aircraft,
the Indenture, the Participation
Agreement, the FAA Bill of Sale, the
Lease and/or the performance by the
parties thereof, nor the
consummation by the parties thereto
of any of the transactions
contemplated thereby, requires the
consent or approval of, or the
giving of notice to, or the regis-
tration with, or the taking of any
other action in respect of, the FAA
except for the filings, the
recordations and the filings for
recordation specified elsewhere in
this opinion.
No opinion is expressed as to laws other than
Federal laws of the United States. In rendering this
opinion, we were subject to the accuracy of the FAA,
its employees and agents, in the filing, indexing and
recording of instruments filed with the FAA and in the
search for encumbrance cross-reference index cards for
the Engines. Further, in rendering this opinion we
are assuming the validity and enforceability of the
above described instruments under local law. Since
our examination was limited to records maintained by
the FAA, our opinion does not cover liens which are
perfected without the filing of notice thereof with
the FAA, such as federal tax liens, liens arising
under Section 1368(a) of Title 29 of the United States
Code, possessory artisan's liens, or matters of which
the parties have actual notice. In rendering this
opinion we are assuming that there are no documents
with respect to the Aircraft which have been filed for
recording under the recording system of the FAA but
have not yet been listed in the available records of
such system as having been so filed.
In rendering this opinion we have relied upon
the opinion of the Assistant Chief Counsel for the
Aeronautical Center dated _______ and have continued
to rely upon the opinion of the Assistant Chief
Counsel for the Aeronautical Center dated
_________ __, 199_, copies of which are attached
hereto.
Very truly yours,
For the Firm
Annex I
(Federal Express Corporation
Trust ______)
Page 1
Certain Definitions
Airframe, Engines and Aircraft
One (1) Airbus A310-203 aircraft bearing
manufacturer's serial number _______ and U.S.
Registration No. ______ (the "Airframe") and two (2)
General Electric CF6-80A3 aircraft engines bearing
manufacturer's serial numbers _______, and _______
(the "Engines") (the Airframe and the Engines are
referred to collectively as the "Aircraft").
Trust Agreement
Trust Agreement, dated as of September 1,
1993, as amended and restated as of March 1, 1994,
between the Owner Participant and the Owner Trustee.
Trust Agreement Supplement
Trust Agreement Supplement, dated as of
_________, 199_, between the Owner Participant and the
Owner Trustee, referring to the Aircraft.
Indenture
Trust Indenture and Security Agreement
(Federal Express Corporation Trust ______) dated as of
March 1, 1994 between the Owner Trustee and the
Indenture Trustee, which together with the Indenture
and Security Agreement Supplement attached thereto.
Confidential Omissions
The Lease was filed with the FAA with Basic
Rent (Schedule II), (ii) the Stipulated Loss Values
(Schedule III), (iii) the Termination Values
(Schedule IV) and (iv) the Additional Purchase Options
Schedule (Schedule V) omitted from the FAA filing
counterpart thereof as containing confidential
financial information.
SCHEDULE A
Lessee
Federal Express Corporation
2007 Corporate Plaza
Memphis, Tennessee 38132-2140
Owner Trustee
First Security Bank of Utah, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Administration
Indenture Trustee
NationsBank of Georgia, National Association
Corporate Trust Administration
GA1-006-09-11
600 Peachtree Street, N.E.
Atlanta, Georgia 30308
Owner Participant
LLG Aircraft Leasing, L.P.
1209 Orange Street
Wilmington, Delaware 19801
SINGLE FILING
Draft of March 16, 1994
(For the Letterhead of Daugherty, Fowler & Peregrin)
______________________, 1994
To the Parties Named on
Schedule A Attached Hereto
Ladies and Gentlemen:
This opinion is furnished to you pursuant to
Section 4.02(j)(iii) of the Participation Agreement
(Federal Express Corporation Trust No. _____) dated as
of March 1, 1994 (the "Participation Agreement") among
Federal Express Corporation, as Lessee (the "Lessee"),
LLG Aircraft Leasing, L.P., as Owner Participant (the
"Owner Participant"), Westdeutsche Landesbank
Girozentrale, New York Branch (the "Loan
Participant"), First Security Bank of Utah, National
Association, as Owner Trustee (the "Owner Trustee"),
NationsBank of Georgia, National Association, as
Indenture Trustee (the "Indenture Trustee"), and
NationsBank of South Carolina, National Association,
as Pass Through Trustee (the "Pass Through Trustee"),
with respect to that portion of the Federal Aviation
Act of 1958, as amended (the "Act"), relative to the
recordation of instruments and the registration of
aircraft under the Act.
The capitalized terms herein shall, unless
otherwise defined, have the same meanings given them
in the Participation Agreement or in Annex I attached
hereto.
We have examined and filed on this date with
the Federal Aviation Administration (the "FAA") the
following described instruments at the respective
times listed below:
(a) AC Form 8050-2 Aircraft Bill of Sale dated
____________, 1994 (the "FAA Bill of Sale")
from ________________, as seller, conveying
title to the Airframe to the Owner Trustee,
which FAA Bill of Sale was filed at ____
_.m., C.S.T.;
(b) AC Form 8050-1 Aircraft Registration
Application dated __________, 1994 (the
"Aircraft Registration Application") by the
Owner Trustee as applicant, covering the
Airframe, which Aircraft Registration
Application was filed at __________ _.m.,
C.S.T.;
(c) Affidavit of the Owner Trustee dated
__________, 1994 (the "Owner Trustee
Affidavit") pursuant to Section
47.7(c)(2)(iii) of Part 47 of the Federal
Aviation Regulations, which Owner Trustee
Affidavit was filed at __________ _.m.,
C.S.T.;
(d) executed counterpart of Trust Agreement
(Federal Express Corporation Trust No. _____)
dated as of March 1, 1994 (the "Trust
Agreement") between the Owner Participant and
the Owner Trustee, with executed counterpart
of Trust Agreement Supplement No. 1 dated
__________, 1994 ("Trust Supplement No. 1")
between the Owner Participant and the Owner
Trustee attached thereto, which Trust
Agreement with Trust Supplement No. 1
attached was filed at ________ _.m., C.S.T.;
(e) executed counterpart of Trust Indenture and
Security Agreement (Federal Express
Corporation Trust No. _____) dated as of
March 1, 1994 (the "Trust Indenture") between
the Owner Trustee and the Indenture Trustee,
with executed counterpart of Indenture and
Security Agreement Supplement No. 1 (Federal
Express Corporation Trust No. _____) dated
__________, 1994 (the "Trust Indenture
Supplement") by the Owner Trustee, covering
the Aircraft, attached thereto, which Trust
Indenture with the Trust Indenture Supplement
attached was filed at ________ _.m., C.S.T.;
and,
(f) executed counterpart of Lease Agreement
(Federal Express Corporation Trust No. _____)
dated as of March 1, 1994 (the "Lease")
between the Owner Trustee, as lessor, and the
Lessee, with executed counterparts of the
following attached thereto: (i) Lease
Supplement No. 1 (Federal Express Corporation
Trust No. _____) dated __________, 1994 (the
"Lease Supplement") between the Owner
Trustee, as lessor, and the Lessee, covering
the Aircraft; (ii) the Trust Indenture; and
(iii) the Trust Indenture Supplement, which
Lease with the foregoing attachments
(collectively, the "Lease Attachments")
attached was filed at _________ _.m., C.S.T.
The Confidential Omissions were intentionally
omitted from the FAA filing counterparts of the Lease
and the Trust Indenture as containing confidential
financial information.
Based upon our examination of the above
described instruments and of such records of the FAA
as we deemed necessary to render this opinion, it is
our opinion that:
1. the FAA Bill of Sale, the Trust Indenture
with the Trust Indenture Supplement attached
and the Lease with the Lease Attachments
attached are all in due form for recordation
by and have been duly filed for recordation
with the FAA pursuant to and in accordance
with the provisions of the Act;
2. the Aircraft Registration Application, the
Owner Trustee Affidavit and the Trust
Agreement with Trust Supplement No. 1
attached are in due form for filing and have
been duly filed with the FAA pursuant to and
in accordance with the provisions of the Act;
3. the Airframe is eligible for registration in
the name of the Owner Trustee pursuant to and
in accordance with the provisions of the Act
and the filing with the FAA of the FAA Bill
of Sale, the Aircraft Registration
Application, the Owner Trustee Affidavit, and
the Trust Agreement with Trust Supplement No.
1 attached will cause the FAA to register the
Airframe, in due course, in the name of the
Owner Trustee and pursuant thereto to issue
to the Owner Trustee an AC Form 8050-3
Certificate of Aircraft Registration covering
the Airframe, and the Airframe will be duly
registered pursuant to and in accordance with
the provisions of the Act;
4. the Owner Trustee has valid legal title to
the Airframe and the Aircraft is free and
clear of all Liens, except (i) the security
interest created by the Trust Indenture, as
supplemented by the Trust Indenture
Supplement, and (ii) the rights of the
parties under the Lease, as supplemented by
the Lease Supplement;
5. the rights of the Owner Trustee and the
Lessee under the Lease, as supplemented by
the Lease Supplement, with respect to the
Aircraft, are perfected;
6. the Trust Indenture, as supplemented by the
Trust Indenture Supplement, constitutes a
duly perfected first priority security
interest in the Aircraft and a duly perfected
first assignment of all the right, title and
interest of the Owner Trustee in, to and
under the Lease and the Lease Supplement
(insofar as such assignment affects an
interest covered by the recording system
established by the FAA pursuant to Section
503(a) of the Act), and no other registration
of the Airframe or filings other than filings
with the FAA (which have been duly effected)
are necessary in order to perfect in any
applicable jurisdiction in the United States
(A) the Owner Trustee's title to the Airframe
or (B) such security interest and assignment
(insofar as such assignment affects an
interest covered by the recording system
established by the FAA pursuant to Section
503(a) of the Act), it being understood that
no opinion is expressed as to the validity,
priority or enforceability of such security
interest and assignment under local law or as
against third parties in respect of the
Airframe and the Engines at a time when the
same, or any of them, are outside the United
States;
7. no authorization, approval, consent, license
or order of, or registration with, or the
giving of notice to, the FAA is required for
the valid authorization, delivery and
performance of the Lease, as supplemented by
the Lease Supplement, the Trust Indenture, as
supplemented by the Trust Indenture
Supplement, or the Trust Agreement, as
supplemented by Trust Supplement No. 1,
except for such filings as are referred to
above; and,
8. neither the execution, and delivery by the
Loan Participant of the Participation
Agreement or by the Owner Participant of the
Participation Agreement or the Trust
Agreement, as supplemented by Trust
Supplement No. 1, nor other consummation of
the transactions contemplated thereby by the
Loan Participant or the Owner Participant,
requires the consent or approval of, or the
giving of notice to, or the registration of,
or the taking of any other action in respect
of the FAA, except (x) the registration of
the Airframe, including the submission of the
Aircraft Registration Application, the Owner
Trustee Affidavit, the Trust Agreement and
Trust Supplement No. 1 to the FAA and (y) the
filings for recordation specified elsewhere
in this opinion.
Since the FAA records reflect that record
title to the Airframe originated with the FAA Bill of
Sale, involving a foreign vendor, our opinion as to
the status of its record title covers only that period
of time commencing with the filing of the FAA Bill of
Sale with the FAA.
No opinion is expressed as to laws other than
Federal laws of the United States. In rendering this
opinion, we were subject to the accuracy of the FAA,
its employees and agents, in the filing, indexing and
recording of instruments filed with the FAA and in the
search for encumbrance cross-reference index cards for
the Engines. Further, in rendering this opinion we
are assuming the validity and enforceability of the
above described instruments under local law. Since
our examination was limited to records maintained by
the FAA, our opinion does not cover liens which are
perfected without the filing of notice thereof with
the FAA, such as federal tax liens, arising under
Section 1368(a) of Title 29 of the United States Code,
possessory artisan's liens, or matters of which the
parties have actual notice. In rendering this opinion
we are assuming that there are no documents with
respect to the Aircraft which have been filed for
recording under the recording system of the FAA but
have not yet been listed in the available records of
such system as having been so filed.
In rendering this opinion we have relied upon
the opinion of the Assistant Chief Counsel of the
Aeronautical Center dated ____________, 1994, a copy
of which is attached hereto.
Very truly yours,
Robert M. Peregrin
For the Firm
Annex I
Certain Definitions
Airframe, Engines and Aircraft
One (1) Airbus A310-203 aircraft bearing
manufacturer's serial number _________ and U.S.
Registration No. __________ (the "Airframe") and two
(2) General Electric CF6-80A3 aircraft engines bearing
manufacturer's serial numbers __________ and
__________ (the "Engines") (the Airframe and the
Engines are referred to collectively as the
"Aircraft").
Confidential Omissions
The Lease was filed with the FAA, with (i)
the Excess Amount and Basic Rent (Schedule II), (ii)
the Stipulated Loss Values (Schedule III), (iii) the
Termination Values (Schedule IV) and (iv) the Purchase
Option Schedule (Schedule V) omitted from the FAA
filing counterpart thereof as containing confidential
financial information; and (v) the percentage of the
purchase price under Section 4.02(a)(B) set forth in
the Ancillary Agreement, which was not attached to the
FAA filing counterpart of the Lease or otherwise filed
with the FAA for recordation.
The Trust Indenture was filed with the FAA
with the Schedule of Principal Payments (Schedule I)
omitted from the FAA filing counterpart thereof as
containing confidential financial information.
SCHEDULE A
Lessee
Federal Express Corporation
Owner Trustee
First Security Bank of Utah, National Association
Indenture Trustee
NationsBank of Georgia, National Association
Owner Participant
LLG Aircraft Leasing, L.P.
Loan Participant
Westdeutsche Landesbank Girozentrale,
New York Branch
Pass Through Trustee
NationsBank of South Carolina, National Association
SPLIT FILING - PHASE I
Draft of March 16, 1994
(For the Letterhead of Daugherty, Fowler & Peregrin)
______________________, 1994
To the Parties Named on
Schedule A Attached Hereto
Ladies and Gentlemen:
This opinion is furnished to you pursuant to
Section 4.02(j)(iii) of the Participation Agreement
(Federal Express Corporation Trust No. _____) dated as
of March 1, 1994 (the "Participation Agreement") among
Federal Express Corporation, as Lessee (the "Lessee"),
LLG Aircraft Leasing, L.P., as Owner Participant (the
"Owner Participant"), Westdeutsche Landesbank
Girozentrale, New York Branch (the "Loan
Participant"), First Security Bank of Utah, National
Association, as Owner Trustee (the "Owner Trustee"),
NationsBank of Georgia, National Association, as
Indenture Trustee (the "Indenture Trustee"), and
NationsBank of South Carolina, National Association,
as Pass Through Trustee (the "Pass Through Trustee"),
with respect to that portion of the Federal Aviation
Act of 1958, as amended (the "Act"), relative to the
recordation of instruments and the registration of
aircraft under the Act.
The capitalized terms herein shall, unless
otherwise defined, have the same meanings given them
in the Participation Agreement or in Annex I attached
hereto.
We have examined and filed on this date with
the Federal Aviation Administration (the "FAA") the
following described instruments at the respective
times listed below:
(a) AC Form 8050-2 Aircraft Bill of Sale dated
____________, 1994 (the "FAA Bill of Sale")
from ________________, as seller, conveying
title to the Airframe to the Owner Trustee,
which FAA Bill of Sale was filed at ____
_.m., C.S.T.;
(b) AC Form 8050-1 Aircraft Registration
Application dated __________, 1994 (the
"Aircraft Registration Application") by the
Owner Trustee as applicant, covering the
Airframe, which Aircraft Registration
Application was filed at __________ _.m.,
C.S.T.;
(c) Affidavit of the Owner Trustee dated
__________, 1994 (the "Owner Trustee
Affidavit") pursuant to Section
47.7(c)(2)(iii) of Part 47 of the Federal
Aviation Regulations, which Owner Trustee
Affidavit was filed at __________ _.m.,
C.S.T.;
(d) executed counterpart of Trust Agreement
(Federal Express Corporation Trust No. _____)
dated as of March 1, 1994 (the "Trust
Agreement") between the Owner Participant and
the Owner Trustee, with executed counterpart
of Trust Agreement Supplement No. 1 dated
__________, 1994 ("Trust Supplement No. 1")
between the Owner Participant and the Owner
Trustee attached thereto, which Trust
Agreement with Trust Supplement No. 1
attached was filed at ________ _.m., C.S.T.;
(e) executed counterpart of Lease Agreement
(Federal Express Corporation Trust No. _____)
dated as of March 1, 1994 (the "Lease")
between the Owner Trustee, as lessor, and the
Lessee, with executed counterpart of Lease
Supplement No. 1 (Federal Express Corporation
Trust No. _____) dated __________, 1994 (the
"Lease Supplement") between the Owner
Trustee, as lessor, and the Lessee, covering
the Aircraft, attached hereto, which Lease
with the Lease Supplement attached was filed
at ________ _.m., C.S.T.; and,
The Confidential Omissions were intentionally
omitted from the FAA filing counterpart of the Lease
as containing confidential financial information.
Based upon our examination of the above
described instruments and of such records of the FAA
as we deemed necessary to render this opinion, it is
our opinion that:
1. the FAA Bill of Sale and the Lease with the
Lease Supplement attached are in due form for
recordation by and have been duly filed for
recordation with the FAA pursuant to and in
accordance with the provisions of the Act;
2. the Aircraft Registration Application, the
Owner Trustee Affidavit and the Trust
Agreement with Trust Supplement No. 1
attached are in due form for filing and have
been duly filed with the FAA pursuant to and
in accordance with the provisions of the Act;
3. the Airframe is eligible for registration in
the name of the Owner Trustee pursuant to and
in accordance with the provisions of the Act
and the filing with the FAA of the FAA Bill
of Sale, the Aircraft Registration
Application, the Owner Trustee Affidavit, and
the Trust Agreement with Trust Supplement No.
1 attached will cause the FAA to register the
Airframe, in due course, in the name of the
Owner Trustee and pursuant thereto to issue
to the Owner Trustee an AC Form 8050-3
Certificate of Aircraft Registration covering
the Airframe, and the Airframe will be duly
registered pursuant to and in accordance with
the provisions of the Act;
4. the Owner Trustee has valid legal title to
the Airframe and the Aircraft is free and
clear of all Liens, except the rights of the
parties under the Lease, as supplemented by
the Lease Supplement;
5. the rights of the Owner Trustee and the
Lessee under the Lease, as supplemented by
the Lease Supplement, with respect to the
Aircraft, are perfected;
6. no authorization, approval, consent, license
or order of, or registration with, or the
giving of notice to, the FAA is required for
the valid authorization, delivery and
performance of the Lease, as supplemented by
the Lease Supplement or the Trust Agreement,
as supplemented by Trust Supplement No. 1,
except for such filings as are referred to
above; and,
7. neither the execution, and delivery by the
Loan Participant of the Participation
Agreement or by the Owner Participant of the
Participation Agreement or the Trust
Agreement, as supplemented by Trust
Supplement No. 1, nor other consummation of
the transactions contemplated thereby by the
Loan Participant or the Owner Participant,
requires the consent or approval of, or the
giving of notice to, or the registration of,
or the taking of any other action in respect
of the FAA, except (x) the registration of
the Airframe, including the submission of the
Aircraft Registration Application, the Owner
Trustee Affidavit, the Trust Agreement and
Trust Supplement No. 1 to the FAA and (y) the
filings for recordation specified elsewhere
in this opinion.
Since the FAA records reflect that record
title to the Airframe originated with the FAA Bill of
Sale, involving a foreign vendor, our opinion as to
the status of its record title covers only that period
of time commencing with the filing of the FAA Bill of
Sale with the FAA.
No opinion is expressed as to laws other than
Federal laws of the United States. In rendering this
opinion, we were subject to the accuracy of the FAA,
its employees and agents, in the filing, indexing and
recording of instruments filed with the FAA and in the
search for encumbrance cross-reference index cards for
the Engines. Further, in rendering this opinion we
are assuming the validity and enforceability of the
above described instruments under local law. Since
our examination was limited to records maintained by
the FAA, our opinion does not cover liens which are
perfected without the filing of notice thereof with
the FAA, such as federal tax liens, arising under
Section 1368(a) of Title 29 of the United States Code,
possessory artisan's liens, or matters of which the
parties have actual notice. In rendering this opinion
we are assuming that there are no documents with
respect to the Aircraft which have been filed for
recording under the recording system of the FAA but
have not yet been listed in the available records of
such system as having been so filed.
In rendering this opinion we have relied upon
the opinion of the Assistant Chief Counsel of the
Aeronautical Center dated ____________, 1994, a copy
of which is attached hereto.
Very truly yours,
Robert M. Peregrin
For the Firm
Annex I
Certain Definitions
Airframe, Engines and Aircraft
One (1) Airbus A310-203 aircraft bearing
manufacturer's serial number _________ and U.S.
Registration No. __________ (the "Airframe") and two
(2) General Electric CF6-80A3 aircraft engines bearing
manufacturer's serial numbers __________ and
__________ (the "Engines") (the Airframe and the
Engines are referred to collectively as the
"Aircraft").
Confidential Omissions
The Lease was filed with the FAA, with (i)
the Excess Amount and Basic Rent (Schedule II), (ii)
the Stipulated Loss Values (Schedule III), (iii) the
Termination Values (Schedule IV) and (iv) the Purchase
Option Schedule (Schedule V) omitted from the FAA
filing counterpart thereof as containing confidential
financial information; and (v) the percentage of the
purchase price under Section 4.02(a)(B) set forth in
the Ancillary Agreement, which was not attached to the
FAA filing counterpart of the Lease or otherwise filed
with the FAA for recordation.
SCHEDULE A
Lessee
Federal Express Corporation
Owner Trustee
First Security Bank of Utah, National Association
Indenture Trustee
NationsBank of Georgia, National Association
Owner Participant
LLG Aircraft Leasing, L.P.
Loan Participant
Westdeutsche Landesbank Girozentrale,
New York Branch
Pass Through Trustee
NationsBank of South Carolina, National Association
SPLIT FILING - PHASE II
Draft of March 16, 1994
(For the Letterhead of Daugherty, Fowler & Peregrin)
______________________, 1994
To the Parties Named on
Schedule A Attached Hereto
Ladies and Gentlemen:
This opinion will supplement our opinion
dated __________, 1994 and is furnished to you
pursuant to Section 4.02(j)(iii) of the Participation
Agreement (Federal Express Corporation Trust No.
_____) dated as of March 1, 1994 (the "Participation
Agreement") among Federal Express Corporation, as
Lessee (the "Lessee"), LLG Aircraft Leasing, L.P., as
Owner Participant (the "Owner Participant"),
Westdeutsche Landesbank Girozentrale, New York Branch
(the "Loan Participant"), First Security Bank of Utah,
National Association, as Owner Trustee (the "Owner
Trustee"), NationsBank of Georgia, National
Association, as Indenture Trustee (the "Indenture
Trustee"), and NationsBank of South Carolina, National
Association, as Pass Through Trustee (the "Pass
Through Trustee"), with respect to that portion of the
Federal Aviation Act of 1958, as amended (the "Act"),
relative to the recordation of instruments and the
registration of aircraft under the Act.
The capitalized terms herein shall, unless
otherwise defined, have the same meanings given them
in the Participation Agreement, our opinion dated
__________, 1994 or in Annex I attached hereto.
We have examined and filed with the Federal
Aviation Administration (the "FAA") on this date at
_____ _.m., C.S.T. an executed counterpart of Trust
Indenture and Security Agreement (Federal Express
Corporation Trust No. _____) dated as of March 1, 1994
(the "Trust Indenture") between the Owner Trustee and
the Indenture Trustee, with executed counterpart of
Indenture and Security Agreement Supplement No. 1
(Federal Express Corporation Trust No. _____) dated
__________, 1994 (the "Trust Indenture Supplement") by
the Owner Trustee, covering the Aircraft, attached
thereto.
The Confidential Omissions were intentionally
omitted from the FAA filing counterpart of the Trust
Indenture as containing confidential financial
information.
Based upon our examination of the above
described instruments and of such records of the FAA
as we deemed necessary to render this opinion, it is
our opinion that:
1. the Trust Indenture with the Trust Indenture
Supplement attached is in due form for
recordation by and has been duly filed for
recordation with the FAA pursuant to and in
accordance with the provisions of the Act;
2. the Airframe is duly registered in the name
of the Owner Trustee pursuant to and in
accordance with the provision of the Act;
3. the Owner Trustee has valid legal title to
the Airframe and the Aircraft is free and
clear of all Liens, except (i) the rights of
the parties under the Lease, as supplemented
by the Lease Supplement and (ii) the security
interest created by the Trust Indenture, as
supplemented by the Trust Indenture
Supplement;
4. the rights of the Owner Trustee and the
Lessee under the Lease, as supplemented by
the Lease Supplement, with respect to the
Aircraft, are perfected;
5. the Trust Indenture, as supplemented by the
Trust Indenture Supplement, constitutes a
duly perfected first priority security
interest in the Aircraft subject to the
rights of the parties under the Lease, as
supplemented by the Lease Supplement, and a
duly perfected first assignment of all the
right, title and interest of the Owner
Trustee in, to and under the Lease and the
Lease Supplement (insofar as such assignment
affects an interest covered by the recording
system established by the FAA pursuant to
Section 503(a) of the Act), and no other
registration of the Airframe or filings other
than filings with the FAA (which have been
duly effected) are necessary in order to
perfect in any applicable jurisdiction in the
United States (A) the Owner Trustee's title
to the Airframe or (B) such security interest
and assignment (insofar as such assignment
affects an interest covered by the recording
system established by the FAA pursuant to
Section 503(a) of the Act), it being
understood that no opinion is expressed as to
the validity, priority or enforceability of
such security interest and assignment under
local law or as against third parties in
respect of the Airframe and the Engines at a
time when the same, or any of them, are
outside the United States;
6. no authorization, approval, consent, license
or order of, or registration with, or the
giving of notice to, the FAA is required for
the valid authorization, delivery and
performance of the Lease, as supplemented by
the Lease Supplement, the Trust Indenture, as
supplemented by the Trust Indenture
Supplement, or the Trust Agreement, as
supplemented by Trust Supplement No. 1,
except for such filings as are referred to
above and the prior filing of the Lease, the
Lease Supplement, the Trust Agreement and
Trust Supplement No. 1 with the FAA; and,
7. neither the execution, and delivery by the
Loan Participant of the Participation
Agreement or by the Owner Participant of the
Participation Agreement or the Trust
Agreement, as supplemented by Trust
Supplement No. 1, nor other consummation of
the transactions contemplated thereby by the
Loan Participant or the Owner Participant,
requires the consent or approval of, or the
giving of notice to, or the registration of,
or the taking of any other action in respect
of the FAA, except (x) the registration of
the Airframe, including the submission of the
Aircraft Registration Application, the Owner
Trustee Affidavit, the Trust Agreement and
Trust Supplement No. 1 to the FAA and (y) the
filings for recordation specified elsewhere
in this opinion.
Since the FAA records reflect that record
title to the Airframe originated with the FAA Bill of
Sale, involving a foreign vendor, our opinion as to
the status of its record title covers only that period
of time commencing with its United States registration
on __________, 1994.
No opinion is expressed as to laws other than
Federal laws of the United States. In rendering this
opinion, we were subject to the accuracy of the FAA,
its employees and agents, in the filing, indexing and
recording of instruments filed with the FAA and in the
search for encumbrance cross-reference index cards for
the Engines. Further, in rendering this opinion we
are assuming the validity and enforceability of the
above described instruments under local law. Since
our examination was limited to records maintained by
the FAA, our opinion does not cover liens which are
perfected without the filing of notice thereof with
the FAA, such as federal tax liens, liens arising
under Section 1368(a) of Title 29 of the United States
Code, possessory artisan's liens, or matters of which
the parties have actual notice. In rendering this
opinion we are assuming that there are no documents
with respect to the Aircraft which have been filed for
recording under the recording system of the FAA but
have not yet been listed in the available records of
such system as having been so filed.
In rendering this opinion we have continued
to rely upon the opinion of the Assistant Chief
Counsel of the Aeronautical Center dated ____________,
1994, a copy of which is attached hereto.
Very truly yours,
Robert M. Peregrin
For the Firm
Annex I
Certain Definitions
Airframe, Engines and Aircraft
One (1) Airbus A310-203 aircraft bearing
manufacturer's serial number _________ and U.S.
Registration No. __________ (the "Airframe") and two
(2) General Electric CF6-80A3 aircraft engines bearing
manufacturer's serial numbers __________ and
__________ (the "Engines") (the Airframe and the
Engines are referred to collectively as the
"Aircraft").
Confidential Omissions
The Lease was filed with the FAA, with (i)
the Excess Amount and Basic Rent (Schedule II), (ii)
the Stipulated Loss Values (Schedule III), (iii) the
Termination Values (Schedule IV) and (iv) the Purchase
Option Schedule (Schedule V) omitted from the FAA
filing counterpart thereof as containing confidential
financial information; and (v) the percentage of the
purchase price under Section 4.02(a)(B) set forth in
the Ancillary Agreement, which was not attached to the
FAA filing counterpart of the Lease or otherwise filed
with the FAA for recordation.
The Trust Indenture was filed with the FAA
with the Schedule of Principal Payments (Schedule I)
omitted from the FAA filing counterpart thereof as
containing confidential financial information.
Trust Agreement and Trust Supplement No. 1
Trust Agreement (Federal Express Corporation
Trust No. ____) dated as of March 1, 1994 (the "Trust
Agreement") between the Owner Participant and the
Owner Trustee, with Trust Agreement Supplement No. 1
dated __________, 1994 ("Trust Supplement No. 1")
between the Owner Participant and the Owner Trustee
attached thereto, which Trust Agreement with Trust
Supplement No. 1 attached was filed as one instrument
by the Federal Aviation Administration on __________,
1994.
Lease and Lease Supplement
Lease Agreement (Federal Express Corporation
Trust No. ____) dated as of March 1, 1994 (the
"Lease") between the Owner Trustee, as lessor, and the
Lessee, as supplemented by Lease Supplement No. 1
(Federal Express Corporation Trust No. ____) dated
__________, 1994 (the "Lease Supplement"), which Lease
with the Lease Supplement attached was recorded as one
instrument by the Federal Aviation Administration on
_______________ and assigned Conveyance No.
____________.
SCHEDULE A
Lessee
Federal Express Corporation
Owner Trustee
First Security Bank of Utah, National Association
Indenture Trustee
NationsBank of Georgia, National Association
Owner Participant
LLG Aircraft Leasing, L.P.
Loan Participant
Westdeutsche Landesbank Girozentrale,
New York Branch
Pass Through Trustee
NationsBank of South Carolina, National Association
Exhibit 4.d
____________________________________________________________
TRUST AGREEMENT
dated as of
September 1, 1993
Amended and Restated
as of
March 1, 1994
BETWEEN
LLG AIRCRAFT LEASING, L.P.
as Trustor,
AND
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION
as Owner Trustee
__________________
FEDERAL EXPRESS CORPORATION
Thirteen Airbus Model A310-203 Aircraft
Identified on Exhibit A Hereto
____________________________________________________________
TABLE OF CONTENTS
Page
PARTIES . . . . . . . . . . . . . . . . . . . . 1
RECITALS . . . . . . . . . . . . . . . . . . . 1
ARTICLE 1
THE LESSOR'S ESTATE
SECTION 1.01. Authorization and Director to
Owner Trustee; Ratification . 2
SECTION 1.02. Declaration of Trust . . . . 3
SECTION 1.03. Events Prior to the Lease . . 3
ARTICLE 2
DISTRIBUTIONS
SECTION 2.01. Rent, Etc. . . . . . . . . . 4
SECTION 2.02. Excepted Payments . . . . . . 5
SECTION 2.03. Other Receipts . . . . . . . 5
SECTION 2.04. Distributions after Default . 5
SECTION 2.05. Distributions after Release
of Lien of Indenture. . . . . 6
SECTION 2.06. Manner of Making
Distributions . . . . . . . . 6
ARTICLE 3
THE OWNER TRUSTEE
SECTION 3.01. Acceptance of Trust and Duties 7
SECTION 3.02. Limitation on Authority of Owner
Trustee . . . . . . . . . . . 8
SECTION 3.03. Notice of Default . . . . . . 8
SECTION 3.04. Action Upon Instructions . . 9
SECTION 3.05. Certain Duties and
Responsibilities of Owner
Trustee . . . . . . . . . . . 10
SECTION 3.06. Certain Rights of Owner Trustee 12
SECTION 3.07. No Representations of Warranties
as to Certain Matters . . . . 15
SECTION 3.08. Status of Moneys Received . . 16
SECTION 3.09. Self-Dealing . . . . . . . . 16
SECTION 3.10. Definition of a Responsible
Officer . . . . . . . . . . . 16
SECTION 3.11. Resignation or Removal of Owner
Trustee . . . . . . . . . . . 16
SECTION 3.12. Estate and Rights of Successor
Owner Trustee . . . . . . . . 17
SECTION 3.13. Merger or Consolidation of Owner
Trustee . . . . . . . . . . . 18
SECTION 3.14. Co-Trustees . . . . . . . . . 18
SECTION 3.15. Interpretation of Agreements 20
SECTION 3.16. Not Acting in Individual
Capacity . . . . . . . . . . 20
SECTION 3.17. Tax Returns . . . . . . . . . 20
ARTICLE 4
TERMINATION OF TRUST
SECTION 4.01. Termination . . . . . . . . . 21
SECTION 4.02. Distribution of Lessor's
Estate Upon Termination . . . 23
ARTICLE 5
TRANSFER OF BENEFICIAL INTEREST . . . . . . . . 23
ARTICLE 6
MISCELLANEOUS
SECTION 6.01. Indemnification . . . . . . . 25
SECTION 6.02. Supplements and Amendments. . 26
SECTION 6.03. Nature of Title of Trustor. . 28
SECTION 6.04. Power of Owner Trustee to
Convey. . . . . . . . . . . . 28
SECTION 6.05. Notices . . . . . . . . . . . 28
SECTION 6.06. Situs of Trust; Applicable
Law; Severability . . . . . . 29
SECTION 6.07. Successors and Assigns . . . 29
SECTION 6.08. Headings and Table of
Contents. . . . . . . . . . . 29
SECTION 6.09. Definitions . . . . . . . . . 29
SECTION 6.10. Counterparts . . . . . . . . 30
SECTION 6.11 Trust Agreement for Benefit
of Owner Trustee, Trustor
and each Indenture Trustee
Only. . . . . . . . . . . . . 30
ARTICLE 7
CERTAIN LIMITATIONS
SECTION 7.01 Limitations on Control. . . . 30
SECTION 7.02 Discretion and Actions of
Owner Trustee . . . . . . . . 31
SECTION 7.03 Removal . . . . . . . . . . . 32
SECTION 7.04 Payments . . . . . . . . . . 32
SECTION 7.05 The Owner Trustee Acts as
Trustee . . . . . . . . . . . 32
SECTION 7.06 Waiver of Claim Against
the Owner Trustee . . . . . . 32
SECTION 7.07 Amendments . . . . . . . . . 32
EXHIBIT A -- Aircraft Description
EXHIBIT B -- Assignment and Assumption Agreement
EXHIBIT C -- OP Guarantee
EXHIBIT D -- Trust Agreement Supplement
SCHEDULE I -- Definitions
TRUST AGREEMENT
TRUST AGREEMENT dated as of September 1,
1993, as amended and restated as of March 1, 1994
(this "Agreement") between FIRST SECURITY BANK OF
UTAH, NATIONAL ASSOCIATION, a national banking
association (in its individual capacity, "FSBU" and
not in its individual capacity but solely as trustee
hereunder, the "Owner Trustee"), and LLG AIRCRAFT
LEASING, L.P., a limited partnership organized under
the laws of Delaware (together with its successors and
permitted assigns, the "Trustor").
W I T N E S S E T H :
WHEREAS, capitalized terms used herein shall
have the respective meanings set forth or referred to
in Section 6.09 hereof;
WHEREAS, the Trustor and the Owner Trustee
have heretofore entered into that certain Trust
Agreement, dated as of September 1, 1993 (the
"Original Trust Agreement");
WHEREAS, pursuant to the Original Trust
Agreement, a trust was created and the Owner Trustee
was authorized to (1) enter into the Original Sales
Agreement with Lufthansa, pursuant to which the Owner
Trustee purchased the Aircraft from Lufthansa on
November 15, 1993, (2) enter into the Original
Modification Agreement with Lufthansa and DA, pursuant
to which each Aircraft is to be converted from
passenger configuration to cargo configuration,
(3) enter into the Original Parts and Services
Agreement with Lufthansa, pursuant to which Lufthansa
will perform described services with respect to the
Aircraft, and (4) enter into the Original Agreement to
Lease with Lufthansa and the Lessee, pursuant to
which, subject to the terms and conditions set forth
therein, the Owner Trustee is to lease to the Lessee,
and the Lessee is to lease from the Owner Trustee,
each Aircraft on the Commencement Date with respect to
such Aircraft.
WHEREAS, Section 13 of the Original Agreement
to Lease permits a Nonrecourse Financing (as defined
therein), subject to certain conditions, and in order
to effectuate such Nonrecourse Financing the Trustor
wishes to authorize the Owner Trustee to, among other
things, (1) execute and deliver a separate
Participation Agreement with respect to each Aircraft,
(2) execute and deliver a separate Indenture and a
separate Collateral Agreement with respect to each
Aircraft, (3) execute and deliver, as contemplated by
each related Participation Agreement, a separate Lease
with respect to each Aircraft and (4) as contemplated
by the Participation Agreement relating to each
Aircraft, issue and sell the related Certificates and
secure such Certificates pursuant to the Indenture and
relating thereto;
WHEREAS, in connection with the foregoing the
Owner Trustee will enter into amendments to each of
the Original Modification Agreement, the Original
Sales Agreement and the Original Parts and Services
Agreement, and the Original Agreement to Lease will be
amended and restated.
WHEREAS, the Trustor and the Owner Trustee
wish to amend and restate the Original Trust Agreement
in its entirety as provided herein.
NOW THEREFORE, in consideration of the mutual
covenants and agreements contained herein, FSBU and
the Trustor agree as follows:
ARTICLE 1
THE LESSOR'S ESTATE
SECTION 1.01. Authorization and Direction to
Owner Trustee; Ratification. (a) The Trustor hereby
authorizes and directs the Owner Trustee not
individually but solely as the Owner Trustee
hereunder:
(i) to (x) execute and deliver (A) the
Agreement to Lease and Amendment No. 1, dated as
of the date hereof, to each of (1) the Original
Sales Agreement, (2) the Original Modification
Agreement and (3) the Original Parts and Services
Agreement, (B) with respect to each Aircraft, the
Participation Agreement, Indenture, Collateral
Agreement and each other related Operative
Agreement (other than those covered by clauses
(A), (C) and (D) of this Section 1.01(a)(i)) to
which the Owner Trustee may be a party, (C) with
respect to each Aircraft, as of the related
Commencement Date, the related Lease, Lease
Supplement, and Trust Agreement Supplement, and
(D) with respect to each Aircraft, as of the
related Exchange Date, the related Indenture and
Security Agreement Supplement, and (y) enter into
and perform each of the actions and transactions
contemplated thereby;
(ii) with respect to each Aircraft, to
execute and deliver from time to time any related
Certificates in the manner and subject to the
terms and conditions provided in the related
Participation Agreement and Indenture;
(iii) to execute and deliver each other
document referred to in any Agreement to Lease
Operative Agreement (which term, for the purposes
of this Trust Agreement only, shall include the
Parts and Services Agreement) or any Operative
Agreement with respect to an Aircraft to which
the Owner Trustee may be a party or which the
Owner Trustee is required to deliver pursuant to
any such Operative Agreement;
(iv) subject to the terms of this Agreement,
to perform the obligations and duties and, upon
instruction of the Trustor, exercise the rights
of the Owner Trustee under the Agreement to Lease
Operative Agreements and the Operative Agreements
with respect to each Aircraft; and
(v) to execute and deliver all such other
instruments, documents or certificates and take
all such other actions in accordance with the
directions of the Trustor, as the Trustor may
deem necessary or advisable in connection with
the transactions contemplated hereby, the taking
of any such action by the Owner Trustee in the
presence of the Trustor or its counsel to
evidence, conclusively, the direction of the
Trustor.
(b) The Trustor hereby ratifies each of the
actions taken by the Owner Trustee pursuant to
the Original Trust Agreement prior to the date
hereof.
SECTION 1.02. Declaration of Trust. FSBU
hereby declares and agrees that it will, and in its
capacity as the Owner Trustee does, hold the Lessor's
Estate with respect to each Aircraft upon the trusts
herein set forth for the use and benefit of the
Trustor, subject, however, to the provisions of, and
the Lien created by, the related Indenture.
SECTION 1.03. Events Prior to the Lease.
The parties acknowledge that Lufthansa shall retain
possession, on behalf of the Owner Trustee, of each
Aircraft prior to the delivery of such Aircraft to DA
pursuant to the Modification Agreement and that
Lufthansa may, in connection with such possession,
exercise its rights under the Sales Agreement in
respect of such Aircraft.
ARTICLE 2
DISTRIBUTIONS
SECTION 2.01. Rent, Etc. The Trustor and
the Owner Trustee acknowledge that (i) upon the
Closing Date with respect to each Aircraft, the
Collateral specified pursuant to the related
Collateral Agreement will be pledged as security for
the related Certificates and (ii) upon the Exchange
Date with respect to any Aircraft, such Aircraft and
the related Lease will be security for the
Certificates issued pursuant to the related Indenture,
and such Lease will provide that all moneys payable by
the Lessee to the Owner Trustee under such Lease
(other than related Excepted Payments) are to be paid
to the related Indenture Trustee while the Lien of the
related Indenture is in effect. Except as otherwise
provided in Section 2.04 hereof, the Owner Trustee
shall promptly apply each payment of Rent (other than
Excepted Payments) pursuant to a Lease, any proceeds
from the sale of the related Aircraft and any proceeds
of any Collateral (as defined in the related
Collateral Agreement), received by it as follows:
(a) prior to the release of the Lien of the
related Indenture, each such payment shall be
payable directly to the related Indenture Trustee
(and if any of the same are received by the Owner
Trustee shall, upon receipt, be paid over to such
Indenture Trustee without deduction, set off or
adjustment of any kind) for distribution in
accordance with the relevant provisions of such
Indenture; provided, that any payments received
by the Owner Trustee from (i) the Lessee with
respect to the Owner Trustee's fees and
disbursements under this Agreement, or (ii) the
Trustor pursuant to Section 6.01 hereof shall not
be paid over to any Indenture Trustee but shall
be retained by the Owner Trustee and applied
toward the purpose for which such payments were
made;
(b) any amount remaining after application
in full in accordance with paragraph (a) of this
Section 2.01 and which represents payments for
which provision as to the application thereof is
made in any other related Operative Agreement
shall be applied promptly to the purpose for
which such payment shall have been made in
accordance with the terms of such Operative
Agreement; and
(c) after application in accordance with
paragraphs (a) and (b) of this Section 2.01, or
to the extent received from the related Indenture
Trustee under the terms of the related Indenture
or Collateral Agreement, the balance, if any,
remaining shall be paid to the Trustor.
SECTION 2.02. Excepted Payments. All
Excepted Payments with respect to an Aircraft at any
time received by the Owner Trustee shall be
distributed promptly to the applicable Person, and
such Excepted Payment shall not be deemed under any
circumstances to be part of the Lessor's Estate with
respect to such Aircraft.
SECTION 2.03. Other Receipts. Except as
otherwise provided in Section 2.04 hereof, any payment
received by the Owner Trustee with respect to or in
connection with any Aircraft, or as contemplated by
any Operative Agreement relating thereto, other than
those referred to in Sections 2.01 and 2.02 hereof and
any Excepted Payment with respect to an Aircraft not
referred to in Section 2.02 hereof, shall be payable
prior to the release of the Lien of the Indenture with
respect to the relevant Aircraft directly to the
related Indenture Trustee (and if any of the same are
received by the Owner Trustee shall, upon receipt, be
paid over to the related Indenture Trustee without
deduction, set off or adjustment of any kind) for
distribution in accordance with the relevant
provisions of such Indenture; and following such
application or release of such Lien, any such payment
for which provision as to the application thereof is
made in any other related Operative Agreements shall
be applied promptly to the purpose for which such
payment shall have been made in accordance with the
terms of such Operative Agreements, and any such
payment received by the Owner Trustee for which no
provision as to the application thereof is made in
such Operative Agreements or in this Article 2 shall,
unless the Trustor shall have otherwise instructed the
Owner Trustee in writing, be distributed promptly to
the Trustor.
SECTION 2.04. Distributions after Default.
Subject to the provisions of Section 2.02 hereof,
(i) all payments received and amounts realized by the
Owner Trustee with respect to or in connection with
any Aircraft, or with respect to or as contemplated by
any Operative Agreement relating thereto, after an
Indenture Event of Default shall have occurred and
shall be continuing under the related Indenture and
after the related Certificates shall have become or
been declared due and payable pursuant to the relevant
provisions of such Indenture, or the related Lease
shall have been declared in default (including,
without limitation, any amounts realized by the Owner
Trustee or the Trustor from the exercise of any
remedies pursuant to Section 17.01 of such Lease), as
well as (ii) all funds then held or thereafter received
by the Owner Trustee, as part of this Trust Agreement
or otherwise, with respect to or in connection with
any Aircraft, or with respect to or as contemplated
by any Operative Agreement relating thereto, shall be
distributed to the related Indenture Trustee.
SECTION 2.05. Distributions after Release of
Lien of Indenture. Except as otherwise provided in
Sections 2.02, 2.03 and 2.04 hereof:
(a) all payments received and amounts
realized by the Owner Trustee under the Lease
with respect to an Aircraft or otherwise with
respect to such Aircraft or any part thereof
(including, without limitation, all payments
received pursuant to Section 17.01 of such Lease
and amounts realized upon the sale or lease of
such Aircraft or any part thereof after the
termination of such Lease with respect thereto),
to the extent received or realized at any time
after the Lien of the related Indenture shall
have been released pursuant to the terms of such
Indenture, and
(b) moneys not included in paragraph (a) of
this Section 2.05 remaining as part of the
Lessor's Estate with respect to an Aircraft after
payment in full of amounts described in paragraph
(a),
shall, to the extent required, be retained by the
Owner Trustee as reimbursement for all expenses
hereunder or under such Lease not theretofore
reimbursed under this Agreement, such Lease or
otherwise and to which the Owner Trustee is entitled
to be reimbursed pursuant to the provisions thereof,
and any balance remaining thereafter shall be
distributed to the Trustor.
SECTION 2.06. Manner of Making
Distributions. The Owner Trustee shall make
distributions or cause distributions to be made to
(i) the Trustor pursuant to this Article 2 by
transferring by wire transfer in immediately available
funds the amount to be distributed to the account set
forth in the related Participation Agreement or to
such other account or accounts of the Trustor as it
may designate from time to time by written notice to
the Owner Trustee (and the Owner Trustee shall use
best efforts to cause such funds to be transferred by
wire transfer on the same day as received, but in any
case not later than the next succeeding Business Day),
and (ii) the relevant Indenture Trustee pursuant to
this Article 2 by paying the amount to be distributed
to such Indenture Trustee in the manner specified in
the related Indenture; provided, that the Owner
Trustee shall invest overnight funds payable to the
Trustor, for the benefit of the Trustor, in
investments that would be permitted by Article 23 of
the Lease (but only to the extent funds are received
on or prior to 1:00 P.M. (Eastern Time) and such
investments are available and, if such investments are
not available to the Owner Trustee which, after
consultation with the Trustor, the Trustor shall
direct) all funds not transferred by wire transfer on
the same day as they were received. Notwithstanding
the foregoing but subject always to the provisions of,
and, for any Aircraft, the Lien created by, the
related Indenture, the Owner Trustee will, if so
requested by the Trustor by written notice, pay any
and all amounts payable by the Owner Trustee hereunder
to the Trustor either (i) by crediting, or causing the
relevant Indenture Trustee to credit, such amount or
amounts to an account or accounts maintained by the
Trustor with the Owner Trustee in its individual
capacity or with such Indenture Trustee, as the case
may be, in immediately available funds, or (ii) by
wire transfer of immediately available funds to such
account as the Trustor may specify with sufficient
information to identify the source and application of
such funds.
ARTICLE 3
THE OWNER TRUSTEE
SECTION 3.01. Acceptance of Trust and
Duties. FSBU confirms its acceptance of the trust
created by the Original Trust Agreement as amended and
restated hereby. FSBU, in its capacity as the Owner
Trustee, agrees to perform the same, including without
limitation, the actions specified in Section 1.01
hereof as herein provided. The Owner Trustee agrees
to disburse all monies that it receives under the
Operative Agreements with respect to any Aircraft in
accordance with the terms hereof. The Owner Trustee
shall not be answerable or accountable in its
individual capacity except as a result of or arising
from (a) the Owner Trustee's willful misconduct or
gross negligence (in its individual capacity or as
trustee), (b) any breach by the Owner Trustee of its
representations, warranties and covenants given in its
individual capacity in this Agreement, Article 5 of
the Lease with respect to any Aircraft, Sections
7.01(b), 7.02(a) and (b) and 7.04 of the Participation
Agreement with respect to any Aircraft or its
representations, warranties and covenants given in its
individual capacity in the relevant provisions of the
Indenture with respect to any Aircraft, (c) the
failure to use ordinary care in receiving, handling
and disbursing funds, (d) Lessor's Liens with respect
to any Aircraft attributable to it in its individual
capacity, and (e) taxes, fees, or other charges on,
based on, or measured by, any fees, commissions or
compensation received by the Owner Trustee in
connection with the transactions contemplated by the
Lease, Indenture and Operative Agreements with respect
to any Aircraft, including this Agreement.
SECTION 3.02. Limitation on Authority of
Owner Trustee. The Owner Trustee shall have no power,
right, duty or authority to manage, control, possess,
use, sell, lease, dispose of or otherwise deal with
any Aircraft, any Airframe, any Engine, any Part
thereof or any other property at any time constituting
a part of the Lessor's Estate with respect to any
Aircraft, or otherwise to take or refrain from taking
any action under or in connection with the Sales
Agreement, any Agreement to Lease Operative Agreement
or the Operative Agreements with respect to any
Aircraft, except (i) to execute and deliver the Sales
Agreement, any Agreement to Lease Operative Agreement
or the Operative Agreements, as the case may be, with
respect to such Aircraft, (ii) to exercise and carry
out or cause to be exercised or carried out the
rights, duties and obligations of the Owner Trustee
hereunder and under the Sales Agreement, the Agreement
to Lease Operative Agreements or the Operative
Agreements, as the case may be, with respect to such
Aircraft, or (iii) as expressly provided in written
instructions from the Trustor given pursuant to
Section 3.03 or 3.04 hereof; provided, that nothing in
this Section 3.02 shall limit in any manner the
obligation of the Owner Trustee to perform and observe
all the terms of the Sales Agreement, the Agreement to
Lease Operative Agreements or the Operative
Agreements, as the case may be, with respect to such
Aircraft or the obligations of the Owner Trustee under
Section 2 of this Agreement.
SECTION 3.03. Notice of Default. In the
event that a Responsible Officer in the Corporate
Trust Administration of the Owner Trustee shall have
actual knowledge of a Pre-Funding Event of Loss with
respect to an Aircraft, a Default or an Event of
Default under the Lease with respect to an Aircraft,
or an Indenture Default or an Indenture Event of
Default under the Indenture with respect to an
Aircraft, the Owner Trustee shall give or cause to be
given to the Trustor and the related Indenture Trustee
prompt notice (in any event, within one Business Day
of the discovery thereof) of such Pre-Funding Event of
Loss, Default, Event of Default, Indenture Default or
Indenture Event of Default by telegram, telex, or
facsimile followed by prompt written notice thereof by
first-class certified mail, postage prepaid, return
receipt requested. Subject to the terms of Section
3.06(e) hereof and the rights of the Indenture
Trustee, and the obligations of the Owner
Trustee under the related Indenture, the Owner Trustee
shall take such action with respect to such Pre-Funding
Event of Loss, Default, Event of Default, Indenture
Default or Indenture Event of Default as shall be
specified in written instructions from the Trustor,
and if the Owner Trustee shall not have received
instructions from the Trustee within 20 days after
giving notice of such Pre-Funding Event of Loss,
Default, Event of Default, Indenture Default or
Indenture Event of Default to the Trustor, the Owner
Trustee may take such action, or refrain from taking
such action, with respect to such Default, Event of
Default, Indenture Default or Indenture Event of
Default as it shall deem advisable in the best
interests of the Trustor; provided, that the Owner
Trustee shall be under no duty to take or refrain from
taking any such action. For all purposes of this
Agreement and, for any Aircraft, the related Lease, in
the absence of actual knowledge of a Responsible
Officer of the Owner Trustee, the Owner Trustee shall
not be deemed to have knowledge of a Pre-Funding Event
of Loss, Default, Event of Default, Indenture Default
or Indenture Event of Default with respect to such
Aircraft unless notified in writing by the Lessee, the
Trustor or the related Indenture Trustee.
SECTION 3.04. Action Upon Instructions.
Subject in all respects to the terms of the Sales
Agreement, the Agreement to Lease Operative Agreements
or the Operative Agreements, as the case may be, with
respect to any Aircraft and the rights of the related
Indenture Trustee, the related Holders and the Lessee
thereunder, and subject further to the terms of
Article 2 and Sections 3.03, 3.05 and 3.06 hereof,
upon the written instructions at any time and from
time to time of the Trustor, the Owner Trustee will
take such of the following actions as may be specified
in such instructions;
(a) give such notice or direction or
exercise such right, remedy or power under the
Sales Agreement, the Agreement to Lease Operative
Agreements or the Operative Agreements, as the
case may be, with respect to any Aircraft or take
such other action, as shall be specified in such
instructions;
(b) take such action to preserve or protect
the Lessor's Estate with respect to any Aircraft
(including the discharge of Liens and
encumbrances) as may be specified in such
instructions;
(c) approve as satisfactory to it all
matters required by the terms of the Sales
Agreement, the Agreement to Lease Operative
Agreements or the Operative Agreements, as the
case may be, with respect to any Aircraft to be
satisfactory to the Owner Trustee (it being
understood that without written instructions of
the Trustor, the Owner Trustee shall not approve
of any matter as satisfactory to it), except such
approvals as may be required with respect to the
Trustor's transfer of its Beneficial Interest
pursuant to Article 5 hereof;
(d) after the termination or expiration of
the Term of the Lease with respect to an
Aircraft, convey in accordance with such
instructions, such Aircraft and all of the Owner
Trustee's right, title and interest in and to
such Aircraft or any part thereof for such
amount, on such terms and to such purchaser or
purchasers as shall be designated in such
instructions, or retain, lease or otherwise
dispose of such Aircraft or any part thereof as
shall be specified in such instructions;
(e) execute and file any financing statement
(and any continuation statement with respect to
any such financing statement) or any other
similar document relating to the Lessor's Estate
with respect to an Aircraft or the security
interests and assignments created by the
Operative Agreements with respect to such
Aircraft, as may be specified in such
instructions (which instructions shall be
accompanied by an execution form of such
financing statement or such continuation
statement, as the case may be); and
(f) any other action as specified by the
Trustor.
SECTION 3.05. Certain Duties and
Responsibilities of Owner Trustee. (a)(i) the
Owner Trustee undertakes to perform such duties
and only such duties as are specifically set
forth herein and in any other Agreement to Lease
Operative Agreements or Operative Agreements to
which it is a party, and with the degree of care
specified in Section 3.01 hereof, and in
accordance with instructions given by the Trustor
hereunder, and no implied duties, covenants or
obligations owed to the Trustor shall be read
into this Agreement, any such instructions or the
Sales Agreement, the Agreement to Lease Operative
Agreements or the Operative Agreements, as the
case may be, with respect to an Aircraft, against
the Owner Trustee, and the Owner Trustee agrees
that it will not manage, control, possess, use,
sell, lease, dispose of or otherwise deal with
any Aircraft or any part of the Lessor's Estate
with respect to such Aircraft except as required
by the terms of the Sales Agreement, the
Agreement to Lease Operative Agreements or the
related Operative Agreements, as the case may be,
any such instructions and as otherwise provided
herein; and
(ii) in the absence of bad faith on its
part, the Owner Trustee may conclusively rely, as
to the truth of the statements and the
correctness of the opinions expressed therein,
upon certificates or opinions furnished to the
Owner Trustee and conforming to the requirements
of this Agreement or the Sales Agreement, the
Agreement to Lease Operative Agreements or the
Operative Agreements, as the case may be, with
respect to an Aircraft, but in the case of any
such certificates or opinions which by any
provisions hereof or thereof are specifically
required to be furnished to the Owner Trustee,
the Owner Trustee shall be under a duty to
examine the same to determine whether or not they
conform to the requirements of this Trust
Agreement or the Sales Agreement, the Agreement
to Lease Operative Agreements or the Operative
Agreements, as the case may be, with respect to
such Aircraft.
(b) No provision hereof shall require the
Owner Trustee to expend or risk its own funds or
otherwise incur any financial liability in the
performance of any of its duties hereunder, or in
the exercise of any of its rights or powers, if
it shall have reasonable grounds for believing
that repayment of such funds or adequate
indemnity against such risk or liability is not
reasonably assured to it. Notwithstanding the
foregoing, the Owner Trustee agrees in its
individual capacity that it will, at its own cost
and expense, promptly take such action as may be
necessary to discharge duly all Lessor's Liens
with respect to any Aircraft attributable to it
in its individual capacity and will claim no
indemnity therefor hereunder, or under any
Participation Agreement, the Sales Agreement, any
Agreement to Lease Operative Agreements or
Operative Agreements with respect to any
Aircraft.
(c) Whether or not therein expressly so
provided, every provision of this Agreement
relating to the conduct or affecting the
liability of or affording protection to the Owner
Trustee shall be subject to the provisions of
this Section 3.05, except that in the event of a
conflict between this Section 3.05 and Section
3.01 hereof, Section 3.01 hereof shall be
controlling.
(d) The Owner Trustee will furnish to the
Trustor, promptly upon receipt thereof,
duplicates or copies of all reports, notices,
requests, demands, certificates, financial
statements and any other instruments furnished to
the Owner Trustee hereunder or under the Sales
Agreement, the Agreement to Lease Operative
Agreements or the Operative Agreements with
respect to any Aircraft (including those
furnished to the Indenture Trustee pursuant to
the terms of the related Indenture) and not
otherwise furnished to the Trustor.
(e) Notwithstanding anything herein to the
contrary, the Owner Trustee shall not be
authorized and shall have no power to "vary the
investment" of the Trustor within the meaning of
Treasury Regulations Section 301.7701-4(c)(1), it
being understood that, for any Aircraft, the
Owner Trustee shall have the power and authority
to fulfill its obligations under Section 2.06
hereof and Article 23 of the related Lease.
SECTION 3.06. Certain Rights of Owner
Trustee. Except as otherwise provided in Section 3.05
hereof:
(a) in the absence of bad faith on its part,
the Owner Trustee may rely and shall be protected
in acting or refraining from acting upon any
resolution, certificate, statement, instrument,
opinion, report, notice, request, direction,
consent, order or other paper or document
reasonably believed by it to be genuine and to
have been signed or presented by the proper party
or parties;
(b) any request, direction or authorization
by the Trustor or any other party to any other
Agreement to Lease Operative Agreement, the Sales
Agreement or the Operative Agreements with
respect to an Aircraft shall be sufficiently
evidenced by a request, direction or
authorization in writing, delivered to the Owner
Trustee, and signed in the name of such party by
any of the Chairman of the Board, the President,
any Vice President, the Treasurer or Assistant
Treasurer or the Secretary or Assistant Secretary
or other duly authorized officer of such party or
the general partner of the Trustor if the Trustor
is a partnership; and any resolution of the Board
of Directors or committee thereof of such party
or a certificate of the general partner of the
Trustor, if the Trustor is a partnership, shall
be sufficiently evidenced by a copy of such
resolution or certificate certified by the
Secretary or an Assistant Secretary of such party
or such general partner, as the case may be, to
have been duly adopted and to be in full force
and effect on the date of such certification, and
delivered to the Owner Trustee;
(c) whenever in the administration of this
Agreement the Owner Trustee shall deem it
desirable that a matter be proved or established
prior to taking, suffering or omitting any action
hereunder, under the Sales Agreement or under any
of the other Agreement to Lease Operative
Agreements or Operative Agreements with respect
to an Aircraft, the Owner Trustee (unless other
evidence be herein or therein specifically
prescribed), absent actual knowledge of a
Responsible Officer of the Owner Trustee to the
contrary, may rely in good faith upon a
certificate in writing, delivered to the Owner
Trustee and signed by any of the Chairman of the
Board, the President, any Vice President, the
Treasurer or Assistant Treasurer or the Secretary
or Assistant Secretary of the Lessee, the Trustor
or the general partner of the Trustor, if the
Trustor is a partnership, or the relevant
Indenture Trustee and notice of such need for
such proof or establishment shall be delivered to
the Trustor, who may advise the Owner Trustee in
respect of such matter and the Owner Trustee
shall act in conformity with such advice;
(d) the Owner Trustee may exercise its
powers and perform its duties by or through such
attorneys, agents and servants as it shall
appoint with due care, and it shall be entitled
to rely upon the advice of counsel reasonably
selected by it with due care and shall be
protected by the advice of such counsel in
anything done or omitted to be done in accordance
with such advice;
(e) the Owner Trustee shall not be under any
obligation to take any action under this
Agreement, the Sales Agreement or under any of
the Agreement to Lease Operative Agreements or
Operative Agreements with respect to an Aircraft
at the request or direction of the Trustor unless
the Persons making such request or direction
shall have offered to the Owner Trustee
reasonable security or indemnity against the
costs, expenses and liabilities which might be
incurred by it in compliance with such request or
direction; nor shall the Owner Trustee be
required to take any action deemed to impose on
the Owner Trustee any obligation to take any
action, if the Owner Trustee shall have been
advised by its counsel that such action is
unlawful or is contrary to the terms of this
Agreement, the Sales Agreement, the Agreement to
Lease Operative Agreements or the Operative
Agreements, as the case may be, with respect to
an Aircraft;
(f) The Owner Trustee shall not be bound to
make any investigation into the fact or matters
stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request,
direction, consent, order or other paper or
document unless a Responsible Officer of the
Owner Trustee has actual knowledge that the facts
or matters stated therein are false or
inaccurate, but the Owner Trustee in its
discretion may make such further inquiry or
investigation into such facts or matters as it
may see fit, and, if the Owner Trustee shall
determine to make such further inquiry or
investigation, it shall be entitled, to the same
extent permitted by the Lessor under the Lease
with respect to any Aircraft, to examine the
books and records of the Lessee to reasonably
determine whether the Lessee is in compliance
with the terms and conditions of such Lease and
to examine the related Aircraft, the related
Airframe, any related Engine or any related Part
thereof personally or by agent or attorney; and
(g) without limiting the generality of
Section 3.05 hereof, except as otherwise provided
in written instructions given to the Owner
Trustee by the Trustor or as otherwise provided
in the Participation Agreement or Indenture with
respect to an Aircraft, the Owner Trustee shall
not have any duty (i) to see to any recording or
filing of the Lease or of this Agreement or any
financing statement or other notice or document
relating thereto or contemplated under the
Agreement to Lease Operative Agreements or
Operative Agreements relating to such Aircraft or
to see to the maintenance of any such recording
or filing (other than FAA reporting requirements
contained in 14 C.F.R. Sections 47.45 and 47.51),
(ii) to see to any insurance on any Aircraft or
any part thereof or to effect or maintain any
such insurance, whether or not the Lessee shall
be in default with respect thereto, other than to
forward to the Trustor copies of all
certificates, reports and other written
information which it receives from the Lessee
pursuant to the Lease relating to such Aircraft,
(iii) to see to the payment or discharge of any
tax, assessment or other governmental charges or
any Lien (except any Lessor's Lien with respect
to such Aircraft attributable to it in its
individual capacity) owing with respect to, or
assessed or levied against any part of the
Lessor's Estate relating to such Aircraft,
(iv) to confirm or verify any financial
statements or reports of the Lessee, or (v) to
inspect such Aircraft at any time or ascertain or
inquire as to the performance or observance of
any of the Lessee's covenants under the Lease
relating to such Aircraft.
SECTION 3.07. No Representations or
Warranties as to Certain Matters. NEITHER THE OWNER
TRUSTEE NOR FSBU MAKES OR SHALL BE DEEMED TO HAVE MADE
ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS
TO (A) THE TITLE (EXCEPT, WITH RESPECT TO THE OWNER
TRUSTEE, AS EXPRESSLY SET FORTH IN SECTION
7.04(a)(vii) OF THE PARTICIPATION AGREEMENT AND
SECTION 7(c) OF THE AGREEMENT TO LEASE), AIRWORTHINESS
(EXCEPT WITH RESPECT TO THE OWNER PARTICIPANT, AS
EXPRESSLY SET FORTH IN SECTION 7.03(a)(xiii) OF THE
PARTICIPATION AGREEMENT), VALUE, CONDITION,
WORKMANSHIP, DESIGN, COMPLIANCE WITH SPECIFICATIONS,
CONSTRUCTION, OPERATION, MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OR USE OF ANY AIRCRAFT,
(B) THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR
NOT DISCOVERABLE, (C) THE ABSENCE OF ANY INFRINGEMENT
OF ANY PATENT, TRADEMARK OR COPYRIGHT, (D) THE ABSENCE
OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT, OR
(E) ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO ANY AIRCRAFT OR
ANY PART THEREOF, except that FSBU represents and
warrants that on the date of transfer thereof to the
Owner Trustee, the Owner Trustee received whatever
rights, title and interests in, to and under each
Aircraft were conveyed to it by Lufthansa and FSBU
represents, warrants and covenants that at all times
on and after such date each Aircraft shall be free of
all Lessor's Liens attributable to it, and that the
Owner Trustee shall comply with the last sentence of
Section 3.05(b) hereof, or (b) any representation or
warranty as to the validity, legality or
enforceability of this Agreement, the Sales Agreement
or any other Agreement to Lease Operative Agreement or
Operative Agreement with respect to an Aircraft to
which the Owner Trustee is a party, or any other
document or instrument, or as to the correctness of
any statement contained in any thereof, except to the
extent that any such representation, warranty or
statement is expressly made herein or therein as a
representation or warranty by the Owner Trustee or
FSBU and except that FSBU hereby represents and
warrants that this Agreement has been, and (assuming
the due authorization, execution and delivery of this
Agreement by the Trustor) the Sales Agreement, the
Agreement to Lease Operative Agreements and Operative
Agreements with respect to each Aircraft to which the
Owner Trustee is a party have been (or at the time of
execution and delivery of any such instrument by the
Owner Trustee hereunder or pursuant to the terms of
the related Participation Agreement that such an
instrument will be) duly executed and delivered by one
of its officers who is or will be, as the case may be,
duly authorized to execute and deliver such
instruments on behalf of the Owner Trustee and that
this Agreement has been duly authorized, executed and
delivered by FSBU and (assuming due authorization,
execution and delivery of this Trust Agreement by the
Trustor) constitutes the legal, valid and binding
obligation of FSBU enforceable against it in
accordance with its terms, except as such
enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other
similar laws affecting the rights of creditors
generally and by general principles of equity.
SECTION 3.08. Status of Moneys Received.
All moneys received by the Owner Trustee under or
pursuant to any provision of this Agreement, the Sales
Agreement or any Agreement to Lease Operative
Agreement or Operative Agreement with respect to each
Aircraft shall constitute trust funds for the purpose
for which they were paid or are held, but need not be
segregated in any manner from any other moneys except
to the extent required by law and may be deposited by
the Owner Trustee under such conditions as may be
prescribed or permitted by law for trust funds, or may
be invested in direct obligations of the United
States.
SECTION 3.09. Self-Dealing. The Owner
Trustee in its individual capacity, or any corporation
in or with which the Owner Trustee may be interested
or affiliated, or any officer or director of any such
corporation, may have normal commercial relations, and
otherwise deal, in the ordinary course of business,
with the Lessee or any other corporation having
relations with the Lessee to the full extent permitted
by law.
SECTION 3.10. Definition of a Responsible
Officer. For purposes of this Trust Agreement only,
"Responsible Officer" when used with respect to the
Owner Trustee means the Chairman or the Vice-Chairman
of the Board of Directors, the Chairman or Vice-
Chairman of the Executive Committee of the Board of
Directors, the President, any Vice President (whether
or not designated by a number or a word or words added
before or after the title "Vice President"), the
Secretary, any Assistant Secretary, or any other
officer in the Corporate Trust Administration of the
Owner Trustee customarily performing functions similar
to those performed by any of the above designated
officers.
SECTION 3.11. Resignation or Removal of
Owner Trustee. The Owner Trustee or any successor
thereof (a) shall resign if required to do so pursuant
to Section 7.02(b) of the Participation Agreement with
respect to any Aircraft and (b) may resign at any time
without cause by giving at least 60 days' prior
written notice to the Trustor and the Indenture
Trustee with respect to each Aircraft, such
resignation in each case to be effective only upon the
appointment of a successor trustee and the acceptance
of such appointment by such successor. In addition,
the Trustor may at any time remove the Owner Trustee
without cause by an instrument in writing delivered to
the Owner Trustee and the Indenture Trustee, such
removal to be effective only upon the appointment by
the Trustor of a successor Owner Trustee and the
acceptance of such appointment by such successor.
Upon the giving of notice of resignation or removal of
the Owner Trustee, the Trustor may appoint a successor
Owner Trustee by an instrument signed by the Trustor.
If the Trustor shall not have so appointed a successor
Owner Trustee within 30 days after such resignation or
removal, the Owner Trustee, the Indenture Trustee with
respect to any Aircraft or the Trustor may apply to
any court of competent jurisdiction to appoint a
successor Owner Trustee to act until such time, if
any, as a successor or successors shall have been
appointed by the Trustor as above provided. Any
successor Owner Trustee so appointed by a court shall
be superseded by any successor Owner Trustee
subsequently appointed by the Trustor.
Each successor Owner Trustee appointed as
herein provided shall be a trust company or banking
corporation which is a Citizen of the United States,
having its principal place of business in the United
States 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 the Owner Trustee hereunder upon reasonable
or customary terms.
SECTION 3.12. Estate and Rights of Successor
Owner Trustee. Any successor Owner Trustee, however
appointed, shall execute and deliver to the
predecessor Owner Trustee, with a copy to the Trustor
and the Indenture Trustee with respect to each
Aircraft, an instrument accepting such appointment,
and thereupon each successor Owner Trustee, without
further act, shall become vested with all the estates,
properties, rights, powers, duties and trust of the
predecessor Owner Trustee in the trusts hereunder with
like effect as if originally named as an Owner Trustee
herein, but nevertheless upon the written request of
such successor Owner Trustee, such predecessor Owner
Trustee shall execute and deliver an instrument
transferring to such successor Owner Trustee, upon the
trust herein expressed, all estates, properties,
rights, powers, duties, property or moneys then held
by such predecessor Owner Trustee upon the trusts
herein expressed. Upon any such transfer by a
predecessor Owner Trustee, such predecessor Owner
Trustee shall provide the successor Owner Trustee and
Trustor an accounting of the Lessor's Estate with
respect to any Aircraft and the trusts hereunder.
Upon the appointment of any successor Owner
Trustee hereunder at any time on or after the
Commencement Date with respect to an Aircraft, the
predecessor Owner Trustee will use its best efforts to
cause registration of each such Aircraft to be
transferred upon the records of the Aeronautics
Authority into the name of the successor Owner
Trustee.
SECTION 3.13. Merger or Consolidation of
Owner Trustee. Any corporation into which the Owner
Trustee in its individual capacity may be merged or
with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which
the Owner Trustee shall be a party, or any corporation
to which substantially all the business of the Owner
Trustee in its individual capacity may be transferred,
shall, subject to the last sentence of Section 3.11
hereof, be the Owner Trustee under this Agreement
without further act; provided, that such corporation
shall not also be the Indenture Trustee with respect
to any Aircraft.
SECTION 3.14. Co-Trustees. At any time, if
the Owner Trustee and the Trustor shall deem it
necessary or prudent or desirable in order to conform
to legal requirements of any jurisdiction in which any
part of the Lessor's Estate with respect to any
Aircraft may at the time be locate, the Trustor and
the Owner Trustee jointly shall have the power, and
shall execute and deliver all instruments, to appoint
one or more persons approved by the Trustor and the
Owner Trustee, to act as co-trustee, or co-trustees,
jointly with the Owner Trustee, or separate trustee or
separate trustees (except insofar as local law makes
it necessary or prudent or desirable for any such co-
trustee or separate trustee to act alone), of all or
any part of the Lessor's Estate with respect to such
Aircraft, and to vest in such Person or Persons, in
such capacity with respect to such Aircraft, such
title to such Lessor's Estate or any part thereof, and
such rights, powers, duties, trusts or obligations as
the Trustor and the Owner Trustee may consider
necessary or prudent or desirable. If the Trustor
shall not have joined in such appointment within 15
days after the receipt by it of a request so to do,
the Owner Trustee alone shall have the power to make
such appointment. The Owner Trustee shall not be
liable for any act or omission of any co-trustee or
separate trustee appointed under this Section 3.14,
except with respect to an appointment made pursuant to
the immediately preceding sentence if the Owner
Trustee shall have failed to exercise due care in
making such appointment. No appointment of, or action
by, any co-trustee or separate trustee appointed under
this Section 3.14 will relieve the Owner Trustee of
any of its obligations under any Operative Agreement
with respect to any Aircraft or otherwise affect any
of the terms of the Indenture with respect to such
Aircraft or adversely affect the interests of the
related Indenture Trustee or Holders in the related
Trust Indenture Estate.
Any co-trustee or separate trustee may, at
any time by an instrument in writing, constitute the
Owner 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 subject to the
conditions of this Agreement.
Every additional trustee hereunder shall be a
Citizen of the United States and, to the extent
permitted by law, be appointed and act, and the Owner
Trustee and its successors shall act, subject to the
following provisions and conditions:
(a) all powers, duties, obligations and
rights conferred upon the Owner Trustee in
respect of the custody, control and management of
monies, the Aircraft or documents authorized to
be delivered hereunder, under the Sales
Agreement, the Agreement to Lease Operative
Agreements or under the Participation Agreement
or any other Operative Agreements with respect to
an Aircraft shall be exercised solely by the
Owner Trustee;
(b) all other rights, powers, duties and
obligations conferred or imposed upon the Owner
Trustee shall be conferred or imposed upon and
exercised or performed by the Owner Trustee and
such additional trustee jointly, except to the
extent that under any law of any jurisdiction in
which any particular act or acts are to be
performed (including the holding of title to the
Lessor's Estate with respect to each Aircraft)
the Owner Trustee shall be incompetent and
unqualified to perform such act or acts, in which
event such rights, powers, duties and obligations
shall be exercised and performed by such
additional trusts;
(c) no power given to, or which is provided
hereby may be exercised by, any such additional
trustee, except jointly with, or with the consent
in writing of, the Owner Trustee;
(d) no trustee hereunder shall be personally
liable by reason of any act or omission of any
other trustee hereunder except as otherwise
provided hereunder; and
(e) the Trustor, at any time, by an
instrument in writing may remove any such
additional trustee.
SECTION 3.15. Interpretation of Agreements.
In the event that the Owner Trustee is unsure as to
the application of any provision of this Agreement,
the Sales Agreement, any Agreement to Lease Operative
Agreement or any Operative Agreement with respect to
an Aircraft, or any other agreement relating to the
transaction contemplated by the Agreement to Lease
Operative Agreements or the Operative Agreements with
respect to such Aircraft, or such provision is
ambiguous as to its application, or is, or appears to
be, in conflict with any other applicable provision,
or in the event that this Agreement, the Sales
Agreement, any Agreement to Lease Operative Agreement
or any other Operative Agreement with respect to such
Aircraft, permits any determination by the Owner
Trustee or is silent or incomplete as to the course of
action which the Owner Trustee is required to take
with respect to a particular set of facts, the Owner
Trustee shall request instructions of the Trustor and,
to the extent that the Owner Trustee acts in good
faith in accordance with any instructions received
from the Trustor, shall not be liable to any Person
pursuant hereto; provided, that in the event that no
response is made to the Owner Trustee by the Trustor
within 25 days after such request, the Owner Trustee
shall not be liable hereunder to any Person for acts
taken by the Owner Trustee in good faith or for any
failure to act, except to the extent provided in the
last sentence of Section 3.01 hereof.
SECTION 3.16. Not Acting in Individual
Capacity. In carrying out the trusts hereby created,
the Owner Trustee will act solely as trustee hereunder
and not in its individual capacity except as expressly
provided herein, in the Sales Agreement, in any
Operative Agreement with respect to an Aircraft or any
Agreement to Lease Operative Agreements to which it is
a party; and all Persons, other than the Trustor as
provided in this Agreement, having any claim against
the Owner Trustee by reason of the transactions
contemplated hereby shall look only to the related
Lessor's Estate for payment or satisfaction thereof,
except to the extent provided in the last sentence of
Section 3.01 hereof.
SECTION 3.17. Tax Returns. The Owner
Trustee shall be responsible for the keeping of all
appropriate books and records relating to the receipt
and disbursement of all moneys under this Agreement,
the Sales Agreement, any Agreement to Lease Operative
Agreement or any Operative Agreement with respect to
an Aircraft. The Trustor shall be responsible for
causing to be prepared and filed all income tax
returns required to be filed by the Trustor. The
Owner Trustee, upon request, will furnish the Trustor
with all such information as may be reasonably
required from the Owner Trustee, upon request, will
furnish the Trustor with all such information as may
be reasonably required from the Owner Trustee in
connection with any other filing or audit and related
litigation obligations. The Owner Trustee shall be
responsible for causing to be prepared at the request
and expense of the Trustor all income tax returns
required to be filed with respect to the trust created
hereby and shall execute and file such returns. The
Trustor, upon request, will furnish the Owner Trustee
with all such information as may be reasonably
required from the Trustor that is in its possession in
connection with the preparation of such income tax
returns.
ARTICLE 4
TERMINATION OF TRUST
SECTION 4.01. Termination. This Agreement
and the trust created and provided for hereby shall
cease and be terminated in any one of the following
events, whichever shall first occur:
(a) If the Trustor shall by notice in
writing to the Owner Trustee revoke and terminate
the trust on and as of a dated stated in such
notice, which date shall not be less than ten nor
more than thirty days from the date of mailing
such notice, then on the date specified in such
notice the trust created and provided for hereby
shall cease and terminate; provided, that this
trust shall not be subject to revocation or
termination, in whole or in part, by the Trustor,
nor shall any portion of the Lessor's Estate with
respect to any Aircraft be withdrawn from the
trust hereunder until the later of (i) the time
all Certificates with respect to an Aircraft, and
all other amounts due under the Indentures
relating thereto, shall have been paid in full,
and the Lien of each Indenture with respect to an
Aircraft shall have been released by the related
Indenture Trustee and (ii) the termination of the
Lease; and provided, further, that such notice
shall be accompanied by the written agreement of
Trustor to assume all of the obligations of the
Owner Trustee under the Sales Agreement, the
Agreement to Lease Operative Agreements and the
Operative Agreements with respect to each
Aircraft and all other obligations of the Owner
Trustee incurred by it hereunder or pursuant
hereto in its role as the Owner Trustee;
(b) The sale or other final disposition by
the Owner Trustee of all of its interest in all
property constituting or included in the Lessor's
Estate with respect to any Aircraft and, if the
Indenture with respect to such Aircraft shall
then be in effect, the sale or other disposition
by the Indenture Trustee under such Indenture of
all of its interest in all property constituting
or included in the related Lessor's Estate, and
the final disposition by the Owner Trustee and,
if the Indenture with respect to such Aircraft
shall then be in effect, the Indenture Trustee
under such Indenture, of all moneys or other
property or proceeds constituting part of the
related Lessor's Estate in accordance with the
terms hereof; or
(c) 110 years from the earlier execution of
this Agreement by either party hereto; provided,
however, that if the Trust shall be or become
valid under applicable law for a period
subsequent to 110 years from the earlier
execution of this Agreement by either party
hereto or, without limiting the generality of the
foregoing, if legislation shall become effective
providing for the validity or permitting the
effective grant of such trust for a period, in
gross, exceeding the period for which such trust
is hereinabove stated to extend and be valid,
then such trust shall not terminate as provided
in the first part of this sentence but shall
extend to and continue in effect until, but only
if such non-termination and extension shall then
be valid under applicable law, such time as the
same shall, under applicable law, cease to be
valid.
In the event of a termination pursuant to
this Section 4.01, if the Indenture with respect to
any Aircraft is still in effect, the Trustor will
promptly and duly execute and deliver to each related
Indenture Trustee such documents and assurances
including, without limitation, conveyances, financing
statements and continuation statements with respect to
financing statements and take such further action as
such Indenture Trustee may from time to time
reasonably request and furnish in order to protect the
rights and remedies created or indented to be created
in favor of such Indenture Trustee under such
Indenture and to create for the benefit of the Holders
a valid lien with respect to, and a first and prior
perfected security interest in, the related Trust
Indenture Estate.
SECTION 4.02. Distribution of Lessor's
Estate upon Termination. Upon any termination of this
trust pursuant to the provisions of Section 4.01, the
Owner Trustee shall convey the Lessor's Estate with
respect to each Aircraft to such purchaser or
purchasers or the Trustor, as the case may be, and for
such amount and on such terms as shall be specified in
written instructions from the Trustor delivered to the
Owner Trustee prior to the date of termination;
provided, that (i) if at the time of any termination
the Lease with respect to an Aircraft remains in force
and effect, then the Lessor's Estate with respect to
such Aircraft shall be sold subject to such Lease, and
(ii) in the event such written instructions are not
delivered to the Owner Trustee on or before the date
of termination, the Owner Trustee shall transfer title
to Lessor's Estate with respect to such Aircraft to
the Trustor. Upon making such transfer or sale and
accounting for all funds which have come into its
hands, the Owner Trustee shall be entitled to receipt
of any sums due and owing to the Owner Trustee for
expenses incurred pursuant hereto as set forth in
Section 2.05.
ARTICLE 5
TRANSFER OF BENEFICIAL INTERESTS
The Trustor may assign, convey or otherwise
transfer to all or any portion of the Beneficial
Interest relating to any Aircraft provided that the
Beneficial Interest with respect to any Aircraft may
not be owned by more than three Persons at any time,
provided further that it gives the Lessee and the
Indenture Trustee with respect to each Aircraft at
least 10 days' prior written notice of such
assignment, conveyance other transfer, and provided
further that the Trustor and the transferee enter into
an Assignment and Assumption Agreement substantially
in the form of Exhibit B hereto and provided that the
Trustor shall remain secondarily liable for all such
obligations assumed by its successor as Trustor;
provided, that the Trustor need not so agree to remain
and shall not be so secondarily liable if such
transferee is (i) a bank, savings institution, finance
company, leasing company or trust company, national
banking association acting for its own account or in a
fiduciary capacity as trustee or agent under any
pension, retirement, profit sharing or similar trust
or fund, insurance company, fraternal benefit society
or corporation acting for its own account having a
combined capital and surplus (or, if applicable,
consolidated tangible net worth or its equivalent) of
not less than $50,000,000, (ii) a subsidiary of any
Person described in clause (i) where such Person
provides (A) support for the obligations assumed by
such transferee satisfactory to the Lessee, the Owner
Trustee and the Indenture Trustee with respect to each
Aircraft or (B) with respect to each Aircraft, an
unconditional guaranty of such subsidiary's obligations
in the form of Exhibit I to the related Participation
Agreement, or (iii) an Affiliate of the original Trustor,
so long as such Affiliate has a combined capital and
surplus (or, if applicable, consolidated tangible net
worth or its equivalent) of not less than $40,000,000.
A transferee hereunder shall be a Citizen of the
United States or shall have established a voting
trust, voting powers or other arrangement reasonable
satisfactory to the Indenture Trustee with respect to
the Aircraft being transferred to permit the Owner
Trustee to be the registered owner of such Aircraft
under the Federal Aviation Act. The Owner Trustee
shall not be on notice of or otherwise bound by any
such assignment, conveyance or transfer unless and
until it shall have received an executed counterpart
of the instrument of such assignment, conveyance or
transfer. Upon any such disposition by the Trustor to
a transferee as above provided, the transferee shall
be deemed a "Trustor" for all purposes hereof, and
shall be deemed to have made all the payments
previously made by its transferor and to have acquired
the same interest in the Lessor's Estate with respect
to the Aircraft being transferred as theretofore held
by its transferor; and each reference herein to the
"Trustor" shall thereafter be deemed a reference to
such transferee (to the extent of the Beneficial
Interest transferred). Notwithstanding anything to
the contrary contained in this Article 5, in no event
shall the Trustor transfer its interest in the
Beneficial Interest with respect to an Aircraft to any
entity whose business is that of a nationwide or
worldwide overnight or expedited delivery small
package air courier, cargo or freight deliverer or
which competes with the Lessee. Notwithstanding
anything to the contrary in this Article 5, prior to
the commencement of the Lease with respect to any
Aircraft, the Trustor's right to assign its Beneficial
Interest, to the extent relating to such Aircraft,
shall be subject to the provisions of Section 10(a) of
the Agreement to Lease.
ARTICLE 6
MISCELLANEOUS
SECTION 6.01. Indemnification. The Trustor
and its assigns agree to reimburse and save the Owner
Trustee, in its individual capacity, harmless against
any and all loss, damage, liability, claims, demands,
disbursements and expenses, including taxes (excluding
taxes imposed against the Owner Trustee upon or with
respect to any fees for services rendered in its
capacity as Owner Trustee hereunder) and reasonable
counsel fees, which are not required to be indemnified
by the Lessee pursuant to Section 9.01 of the
Participation Agreement with respect to any Aircraft
and which may be incurred by reason of its being the
Owner Trustee or acting hereunder or under the
Operative Agreements with respect to any Aircraft, but
solely by reason thereof and arising out of or
relating solely to this Agreement or the Agreement to
Lease Operative Agreements, under the Sales Agreement,
under any Agreement to Lease Operative Agreement or
the Operative Agreements with respect to any Aircraft
or any Aircraft or the Rents and other sums payable
therefor, or by reason of any occurrence directly
relating thereto while so acting, and to secure the
payment thereof, the Owner Trustee, in its individual
capacity, shall have Lien on the Lessor's Estate with
respect to each Aircraft and the proceeds therefor,
including income, prior to any interest therein of the
Trustor and its assigns (but subject to the rights of
the Lessee under the Operative Agreements with respect
to each Aircraft and subject and subordinate to the
Lien of each Indenture with respect to an Aircraft),
except only in respect of any such loss, damage,
liability, claims, demands, disbursements and
expenses, including taxes and counsel fees, arising
from or as a result of (A) the Owner Trustee's willful
misconduct or gross negligence (in its individual
capacity or as trustee), (B) any inaccuracy of any
representation of the Owner Trustee or any breach by
the Owner Trustee of its warranties and covenants
given in its individual capacity in this Agreement,
the Agreement to Lease with respect to any Aircraft,
Article 5 of the Lease with respect to any Aircraft,
Sections 7.01(c), 7.02(a) and (b) and 7.04 of the
Participation Agreement with respect to any Aircraft
and its representations and warranties in relevant
provisions of the Indenture with respect to any
Aircraft or elsewhere in the Operative Agreements with
respect to any Aircraft, the Agreement to Lease
Operative Agreements or the Sales Agreement, (C) the
failure to use ordinary care in receiving, handling
and disbursing funds, (D) Lessor's Liens with respect
to any Aircraft attributable to it in its individual
capacity, (E) taxes, fees, or other charges on, based
on, or measured by, any fees, commissions or
compensation received by the Owner Trustee in
connection with the transactions contemplated by the
Lease, Collateral Agreement and Indenture with respect
to any Aircraft and this Agreement, the Agreement to
Lease Operative Agreements or the Sales Agreement,
(F) Taxes excluded from indemnification pursuant to
Section 8.01 of the relevant Participation Agreement
(disregarding for the purposes of this Section 6.01
subsections (ii) and (v) of Section 8.01(b) of any
such Participation Agreement) or (G) Expenses with
respect to any Aircraft excluded from indemnification
pursuant to Section 9.01(b) of the related
Participation Agreement (disregarding for the purposes
of this Section 6.01 subsections (ii), (iv) and
(viii) of Section 9.01(b) of such Participation
Agreement); provided, that, before asserting any right
to payment or indemnification hereunder, the Owner
Trustee shall first demand (but need not exhaust its
remedies with respect to) its corresponding right to
payment or indemnification from the Lessee pursuant to
each relevant Participation Agreement. It is further
understood that the distribution by the Owner Trustee
of all or any part of the Lessor's Estate with respect
to any Aircraft as provided in Section 4.02 of this
Agreement shall not impair the right of the Owner
Trustee to indemnity, payment and reimbursement as
herein provided. In the event the Owner Trustee makes
any advances at any time to pay or to provide for the
payment of any such loss, damage, liability, claim,
demand or expense, then the Owner Trustee, in its
individual capacity, shall be entitled, in addition to
reimbursement for the principal of the sum so
advanced, to interest on the amount of such advances
at the Corporate Base Rate. The provisions of this Section
shall continue in force and effect notwithstanding the
termination of this trust or the resignation, inability
or incapacity to act or removal of the Owner Trustee.
The Owner Trustee (in its individual capacity or as Owner
Trustee) agrees that it shall have no right against (except
as provided in this Section 6.01) the Trustor or (subject
to the provisions of each Indenture with respect to an
Aircraft) the Trust Indenture Estate with respect to
any Aircraft for any fee as compensation for its
services hereunder.
SECTION 6.02. Supplements and Amendments.
(a) Subject to Section 6.02(b) hereof, at any time and
from time to time, only upon the written request of
the Trustor (i) FSBU and the Trustor shall execute a
supplement hereto for the purpose of adding provisions
to, or changing or eliminating provisions of, this
Agreement as specified in such request and (ii) the
Owner Trustee shall, subject to the relevant
provisions of the Indenture with respect to any
Aircraft, enter into or consent to such written
amendment or modification of or supplement to any of
the Sales Agreement, the Agreement to Lease Operative
Agreements or Operative Agreements with respect to
such Aircraft as the related Indenture Trustee and any
other necessary parties may agree to in writing and as
may be specified in such request, or execute and
deliver such written waiver of the terms of any of the
Sales Agreement, the Agreement to Lease Operative
Agreements or Operative Agreements with respect to any
Aircraft as may be agreed to in writing by the related
Indenture Trustee and as may be specified in such
request; provided, that (A) the Owner Trustee shall
not execute any such supplement, amendment, waiver or
modification without the prior written consent of the
Trustor, (B) if in the reasonable opinion of the Owner
Trustee any document required to be executed by it
pursuant to this Section adversely affects any right
or duty of, or immunity or indemnity in favor of, the
Owner Trustee under this Agreement, the Sales
Agreement or any other Agreement to Lease Operative
Agreement or Operative Agreement with respect to an
Aircraft, the Owner Trustee may in its discretion
decline to execute such document and (C) any amendment
or supplement to this Agreement that would adversely
affect the rights of the Indenture Trustee or Holders
referred to in the Indenture with respect to any
Aircraft shall be subject to the prior written consent
of each such Indenture Trustee.
(b) No consent of the Trustor pursuant to
this Section 6.02 shall be required to enable the
Owner Trustee to execute and deliver any Lease, Lease
Supplement, Trust Agreement Supplement or Indenture
and Security Agreement Supplement pursuant to the
terms of the Lease and Section 1.01 hereof. For each
Aircraft, the "Trust Agreement Supplement" means the
supplement to this Trust Agreement, substantially in
the form of Exhibit D to this Trust Agreement and
dated the Commencement Date for such Aircraft, which
shall particularly describe such Aircraft.
(c) It shall not be necessary that any
request pursuant to this Section 6.02 specify the
particular form of the proposed document to be
executed pursuant to such request, but it shall be
sufficient if such request shall indicate the
substance thereof. Promptly after the execution by
FSBU or the Owner Trustee of any document pursuant to
this Section 6.02, the Owner Trustee shall mail a
conformed copy thereof to the Trustor and the
Indenture Trustee under each Indenture with respect to
an Aircraft, but the failure of the Owner Trustee to
mail such conformed copies shall not impair or affect
the validity of such documents.
SECTION 6.03. Nature of Title of Trustor.
The Trustor shall not have any legal title to any part
of the Lessor's Estate with respect to any Aircraft.
No transfer, by operation of law or otherwise, of the
right, title and interest of the Trustor in and to the
Lessor's Estate with respect to any Aircraft or the
trusts hereunder shall operate to terminate this
Agreement or any such Lessor's Estate.
SECTION 6.04. Power of Owner Trustee to
Convey. Any assignment, sale, transfer or other
conveyance by the Owner Trustee of the interest of the
Owner Trustee in the Sales Agreement, the Agreement to
Lease Operative Agreements or Operative Agreements
with respect to any Aircraft or any part thereof
pursuant to and in compliance with the terms of the
Sales Agreement, this Agreement or the Agreement to
Lease Operative Agreements or such Operative
Agreements shall bind the Trustor and shall be
effective to transfer or convey all right, title and
interest of the Owner Trustee and the Trustor in and
to the Sales Agreement, the Agreement to Lease
Operative Agreements or such Operative Agreements or
any Aircraft or such part thereof. No purchaser or
other grantee shall be required to inquire as to the
authorization, necessity, expediency or regularity of
such assignment, sale, transfer or conveyance or as to
the application of any sale or other proceeds with
respect thereto by the Owner Trustee.
SECTION 6.05. Notices. All notices,
demands, declarations and other communications
required bay this Agreement shall be in writing and
shall be deemed received (a) if given by telecopier
when transmitted and the appropriate telephonic
confirmation received if transmitted on a Business Day
and during normal business hours of the recipient, and
otherwise on the next Business Day following
transmission, (b) if given by certified mail, return
receipt requested, postage prepaid five Business Days
after being deposited in the United States mails and
(c) if given by Federal Express service or other
means, when received or personally delivered,
addressed:
If to the Owner First Security Bank of Utah,
Trustee: National Association
79 South Main Street
Salt City Utah, Utah 84111
Attention: Corporate Trust
Administration
Facsimile: (801) 246-5053
If to the Trustor: LLG Aircraft Leasing, L.P.
1209 Orange Street
Wilmington, DE 19801
Salt City Utah, Utah 84111
Attention: President
Facsimile:
If to any Indenture
Trustee: As specified in the
relevant Participation
Agreement.
or as to any of the foregoing parties at such other
address as such party may designate by notice duly
given in accordance with this Section to the other
parties.
SECTION 6.06. Situs of Trust; Applicable
Law; Severability. THIS AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF UTAH,
INCLUDING ALL MATTERS OF VALIDITY, CONSTRUCTION AND
PERFORMANCE. If any provision of this Agreement shall
be invalid or unenforceable, the remaining provisions
hereof shall continue to be fully effective; provided,
that such remaining provisions do not increase the
obligations or liabilities of the Owner Trustee or the
Trustor.
SECTION 6.07. Successors and Assigns. This
agreement shall be binding upon and shall inure to the
parties hereto and their respective successors and
permitted assigns, including any successive holders of
the Beneficial Interest, but only to the extent the
Beneficial Interest has been transferred or assigned
in accordance with the limitations of Article 5 of
this Agreement and, if applicable, Section 10(a) of
the Agreement to Lease.
SECTION 6.08. Headings and Table of
Contents. The headings of the Article and Sections of
this Agreement and the Table of Contents are inserted
for convenience only and shall not affect the meaning
or construction of any of the provision hereof.
SECTION 6.09. Definitions. Capitalized
terms used herein, unless otherwise herein defined or
the context hereof shall otherwise require, shall have
the respective meanings set forth in the Agreement to
Lease, except that any capitalized term used herein in
relation to an Aircraft shall have the meaning set
forth in Schedule II to the Participation Agreement
with respect to such Aircraft. Each such Schedule is
incorporated herein.
SECTION 6.10. Counterparts. This
instruments may be executed in any number of
counterparts or upon separate signature pages bound
together in several counterparts, each of which when
so executed shall be deemed to be an original, and
such counterparts together shall constitute and be one
and the same instrument.
SECTION 6.11. Trust Agreement for Benefit
of Owner Trustee, Trustor and each Indenture Trustee
Only. Except as expressly provided herein, nothing in
this Trust Agreement, whether express or implied,
shall be construed to give to any person other than
the Owner Trustee, the Indenture Trustee under the
related Indenture, and the Trustor any legal or
equitable right, remedy or claim under or in respect of
this Trust Agreement.
ARTICLE 7
CERTAIN LIMITATIONS
SECTION 7.01 Limitations on Control. The
Trustor agrees to certain limitations on control in
order to ensure the eligibility of the Aircraft for
United States registration under the Federal Aviation
Act. Notwithstanding any other provision of this
Agreement, but subject to the other provisions of this
Article 7, from and after the date of this Agreement
and until termination of this Agreement pursuant to
Article 4 or termination of this Article pursuant to
Section 7.07 hereof, (a) the Trustor shall not have
any right (i) to remove the Owner Trustee, (ii) to
instruct the Owner Trustee with respect to the
ownership or operation of any of the Aircraft, (iii)
to give consents with respect to any lawful action of
the Owner Trustee not prohibited by this Agreement
relating to the ownership or operation of any of the
Aircraft, and (iv) to consent to the amendment or
supplement of this Agreement (collectively, the
"Control Rights") and (b) the Owner Trustee shall have
absolute and complete discretion in all matters as to
which the Trustor would have had any Control Rights,
but for the provisions of this Article 7; provided,
however, the Owner Trustee agrees that it shall not,
without the prior written consent of the Trustor,
consent to (x) any amendment, supplement or
termination of this Agreement or any Operative
Agreement to which the Owner Trustee is a party or (y)
the sale, lease, sublease, mortgage or other
disposition of all or a portion of the Trust Estate
other than as provided in this Agreement. The
discretion given to the Owner Trustee in clause (b) of
the immediately preceding sentence (x) is in addition
to the discretion given to the Owner Trustee under the
other Articles of this Agreement and (y) is expressly
limited to the Control Rights that, but for the
provisions of this Article 7, would be held or
exercisable by the Trustor, and does not extend to any
other rights, powers or privileges in respect of the
Beneficial Interest of the Trustor.
SECTION 7.02. Discretion and Actions of
Owner Trustee. (a) The Owner Trustee, in exercising
its discretion under this Article 7, shall exercise
its best judgment and shall not be liable for any
action taken or failed to be taken hereunder, except
for its gross negligence or wilful misconduct, and
shall exercise the Control Rights in connection with
all matters involving the ownership and operation of
the Aircraft by the Owner Trustee. The Owner Trustee
shall not be required, and shall have no duty or
obligation, to exercise Control Rights in respect of
any other matters.
(b) The Owner Trustee, in exercising any
Control Rights, may act directly or through any agents
or attorneys and may consult with counsel, accountants
and other skilled persons to be selected and retained
by it, and the Owner Trustee shall not be liable for
anything done, suffered or omitted in good faith in
accordance with the advice or opinion of any such
counsel, accountants or other skilled persons and the
Owner Trustee shall not be liable for the negligence
of any such counsel, accountants or other skilled
persons.
(c) Notwithstanding any other provision
hereof, the Owner Trustee, in exercising any Control
Rights pursuant to this Article 7 in connection with
all matters involving the ownership or operation of
any of the Aircraft by the Owner Trustee, shall be
free of any kind of control by the Trustor and shall
exercise the Control Rights as it in its discretion
shall deem necessary to protect the interests of the
United States, notwithstanding any countervailing
interests of any foreign power which, or whose
citizens may, have a direct or indirect interest in
the Lessor's Estate with respect to any Aircraft and
any such action by the Owner Trustee shall not be
considered malfeasance or in breach of any obligation
which the Owner Trustee might otherwise have to the
Trustor. In exercising any Control Rights pursuant to
this Article 7 in connection with any matters which
may arise not relating to the ownership and operation
of any of the Aircraft, the Owner Trustee shall be
permitted, but shall be under no duty, to seek the
advice of the Trustor before exercising such Control
Rights, subject, however, to the proviso in the first
sentence of Section 7.01. The Owner Trustee, promptly
after each exercise of any Control Rights hereunder,
shall notify the Trustor of the exercise thereof.
SECTION 7.03. Removal. Notwithstanding
any provision of this Agreement relating to any right
or power of the Trustor to remove the Owner Trustee,
the Owner Trustee may be removed only for its gross
negligence or willful misconduct.
SECTION 7.04. Payments. Notwithstanding
any other provision of this Article 7, the Trustor and
not the Owner Trustee shall be entitled to receive
from the Owner Trustee or otherwise all payments or
insurance proceeds, and other payments of whatsoever
kind and nature payable to the Trustor pursuant to
this Agreement or any other Operative Agreement with
respect to an Aircraft in the same manner as if the
Control Rights had not been transferred to the Owner
Trustee and held in trust hereunder.
SECTION 7.05. The Owner Trustee Acts as
Trustee. Notwithstanding any other provision of this
Agreement, in exercising any Control Rights pursuant
to this Article 7, the Owner Trustee acts solely as
trustee and not in its individual capacity, and except
as may be otherwise expressly provided in Section 7.02
hereof, all persons having any claim against First
Security or the Owner Trustee by reason of the
transactions contemplated by this Article 7 shall not
have any recourse to First Security.
SECTION 7.06. Waiver of Claim Against the
Owner Trustee. To the extent permitted by law, the
Trustor agrees to waive and does hereby waive any and
all claims of every kind and nature which hereafter
the Trustor may have against First Security, its
successors and assigns, and does release the Owner
Trustee, its successors and assigns, from any
liability whatsoever arising out of or in connection
with the exercise of its powers or the performance of
its duties under this Article 7, except liability for
the gross negligence or wilful misconduct of the Owner
Trustee.
SECTION 7.07. Amendments, Termination of
Article 7. Notwithstanding Section 6.02, so long as
the Aircraft shall be registered under the laws of the
United States and until termination of this Agreement
and the trust created hereby, this Article 7 shall not
be amended, supplemented or modified unless the FAA
shall have concluded that such amendment, supplement
or modification would not cause any Aircraft to be
ineligible for registration in the United States,
provided, however, that this Article 7 shall terminate
without any notice or action of the Owner Trustee on
the earlier of (i) the date the Trustor shall have
become a "citizen of the United States" as defined in
Section 101(16) of the Federal Aviation Act, (ii) the
date the Owner Trustee being a "citizen of the United
States" as defined in Section 101(16) of the Federal
Aviation Act is no longer required to maintain
registration of any of the Aircraft with the FAA or
(iii) such earlier date as the Trustor may, with the
prior written consent of the Indenture Trustee and the
Lessee, deliver to the Owner Trustee a written notice
of its election to terminate this Article 7. The
Trustor shall send written notification to the FAA,
with copies thereof to the Lessee, the Owner Trustee
and each Indenture Trustee with respect to an
Aircraft, of any termination of this Article 7.
This Agreement may be signed in any number of
counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and
hereto were upon the same instrument.
IN WITNESS WHEREOF, FSBU and the Trustor have
caused this Agreement to be duly executed as of
March __, 1994.
LLG AIRCRAFT LEASING, L.P.
By LLG OF DELAWARE, INC.,
Its General Partner
By ______________________
Title:
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION
By ______________________
Title:
Exhibit A
AIRCRAFT DESCRIPTION
The Owner Trustee shall lease to Federal Express the
following Aircraft:
METRIC TONS OF
AIR GROSS WEIGHT AT SCHEDULED
AIRCRAFT CRAFT LH SCHEDULED COMMENCEMENT ENGINE
TYPE MSN REGISTRATION COMMENCEMENT DATE DATE TYPE
-------- ----- ------------ ----------------- ------------ --------
1. 310-203 254 D-AICH 132 7.15.94 CF6-80A3
2. 310-203 397 D-AICR 142 8.26.94 CF6-80A3
3. 310-203 273 D-AICL 142 9.13.94 CF6-80A3
4. 310-203 400 D-AICS 142 10.19.94 CF6-80A3
5. 310-203 360 D-AICP 142 11.11.94 CF6-80A3
6. 310-203 359 D-AICN 142 1.04.95 CF6-80A3
7. 310-203 191 D-AICA 132 1.27.95 CF6-80A3
8. 310-203 201 D-AICB 132 3.10.95 CF6-80A3
9. 310-203 230 D-AICC 132 4.07.95 CF6-80A3
10. 310-203 233 D-AICD 132 5.10.95 CF6-80A3
11. 310-203 356 D-AICM 142 6.08.95 CF6-80A3
12. 310-203 237 D-AICF 132 7.07.95 CF6-80A3
13. 310-203 257 D-AICK 132 8.04.95 CF6-80A3
Exhibit B
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as
of ________ __, 199 between ,
a organized under the laws of
(the "Assignor"), and ______________, a
organized under the laws of
_____________ (the "Assignee").
W I T N E S S E T H :
WHEREAS, the parties hereto desire to effect
(a) the transfer by the Assignor to the Assignee of
the right, title and interest of the Assignor (except
as reserved below) in, under and with respect to,
among other things, (i) the Agreement to lease dated
as of September 1, 1993, among Deutsche Lufthansa
Aktiengesellschaft ("Lufthansa"), First Security Bank
of Utah, National Association ("FSBU"), as Owner
Trustee and Federal Express Corporation ("Federal"),
(ii) the Trust Agreement dated as of September 1, 1993
(the "Trust Agreement") between FSBU and LLG Aircraft
Leasing, L.P., (iii) the Lessor's Estate (as defined
in the Trust Agreement) [and (iv) the Participation
Agreement, dated as of ________ __, 199_, among
Federal, as Lessee, the Assignor, as Owner
Participant, the entities listed on Schedule I
thereto, as Loan Participants(1), First Security
Bank of Utah, National Association, as Owner Trustee,
____________________________, as Indenture Trustee (as
amended, modified or supplemented from time to time,
the "Participation Agreement"), including, without
limitation, any indemnity payments payable to the
Assignee directly or indirectly thereunder, (v) the
Tax Indemnity Agreement identified in the
Participation Agreement (the "Tax Indemnity
Agreement"), (vi) the other Operative Agreements to
which the Assignor is a party or by which it is
bound](2), and (vii) the proceeds therefrom but, in
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(1) Not if debt is publicly offered.
(2) This language to be included only with respect
to an Aircraft that is the subject of a transfer
following the lease thereof to the Lessee.
each case, only to the extent relating to the Aircraft
identified in Exhibit A hereto (the "Assigned
Aircraft") (such rights, title and interest described
in clauses (i) through [(vii)] inclusive, except as
reserved in Section 1 hereof, being hereafter
collectively referred to as the "Transferred
Interest") and (b) the assumption by the Assignee of
the obligations of the Assignor accruing under or with
respect to the Transferred Interest from and after the
Effective Time (as defined in Section 12 hereof); and
WHEREAS, such documents permit such transfer
upon satisfaction of certain conditions heretofore or
concurrently herewith being complied with;
NOW, THEREFORE, in consideration of the
premises and of the mutual covenants and agreements
herein contained, the parties hereto do hereby agree
as follows (capitalized terms used herein without
definition having the meaning ascribed thereto in the
[Agreement to Lease](3) [the Participation
Agreement](4)):
1. Assignment. The Assignor has sold,
assigned, conveyed, transferred and set over, and does
hereby sell, assign, convey, transfer and set over,
unto the Assignee as of the date hereof all of its
present and future right, title and interest in, under
and with respect to the Transferred Interest together
with all other documents and instruments evidencing
any of such right, title and interest, except such
rights of the Assignor as have accrued to the Assignor
prior to the Effective Time (including specifically,
but without limitation, the right to receive any
amounts due or accrued to the Assignor under the Trust
Agreement in respect of the Assigned Aircraft prior to
the Effective Time [and the right to receive any
indemnity payment in respect of the Assigned Aircraft
pursuant to the Participation Agreement or the Tax
Indemnity Agreement with respect to events occurring
prior to the Effective Time)]**.
2. Assumption. The Assignee hereby
undertakes all of the duties and obligations of the
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(3) This language to be used in the case of a
transfer in respect of an Aircraft prior to the lease
thereof to the Lessee.
(4) This language to be used in the case of a
transfer in respect of an Aircraft subsequent to the
lease thereof to the Lessee.
"Owner Participant" with respect to the Transferred
Interest accruing on or subsequent to the Effective
Time (for the avoidance of doubt, excluding any
duties, obligations and liabilities of the Assignor
required to be performed by it on or prior to the
Effective Time hereof with respect to the Transferred
Interest), and hereby confirms that it shall be deemed
a party to each agreement referred to in the first
recital hereof to which the Assignor is a party or by
which it is bound and each such other contract,
agreement, document and instrument referred to in such
recital, and shall be bound by all the terms thereof
(including the agreements and obligations of the
Assignor set forth therein) as if therein named as the
Owner Participant to the extent of the Transferred
Interest (all such agreements, contracts, documents
and instruments being hereinafter referred to as the
"Assigned Documents") but, in each such case, only to
the extent relating to the Assigned Aircraft. The
assignment and assumption effected hereby shall
release the Assignor, to the extent of the Transferred
Interest, from its obligations under the Assigned
Documents, except to the extent of any such
obligations arising or accruing prior to the Effective
Time.
3. Appointment as Attorney-in-Fact. In
furtherance of the within assignment, the Assignor
hereby constitutes and appoints the Assignee, and its
successors and assigns, the true and lawful attorneys
of the Assignor, with full power of substitution, in
the name of the Assignee or in the name of the
Assignor but on behalf of and for the benefit of and
at the expense of the Assignee, to collect for the
account of the Assignee all items sold, transferred or
assigned to the Assignee pursuant hereto; to institute
and prosecute, in the name of the Assignor or
otherwise, but at the expense of the Assignee, all
proceedings that the Assignee may deem proper in order
to collect, assert or enforce any claim, right or
title of any kind in or to the items sold, transferred
or assigned; to defend and compromise at the expense
of the Assignee any and all actions, suits or
proceedings as to title to or interest in any of the
Transferred Interest; and to do all such acts and
things in relation thereto at the expense of the
Assignee as the Assignee shall reasonably deem
advisable. The Assignor hereby acknowledges that this
appointment is coupled with an interest and is
irrevocable by the Assignor in any manner or for any
reason or by virtue of any dissolution of the
Assignor.
4. Payments. The Assignor hereby covenants
and agrees to pay over to the Assignee, if and when
received following the date hereof, any amounts
(including any sums payable as interest in respect
thereof) paid to or for the benefit of the Assignor
that, under Section 1 hereof, belong to the Assignee,
and the Assignee hereby covenants and agrees to pay
over to the Assignor, if and when received following
the date hereof, any amounts (including any sums
payable as interest in respect thereof) paid to or for
the benefit of the Assignee that, under Section 1
hereof, belong to the Assignor.
5. Further Assurances. The Assignor shall,
at any time and from time to time, upon the request of
the Assignee, promptly and duly execute and deliver
any and all such further instruments and documents and
take such further action as the Assignee may
reasonably request to obtain the full benefits of this
Assignment and of the right and powers herein granted.
6. Investment Purpose. The Assignee hereby
represents that it is acquiring the trust and other
interests hereby assigned to it for its own account
for the purpose of investment and not with a view to
the distribution or resale of either thereof.
7. Representations and Warranties. The
Assignee represents and warrants that:
(a) it is duly organized and validly
existing in good standing under the laws of
its jurisdiction of organization, and has the
power and authority to carry on its business
as now conducted, to own or hold under lease
its properties and to enter into and perform
its obligations under the Assigned Documents
to which it is or will be a party;
(b) this Assignment and Assumption
Agreement has been duly authorized by all
necessary action on its part, does not
require any approval not already obtained of
its [stockholders](5) or any approval or
consent not already obtained of any trustee
or holders of any of its indebtedness or
obligations, and has been duly executed and
delivered by the Assignee, and neither the
execution and delivery thereof, nor the
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(5) This language to be used only if the Assignee
is a corporation.
consummation of the transactions contemplated
hereby, nor compliance by the Assignee with
any of the terms and provisions hereof or of
any of the Assigned Documents to which it
will become a party or by which it will be
bound, will contravene any United States
Federal or state law, judgment, governmental
rule, regulation or order applicable to or
binding on the Assignee (it being understood
that no representation or warranty is made
with respect to laws, rules or regulations
relating to the particular nature of the
equipment owned by the Owner Trustee, other
than such laws, rules or regulations relating
to lease transactions generally or to the
citizenship requirements of the Assignee
under the Federal Aviation Act, and assuming,
with respect to ERISA, the continuing
accuracy of the representations and
warranties set forth in Section [6.01(k)] of
the Participation Agreement and the
representations, warranties and covenants set
forth in Section [2.18](6) of the Trust
Indenture) or contravene or result in any
breach of or constitute any default under, or
result in the creation of any Lien (other
than Liens provided for in the Assigned
Documents) upon any property of the Assignee
or any indenture, mortgage, chattel mortgage,
deed of trust, conditional sales contract,
bank loan or credit agreement, corporate
charter, by-law or other agreement or
instrument to which the Assignee is a party
or by which it or its properties may be bound
or affected;
(c) each of the Assigned Documents to
which it will become a party, assuming such
document is the legal, valid and binding
obligation of each other party thereto, will
constitute the legal, valid and binding
obligation of the Assignee, enforceable in
accordance with its terms, except as such
enforceability may be limited by bankruptcy
insolvency, moratorium, reorganization or
other similar laws or equitable principles of
general application to or affecting the
enforcement of creditors' rights generally;
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(6) Appropriate cross-reference to be used to the
section of the Indenture relating to the source of
funds of the Loan Participants.
(d) there are no pending or, to the
knowledge of the Assignee, threatened actions
or proceedings against the Assignee before
any court or administrative agency which, if
determined adversely to the Assignee, would
materially adversely affect the ability of
the Assignee to perform its obligations under
any Assigned Document to which it will become
a party;
(e) upon the execution and delivery of
this Assignment and Assumption Agreement, the
Lessor's Estate and the Indenture Estate, if
any, will be free and clear of Lessor's Liens
attributable to the Assignee;
(f) neither the execution and delivery
by the Assignee of this Assignment and
Assumption Agreement, nor the consummation by
it of any of the transactions contemplated
hereby, requires the consent or approval of,
the giving of notice to, the registration
with, the recording or filing of any document
with, or the taking of any other action in
respect of, any Federal or other governmental
authority or agency (it being understood that
no representation or warranty is made with
respect to laws, rules or regulations
relating to the particular nature of the
equipment owned by the Owner Trustee, other
than such laws, rules or regulations relating
to lease transactions generally or to the
citizenship requirements of the Assignee
under applicable aviation law);
(g) the Assignee is not an "investment
company" or a company controlled by an
"investment company, required to register as
such under the Investment Company Act of
1940, as amended;
(h) no part of the funds to be used by
it to acquire any right, title or interest in
any of the Transferred Interest constitutes
assets (within the meaning of ERISA and any
applicable rules and regulations) of any
employee benefit plan subject to Title I of
ERISA or of any employee benefit plan or
individual retirement account subject to
Section 4975 of the Code;
(i) on the date hereof [it is a "citizen
of the United States" within the meaning of
Section 101(16) of the Federal Aviation Act
and the rules and regulations of the FAA
thereunder (without use of a voting trust
agreement or voting powers trust agreement)]
[it has entered into a voting powers or
voting trust agreement which has been
approved by the FAA (to the extent required
by the Federal Aviation Act or the FAA) and
which is in form and substance reasonably
satisfactory to the Lessee and the Indenture
Trustee];(7)
(j) the transfer to it of the
Transferred Interest will not adversely
affect the continued registration of the
Aircraft in the name of the Owner Trustee or
violate any provision of the Federal Aviation
Act or any rules or regulations promulgated
thereunder, or violate any provisions of the
Securities Act of 1933, as amended, or any
other applicable Federal or state law;
(k) [it is a "Transferee" satisfying
the conditions set forth in Section 5 of the
Trust Agreement] [alternatively, Guarantee in
the form of Exhibit F to the Agreement to
Lease to be provided]; and
(l) after giving effect to this
assignment, there will be no more than three
Owner Participants with respect to the
Aircraft.
8. Representations and Warranties of
Assignor. Assignor represents and warrants that:
(a) it is duly organized and validly
existing in good standing under the laws of
its jurisdiction of organization and has the
requisite power, authority and legal right to
enter into and carry out the transactions
contemplated hereby;
(b) this Agreement has been duly
authorized, executed and delivered by it and
constitutes the legal, valid and binding
obligation of Assignor, enforceable against
it in accordance with its terms, except as
such enforceability may be limited by
- --------------
(7) One of the two preceding clauses to be deleted
as appropriate.
bankruptcy, insolvency, moratorium,
reorganization or other similar laws or
equitable principles of general application
to or affecting the enforcement of creditors'
rights generally ;
(c) no action or proceeding is pending,
has been instituted or, to the knowledge of
Assignor, is threatened, before any court or
governmental agency, nor has any order,
judgment or decree been issued or, to the
knowledge of Assignor, is threatened, by any
court or governmental agency which would
materially adversely affect the ability of
Assignor to complete and consummate its
obligations contemplated hereby;
(d) the Lessor's Estate is free of
Lessor's Liens attributable to it;
(e) it has fully performed all of its
obligations under each Assigned Document to
which it is a party or by which it is bound,
which obligations by their terms are required
to be satisfied or performed prior to the
Effective Time or prior to the consummation
of the transactions contemplated hereby;
(f) neither the execution, delivery and
performance by it of this Agreement, nor
compliance by it with any of the provisions
thereof requires or will require any approval
of its stockholders, or approval or consent
of any trustees or holders of any
indebtedness obligations of it or contravenes
or will contravene any law (assuming, with
respect to ERISA, the continuing accuracy of
the representations and warranties set forth
in Section 6.01(k) of the Participation
Agreement and the representations, warranties
and covenants set forth in Section
[2.18](8) of the Trust Indenture) or any
order of any court or governmental authority
or agency applicable to or binding on it or
contravenes or will contravene the provisions
of, or constitute a default under any
indenture, mortgage, contract or any
agreement or instrument to which it is a
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(8) Appropriate cross-reference to be used to the
section of the Indenture relating to the source of
funds of the Loan Participants.
party or by which it or any of its property
may be bound or affected; and
(g) the transfer to Assignee of all of
the Assignor's right, title and interest as
Owner Participant will not violate any
provision of the Federal Aviation Act (or any
rules or regulations promulgated thereunder),
Securities Act of 1933, as amended (and no
registration pursuant to such Act or the
rules and regulations thereunder shall be
required in connection with such transfer) or
any other applicable law (assuming, with
respect to ERISA, (x) that the Assignee's
representations and warranties, as they
relate to ERISA, in Section 8(h) above are
true and correct and (y) the continuing
accuracy of the representations and
warranties set forth in Section 6.01(k) of
the Participation Agreement and the
representations, warranties and covenants set
forth in Section [2.18]* of the Trust
Indenture).
9. GOVERNING LAW. THIS ASSIGNMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
ANY PROVISION OF NEW YORK LAW THAT WOULD REQUIRE THE
APPLICATION OF THE LAWS OF ANOTHER STATE.
10. Counterparts. This Assignment may be
executed in any number of counterparts, all of which
together shall constitute a single instrument. It
shall not be necessary that any counterpart be signed
by both parties so long as each party shall sign at
least one counterpart.
11. Third Party Beneficiaries. Each party
hereto agrees, for the benefit of the Owner Trustee,
the Loan Participants, the Lessee and the Indenture
Trustee (collectively, the "Beneficiaries"), that the
representations, warranties and covenants of such
party contained herein are also intended to be for the
benefit of each Beneficiary, and each Beneficiary
shall be deemed to be an express third party
beneficiary with respect thereto, entitled to enforce
directly and in its own name any rights or claims it
may have against such party as such beneficiary.
12. Effectiveness. This Agreement shall be
effective upon its execution and delivery by each of
Assignor and Assignee, the exact time of occurrence of
which (the "Effective Time") shall be agreed in
writing signed by Assignor and Assignee.
IN WITNESS WHEREOF, the parties hereto,
through their respective officers thereunto duly
authorized, have duly executed this Assignment as of
the day and year first above written.
[ASSIGNOR]
By:_________________________
Name:
Title:
[ASSIGNEE]
By:_________________________
Name:
Title:
Exhibit C
OP GUARANTEE
OP GUARANTEE, dated as of __________ __, ____, by
__________, a __________ [corporation] (the "Guarantor"), to
the Owner Trustee, the Indenture Trustee, the Pass Through
Trustee and the Lessee referred to in the Participation
Agreement described below (collectively, together with their
successors and assigns, the "Beneficiaries" and, each
individually, a "Beneficiary").
W I T N E S S E T H :
WHEREAS, reference is hereby made to the
Participation Agreement, dated as of March 1, 1994 (as
amended, modified or supplemented from time to time, the
"Participation Agreement"), among Federal Express
Corporation, as Lessee, LLG Aircraft Leasing, L.P., as Owner
Participant, First Security Bank of Utah, National
Association, as Owner Trustee ("FSBU"), NationsBank of
Georgia, National Association, as Indenture Trustee,
NationsBank of South Carolina, National Association, as Pass
Through Trustee, and Westdeutsche Landesbank Girozentrale,
New York Branch; and
[WHEREAS, this Guarantee is being delivered by the
Guarantor with respect to the obligations of LLG Aircraft
Leasing, L.P., (the "Obligor") as contemplated by Section
7.03(ix) of the Participation Agreement; and]*
[WHEREAS, [LLG Aircraft Leasing, L.P.] [Insert
name of subsequent transferor] (the "Transferor"), wishes to
transfer to ___________ (the "Obligor"), inter alia, [all][a
portion] of the Transferor's right, title and interest in
and to the Participation Agreement, the Trust Agreement (as
defined in the Participation Agreement) and each other
Operative Agreement (as defined in the Participation
Agreement) to which the Transferor is a party or by which it
is bound pursuant to the Assignment and Assumption
Agreement, dated as of ______________ __, 199_, between the
Transferor and the Obligor; and]**
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* Insert in the case of a guarantee by Lufthansa.
** Insert in the case of a guarantee in connection with a
transfer.
[WHEREAS, the terms of the Trust Agreement provide
that the aforementioned transfer is conditioned upon the
execution and delivery of this Guarantee by the Guarantor;]*
NOW, THEREFORE, [in order that the Transferor may
make the aforementioned transfer to the Obligor,]* the
Guarantor hereby agrees with and for the benefit of the
Beneficiaries as follows:
1. Definitions. As used in this Guarantee, terms
defined in the Participation Agreement are used herein as
therein defined, unless otherwise defined herein.
2. Guarantee. a. The Guarantor hereby
unconditionally and irrevocably guarantees as primary
obligor and not merely as a surety to the Beneficiaries and
their respective successors, endorsees, transferees and
assigns, the prompt and complete payment by the Obligor when
due (whether at the stated due date thereof, by acceleration
or otherwise) of, and the faithful performance of, and
compliance with, all payment obligations of the Obligor
under the Operative Agreements or any related documents owed
to such Beneficiary, strictly in accordance with the terms
thereof and the timely performance of all other obligations
of the Obligor owed to such Beneficiary thereunder strictly
in accordance with the terms thereof (such payment and other
obligations, the "Obligations"), and the Guarantor further
agrees to pay any and all expenses (including, without
limitation, all reasonable fees and disbursements of
counsel) that may be paid or incurred by the Beneficiaries
in enforcing, or obtaining advice of counsel in respect of,
any rights with respect to, or collecting, any or all of the
Obligations and/or enforcing any rights with respect to, or
collecting against, the Guarantor under this Guarantee.
b. No payment or payments made by the Obligor,
the Guarantor, any other guarantor or any other Person or
received or collected by any Beneficiary from the Obligor,
the Guarantor, any other guarantor or any other person by
virtue of any action or proceeding or any set-off or
appropriation or application at any time or from time to
time in reduction of or in payment of the Obligations shall
be deemed to modify, reduce, release or otherwise affect the
liability of the Guarantor hereunder until the Obligations
are paid and performed in full.
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* Insert in the case of a guarantee in connection with a
transfer.
c. If for any reason any Obligation to be
performed or observed by the Obligor (whether affirmative or
negative in character) shall not be observed or performed
strictly in accordance with the terms thereof, or if any
amount payable by the Obligor in connection with any
Obligation shall not be paid promptly when due and payable,
the Guarantor shall perform or observe or cause to be
performed or observed each such Obligation or undertaking
and shall pay such amount at the place and to the person or
entity entitled thereto pursuant to the Operative Agreements
regardless of whether or not any Beneficiary or anyone
acting on behalf of any of them shall have instituted any
suit, action or proceeding or exhausted its remedies or
taken any steps to enforce any rights against the Obligor or
any other person or entity to compel any such performance or
to collect all or any part of such amount pursuant to the
provisions of the Operative Agreements or at law or in
equity, or otherwise, and regardless of any other condition
or contingency.
d. The Guarantor irrevocably waives promptness,
diligence, demand, and all notices whatsoever as to the
Obligations and covenants guaranteed hereby, and any other
circumstances which might otherwise constitute a defense
available to it, or a discharge of it (other than the
defense of payment or performance) and agrees that it shall
not be required to consent to or receive any notice of any
amendment or modification of, or waiver, consent or
extension with respect to, the Participation Agreement, the
Trust Agreement or the other Operative Agreements to which
the Obligor is a party that may be made or given as provided
herein or otherwise.
e. The Guarantor further agrees to pay all
expenses (including, without limitation, all reasonable fees
and disbursements of counsel) that may be paid or incurred
by the beneficiaries hereof in enforcing any rights with
respect to, or collecting, any or all of the Obligations
and/or enforcing any rights with respect to, or collecting
against, the Guarantor under this Guarantee.
f. The Guarantor understands and agrees that its
Obligations hereunder shall be construed as continuing,
absolute and unconditional without regard to (a) the
validity, regularity or enforceability of any Operative
Agreement, any of the Obligations or any collateral security
therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by any
Beneficiary, (b) any defense, set-off or counterclaim (other
than a defense of full payment or performance) that may at
any time be available to or be asserted by the Obligor
against any Beneficiary, or (c) any other circumstances
whatsoever (with or without notice to or knowledge of the
Obligor or the Guarantor) that constitutes, or might be
construed to constitute, an equitable or legal discharge of
the Obligor for the Obligations, or of the Guarantor under
this Guarantee, in bankruptcy or in any other instance.
g. The obligation of the Guarantor hereunder
will not be discharged by: (a) any extension or renewal
with respect to any obligation of the Obligor under the
Operative Agreements; (b) any modification of, or amendment
or supplement to, any such Operative Agreement; (c) any
furnishing or acceptance of additional security or any
release of any security; (d) any waiver, consent or other
action or inaction or any exercise or non-exercise of any
right, remedy or power with respect to the Obligor or any
change in the structure of the Obligor; (e) any insolvency,
bankruptcy, reorganization, arrangement, composition,
liquidation, dissolution or similar proceedings with respect
to the Obligor; (f) except as provided in Section 14 hereof,
any change in ownership of the shares of capital stock of
the Guarantor or the Obligor; or (g) any other occurrence
whatsoever, except payment in full of all amounts payable by
the Obligor under the Operative Agreements and performance
in full of all Obligations of the Obligor in accordance with
the terms and conditions of the Operative Agreements.
3. No Subrogation, Contribution, Reimbursement or
Indemnity. Notwithstanding anything to the contrary in this
Guarantee, the Guarantor hereby agrees not to assert any
rights which may have arisen in connection with this
Guarantee to be subrogated to any of the rights (whether
contractual, under the Bankruptcy Code, including Section
509 thereof, under common law or otherwise) of any
Beneficiary against the Obligor or against any Beneficiary
for the payment of the Obligations until indefeasible
payment or performance in full of the Obligations. The
Guarantor hereby further agrees not to assert any
contractual, common law, statutory or other rights of
reimbursement, contribution, exoneration or indemnity (or
any similar right) from or against the Obligor or any other
Person which may have arisen in connection with this
Guarantee if any payment under this Guarantee is outstanding
at such time. So long as any payment under this Guarantee
is outstanding, if any amount shall be paid by or on behalf
of the Obligor to the Guarantor on account of any of the
rights referred to above in this paragraph, such amount
shall be held by the Guarantor in trust, segregated from
other funds of such Guarantor, and shall, forthwith upon
receipt by such Guarantor, be turned over to the applicable
Beneficiary in the exact form received by the Guarantor
(duly endorsed by the Guarantor to the applicable
Beneficiary, if required).
4. Amendment with Respect to the Obligations;
Waiver of Rights. The Guarantor shall remain fully
obligated hereunder notwithstanding that, without any
reservation of rights against the Guarantor and without
notice to or further assent by the Guarantor, any demand for
payment or performance of any of the Obligations made by any
Beneficiary may be rescinded by such party and any of the
Obligations continued, and the Obligations, or the liability
of any other party upon or for any part thereof, or any
collateral security or guaranty therefor or right of offset
with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by any
Beneficiary and any Operative Agreement and/or any
collateral security document or other guaranty or document
in connection therewith, may be amended, modified,
supplemented or terminated, in whole or in part, in
accordance with the provisions thereof from time to time,
and any collateral security, guaranty or right of offset at
any time held by any Beneficiary for the payment or
performance of the Obligations may be sold, exchanged,
waived, surrendered or released. No Beneficiary shall have
any obligation to protect, secure, perfect or insure any
Lien at any time held by it as security for the Obligations
or for this Guarantee or any property subject thereto. When
making any demand hereunder against the Guarantor, a
Beneficiary may, but shall be under no obligation to, make a
similar demand on the Obligor or any other guarantor, and
any failure by a Beneficiary to make any such demand or to
collect any payments from the Obligor or any such other
guarantor or any release of the Obligor or such other
guarantor shall not relieve the Guarantor of its obligations
or liabilities hereunder, and shall not impair or affect the
rights and remedies, express or implied, or as a matter of
law, of any Beneficiary against the Guarantor. For the
purposes hereof, "demand" shall include, but not be limited
to, the commencement and continuance of any legal
proceedings. [The Guarantor represents and warrants that it
owns, directly or indirectly, 100% of the capital stock of
the Obligor and that its obligations hereunder shall
continue unimpaired, even if the Guarantor no longer owns,
directly or indirectly, all or any portion of the capital
stock of the Obligor.]*
- --------------
* Insert in the case of a guarantee in connection with a
transfer.
5. Guarantee Absolute and Unconditional. The
Guarantor waives any and all notice of the creation,
renewal, extension or accrual of any of the Obligations and
notice of or proof of reliance by any Beneficiary upon this
Guarantee or acceptance of this Guarantee; the Obligations,
and any of them, shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended,
amended or waived, in reliance upon this Guarantee; and all
dealings between the Obligor or the Guarantor and any
Beneficiary shall likewise be conclusively presumed to have
been had or consummated in reliance upon this Guarantee.
The Guarantor waives diligence, presentment, protest, demand
for payment and notice of default or nonpayment to or upon
the Transferee or the Guarantor with respect to the
Obligations. The Guarantor understands and agrees that this
Guarantee shall be construed as a continuing, absolute and
unconditional guaranty of payment and performance (and not
merely of collectability) without regard to (a) the
validity, regularity or enforceability of any Operative
Agreement or any related agreement, any of the Obligations
or any collateral security therefor or guaranty or right of
offset with respect thereto at any time or from time to time
held by any Beneficiary, (b) any defense, set-off or
counterclaim (other than a defense of full payment or
performance) that may at any time be available to or be
asserted by the Obligor against any Beneficiary, or (c) any
other circumstance whatsoever (with or without notice to or
knowledge of the Obligor or the Guarantor) that constitutes,
or might be construed to constitute, an equitable or legal
discharge of the Obligor for the Obligations, or of the
Guarantor under this Guarantee, in bankruptcy or in any
other instance. When pursuing its rights and remedies
hereunder against the Guarantor, any Beneficiary may, but
shall be under no obligation to, pursue such rights and
remedies as it may have against the Obligor or any other
person or entity or against any collateral security or
guaranty for the Obligations or any right of offset with
respect thereto, and any failure by any Beneficiary to
pursue such other rights or remedies or to collect any
payments from the Obligor or any such other person or entity
or to realize upon any such collateral security or guaranty
or to exercise any such right of offset, or any release of
the Obligor or any such other person or entity or any such
collateral security, guaranty or right of offset, shall not
relieve the Guarantor of any liability hereunder, and shall
not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of any
Beneficiary against the Guarantor. This Guarantee shall
remain in full force and effect and be binding in accordance
with and to the extent of its terms upon the Guarantor and
the successors and assigns thereof, and shall inure to the
benefit of the Beneficiaries, and their respective
successors, indorsees, transferees and assigns, until the
earlier of (x) all of the Obligations and the obligations of
the Guarantor under this Agreement shall have been satisfied
by payment and performance in full, (y) the right, title and
interest of the Obligor shall have been transferred to a
Person meeting the requirements of Article 5 of the Trust
Agreement, it being understood that this Guarantee shall
remain in effect with respect to obligations of the Obligor
arising prior to such transfer and (z) the Obligor obtaining
a tangible net worth equalling or exceeding [$50,000,000
(Fifty Million Dollars)].* The Guarantor further agrees
that, without limiting the generality of this Guarantee, if
any Beneficiary (or any assignee thereof) shall be prevented
by applicable law from exercising its remedies (or any of
them) against the Obligor under any Operative Agreement such
Beneficiary (or any assignee thereof) shall be entitled to
receive hereunder from the Guarantor the sums that would
have otherwise been due from the Obligor had such remedies
been able to be exercised.
6. Reinstatement. This Guarantee shall continue
to be effective, or be reinstated, as the case may be, if at
any time payment, or any part thereof, of any of the
Obligations is rescinded or must otherwise be restored or
returned by any Beneficiary upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Obligor or
the Guarantor, or upon or as a result of the appointment of
a receiver, intervenor or conservator of, or trustee or
similar officer for, the Obligor or the Guarantor or any
substantial part of its property, or otherwise, all as
though such payments had not been made. The Guarantor shall
not commence any "case" (as defined in Title 11 of the
United States Code) against the Obligor.
7. Payments. The Guarantor hereby guarantees
that payments hereunder shall be paid without set-off,
counterclaim, deduction or withholding, and shall be made in
U.S. Dollars.
8. Representations and Warranties. The Guarantor
hereby represents and warrants that:
a. the Guarantor is a corporation duly organized,
validly existing and in good standing under the laws of
the jurisdiction of its incorporation and has the
corporate power and authority and the legal right to
own and operate its property, to lease the property it
operates and to conduct the business in which it is
currently engaged;
- --------------
* $40,000,000 (Forty Million Dollars) if the Obligor is
an Affiliate of, or one of the partners of, LLG
Aircraft Leasing, L.P.
b. the Guarantor has the corporate power and
authority and the legal right to execute and deliver,
and to perform its obligations under, this Guarantee,
has taken all necessary corporate action to authorize
its execution, delivery and performance of this
Guarantee, and this Guarantee has been duly executed
and delivered by the Guarantor and does not require any
approval not already obtained of its stockholders or
any approval or consent not already obtained of any
trustee or holders of any of its indebtedness or
obligations;
c. this Guarantee constitutes a legal, valid and
binding obligation of the Guarantor enforceable in
accordance with its terms, except as such
enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganization, or other
similar laws or equitable principals of general
application to or affecting the enforcement of
creditor's rights generally;
d. neither the execution and delivery of this
Guarantee nor compliance by the Guarantor with any of
the terms and provisions hereof will contravene any
United States Federal or state law, judgment,
governmental rule, regulation or order applicable to or
binding on the Guarantor (assuming, with respect to
ERISA, the continuing accuracy of the representations
and warranties set forth in Sections 6.01(k)(ix) and
7.01(b) of the Participation Agreement) or contravene
or result in any breach of or constitute any default
under, or result in the creation of any lien on any
property of the Guarantor or, any indenture, mortgage,
chattel mortgage, deed of trust, conditional sales
contract, bank loan or credit agreement, corporate
charter, by-law or other agreement or instrument to
which the Guarantor is a party or by which it or its
properties may be bound or affected;
e. no consent or authorization of, filing with,
or other act by or in respect of, any arbitrator or
governmental authority and no consent of any other
person (including, without limitation, any stockholder
or creditor of the Guarantor) is required in connection
with the execution, delivery, performance, validity or
enforceability of this Guarantee;
f. no litigation, investigation or proceeding of
or before any arbitrator or governmental authority is
pending or, to the knowledge of the Guarantor,
threatened by or against the Guarantor or against any
of its properties or revenues (i) with respect to this
Guarantee or any of the transactions contemplated
hereby or (ii) that could have a material adverse
effect on the business, operations, property or
financial or other condition of the Guarantor;
g. the balance sheet of the Guarantor as at
_______ and the related statement of income and
retained earnings for the fiscal year then ended
(copies of which have heretofore been furnished to each
Beneficiary) have been prepared in accordance with
generally accepted accounting principles applied
consistently throughout the period involved, are
complete and correct and present fairly the financial
condition of the Guarantor as at such date and the
results of its operations for such fiscal year; since
such date there has been no material adverse change in
the business, operations, property or financial or
other condition of the Guarantor; the Guarantor has no
material contingent obligation, contingent liability or
liability for taxes, long-term lease or unusual forward
or long-term commitment that is not reflected in the
foregoing statements or in the notes thereto; and
h. the Guarantor is a [bank or other financial
institution with a combined capital, surplus and
undivided profits of at least $50,000,000]*
[corporation whose tangible net worth is at least
$50,000,000]*, exclusive of goodwill, as of the
proposed date of transfer, as determined in accordance
with generally accepted accounting principles.
9. Severability. Any provision of this Guarantee
that 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 hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other
jurisdiction.
10. Section Headings. The Section headings used in
this Guarantee are for convenience of reference only and are
not to affect the construction hereof or be taken into
consideration in the interpretation hereof.
- --------------
* Replace with $40,000,000 if Obligor is an Affiliate of,
or a partner of, LLG Aircraft Leasing, L.P.
11. No Waiver; Cumulative Remedies. No Beneficiary
shall by any act (except by a written instrument pursuant to
Section 13 hereof), delay, indulgence, omission or otherwise
be deemed to have waived any right or remedy hereunder or to
have acquiesced in any breach of any of the terms and
conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of any Beneficiary, any right, power
or privilege hereunder shall operate as a waiver thereof.
No single or partial exercise of any right, power or
privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power
or privilege. A waiver by a Beneficiary of any right or
remedy hereunder on any one occasion shall not be construed
as a bar to any right or remedy that such Beneficiary would
otherwise have on any future occasion. The rights and
remedies herein provided are cumulative, may be exercised
singly or concurrently and are not exclusive of any rights
or remedies provided by law.
12. Integration. This Guarantee represents the
entire agreement of the Guarantor with respect to the
subject matter hereof and there are no promises or
representations by any Beneficiary relative to the subject
matter hereof not reflected herein.
13. Amendments and Waivers. None of the terms or
provisions of this Guarantee may be waived, amended or
supplemented or otherwise modified except by a written
instrument executed by the Guarantor and each Beneficiary.
14. Transfer of Interest in the Obligor or of this
Guarantee. The Guarantor may assign, convey or otherwise
transfer (a) any of its interest in the Obligor or (b) its
obligations hereunder, in either case to any other person
(hereinafter referred to as the "the Subsequent Guarantor");
provided that the Subsequent Guarantor enters into an
agreement substantially in the form of this Guarantee
Agreement; and, provided, further, that, if the Subsequent
Guarantor is not a bank or a lending institution with a
combined capital, surplus and undivided profits of at least
[$50,000,000]*, or is not a corporation with a net worth of
at least [$50,000,000]*, the Guarantor shall enter into an
agreement, substantially in the form of this Guarantee,
guaranteeing the Obligations of the Obligor under the
Operative Agreements or provide such a guarantee from such a
bank, lending institution or corporation satisfactory to
each Beneficiary, so that there will then be existing both
such guaranty agreement as well as the guaranty agreement
executed by the Subsequent Guarantee; in such event, the
Beneficiaries shall have the right to enforce the
obligations of the Guarantor under such guaranty agreement
without first proceeding against the Subsequent Guarantor
under its guaranty referred to above.
- --------------
* Replace with $40,000,000 if the Obligor is an Affiliate
of, or a partner of, LLG Aircraft Leasing, L.P.
15. Successors and Assigns. This Guarantee shall
be binding upon the successors and permitted assigns of the
Guarantor and shall inure to the benefit of the
Beneficiaries and their respective successors and permitted
assigns.
16. GOVERNING LAW. THIS GUARANTEE SHALL BE
GOVERNED BY AND BE CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK BUT WITHOUT GIVING
EFFECT TO ANY PROVISION OF NEW YORK LAW THAT WOULD REQUIRE
THE APPLICATION OF THE LAWS OF ANOTHER STATE.
17. Notices. All notices, requests and demands to
or upon the Guarantor or any Beneficiary to be effective
shall be in writing or by telegraph, facsimile or telex and,
unless otherwise expressly provided herein, shall be deemed
to have been duly given or made when delivered by hand, or,
in the case of mail, five days after deposit in the postal
system, certified mail prepaid, or, in the case of
telegraphic notice, when sent, answerback received,
addressed to (a) in the case of the Guarantor [address,
telex and fax information to be provided] and (b) in the
case of any Beneficiary, the address, telex or telecopy
number provided for such party in the Participation
Agreement.
IN WITNESS WHEREOF, the undersigned has caused
this Guarantee to be duly executed and delivered by its duly
authorized officer as of the day and year first above
written.
[NAME OF GUARANTOR]
By:________________________
Name:
Title:
By:_________________________
Name:
Title:
Exhibit D
TRUST AGREEMENT SUPPLEMENT NO. __
Trust Agreement Supplement No. __, dated
______ __, 199_, between First Security Bank of Utah,
National Association, a national banking association
(in its individual capacity "FSBU" and not in its
individual capacity, but solely as trustee hereunder,
the "Owner Trustee") and LLG AIRCRAFT Leasing, L.P., a
limited partnership organized under the laws of
Delaware (together with its successors and permitted
assigns, the "Trustor").
W I T N E S S E T H:
WHEREAS, the Trustor and FSBU have heretofore
entered into that certain Trust Agreement, dated as of
September 1, 1993, as amended and restated as of
March 1, 1994 (the "Trust Agreement");
WHEREAS, capitalized terms used herein shall
have the meanings set forth in the Trust Agreement;
WHEREAS, the Trust Agreement provides for the
execution and delivery of supplements thereto
(individually, a "Supplement" and, collectively,
"Supplements") substantially in the form hereof, each
of which shall particularly describe an Aircraft
included in the property covered by the Trust
Agreement and to be leased to the Lessee pursuant to
the related Lease;
WHEREAS, the Trust Agreement relates to the
Airframe and Engines (together constituting the
"Aircraft") described below and a counterpart of the
Trust Agreement [is attached to] [has been filed with
the FAA at _____]* and is made a part of this Trust
Agreement Supplement; and
WHEREAS, the Trustor and the Owner Trustee
wish to supplement the Trust Agreement to the extent
provided herein;
NOW, THEREFORE, in consideration of the
mutual covenants and agreements contained herein, the
Owner Trustee and the Trustor hereby acknowledge that
the Owner Trustee has purchased for value and hereby
(*) Insert as appropriate.
does confirm its purchase for value of the following
described property:
AIRFRAME
1 airframe identified as follows:
FAA
Registration Manufacturer's
Manufacturer Model Number Serial Number
- ------------ ----- -------------- ---------------
Airbus A310-203
AIRCRAFT ENGINES
2 aircraft engines, each such engine having 750 or
more rated takeoff horsepower or the equivalent
thereof, identified as follows:
Manufacturer's
Manufacturer Model Serial Number
- ------------ ----- --------------
General Electric CF6-80A3
whether or not such Engines shall be installed in or
attached to the Aircraft or any other Aircraft.
This Supplement shall be construed as
supplemental to the Trust Agreement and shall form a
part of it, and the Trust Agreement is hereby
incorporated by reference herein and is hereby
ratified, approved and confirmed.
This Supplement is being delivered in the
State of New York.
This Supplement may be executed by the Owner
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.
AND FURTHER, the Owner Trustee hereby
acknowledges that the Aircraft referred to above has
been delivered to the Owner Trustee and is included in
the property of the Owner Trustee covered by all the
terms and conditions of the Trust Agreement, subject,
after the related Exchange Date, to the pledge or
mortgage thereof under the related Indenture.
IN WITNESS WHEREOF, FSBU and the Trustor have
caused this Agreement to be duly executed as of
__________ __, 199_.
LLG AIRCRAFT LEASING, L.P.
By LLG OF DELAWARE, INC.,
Its General Partner
By ______________________
Title:
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION
By ___________________________
Title:
SCHEDULE I
DEFINITIONS
GENERAL PROVISIONS
The following terms shall have the following
meanings for all purposes of each Operative Agreement
which specifically incorporates this Schedule,
referred to below, unless otherwise defined in such
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 such 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 or Federal Aviation Act. The Federal
Aviation Act of 1958, as amended from time to time,
and the regulations promulgated pursuant thereto.
Additional Insureds. As defined in
Article 13 of the Lease.
Aeronautics Authority or FAA. 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
located in the United States succeeding to the
functions of any of the foregoing.
Affiliate. With respect to any Person, any
partner of such Person or 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 or such partner 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 federal, state, local and foreign
income taxes resulting from the receipt or accrual of
such payments, shall be equal to the payment received
or deemed to have been received. In the case of
amounts payable to the Lessor, the Owner Participant
or any partner of the Owner Participant, or any
corporate affiliate of any partner of the Owner
Participant, it shall be presumed that such Person is
at all times subject to federal income tax at the
maximum marginal rate generally applicable to
corporations from time to time and actual state, local
and foreign income taxes.
Agreement to Lease. The Original Agreement
to Lease, as amended and restated as of March 1, 1994,
among Lufthansa, the Lessee and the Lessor.
Air Carrier. Any air carrier which is a
United States "domestic air carrier" as defined in
Part 121 of the Federal Aviation Regulations, and any
"foreign air carrier" (as defined in the Act) as to
which there is in force a permit granted under
Section 402 of the Act.
Aircraft. The Airframe together with the two
Engines whether or not any of such Engines may from
time to time be installed on such Airframe or may be
installed on any other airframe or on any other
aircraft.
Aircraft Cost. The amount specified as the
Aircraft Cost for the Aircraft on Schedule I to the
Agreement to Lease (as in effect on the Closing Date).
Airframe. The Airbus Model A310-203 aircraft
(excluding the Engines or engines from time to time
installed thereon) contemplated by the Participation
Agreement to be leased on the Commencement Date by the
Lessor to the Lessee pursuant to the Lease, and having
the manufacturer's serial number ________________ and,
on and after the Commencement Date, the United States
FAA Registration Number specified in the initial Lease
Supplement, including all Parts.
Ancillary Agreements. Any written agreement
between parties to the Agreement to Lease Operative
Agreements or Operative Agreements entered into on the
Closing Date or at any time thereafter in connection
with the transactions contemplated by the Operative
Agreements, as amended from time to time, including,
without limitation, Ancillary Agreement No. 1.
Ancillary Agreement No. 1. The agreement,
dated as of the Commencement Date, among the Lessee,
the Owner Trustee and the Indenture Trustee.
Appraisal. The appraisal delivered pursuant
to Section 4.01(l) of the Participation Agreement.
Bankruptcy Code. The Federal Bankruptcy Code
of 1978, as amended, and any successor thereto.
Bankruptcy Default. An event specified in
Section 16.01(e), (f) or (g) of the Lease which with
the giving of notice or lapse of time or both would
constitute an Event of Default.
Basic Rent. The aggregate periodic rent
payable throughout the Basic Term pursuant to
Section 3.01 of the Lease.
Basic Term. The period commencing at the
beginning of the day on the Commencement Date and
ending at the end of the day on the day immediately
preceding the date 15 years from the Commencement
Date, or such earlier date on which the Lease shall be
terminated as provided therein.
Beneficial Interest. The interest of the
Owner Participant under the Trust Agreement.
Bills of Sale. Has the meaning set forth in
Section 4.02(d)(v) of the Participation Agreement.
Business Day. Any day on which commercial
banks are not authorized or required to close in New
York City and Memphis, Tennessee, and so long as the
Lien of the Indenture is in effect, in Atlanta,
Georgia, and Columbia, South Carolina, and thereafter
in Salt Lake City, Utah.
Certificates or Equipment Trust Certificates.
The Equipment Trust Certificates (Federal Express
Corporation Trust ___) issued by the Owner Trustee
pursuant to the Indenture and any certificate issued
in exchange therefor or replacement thereof pursuant
to the Indenture.
Citizen of the United States. A citizen of
the United States as defined in Section 101(16) of the
Act, or any analogous part of any successor or
substituted legislation or regulation at the time in
effect.
Closing Date. The Business Day on which the
sale of the Pass Through Certificates to the
Underwriters occurs pursuant to the Underwriting
Agreement.
Closings. The closing with respect to the
acquisition of the Pass Through Certificates by the
Underwriters and the closing with respect to the
acquisition of the Certificates by the Pass Through
Trusts.
Code. Except as otherwise provided,
references to the Code shall mean the Internal Revenue
Code of 1986, as amended from time to time.
Collateral. Has the meaning set forth in the
Collateral Agreement.
Collateral Agreement. The Collateral
Agreement (Trust ______), dated as of March 1, 1994,
between the Owner Trustee and the Indenture Trustee,
as amended or modified from time to time.
Commencement Date. The date on which the
Aircraft is leased by the Lessor to the Lessee under
the Lease, which date shall also be the date of the
initial Lease Supplement.
Commission or SEC. The Securities and
Exchange Commission, as from time to time constituted,
created under the Exchange Act, or if at any time
after the execution and delivery of the Participation
Agreement such Commission is not existing and
performing the duties now assigned to it under the
Exchange Act, then the body performing such duties on
such date.
Company. Federal Express Corporation, a
Delaware corporation, and its permitted successors and
assigns hereunder.
Corporate Base Rate. The rate announced from
time to time by The Chase Manhattan Bank, N.A. or any
successors thereto at its head office at New York, New
York, as its Corporate Base Rate.
Corporate Trust Office. The office of the
Indenture Trustee at which the Indenture Trustee's
corporate trust business shall be administered which
the Indenture Trustee shall have specified by notice
in writing to the Lessee, the Owner Trustee and the
Holders.
Cut-off Date. The earlier to occur of (i)
the date which is 365 days after the Scheduled
Commencement Date, or any earlier Business Day (but in
no event earlier than the Scheduled Commencement Date)
specified as the Cut-off Date by the Owner Trustee in
an irrevocable written notice (including, without
limitation, in any such notice contemplated by Section
12 of the Agreement to Lease) given to the Indenture
Trustee not less than 30 days prior thereto and (ii)
30 days after the date of any Pre-Funding Termination
Notice in accordance with Section 3 of the Agreement
to Lease.
DA. Deutsche Aerospace Airbus GmbH, a German
corporation, its successor and permitted assigns.
Debt Portion. The amount specified as such
on Schedule IV to the Participation Agreement.
Debt Rate. The weighted average rate of
interest applicable from time to time to the
Certificates, but in no event less than 8% per annum.
Deemed Event of Loss. If the Exchange Date
does not occur on or prior to the Cut-off Date.
Default. Any event or condition, which with
the lapse of time or the giving of notice, or both,
would constitute an Event of Default.
Delivery Notice. Notice of the Aircraft's
Commencement Date, given by the Owner Participant as
provided in Section 3.01 of the Participation
Agreement and including any notice with respect to a
postponed Commencement Date given by the Owner
Participant pursuant to Section 3.02 of the
Participation Agreement.
Demand Note. Each of the Promissory Notes
(D-_______), dated the Closing Date, from Lufthansa in
the form of Exhibit E to the Participation Agreement,
and in an aggregate principal amount specified under
"Demand Note Principal Amount" in Schedule IV to the
Participation Agreement.
Demand Note Collateral. Has the meaning set
forth in the Collateral Agreement.
Dollars and $. The lawful currency of the
United States of America.
Engine. Each of the two General Electric
CF6-80A3 engines, more fully described in the initial
Lease Supplement (or, prior to the Commencement Date,
in Exhibit A to the Agreement to Lease opposite the
Airframe), 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 7.02(a)(vii), 10.03,
11.03, 11.04 or 12.02 of the Lease, together with all
Parts. 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 Lease.
ERISA. The Employee Retirement Income
Security Act of 1974, as amended.
Event of Default. Each of the events
specified in Article 16 of the Lease.
Event of Loss. Event of Loss means any of
the following events on or after the Commencement Date
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 120 days or to the end of the
Term, if less, due to theft or disappearance, or
(B) for a period in excess of 60 days or to the end of
the Term, if less, due to the destruction, damage
beyond economic repair or rendition of such property
permanently unfit for normal use by Lessee 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) (1) condemnation, confiscation or seizure of, or
requisition of title to such property by the
Government, any foreign government or purported
government or any agency or instrumentality thereof,
such Event of Loss being deemed to occur on the date
of any such condemnation, confiscation, seizure or
requisition of title, or (2) requisition of use of
such property (A) by 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 (or such shorter period
ending on the earlier of the expiration of the Term or
on the date on which an insurance settlement with
respect to such property on the basis of a total loss
or constructive or compromised total loss shall
occur), or (B) by the Government for a period
extending beyond the Term, provided that no Event of
Loss shall be deemed to have occurred, and the Term
shall be extended automatically for a period of up to
six months beyond the end of the Term in the event
that the Aircraft, the Airframe or Engine is
requisitioned by the Government pursuant to an
activation as part of the Civil Reserve Air Fleet
Program described in Section 7.02(a)(iv) of the Lease;
and (iv) 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 Airbus Model
A310-203 aircraft equipped with engines of the same
make and model as the Engines for a period of six (6)
consecutive months, unless the Lessee, prior to the
expiration of such six (6) 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 one (1)
year, unless the Lessee, prior to the expiration of
such one (1) year period shall have conformed the
Aircraft 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 Lessee; provided,
that if there is a conflict between the operation of
clause (iv) above and Section 12.05 of the Lease (by
reference to Section 12.04(ix) thereof), such
Section 12.05 of the Lease shall control. The date of
such Event of Loss shall be the date of (i) loss of
such property or its use thereof for a period in
excess of 120 days, or to the end of the Term, if less
due to theft or disappearance, or loss for a period in
excess of 60 days, or to the end of the Term, if less
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 or to the end of the Term),
(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 (iv) above. On or
after the Commencement Date, 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.
Exchange Act. The Securities Exchange Act of
1934, as amended.
Exchange Date. The date, on or after the
Commencement Date, on which the Indenture Trustee
releases the Debt Portion pursuant to Section 7(e) of
the Collateral Agreement.
Excepted Payments. Collectively, (i) all
right, title and interest of the Owner Participant or
the Owner Trustee in, to and under the Tax Indemnity
Agreement and any moneys due or to become due under
the Tax Indemnity Agreement and payments of
Supplemental Rent or other payments by the Lessee in
either case solely in respect of the Tax Indemnity
Agreement, (ii) indemnity payments and interest
thereon and other amounts paid or payable by the
Lessee to the Owner Participant or to the Owner
Trustee in its individual capacity or any of their
respective Affiliates (other than the Owner Trustee in
its capacity as trustee and the trust created pursuant
to the Trust Agreement), successors, assigns,
directors, officers, employees, agents or servants
pursuant to Articles 8, 9 or 10 of the Participation
Agreement or any corresponding payment of Supplemental
Rent under the Lease; (iii) proceeds of public
liability insurance or governmental indemnities in
lieu thereof in respect of the Aircraft payable to the
Owner Participant or the Owner Trustee, in its
individual capacity, or any of their Affiliates (other
than the Owner Trustee in its capacity as trustee and
the trust created pursuant to the Trust Agreement),
successors or assigns, as a result of insurance claims
made, or losses suffered, by, or amounts in respect of
such indemnities paid for the benefit of, the Owner
Participant or the Owner Trustee in its individual
capacity or any of their Affiliates (other than the
Owner Trustee in its capacity as trustee and the trust
created pursuant to the Trust Agreement), successors
or assigns, directors, officers, employees, agents or
servants, either pursuant to the Lease (which shall
include proceeds of any self-insurance by the Lessee)
or maintained by the Owner Trustee or the Owner
Participant and not required to be maintained under
the Lease; (iv) proceeds of any insurance in respect
of the Aircraft (not required by Section 13 of the
Lease) which is separately acquired and paid for by
the Owner Participant (directly or through the Owner
Trustee) or the Lessor in accordance with Section
13.05 of the Lease); (v) indemnity payments payable by
the Owner Participant to the Owner Trustee in its
individual capacity pursuant to Section 6.01 of the
Trust Agreement; (vi) Transaction Costs or other
expenses paid or payable by the Lessee to, or for the
benefit of, the Indenture Trustee, First Security or
the Owner Participant pursuant to Section 10.01 of the
Participation Agreement; (vii) if the Lessee has
assumed the obligations of the Owner Trustee pursuant
to Section 7.12 of the Participation Agreement and
Section 2.12 of the Indenture, the amount payable as
purchase price pursuant to Section 4.02(a), (c) or (d)
of the Lease; (viii) the right to enforce, and the
proceeds of any such enforcement of, any right to
receive the proceeds of any of the amounts referred to
in clauses (i) through (vii) above, and the right to
declare an Event of Default under the Lease in respect
of any of the foregoing amounts, but not including the
right to exercise any remedies under the Lease except
for those specifically provided for in this clause
(viii); and (ix) any payments in respect of interest
to the extent attributable to the payments referred to
in clauses (i) through (vii) above.
Expense and Expenses. Have the meanings
specified in Section 9.01(a) of the Participation
Agreement.
FAA Bill of Sale. Has the meaning set forth
in Section 4.02(d)(iv) of the Participation Agreement.
Fair Market Rental. An amount determined on
the basis of, and equal in amount to, the rental which
would be obtained in an arm's-length transaction
between an informed and willing lessee and an informed
and willing lessor unaffiliated with such lessee,
neither being under any compulsion to lease. In such
determination, it shall be assumed that the Aircraft
is in the condition required under the Lease in the
case of return of the Aircraft pursuant to Article 12
of the Lease. Fair Market Rental shall be determined
in accordance with the provisions of Section 4.03 of
the Lease.
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. Unless otherwise provided in the
applicable provisions of any Operative Agreement, in
such determination it shall be assumed that the
Aircraft is in the condition required under the Lease
in the case of return of the Aircraft pursuant to
Article 12 of the Lease. Fair Market Value shall be
determined in accordance with the provisions of
Section 4.03 of the Lease.
Frankfurt Business Day. A day which is a
Business Day and is a day (other than a Saturday or
Sunday) on which commercial banks in Frankfurt,
Germany are generally open for the conduct of
business.
Geneva Convention. The International
Convention on the Recognition of Rights in Aircraft
(Geneva 1948).
Government. The United States of America or
an agency or instrumentality thereof.
Government Obligations. Direct obligations
of the United States of America which are not
callable, redeemable or payable prior to maturity, in
whole or in part, directly or indirectly, by any
Person.
Holder of a Certificate; Holder. As of any
particular time, the Person in whose name a
Certificate shall be registered as payee with the
Indenture Trustee.
Indemnification Agreement. The
Indemnification Agreement, dated the date of the
Underwriting Agreement, among the Lessee, Lufthansa,
the LC Bank and the Underwriters.
Indemnitee. Each of the Owner Trustee, in
its individual capacity and as Owner Trustee and
Lessor, the Owner Participant, the Indenture Trustee
(after the Exchange Date), in its individual capacity
and as Indenture Trustee and any successor (including
any trustee which may succeed to the Lessor's interest
under the Lease), Affiliate, assign, officer,
director, employee, agent and servant of any of the
foregoing, the Lessor's Estate (except to the extent
comprised prior to the Exchange Date of the Trust
Indenture Estate) and (after the Exchange Date) the
Trust Indenture Estate and the officers, directors,
employees, agents and servants of Lufthansa and
the General Partner of the Owner Participant.
Indenture. The Trust Indenture and Security
Agreement (Federal Express Corporation Trust _____) dated
as of March 1, 1994, between the Owner Trustee and the
Indenture Trustee, as supplemented by the Indenture
and Security Agreement Supplement No. 1, and any
amendment or supplement thereto entered from time to
time.
Indenture and Security Agreement Supplement;
Indenture Supplement. A supplement to the Indenture,
substantially in the form of Exhibit A to the
Indenture.
Indenture Default. Any event which, with the
giving of notice or lapse of time, or both, would be
an Indenture Event of Default.
Indenture Documents. The Indenture, the
Collateral Agreement, the Letter of Credit, the
Demand Notes, the Sales Agreement (to the extent
relating to the Aircraft), the Parts and Services
Agreement (to the extent relating to the Aircraft),
the Bills of Sale, the Modification Agreement (to the
extent relating to the Aircraft), the Lease, the
Participation Agreement, the Agreement to Lease
(to the extent relating to the Aircraft), the Trust
Agreement (to the extent relating to the Aircraft
or the Lessor's Estate) and the Certificates.
Indenture Event of Default. Each of the
events specified in Section 7.01 of the Indenture.
Indenture Trustee. NationsBank of Georgia,
National Association, a national banking association,
not in its individual capacity but solely as Indenture
Trustee under the Indenture and each other Person
which may from time to time be acting as successor
trustee under the Indenture.
Indenture Trustee's Liens. Any Lien on the
Trust Indenture Estate resulting from (i) claims
against the Indenture Trustee not related to the
administration of the Trust Indenture Estate or any
transactions pursuant to the Indenture or any
Indenture Document or (ii) any act or omission of the
Indenture Trustee which is not related to the
transactions contemplated by the Operative Agreements
or is in violation of any of the terms of the
Operative Agreements.
Independent Appraisal. An appraisal
conducted pursuant to Section 4.03 of the Lease.
Independent Investment Banker. An
independent investment banking institution of national
standing appointed by the Lessee that is independent
in fact, does not have any direct financial interests,
or any material indirect financial interest, in the
Lessee or any Affiliate of the Lessee, and is not
connected with the Lessee or any Affiliate of the
Lessee, 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 purchase 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.
Interest Payment Date. Each March 23 and
September 23, commencing September 23, 1994.
Issuance Date. For any Pass Through Trust,
the date of the issuance of the related Pass Through
Certificates.
LC Bank. Westdeutsche Landesbank
Girozentrale, New York Branch.
Lease. The Lease Agreement (Federal Express
Corporation Trust _____), in the form of Exhibit B to
the Participation Agreement, dated as of the
Commencement Date or prior thereto, between the Lessor
and the Lessee, as said Lease may from time to time be
supplemented or amended, or its terms waived or
modified, to the extent permitted by, and in
accordance with, the terms of the Indenture,
including, without limitation, supplementation by the
Lease Supplement.
Lease Supplement. The Lease Supplement,
substantially in the form of Exhibit A to the Lease,
entered into between the Lessor and the Lessee.
Lessee. Federal Express Corporation, a
Delaware corporation, and any successors or permitted
assigns in its capacity as lessee under the Lease.
Lessee Documents. Each of the Operative
Agreements and Ancillary Agreements to which the
Lessee is or is to be a party; provided, however, that
for purposes of Section 6.01 of the Participation
Agreement, Lessee Documents shall not include the
Lease or any Lease Supplement prior to the
Commencement Date.
Lessor. First Security Bank of Utah,
National Association, a national banking association,
not in its individual capacity but solely as Owner
Trustee under the Trust Agreement, and its successors
and permitted assigns.
Lessor's Estate. All estate, right, title
and interest of the Owner Trustee in and to any
Additional Collateral, the Aircraft, the Lease, any
Lease Supplement, the Participation Agreement and the
other Indenture Documents, any warranty with respect
to the Airframe and the Engines, all amounts of Basic
Rent and Supplemental Rent, including without
limitation, insurance proceeds (other than insurance
proceeds payable to or for the benefit of the Owner
Trustee, for its own account or in its individual
capacity, the Owner Participant or the Indenture
Trustee), and requisition, indemnity or other payments
of any kind for or with respect to the Aircraft
(except amounts owing to the Owner Participant, to the
Indenture Trustee, to the Owner Trustee in its
individual capacity or to any of their respective
directors, officers, employees and agents pursuant to
Articles 8 and 9 of the Participation Agreement).
Notwithstanding the foregoing, "Lessor's Estate" shall
(i) include all items of property purported to be
covered by the Trust Indenture Estate and (ii) not
include any Excepted Payment.
Lessor's Liens. Liens on the Lessor's Estate
or the Trust Indenture Estate, arising as a result of
(i) claims against or liabilities of the Lessor, in
its individual capacity or as Owner Trustee, or the
Owner Participant, in each case not related to the
transactions contemplated by the Operative Agreements,
(ii) any act or omission of the Lessor in its
individual capacity or as Owner Trustee, and, in the
case of the Lessor in its individual capacity, arising
from its gross negligence or willful misconduct either
not related to the transactions contemplated by or
expressly prohibited under the Operative Agreements
and any act or omission of the Owner Participant which
is not related to the transactions contemplated by the
Operative Agreements or is in violation of any of the
terms of the Operative Agreements, (iii) Taxes or
Expenses imposed against the Lessor, in its individual
capacity or as Owner Trustee, the Owner Participant,
Lessor's Estate or the trust created by the Trust
Agreement which are not indemnified against by the
Lessee pursuant to the Tax Indemnity Agreement or the
Participation Agreement, (iv) claims against the
Lessor or the Owner Participant arising from the
voluntary transfer by the Lessor or the Owner
Participant of its interests in the Aircraft or the
Lessor's Estate other than a transfer of the Aircraft
or the Lessor's Estate pursuant to Section 4.02(a) or
Articles 10 or 11 of the Lease and other than a
transfer pursuant to the exercise of the remedies set
forth in Article 17 of the Lease or (v) claims against
the Lessor or the Owner Participant (or any Affiliate
of either) relating to the Modification Agreement, the
Agreement to Lease, the Sales Agreement, the Demand
Note, the Collateral Agreement, the Sub-subcontract
(as defined in the Agreement to Lease) or the Parts
and Services Agreement.
Letter of Credit. The Irrevocable Letter of
Credit, dated the Closing Date, in the form of
Exhibit G to the Participation Agreement and with a
Stated Amount equal to the amount specified under
"Letter of Credit Stated Amount" on Schedule IV to the
Participation Agreement, from the LC Bank to the
Indenture Trustee.
Lien. Any mortgage, pledge, lien, charge,
encumbrance, lease or security interest or other
similar interest.
Liquid Collateral. Has the meaning set forth
in the Collateral Agreement.
Lufthansa. Deutsche Lufthansa
Aktiengesellschaft.
Lufthansa Side Letter. The letter, dated the
Closing Date, substantially in the form of Exhibit J
to the Participation Agreement, among Lufthansa, the
Indenture Trustee and the Pass Through Trustee.
Majority in Interest of Certificate Holders.
As of a particular date of determination, the Holders
of more than 50% of the aggregate unpaid principal
amount of all Certificates outstanding as of such date
excluding for purposes of this definition any
Certificates held by (i) the Owner Participant unless
all Certificates then outstanding shall be held by the
Owner Participant, (ii) the Lessee or (iii) any
Affiliate of either.
Make-Whole Premium. An amount determined as
of the Business Day before the applicable Prepayment
Date or date of purchase, as the case may be, which an
Independent Investment Banker determines to be equal
to the excess of (i) the present values of all
remaining scheduled payments of principal on the
Certificate to be prepaid or purchased and interest
thereon (excluding interest accrued from the
immediately preceding Payment Date to such Prepayment
Date or date of purchase, as the case may be) to the
Maturity of such 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 Certificate.
Maturity. With respect to any Certificate,
the date on which the final principal amount of such
Certificate is scheduled to be due and payable.
Modification Agreement. The Original
Modification Agreement, as amended by Amendment No. 1
thereto, dated as of March 1, 1994, among the Lessor,
the Owner Participant, Lufthansa and DA.
Modification Cost. The amount set forth in
the "Total" column for the Aircraft in the Rate
Schedule on Exhibit E to the Modification Agreement.
Moody's. Moody's Investors Service, Inc.
Net Proceeds. The amount specified as such
on Schedule IV to the Participation Agreement.
Non-U.S. Person. Any Person other than (i) a
citizen or resident of the United States, as defined
in section 7701(a)(30) of the Code (for purposes of
this definition, the "United States"), (ii) a
corporation, partnership or other entity created or
organized in or under the laws of the United States or
any political subdivision thereof or therein, or
(iii) any estate or trust that is subject to United
States federal income taxation regardless of the
source of its income.
Obsolete Parts. Parts which the Lessee in
good faith determines to be obsolete or no longer
suitable or appropriate for use on the Airframe or any
Engine.
OP Guarantee. The Guarantee, if any, by
Lufthansa in the form of Exhibit I to the
Participation Agreement.
Operative Agreements. The Modification
Agreement, the Agreement to Lease, the Participation
Agreement, the Trust Agreement, the Trust Agreement
Supplement, the Bills of Sale, the Lease, any Lease
Supplement, any Ancillary Agreement which by its terms
is an Operative Agreement, the Certificates outstanding
at the time of reference, the Indenture, any Indenture
and Security Agreement Supplement, the Collateral
Agreement, the Demand Note, the Parts and Services
Agreement, the Indemnification Agreement, the Pass
Through Agreement and the Series Supplements, the Pass
Through Certificates outstanding at the time of reference,
the Sales Agreement, the OP Guarantee (if any) and the
Tax Indemnity Agreement, each as amended from time to
time.
Options Agreement. The letter agreement
dated September 1, 1993 between DA and the Lessee
relating, inter alia, to the sale by DA to the Lessee
of certain cargo conversion kits and the
acknowledgement and agreement by DA of certain rights
of the Lessee under the Modification Agreement.
Outstanding. When used with respect to
Certificates, as of the date of determination and
subject to the provisions of Section 10.04 of the
Indenture, all Certificates theretofore executed and
delivered under the Indenture, with the exception of
the following:
(i) Certificates theretofore cancelled by
the Indenture Trustee or delivered to the
Indenture Trustee for cancellation pursuant to
Section 2.08 of the Indenture or otherwise;
(ii) Certificates for which prepayment money
in the necessary amount has been theretofore
deposited with the Indenture Trustee in trust for
the Holders of such Certificates pursuant to
Section 14.01 of the Indenture; provided, that if
such Certificates are to be prepaid, notice of
such prepayment has been duly given pursuant to
the Indenture or provision therefor satisfactory
to the Indenture Trustee has been made; and
(iii) Certificates in exchange for or in lieu
of which other Certificates have been executed
and delivered pursuant to Article II of the
Indenture.
Original Agreement to Lease. The Agreement
to Lease, dated as of September 1, 1993 among
Lufthansa, the Lessee and the Lessor.
Original Agreements. The Original Agreement
to Lease, the Original Modification Agreement, the
Original Parts and Services Agreement, the Original
Sales Agreement and the Original Trust Agreement.
Original Modification Agreement. The
Aircraft Modification and Maintenance Agreement, dated
as of September 1, 1993, among the Lessor, Lufthansa
and DA.
Original Parts and Services Agreement. The
Parts and Services Agreement, dated as of September 1,
1993, between the Owner Trustee and Lufthansa.
Original Sales Agreement. The Sales
Agreement for Aircraft, dated as of September 1, 1993,
between the Owner Trustee and Lufthansa.
Original Trust Agreement. The Trust
Agreement, dated as of September 1, 1993, between the
Owner Participant and the Owner Trustee in its
individual capacity.
Owner Participant. The trustor originally
named in the Trust Agreement and any successor
thereto, and any Person to which Owner Participant
transfers, in accordance with the Trust Agreement and
the Participation Agreement, its right, title and
interest in and to the Operative Agreements and the
Lessor's Estate.
Owner Trustee. First Security Bank of Utah,
National Association, a national banking association,
not in its individual capacity except as otherwise
expressly stated, but solely as Owner Trustee under
the Trust Agreement, and its successors and permitted
assigns.
Participation Agreement. The Participation
Agreement (Federal Express Corporation Trust _____),
dated as of March 1, 1994, among the Lessee, the Owner
Trustee, not in its individual capacity except as
otherwise expressly stated therein, but solely as,
Owner Trustee, the Owner Participant, the Pass Through
Trustee, not in its individual capacity except as
otherwise expressly stated therein, but solely as Pass
Through Trustee, the Indenture Trustee, not in its
individual capacity except as otherwise expressly
stated therein but solely as Indenture Trustee and the
LC Bank, as amended, modified or supplemented, or the
terms thereof waived.
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, so long as title
thereto shall be vested in the Lessor, prior to
replacement thereof in accordance with the Lease,
which may be removed therefrom.
Parts and Services Agreement. The Original
Parts and Services Agreement, as amended by Amendment
No. 1 thereto, dated as of March 1, 1994, between the
Owner Trustee and Lufthansa.
Parts Cost. The cost of the parts and
services with respect to the Aircraft pursuant to
Article 4 of the Parts and Services Agreement.
Pass Through Agreement. The Pass Through
Trust Agreement dated as of March 1, 1994 between the
Lessee 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 1994
Pass Through Certificates, Series A310-A1, 1994 Pass
Through Certificates, Series A310-A2, or 1994 Pass
Through Certificates, Series A310-A3, in each case 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 Excess Amount. The
excess of the principal amount of the Certificates
issued on the Closing Date over the Net Proceeds.
Pass Through Trust. The Federal Express Pass
Through Trust, 1994-A310-A1, Federal Express Pass
Through Trust, 1994-A310-A2 or Federal Express Pass
Through Trust, 1994-A310-A3, in each case formed
pursuant to the related Series Supplement in
accordance with the Pass Through Agreement; and "Pass
Through Trusts" means all of such Pass Through
Trusts.
Pass Through Trustee. NationsBank of South
Carolina, National Association, 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 permitted assigns as
Pass Through Trustee thereunder.
Past Due Rate. In respect of (A) any amount
payable to the Owner Participant or the Owner Trustee
a rate per annum during the period from and including
the due date to but excluding the date on which such
amount is paid in full equal to 2.5% plus the Debt
Rate and (B) any principal of or interest on any
Certificate or any other amount payable under the
Indenture, any Certificate or any other Operative
Agreement that is not paid when due (whether at
Maturity, by acceleration, by optional or mandatory
prepayment or otherwise) to any Holder, the Indenture
Trustee or the Pass Through Trustee, a rate per annum
during the period from and including the due date to
but excluding the date on which such amount is paid in
full equal to (i) in the case of any such amount
payable to the Holder of any Certificate, 2.5% plus
the interest rate applicable to such Certificate and
(ii) in the case of any other such amount, 2.5% plus
the weighted average rate of interest from time to
time payable with respect to the Certificates (or if
no Certificates are then outstanding, such weighted
average rate at the time immediately preceding the
final payment with respect thereto).
Paying Agent. Has the meaning set forth in
Section 3.04 of the Indenture.
Payment Date. Any Interest Payment Date or
Sinking Fund Redemption Date.
Payment Default. Any event specified in
Section 16.01(a) or 16.01(b) of the Lease which with
the giving of notice or lapse of time or both would
constitute an Event of Default.
Permitted Investments. Those investments
enumerated in Section 23.01(a) (i), (ii), (iii) and
(iv) of the Lease.
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).
Pre-Funding Event of Loss. Any of the
following events prior to the Exchange Date 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 120 days or to the Cut-off Date, if less,
due to theft or disappearance, or (B) for a period in
excess of 60 days or to the Cut-off Date, if less, due
to the destruction, damage beyond economic repair or
rendition of such property permanently unfit for
normal use by Lessee for any reason whatsoever
(provided, however, that failure to properly complete
any work contemplated by the Modification Agreement
shall not constitute the basis for a Pre-Funding Event
of Loss); (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) (1) condemnation, confiscation or seizure of, or
requisition of title to such property by the
Government, any foreign government or purported
government or any agency or instrumentality thereof,
such Pre-Funding Event of Loss being deemed to occur
on the date of any such condemnation, confiscation,
seizure or requisition of title, or (2) requisition of
use of such property (A) by 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 (or such shorter period
ending on the earlier of the Cut-off Date or on the
date on which an insurance settlement with respect to
such property on the basis of a total loss or
constructive or compromised total loss shall occur),
or (B) by the Government for a period extending beyond
the Cut-off Date; and (iv) 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 Airbus Model A310-203 aircraft
equipped with engines of the same make and model as
the Engines for a period ending on or after the Cut-
off Date. The date of such Pre-Funding Event of Loss
shall be the date of (i) loss of such property or its
use thereof for a period in excess of 120 days, or to
the Cut-off Date, if less, due to theft or
disappearance; or loss for a period in excess of 60
days, or to the Cut-off Date, if less, 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 or as otherwise contemplated by clause
(iii)(2)(A) above), (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 (iv) above. A
Pre-Funding Event of Loss with respect to the Aircraft
shall be deemed to have occurred if any Pre-Funding
Event of Loss occurs with respect to the Airframe.
Pre-Funding Prepayment Date. Has the meaning
as set forth in Section 6(c) of the Collateral
Agreement.
Pre-Funding Termination Notice. Has the
meaning set forth in Section 3 of the Agreement to
Lease.
Prepayment Date. Has the meaning specified
in Section 6.02(b) of the Indenture.
Prepayment Price. Has the meaning specified
in Section 6.02(b) of the Indenture.
Proposed Termination Date. The proposed date
of termination of the Lease as specified by the Lessee
in its notice given pursuant to Section 10.01 thereof.
Purchase Price. The amount set forth in the
"Purchase Price in U.S. Dollars" column for the
Aircraft on Exhibit B to the Sales Agreement.
Record Date. With respect to any payment
under the Indenture means the 15th calendar day prior
to the date such payment is due.
Recourse Amount. Has the meaning specified
in Section 16.10 of the Participation Agreement.
Register. Has the meaning set forth in
Section 3.02 of the Indenture.
Registrar. Has the meaning set forth in
Section 3.02 of the Indenture.
Remaining Weighted Average Life. For any
Certificate, as of any determination date, the number
of years obtained by dividing (a) the sum of the
products obtained by multiplying (i) the amount of
each then remaining mandatory sinking fund redemption
payment of principal, including the payment due on the
Maturity of such Certificate, by (ii) the number of
years (calculated to the nearest one-twelfth) which
will elapse between such determination date, and the
date on which such payment is scheduled to be made, by
(b) the then outstanding principal amount of such
Certificate.
Renewal Rent. The amount payable by the
Lessee as rent in accordance with Section 4.01 of the
Lease during any Renewal Term.
Renewal Term. One term of two years with
respect to which the Lessee has exercised its option
to renew the Lease pursuant to Section 4.01(a)
thereof.
Rent. All payments due from the Lessee under
the Lease as Basic Rent, Renewal Rent and Supplemental
Rent, collectively.
Rent Payment Date. Each March 23 and
September 23, commencing on the first such date
after the Commencement Date, and continuing thereafter
during the Term.
Replacement Engine. A General Electric
CF6-80A3 engine of the same or of equal or greater
value and utility as the Engine being replaced,
together with all Parts relating to such engine;
provided, however, that such Engine shall be of the
same model as other Engines then subject to the Lease.
Responsible Officer. With respect to the
Owner Trustee (except for purposes of the Trust
Agreement) or 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 party, any corporate officer or other employee
of a party 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.
Sales Agreement. The Original Sales
Agreement as amended by Amendment No. 1 thereto, dated
as of March 1, 1994, between the Owner Trustee and
Lufthansa.
Scheduled Commencement Date. ______________,
199_.
Securities Act. The Securities Act of 1933,
as amended.
Secured Obligations. Has the meaning set
forth in the Granting Clause of the Indenture.
Series Supplement. The Series Supplement
1994-A310-A1 to be executed and delivered by the Lessee
and the Pass Through Trustee, the Series Supplement
1994-A310-A2 to be executed and delivered by the Lessee and
the Pass Through Trustee or the Series Supplement 1994-A310-A3
to be executed and delivered by the Lessee and the
Pass Through Trustee, in each case as such Series
Supplement may be modified, supplemented or amended
from time to time in accordance with the provisions
thereof and "Series Supplements" means all of such
Series Supplements.
Sinking Fund Redemption Date. Has the
meaning specified in Section 6.06 of the Indenture.
Sinking Fund Redemption Price. Has the
meaning specified in Section 6.06 of the Indenture.
Special Aviation Counsel. Daugherty, Fowler
& Peregrin.
S&P. Standard & Poor's Corporation.
Stipulated Loss Value. As of any Stipulated
Loss Value Determination Date during the Basic Term,
the greater of (i) the amount determined by multiplying
the Aircraft Cost by the percentage set forth in
Schedule III to the Lease under the heading
"Stipulated Loss Value Factor" opposite such date, and
(ii) an amount at least sufficient to pay in full, as
of the date of payment thereof, the aggregate unpaid
principal amount of the Certificates outstanding on such
date of payment, together with the accrued and unpaid interest
thereon; and during any Renewal Term, the amount
determined pursuant to Section 4.01(b) of the Lease.
Stipulated Loss Value Determination Date.
Each date set forth on Schedule III of the Lease under
the heading "Stipulated Loss Value Factors".
Supplemental Rent. All amounts, liabilities
and obligations which the Lessee assumes or agrees to
perform or pay under the Lease or under the
Participation Agreement or Tax Indemnity Agreement or
an Ancillary Agreement to the Lessor or others,
including, without limitation, payment of any Make-
Whole Premium payable by the Lessor under the
Indenture that is required to be paid by the Lessee
pursuant to Section 3.02 of the Lease, payments of
Stipulated Loss Value and amounts calculated by
reference to Termination Value and all amounts
required to be paid by the Lessee under the
agreements, covenants and indemnities contained in the
Lease or in the Participation Agreement or the Tax
Indemnity Agreement or other Ancillary Agreement, but
excluding (i) Basic Rent and (ii) any such amounts,
liabilities and obligations to the extent such
amounts, liabilities or obligations arise out of or
relate to the period prior to execution of the Lease
Supplement with respect to the Aircraft.
Tax. Has the meaning set forth in Section
8.01(a) of the Participation Agreement.
Tax Attribute Period. The period commencing
on the first day of the taxable year of the Owner
Participant in which the Commencement Date occurs and
ending on the last day of the seventh succeeding
taxable year of the Owner Participant; provided,
however, that if the Lessee breaches its
representation set forth in Section 4(a) of the Tax
Indemnity Agreement and as a result it is required to
pay an indemnity pursuant to said Agreement the Tax
Attribute Period shall be the period over which the
Owner Participant is required to depreciate the
Aircraft for purposes of calculating the indemnity
payable pursuant to Section 5 of the Tax Indemnity
Agreement.
Tax Indemnity Agreement. The Tax Indemnity
Agreement, dated as of the Commencement Date, among
the Lessee, and the Owner Participant and the partners
listed on the Schedule A thereto, as from time to time
modified, amended or supplemented pursuant to its
applicable provisions.
Term. The Basic Term and, if renewed
pursuant to Section 4.01 of the Lease, the Renewal
Term, or the period commencing on the Commencement
Date and ending on such earlier date on which the
Lease is terminated pursuant to its terms.
Termination Date. A Rent Payment Date during
the Basic Term that is on or after the end of the Tax
Attribute Period in the case of Article 10 of the
Lease and in the case of Section 4.02 of the Lease,
the date specified in the notice from the Lessee given
pursuant to such Section.
Termination Value. As of any Termination Date,
the greater of (i) the amount determined by multiplying
the Aircraft Cost by the percentage set forth in Schedule
IV to the Lease under the heading "Termination Value Factor"
opposite such Termination Date, and (ii) an amount at least
sufficient to pay in full, as of the date of payment
thereof, the aggregate unpaid principal amount of the
Certificates outstanding on such date of payment, together
with the accrued and unpaid interest thereon.
Transaction Costs. Those costs and expenses
set forth in Section 10.01(a) of the Participation
Agreement.
Treasury Yield. (i) In the case of a
Certificate having a Maturity within one year after
the Prepayment Date or purchase date, as the case may
be, 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
Certificate, and (ii) in the case of a Certificate
having a Maturity one year or more after the
Prepayment Date or purchase date, as the case may be,
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 Lessee) corresponding in maturity to the Remaining
Weighted Average Life of such 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 or purchase date, as the
case may be.
Trust Agreement. The Original Trust
Agreement, as amended and restated as of March 1,
1994, and as amended or supplemented pursuant to its
applicable provisions and in accordance with the other
Operative Agreements (including, without limitation,
as supplemented by any Trust Agreement Supplement).
Trust Agreement Supplement. The Trust
Agreement Supplement (as defined in the Trust
Agreement) relating to the Aircraft.
Trust Indenture Act. The Trust Indenture Act
of 1939, as amended.
Trust Indenture Estate; Indenture Estate.
The property, rights and privileges described in the
Granting Clause of the Indenture, other than
(A) Excepted Payments, including, without limitation
all right, title and interest of the Owner Participant
in, to and under the Tax Indemnity Agreement and any
moneys due and to become due under the Tax Indemnity
Agreement, all as provided in the Indenture, and
(B) rights granted to the Owner Trustee or the Owner
Participant under the Indenture, including without
limitation under Section 2.05, 7.02, 8.01, 8.02, 8.03,
13.01 and 13.02 thereof, and the Letter of Credit and
any rights thereunder.
Underwriters. The several Underwriters named
in the Underwriting Agreement.
Underwriting Agreement. The Underwriting
Agreement dated March 16, 1994 among the Lessee,
Lufthansa, the Owner Participant, Goldman, Sachs &
Co. and Merrill Lynch, Pierce, Fenner & Smith.
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 401 or Section 418 of the
Federal Aviation Act, and as to which there is in
force an air carrier operating certificate issued
pursuant to 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.
Exhibit 4.e
=====================================================================
LEASE AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST ____________)
Dated as of _______ 1, 199_
between
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION,
Not in its Individual Capacity,
but Solely as Owner Trustee,
AS LESSOR
and
FEDERAL EXPRESS CORPORATION,
AS LESSEE
COVERING ONE AIRBUS MODEL A310-203 AIRCRAFT,
SERIAL NO. ____,
CERTAIN OF THE RIGHT, TITLE AND INTEREST IN
AND TO THIS LEASE AGREEMENT OF FIRST SECURITY BANK OF
UTAH, NATIONAL ASSOCIATION, AS OWNER TRUSTEE, HAS BEEN
ASSIGNED TO AND IS SUBJECT TO A LIEN AND SECURITY
INTEREST IN FAVOR OF NATIONSBANK OF GEORGIA, NATIONAL
ASSOCIATION, AS INDENTURE TRUSTEE UNDER A TRUST
INDENTURE AND SECURITY AGREEMENT FOR THE BENEFIT OF
THE HOLDERS OF THE CERTIFICATES REFERRED TO IN SUCH
TRUST INDENTURE AND SECURITY AGREEMENT.
=====================================================================
TABLE OF CONTENTS
Page
----
Initial Recitals. . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 1
DEFINITIONS
ARTICLE 2
ACCEPTANCE UNDER THE LEASE
Section 2.01. Lease of the Aircraft . . . . . . . . . . . . 1
ARTICLE 3
RENT AND RENT ADJUSTMENT
Section 3.01. Basic Rent . . . . . . . . . . . . . . . . . . 2
Section 3.02. Supplemental Rent . . . . . . . . . . . . . . 2
Section 3.03. Payment to Indenture Trustee . . . . . . . . . 3
Section 3.04. Costs and Expenses . . . . . . . . . . . . . . 3
ARTICLE 4
RENEWAL OPTIONS AND PURCHASE OPTIONS
Section 4.01. Renewal Options . . . . . . . . . . . . . . . 4
Section 4.02. Purchase Option . . . . . . . . . . . . . . . 4
Section 4.03. Appraisal Procedures . . . . . . . . . . . . . 6
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
Section 5.01. Disclaimer of Representations
and Warranties . . . . . . . . . . . . . . . . 7
Section 5.02. No Modification of Other Warranties. . . . . . 9
Section 5.03. Certain Agreements of the Lessee . . . . . . . 9
ARTICLE 6
LIENS
Section 6.01. Liens . . . . . . . . . . . . .. . . . . . . . 9
ARTICLE 7
AIRCRAFT REGISTRATION, MAINTENANCE AND OPERATION
Section 7.01. Registration, Maintenance and
Operation . . . . . . . . . . . . . . . . . . . 11
Section 7.02. Possession and Permitted Transfer
and Sublease . . . . . . . . . . . . . . . . . 14
Section 7.03. Insignia . . . . . . . . . . . . . . . . . . . 20
ARTICLE 8
REPLACEMENT AND POOLING OF PARTS
Section 8.01. Replacement of Parts . . . . . . . . . . . . . 20
Section 8.02. Pooling of Parts . . . . . . . . . . . . . . . 21
ARTICLE 9
ALTERATIONS, MODIFICATIONS AND ADDITIONS
Section 9.01. Required Alterations and
Modifications . . . . . . . . . . . . . . . . . 22
Section 9.02. Other Alterations and
Modifications . . . . . . . . . . . . . . . . . 23
ARTICLE 10
VOLUNTARY TERMINATION
Section 10.01. Right of Termination Upon
Obsolescence or Surplus . . . . . . . . . . . 24
Section 10.02. Retention of the Aircraft by the
Lessor . . . . . . . . . . . . . . . . . . . . 27
Section 10.03. Voluntary Termination as
to Engines . . . . . . . . . . . . . . . . . . 29
ARTICLE 11
LOSS, DESTRUCTION, REQUISITION
Section 11.01. Lessee's Notification
Responsibility . . . . . . . . . . . . . . . . 29
Section 11.02. Payment of Stipulated Loss Value . . . . . . 29
Section 11.03. Intentionally Omitted . . . . . . . . . . . . 30
Section 11.04. Event of Loss with Respect to an
Engine . . . . . . . . . . . . . . . . . . . . 30
Section 11.05. Application of Payments from the
Government or Others . . . . . . . . . . . . . 33
Section 11.06. Requisition of the Airframe and the
Installed Engines for Use by
Government . . . . . . . . . . . . . . . . . . 34
Section 11.07. Requisition for Use by Government
of an Engine Not Installed
on the Airframe . . . . . . . . . . . . . . . 35
Section 11.08. Application of Payments During
Existence of Certain Defaults . . . . . . . . 35
ARTICLE 12
RETURN OF THE AIRCRAFT
Section 12.01. Return of the Aircraft . . . . . . . . . . . 35
Section 12.02. Return of the Engines . . . . . . . . . . . . 36
Section 12.03. Return of Manuals . . . . . . . . . . . . . . 37
Section 12.04. Condition of Aircraft . . . . . . . . . . . . 37
Section 12.05. Delayed Return of Aircraft . . . . . . . . . 39
Section 12.06. Storage . . . . . . . . . . . . . . . . . . . 40
Section 12.07. Special Markings . . . . . . . . . . . . . . 41
Section 12.08. Lessor's Option to Purchase Parts . . . . . . 41
ARTICLE 13
INSURANCE
Section 13.01. Public Liability and Property
Damage Liability Insurance . . . . . . . . . . 41
Section 13.02. Insurance Against Loss or Damage to
the Aircraft and Engines . . . . . . . . . . . 44
Section 13.03. Application of Insurance Proceeds . . . . . . 47
Section 13.04. Reports . . . . . . . . . . . . . . . . . . . 48
Section 13.05. Lessor's Insurance . . . . . . . . . . . . . 49
Section 13.06. Self-Insurance . . . . . . . . . . . . . . . 49
ARTICLE 14
INSPECTION
Section 14.01. Right of Inspection . . . . . . . . . . . . . 49
Section 14.02. No Obligation to Inspect . . . . . . . . . . 50
ARTICLE 15
ASSIGNMENT
Section 15.01. Lessee's Right to Assign . . . . . . . . . . 50
Section 15.02. Citizenship . . . . . . . . . . . . . . . . . 51
ARTICLE 16
EVENTS OF DEFAULT
Section 16.01. Events of Default . . . . . . . . . . . . . . 51
ARTICLE 17
REMEDIES
Section 17.01. Remedies Upon Lessee's Default . . . . . . . 54
Section 17.02. Cumulative Remedies . . . . . . . . . . . . . 57
Section 17.03. Waiver . . . . . . . . . . . . . . . . . . . 58
Section 17.04. Lessor's Right to Perform for
Lessee . . . . . . . . . . . . . . . . . . . . 58
ARTICLE 18
COVENANT OF QUIET ENJOYMENT
Section 18.01. Quiet Enjoyment . . . . . . . . . . . . . . . 58
ARTICLE 19
FURTHER ASSURANCES; FINANCIAL INFORMATION
Section 19.01. Further Assurances . . . . . . . . . . . . . 59
ARTICLE 20
NET LEASE
Section 20.01. Nature of Lease . . . . . . . . . . . . . . . 59
ARTICLE 21
SUCCESSOR LESSOR
Section 21.01. Successor Lessor . . . . . . . . . . . . . . 61
ARTICLE 22
SECURITY FOR LESSOR'S OBLIGATIONS
Section 22.01. Security for Lessor's Obligations
to Holders . . . . . . . . . . . . . . . . . . 61
Section 22.02. Lease Subject to Indenture . . . . . . . . . 61
Section 22.03. Consent of Lessee to Assignment
of Lease as Security . . . . . . . . . . . . . 62
ARTICLE 23
SECURITY FUNDS
Section 23.01. Investment of Security Funds . . . . . . . . 62
ARTICLE 24
CONCERNING THE LESSOR
Section 24.01. Lessor's Entry Into Lease . . . . . . . . . . 64
ARTICLE 25
NOTICES
Section 25.01. Notices . . . . . . . . . . . . . . . . . . . 65
ARTICLE 26
MISCELLANEOUS
Section 26.01. Section Headings and Captions . . . . . . . . 66
Section 26.02. References . . . . . . . . . . . . . . . . . 66
Section 26.03. Applicable Law . . . . . . . . . . . . . . . 66
Section 26.04. Severability . . . . . . . . . . . . . . . . 66
Section 26.05. No Oral Modification . . . . . . . . . . . . 67
Section 26.06. Agreement as Chattel Paper . . . . . . . . . 67
Section 26.07. Counterparts and Effective Date . . . . . . . 67
Section 26.08. Incorporation by Reference . . . . . . . . . 67
ARTICLE 27
TRUE LEASE
Section 27.01. Intent of the Parties . . . . . . . . . . . . 68
Section 27.02. Section 1110 Compliance . . . . . . . . . . . 68
Schedule I -- Definitions
Schedule II -- Basic Rent
Schedule III -- Stipulated Loss Values
Schedule IV -- Termination Values
Schedule V -- Purchase Option
Exhibit A -- Form of Lease Supplement
Exhibit B -- Aircraft Description
LEASE AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST ______)
Lease Agreement (Federal Express Corporation
Trust _______) (this "Lease") dated as of
__________ 1, 199_ between FIRST SECURITY BANK OF
UTAH, NATIONAL ASSOCIATION, a national banking
association, not in its individual capacity but solely
as Owner Trustee under the Trust Agreement (as defined
in Article 1 below) (the "Lessor"), and FEDERAL
EXPRESS CORPORATION, a Delaware corporation (the
"Lessee").
W I T N E S S E T H :
WHEREAS, subject to the terms and conditions
set forth in the Participation Agreement (as
hereinafter defined), the Lessee desires to lease from
the Lessor and the Lessor is willing to lease to the
Lessee the Aircraft (as hereinafter defined) in
accordance with the terms and conditions set forth in
this Lease;
NOW, THEREFORE, in consideration of the
mutual promises herein, and other good and valuable
consideration, the receipt and adequacy of which is
hereby acknowledged by the parties, the Lessor and the
Lessee agree as follows:
ARTICLE 1
DEFINITIONS
Unless the context otherwise requires, the
capitalized terms herein shall have the meanings given
in Schedule II to the Participation Agreement, a copy
of which schedule is annexed hereto as Schedule I, for
all purposes of this Lease and shall be equally
applicable to both the singular and the plural forms
of the terms defined.
ARTICLE 2
ACCEPTANCE UNDER THE LEASE
Section 2.01. Lease of Aircraft. The
Lessor, subject to satisfaction or waiver of the
conditions set forth in this Lease, the Agreement to
Lease (to the extent relating to the Aircraft) and in
the Participation Agreement, hereby agrees to lease
the Aircraft to the Lessee, and the Lessee hereby
agrees to lease the Aircraft from the Lessor.
Execution by the Lessee of the Lease Supplement with
respect to the Aircraft shall be conclusive evidence
that such conditions have been satisfied or waived.
The Lease shall last for the Term, at all times during
which full legal title to the Aircraft shall remain
vested in the Lessor to the exclusion of the Lessee,
notwithstanding the possession and use thereof by the
Lessee or any other party.
ARTICLE 3
RENT
Section 3.01. Basic Rent. The Lessee agrees
to pay to the Lessor in immediately available funds
denominated in United States Dollars on each Rent
Payment Date during the Basic Term, Basic Rent in the
amount set forth for such Rent Payment Date on
Schedule II hereto. Each payment of Basic Rent shall
be payable in arrears and shall be accrued over the
six month period ending on and including the day
immediately preceding the Rent Payment Date on which
such arrears payment of Basic Rent is scheduled to be made.
Anything contained in this Lease to the
contrary notwithstanding, on each Rent Payment Date
after the Exchange Date (other than the first Rent
Payment Date after the Commencement Date, at which
time Basic Rent will be prorated as provided in
Schedule II hereto) the Lessee shall pay as Basic Rent
that amount which shall be, under any circumstances
and in any event, at least sufficient to pay in full,
any installment of principal of and interest on the
Certificates required to be paid pursuant to the
Certificates (other than amounts becoming due on
account of the exercise of remedies pursuant to
Section 17 hereof) on such Rent Payment Date.
Section 3.02. Supplemental Rent. The Lessee
agrees to pay or cause to be paid to the Lessor, or to
whomever shall be entitled to it, any and all
Supplemental Rent promptly as the same shall become
due. If the Lessee fails to pay any Supplemental Rent
when due, the Lessor shall have all rights, powers and
remedies provided for in this Lease, or by law or
equity or otherwise in the case of nonpayment of Basic
Rent. The Lessee will also pay to the person entitled
thereto, on demand, as Supplemental Rent, to the
extent permitted by applicable law, an amount equal to
interest at the Past Due Rate on any part of any
installment of Basic Rent not paid when due, for any
period until the same shall be paid and on any payment
of Supplemental Rent not paid when due, for the period
until the same shall be paid. In addition, in the
case of (i) any prepayment of the Certificates
pursuant to Section 6.02(a)(ii), 6.02(a) (iii) (if
clause (A) of Section 8.02(a) of the Indenture is
applicable), or 6.02(a)(iv) of the Indenture or (ii)
any purchase of the Certificates pursuant to clause
(A) of the first sentence of Section 8.02(a) of the
Indenture, unless any such prepayment or purchase arises
out of an Indenture Event of Default that occurs at a
time when no Event of Default is continuing, the Lessee
will pay to the Lessor, as Supplemental Rent, on the
date of such prepayment or purchase, an amount equal to
the aggregate amount of the Make-Whole Premium payable
upon such prepayment or purchase pursuant to the Indenture.
The expiration or other termination of the Lessee's
obligation to pay Basic Rent shall not limit or otherwise
modify the obligations of the Lessee with respect to
the payment of Supplemental Rent.
Section 3.03. Payment to Indenture Trustee.
All Rent payable by the Lessee to the Lessor shall be
paid to the Lessor at its principal office at 79 South
Main Street, Salt Lake City, Utah, 84111, or as the
Lessor may otherwise direct, by wire transfer of
immediately available funds in U.S. Dollars with
sufficient information to identify sources and
applications of such funds no later than 11:00 a.m.,
Central Time on the due date of such payment;
provided, however, that on and after the Exchange Date
and so long thereafter as the Indenture shall not
have been discharged, the Lessor hereby directs, and
the Lessee agrees, that all Rent (other than Excepted
Payments) and all amounts referred to in Section 3.01
hereof, shall be paid directly to the Indenture
Trustee at its principal office no later than
11:00 a.m., Central Time, on the due date of such
payment. In any case where a scheduled Rent Payment
Date shall not be a Business Day, such Rent Payment
Date shall be adjourned to the next succeeding
Business Day.
Section 3.04. Costs and Expenses. As
between the Lessor and the Lessee, all obligations
under this Lease shall be done, performed and complied
with at the Lessee's cost and expense, whether or not
so expressed, unless otherwise expressly stated to the
contrary.
ARTICLE 4
RENEWAL OPTIONS AND PURCHASE OPTIONS
Section 4.01. Renewal Options. (a) Election
to Renew. The Lessee shall provide the Lessor with
irrevocable written notice (the "Preliminary Notice")
not less than 1 year prior to the end of the Basic
Term, whether it will exercise its options either to
renew this Lease pursuant to this Section 4.01 or to
purchase the Aircraft pursuant to Section 4.02(a)(A).
Provided that, (i) no Payment Default or Event of
Default shall have occurred and be continuing at the
time of renewal, (ii) this Lease has not otherwise
expired or terminated, and (iii) the Lessee shall have
delivered the Preliminary Notice, the Lessee may, by
irrevocable written notice delivered to the Lessor not
less than 180 days prior to the end of the Basic Term,
elect to extend the Term for a Renewal Term commencing
on the expiration of the Basic Term and ending on the
second annual anniversary of such expiration of the
Basic Term. The rent payable with respect to any such
Renewal Term shall be equal to the then-current Fair
Market Rental of the Aircraft.
(b) Terms and Conditions. Any such renewal
shall be on the same terms and conditions as provided
herein, except that during any Renewal Term, the
Stipulated Loss Value as of any Stipulated Loss Value
Determination Date during the Renewal Term be equal to
the greater of Stipulated Loss Value on the last day
of the Basic Term and the Fair Market Value of the
Aircraft as of the commencement of such Renewal Term.
Section 4.02. Purchase Option. (a) Election
to Purchase. Provided that (i) this Lease has not
otherwise expired or terminated, and (ii) the Lessee
shall have previously given the Preliminary Notice
under Section 4.01(a) hereof in the case of paragraph
(A) below or the applicable notice for each other
paragraph below, as the case may be, the Lessee may:
(A) by irrevocable written notice delivered
to the Lessor and the Owner Participant not less
than 180 days prior to the end of the Basic Term,
elect to purchase the Aircraft on the last day of
the Basic Term (provided that the Indenture has
been discharged or will be discharged
concurrently with such purchase) for an amount
equal to the Fair Market Value thereof; or
(B) by irrevocable written notice delivered
to the Lessor and the Owner Participant not less
than 365 days prior to the end of the Renewal
Term, if any, elect to terminate the Lease and
purchase the Aircraft on the first day following
such Renewal Term at a price equal to the Fair
Market Value of the Aircraft on such day; or
(C) exercise the purchase option in this
Section 4.02(a)(C) which is more particularly
described in Schedule V hereto by reference to
this Section 4.02(a)(C) and which option shall be
in an amount not less than Fair Market Value; or
(D) exercise the purchase option in this
Section 4.02(a)(D) which is more particularly
described in Schedule V hereto by reference to
this Section 4.02(a)(D) and which option shall be
in an amount not less than Fair Market Value.
The Lessee shall give the Lessor, the Owner
Participant and the Indenture Trustee not less than
120 days' prior written notice of its election to
purchase pursuant to Section 4.02(a)(C) or 4.02(a)(D)
hereof. Such notice shall either direct the Lessor to
prepay the Certificates in full on such Termination
Date pursuant to the applicable provisions of the
Indenture or state that the Lessee shall exercise its
option to assume all of the Certificates pursuant to
Section 7.12 of the Participation Agreement as of such
Termination Date; provided, however, that in no event
may the Lessee assume the Certificates pursuant to
such Section 7.12 prior to the Exchange Date. The
Lessee's notice pursuant to Section 4.02(a)(C) or
4.02(a)(D) hereof shall become irrevocable 10 days
prior to the applicable Termination Date designated in
such notice.
(b) Terms and Conditions. If the Lessee
elects to purchase the Aircraft pursuant to Section
4.02(a), the Lessee shall pay to the Lessor on the
applicable Termination Date by wire transfer of
immediately available funds the applicable purchase
price together with any amounts past due hereunder and
all other Supplemental Rent due under this Lease, the
Participation Agreement, the Tax Indemnity Agreement
or any Ancillary Agreement whereupon the Lessor will
transfer to the Lessee, without recourse or warranty
(except as to the absence of Lessor's Liens) and
subject to the disclaimers set forth in Section 5.01
hereof, all of the Lessor's right, title and interest
in and to the Aircraft on an "as-is, where is" basis.
In connection with such transfer, the Lessee shall prepare
and the Lessor shall execute or arrange for the execution
of a bill of sale evidencing such transfer and any other
document reasonably deemed by the parties to be
necessary to convey such right, title and interest to
the Lessee and, if applicable, will deliver to the
Lessee such instrument as the Lessor shall have
received from the Indenture Trustee releasing the
Aircraft from the Lien of the Indenture. In
connection with any termination or proposed
termination of the Lease, the Lessee shall pay, at the
time of the applicable Termination Date, all related
reasonable costs and expenses of the Owner
Participant, the Lessor and the Indenture Trustee.
Section 4.03. Appraisal Procedures. (a)
Generally. Whenever Fair Market Rental or Fair Market
Value is required to be determined under this Lease
(unless otherwise provided herein), it shall be
determined by the mutual agreement of the Lessor and
the Lessee in accordance with the definitions of such
terms in Article 1. If the Lessee and the Lessor
cannot agree within twenty (20) days after the
Lessee's notice of election to purchase the Aircraft
or notice to extend the Term, as the case may be, such
amount shall be determined by independent appraisal
conducted by appraisers selected pursuant to Section
4.03(b). At any time prior to final determination of
such amount pursuant to Section 4.03(b), the Lessee
and the Lessor shall be entitled to submit to the
appraisers (and shall submit to each other any bids
submitted to the appraisers) any bids from unrelated
third parties, and such bids shall be accorded the
weight such appraisers deem appropriate. The Lessor
and the Lessee shall each have an opportunity to
comment on any such bids after receiving a copy
thereof.
(b) Selection. If an independent appraisal
is required pursuant to this Lease, the Lessor and the
Lessee shall consult for the purpose of appointing a
mutually acceptable, qualified aircraft appraiser. If
they are unable to agree on a single appraiser within
ten (10) Business Days, then the independent appraisal
shall be arrived at by mutual agreement of two
nationally recognized, independent aircraft
appraisers, one chosen by the Lessor and one chosen by
the Lessee, or, if such appraisers cannot agree on the
amount of such appraisal, their appraisals shall be
treated in the manner described in Section 4.03(c)
hereof with an appraisal arrived at by a third
nationally recognized, independent aircraft appraiser
chosen by the mutual consent of such two appraisers;
provided, however, that if either party shall fail to
appoint an appraiser within fifteen (15) Business Days
after a written request to do so by the other party,
or if such two appraisers cannot agree on the amount
of such appraisal and fail to appoint a third
appraiser within twenty (20) Business Days after the
date of the appointment of the second of such
appraisers, then either party may initiate an
arbitration proceeding with the American Arbitration
Association for purposes of appointing a nationally
recognized, independent aircraft appraiser.
(c) Valuation. If one appraiser is chosen,
the value determined by such appraiser shall be final
and binding upon the Lessor and the Lessee. If two
appraisers are chosen, one appraiser by the Lessor and
one by the Lessee, and such appraisers agree on the
value, such value shall be final and binding upon the
Lessor and the Lessee. If three appraisers shall be
appointed and the difference between the determination
which is farther from the middle determination is more
than 125% of the difference between the middle
determination and the third determination, then such
farther determination shall be excluded, the remaining
two determinations shall be averaged, and such average
shall be final and binding upon the Owner Participant
and the Lessee. Otherwise, the average of all three
determinations shall be final and binding upon the
Owner Participant and the Lessee.
(d) Rules of Appraisal. Any appraisal
pursuant to this Section 4.03 shall be conducted in
accordance with the commercial rules of the American
Arbitration Association as then in effect, as modified
by this Section 4.03 and the definitions of Fair
Market Value and Fair Market Rental. All expenses of
any independent appraisal shall be borne by the
Lessee, except that each of the Lessee and the Owner
Participant (in the case of the Lessor) shall bear any
fees, costs and expenses of its respective attorneys
in connection with such appraisal except that in the
case of an Event of Default or in the case of a
revocation by the Lessee of its election to terminate
the Lease pursuant to Section 4.02 or Article 10
hereof, such expenses shall be borne by the Lessee.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
Section 5.01. Disclaimer of Representations
and Warranties. THE LESSEE ACKNOWLEDGES AND AGREES
THAT (i) THE AIRFRAME AND EACH ENGINE IS OF A SIZE,
DESIGN, AND CAPACITY AND MANUFACTURE SELECTED BY AND
ACCEPTABLE TO THE LESSEE, (ii) THE LESSEE IS SATISFIED
THAT THE AIRFRAME AND THE ENGINE IS SUITABLE FOR ITS
PURPOSES, (iii) NEITHER THE OWNER PARTICIPANT NOR THE
LESSOR IS A MANUFACTURER OR A DEALER IN PROPERTY OF
SUCH KIND AND (iv) THE AIRFRAME AND EACH ENGINE IS
LEASED HEREUNDER SUBJECT TO ALL APPLICABLE LAWS AND
GOVERNMENTAL REGULATIONS, NOW IN EFFECT OR HEREAFTER
ADOPTED, WITHOUT REPRESENTATION OR WARRANTY OF ANY
KIND BY THE LESSOR, THE INDENTURE TRUSTEE OR THE OWNER
PARTICIPANT. WITHOUT DEROGATION OF THE LESSEE'S
RIGHTS UNDER THE MODIFICATION AGREEMENT, THE OPTIONS
AGREEMENT OR SECTION 2 OF THE AGREEMENT TO LEASE AND
EXCEPT AS PROVIDED IN SECTION 2 OF THE AGREEMENT TO
LEASE, THE LESSOR LEASES TO LESSEE THE AIRFRAME AND
EACH ENGINE, AS-IS, WHERE-IS, AND NEITHER THE LESSOR,
THE INDENTURE TRUSTEE NOR THE OWNER PARTICIPANT
MAKES, HAS MADE OR SHALL BE DEEMED TO HAVE MADE, AND
HAS AND WILL HAVE BEEN DEEMED TO HAVE EXPRESSLY
DISCLAIMED, ANY WARRANTY OR REPRESENTATION EITHER
EXPRESS OR IMPLIED, AS TO (A) THE TITLE (EXCEPT, WITH
RESPECT TO THE OWNER TRUSTEE, AS EXPRESSLY SET FORTH
IN SECTION 7.04(a)(vii) OF THE PARTICIPATION AGREEMENT
AND SECTION 7(c) OF THE AGREEMENT TO LEASE),
AIRWORTHINESS (EXCEPT WITH RESPECT TO THE OWNER
PARTICIPANT, AS EXPRESSLY SET FORTH IN
SECTION 7.03(a)(xiii) OF THE PARTICIPATION AGREEMENT,
WORKMANSHIP, CONDITION, VALUE, FITNESS FOR ANY
PARTICULAR USE OR PURPOSE, DESIGN, OPERATION OR
MERCHANTABILITY OF THE AIRFRAME, ANY ENGINE OR ANY
PART THEREOF, (B) THE ABSENCE OF LATENT OR OTHER
DEFECTS, WHETHER OR NOT DISCOVERABLE, (C) THE ABSENCE
OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR
COPYRIGHT, (D) THE ABSENCE OF OBLIGATIONS BASED ON
STRICT LIABILITY IN TORT, OR (E) ANY OTHER MATTER
WHATSOEVER. IT IS AGREED THAT ALL RISKS INCIDENT TO
THE MATTERS DISCLAIMED IN THE PRECEDING SENTENCE, AS
AMONG THE LESSOR, THE OWNER PARTICIPANT AND THE
INDENTURE TRUSTEE, ON THE ONE HAND, AND THE LESSEE ON
THE OTHER, ARE TO BE BORNE BY THE LESSEE.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN
THE FOREGOING, IT IS HEREBY AGREED AND UNDERSTOOD
BETWEEN THE PARTIES HERETO THAT, EXCEPT AS PROVIDED IN
THE AGREEMENT TO LEASE, THE LESSOR SHALL BEAR THE SOLE
RESPONSIBILITY FOR ALL RISKS, COSTS, EXPENSES AND
LIABILITIES ARISING OUT OF THE OWNERSHIP, USE,
OPERATION, MAINTENANCE OR LEASE OF THE AIRCRAFT DURING
THE PERIOD PRIOR TO THE EXECUTION OF THE LEASE
SUPPLEMENT ON THE COMMENCEMENT DATE BY THE LESSEE AND
THAT THE LESSEE SHALL NOT BE RESPONSIBLE FOR ANY SUCH
RISKS, COSTS, EXPENSES AND LIABILITIES. FOR THE
AVOIDANCE OF DOUBT, IT IS FURTHER AGREED BETWEEN THE
PARTIES THAT THE LESSOR SHALL BE RESPONSIBLE FOR ANY
SUCH RISKS, COSTS, EXPENSES AND LIABILITIES WHICH
ARISE SUBSEQUENT TO THE EXECUTION OF SUCH LEASE
SUPPLEMENT BY THE LESSEE TO THE EXTENT THEY ARISE OUT
OF OR RELATE TO ANY ACT OR OMISSION PRIOR TO SUCH
EXECUTION BY THE LESSEE. The provisions of this
Section 5.01 have been negotiated by the Lessor and
the Lessee and, except as provided in Section 7.04 of
the Participation Agreement or in Section 7(c) of the
Agreement to Lease, are intended to be a complete
exclusion and negation of any representations or
warranties of the Lessor, express or implied, with
respect to the Airframe and each Engine that may arise
pursuant to any law now or hereafter in effect, or
otherwise.
Section 5.02. No Modification of Other
Warranties. None of the provisions of this Article 5
or any other provision of this Lease shall be deemed
to amend, modify or otherwise affect the
representations, warranties or other obligations
(express or implied) of the Lessee. So long as an
Event of Default shall not have occurred and be
continuing under this Lease and to the extent
permitted under the applicable warranty, patent
indemnity, or service-life policy, (i) the Lessor
shall assign or otherwise make available to the Lessee
such rights as the Lessor may have under any warranty,
patent indemnity, or service-life policy made or given
by the Aircraft manufacturer, Engine manufacturer, DA
or any other subcontractor performing work on the
Aircraft pursuant to the Modification Agreement or any
of their respective subcontractors or suppliers, and
any other claims against the Aircraft manufacturer and
Engine manufacturer or any such subcontractor or
supplier with respect to the Aircraft, including all
rights to demand, accept and retain all rights in and
to property (other than the Aircraft), data and
services of any kind which the Aircraft manufacturer
and Engine manufacturer are obligated to provide; and
(ii) all payments pursuant to any manufacturer's or
subcontractor's warranty, patent indemnity, or
service-life policy obligation shall be paid to the
Lessee and the Lessee shall apply such payments to the
cost of repair or correction of any condition of the
Aircraft which gave rise to such payments, and the
excess (if any) shall be paid to the Lessor.
Section 5.03. Certain Agreements of the
Lessee. The Lessee agrees with the Lessor for the
benefit of the Owner Participant and the Indenture
Trustee that the Lessee shall perform the agreements,
covenants and indemnities of the Lessee set forth in
the Participation Agreement to the extent the same are
applicable to the Owner Participant, or the Indenture
Trustee, as the case may be, as fully and to the same
extent and with the same force and effect as if set
forth in full in this Article 5.
ARTICLE 6
LIENS
Section 6.01. Liens. The Lessee 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 the Lessor's
Estate or this Lease or the Aircraft, the Airframe or
any Engine or any Part or title thereto or any
interest therein except:
(a) the respective rights of the Lessor and
the Lessee as provided in this Lease, the
security interest and Lien of the Indenture and
the rights of the Owner Participant, the Lessor
and the Indenture Trustee under the Trust
Agreement, the Indenture and the Participation
Agreement;
(b) the rights of any sublessee or
transferee under a sublease or a transfer
expressly permitted by the terms of this Lease;
(c) Lessor's Liens and Indenture Trustee's
Liens, to the extent required to be discharged
by the Owner Participant, the Lessor or the
Indenture Trustee, as the case may be, in
accordance with Sections 7.03(b), 7.04(b) or
7.05(b) of the Participation Agreement;
(d) Liens for taxes imposed against the
Lessor, the Owner Trustee, in its individual
capacity, the Owner Participant, or the Indenture
Trustee, against which the Lessee has not
indemnified (and is not obligated to indemnify)
the Lessor, the Owner Trustee, in its individual
capacity, the Owner Participant or the Indenture
Trustee;
(e) Liens for taxes imposed against the
Lessee either not yet due or being contested in
good faith by appropriate proceedings so long as
such Liens or proceedings do not involve any
danger of the sale, forfeiture or loss of the
Lessor's Estate, the Aircraft, the Airframe or
any Engine or any interest therein;
(f) materialmen's, mechanics', workmen's,
repairmen's, employees' or other like Liens
arising against the Lessee in the ordinary course
of the Lessee's business for amounts the payment
of which is either not yet due or is being
contested in good faith by appropriate
proceedings so long as such Liens or proceedings
do not involve any danger of the sale, forfeiture
or loss of the Lessor's Estate, the Aircraft, the
Airframe or any Engine or any interest therein;
(g) Liens arising from judgment or awards
against the Lessee with respect to which (i) 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 (ii) there is not, and such proceedings do
not involve, any danger of the sale, forfeiture
or loss of the Lessor's Estate, the Aircraft, the
Airframe, any Engine or any interest therein, and
so long as the Lessee shall have provided a bond
or other security reasonably acceptable to the
Lessor in order to protect the Lessor against the
risks arising from such Lien; and
(h) Liens with respect to Collateral.
ARTICLE 7
AIRCRAFT REGISTRATION, MAINTENANCE AND OPERATION
Section 7.01. Registration, Maintenance and
Operation. The Lessee, at its own cost and expense,
shall:
(a) upon delivery of the Aircraft to the
Lessee hereunder, cause the Aircraft to be duly
registered in the name of the Lessor as owner,
pursuant to the Act, subject to the proviso to
Section 6.02(b) of the Participation Agreement,
and at all times in accordance with the rules and
regulations of the Aeronautics Authority or the
applicable laws, rules and regulations of any
other jurisdiction in which the Aircraft may then
be registered in accordance with Section 6.02(b)
of the Participation Agreement;
(b) maintain, inspect, service, repair, test
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 Airframe) in as good operating condition as
when delivered, ordinary wear and tear excepted,
and in any event (i) in accordance with the
applicable regulations of the Aeronautics
Authority, or of the regulatory agency or body of
any other jurisdiction in which the Aircraft may
then be registered, and with the Lessee's
maintenance program approved by the Aeronautics
Authority or such agency or body, (ii) in the
same manner as with other Airbus A310 aircraft
and with the same care used by the Lessee with
respect to other Airbus widebody aircraft and in
the same manner and with the same care used by
the Lessee with respect to similar engines
installed on Airbus A310 aircraft, (or other
engines permitted by the terms of this Lease to
be used on the Airframe) owned or operated by the
Lessee, to the extent that the same regulations,
and the Lessee's FAA-approved maintenance program
shall apply to any such aircraft and related
engines, owned or leased by the Lessee, and
utilized in similar circumstances, and without
discriminating against the Aircraft, with respect
to its use, operation or maintenance in
contemplation of the expiration or termination of
this Lease as it relates to the Aircraft other
than withdrawal of the Aircraft from use and
operation as is necessary to prepare the Aircraft
for return to the Lessor upon such expiration or
termination, (iii) 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 Lessee
shall not be in default of its obligation in this
Section 7.01(b)(iii) to maintain the Aircraft's
airworthiness certification in good standing if
the Aircraft loses its airworthiness
certification, such loss is curable and the
Lessee undertakes such cure promptly, diligently,
and continuously, using its best efforts but,
provided, further, that in the event such loss is
not a loss of the character described in clause
(iv) of the definition of Event of Loss and is
not curable or, if curable, has not been cured
within twelve (12) months of the date the
airworthiness certification was lost, unless the
Lessor elects to retain the Aircraft in
accordance with the procedure described in
Article 10 hereof, the Aircraft shall be sold
within 90 days after the earlier of (1) the date
it is determined that the loss of the
airworthiness certificate is not curable, (2) the
date twelve (12) months after the airworthiness
certificate is lost, or (3) 90 days prior to the
end of the Term, in each case, in accordance with
the procedure set forth in Section 10.01(b)
hereof (except that the Lessee shall have no
right to rescind such termination procedure
(unless the loss of airworthiness certification
shall have been cured) and the Lessee shall
accept the highest bid thereunder without regard
to whether such bid is less than Termination
Value) and the Lessee shall make the payments set
forth in Section 10.01(c) hereof, and on the date
of such sale this Lease shall (subject to the
conditions specified in Article 10 hereof)
terminate; and provided, that this Lease shall
continue in full force and effect until the
Aircraft is sold according to such procedures and
nothing in this Section 7.01(b) shall or shall be
deemed to limit in any respect the Lessee's
obligations under Article 12 hereof or under any
other Operative Agreement;
(c) 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, all such records
and logs to be maintained in the English
language, to the extent required by the Federal
Aviation Act (which records, logs and other
materials shall, as between the Lessor and the
Lessee and all parties claiming through the
Lessee, be the property of the Lessor but shall
become the property of the Lessee upon purchase
by the Lessee of the Aircraft pursuant to the
terms of this Lease or upon the occurrence of an
Event of Loss and the Lessee's compliance with
Section 11.02 hereof);
(d) promptly furnish to the Lessor such
information within the Lessee's possession as may
be required to enable the Lessor to file any
reports to be filed by the Lessor with any
governmental authority because of the Lessor's
ownership of or the Owner Participant's or the
Indenture Trustee's interest in the Aircraft;
(e) not maintain, 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 Lessee or the Aircraft or
any Engine or any manufacturer's operation manual
or instruction or service bulletin relating to
the Airframe or any Engine or for any purpose for
which the Aircraft is not designed; provided,
however, that the Lessee may in good faith (after
having delivered to the Lessor a certificate
signed by an authorized officer of the Lessee
stating the relevant facts) contest the validity
or application of any such law, license, rule,
regulation or order in any manner that does not
in the Lessor's opinion, involve any risk of
liabilities or civil penalties or criminal
penalties being imposed on or against the Owner
Participant, the Indenture Trustee or the Lessor,
that does not involve any material risk of loss
or forfeiture of the Aircraft or any Engine and
that does not materially adversely affect the
Lessor, its title or interest in such Aircraft or
any Engine, or the interests of the Indenture
Trustee or the Owner Participant; and if any such
law, license, rule, regulation or order requires
alteration of the Aircraft or any Engine, the
Lessee will conform therewith at its expense and
will maintain the Aircraft and the Engines in
proper operating condition under such law,
license, rule, regulation or order; and
(f) not operate or locate the Aircraft or
any Engine, or suffer the Aircraft or any Engine
to be operated or located, (i) in any area
excluded from coverage by an insurance policy in
effect with respect to the Aircraft and each
Engine required by the terms of Article 13
hereof, except in the case of a requisition for
use by the Government where the Lessee has
obtained (and furnished the Lessor with
satisfactory evidence of its having obtained)
prior to the operation or location of the
Airframe or any Engine in such area,
indemnification or insurance in lieu of such
indemnification from the Government against the
risks and in the amounts required by, and
otherwise in compliance with, Article 13 hereof
covering such operation or location in such area,
or (ii) in areas that are war zones or
recognized, or, in the Lessee's reasonable
judgment, threatened areas of hostilities
(including any area of the United States of
America which becomes such an area), unless fully
covered by international war-risk and allied
perils insurance coverage including hijacking
(air piracy) and non-Government confiscation and
expropriation insurance) or unless the Aircraft
is operated or used under contract with the
Government under which contract the Government
assumes liability for any damage, loss,
destruction or failure to return possession of
the Aircraft at the end of the term of the
contract and for injury to persons or damage to
properties of others, in either case in the
amounts required by Article 13 hereof, and the
Lessee shall have furnished the Lessor with
satisfactory evidence thereof.
Section 7.02. Possession and Permitted
Transfer and Sublease. (a) Conditions. The Lessee
will not, without the prior written consent of the
Lessor, sublease 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 Lessee shall comply with the
provisions of Article 13 hereof, the Lessee may
without the prior written consent of the Lessor and
the Owner Participant:
(i) at any time, so long as the sublessee is
generally meeting its 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 sublease is
entered into, and no Payment Default or
Bankruptcy Default shall exist at the inception
of the sublease (A) sublease the Aircraft or any
Engine to a U.S. Air Carrier, (B) after the Tax
Attribute Period, sublease the Aircraft to an Air
Carrier which is principally based in and
domiciled in one of the countries listed on
Schedule III of the Participation Agreement, or
(C) after the Tax Attribute Period, sublease the
Aircraft to any other Air Carrier not described
in this Section which shall be acceptable to the
Lessor as evidenced by its prior written consent;
provided, that, (i) with respect to clauses (B)
and (C) above, at the time of any such sublease
the United States of America maintains normal and
full diplomatic relations with the country in
which such Air Carrier is principally based and
domiciled and (ii) any such Air Carrier to which
the Aircraft is proposed to be subleased shall
operate the Aircraft under a maintenance program
where standards are at least equal to those
specified for similar aircraft with similar
engines by one of the Federal Aviation
Administration, the Directoire Generale de
l'Aviation Civile of the French Republic, the
Luftfahrt Bundesamt of the Federal Republic of
Germany or the Civil Aviation Authority of the
United Kingdom. In the case of any sublease (x)
such sublease shall include the provisions
required by Section 7.02(b) hereof and expressly
require the sublessee to operate and maintain the
Aircraft in compliance with the applicable
provisions of this Lease, (y) such sublease shall
provide that such sublessee will not transfer
possession of, or any other rights to, the
subleased Airframe or any Engine to any other
person without the prior written consent of the
Lessor (except as permitted by subparagraphs (ii)
through (viii) below) and (z) such sublease shall
expire not later than 180 days prior to the
expiration of the Basic Term or the Renewal Term,
if any. In addition, prior to entering into any
such sublease under clause (C) of this Section
7.02(a)(i), the Lessee will provide opinions of
counsel (such counsel and the form of such
opinions to be reasonably satisfactory to the
Lessor and the Indenture Trustee) to the effect
that (1) the Operative Agreements and the
sublease will constitute legal, valid and
enforceable obligations of the parties thereto
under the laws of such country (including without
limitation the provisions thereof required by
Section 7.02(b) below), (2) it is not necessary
for the Owner Participant, the Lessor or the
Indenture Trustee to register or qualify to do
business in such country as a result of the
proposed sublease or in order for the Owner
Participant, the Lessor or the Indenture Trustee
to enforce the terms and conditions of the
Operative Agreements, (3) the laws of such
country require fair compensation by the
government of such country payable in a currency
freely convertible into U.S. Dollars for the loss
of the use of or title to the Airframe or any
Engine in the event of a requisition of use or
title by such government, (4) the Lessor's title
to the subleased equipment will be recognized,
(5) there is no tort liability of the owner of an
aircraft not in possession thereof or of persons
lending money to such an owner for the purchase
of an aircraft, under the laws of such
jurisdiction other than tort liability which
might have been imposed on such owner or persons
under the laws of the United States or any state
thereof (it being understood that, in the event
that such latter opinion cannot be given in a
form satisfactory to the Lessor, such opinion
shall be waived if insurance reasonably
satisfactory to the Lessor is available to cover
such risk and is provided at or before the
execution of such a sublease, at the Lessee's
cost and expense), (6) the required agreement of
such foreign air carrier that its rights under
the sublease are subject and subordinate to all
the terms of this Lease is enforceable against
such foreign air carrier under applicable law
(subject only to customary exceptions to
enforceability), (7) the remedies provisions of
this Lease are enforceable against the Lessee
notwithstanding such sublease or any bankruptcy
proceedings involving the sublessee and (8) none
of the Owner Participant, the Lessor, or the
Indenture Trustee will suffer any unindemnified
adverse tax consequences as a result of such
sublease;
(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 Lessee in the ordinary course of its
business with a vendor domiciled in the United
States or in a country with which the United
States maintains "normal" diplomatic relations
(other than in the case of Taiwan, in which case
relations as in effect on the Commencement Date
shall be acceptable), or; (x) any United States
Air Carrier certificated under Section 401 of the
Act or any successor provision or (y) any
"foreign air carrier" (as such term is defined in
the Act) which is (I) organized in a country
listed on Schedule III to the Participation
Agreement, (II) organized in a country with which
the United States then maintains "normal"
diplomatic relations (other than in the case of
Taiwan, in which case relations as in effect on
the Commencement Date shall be acceptable), (III)
is a party to the Geneva Convention or (IV)
otherwise provides equivalent protection to
owners, lessors and mortgagees of aircraft;
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 Lease shall be observed; and provided,
further, that no such agreement or arrangement
contemplates or requires the transfer of title to
or registration of the Airframe or any Engine,
and if the Lessor's title to any Engine shall
nonetheless be divested under any such agreement
or arrangement, such divestiture shall be deemed
to be an Event of Loss occurring on the date of
such divestiture with respect to such Engine and
the Lessee shall comply with Section 11.04 of
this Lease 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, service, 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 Article 9 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. 20999, as amended, or any
similar or substitute programs, so long as the
Lessee (or any permitted sublessee or transferee
pursuant to this Section) shall promptly notify
the Lessor 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,
provided, that if such transfer of possession
continues beyond the end of the Basic Term or the
Renewal Term, the Basic Term or the Renewal Term,
as applicable, shall be automatically extended
(including the obligation to pay Rent per diem
during such extension at a rate equal to the Fair
Market Rental) for up to six (6) months after the
end of the Term;
(v) install or permit the installation of an
Engine on an airframe which is owned by the
Lessee or any permitted sublessee free and clear
of all Liens, except (A) Liens of the type
permitted under Section 6.01 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 Lessee or
any permitted sublessee or transferee or
purchased by the Lessee 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 Lessor 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 7.02(a);
(vii) install or permit the installation of an
Engine on an airframe owned by the Lessee, leased
to the Lessee or purchased by the Lessee subject
to a conditional sale or other security agreement
under circumstances where neither subparagraph
(v) nor subparagraph (vi) of this Section 7.02(a)
is applicable, provided that such installation
shall be deemed an Event of Loss with respect to
such Engine and the Lessee shall comply with
Section 11.04 hereof in respect of such Engine,
the Lessor not intending to waive any right,
title or interest it may have to or in such
Engine under applicable law until compliance by
the Lessee with such Section 11.04; and
(viii) enter into a wet lease under which the
Lessee has effective control of the Aircraft in
the ordinary course of the Lessee's business
which shall not be considered a transfer of
possession hereunder, provided that the Lessee's
obligations under this Lease shall continue in
full force and effect notwithstanding any such
wet lease.
(b) Rights of Transferee. Notwithstanding
the provisions of Section 7.02(a) 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 7.02(a) hereof shall be
subject and subordinate to, and any sublease or wet
lease permitted by Section 7.02(a) hereof shall be
made expressly subject and subordinate to, all the
terms of this Lease, including, without limitation,
the Lessor's right to repossession pursuant to Article
17 hereof and to avoid such sublease upon such
repossession, and the Lessee shall remain primarily
liable for the performance of all the terms of this
Lease to the same extent as if such sublease or
transfer had not occurred. Any such sublease shall
include appropriate provisions for the maintenance,
inspection (as required by Section 14.01 hereof) and
insurance of the Aircraft, the Airframe and each
Engine in accordance with the provisions of this Lease
and shall provide assurances reasonably satisfactory
to the Lessor that the sublessee may not further
sublease any of such equipment. The Lessee shall
notify the Lessor, the Owner Participant and the
Indenture Trustee of any sublease of the Airframe at
least 15 days before the execution and delivery
thereof. The Lessee shall provide the Lessor, the
Owner Participant and the Indenture Trustee within 15
days after execution and delivery thereof a copy of
any sublease which has a term in excess of six (6)
months and shall deliver a copy of any other sublease
promptly after a request therefor from any such party
and, prior to execution and delivery of any sublease
deliver to Lessor all other documents required
hereunder relating to such sublease or transfer of
possession.
(c) No Release of Lessee/Costs of
Subleasing. No sublease, interchange or pooling
agreement or other relinquishment of possession
permitted under this Article 7 of the Aircraft, the
Airframe or any Engine shall in any way discharge or
diminish any of the Lessee's obligations to the
Lessor, the Owner Participant or the Indenture Trustee
under this Lease, the Participation Agreement or the
Tax Indemnity Agreement, or constitute a waiver of any
of the Lessor's rights and remedies hereunder or
thereunder or extend beyond the end of the Term
(except as provided in Section 7.02(a)(iv) hereof).
Subject to the terms and conditions of this Lease, the
Lessee will retain the right to cure any default by
any sublessee permitted pursuant to this Section 7.02
and to terminate such sublease upon such default. The
Lessee shall pay all costs of the Lessor, the Owner
Participant and the Indenture Trustee incurred in
connection with any subleasing or proposed subleasing.
Section 7.03. Insignia. (a) Nameplate. On
or prior to the Commencement Date of the Aircraft or
as soon thereafter as possible, the Lessee 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 "FIRST SECURITY BANK OF UTAH, NATIONAL
ASSOCIATION, AS OWNER TRUSTEE, OWNER AND LESSOR," and,
so long as the Airframe or any Engine shall be subject
to the Lien of the Indenture the additional
inscription "NATIONSBANK OF GEORGIA, NATIONAL
ASSOCIATION, AS INDENTURE TRUSTEE, MORTGAGEE."
(b) Lessee's Marks. Except as provided in
clause (a) above, the Lessee will not allow the name
of any Person to be placed on the Airframe or on any
Engine as a designation that might be interpreted as a
claim of ownership; provided, that during the Term,
the Lessee may cause such Aircraft to be lettered
"Federal Express Corporation" or may letter, paint or
mark it in some other appropriate manner for
convenience of identification of the Lessee's interest
or the interest of any permitted sublessee (including
but not limited to the Lessee's or any permitted
sublessee's customary colors and insignia) and to bear
insignia plates or other markings identifying the
supplier or manufacturer of the Airframe or the
Engines or any Parts of either.
ARTICLE 8
REPLACEMENT AND POOLING OF PARTS
Section 8.01. Replacement of Parts. (a)
Generally. The Lessee, 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 9.01 or 9.02 hereof. In
addition, the Lessee 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 Lessee, except as otherwise provided in Sections
9.01 or 9.02 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 8.02 hereof and Liens
permitted under Section 6.01(a),(b),(c),(d) and (f)
hereof) and shall be in at least as good operating
condition as, and shall have a value and utility at
least equal to, the Parts replaced, and in any event
not less than the condition and repair required to be
maintained by the provisions of this Lease.
(b) Title. All Parts at any time removed
from the Airframe or any Engine shall remain the
property of the Lessor until such Parts shall be
replaced by Parts which have been incorporated or
installed in or attached to the Airframe or such
Engine and which meet the requirements for replacement
Parts specified in Section 8.01(a) hereof.
Immediately upon any replacement Part (other than, to
the extent permitted by Section 8.02 hereof, a
replacement Part subject to a pooling arrangement)
becoming incorporated or installed in or attached to
the Airframe or any Engine, and without further act:
(i) title to the replaced Part shall vest in
the Lessee, free and clear of all rights of the
Lessor, and such replaced Part shall no longer be
deemed a Part under this Lease;
(ii) title to such replacement Part shall
vest in the Lessor free and clear of all Liens
except for Liens permitted by Section 6.01(a),
(b), (c), (d) and (f) hereof; and
(iii) such replacement Part shall become
subject to this Lease and to the Lien of the
Indenture and shall be deemed part of the
Airframe or such Engine for all purposes to the
same extent as the Parts originally incorporated
or installed in or attached to the Airframe or
such Engine.
Section 8.02. Pooling of Parts. Any Part
removed from the Airframe or any Engine as permitted
in Section 8.01(a) hereof may be subjected by the
Lessee to any normal pooling arrangement customary in
the airline industry and entered into with vendors and
other Air Carriers in the ordinary course of the
Lessee's business, provided that the Part replacing
such removed Part shall be incorporated or installed
in or attached to the Airframe or such Engine in
accordance with Section 8 hereof, 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 8.01(a) hereof may be owned
by another Air Carrier subject to such normal pooling
arrangement, provided that the Lessee, at its own cost
and expense and as promptly as possible, either:
(a) causes title to such replacement Part to
vest in the Lessor in accordance with Section
8.01(b) hereof by the Lessee acquiring title to
such replacement Part for the benefit of, and
transferring such title to, the Lessor free and
clear of all Liens (other than Liens permitted
under Section 6.01(a), (b), (c), (d) and (f)
hereof); 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 Lessee free and clear of all
Liens (other than Liens permitted under Section
6.01(a), (b), (c), (d) and (f) hereof) and by
causing title to such further replacement Part to
vest in the Lessor in accordance with Section
8.01(b) hereof.
All such replacement Parts and further
replacement Parts shall meet the standards set forth
in the last sentence of Section 8.01(a) hereof.
ARTICLE 9
ALTERATIONS, MODIFICATIONS AND ADDITIONS
Section 9.01. Required Alterations and
Modifications. The Lessee, at its own cost and
expense, shall make or cause to be made such
alterations and modifications in and additions to the
Airframe and each Engine 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 Lessee's
operations and aircraft; provided, however, that the
Lessee may in good faith (after having delivered to
the Lessor a certificate signed by an authorized
officer of the Lessee stating the relevant facts)
contest the validity or application of any such
requirement in any manner that does not, in the
Lessor's opinion, involve any risk of liabilities or
civil penalties or criminal penalties being imposed on
or against the Owner Participant, the Indenture
Trustee or the Lessor, that does not involve any
material risk of loss or forfeiture of the Aircraft or
any Engine and that does not materially adversely
affect the Lessor, its title or interest in such
Aircraft or any Engine, or the interests of the
Indenture Trustee or the Owner Participant; and if any
such requirement requires alteration of the Aircraft
or any Engine, the Lessee will conform therewith at
its expense and will maintain the Aircraft and the
Engines in proper operating condition under such
requirement. All such alterations, modifications or
additions required to be made under this Section 9.01
shall be made on or before the date mandated therefor,
taking into account postponements resulting from a
contest or otherwise and shall be made at such time
and in such a manner so as not to discriminate against
the Aircraft whether by reason of its leased status or
otherwise. Title to all alterations, modifications
and additions made pursuant to this Section 9.01 shall
without further act vest in the Lessor and become
subject to this Lease.
Section 9.02. Other Alterations and
Modifications. (a) Generally. The Lessee, 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 Lessee 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, individually or in the aggregate,
shall create any adverse tax consequences for the
Owner Participant not otherwise indemnified for,
diminish the value, useful life, or utility of the
Airframe or the value and utility of any Engine or
impair its condition or airworthiness below its value,
useful life (in the case of the Airframe only),
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 Lease, or cause the
Airframe or any Engine to become "limited use
property" within the meaning of Revenue Procedure
76-30, 1976-2 C.B. 647.
(b) Title to Installed Parts. Title to 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 Section 9.02(a) hereof shall without
further act vest in the Lessor and become subject to
this Lease; provided, however, that the Lessee may
remove any such Part at any time during the Term 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 Commencement 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 Article 7 hereof or the first sentence
of Section 9.01 hereof;
(iii) such Part can be removed from the
Airframe or such Engine without (A) causing
material damage to the Airframe or such Engine
(it being understood that the Lessee shall repair
any damage caused by a permitted removal) or
diminishing or impairing the value, utility,
condition or airworthiness required to be
maintained by the terms of this Lease or (B)
diminishing the value, utility or remaining
useful life (in the case of the Airframe) or the
value and utility (in the case of such Engine)
which the Airframe or such Engine would have had
at such time had such alteration, modification,
removal or addition not occurred, assuming the
Airframe or such Engine was then in the condition
required to be maintained by the terms of this
Lease; and
(iv) the cost of such Part was not paid by
the Lessor.
(c) Title to Removed Parts. Upon the
removal by the Lessee of any such Part as provided in
subsection (b) above, title thereto shall, without
further act, vest in the Lessee and such Part shall no
longer be deemed a Part. Any Part not removed by the
Lessee as above provided prior to the return of the
applicable Aircraft to the Lessor hereunder shall
remain the property of the Lessor and subject to this
Lease.
ARTICLE 10
VOLUNTARY TERMINATION
Section 10.01. Right of Termination Upon
Obsolescence or Surplus. (a) Option to Terminate.
So long as no Event of Default or Payment Default
shall have occurred and be continuing, the Lessee
shall have the right, at its option, on any
Termination Date, on at least 180 days' prior written
notice (which notice shall state the Proposed
Termination Date) to the Lessor, the Indenture Trustee
and the Owner Participant (or, in the circumstances
described in Section 7.01(b) hereof, the Lessee shall
have the obligation on not more than 90 days' prior
written notice) to terminate this Lease as of a
Termination Date (or within such 90-day period) if the
Aircraft shall have become obsolete or surplus to the
operations of the Lessee; provided that the Lessee
shall have furnished to the Lessor, the Indenture
Trustee and the Owner Participant a certificate of
the Lessee's President, Chief Executive Officer, Chief
Financial Officer, Chief Operating Officer, Treasurer
or Assistant Treasurer stating the determination
of Lessee that the Aircraft is obsolete or surplus to
its needs or that the Lessee has given such notice
pursuant to Section 7.01(b) hereof. Unless the Lessor
has elected to retain the Aircraft as herein provided
or the Lessee has given such notice pursuant to Section
7.01(b) hereof, the Lessee shall have one right to revoke
its notice of termination not less than ten (10) Business
Days prior to the Proposed Termination Date whereupon
this Lease shall continue in full force and effect;
provided that the Lessee may not deliver another
notice of termination within one year after revocation
of the prior notice, and provided further that the
Lessee may not revoke its notice if a cash bid which
is for an amount greater than or equal to Termination
Value has been submitted for the purchase of the
Aircraft.
(b) Sale Procedure. During the period from
the giving of notice pursuant to Section 10.01(a)
until the Proposed Termination Date, the Lessee, as
non-exclusive agent for the Lessor, shall use its
reasonable efforts to obtain bids for the cash
purchase on the Proposed Termination Date (or such
earlier date as shall be consented to in writing by
the Lessor) of such Aircraft. On the Termination
Date, the Engines shall be installed on the Airframe
(provided that the Airframe may be sold with engines
meeting the requirements set forth herein for
Replacement Engines in lieu of the Engines so long as
the aggregate number of Engines and Replacement
Engines being sold with the Airframe equals two). The
Lessor may, if it desires to do so, seek to obtain
such bids. The Owner Participant shall not inspect
any bids received by the Lessee, unless the Owner
Participant has given to the Lessee binding and
irrevocable notice that neither the Owner Participant
nor any of its Affiliates nor any Person acting for
the Owner Participant or such Affiliate will submit a
bid for the purchase of the Aircraft and if such
notice has been given, the Lessee will provide the
Lessor with copies of bids received by the Lessee. No
bid may be submitted by the Lessee or any Person, firm
or corporation affiliated with the Lessee (or with
whom or which there is any arrangement or
understanding as to the subsequent use of the Aircraft
by the Lessee or any of its Affiliates) or any agent
or person acting on behalf of the Lessee. The Lessee
may reject any bid which is less than the applicable
Termination Value unless the sale is being made
pursuant to a notice given in accordance with Section
7.01(b) hereof. Subject to the provisions of Section
10.02 hereof, on the Proposed Termination Date or such
earlier date of sale as shall be consented to in
writing by the Lessor, the Lessee shall deliver the
Airframe which shall have the Engines installed on it
(provided that the Airframe may be delivered with
installed engines meeting the requirements set forth
herein for Replacement Engines in lieu of the Engines
so long as the aggregate number of Engines and
Replacement Engines being delivered with the Airframe
equals two and the Lessee shall comply with the
provisions of Section 11.04 hereof as if an Event of
Loss occurred with regard to the Engines) to the
bidder which shall have submitted the highest cash bid
(whether certified to the Lessor by the Lessee or
directly received by the Lessor and certified to the
Lessee, it being understood, however, that all bidders
shall be required to make payments directly to the
Lessor) in the same manner as if delivery were made to
the Lessor pursuant to Article 12 hereof, at a
location specified by such bidder, and shall duly
transfer to the Lessor title to any such engines not
owned by the Lessor, and the Lessor shall, upon
payment in full of the bid price and all amounts due
and owing pursuant to Section 10.01(c) hereof by wire
transfer of immediately available funds, sell the
Airframe and Engines or engines to such bidder without
recourse or warranty (except as to the absence of
Lessor's Liens).
(c) Payments to the Lessor. The total
selling price realized at a sale of the Aircraft
pursuant to Section 10.01(b) hereof net of all
expenses of the sale (including commissions and any
sales or transfer taxes) (the "Net Sales Price") shall
be retained by the Lessor (or the Indenture Trustee,
as long as the Indenture is in force) and, in
addition, on or before the Proposed Termination Date
(or any earlier date of sale), the Lessee shall pay to
the Lessor (or the Indenture Trustee, as long as the
Indenture is in force), by wire transfer of
immediately available funds, the sum of:
(i) the excess, if any, of the Termination
Value for the Aircraft computed as of the
Termination Date over the Net Sales Price
therefor; plus
(ii) all other amounts then due and payable
by the Lessee under this Lease or any other
Operative Agreement (including any Make-Whole
Premium payable pursuant to the Indenture).
(d) Transfer of Uninstalled Engines. Upon
payment of the amounts described in Section 10.01(c)
hereof and upon transfer to the Lessor of title to
engines which have been returned in lieu of Engines as
provided in Section 10.01(b) hereof, and upon payment
of all other amounts then due under this Lease, the
Lessor will transfer to the Lessee, without recourse
or warranty (except as to the absence of Lessor's
Liens), all of the Lessor's right, title and interest
in and to any Engines which were replaced with engines
pursuant to Section 10.01(b) hereof, and shall deliver
to the Lessee, at the Lessee's cost, such instrument
as the Lessor shall have received from the Indenture
Trustee, releasing such Engines from the Lien of the
Indenture.
(e) Limitation on the Lessor's Duties. The
Lessor shall be under no duty to solicit bids, to
inquire into the efforts of the Lessee to obtain bids
or otherwise to take any action in connection with any
such sale other than to transfer to the purchaser
named in the highest cash bid as referred to above (or
to such purchaser and to the Lessee, as the case may
be), without recourse or warranty (except as to the
absence of Lessor's Liens), all of the Lessor's right,
title and interest in and to the Aircraft, against
receipt by the Lessor of the payments provided for.
(f) Termination of the Lessee's Obligations.
Upon the sale of the Aircraft pursuant to this Section
10.01 and upon compliance by the Lessee with the
further provisions of this Article 10, the obligation
of the Lessee to pay Basic Rent shall cease for any
Rent Payment Date occurring after the Termination
Date and the Term shall end effective as of the
Termination Date. If no sale shall have
occurred on or before the Proposed Termination Date,
this Lease shall continue in full force and effect
and, for purposes of Section 10.01(a) hereof, it shall
be deemed that the Lessee has rescinded its notice of
termination, and the Lessee shall pay the expenses
incurred by the Lessor, the Owner Participant and the
Indenture Trustee in connection with the proposed
sale.
Section 10.02. Retention of the Aircraft by
the Lessor. (a) Generally. Notwithstanding Section
10.01, the Lessor may, subject to Section 10.02(b)
hereof, elect to retain the Aircraft after receipt of
the Lessee's notice of termination given in accordance
with Section 10.01(a), by giving the Lessee and the
Indenture Trustee written irrevocable notice of such
election not less than thirty (30) days prior to the
Proposed Termination Date. If the Lessor so elects,
the Lessee shall pay to the Lessor on the Proposed
Termination Date, by wire transfer of immediately
available funds all amounts then due and payable by
the Lessee under this Lease and any other Operative
Agreement on or prior to the Termination Date
(including any Make-Whole Premium payable pursuant to
the Indenture).
(b) Payment of the Certificates. It shall
be an absolute condition precedent to the Lessor's
right to retain the Aircraft and to the termination of
the Term pursuant to this Section 10.02 that the
Lessor (or the Lessee to the extent set forth in
Section 10.02(a)) shall have paid to the Holders of
the Certificates and such Holders shall have received
the entire outstanding principal amount of and accrued
interest on the Certificates on the Termination Date
and all other sums due and owing to the Indenture
Trustee and the Holders of the Certificates (including
any Make-Whole Premium payable pursuant to the
Indenture) on or prior to the Termination Date under
this Lease, the Indenture or any other Operative
Agreement. If the condition precedent set forth in
this Section 10.02(b) is not satisfied on any
Termination Date, the Lease shall continue in full
force and effect with respect to the Aircraft (and the
Lessee's notice of termination referred to in Section
10.02(a) hereof shall be deemed revoked).
(c) Delivery of Aircraft to Lessor; Title to
Engines. If the Lessor elects to retain such Aircraft
pursuant to this Section 10.02, the Lessee shall
deliver the Airframe and the Engines (provided that
the Airframe may be delivered with engines meeting the
requirements set forth herein for Replacement Engines
in lieu of the Engines so long as the aggregate number
of Engines and engines being delivered with the
Airframe equals two and provided that the other
requirements of Section 11.04 hereof are met as if an
Event of Loss has occurred with regard to the Engines)
to the Lessor in the same manner as if delivery were
made to the Lessor pursuant to Article 12 hereof, and
shall duly transfer to the Lessor right, title and
interest to any such engines not owned by the Lessor,
all in accordance with Article 12 hereof. Upon such
delivery of the Airframe and the Engines or engines to
the Lessor and payment by the Lessee of any amounts
required to be paid by the Lessee pursuant to Section
10.02(a) hereof, the Lessor will transfer to the
Lessee, without recourse or warranty (except as to the
absence of Lessor's Liens), all of the Lessor's right,
title and interest in and to any Engines which were
replaced by engines pursuant to this Section 10.02(c),
and shall deliver to the Lessee such instrument as the
Lessor shall have received from the Indenture Trustee
releasing such Engines from the Lien of the Indenture.
(d) Termination of the Lessee's Obligations.
Upon compliance by the Lessor and the Lessee with the
provisions of this Section 10.02 and upon compliance
by the Lessee with the further provisions of this
Article 10, the obligation of the Lessee to pay Basic
Rent shall cease for any Rent Payment Date occurring
on or after the Termination Date and the Term shall
end effective as of the Termination Date.
Section 10.03. Voluntary Termination as to
Engines. So long as no Event of Default shall have
occurred and be continuing, the Lessee shall have the
right at its option and at any time, on at least sixty
(60) days' prior written notice to the Lessor, to
terminate this Lease with respect to any Engine not
then installed or held for use on the Airframe,
provided that prior to the date of such termination,
the Lessee shall comply with the terms of Section
11.04 hereof to the same extent as if an Event of Loss
had occurred with respect to such Engine.
ARTICLE 11
LOSS, DESTRUCTION, REQUISITION
Section 11.01. Lessee's Notification
Responsibility. The Lessee shall notify the Lessor,
the Owner Participant and the Indenture Trustee as
soon as practicable but in no event more than five (5)
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.
Section 11.02. Payment of Stipulated Loss
Value. (a) If an Event of Loss has occurred, the
Lessee shall pay to the Lessor, by wire transfer of
immediately available funds on the earlier of (i) the
fifth Business Day following receipt in full of
insurance proceeds or requisition proceeds, described
in Section 11.05 hereof, in connection with such Event
of Loss and (ii) the 90th day after the occurrence of
such Event of Loss (the earlier of such dates being
referred to herein as the "Loss Payment Date"), the
sum of (A) the Stipulated Loss Value, determined as of
the Stipulated Loss Value Determination Date next
preceding the Loss Payment Date (or, if the Loss
Payment Date occurs on a Stipulated Loss Value
Determination Date, determined as of such Stipulated
Loss Value Determination Date), together with interest
on such amount at the Debt Rate from such Stipulated
Loss Value Determination Date to the Loss Payment
Date, plus (B) any and all Basic Rent due and payable
on or prior to the relevant Stipulated Loss Value
Determination Date and unpaid, plus (C) any and all
Supplemental Rent due and payable on or prior to such
Loss Payment Date and all other amounts owing by the
Lessor to the Indenture Trustee or to the Holders
under the Indenture and the other Operative Agreements
plus (D) any reasonable out-of-pocket expenses
incurred in connection with such Event of Loss and the
related prepayment of the Certificates by the Lessor,
the Owner Participant and the Indenture Trustee.
(b) Termination of Lease; Title Transfer.
Upon payment in full of the amounts due pursuant to
Section 11.02(a) hereof, the obligation of the Lessee
to pay Basic Rent on any Rent Payment Date occurring
subsequent to the payment of such amounts shall
terminate and the Term shall end. Further, upon such
payment, the Lessor will transfer to the Lessee,
without recourse or warranty (except as to the absence
of Lessor's Liens) and subject to the disclaimers set
forth in Section 5.01 hereof, all of the Lessor's
right, title and interest, in and to the Airframe,
Engines and engines, if any, with respect to which
such Event of Loss occurred, as well as all of the
Lessor's right, title and interest in and to any
Engines constituting part of the Aircraft but not
installed on the Airframe when such Event of Loss
occurred. In connection with such transfer, the
Lessee shall prepare and the Lessor shall execute or
arrange for the execution of a bill of sale evidencing
such transfer and any other document reasonably deemed
by the parties to be necessary to convey such right,
title and interest to the Lessee and, if applicable,
the Lessor will deliver to the Lessee such instrument
as the Lessor shall have received from the Indenture
Trustee releasing the Aircraft from the Lien of the
Indenture.
Section 11.03. [Intentionally Omitted]
Section 11.04. Event of Loss with Respect to
an Engine. (a) Generally. 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 Lessee shall
give the Lessor and the Indenture Trustee prompt
written notice thereof and shall, as soon as
practicable but in any event within sixty (60) days
after the occurrence of such Event of Loss, duly
convey or cause to be conveyed to the Lessor, a
replacement for the Engine with respect to which such
Event of Loss occurred, good and marketable title to a
Replacement Engine, free and clear of all Liens not
excepted in Section 6.01(a), (b), (c), (d) and (f)
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 Lease immediately prior to the
occurrence of such Event of Loss, provided that after
any replacement both Engines shall be of identical
make and model. 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 Lease.
(b) Conditions Precedent. Prior to or at
the time of any conveyance of an Engine pursuant to
Section 11.04(a) hereof, the Lessee, at its own cost
and expense will:
(i) furnish the Lessor with an original of,
and the Indenture Trustee with a copy of, a full
warranty bill of sale, in form and substance
satisfactory to the Lessor, the Owner Participant
and the Indenture Trustee with respect to such
Replacement Engine together with an assignment in
form and substance satisfactory to the Lessor and
the Indenture Trustee of any and all
manufacturer's warranties applicable thereto and
a consent reasonably satisfactory to the Lessor
and the Indenture Trustee from such manufacturer
to such assignment;
(ii) cause a Lease Supplement covering such
Replacement Engine to be duly executed by the
Lessee and filed for recordation 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 6.02(b) of the Participation Agreement
and, if the Engine being replaced was registered
under the jurisdiction in which the Aircraft is
then registered, the Replacement Engine shall be
registered in the same fashion;
(iii) furnish the Lessor and the Indenture
Trustee with a certificate of the Lessee
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 at least the
condition and repair required by the terms of
this Lease immediately prior to the occurrence of
such Event of Loss;
(iv) furnish the Lessor with such evidence
of compliance with the insurance provisions of
Article 13 hereof with respect to such
Replacement Engine as the Lessor or the Indenture
Trustee may reasonably request;
(v) provide the Owner Participant and the
Lessor with (A) an opinion of counsel selected by
the Owner Participant and reasonably acceptable
to the Lessee (which opinion shall be reasonably
satisfactory in form and substance to the Owner
Participant and the Lessor) that it will suffer
no adverse tax consequences not otherwise
indemnified for as of the Commencement Date as a
result of such substitution or (B) an indemnity
reasonably acceptable to the Lessor against such
consequences;
(vi) comply with the provisions of the
Indenture relating to the replacement of Engines
upon the occurrence of an Event of Loss;
(vii) cause an Indenture Supplement with
respect to such Replacement Engine to be duly
executed by the Lessor 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 be
registered as permitted by Section 6.02(b) of the
Participation Agreement in order that the
Indenture shall constitute a first and prior and
perfected Lien and security interest on and in
respect of such Replacement Engine;
(viii) take such other action, including the
filing with the Secretary of State of Utah of UCC
financing statements naming the Indenture Trustee
as Secured Party and with the Secretary of State
of Tennessee only a notice filing, as the Lessor
or the Indenture Trustee may reasonably request
in order that such Replacement Engine be duly and
properly titled in the Lessor, leased under this
Lease and subjected to the Lien of the Indenture
to the same extent as the replaced Engine;
(ix) furnish the Lessor, the Owner
Participant and the Indenture Trustee with an
opinion (reasonably satisfactory in form and
substance to the Lessor, the Owner Participant
and the Indenture Trustee) of counsel to the
Lessee (which may be the Lessee's General
Counsel) addressed to the Indenture Trustee to
the effect that (A) the Lessor has good title to
such Replacement Engine, and (B) such Replacement
Engine has been validly subjected to the Lien of
the Indenture (with the effect and result that
the Indenture constitutes a first and prior
perfected security interest and Lien on such
Replacement Engine); and
(x) 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 the Indenture to the same extent
as the replaced Engine.
(c) Title Transfer. Upon compliance by the
Lessee with the terms of Sections 11.04(a) and (b)
hereof, the Lessor will transfer to the Lessee
(subject to any insurer's salvage rights), without
recourse or warranty (except as to the absence of
Lessor's Liens) and subject to the disclaimers set
forth in Section 5.01 hereof, all of the Lessor's
right, title and interest, if any, in and to the
Engine with respect to which such Event of Loss
occurred. In connection with such transfer, the
Lessee shall prepare and the Lessor shall execute or
forward to the Indenture Trustee for execution, as the
case may be, all in recordable form, a bill of sale
evidencing such transfer, a release from the Indenture
of the Engine with respect to which such Event of Loss
occurred, such instrument, if any, as the Lessor shall
have received from the Indenture Trustee releasing
such Engine from the Lien of the Indenture and any
other document reasonably deemed by the parties to be
necessary to convey such right, title and interest to
the Lessee and to effect such release, all at the
Lessee's sole cost and expense. Each Replacement
Engine shall, after such conveyance, be deemed part of
the property leased under this Lease. An Event of
Loss covered by this Section 11.04 shall not result in
any change in Basic Rent, Stipulated Loss Values or
Termination Values with respect to the corresponding
Aircraft, but may result in payments to be made
pursuant to the Tax Indemnity Agreement and the
Participation Agreement.
Section 11.05. Application of Payments from
the Government or Others. (a) Generally. Any
payments (other than insurance proceeds the
application of which is provided for in Section 13.03
hereof) received at any time by the Lessor or by the
Lessee from any governmental authority or any other
party, foreign or domestic, with respect to an Event
of Loss resulting from the condemnation, confiscation,
theft or seizure of, or requisition of title to or use
of, the Airframe or any Engine will be applied, as
appropriate, in accordance with Section 11.05(b) or
Section 11.05(c) hereof.
(b) Payments of Stipulated Loss Value. If
the payments described in Section 11.05(a) hereof are
received with respect to the Airframe or with respect
to the Airframe and Engines or engines then installed
on such Airframe, so much of such payments as shall
not exceed the amount required to be paid by the
Lessee pursuant to Section 11.02 hereof shall be paid
to the Lessor in reduction of the Lessee's obligations
under Section 11.02 hereof if not already paid by the
Lessee, or, if such obligations have already been
discharged in full by the Lessee, such payments shall
be applied to reimburse the Lessee for its payment of
such Stipulated Loss Value and, if and to the extent
specifically included in such payment, to pay to the
Lessee interest on such amount of Stipulated Loss
Value at the rate included in such payment if any, or
otherwise at the applicable Debt Rate, for the period
from the date of payment by the Lessee of the
Stipulated Loss Value to the date of reimbursement of
the Lessee under this Section 11.05(b). The excess,
if any, remaining after such application shall be
divided between the Lessor and the Lessee as their
respective interests may appear.
(c) Payment upon Engine Replacement. If the
payments described in Section 11.05(a) hereof are
received with respect to an Engine not then installed
on the Airframe under the circumstances contemplated
by Section 11.04 hereof, all such payments shall,
subject to Section 11.08 hereof, be paid over to or
retained by the Lessee, provided that the Lessee shall
have fully performed its obligations pursuant to
Section 11.04 hereof with respect to the Event of Loss
for which such payments are made.
Section 11.06. Requisition of the 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 of either (a
"Requisitioning Government") of the Airframe and the
Engines or engines then installed on the Airframe
during the Term, which requisition does not constitute
an Event of Loss, the Lessee shall promptly notify the
Lessor, the Indenture Trustee, and the Owner
Participant of such requisition and all of the
Lessee's obligations under this Lease shall continue
to the same extent as if such requisition had not
occurred except to the extent that any failure or
delay in the performance or observance of such
obligations (other than obligations for the payment of
Rent) by the Lessee shall have been caused by such
requisition. All payments received by the Lessor, the
Lessee or any permitted sublessee or transferee from
the Requisitioning Government for such use of the
Airframe and Engines or engines during the Term (other
than any such requisition which constitutes an Event
of Loss, as to which the provisions of Section 11.05
hereof shall govern) shall, subject to Section 11.08
hereof, be paid over to, or retained by the Lessee or
such permitted sublessee or transferee. All payments
received by the Lessor, the Lessee or any such
permitted sublessee or transferee from the
Requisitioning Government for the use of the Airframe
and Engines or engines after the Term shall be paid
over to, or retained by, the Lessor (or the Lessee if
it shall have purchased the Lessor's interest therein
in accordance with the provisions hereof). In the
event of any such requisition for use, the Lessee
agrees to use reasonable efforts to obtain
reimbursement from the Requisitioning Government to
the Lessor for damages suffered by the Lessor or the
Owner Participant, with respect to which the Lessee is
not obligated to indemnify under the Operative
Agreements, as a result of such requisition for use.
The Lessee will endeavor to keep the Lessor informed
as to any negotiations between the Lessee and/or any
permitted sublessee or transferee and a Requisitioning
Government with respect to any such requisition and
will consult with the Lessor regarding methods or
procedures that are appropriate to effect recovery
from such Requisitioning Government for such damages.
Section 11.07. Requisition for Use by
Government of an Engine Not Installed on the Airframe.
In the event of the requisition for use by a
Requisitioning Government of registry of the Aircraft
or any agency or instrumentality thereof of any Engine
not then installed on the Airframe, the Lessee shall
replace such Engine by complying with the terms of
Section 11.04 hereof to the same extent as if an Event
of Loss had occurred with respect to such Engine as of
the date of such requisition, and any payments
received by the Lessor or the Lessee from the
Requisitioning Government with respect to such
requisition shall, subject to Section 11.08 hereof, be
paid over to or retained by the Lessee, provided that
the Lessee shall have fully performed its obligations
under Section 11.04 hereof.
Section 11.08. Application of Payments
During Existence of Certain Defaults. Any amount
referred to in Section 11.05, 11.06 or 11.07 hereof
which is payable to the Lessee shall not be paid to
the Lessee, or, if it has been previously paid
directly to the Lessee, shall not be retained by the
Lessee, if at the time of such payment a Payment
Default, Bankruptcy Default or an Event of Default
shall have occurred and be continuing, but shall be
paid to and held by the Lessor (or the Indenture
Trustee so long as the Lien of the Indenture is in
effect) as provided in Article 23 hereof as security
for the obligations of the Lessee under this
Agreement, and at such time as there shall not be
continuing any such Payment Default, Bankruptcy
Default or Event of Default, such amount shall be paid
to the Lessee.
ARTICLE 12
RETURN OF AIRCRAFT
Section 12.01. Return of Aircraft. Unless
such Aircraft is purchased by the Lessee as provided
in Section 4.02 hereof, at the end of the Term, or
upon the termination of this Lease pursuant to Article
7, Article 10 or Article 17 hereof or otherwise
(including termination as a result of a rejection
hereof pursuant to any provision of the Bankruptcy
Code), the Lessee, at its own cost and expense, will
return the Aircraft by delivering it to the Lessor on
the last day of the Term (including the date specified
in any court order authorizing such a rejection) or on
the Termination Date, as the case may be, at the
Lessee's principal maintenance facility in Memphis,
Tennessee or such other location within the
continental United States (on the Lessee's route
structure as in effect on the return date) as
determined by the Lessee or such other location
mutually agreed upon by the Lessee and the Lessor, and
the Airframe shall be fully equipped with two Engines
of the same or an improved make and model as were
delivered on the Commencement Date (or Replacement
Engines), free and clear of all Liens (other than
Lessor's Liens), including any rights of third parties
under pooling, interchange, overhaul, repair or
similar agreement or arrangements, it being understood
that both such Engines and Replacement Engines so
returned shall be of identical make and model and that
any Replacement Engine shall be in at least as good
operating condition and have at least the same value
and utility as the Engines being replaced, assuming
such Engines were in the condition required hereunder.
The Lessee will give the Lessor at least thirty (30)
(or ten (10) in the case of a return pursuant to
Article 17 or in connection with such a rejection)
days prior written notice of the place of such return;
provided, however, that if the Lessor shall have made
the request for storage pursuant to Section 12.06
hereof, the Lessee shall return the Aircraft to the
Lessor at the site of the storage.
Section 12.02. Return of Engines. If either
engine not owned by the Lessor shall be delivered with
the Airframe as set forth in Section 12.01 hereof, the
Lessee, concurrently with such delivery, will, at its
own cost and expense furnish the Lessor with (i) a
full warranty bill of sale, in form and substance
reasonably satisfactory to the Lessor, with respect to
such engine, (ii) an opinion of the Lessee's counsel
to the effect that, upon such return, the Lessor will
acquire full right, title and interest to such engine
free and clear of all Liens (other than Lessor's
Liens) and (iii) a certificate as described in Section
11.04(b)(iii) hereof. The Lessee shall take such
other action as the Lessor may reasonably request in
order that such Replacement Engine shall be duly and
properly titled in the Lessor free and clear of all
Liens (other than Lessor's Liens), and the Lessor will
then transfer to the Lessee, without recourse or
warranty (except as to the absence of Lessor's Liens)
and subject to the disclaimers set forth in Section
5.01 hereof, all the Lessor's right, title and
interest in and to any Engine in lieu of which a
Replacement Engine has been delivered pursuant to
Section 12.01 hereof, "as is, where is". In
connection with such transfer, the Lessee shall
prepare and the Lessor shall execute or arrange for
the execution of a bill of sale evidencing such
transfer and any other document reasonably deemed by
the parties to be necessary to convey such right,
title and interest to the Lessee and, if applicable,
the Lessor will deliver to the Lessee such instrument
as the Lessor shall have received from the Indenture
Trustee releasing the Aircraft from the Lien of the
Indenture.
Section 12.03. Return of Manuals. Upon the
return of the Aircraft, the Lessee shall deliver to
the Lessor (updated to reflect the actual
configuration of the Aircraft at the time of return)
all logs, manuals, certificates and data (to be in the
English language if necessary to permit the
registration of the Aircraft or as required by the
FAA), and inspection, modification and overhaul
records pertaining to the Airframe, Engines or
engines, which are then in the Lessee's possession and
reasonably required for the further sale or lease by
the Lessor of the Aircraft, Engines or engines or
which are required to be maintained with respect
thereto under applicable rules and regulations of the
Aeronautics Authority and under the rules of any other
government of registry.
Section 12.04. Condition of the Aircraft.
(a) Required Condition. The Aircraft when returned
to the Lessor shall, at the Lessee's own cost and
expense, meet the following requirements:
(i) it shall be duly registered in the name
of the Lessor or its designee pursuant to the Act
unless, at least sixty (60) days prior to the
date scheduled for the return of the Aircraft,
the Lessor otherwise requests the Lessee to
retain the then-existing registration of the
Aircraft;
(ii) it shall be clean by airline and cargo
handling operating standards;
(iii) the Airframe shall be returned with the
Engines, or any replacements thereto as herein
authorized, provided that the Airframe shall have
an aggregate of two Engines or engines (as herein
authorized under Section 12.02 hereof), all of
the same make and model, installed thereon,
together with the equipment, accessories or parts
installed thereon on the Commencement Date or
replacements therefor (as herein authorized) and
alterations, modifications and additions thereto
made in accordance with the provisions of this
Lease;
(iv) it shall be in the condition required
by Section 7.01(b) hereof, and otherwise be in as
good condition as when delivered to the Lessee,
ordinary wear and tear excepted;
(v) it shall have a currently effective
airworthiness certificate issued by the
Aeronautics Authority;
(vi) it shall comply with any then
applicable rules and regulations imposed by the
Aeronautics Authority and, without limitation of
the foregoing, terminate all airworthiness
directives of, and mandatory modifications
required by, the Aeronautics Authority (or any
government or governmental authority, domestic or
foreign, having jurisdiction over the Aircraft)
required to be terminated before the end of the
Term and each Engine (including any Replacement
Engine) shall be serviceable in accordance with
the Lessee's Aeronautics Authority approved
maintenance program;
(vii) it shall be free and clear of all Liens
and rights of others (other than the Lessor's
Liens) including, without limitation, rights of
third parties under pooling, interchange,
overhaul, repair and other similar agreements or
arrangements referred to in Section 7.02(a)
hereof;
(viii) each Engine (including any Replacement
Engine) shall be serviceable and shall have been
continuously maintained in accordance with the
Lessee's FAA-approved maintenance program or
the maintenance program of the Lessee approved by
the aeronautical authority of the country of
registry of the Aircraft;
(ix) it shall be in a standard cargo
configuration; and
(x) it shall not be subject to a use
prohibition of the character described in clause
(iv) of the definition of "Event of Loss";
provided, however, that so long as no Event of
Default, Payment Default or Bankruptcy Default
exists if such a use prohibition shall have
occurred and be continuing and shall be curable
by action by the Lessee and the Lessee shall be
undertaking such cure promptly, diligently and
continuously, using its best efforts, then the
Lessee shall have a period of eighteen (18)
months from the date of such prohibition to
effect such cure and the provisions of Section
12.05 hereof shall apply throughout such period.
(b) Remaining Time. On return, (i) the
Airframe shall have been maintained under the Lessee's
continuous maintenance program approved by the FAA.
With respect to maintenance under the Lessee's FAA-
approved maintenance program, or the maintenance program
of the Lessee approved by the aeronautical authority of
the country of registry of the Aircraft, the Lessee shall
have treated the Aircraft in a non-discriminatory
manner with other A310 aircraft in the Lessee's fleet,
and the Aircraft shall be free and clear of all Liens
and rights of others other than the Lessor's Liens and
shall be in compliance in every material respect with
the Lessee's maintenance program as if the Term were
not ending. Any and all defects or discrepancies
revealed by any of the inspection procedures outlined
in Article 14 hereof shall be corrected by Lessee at
Lessee's expense prior to the return of the Aircraft
to Lessor.
Section 12.05. Delayed Return of Aircraft.
(a) If the return of the Aircraft to the Lessor in
compliance with the terms of this Lease shall be
delayed beyond the scheduled end of the Term because
of the occurrence of an event described in clause
(iii)(B) of the definition of Event of Loss or
pursuant to Section 12.04(a)(x), this Lease shall not
terminate but shall continue in full force and effect
until the earlier to occur of the return of the
Aircraft hereunder or the expiration of the six-month
period (or such shorter period referred to in said
clause (iii)(B) or, in the event that Section
12.04(a)(x) shall be applicable, the expiration of the
18-month period referred to therein) after the
scheduled end of the Term, provided that (i)
Stipulated Loss Value during such extension shall be
an amount determined in accordance with Section
4.01(b) hereof, (ii) the Lessee shall pay on demand,
as Basic Rent for each day of such delay and this
Lease shall continue, an amount equal to the average
per diem of the Basic Rent paid during the Basic Term
and the Renewal Rent paid during any Renewal Term or
such higher compensation being paid by the Government
pursuant to the Civil Reserve Airfleet Program and
(iii) neither the Lessee nor any other Person shall
use or operate the Aircraft in any manner, except
pursuant to the activation of such Civil Reserve
Airfleet Program.
(b) If, in the case of a delay in return
pursuant to paragraph (a) above, at the expiration of
the six-month period following the scheduled end of
the Term the Aircraft has not been returned to the
Lessor, an Event of Loss shall be deemed to have
occurred on the date of expiration of such six-month
period (or such shorter period referred to in
paragraph (a) above) or 18-month period if Section
12.04(a)(x) shall be applicable and on such date (or
at such earlier date as an Event of Loss pursuant to
clause (iv) of the definition of Event of Loss shall
have occurred) the Lessee shall pay to the Lessor all
amounts then due hereunder together with the
Stipulated Loss Value for the Aircraft determined as
of such date; provided, however, that the Lessor shall
have the right to waive payment of such Stipulated
Loss Value and accept the Aircraft on such date, "as
is, where is" (including the Aircraft's being subject
to any use prohibition of the character described in
clause (iv) of the definition of Event of Loss).
(c) In any other situation in which the
Aircraft is not returned to the Lessor upon the
expiration of the Term (other than due to a purchase
of the Aircraft by the Lessee pursuant to this Lease
or by a purchaser under Article 10), the Lessee shall
pay on demand as Rent for each day of such delay and
this Lease shall continue, an amount equal to the
higher of (x) the per diem Fair Market Rental for up
to six (6) months after the end of the Term and (y)
the per diem average of the Basic Rent payable during
the Basic Term, or the Renewal Rent payable during any
Renewal Term; provided, however, that nothing in this
paragraph shall be deemed (i) to relieve the Lessee in
any respect from any Default or Event of Default
arising from the failure to return the Aircraft at the
time or in the condition required by the Operative
Agreements or (ii) to permit the Lessee or any
sublessee to operate or use the Aircraft otherwise
than in connection with effecting such return. For
the avoidance of doubt, it is expressly agreed and
understood that, except with respect to the 18-month
period referred to in Section 12.04(a)(x), no period
of delayed return pursuant to this Article 12 shall
exceed six (6) months.
Section 12.06. Storage. Upon any expiration
or termination of this Lease, at the written request
of the Lessor given at least 15 days prior to such
expiration or termination, the Lessee will arrange, or
will cause to be arranged, at no charge to the Lessor
(subject, however, to the last sentence of this
Section 12.06), storage at a ramp storage facility for
the Aircraft at the Lessee's principal maintenance
facilities in Memphis, Tennessee or one of the
Lessee's other maintenance facilities or at a location
selected by the Lessee used as a location for the
parking or storage of aircraft for a period of up to
30 days. At the end of such 30 day period, if the
Lessor so requests within 10 days before the end of
such period, the Lessee will continue to provide such
ramp storage facility at such facility or location for
an additional 30 days at the Lessor's expense. If the
Lessee is required to move the Aircraft from one
storage facility to another, such move shall be at the
risk and expense of the Lessee during the initial
thirty-day storage period, otherwise the maintenance
and risk of loss of, and responsibility for obtaining
insurance on, the Aircraft shall be the responsibility
of the Lessor during any period of storage; provided,
however, that the Lessee will, upon written request of
the Lessor and at the Lessor's expense, not to exceed
the Lessee's incremental cost of such service, obtain
insurance for the Aircraft (including, if possible,
coverage through its fleet policy). Notwithstanding
other provisions of this Section 12.06, in the event
of an Event of Default all storage, maintenance,
insurance costs and risk of loss for the Aircraft
shall be for the account of the Lessee.
Section 12.07. Special Markings. The Lessee
shall, at the Lessee's cost, completely strip from the
interior and the exterior of the Aircraft all
insignias and other distinctive markings of the Lessee
or any sublessee and repaint the stripped down areas
in a workmanlike manner in matching exterior colors.
Section 12.08. Lessor's Option to Purchase
Parts. At any time after the Lessee has advised the
Lessor that it has determined not to renew this Lease
or purchase the Aircraft, or the Aircraft is otherwise
to be returned to the Lessor, the Lessee shall advise
the Lessor of any Part which the Lessee intends, and
is permitted, to remove as provided in Section 9.02(b)
above, and the Lessor may, at its option, upon 30 days
notice to the Lessee, purchase any or all of such
Parts from the Lessee upon the expiration of the Term
at their then Fair Market Value determined in
accordance with the provisions of Section 4.03 hereof.
Upon any return of the Aircraft pursuant to this
Article 12, if the Lessor does not elect to exercise
its option under this Section 12.08, the Lessee will,
at its own cost and expense, remove such Parts
described in subparagraph (i), (ii), or (iii) to
Section 9.02(b) as the Lessor may request.
ARTICLE 13
INSURANCE
Section 13.01. Public Liability and Property
Damage Liability Insurance. (a) Public Liability and
Property Damage Liability Insurance. The Lessee, at
its own cost and expense, will maintain or cause to be
maintained, 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 Lessee customarily
maintains with respect to similar aircraft and engines
which comprise the fleet of the Lessee (subject to the
limitations set forth in Section 13.06) 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 Lessee and owning or
operating aircraft and engines similar to the
Aircraft and Engines; provided that such insurance
shall not be in amounts less than the amount per
occurrence as shall have been agreed to on the Closing
Date by the Owner Participant, the Lessee and the
Indenture Trustee, unless and only so long as the
Aircraft is not operated and appropriate insurance for
the Aircraft on the ground is maintained;
provided that in no event shall the limits of
liability for all public liability insurance be less
than the amount, per occurrence, as shall have been
agreed to on the Closing Date by the Owner
Participant, the Lessee and the Indenture Trustee,
unless and only so long as the Aircraft is not
operated and appropriate insurance for the Aircraft on
the ground is maintained.
(b) Government Indemnification.
Notwithstanding Section 13.01(a) 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 Lessee shall
maintain throughout the period of such requisition
such insurance as would otherwise be required under
this Section 13.01; provided that the Lessor shall
accept, in lieu of such insurance coverage, written
indemnification or insurance from the Government which
is substantially the same as otherwise required under
this Article 13.
(c) Policy Terms. Any policy of insurance
carried and maintained in accordance with this Section
13.01, and any policy taken out in substitution or
replacement for any such policy subject to the terms,
conditions and limitations thereof, shall:
(i) name or be amended to name the Lessor in
its individual capacity and as owner of the
Aircraft, the Owner Participant and the Indenture
Trustee, in its capacity as such, and each of
their respective Affiliates, successors,
permitted assigns and the respective officers,
directors, employees, servants and agents of the
foregoing in their respective capacities as such
as additional insureds (hereinafter in this
paragraph (c) sometimes referred to as
"Additional Insured");
(ii) provide that, in respect of the
interest of any Additional Insured in such
policies, the insurance shall not be invalidated
by any action or inaction of the Lessee or any
Additional Insured as defined under the policy of
insurance required under this Section 13.01
(other than such Additional Insured) and shall
insure each Additional Insured regardless of any
breach or violation of any warranty, declaration
or condition contained in such policies by the
Lessee or any other Additional Insured as defined
under the policy of insurance required under this
Section 13.01 (other than such Additional
Insured);
(iii) provide that if such insurance is
canceled for any reason, or any substantial
change is made in the policies which adversely
affect the scope of 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 any
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 each such Additional Insured of
written notice from such insurers of such
cancellation, change or lapse;
(iv) provide that no Additional Insured
shall have any obligation or liability for
premiums or other payments, if any, in connection
with such insurance;
(v) provide that the insurers shall waive
any rights to be subrogated to the rights of each
Additional Insured, to the extent that the Lessee
has waived its rights under this Lease or the
other Operative Agreements; provided that the
exercise by insurers of rights of subrogation
derived from rights retained by the Lessee shall
not, in any way, delay payment of any claim that
would otherwise be payable by such insurers but
for the existence of rights of subrogation
derived from rights retained by the Lessee;
(vi) 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 any Additional Insured;
(vii) provide that all of the provisions of
such policy shall operate in the same manner as
if there were a separate policy covering each
Additional Insured; provided, that such policies
shall not operate to increase any insurer's limit
of liability; and
(viii) be primary, without right of
contribution from any other insurance which is
carried by any Additional Insured with respect to
its interest in the Aircraft.
Section 13.02. Insurance Against Loss or
Damage to Aircraft and Engines. (a) Hull Insurance.
The Lessee, 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, with respect to
governmental confiscation and expropriation, in the
country of registry with such retentions (subject to
the limitations set forth in Section 13.06 hereof) and
in such form and amounts as the Lessee customarily
maintains with respect to the aircraft in the Lessee's
fleet of the same type and model and operated on the
same routes as the Aircraft (except that the Lessee
shall be required to maintain war-risk, hijacking (air
piracy) and governmental confiscation and
expropriation insurance (except, with respect to
governmental confiscation and expropriation, 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 this Lease and
the Lien of the Indenture be for an amount not less
than an amount equal to the Stipulated Loss Value for
the Aircraft from time to time.
(b) Policy Terms. Any policies carried and
maintained in accordance with this Section 13.02 and
any policies taken out in substitution or replacement
for any such policies subject to the terms, conditions
and limitations thereof shall:
(i) name or be amended to name the Lessor in
its individual capacity and as owner of the
Aircraft, the Owner Participant and the Indenture
Trustee and each of their respective Affiliates,
successors, permitted assigns and the respective
officers, directors, employees, servants and
agents of the foregoing, in their respective
capacities as such, as additional insureds
(hereinafter in this paragraph (b) sometimes
referred to as "Additional Insured"), and the
Lessor (or, so long as the Indenture as it
relates to the Aircraft shall not have been
discharged, the Indenture Trustee) as sole loss
payee (hereinafter in this paragraph (b)
sometimes referred to as "Loss Payee");
(ii) provide with respect to coverage
provided under this Section 13.02, that (i) in
the event of a loss involving proceeds in excess
of $5,000,000 (or in the case of a loss while the
Aircraft is in the possession of a permitted
sublessee or transferee, $2,500,000), the
proceeds in respect of such loss up to an amount
equal to the Stipulated Loss Value for the
Aircraft shall be payable to the Lessor (or, so
long as the Indenture shall not have been
discharged, the Indenture Trustee), it being
understood and agreed that in the case of any
payment to the Lessor (or the Indenture Trustee)
otherwise than in respect of an Event of Loss,
the Lessor (or 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 Lessee or its
order, and (ii) the entire amount of any loss
involving proceeds in the aggregate of $5,000,000
(or in the case of a loss while the Aircraft is
in the possession of a permitted sublessee or
transferee, $2,500,000) or less or the amount of
any proceeds of any loss in excess of the
Stipulated Loss Value for the Aircraft shall be
paid to the Lessee or its order unless a Payment
Default or an Event of Default shall have
occurred and be continuing and the insurers have
been notified thereof by the Lessor or the
Indenture Trustee (and if the insurers have
notice of a Payment Default or Event of Default,
such payment shall be made to the Indenture
Trustee);
(iii) provide that if such insurance is
canceled for any reason or any substantial change
is made in the policies which adversely affects
the scope of 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 any Additional
Insured or the Loss Payee 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 each such Additional Insured or
Loss Payee of written notice from such Insurer of
such cancellation, change or lapse;
(iv) provide that, in respect of the
interest of the Lessor (in its individual
capacity and as the Owner Trustee), the Owner
Participant or the Indenture Trustee in their
respective capacities as such in such policies
the insurance shall not be invalidated by any
action or inaction of the Lessee, any Additional
Insured or the Loss Payee (other than any action
or inaction of such Additional Insured or the
Loss Payee) and shall insure the Lessor (in its
individual capacity and as Owner Trustee), the
Owner Participant or the Indenture Trustee,
regardless of any breach or violation of any
warranty, declaration or condition in such
policies by the Lessee or any other Insured as
defined under the policy of insurance required
under this Section 13.02;
(v) provide that the insurers shall waive
any rights of subrogation against the Lessor (in
its individual capacity and as Owner Trustee),
the Owner Participant or the Indenture Trustee,
to the extent that the Lessee has waived its
rights under this Lease; provided that the
exercise by insurers of rights of subrogation
derived from rights retained by the Lessee shall
not, in any way, delay payment of any claim that
would otherwise be payable by such insurers but
for the existence of rights of subrogation
derived from rights retained by the Lessee;
(vi) 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 any Additional Insured or Loss
Payee;
(vii) be primary and without rights of
contribution from any other insurance which is
carried by any Additional Insured or Loss Payee
with respect to its interest in the Aircraft; and
(viii) provide that no Additional Insured or
Loss Payee shall have any obligation or liability
for premiums or other payments, if any, in
connection with such insurance.
Section 13.03. Application of Insurance
Proceeds. (a) Generally. All insurance proceeds
(other than proceeds from policies carried by the
Lessor, the Owner Participant or the Indenture
Trustee) received under policies described in Section
13.02 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:
(i) 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, so much of such
proceeds as shall not exceed the amounts required
to be paid by the Lessee pursuant to said Section
11.02 hereof shall be applied in reduction of the
Lessee's obligation to pay such amounts if not
already paid by the Lessee, or if already paid by
the Lessee, shall be applied to reimburse the
Lessee 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 Lessee; if and so long as the
foregoing proviso is not satisfied, such proceeds
shall be held pursuant to Section 23.01 hereof as
security for the Lessee's obligations hereunder
and under the Participation Agreement; or
(ii) 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
11.04 hereof, all such proceeds shall be paid to
the Indenture Trustee (unless the Indenture has
been discharged in which case paid to the Lessor)
for disbursement to the order of the Lessee,
after the Lessee shall have fully performed the
terms of Section 11.04 hereof with respect to the
Event of Loss for which such proceeds are paid,
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 23.01 hereof as security for the
Lessee's obligations hereunder and under the
Participation Agreement.
(b) Payment if no Event of Loss. The
insurance proceeds of any property damage loss not
constituting an Event of Loss with respect to the
Aircraft, the Airframe or an Engine will be applied in
payment (or to reimburse the Lessee) for repairs or
for replacement property in accordance with Articles 7
and 8 hereof, if not already paid for by the Lessee,
and any balance remaining after compliance with said
Articles 7 and 8 hereof with respect to such loss
shall be paid to the order of the Lessee, 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 23.01 hereof as
security for the Lessee's obligations hereunder and
under the Participation Agreement.
(c) Information. If any Additional Insured
becomes subject to any claim covered by any insurance
policy maintained pursuant to this Article 13, the
Lessee shall make available any information required
by such Additional Insured in connection with such
claim.
Section 13.04. Reports. On or before the
Commencement Date and thereafter annually on or before
the scheduled expiration date for such policy during
the Term (the "Expiration Date"), an aviation
insurance broker will furnish to the Lessor and the
Indenture Trustee a signed report, 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 Lease. The
Lessee will cause its aviation insurance broker to
advise the Lessor, the Owner Participant and 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 Lessee of which it has
knowledge and which might invalidate, cause
cancellation of or render unenforceable all or any
part of any insurance carried by the Lessee with
respect to the Aircraft. The Lessee will cause such
insurance broker to agree to advise the Lessor, the
Owner Participant and 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 Article 13 will not be
renewed at the Expiration Date. The Lessee will also
cause such insurance broker to deliver to the Lessor,
the Owner Participant and the Indenture Trustee on or
prior to the date of expiration of any insurance
policy referenced in a previously delivered
certificate of insurance, a new certificate of
insurance, confirming to such parties that such
insurance as certified on the Commencement Date
continues in full force and effect. If the Lessee
shall fail to maintain insurance as required, the
Lessor may, at its option, provide such insurance, and
in such event, the Lessee shall, upon demand,
reimburse the Lessor, as Supplemental Rent, for the
cost of such insurance; provided, however, that no
exercise of said option shall affect the provisions of
this Lease, including the provisions that failure by
the Lessee to maintain the prescribed insurance shall
constitute an Event of Default or otherwise constitute
a waiver of any other rights the Lessor may have
against the Lessee.
Section 13.05. Lessor's Insurance. The
Lessor may insure the Airframe or any Engine at its
own cost and expense, including insuring the Aircraft
for amounts in excess of the Stipulated Loss Value of
the Aircraft, provided that any insurance so
maintained by the Lessor shall not result in a
reduction of coverage or amounts payable under
insurance required or permitted to be maintained by
the Lessee under this Article 13 or increase the cost
to the Lessee of maintaining such insurance; provided
further, that any insurance policies of the Lessor
insuring the Airframe or any Engine shall provide for
a release to the Lessee of any and all salvage rights
in and to the Airframe or any Engine.
Section 13.06. Self-Insurance. The Lessee
may self-insure the risks required to be insured
against by Sections 13.01 and 13.02 hereof in such
reasonable amounts as are then applicable to other
aircraft or engines of the Lessee of value comparable
to the Aircraft, but in no case shall such
self-insurance with respect to all aircraft in the
Lessee's fleet in aggregate exceed for any 12-month
year an amount equal to the lesser of (i) 50% of the
highest insured value of any single aircraft in the
Lessee's fleet and (ii) 1.5% of the average aggregate
insured value from time to time of the Lessee'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. The foregoing shall not permit Lessee
to discriminate as between insurance coverage on the
Aircraft and insurance which Lessee maintains with
respect to similar aircraft owned or operated by the
Lessee operating on similar routes in similar
locations.
ARTICLE 14
INSPECTION
Section 14.01. Right of Inspection. At all
times following the Commencement Date, the Lessor, the
Indenture Trustee (if the Indenture is still in
effect), and the Owner Participant or their respective
authorized representatives, at such party's expense
may at any reasonable times and upon reasonable prior
notice, inspect the Aircraft, the books and records of
the Lessee relating to the maintenance of the
Aircraft, and such other information as they may
reasonably request, and may make copies of those parts
of such books, records and other information as are
not deemed to be confidential by the Lessee. Within
365 days before the end of the Term, the Lessee shall
upon a request from the Lessor (i) advise the Lessor,
the Owner Participant and the Indenture Trustee (if the
Indenture is still in effect) of any major maintenance
visits scheduled during such 365-day period and shall
permit the Lessor, the Indenture Trustee (if the Indenture
is still in effect) and the Owner Participant or their
respective authorized representatives to observe such
major maintenance visit and (ii) cooperate with the
Lessor generally in making the Aircraft available for
inspection by the Lessor's prospective purchasers or
lessees, in all such cases, so long as such
observation or inspection does not interfere with the
Lessee's operation and maintenance of the Aircraft.
Section 14.02. No Obligation to Inspect.
Neither the Lessor, the Indenture Trustee, nor the
Owner Participant shall have any duty to make any
inspection of the Aircraft and no such party shall
incur any liability or obligation by reason of not
making any such inspection.
ARTICLE 15
ASSIGNMENT
Section 15.01. Lessee's Right to Assign.
The Lessee shall not, and shall have no authority or
power to assign, convey or sublease any of its rights
under this Lease without the prior written consent of
the Lessor except (i) as expressly provided in Section
7.02 hereof, or in the case of any requisition by the
Government referred to in Section 7.01 of this Lease,
or (ii) to a wholly-owned subsidiary of the Lessee
which shall be a certificated Air Carrier. Any such
assignment, conveyance or sublease shall in no way
relieve the Lessee from any obligation under any or
any other Operative Agreement or any written agreement
of the Lessee entered into in connection with the
transactions contemplated by the Operative Agreements,
which shall be and remain obligations of the Lessee.
The Lessor agrees that it will not assign or convey
its right, title and interest in and to this Lease or
the Aircraft except as contemplated by or provided in
this Lease, the Trust Agreement, the Indenture, the
Agreement to Lease or the Participation Agreement.
The terms and provisions of this Lease shall be
binding upon and inure to the benefit of the Lessor
and the Lessee and their respective successors and
assigns, and shall inure, to the extent expressly
provided herein, to the direct benefit of, and in
accordance with the provisions of the Indenture and
the Participation Agreement shall be enforceable by
the Indenture Trustee, the Lessor and their respective
successors and assigns.
Section 15.02. Citizenship. The Lessee will
at all times be a duly certificated Air Carrier under
the Act.
ARTICLE 16
EVENTS OF DEFAULT
Section 16.01. Events of Default. Each of
the following events shall constitute an Event of
Default, whether any such event shall be voluntary or
involuntary or come about or be effected by operation
of law or pursuant to or in compliance with any
judgment, decree or order of any court or any order,
rule or regulation of any administrative or
governmental body:
(a) the Lessee shall fail to make any
payment of Basic Rent, Renewal Rent, Stipulated
Loss Value or Termination Value, as the case may
be, within five (5) Business Days after receipt
of written notice from the Lessor stating that
such payment is overdue; or
(b) the Lessee shall fail to make any
payment of Supplemental Rent (other than amounts
described in clause (a) above) within ten (10)
days after the Lessee has received written notice
from the Person entitled to receive such payment
stating that such payment is due (except that
with respect to any failure to pay Excepted
Payments for such period, such failure shall
constitute an Event of Default at the discretion
of the Owner Participant); or
(c) (i) the Lessee shall fail to procure,
carry and maintain insurance on or in respect of
the Aircraft at any time in accordance with the
provisions of Article 13 hereof or the provisions
of any Ancillary Agreement to which the Lessee is
a party or such insurance lapses or is canceled,
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 Lessor of written
notice of such lapse or cancellation or the date that
such lapse or cancellation is effective as to the Lessor
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 by Section 13.02 and by any
Ancillary Agreement to which the Lessee is a party
while on the ground and not operated or (ii) the
Aircraft shall be operated at any time when public
liability insurance required under Section 13.01
hereof shall not be in effect (it being
understood that the Lessee is not required to
maintain such insurance under Section 13.01
hereof while the indemnification or insurance
referred to in the proviso to Section 13.01(b)
hereof is in effect); or
(d) the Lessee shall fail to perform or
observe any other covenant, condition or
agreement to be performed or observed by it under
any Operative Agreement (excluding any covenant
in the Tax Indemnity Agreement which could give
rise to an obligation on the part of the Lessee
to indemnify thereunder (regardless of Section
26.08 hereof), but subject to Section 16.01(b)
hereof) or any other written agreement of the
Lessee 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 Lessee has knowledge of the
failure or the Lessee shall have received written
notice from the Lessor, the Indenture Trustee or
the Owner Participant 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 Lessee 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 Lessee's best efforts, such
failure shall not constitute an Event of Default;
provided, further, that failure of the Lessee to
maintain the registration of the Aircraft under
the Act pursuant to the Lessee's covenants and
agreement in Section 6.02(b) of the Participation
Agreement and in Section 7.01(a) of this Lease,
when the lapse of such registration is solely
because the Owner Participant or the Lessor has
ceased to be a Citizen of the United States, or
when the lapse of such registration is solely
because the Owner Participant has revoked control
rights pursuant to clause (iii) of Section 7.07
of the Trust Agreement or other similar
arrangements designed to permit such
registration, shall not constitute a Default or
an Event of Default; or
(e) an order for relief shall be entered in
respect of the Lessee 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 Lessee shall consent
to the appointment of a custodian, receiver,
trustee or liquidator of itself or of a
substantial part of its property; or the Lessee
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 Lessee shall
file, or the Board of Directors of the Lessee
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, insolvency or similar laws (as now or
hereafter in effect) or an answer admitting the
material allegations of a petition filed against
the Lessee in any such proceeding; or the Lessee
shall file, or the Board of Directors of the
Lessee shall authorize the Lessee 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
(f) an order, judgment or decree shall be
entered by any court of competent jurisdiction
appointing, without the consent of the Lessee, a
custodian, receiver, trustee, or liquidator of
the Lessee or of any substantial part of its
property, or sequestering any substantial part of
the property of the Lessee, or granting any other
relief in respect of the Lessee 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
(g) a petition against the Lessee 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 Lessee, any court of
competent jurisdiction shall assume jurisdiction,
custody or control of the Lessee 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
(h) any representation or warranty made by
the Lessee in this Lease or in the Participation
Agreement or in any document or certificate
furnished by the Lessee in connection with or
pursuant to this Lease or the Participation
Agreement (except for the Tax Indemnity Agreement
(regardless of Section 26.08 hereof)) shall at
any time prove to have been incorrect at the time
made in any respect material to the transactions
contemplated by this Lease and, if originally
made by the Lessee in good faith, shall remain
material and unremedied for a period of thirty
(30) days after a Responsible Officer of the
Lessee shall have actual knowledge or the Lessee
shall have received written notice of such
misstatement.
ARTICLE 17
REMEDIES
Section 17.01. Remedies Upon Lessee's
Default. (a) Remedies Generally. Upon the
occurrence of any Event of Default and at any time
after such occurrence so long as the same shall be
continuing, the Lessor may, at its option, declare
this Lease to be in default (except that no such
declaration shall be required in the case of an Event
of Default pursuant to paragraphs (e), (f) or (g) of
Section 16.01 hereof), and at any time thereafter the
Lessor may do, and the Lessee shall comply with, one
or more of the following, as the Lessor in its sole
discretion shall elect, to the extent permitted by,
and subject to compliance with, any mandatory
requirements of applicable law then in effect:
(i) Demand in writing that the Lessee shall,
and upon such written demand the Lessee shall, at
the Lessee's own cost and expense, return
promptly to the Lessor the Airframe and Engines
as the Lessor may demand in the manner and
condition required by, and otherwise in
accordance with all of the provisions of, Article
12 (provided that, unless the Lessor shall
require otherwise, the Aircraft shall be returned
within the continental United States), or the
Lessor, at its option, may enter upon the
premises where the Airframe or any Engine is
located or believed to be located and take
immediate possession of and remove the Airframe
or any Engine (together with any engine which is
not an Engine but is installed on the Airframe,
subject to all of the rights of the owner,
lessor, lien holder or secured party of such
engine) without the necessity for first
instituting proceedings, or by summary
proceedings or otherwise, all without liability
of the Lessor to the Lessee for or by reason of
such entry or taking of possession, whether for
the restoration of damage to property caused by
such action or otherwise;
(ii) With or without taking possession
thereof, sell or otherwise dispose of the
Airframe and Engines, at public or private sale
and with or without advertisement or notice to
the Lessee, as the Lessor may determine, and the
Lessor may hold the Lessee liable for any
installment of Basic Rent and Renewal Rent due on
or before the date of such sale of the Aircraft
(and, if such Basic Rent or Renewal Rent is
payable in arrears, the pro rata portion of the
installment of such Basic Rent or Renewal Rent
due on the next succeeding Rent Payment Date in
respect of any period commencing on the
immediately preceding Rent Payment Date to the
date of such sale), or hold, use, operate, lease
to others or keep idle all or any part of the
Airframe or any Engine as the Lessor, in its sole
discretion, may determine, in any such case free
and clear of any rights of the Lessee except as
otherwise set forth in this Article 17, and
without any duty to account to the Lessee with
respect to such action or inaction or for any
proceeds except to the extent required by Section
17.01(a)(iv) hereof; in the event the Lessor
elects to exercise its rights under said Section,
and in connection with any sale of the Aircraft
or any part thereof pursuant to this Article 17,
the Lessor, the Owner Participant or the
Indenture Trustee, may bid for and purchase such
property;
(iii) Whether or not the Lessor shall have
exercised or shall later at any time exercise any
of its rights under Section 17.01(a)(i) or
17.01(a)(ii) hereof, the Lessor, by written
notice to the Lessee specifying a payment date
not earlier than 10 days from the date of such
notice, may demand that the Lessee pay to the
Lessor, and the Lessee shall pay to the Lessor on
the payment date specified in such notice, as
liquidated damages for loss of a bargain and not
as a penalty (in lieu of the Basic Rent or
Renewal Rent due on Rent Payment Dates occurring
after the payment date specified in such notice),
any installment of Basic Rent or Renewal Rent due
on or before, and any Supplemental Rent due on or
before such payment date, plus an amount equal to
the excess, if any, of the Stipulated Loss Value
for the Aircraft, computed as of the Stipulated
Loss Value Determination Date on or next
preceding the payment date specified in such
notice over the Fair Market Value of the
Aircraft, computed as of the Stipulated Loss
Value Determination Date on or next preceding the
payment date specified in such notice on an "as-
is, where-is" basis and assuming a sale on a
liquidation basis (and calculated assuming that
the Aircraft will be in storage for a period of
twelve months unless the Lessor has arranged for
a sale or a new lease of the Aircraft scheduled
to be completed or to commence within such twelve
month period, in which case such sale or new
lease shall be taken into account in determining
such Fair Market Value) together with interest,
to the extent permitted by applicable law, at the
Past Due Rate on the amount of such Stipulated
Loss Value, from the applicable Stipulated Loss
Value Determination Date to the date of actual
payment of such amount; provided, however, that
if (and in any event prior to the time for
payment hereunder) the Lessor is unable within a
reasonable period of time to recover possession
of the Aircraft, or any portion thereof, pursuant
to clause (i) above unencumbered by this Lease
and free and clear of all Liens (other than
Lessor's Liens), Fair Market Value of the
Aircraft or such portion shall, at the option of
the Lessor to the extent legally enforceable, be
zero and after payment in full by the Lessee of
the amount specified above and all other amounts
due from the Lessee under this Lease and the
other Operative Agreements, the Lessor shall
promptly transfer (without recourse or warranty
other than as to the absence of the Lessor's
Liens and subject to the disclaimers set forth in
Section 5.01 hereof) all of its right, title and
interest in the Aircraft or such portion, to the
Lessee and the Lessee shall, as promptly as
practicable thereafter sell the Aircraft and
remit to the Lessor the excess, if any, of the
net sales proceeds (after deducting costs of sale
incurred by the Lessee) over such Stipulated Loss
Value;
(iv) In the event the Lessor, pursuant to
Section 17.01(a)(ii) hereof, shall have sold the
Airframe and/or any Engine, the Lessor, in lieu
of exercising its rights under Section
17.01(a)(iii) hereof, may, if it shall so elect,
demand that the Lessee pay the Lessor, and the
Lessee shall pay to the Lessor, on the date of
such sale, as liquidated damages for loss of a
bargain and not as a penalty (in lieu of the
Basic Rent or Renewal Rent due after the date on
which such sale occurs) any unpaid Basic Rent or
Renewal Rent due on or before the date on which
such sale occurs, and any Supplemental Rent due
on or before the date on which such sale occurs,
plus an amount equal to the excess, if any, of
(A) the Stipulated Loss Value for the Aircraft,
computed as of the Stipulated Loss Value
Determination Date on or next preceding the sale
date, over (B) the net proceeds of such sale (after
deduction of all of the Lessor's costs and
expenses of such sale, including, without
limitation, sales or transfer taxes, costs of
storage, overhaul, maintenance, preparation and
transportation of the Aircraft and brokers' and
attorneys' fees) together with interest, to the
extent permitted by applicable law, at the Past
Due Rate, on the amount of such excess from the
date of such sale to the date of actual payment
by the Lessee;
(v) Proceed by appropriate court action to
enforce the terms of this Lease or to recover
damages for its breach;
(vi) Terminate or rescind this Lease as to
the Airframe or any or all of the Engines; or
(vii) Exercise any other right or remedy
which may be available to the Lessor under
applicable law.
(b) Cost of Exercise of Remedies. In
addition, the Lessee shall be liable, except as
otherwise provided above, for any and all unpaid Rent
due before, after or during the exercise of any of the
Lessor's remedies, for all amounts payable by the
Lessee under the Participation Agreement before or
after any termination hereof, and for all reasonable
legal fees and other costs and expenses
incurred by the Lessor by reason of the occurrence of
any Event of Default or the exercise of the Lessor's
remedies, including, without limitation, all costs and
expenses incurred in connection with the return of the
Airframe or any Engine in accordance with the terms of
Article 12 or in placing the Airframe or Engines in
the condition and airworthiness required by such
Article or in connection with any use, operation,
maintenance, storage, or leasing carried out as part
of such exercise.
Section 17.02. Cumulative Remedies. Except
as otherwise provided, no remedy referred to in this
Article 17 is intended to be exclusive, but each shall
be cumulative and in addition to any other remedy
referred to above or otherwise available to the Lessor
at law or in equity; and the exercise or beginning of
exercise by the Lessor of any one or more of such
remedies shall not preclude the simultaneous or later
exercise by the Lessor of any or all of such other
remedies.
Section 17.03. Waiver. No express or
implied waiver by the Lessor of any Event of Default
shall in any way be, or be construed to be, a waiver
of any future or subsequent Event of Default. To the
extent permitted by applicable law, the Lessee waives
any rights now or in the future conferred by statute
or otherwise which may require the Lessor to sell,
lease or otherwise use the Airframe or either Engine
in mitigation of the Lessor's damages or which may
otherwise limit or modify any of the Lessor's rights
or remedies under this Article 17. The Lessor's
access to the Aircraft is of the essence and shall not
be impaired.
Section 17.04. Lessor's Right to Perform for
Lessee. If the Lessee fails to make any required
payment of Rent or fails to perform or comply with any
of its agreements contained in this Lease, whether or
not such failure shall constitute an Event of Default
hereunder, the Lessor may (but shall not be obligated
to) make such payments or perform or comply with such
agreement, and the amount of such payment and the
amount of the reasonable costs and expenses of the
Lessor incurred in connection with such payment or the
performance of or compliance with such agreement,
together with interest (to the extent permitted by
applicable law) at the Past Due Rate from the date of
the making of such payment or the incurring of such
costs and expenses by the Lessor to the date of
payment of such Rent or other amount by the Lessee,
shall be deemed Supplemental Rent payable by the
Lessee upon demand. No such payment or performance by
the Lessor shall be deemed to waive any Default or
Event of Default or relieve the Lessee of its
obligations hereunder.
ARTICLE 18
COVENANT OF QUIET ENJOYMENT
Section 18.01. Quiet Enjoyment. So long as
no Event of Default shall have occurred and be
continuing, each of the parties hereto covenants that
neither it nor any other person lawfully claiming
through it (other than the holder of a Lien which the
Lessee is obligated to discharge pursuant to Article 6
hereof) shall interfere with the Lessee's right to
quietly enjoy the Aircraft without hindrance or
disturbance by it or any such other Person.
ARTICLE 19
FURTHER ASSURANCES; FINANCIAL INFORMATION
Section 19.01. Further Assurances. The
Lessee will cause each of this Lease, the Trust
Agreement and the Indenture, and upon the execution
and delivery of each Lease Supplement and Indenture
Supplement will cause each of them, to be duly filed
for recordation in accordance with the Act and will
maintain the recordation of the Indenture until the
Lien of the Indenture shall have been discharged
pursuant to the terms of the Indenture. In addition,
the Lessee will, at the Lessee's own cost and expense,
promptly and duly execute and deliver to the Lessor,
the Owner Participant and the Indenture Trustee such
further documents and assurances to carry out the
intent and purpose of this Lease and the Indenture and
to establish and protect the rights and remedies
created or intended to be created in favor of the
Lessor under this Lease, and of the Owner Participant
under the Trust Agreement and of the Indenture Trustee
under the Indenture, including, without limitation,
the execution and filing of Uniform Commercial Code
financing and continuation statements, the execution
and delivery of supplements and amendments to this
Lease and to the Indenture, in recordable form,
subjecting to this Lease and the Indenture, and any
Replacement Engine delivered by the Lessee pursuant to
Section 11.04 and the recording and filing of
counterparts of this Lease and the Indenture in
accordance with the laws of such jurisdictions as the
Lessor or the Indenture Trustee may from time to time
deem advisable. The foregoing does not impose upon
the Lessor any additional liabilities not otherwise
contemplated by this Lease.
ARTICLE 20
NET LEASE
Section 20.01. Nature of Lease. (a) This
Lease is a net lease, it being the intention of the
parties hereto with respect to the Aircraft that the
obligations of the Lessee to pay all costs and
expenses of every character, whether foreseen or
unforeseen or ordinary or extraordinary, in connection
with the use, operation, maintenance, repair and
reconstruction of the Airframe and each Engine by the
Lessee, including, without limitation, the costs and
expenses particularly set forth in this Lease, shall
be absolute and unconditional, shall be separate and
independent covenants and agreements, and shall
continue unaffected unless and until the covenants
have been terminated pursuant to an express provision
of this Lease. Without limiting any other rights of
the Lessee hereunder or under the other Operative
Agreements, the obligation to pay Rent and all amounts
payable by the Lessee under this Lease or the
Participation Agreement shall be absolute and
unconditional and (except as otherwise expressly
provided with respect to Supplemental Rent) shall be
paid without notice or demand and such obligation
shall not be affected by any circumstance, including,
without limitation:
(i) any setoff, counterclaim, recoupment,
defense or other right which the Lessee may have
against the Lessor, the Owner Participant, any
Holder, the Indenture Trustee or anyone else for
any reason (including, without limitation, any
breach by the Lessor, the Owner Participant, the
Indenture Trustee or any Holder of their
respective representations, warranties,
agreements or covenants contained in any of the
Operative Agreements);
(ii) any defect in the title, airworthiness,
registration, eligibility for registration under
the Act (and the regulations thereunder) or under
any of the laws or regulations of any other
country of registry of the Aircraft, condition,
design, operation, merchantability or fitness for
use of, suitability for a particular purpose of,
or any damage to or loss or destruction of, the
Aircraft or any portion thereof, or any
interruption or cessation in the use or
possession of the Aircraft by the Lessee or any
sublessee for any reason including, without
limitation, by reason of governmental action;
(iii) any insolvency, bankruptcy,
reorganization or similar case or proceedings by
or against the Lessor, the Lessee, the Indenture
Trustee or the Owner Participant or any other
Person; or
(iv) any other circumstance, happening or
event whatsoever, whether or not unforeseen, or
similar to any of the foregoing.
(b) To the extent permitted by applicable
law, the Lessee waives any and all rights which it may
now have or which at any time it may have conferred
upon it, by statute or otherwise, to terminate,
cancel, quit, rescind or surrender this Lease, the
Airframe, or any Engine or part hereof, other than in
accordance with the terms hereof.
(c) Except as expressly provided herein,
each payment of Rent made by the Lessee shall be final
as to the Lessor and the Lessee, and the Lessee will
not seek to return nor to recover, abate, suspend,
defer or reduce all or any part of any such payment of
Rent from the Lessor or from the Indenture Trustee for
any reason.
ARTICLE 21
SUCCESSOR LESSOR
Section 21.01. Successor Lessor. The Lessee
agrees that in the case of the appointment of any
successor trustee for the Lessor pursuant to the terms
of the Participation Agreement, such successor trustee
shall, upon written notice by such successor to the
Lessee, succeed to all the rights, powers and title of
the Lessor under this Lease and shall be deemed to be
the Lessor and the owner of the Aircraft for all
purposes of this Lease without the necessity of any
consent or approval by the Lessee and without in any
way altering the terms of this Lease or the Lessee's
obligations. One such appointment and designation of
a successor trustee shall not exhaust the right to
appoint and designate further successor trustee
pursuant to the Participation Agreement, but such
right may be exercised repeatedly so long as this
Lease shall be in effect.
ARTICLE 22
SECURITY FOR LESSOR'S OBLIGATIONS
Section 22.01. Security for Lessor's
Obligations to Holders. In order to secure the
indebtedness evidenced by the Certificates the
Indenture provides, among other things, for the
assignment by the Lessor to the Indenture Trustee of
this Lease and the Lease Supplement and for the
creation of a first mortgage and security interest in
favor of the Indenture Trustee on the Aircraft. The
Lessee consents to and acknowledges such assignment
(subject to the reservations and conditions therein
set forth) and the receipt of a copy of the Indenture.
Section 22.02. Lease Subject to Indenture.
On and after the Exchange Date, this Lease shall be
subordinate to the Lien of the Indenture.
Notwithstanding the exercise by the Indenture Trustee
of any rights or remedies under or in respect of the
Indenture, the Lessee shall not be relieved of the
obligation to perform all the terms and provisions to
be performed by the Lessee under this Lease, and this
Lease shall not terminate or be otherwise affected by
reason of any such exercise of any such rights and
remedies unless after an Event of Default shall have
occurred and be continuing this Lease is terminated in
respect of the Aircraft upon the election of the
Indenture Trustee in connection with the exercise of
its rights and remedies under the Indenture in respect
of the Aircraft, evidenced by and as stated in written
notice of such termination from the Indenture Trustee
to the Lessee.
Section 22.03. Consent of Lessee to
Assignment of Lease as Security. The Lessee hereby
accepts and consents, pursuant to the terms of the
Indenture, to the Indenture Trustee's rights to
receive payments (other than Excepted Payments) due
under this Lease, the right to transfer or assign
title to the Aircraft subject to this Lease, to make
all waivers and agreements except as otherwise
provided in the Indenture, to give all notices,
consents and releases and to take all action upon the
happening of a Default or Event of Default under this
Lease (except as otherwise specifically provided in
the Indenture), or to do any and all other things
whatsoever which the Lessor is or may become entitled
to do under this Lease (except as otherwise provided
in the Indenture); all or any of which rights,
obligations, benefits and interests may, pursuant to
the terms of the Indenture, be reassigned or
retransferred by the Indenture Trustee at any time and
from time to time (except as otherwise provided in the
Indenture); provided, however, that the Lessor, except
to the extent, and for such time as, it is unable to
do so by virtue of the Indenture, shall remain liable
for the performance of all the terms, conditions,
covenants and provisions for which it is obligated
under this Lease notwithstanding such assignment. The
Lessee agrees to furnish the Indenture Trustee with
copies of all notices and other communications
required to be made to the Lessor hereunder
contemporaneously with the giving of the same to the
Lessor.
ARTICLE 23
SECURITY FUNDS
Section 23.01. Investment of Security Funds.
(a) Any amounts otherwise payable to the Lessee shall
be held by the Lessor as security for, and may be
applied by the Lessor against, the obligations of the
Lessee under this Lease during such time as there
shall have occurred and be continuing a Default or
Event of Default, and, at such times as there shall
not be continuing a Default or Event of Default, such
amounts, net of any amounts which have been applied by
the Lessor against the Lessee's obligations hereunder,
shall be paid to the Lessee. Any amounts which are
held by the Lessor pending payment to the Lessee
shall, until paid to the Lessee or applied against the
Lessee's obligations hereunder, be invested by the
Lessor, as directed from time to time, in writing (and
in the absence of a written direction by the Lessee or
at any time an Event of Default shall have occurred
and be continuing, the Lessor shall invest such monies
in direct obligations of the United States of
America), by the Lessee and at the expense and risk of
the Lessee, in the following securities (which in the
case of securities referred to in subparagraphs (i)
through (iv) of this Section 23.01(a) hereof shall
mature within ninety (90) days of the date of
purchase):
(i) direct obligations of the United States
of America; or
(ii) obligations fully guaranteed by the
United States of America; or
(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, having a
combined capital and surplus of at least
$500,000,000 and having a rating of "B" or better
from the Thomson BankWatch or IBCA Ltd.; or
(iv) commercial paper rated A-1/P-1 by
Standard & Poor's Corporation and Moody's
Investors Service, Inc., respectively (or if
neither such organization shall rate such
commercial paper at any time, by any nationally
recognized statistical rating organization in the
United States of America) equal to the highest
rating assigned by such rating organization.
(b) At any time any invested funds are
distributed to the Lessee, there shall be promptly
remitted to the Lessee any gain (including interest
received) realized as the result of any investment
pursuant to Section 23.01(a) hereof (net of any fees,
commissions and other costs and expenses, if any,
incurred by the Lessor in connection with such
investment), unless a Default or Event of Default
shall have occurred and be continuing in which case
such funds shall be applied in the same manner as the
principal so invested. The Lessee shall be
responsible for and will promptly pay to the Indenture
Trustee or the Lessor, as the case may be, on demand,
the amount of any loss realized as the result of any
such investment (together with any fees, commissions
and other costs and expenses, if any, incurred by the
Lessor or the Indenture Trustee, in connection with
such investment), such amount to be disposed of in
accordance with the terms of the Lease or the
Indenture, as the case may be.
ARTICLE 24
CONCERNING THE LESSOR
Section 24.01. Lessor's Entry Into Lease.
Except as expressly provided herein, the Lessor and
the Lessee agree that this Lease is executed by First
Security Bank of Utah, National Association not
individually but solely as Owner Trustee under the
Trust Agreement in the exercise of the power and
authority conferred and vested in it as such Owner
Trustee, that each and all of the representations,
undertakings and agreements by First Security Bank of
Utah, National Association, or for the purpose or with
the intention of binding First Security Bank of Utah,
National Association individually, are made and
intended for the purpose of binding only the Lessor's
Estate, and that in no case whatsoever shall First
Security Bank of Utah, National Association be
personally liable for any loss in respect of such
representations, undertakings and agreements, that
actions to be taken by the Lessor pursuant to its
obligation hereunder may, in certain instances, be
taken by the Lessor only upon specific authority of
the Owner Participant, except as otherwise provided in
the Trust Agreement, that nothing herein contained
shall be construed as creating any liability on First
Security Bank of Utah, National Association,
individually or personally, to perform any covenant,
either express or implied, herein, all such liability,
if any, being expressly waived by the Lessee and by
each and every person now or hereafter claiming by,
through or under the Lessee except with respect to the
gross negligence or willful misconduct or First
Security Bank of Utah, National Association, and that
so far as First Security Bank of Utah, National
Association, individually or personally is concerned,
the Lessee and any Person claiming by, through or
under the Lessee shall look solely to the Lessor's
Estate for the performance of any obligation under
this Lease; provided, that nothing in this Section
24.01 shall be construed to limit in scope or
substance those representations and warranties of
First Security Bank of Utah, National Association in
its individual capacity set forth in the Participation
Agreement. The term the "Lessor" as used in this
Lease shall include any trustee succeeding First
Security Bank of Utah, National Association as Owner
Trustee under the Trust Agreement. Any obligation of
the Lessor hereunder may be performed by the Owner
Participant, and any such performance shall not be
construed as revocation of the trust created by the
Trust Agreement. Nothing contained in this Lease
shall restrict the operation of the provisions of the
Trust Agreement with respect to its revocation of the
resignation or removal of the Owner Trustee hereunder.
ARTICLE 25
NOTICES
Section 25.01. Notices. All notices,
demands, declarations and other communications
required by this Agreement shall be in writing and
shall be deemed received (i) if given by telecopier
when transmitted and the appropriate telephonic
confirmation received if transmitted on a Business Day
or during normal business hours of the recipient, and
otherwise on the next Business Day following
transmission, provided that in such case, such notice
by telecopy shall be confirmed by international
certified or registered air mail promptly thereafter,
(ii) if given by certified international air mail or
registered international air mail, by the addressee
receipt, (iii) if given by telex, upon receipt by the
party transmitting the telex of such party's callback
code at the end of such telex (receipt of confirmation
in writing not being necessary to the effectiveness of
any telex), provided that in such case, such notice by
telex shall be confirmed by international certified or
registered air mail promptly thereafter and (iv) if
given by Federal Express courier or other means, when
received or personally delivered, addressed:
(a) If to the Lessee, to its office at 2007
Corporate Plaza, Memphis, Tennessee 38132,
Attention: Vice President and Treasurer with a
copy to Senior Vice President and General
Counsel; telephone (901) 395-3388, facsimile
(901) 395-4758; or at such other address as the
Lessee shall from time to time designate in
writing to the Lessor, the Owner Participant and
the Indenture Trustee;
(b) If to the Lessor or Owner Trustee, to
its office at 79 South Main Street, Salt Lake
City, Utah 84111, Attention: Corporate Trust
Department; telephone: (801) 246-5630, telecopier
(801) 246-5053; or to such other address as the
Lessor shall from time to time designate in
writing to the Lessee and the Indenture Trustee,
with a copy to the Owner Participant at the Owner
Participant's address as provided in subsection
(c) below and with a copy to the Indenture
Trustee at the Indenture Trustee's address as
provided in subsection (d) below;
(c) If to the Owner Participant, in
accordance with the Participation Agreement; and
(d) If to the Indenture Trustee, to such
address as the Indenture Trustee shall from time
to time designate in writing to the Lessor, the
Lessee and the Owner Participant.
If any such notice is received on a day which is not a
Business Day at the place of delivery, such notice
shall be deemed to have been received on the
immediately following Business Day at the place of
delivery; provided, that if tender of any notice is
refused by the addressee thereof, such notice shall be
deemed to have been delivered upon such tender.
ARTICLE 26
MISCELLANEOUS
Section 26.01. Section Heading and Captions.
All article and section headings and captions used in
this Lease are purely for convenience and shall not
affect the interpretation of this Lease.
Section 26.02. References. Any reference to
a specific article or section number shall be
interpreted as a reference to that article or section
of this Lease unless otherwise expressly provided.
Section 26.03. APPLICABLE LAW. THIS LEASE
SHALL IN ALL RESPECTS BE GOVERNED BY, AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE BUT WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAWS, AND IS BEING DELIVERED IN NEW YORK.
Section 26.04. Severability. Any provision
of this Lease 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 hereof, and any such prohibition or
unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in
any other jurisdiction.
Section 26.05. No Oral Modification. The
terms and provisions of this Lease 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. Any such change, waiver,
discharge or termination is also subject to the
applicable provisions of the Indenture.
Section 26.06. Agreement as Chattel Paper.
To the extent that this Lease constitutes chattel
paper (as such term is defined in the Uniform
Commercial Code as in effect in any applicable
jurisdiction), no security interest in this Lease may
be created through the transfer or possession of any
counterpart other than the original counterpart, which
shall be the counterpart containing the receipt
executed by the Indenture on its signature page.
Section 26.07. Counterparts and Effective
Date. This Lease may be executed in any number of
counterparts, each of which shall be an original
(except that only the counterpart bearing the receipt
executed by the Indenture shall be the original for
purposes of perfecting a security interest therein as
chattel paper under the Uniform Commercial Code), but
all of which taken together shall constitute one and
the same instrument and any of the parties hereto may
execute this Lease by signing any such counterpart.
Section 26.08. Incorporation by Reference.
The provisions of Articles 8 and 9 of the
Participation Agreement and the provisions of the Tax
Indemnity Agreement are incorporated herein by
reference (but, in the case of the provisions of the
Tax Indemnity Agreements, solely for the benefit of
the Owner Participant) with the same effect as if set
forth herein in their entirety. The Lessee agrees that,
in addition to its obligations under this Lease, it
will comply with the provisions of Ancillary Agreement
No. 1.
ARTICLE 27
TRUE LEASE
Section 27.01. Intent of the Parties. It is
the intent of the Lessor and the Lessee (but the
Lessee makes no representation to such effect) that
for all purposes this Lease will be a true lease, that
the Owner Participant (through its interest in the
Lessor) shall at all times be considered to be the
owner of the Aircraft for tax purposes and that this
Lease conveys to the Lessee no right, title or
interest in the Aircraft except as a lessee.
Section 27.02. 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 Lessor and the Lessee
have each caused this Lease to be duly executed and
this Lease shall be effective this __ day of
_____________ 199__.
LESSOR: FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION,
not in its individual
capacity, but solely as Owner
Trustee
By _________________________
Title:
LESSEE: FEDERAL EXPRESS CORPORATION
By _________________________
Title:
Receipt of this original counterpart of the
Lease is hereby acknowledged on this __ day of ________
199_.
Indenture Trustee: NATIONSBANK OF GEORGIA, NATIONAL
ASSOCIATION, not in its
individual capacity, but
solely as Indenture Trustee
By_____________________________
Title:
SCHEDULE I
DEFINITIONS
GENERAL PROVISIONS
The following terms shall have the following
meanings for all purposes of each Operative Agreement
which specifically incorporates this Schedule,
referred to below, unless otherwise defined in such
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 such 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 or Federal Aviation Act. The Federal
Aviation Act of 1958, as amended from time to time,
and the regulations promulgated pursuant thereto.
Additional Insureds. As defined in
Article 13 of the Lease.
Aeronautics Authority or FAA. 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
located in the United States succeeding to the
functions of any of the foregoing.
Affiliate. With respect to any Person, any
partner of such Person or 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 or such partner 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 federal, state, local and foreign
income taxes resulting from the receipt or accrual of
such payments, shall be equal to the payment received
or deemed to have been received. In the case of
amounts payable to the Lessor, the Owner Participant
or any partner of the Owner Participant, or any
corporate affiliate of any partner of the Owner
Participant, it shall be presumed that such Person is
at all times subject to federal income tax at the
maximum marginal rate generally applicable to
corporations from time to time and actual state, local
and foreign income taxes.
Agreement to Lease. The Original Agreement
to Lease, as amended and restated as of March 1, 1994,
among Lufthansa, the Lessee and the Lessor.
Air Carrier. Any air carrier which is a
United States "domestic air carrier" as defined in
Part 121 of the Federal Aviation Regulations, and any
"foreign air carrier" (as defined in the Act) as to
which there is in force a permit granted under
Section 402 of the Act.
Aircraft. The Airframe together with the two
Engines whether or not any of such Engines may from
time to time be installed on such Airframe or may be
installed on any other airframe or on any other
aircraft.
Aircraft Cost. The amount specified as the
Aircraft Cost for the Aircraft on Schedule I to the
Agreement to Lease (as in effect on the Closing Date).
Airframe. The Airbus Model A310-203 aircraft
(excluding the Engines or engines from time to time
installed thereon) contemplated by the Participation
Agreement to be leased on the Commencement Date by the
Lessor to the Lessee pursuant to the Lease, and having
the manufacturer's serial number ________________ and,
on and after the Commencement Date, the United States
FAA Registration Number specified in the initial Lease
Supplement, including all Parts.
Ancillary Agreements. Any written agreement
between parties to the Agreement to Lease Operative
Agreements or Operative Agreements entered into on the
Closing Date or at any time thereafter in connection
with the transactions contemplated by the Operative
Agreements, as amended from time to time, including,
without limitation, Ancillary Agreement No. 1.
Ancillary Agreement No. 1. The agreement,
dated as of the Commencement Date, among the Lessee,
the Owner Trustee and the Indenture Trustee.
Appraisal. The appraisal delivered pursuant
to Section 4.01(l) of the Participation Agreement.
Bankruptcy Code. The Federal Bankruptcy Code
of 1978, as amended, and any successor thereto.
Bankruptcy Default. An event specified in
Section 16.01(e), (f) or (g) of the Lease which with
the giving of notice or lapse of time or both would
constitute an Event of Default.
Basic Rent. The aggregate periodic rent
payable throughout the Basic Term pursuant to
Section 3.01 of the Lease.
Basic Term. The period commencing at the
beginning of the day on the Commencement Date and
ending at the end of the day on the day immediately
preceding the date 15 years from the Commencement
Date, or such earlier date on which the Lease shall be
terminated as provided therein.
Beneficial Interest. The interest of the
Owner Participant under the Trust Agreement.
Bills of Sale. Has the meaning set forth in
Section 4.02(d)(v) of the Participation Agreement.
Business Day. Any day on which commercial
banks are not authorized or required to close in New
York City and Memphis, Tennessee, and so long as the
Lien of the Indenture is in effect, in Atlanta,
Georgia, and Columbia, South Carolina, and thereafter
in Salt Lake City, Utah.
Certificates or Equipment Trust Certificates.
The Equipment Trust Certificates (Federal Express
Corporation Trust ___) issued by the Owner Trustee
pursuant to the Indenture and any certificate issued
in exchange therefor or replacement thereof pursuant
to the Indenture.
Citizen of the United States. A citizen of
the United States as defined in Section 101(16) of the
Act, or any analogous part of any successor or
substituted legislation or regulation at the time in
effect.
Closing Date. The Business Day on which the
sale of the Pass Through Certificates to the
Underwriters occurs pursuant to the Underwriting
Agreement.
Closings. The closing with respect to the
acquisition of the Pass Through Certificates by the
Underwriters and the closing with respect to the
acquisition of the Certificates by the Pass Through
Trusts.
Code. Except as otherwise provided,
references to the Code shall mean the Internal Revenue
Code of 1986, as amended from time to time.
Collateral. Has the meaning set forth in the
Collateral Agreement.
Collateral Agreement. The Collateral
Agreement (Trust ______), dated as of March 1, 1994,
between the Owner Trustee and the Indenture Trustee,
as amended or modified from time to time.
Commencement Date. The date on which the
Aircraft is leased by the Lessor to the Lessee under
the Lease, which date shall also be the date of the
initial Lease Supplement.
Commission or SEC. The Securities and
Exchange Commission, as from time to time constituted,
created under the Exchange Act, or if at any time
after the execution and delivery of the Participation
Agreement such Commission is not existing and
performing the duties now assigned to it under the
Exchange Act, then the body performing such duties on
such date.
Company. Federal Express Corporation, a
Delaware corporation, and its permitted successors and
assigns hereunder.
Corporate Base Rate. The rate announced from
time to time by The Chase Manhattan Bank, N.A. or any
successors thereto at its head office at New York, New
York, as its Corporate Base Rate.
Corporate Trust Office. The office of the
Indenture Trustee at which the Indenture Trustee's
corporate trust business shall be administered which
the Indenture Trustee shall have specified by notice
in writing to the Lessee, the Owner Trustee and the
Holders.
Cut-off Date. The earlier to occur of (i)
the date which is 365 days after the Scheduled
Commencement Date, or any earlier Business Day (but in
no event earlier than the Scheduled Commencement Date)
specified as the Cut-off Date by the Owner Trustee in
an irrevocable written notice (including, without
limitation, in any such notice contemplated by Section
12 of the Agreement to Lease) given to the Indenture
Trustee not less than 30 days prior thereto and (ii)
30 days after the date of any Pre-Funding Termination
Notice in accordance with Section 3 of the Agreement
to Lease.
DA. Deutsche Aerospace Airbus GmbH, a German
corporation, its successor and permitted assigns.
Debt Portion. The amount specified as such
on Schedule IV to the Participation Agreement.
Debt Rate. The weighted average rate of
interest applicable from time to time to the
Certificates, but in no event less than 8% per annum.
Deemed Event of Loss. If the Exchange Date
does not occur on or prior to the Cut-off Date.
Default. Any event or condition, which with
the lapse of time or the giving of notice, or both,
would constitute an Event of Default.
Delivery Notice. Notice of the Aircraft's
Commencement Date, given by the Owner Participant as
provided in Section 3.01 of the Participation
Agreement and including any notice with respect to a
postponed Commencement Date given by the Owner
Participant pursuant to Section 3.02 of the
Participation Agreement.
Demand Note. Each of the Promissory Notes
(D-_______), dated the Closing Date, from Lufthansa in
the form of Exhibit E to the Participation Agreement,
and in an aggregate principal amount specified under
"Demand Note Principal Amount" in Schedule IV to the
Participation Agreement.
Demand Note Collateral. Has the meaning set
forth in the Collateral Agreement.
Dollars and $. The lawful currency of the
United States of America.
Engine. Each of the two General Electric
CF6-80A3 engines, more fully described in the initial
Lease Supplement (or, prior to the Commencement Date,
in Exhibit A to the Agreement to Lease opposite the
Airframe), 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 7.02(a)(vii), 10.03,
11.03, 11.04 or 12.02 of the Lease, together with all
Parts. 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 Lease.
ERISA. The Employee Retirement Income
Security Act of 1974, as amended.
Event of Default. Each of the events
specified in Article 16 of the Lease.
Event of Loss. Event of Loss means any of
the following events on or after the Commencement Date
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 120 days or to the end of the
Term, if less, due to theft or disappearance, or
(B) for a period in excess of 60 days or to the end of
the Term, if less, due to the destruction, damage
beyond economic repair or rendition of such property
permanently unfit for normal use by Lessee 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) (1) condemnation, confiscation or seizure of, or
requisition of title to such property by the
Government, any foreign government or purported
government or any agency or instrumentality thereof,
such Event of Loss being deemed to occur on the date
of any such condemnation, confiscation, seizure or
requisition of title, or (2) requisition of use of
such property (A) by 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 (or such shorter period
ending on the earlier of the expiration of the Term or
on the date on which an insurance settlement with
respect to such property on the basis of a total loss
or constructive or compromised total loss shall
occur), or (B) by the Government for a period
extending beyond the Term, provided that no Event of
Loss shall be deemed to have occurred, and the Term
shall be extended automatically for a period of up to
six months beyond the end of the Term in the event
that the Aircraft, the Airframe or Engine is
requisitioned by the Government pursuant to an
activation as part of the Civil Reserve Air Fleet
Program described in Section 7.02(a)(iv) of the Lease;
and (iv) 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 Airbus Model
A310-203 aircraft equipped with engines of the same
make and model as the Engines for a period of six (6)
consecutive months, unless the Lessee, prior to the
expiration of such six (6) 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 one (1)
year, unless the Lessee, prior to the expiration of
such one (1) year period shall have conformed the
Aircraft 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 Lessee; provided,
that if there is a conflict between the operation of
clause (iv) above and Section 12.05 of the Lease (by
reference to Section 12.04(ix) thereof), such
Section 12.05 of the Lease shall control. The date of
such Event of Loss shall be the date of (i) loss of
such property or its use thereof for a period in
excess of 120 days, or to the end of the Term, if less
due to theft or disappearance, or loss for a period in
excess of 60 days, or to the end of the Term, if less
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 or to the end of the Term),
(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 (iv) above. On or
after the Commencement Date, 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.
Exchange Act. The Securities Exchange Act of
1934, as amended.
Exchange Date. The date, on or after the
Commencement Date, on which the Indenture Trustee
releases the Debt Portion pursuant to Section 7(e) of
the Collateral Agreement.
Excepted Payments. Collectively, (i) all
right, title and interest of the Owner Participant or
the Owner Trustee in, to and under the Tax Indemnity
Agreement and any moneys due or to become due under
the Tax Indemnity Agreement and payments of
Supplemental Rent or other payments by the Lessee in
either case solely in respect of the Tax Indemnity
Agreement, (ii) indemnity payments and interest
thereon and other amounts paid or payable by the
Lessee to the Owner Participant or to the Owner
Trustee in its individual capacity or any of their
respective Affiliates (other than the Owner Trustee in
its capacity as trustee and the trust created pursuant
to the Trust Agreement), successors, assigns,
directors, officers, employees, agents or servants
pursuant to Articles 8, 9 or 10 of the Participation
Agreement or any corresponding payment of Supplemental
Rent under the Lease; (iii) proceeds of public
liability insurance or governmental indemnities in
lieu thereof in respect of the Aircraft payable to the
Owner Participant or the Owner Trustee, in its
individual capacity, or any of their Affiliates (other
than the Owner Trustee in its capacity as trustee and
the trust created pursuant to the Trust Agreement),
successors or assigns, as a result of insurance claims
made, or losses suffered, by, or amounts in respect of
such indemnities paid for the benefit of, the Owner
Participant or the Owner Trustee in its individual
capacity or any of their Affiliates (other than the
Owner Trustee in its capacity as trustee and the trust
created pursuant to the Trust Agreement), successors
or assigns, directors, officers, employees, agents or
servants, either pursuant to the Lease (which shall
include proceeds of any self-insurance by the Lessee)
or maintained by the Owner Trustee or the Owner
Participant and not required to be maintained under
the Lease; (iv) proceeds of any insurance in respect
of the Aircraft (not required by Section 13 of the
Lease) which is separately acquired and paid for by
the Owner Participant (directly or through the Owner
Trustee) or the Lessor in accordance with Section
13.05 of the Lease); (v) indemnity payments payable by
the Owner Participant to the Owner Trustee in its
individual capacity pursuant to Section 6.01 of the
Trust Agreement; (vi) Transaction Costs or other
expenses paid or payable by the Lessee to, or for the
benefit of, the Indenture Trustee, First Security or
the Owner Participant pursuant to Section 10.01 of the
Participation Agreement; (vii) if the Lessee has
assumed the obligations of the Owner Trustee pursuant
to Section 7.12 of the Participation Agreement and
Section 2.12 of the Indenture, the amount payable as
purchase price pursuant to Section 4.02(a), (c) or (d)
of the Lease; (viii) the right to enforce, and the
proceeds of any such enforcement of, any right to
receive the proceeds of any of the amounts referred to
in clauses (i) through (vii) above, and the right to
declare an Event of Default under the Lease in respect
of any of the foregoing amounts, but not including the
right to exercise any remedies under the Lease except
for those specifically provided for in this clause
(viii); and (ix) any payments in respect of interest
to the extent attributable to the payments referred to
in clauses (i) through (vii) above.
Expense and Expenses. Have the meanings
specified in Section 9.01(a) of the Participation
Agreement.
FAA Bill of Sale. Has the meaning set forth
in Section 4.02(d)(iv) of the Participation Agreement.
Fair Market Rental. An amount determined on
the basis of, and equal in amount to, the rental which
would be obtained in an arm's-length transaction
between an informed and willing lessee and an informed
and willing lessor unaffiliated with such lessee,
neither being under any compulsion to lease. In such
determination, it shall be assumed that the Aircraft
is in the condition required under the Lease in the
case of return of the Aircraft pursuant to Article 12
of the Lease. Fair Market Rental shall be determined
in accordance with the provisions of Section 4.03 of
the Lease.
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. Unless otherwise provided in the
applicable provisions of any Operative Agreement, in
such determination it shall be assumed that the
Aircraft is in the condition required under the Lease
in the case of return of the Aircraft pursuant to
Article 12 of the Lease. Fair Market Value shall be
determined in accordance with the provisions of
Section 4.03 of the Lease.
Frankfurt Business Day. A day which is a
Business Day and is a day (other than a Saturday or
Sunday) on which commercial banks in Frankfurt,
Germany are generally open for the conduct of
business.
Geneva Convention. The International
Convention on the Recognition of Rights in Aircraft
(Geneva 1948).
Government. The United States of America or
an agency or instrumentality thereof.
Government Obligations. Direct obligations
of the United States of America which are not
callable, redeemable or payable prior to maturity, in
whole or in part, directly or indirectly, by any
Person.
Holder of a Certificate; Holder. As of any
particular time, the Person in whose name a
Certificate shall be registered as payee with the
Indenture Trustee.
Indemnification Agreement. The
Indemnification Agreement, dated the date of the
Underwriting Agreement, among the Lessee, Lufthansa,
the LC Bank and the Underwriters.
Indemnitee. Each of the Owner Trustee, in
its individual capacity and as Owner Trustee and
Lessor, the Owner Participant, the Indenture Trustee
(after the Exchange Date), in its individual capacity
and as Indenture Trustee and any successor (including
any trustee which may succeed to the Lessor's interest
under the Lease), Affiliate, assign, officer,
director, employee, agent and servant of any of the
foregoing, the Lessor's Estate (except to the extent
comprised prior to the Exchange Date of the Trust
Indenture Estate) and (after the Exchange Date) the
Trust Indenture Estate and the officers, directors,
employees, agents and servants of Lufthansa and
the General Partner of the Owner Participant.
Indenture. The Trust Indenture and Security
Agreement (Federal Express Corporation Trust _____) dated
as of March 1, 1994, between the Owner Trustee and the
Indenture Trustee, as supplemented by the Indenture
and Security Agreement Supplement No. 1, and any
amendment or supplement thereto entered from time to
time.
Indenture and Security Agreement Supplement;
Indenture Supplement. A supplement to the Indenture,
substantially in the form of Exhibit A to the
Indenture.
Indenture Default. Any event which, with the
giving of notice or lapse of time, or both, would be
an Indenture Event of Default.
Indenture Documents. The Indenture, the
Collateral Agreement, the Letter of Credit, the
Demand Notes, the Sales Agreement (to the extent
relating to the Aircraft), the Parts and Services
Agreement (to the extent relating to the Aircraft),
the Bills of Sale, the Modification Agreement (to the
extent relating to the Aircraft), the Lease, the
Participation Agreement, the Agreement to Lease
(to the extent relating to the Aircraft), the Trust
Agreement (to the extent relating to the Aircraft
or the Lessor's Estate) and the Certificates.
Indenture Event of Default. Each of the
events specified in Section 7.01 of the Indenture.
Indenture Trustee. NationsBank of Georgia,
National Association, a national banking association,
not in its individual capacity but solely as Indenture
Trustee under the Indenture and each other Person
which may from time to time be acting as successor
trustee under the Indenture.
Indenture Trustee's Liens. Any Lien on the
Trust Indenture Estate resulting from (i) claims
against the Indenture Trustee not related to the
administration of the Trust Indenture Estate or any
transactions pursuant to the Indenture or any
Indenture Document or (ii) any act or omission of the
Indenture Trustee which is not related to the
transactions contemplated by the Operative Agreements
or is in violation of any of the terms of the
Operative Agreements.
Independent Appraisal. An appraisal
conducted pursuant to Section 4.03 of the Lease.
Independent Investment Banker. An
independent investment banking institution of national
standing appointed by the Lessee that is independent
in fact, does not have any direct financial interests,
or any material indirect financial interest, in the
Lessee or any Affiliate of the Lessee, and is not
connected with the Lessee or any Affiliate of the
Lessee, 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 purchase 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.
Interest Payment Date. Each March 23 and
September 23, commencing September 23, 1994.
Issuance Date. For any Pass Through Trust,
the date of the issuance of the related Pass Through
Certificates.
LC Bank. Westdeutsche Landesbank
Girozentrale, New York Branch.
Lease. The Lease Agreement (Federal Express
Corporation Trust _____), in the form of Exhibit B to
the Participation Agreement, dated as of the
Commencement Date or prior thereto, between the Lessor
and the Lessee, as said Lease may from time to time be
supplemented or amended, or its terms waived or
modified, to the extent permitted by, and in
accordance with, the terms of the Indenture,
including, without limitation, supplementation by the
Lease Supplement.
Lease Supplement. The Lease Supplement,
substantially in the form of Exhibit A to the Lease,
entered into between the Lessor and the Lessee.
Lessee. Federal Express Corporation, a
Delaware corporation, and any successors or permitted
assigns in its capacity as lessee under the Lease.
Lessee Documents. Each of the Operative
Agreements and Ancillary Agreements to which the
Lessee is or is to be a party; provided, however, that
for purposes of Section 6.01 of the Participation
Agreement, Lessee Documents shall not include the
Lease or any Lease Supplement prior to the
Commencement Date.
Lessor. First Security Bank of Utah,
National Association, a national banking association,
not in its individual capacity but solely as Owner
Trustee under the Trust Agreement, and its successors
and permitted assigns.
Lessor's Estate. All estate, right, title
and interest of the Owner Trustee in and to any
Additional Collateral, the Aircraft, the Lease, any
Lease Supplement, the Participation Agreement and the
other Indenture Documents, any warranty with respect
to the Airframe and the Engines, all amounts of Basic
Rent and Supplemental Rent, including without
limitation, insurance proceeds (other than insurance
proceeds payable to or for the benefit of the Owner
Trustee, for its own account or in its individual
capacity, the Owner Participant or the Indenture
Trustee), and requisition, indemnity or other payments
of any kind for or with respect to the Aircraft
(except amounts owing to the Owner Participant, to the
Indenture Trustee, to the Owner Trustee in its
individual capacity or to any of their respective
directors, officers, employees and agents pursuant to
Articles 8 and 9 of the Participation Agreement).
Notwithstanding the foregoing, "Lessor's Estate" shall
(i) include all items of property purported to be
covered by the Trust Indenture Estate and (ii) not
include any Excepted Payment.
Lessor's Liens. Liens on the Lessor's Estate
or the Trust Indenture Estate, arising as a result of
(i) claims against or liabilities of the Lessor, in
its individual capacity or as Owner Trustee, or the
Owner Participant, in each case not related to the
transactions contemplated by the Operative Agreements,
(ii) any act or omission of the Lessor in its
individual capacity or as Owner Trustee, and, in the
case of the Lessor in its individual capacity, arising
from its gross negligence or willful misconduct either
not related to the transactions contemplated by or
expressly prohibited under the Operative Agreements
and any act or omission of the Owner Participant which
is not related to the transactions contemplated by the
Operative Agreements or is in violation of any of the
terms of the Operative Agreements, (iii) Taxes or
Expenses imposed against the Lessor, in its individual
capacity or as Owner Trustee, the Owner Participant,
Lessor's Estate or the trust created by the Trust
Agreement which are not indemnified against by the
Lessee pursuant to the Tax Indemnity Agreement or the
Participation Agreement, (iv) claims against the
Lessor or the Owner Participant arising from the
voluntary transfer by the Lessor or the Owner
Participant of its interests in the Aircraft or the
Lessor's Estate other than a transfer of the Aircraft
or the Lessor's Estate pursuant to Section 4.02(a) or
Articles 10 or 11 of the Lease and other than a
transfer pursuant to the exercise of the remedies set
forth in Article 17 of the Lease or (v) claims against
the Lessor or the Owner Participant (or any Affiliate
of either) relating to the Modification Agreement, the
Agreement to Lease, the Sales Agreement, the Demand
Note, the Collateral Agreement, the Sub-subcontract
(as defined in the Agreement to Lease) or the Parts
and Services Agreement.
Letter of Credit. The Irrevocable Letter of
Credit, dated the Closing Date, in the form of
Exhibit G to the Participation Agreement and with a
Stated Amount equal to the amount specified under
"Letter of Credit Stated Amount" on Schedule IV to the
Participation Agreement, from the LC Bank to the
Indenture Trustee.
Lien. Any mortgage, pledge, lien, charge,
encumbrance, lease or security interest or other
similar interest.
Liquid Collateral. Has the meaning set forth
in the Collateral Agreement.
Lufthansa. Deutsche Lufthansa
Aktiengesellschaft.
Lufthansa Side Letter. The letter, dated the
Closing Date, substantially in the form of Exhibit J
to the Participation Agreement, among Lufthansa, the
Indenture Trustee and the Pass Through Trustee.
Majority in Interest of Certificate Holders.
As of a particular date of determination, the Holders
of more than 50% of the aggregate unpaid principal
amount of all Certificates outstanding as of such date
excluding for purposes of this definition any
Certificates held by (i) the Owner Participant unless
all Certificates then outstanding shall be held by the
Owner Participant, (ii) the Lessee or (iii) any
Affiliate of either.
Make-Whole Premium. An amount determined as
of the Business Day before the applicable Prepayment
Date or date of purchase, as the case may be, which an
Independent Investment Banker determines to be equal
to the excess of (i) the present values of all
remaining scheduled payments of principal on the
Certificate to be prepaid or purchased and interest
thereon (excluding interest accrued from the
immediately preceding Payment Date to such Prepayment
Date or date of purchase, as the case may be) to the
Maturity of such 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 Certificate.
Maturity. With respect to any Certificate,
the date on which the final principal amount of such
Certificate is scheduled to be due and payable.
Modification Agreement. The Original
Modification Agreement, as amended by Amendment No. 1
thereto, dated as of March 1, 1994, among the Lessor,
the Owner Participant, Lufthansa and DA.
Modification Cost. The amount set forth in
the "Total" column for the Aircraft in the Rate
Schedule on Exhibit E to the Modification Agreement.
Moody's. Moody's Investors Service, Inc.
Net Proceeds. The amount specified as such
on Schedule IV to the Participation Agreement.
Non-U.S. Person. Any Person other than (i) a
citizen or resident of the United States, as defined
in section 7701(a)(30) of the Code (for purposes of
this definition, the "United States"), (ii) a
corporation, partnership or other entity created or
organized in or under the laws of the United States or
any political subdivision thereof or therein, or
(iii) any estate or trust that is subject to United
States federal income taxation regardless of the
source of its income.
Obsolete Parts. Parts which the Lessee in
good faith determines to be obsolete or no longer
suitable or appropriate for use on the Airframe or any
Engine.
OP Guarantee. The Guarantee, if any, by
Lufthansa in the form of Exhibit I to the
Participation Agreement.
Operative Agreements. The Modification
Agreement, the Agreement to Lease, the Participation
Agreement, the Trust Agreement, the Trust Agreement
Supplement, the Bills of Sale, the Lease, any Lease
Supplement, any Ancillary Agreement which by its terms
is an Operative Agreement, the Certificates outstanding
at the time of reference, the Indenture, any Indenture
and Security Agreement Supplement, the Collateral
Agreement, the Demand Note, the Parts and Services
Agreement, the Indemnification Agreement, the Pass
Through Agreement and the Series Supplements, the Pass
Through Certificates outstanding at the time of reference,
the Sales Agreement, the OP Guarantee (if any) and the
Tax Indemnity Agreement, each as amended from time to
time.
Options Agreement. The letter agreement
dated September 1, 1993 between DA and the Lessee
relating, inter alia, to the sale by DA to the Lessee
of certain cargo conversion kits and the
acknowledgement and agreement by DA of certain rights
of the Lessee under the Modification Agreement.
Outstanding. When used with respect to
Certificates, as of the date of determination and
subject to the provisions of Section 10.04 of the
Indenture, all Certificates theretofore executed and
delivered under the Indenture, with the exception of
the following:
(i) Certificates theretofore cancelled by
the Indenture Trustee or delivered to the
Indenture Trustee for cancellation pursuant to
Section 2.08 of the Indenture or otherwise;
(ii) Certificates for which prepayment money
in the necessary amount has been theretofore
deposited with the Indenture Trustee in trust for
the Holders of such Certificates pursuant to
Section 14.01 of the Indenture; provided, that if
such Certificates are to be prepaid, notice of
such prepayment has been duly given pursuant to
the Indenture or provision therefor satisfactory
to the Indenture Trustee has been made; and
(iii) Certificates in exchange for or in lieu
of which other Certificates have been executed
and delivered pursuant to Article II of the
Indenture.
Original Agreement to Lease. The Agreement
to Lease, dated as of September 1, 1993 among
Lufthansa, the Lessee and the Lessor.
Original Agreements. The Original Agreement
to Lease, the Original Modification Agreement, the
Original Parts and Services Agreement, the Original
Sales Agreement and the Original Trust Agreement.
Original Modification Agreement. The
Aircraft Modification and Maintenance Agreement, dated
as of September 1, 1993, among the Lessor, Lufthansa
and DA.
Original Parts and Services Agreement. The
Parts and Services Agreement, dated as of September 1,
1993, between the Owner Trustee and Lufthansa.
Original Sales Agreement. The Sales
Agreement for Aircraft, dated as of September 1, 1993,
between the Owner Trustee and Lufthansa.
Original Trust Agreement. The Trust
Agreement, dated as of September 1, 1993, between the
Owner Participant and the Owner Trustee in its
individual capacity.
Owner Participant. The trustor originally
named in the Trust Agreement and any successor
thereto, and any Person to which Owner Participant
transfers, in accordance with the Trust Agreement and
the Participation Agreement, its right, title and
interest in and to the Operative Agreements and the
Lessor's Estate.
Owner Trustee. First Security Bank of Utah,
National Association, a national banking association,
not in its individual capacity except as otherwise
expressly stated, but solely as Owner Trustee under
the Trust Agreement, and its successors and permitted
assigns.
Participation Agreement. The Participation
Agreement (Federal Express Corporation Trust _____),
dated as of March 1, 1994, among the Lessee, the Owner
Trustee, not in its individual capacity except as
otherwise expressly stated therein, but solely as,
Owner Trustee, the Owner Participant, the Pass Through
Trustee, not in its individual capacity except as
otherwise expressly stated therein, but solely as Pass
Through Trustee, the Indenture Trustee, not in its
individual capacity except as otherwise expressly
stated therein but solely as Indenture Trustee and the
LC Bank, as amended, modified or supplemented, or the
terms thereof waived.
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, so long as title
thereto shall be vested in the Lessor, prior to
replacement thereof in accordance with the Lease,
which may be removed therefrom.
Parts and Services Agreement. The Original
Parts and Services Agreement, as amended by Amendment
No. 1 thereto, dated as of March 1, 1994, between the
Owner Trustee and Lufthansa.
Parts Cost. The cost of the parts and
services with respect to the Aircraft pursuant to
Article 4 of the Parts and Services Agreement.
Pass Through Agreement. The Pass Through
Trust Agreement dated as of March 1, 1994 between the
Lessee 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 1994
Pass Through Certificates, Series A310-A1, 1994 Pass
Through Certificates, Series A310-A2, or 1994 Pass
Through Certificates, Series A310-A3, in each case 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 Excess Amount. The
excess of the principal amount of the Certificates
issued on the Closing Date over the Net Proceeds.
Pass Through Trust. The Federal Express Pass
Through Trust, 1994-A310-A1, Federal Express Pass
Through Trust, 1994-A310-A2 or Federal Express Pass
Through Trust, 1994-A310-A3, in each case formed
pursuant to the related Series Supplement in
accordance with the Pass Through Agreement; and "Pass
Through Trusts" means all of such Pass Through
Trusts.
Pass Through Trustee. NationsBank of South
Carolina, National Association, 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 permitted assigns as
Pass Through Trustee thereunder.
Past Due Rate. In respect of (A) any amount
payable to the Owner Participant or the Owner Trustee
a rate per annum during the period from and including
the due date to but excluding the date on which such
amount is paid in full equal to 2.5% plus the Debt
Rate and (B) any principal of or interest on any
Certificate or any other amount payable under the
Indenture, any Certificate or any other Operative
Agreement that is not paid when due (whether at
Maturity, by acceleration, by optional or mandatory
prepayment or otherwise) to any Holder, the Indenture
Trustee or the Pass Through Trustee, a rate per annum
during the period from and including the due date to
but excluding the date on which such amount is paid in
full equal to (i) in the case of any such amount
payable to the Holder of any Certificate, 2.5% plus
the interest rate applicable to such Certificate and
(ii) in the case of any other such amount, 2.5% plus
the weighted average rate of interest from time to
time payable with respect to the Certificates (or if
no Certificates are then outstanding, such weighted
average rate at the time immediately preceding the
final payment with respect thereto).
Paying Agent. Has the meaning set forth in
Section 3.04 of the Indenture.
Payment Date. Any Interest Payment Date or
Sinking Fund Redemption Date.
Payment Default. Any event specified in
Section 16.01(a) or 16.01(b) of the Lease which with
the giving of notice or lapse of time or both would
constitute an Event of Default.
Permitted Investments. Those investments
enumerated in Section 23.01(a) (i), (ii), (iii) and
(iv) of the Lease.
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).
Pre-Funding Event of Loss. Any of the
following events prior to the Exchange Date 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 120 days or to the Cut-off Date, if less,
due to theft or disappearance, or (B) for a period in
excess of 60 days or to the Cut-off Date, if less, due
to the destruction, damage beyond economic repair or
rendition of such property permanently unfit for
normal use by Lessee for any reason whatsoever
(provided, however, that failure to properly complete
any work contemplated by the Modification Agreement
shall not constitute the basis for a Pre-Funding Event
of Loss); (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) (1) condemnation, confiscation or seizure of, or
requisition of title to such property by the
Government, any foreign government or purported
government or any agency or instrumentality thereof,
such Pre-Funding Event of Loss being deemed to occur
on the date of any such condemnation, confiscation,
seizure or requisition of title, or (2) requisition of
use of such property (A) by 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 (or such shorter period
ending on the earlier of the Cut-off Date or on the
date on which an insurance settlement with respect to
such property on the basis of a total loss or
constructive or compromised total loss shall occur),
or (B) by the Government for a period extending beyond
the Cut-off Date; and (iv) 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 Airbus Model A310-203 aircraft
equipped with engines of the same make and model as
the Engines for a period ending on or after the Cut-
off Date. The date of such Pre-Funding Event of Loss
shall be the date of (i) loss of such property or its
use thereof for a period in excess of 120 days, or to
the Cut-off Date, if less, due to theft or
disappearance; or loss for a period in excess of 60
days, or to the Cut-off Date, if less, 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 or as otherwise contemplated by clause
(iii)(2)(A) above), (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 (iv) above. A
Pre-Funding Event of Loss with respect to the Aircraft
shall be deemed to have occurred if any Pre-Funding
Event of Loss occurs with respect to the Airframe.
Pre-Funding Prepayment Date. Has the meaning
as set forth in Section 6(c) of the Collateral
Agreement.
Pre-Funding Termination Notice. Has the
meaning set forth in Section 3 of the Agreement to
Lease.
Prepayment Date. Has the meaning specified
in Section 6.02(b) of the Indenture.
Prepayment Price. Has the meaning specified
in Section 6.02(b) of the Indenture.
Proposed Termination Date. The proposed date
of termination of the Lease as specified by the Lessee
in its notice given pursuant to Section 10.01 thereof.
Purchase Price. The amount set forth in the
"Purchase Price in U.S. Dollars" column for the
Aircraft on Exhibit B to the Sales Agreement.
Record Date. With respect to any payment
under the Indenture means the 15th calendar day prior
to the date such payment is due.
Recourse Amount. Has the meaning specified
in Section 16.10 of the Participation Agreement.
Register. Has the meaning set forth in
Section 3.02 of the Indenture.
Registrar. Has the meaning set forth in
Section 3.02 of the Indenture.
Remaining Weighted Average Life. For any
Certificate, as of any determination date, the number
of years obtained by dividing (a) the sum of the
products obtained by multiplying (i) the amount of
each then remaining mandatory sinking fund redemption
payment of principal, including the payment due on the
Maturity of such Certificate, by (ii) the number of
years (calculated to the nearest one-twelfth) which
will elapse between such determination date, and the
date on which such payment is scheduled to be made, by
(b) the then outstanding principal amount of such
Certificate.
Renewal Rent. The amount payable by the
Lessee as rent in accordance with Section 4.01 of the
Lease during any Renewal Term.
Renewal Term. One term of two years with
respect to which the Lessee has exercised its option
to renew the Lease pursuant to Section 4.01(a)
thereof.
Rent. All payments due from the Lessee under
the Lease as Basic Rent, Renewal Rent and Supplemental
Rent, collectively.
Rent Payment Date. Each March 23 and
September 23, commencing on the first such date
after the Commencement Date, and continuing thereafter
during the Term.
Replacement Engine. A General Electric
CF6-80A3 engine of the same or of equal or greater
value and utility as the Engine being replaced,
together with all Parts relating to such engine;
provided, however, that such Engine shall be of the
same model as other Engines then subject to the Lease.
Responsible Officer. With respect to the
Owner Trustee (except for purposes of the Trust
Agreement) or 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 party, any corporate officer or other employee
of a party 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.
Sales Agreement. The Original Sales
Agreement as amended by Amendment No. 1 thereto, dated
as of March 1, 1994, between the Owner Trustee and
Lufthansa.
Scheduled Commencement Date. ______________,
199_.
Securities Act. The Securities Act of 1933,
as amended.
Secured Obligations. Has the meaning set
forth in the Granting Clause of the Indenture.
Series Supplement. The Series Supplement
1994-A310-A1 to be executed and delivered by the Lessee
and the Pass Through Trustee, the Series Supplement
1994-A310-A2 to be executed and delivered by the Lessee and
the Pass Through Trustee or the Series Supplement 1994-A310-A3
to be executed and delivered by the Lessee and the
Pass Through Trustee, in each case as such Series
Supplement may be modified, supplemented or amended
from time to time in accordance with the provisions
thereof and "Series Supplements" means all of such
Series Supplements.
Sinking Fund Redemption Date. Has the
meaning specified in Section 6.06 of the Indenture.
Sinking Fund Redemption Price. Has the
meaning specified in Section 6.06 of the Indenture.
Special Aviation Counsel. Daugherty, Fowler
& Peregrin.
S&P. Standard & Poor's Corporation.
Stipulated Loss Value. As of any Stipulated
Loss Value Determination Date during the Basic Term,
the greater of (i) the amount determined by multiplying
the Aircraft Cost by the percentage set forth in
Schedule III to the Lease under the heading
"Stipulated Loss Value Factor" opposite such date, and
(ii) an amount at least sufficient to pay in full, as
of the date of payment thereof, the aggregate unpaid
principal amount of the Certificates outstanding on such
date of payment, together with the accrued and unpaid interest
thereon; and during any Renewal Term, the amount
determined pursuant to Section 4.01(b) of the Lease.
Stipulated Loss Value Determination Date.
Each date set forth on Schedule III of the Lease under
the heading "Stipulated Loss Value Factors".
Supplemental Rent. All amounts, liabilities
and obligations which the Lessee assumes or agrees to
perform or pay under the Lease or under the
Participation Agreement or Tax Indemnity Agreement or
an Ancillary Agreement to the Lessor or others,
including, without limitation, payment of any Make-
Whole Premium payable by the Lessor under the
Indenture that is required to be paid by the Lessee
pursuant to Section 3.02 of the Lease, payments of
Stipulated Loss Value and amounts calculated by
reference to Termination Value and all amounts
required to be paid by the Lessee under the
agreements, covenants and indemnities contained in the
Lease or in the Participation Agreement or the Tax
Indemnity Agreement or other Ancillary Agreement, but
excluding (i) Basic Rent and (ii) any such amounts,
liabilities and obligations to the extent such
amounts, liabilities or obligations arise out of or
relate to the period prior to execution of the Lease
Supplement with respect to the Aircraft.
Tax. Has the meaning set forth in Section
8.01(a) of the Participation Agreement.
Tax Attribute Period. The period commencing
on the first day of the taxable year of the Owner
Participant in which the Commencement Date occurs and
ending on the last day of the seventh succeeding
taxable year of the Owner Participant; provided,
however, that if the Lessee breaches its
representation set forth in Section 4(a) of the Tax
Indemnity Agreement and as a result it is required to
pay an indemnity pursuant to said Agreement the Tax
Attribute Period shall be the period over which the
Owner Participant is required to depreciate the
Aircraft for purposes of calculating the indemnity
payable pursuant to Section 5 of the Tax Indemnity
Agreement.
Tax Indemnity Agreement. The Tax Indemnity
Agreement, dated as of the Commencement Date, among
the Lessee, and the Owner Participant and the partners
listed on the Schedule A thereto, as from time to time
modified, amended or supplemented pursuant to its
applicable provisions.
Term. The Basic Term and, if renewed
pursuant to Section 4.01 of the Lease, the Renewal
Term, or the period commencing on the Commencement
Date and ending on such earlier date on which the
Lease is terminated pursuant to its terms.
Termination Date. A Rent Payment Date during
the Basic Term that is on or after the end of the Tax
Attribute Period in the case of Article 10 of the
Lease and in the case of Section 4.02 of the Lease,
the date specified in the notice from the Lessee given
pursuant to such Section.
Termination Value. As of any Termination Date,
the greater of (i) the amount determined by multiplying
the Aircraft Cost by the percentage set forth in Schedule
IV to the Lease under the heading "Termination Value Factor"
opposite such Termination Date, and (ii) an amount at least
sufficient to pay in full, as of the date of payment
thereof, the aggregate unpaid principal amount of the
Certificates outstanding on such date of payment, together
with the accrued and unpaid interest thereon.
Transaction Costs. Those costs and expenses
set forth in Section 10.01(a) of the Participation
Agreement.
Treasury Yield. (i) In the case of a
Certificate having a Maturity within one year after
the Prepayment Date or purchase date, as the case may
be, 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
Certificate, and (ii) in the case of a Certificate
having a Maturity one year or more after the
Prepayment Date or purchase date, as the case may be,
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 Lessee) corresponding in maturity to the Remaining
Weighted Average Life of such 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 or purchase date, as the
case may be.
Trust Agreement. The Original Trust
Agreement, as amended and restated as of March 1,
1994, and as amended or supplemented pursuant to its
applicable provisions and in accordance with the other
Operative Agreements (including, without limitation,
as supplemented by any Trust Agreement Supplement).
Trust Agreement Supplement. The Trust
Agreement Supplement (as defined in the Trust
Agreement) relating to the Aircraft.
Trust Indenture Act. The Trust Indenture Act
of 1939, as amended.
Trust Indenture Estate; Indenture Estate.
The property, rights and privileges described in the
Granting Clause of the Indenture, other than
(A) Excepted Payments, including, without limitation
all right, title and interest of the Owner Participant
in, to and under the Tax Indemnity Agreement and any
moneys due and to become due under the Tax Indemnity
Agreement, all as provided in the Indenture, and
(B) rights granted to the Owner Trustee or the Owner
Participant under the Indenture, including without
limitation under Section 2.05, 7.02, 8.01, 8.02, 8.03,
13.01 and 13.02 thereof, and the Letter of Credit and
any rights thereunder.
Underwriters. The several Underwriters named
in the Underwriting Agreement.
Underwriting Agreement. The Underwriting
Agreement dated March 16, 1994 among the Lessee,
Lufthansa, the Owner Participant, Goldman, Sachs &
Co. and Merrill Lynch, Pierce, Fenner & Smith.
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 401 or Section 418 of the
Federal Aviation Act, and as to which there is in
force an air carrier operating certificate issued
pursuant to 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
BASIC RENT
Rent
Payment
Date Advance Arrears
---- ------- -------
[On each Rent Payment Date, Lessee will pay as Basic Rent an amount that
will be at least sufficient to pay in full, as of such Payment Date, the
aggregate unpaid principal amount of due and unpaid installments on the
Certificates outstanding on such Rent Payment Date, together with the
accrued and unpaid interest thereon, except that on the first Rent Payment
Date after the Exchange Date, the difference between the Basic Rent due on
such Rent Payment Date by the Lessee and such principal and interest due on
such Rent Payment Date, will be payable from the amount available in the
Collateral Account and funds available under the Letter of Credit.]
SCHEDULE III
STIPULATED LOSS VALUES
Stipulated Loss
Date Value Factor
---- ---------------
[Stipulated Loss Value will be an amount at least sufficient to pay in
full, as of the date of payment thereof, the aggregate unpaid principal
amount of the Certificates outstanding on such date of payment, together
with the accrued and unpaid interest thereon.]
SCHEDULE IV
TERMINATION VALUES
Termination Termination
Date Value Factor
----------- ------------
[Termination Value will be an amount at least sufficient to pay in full, as
of the date of payment thereof, the aggregate unpaid principal amount of
the Certificates outstanding on such date of payment, together with the
accrued and unpaid interest thereon.]
SCHEDULE V
PURCHASE OPTION SCHEDULE
(C) The Purchase Option Referred to in Section
4.02(a)(C) of the Lease. If any Significant
Expenditure (as defined below) with respect to the
Aircraft is required at any time on or after the
Tax Attribute Period, the Lessee may elect to
terminate the Lease and purchase the Aircraft on
any Rent Payment Date occurring after the Tax
Attribute Period, at the Lessee's option, by either
(1) payment to the Lessor in immediately available
funds of an amount equal to the greater of (x) the
Fair Market Value of the Aircraft or (y) the
Termination Value for the Aircraft, determined in
each case as of such Rent Payment Date or (2) the
assumption by the Lessee pursuant to Section 7.12
of the Participation Agreement of all of the
obligations of the Lessor under the Indenture, the
Certificates and Section 7.04 of the Participation
Agreement and the payment to the Lessor in
immediately available funds of an amount equal to
the excess of (A) the greater of (I) the
Termination Value for the Aircraft, or (II) the
Fair Market Value of the Aircraft, both computed as
of such Rent Payment Date, over (B) the unpaid
principal amount of the Certificates outstanding as
of such Rent Payment Date; it being understood that
Fair Market Value for this purpose shall be
determined without regard to any Significant
Expenditure. For purposes of this paragraph (C)
the term "Significant Expenditure" means
expenditures in respect of non-severable
improvements (i.e. improvements which cannot by the
terms of Section 9.02(b) of the Lease be removed
from the Aircraft) which in the Lessee's reasonable
judgment would exceed $10,000,000 and which the
Owner Participant will not permit to be financed on
similar terms and conditions then available for
similar transactions or through additional equity
investments of the Owner Participant or both (it
being understood that Section 4.02(a)(C) shall not
impose any obligation on the Owner Participant to
provide or permit such financing); or
(D) The Purchase Option Referred to in Section
4.02 (a)(D) of the Lease. In the event that a
Burdensome Indemnity Payment shall occur that is
not deliberately caused by Lessee at any time on or
after the Tax Attribute Period, the Lessee may,
elect to terminate the Lease and purchase the
Aircraft on the first Rent Payment Date (the
"Burdensome Indemnity Payment Date") following the
date that the Owner Participant provides the Lessee
with a written notice of any Loss (as defined in
Section 5 of the Tax Indemnity Agreement) that is a
Burdensome Indemnity Payment, at the Lessee's
option, by either (1) payment to the Lessor in
immediately available funds of an amount equal to
the greater of (x) the Fair Market Value of the
Aircraft or (y) the Termination Value for the
Aircraft, determined in each case as of such
Burdensome Indemnity Payment Date, or (2) the
assumption by the Lessee, pursuant to Section 7.12
of the Participation Agreement, of all of the
obligations of the Lessor under the Indenture, the
Certificates and Section 7.04 of the Participation
Agreement and the payment to the Lessor in
immediately available funds of an amount equal to
the excess of (A) the greater of (I) the
Termination Value for the Aircraft, or (II) the
Fair Market Value of the Aircraft, both computed as
of the Burdensome Indemnity Payment Date, over (B)
the unpaid principal amount of the Certificates
outstanding as of such Date. For purposes of this
paragraph (D), the term "Burdensome Indemnity
Payment" means a Loss, as defined in the Tax
Indemnity Agreement, which causes the aggregate net
present value as of the determination date
discounted at the Debt Rate, of all Losses which
can be avoided through a purchase by the Lessee of
the Aircraft, to exceed 2.5% of the Aircraft Cost.
EXHIBIT A
FORM OF LEASE SUPPLEMENT
THE INTEREST OF LESSOR UNDER THIS LEASE SUPPLEMENT
NO. 1 IS SUBJECT TO A SECURITY INTEREST
LEASE SUPPLEMENT NO. 1
LEASE SUPPLEMENT NO. 1, dated ________, 199_,
between FIRST SECURITY BANK OF UTAH, NATIONAL
ASSOCIATION, a national banking association, not in its
individual capacity, but solely as Owner Trustee under
the Trust Agreement dated as of _________ 1, 199_ (the
"Lessor"), and FEDERAL EXPRESS CORPORATION, a Delaware
corporation (the "Lessee").
W I T N E S S E T H :
WHEREAS, the Lessor and the Lessee have entered
into that certain Lease Agreement dated as of ______ 1,
199_ (the "Lease", the defined terms in the Lease being
used in this Lease Supplement with the same meaning as
in the Lease), which provides for the execution and
delivery of a Lease Supplement, substantially in the
form of this Lease Supplement No. 1, for the purpose of
leasing under the Lease the aircraft and engines
described below (the "Aircraft") as and when delivered
by the Lessor to the Lessee in accordance with the terms
of the Lease;
WHEREAS, the Lease relates to the Aircraft;
WHEREAS, a counterpart of the Lease is attached
to and made a part of this Lease Supplement, and this
Lease Supplement, together with such attachment, is
being filed for recordation on this date with the FAA as
one document.
NOW, THEREFORE, for and in consideration of the
premises and other good and sufficient consideration,
the Lessor and the Lessee agree as follows:
Section 1. Aircraft. The Lessor hereby
delivers and leases to the Lessee under the Lease, and
the Lessee hereby accepts and leases from the Lessor
under the Lease, the following described Airbus Model
310-203 Aircraft, which Aircraft as of the date of this
Lease Supplement consists of the following:
(a) Airbus Model 310-203 Airframe; U.S.
Registration Number ______; Manufacturer's Serial
No. _____; and
(b) Two (2) General Electric CF6-80A3 Engines
bearing, respectively, Manufacturer's Serial Nos.
______ and ______ (both engines have 750 or more
rated takeoff horsepower or the equivalent of such
horsepower).
Section 2. Commencement Date. The
Commencement Date of the Aircraft is the date of this
Lease Supplement.
Section 3. Term. The Term for the Aircraft
shall commence on the Commencement Date, and shall
terminate on _______ __, ____, unless earlier terminated
or extended pursuant to the terms of the Lease.
Section 4. Rent. The Lessee hereby agrees to
pay the Lessor Rent for the Aircraft throughout the Term
thereof in accordance with the terms and provisions of
the Lease.
Section 5. Lessee's Acceptance of Aircraft.
The Lessee hereby confirms to the Lessor that the
Aircraft has been duly marked in accordance with Section
7.03 of the Lease and that the Lessee has accepted the
Aircraft for all purposes hereof and of the Lease, as
being free and clear of all Liens except Lessor's Liens.
Such acceptance by the Lessee shall be without prejudice
to any rights of the Lessor or the Lessee against the
Manufacturer or any vendor of equipment included in the
Aircraft.
Section 6. Incorporation of Lease By
Reference. All the provisions of the Lease are hereby
incorporated by reference in this Lease Supplement to
the same extent as if fully set forth in this Lease
Supplement.
Section 7. Governing Law. THIS LEASE
SUPPLEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE BUT WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAWS, AND IS BEING DELIVERED
IN THE STATE OF NEW YORK.
Section 8. Counterparts. This Lease
Supplement may be executed in any number of
counterparts, each of which shall be an original (except
that only the counterpart bearing the receipt executed
by Indenture Trustee shall be the original for purposes
of perfecting a security interest therein as chattel
paper under the Uniform Commercial Code), but all of
which taken together shall constitute one and the same
instrument and any of the parties hereto may execute
this Lease Supplement by signing any such counterpart.
IN WITNESS WHEREOF, the Lessor and the Lessee
have caused this Lease Supplement to be duly executed as
of the day and year first above written.
LESSOR: FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION,
except as expressly provided
herein, not in its
individual capacity, but
solely as Owner Trustee
By_________________________________
Title:
LESSEE: FEDERAL EXPRESS CORPORATION
By_________________________________
Title:
Receipt of this original counterpart of the
Lease Supplement is hereby acknowledged on this __ day
of ________ 199_.
Indenture Trustee: NATIONSBANK OF GEORGIA, NATIONAL
ASSOCIATION, not in its
individual capacity, but
solely as Indenture Trustee
By_____________________________
Title:
<TABLE>
EXHIBIT B
AIRCRAFT DESCRIPTION
<CAPTION>
The Owner Trustee shall lease to Federal Express the
following Aircraft:
METRIC TONS OF
AIR GROSS WEIGHT AT SCHEDULED
AIRCRAFT CRAFT LH SCHEDULED COMMENCEMENT ENGINE
TYPE MSN REGISTRATION COMMENCEMENT DATE DATE TYPE
-------- ----- ------------ ----------------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
1. 310-203 254 D-AICH 132 7.15.94 CF6-80A3
2. 310-203 397 D-AICR 142 8.26.94 CF6-80A3
3. 310-203 273 D-AICL 142 9.13.94 CF6-80A3
4. 310-203 400 D-AICS 142 10.19.94 CF6-80A3
5. 310-203 360 D-AICP 142 11.11.94 CF6-80A3
6. 310-203 359 D-AICN 142 1.04.95 CF6-80A3
7. 310-203 191 D-AICA 132 1.27.95 CF6-80A3
8. 310-203 201 D-AICB 132 3.10.95 CF6-80A3
9. 310-203 230 D-AICC 132 4.07.95 CF6-80A3
10. 310-203 233 D-AICD 132 5.10.95 CF6-80A3
11. 310-203 356 D-AICM 142 6.08.95 CF6-80A3
12. 310-203 237 D-AICF 132 7.07.95 CF6-80A3
13. 310-203 257 D-AICK 132 8.04.95 CF6-80A3
</TABLE>
Exhibit 4.f
[FORM OF LETTER OF CREDIT]
[Date ETC's are issued]
Irrevocable Letter of Credit No. ____
Expiry Date: Not later than _____, 199_
TO: NationsBank of Georgia, National Association,
not individually, but solely as Indenture Trustee
under the Trust Indenture referred to below
600 Peachtree Street, N.E.
GA1-006-09-11
Atlanta, Georgia 30308
1. We hereby establish in your favor as trustee
for the benefit of certain certificate holders (in such
capacity, and together with any successors in such
capacity under the Indenture referred to below, "you" or
the "Indenture Trustee") under the Trust Indenture and
Security Agreement (Federal Express Corporation Trust __)
(the "Indenture") dated as of March 1, 1994 between
the Indenture Trustee and First Security Bank of
Utah, National Association (the "Owner Trustee" or the
"Lessor"), this Irrevocable Letter of Credit ("Letter of
Credit") for an aggregate amount up to but not to exceed
________________ United States dollars ($_______________)
(the "Stated Amount") available from time to time in the
amounts and subject to the conditions hereinafter
provided. This Letter of Credit is issued in connection
with the Participation Agreement (Federal Express
Corporation Trust __) dated as of March 1, 1994 (as in
effect on the date hereof, the "Participation Agreement")
among Federal Express Corporation (the "Lessee"), the
Owner Trustee, LLG Aircraft Leasing, L.P., NationsBank of
South Carolina, National Association, as Pass Through
Trustee, the Indenture Trustee and Westdeutsche Landesbank
Girozentrale, New York Branch, as LC Bank, covering one
Airbus model A310-203 aircraft, equipped with two General
Electric CF6-80A3 engines. Capitalized terms used in this
Letter of Credit shall have the respective meanings as
provided in Schedule I hereto.
2. We hereby irrevocably authorize you to draw
on us, in accordance with the terms hereinafter set forth,
an amount on the relevant Settlement Date equal to (i) in
the case of a Partial Draw, the Partial Draw Amount
applicable to such Settlement Date and (ii) in the case of
a Final Draw, the Final Draw Amount applicable to such
Settlement Date. You may effect multiple Partial Draws
pursuant to paragraph 3(a)(ii)(A) hereof but only one
Partial Draw pursuant to paragraph 3(a)(ii)(B) hereof and
only one Final Draw pursuant to paragraph 3(b) hereof,
provided that no drawing hereunder may exceed the
Available Amount hereof on the date of such drawing. Only
one drawing may be paid on any Settlement Date. The
Available Amount shall automatically be reduced to zero on
the Termination Date (after giving effect to any drawings
permitted on such date). Each Partial Draw shall pro
tanto automatically reduce the Stated Amount of this
Letter of Credit and no reinstatement shall occur.
3. Funds under this Letter of Credit are
available to you from time to time from the date hereof to
the Termination Date against presentation (by the time
indicated below) of:
(a) if the relevant drawing is a Partial Draw,
(i) your draft in the form of Exhibit 1 hereto and
(ii) a completed certificate signed in your name by
any two persons purporting to be your Vice Presidents
and/or Senior Vice Presidents in the form of (A) in
the case of a Partial Draw pursuant to Section 6(b) of
the Collateral Agreement, Exhibit 2 hereto, and (B) in
the case of a Partial Draw pursuant to Section 6(d) of
the Collateral Agreement, Exhibit 3 hereto; and
(b) if the relevant drawing is a Final Draw, (i)
your draft in the form of Exhibit 1 hereto and (ii) a
completed certificate signed in your name by any two
persons purporting to be your Vice Presidents and/or
Senior Vice Presidents in the form of Exhibit 4
hereto.
4. Each draft and certificate shall be dated the
date of presentation (which shall be a Business Day) and
shall be presented at our office located at 1211 Avenue of
the Americas, 24th Floor, New York, New York 10036 (or at
any other office in New York, New York which may be
designated by us by written notice delivered to you). If
we receive any such draft and certificate at our above-
specified office, all in conformity with the terms and
conditions of this Letter of Credit, prior to 10:00 a.m.
(New York City time) on any Business Day, we will honor
the draft by 2:00 p.m. (New York City time) on the
relevant Settlement Date. If we receive any such draft
and certificate at such office on or after 10:00 a.m. (New
York City time) on any Business Day, for all purposes
hereof such draft and certificate shall be deemed
presented on the next succeeding Business Day. Payment
under this Letter of Credit will be made by wire transfer
in Federal Funds to your account at ___________________ or
such other account in New York, New York; Atlanta,
Georgia; or _____________ that you may designate to us in
writing. Following receipt of a draft and certificate
which are not in conformity with this Letter of Credit, we
will promptly notify you of such nonconformity and the
reason therefor. By accepting this Letter of Credit, you
agree (i) to deliver to us a certificate in the form of
Exhibit 5 hereto promptly after the occurrence of (a) the
first Payment Date occurring after the Exchange Date, if
no drawing hereunder is made pursuant to paragraph
3(a)(ii)(B) hereof or (b) the date 30 days after the Cut-
off Date, if a Deemed Event of Loss has occurred but no
drawing hereunder has been made pursuant to paragraph 3(b)
hereof, and upon receipt of such certificate (but after
giving effect to any Partial Draw theretofore made
hereunder) the amount of this Letter of Credit shall be
reduced to zero and (ii) to return the original hereof to
us promptly after the Termination Date.
5. The "Termination Date" shall be the earliest
of 5:00 p.m., New York time, (a) on the Settlement Date of
any Final Draw, (b) on the Settlement Date of any Partial
Draw pursuant to paragraph 3(a)(ii)(B) hereof, (c) on the
date the Available Amount hereof is otherwise fully drawn
or reduced to zero and (d) [THE DATE WHICH IS 365 DAYS
FROM SCHEDULED COMMENCEMENT DATE AND THE NUMBER OF DAYS
UNTIL THE FIRST SPECIAL DISTRIBUTION DATE AT LEAST 20 DAYS
AFTER SUCH 365TH DAY] (or if such date is not a Business
Day, on the next succeeding Business Day).
6. Any notice referred to herein that is to be
given by us to you shall be given by facsimile
transmission addressed to you at NationsBank of Georgia,
National Association, 600 Peachtree Street, N.E. GA1-006-
09-11, Atlanta, Georgia 30308, telecopier: (404) 607-6534,
Attention: Corporate Trust Administration (or to such
other address or facsimile number designated by you by
written notice delivered to us) and shall be effective
upon receipt of the appropriate answerback or confirmation
by you of your receipt of the facsimile transmission. We
will also forward a copy of any notice sent by us to you
by overnight (or earlier) delivery service to the address
set forth above. All drawings and communications to us
with respect to this Letter of Credit shall be in writing
and shall be addressed to us at 1211 Avenue of the
Americas, 24th floor, New York, New York 10036, Attention:
Trade Services Group, and shall specifically refer to the
number of this Letter of Credit.
7. Except as set forth below, this Letter of
Credit shall be governed by the Uniform Customs and
Practice for Documentary Credits (revision effective
January 1, 1994) International Chamber of Commerce
Publication No. 500, and, as to matters not covered
therein, be governed by the law of the State of New York,
including without limitation the Uniform Commercial Code
as in effect in such State.
8. This Letter of Credit is not transferrable
and the benefit hereof may not be assigned except to a
successor trustee to the Indenture Trustee.
9. This Letter of Credit sets forth in full our
undertaking, and such undertaking shall not in any way be
modified, amended, amplified or limited by reference to
any document, instrument or agreement referred to herein,
except as provided in Schedule I and Exhibits 1 through 5
hereto and the notices referred to herein; and any such
reference shall not be deemed to incorporate herein by
reference any document, instrument or agreement except as
set forth above.
Very truly yours,
WESTDEUTSCHE LANDESBANK
GIROZENTRALE,
NEW YORK BRANCH
By________________________________
Name:
Title:
By________________________________
Name:
Title:
SCHEDULE I
to
Letter of Credit
Unless otherwise defined in this Schedule or the
Letter of Credit, capitalized terms used herein or therein
shall have the meanings assigned thereto in Schedule II to
the Participation Agreement. Reference herein to any
agreement shall mean such agreement (other than the Lease
and Lease Supplement) as in effect on the date of the
Letter of Credit.
"Agreement to Lease" shall mean the Original
Agreement to Lease, as amended and restated as of
March 1, 1994, among Lufthansa, the Lessee and the
Lessor, as such agreement is in effect on the date hereof.
"Airframe" shall mean the Airbus Model A310-203
aircraft (excluding the Engines or engines from time to
time installed thereon) contemplated by the Participation
Agreement to be leased on the Commencement Date by the
Lessor to the Lessee pursuant to the Lease, and having the
manufacturer's serial number __________ and, on and after
the Commencement Date, the United States FAA Registration
Number specified in the initial Lease Supplement,
including all Parts.
"Available Amount" shall mean, subject to the
second to last sentence of paragraph 2 of the Letter of
Credit, as of any Settlement Date the difference between
(i) the Stated Amount and (ii) the aggregate amount paid
out pursuant to prior drawings under the Letter of Credit.
"Basic Rent" shall mean the aggregate periodic
rent payable throughout the Basic Term pursuant to Section
3.01 of the Lease.
"Business Day" shall mean any day on which
commercial banks are not authorized or required to close
in New York City and Memphis, Tennessee, and so long as
the Lien of the Indenture is in effect, in Atlanta,
Georgia, and Columbia, South Carolina, and thereafter in
Salt Lake City, Utah.
"Certificates" shall mean the Equipment Trust
Certificates (Federal Express Corporation Trust ___)
issued by the Owner Trustee pursuant to the Indenture and
any certificate issued in exchange therefor or replacement
thereof pursuant to the Indenture.
"Collateral Agreement" shall mean the Collateral
Agreement (Trust __), dated as of March 1, 1994, between
the Owner Trustee and the Indenture Trustee, as such
agreement is in effect on the date hereof.
"Commencement Date" shall mean the date on which
the Aircraft is leased by the Lessor to the Lessee under
the Lease, which date shall also be the date of the
initial Lease Supplement.
"Cut-off Date" shall mean the earlier to occur of
(i) the date which is 365 days after the Scheduled
Commencement Date, or any earlier Business Day (but in no
event earlier than the Scheduled Commencement Date)
specified as the Cut-off Date by the Owner Trustee in an
irrevocable written notice (including, without limitation,
in any such notice contemplated by Section 12 of the
Agreement to Lease) given to the Indenture Trustee not
less than 30 days prior thereto and (ii) 30 days after the
date of any Pre-Lease Termination Notice in accordance
with Section 3 of the Agreement to Lease.
"Debt Portion" shall mean the amount specified as
such on Schedule IV to the Participation Agreement.
"Exchange Date" shall mean the date on which the
Indenture Trustee releases the Debt Portion pursuant to
Section 7(e) of the Collateral Agreement.
"Final Draw" shall mean any draw under the Letter
of Credit contemplated by Section 6(c) of the Collateral
Agreement.
"Final Draw Amount" shall mean the amount drawn
or to be drawn pursuant to a Final Draw.
"Frankfurt Business Day" shall mean a day which
is a Business Day and is a day (other than a Saturday or
Sunday) on which commercial banks in Frankfurt, Germany
are generally open for the conduct of business.
"Interest Payment Date" shall mean each ________
and _________, commencing _________, 1994
"Lease" shall mean the Lease Agreement (Federal
Express Corporation Trust __), in the form of
Exhibit B to the Participation Agreement, dated as of the
Commencement Date or prior thereto, between the Lessor and
the Lessee, as said Lease may from time to time be
supplemented or amended, or its terms waived or modified,
to the extent permitted by, and in accordance with, the
terms of the Indenture, including, without limitation,
supplementation by the Lease Supplement.
"Lease Supplement" shall mean the Lease
Supplement, substantially in the form of Exhibit A to the
Lease, entered into between the Lessor and the Lessee.
"Lufthansa" shall mean Deutsche Lufthansa
Aktiengesellschaft.
"Partial Draw" shall mean any draw under the
Letter of Credit contemplated by Section 6(b) or 6(d) of
the Collateral Agreement.
"Partial Draw Amount" shall mean the amount drawn
or be drawn pursuant to any Partial Draw.
"Payment Date" shall mean any Interest Payment
Date or Sinking Fund Redemption Date.
"Pre-Funding Prepayment Date" shall mean the date
of any prepayment of the Certificates required pursuant to
Section 6.02(a)(vi) of the Indenture.
"Pre-Funding Termination Notice" shall mean the
Pre-Funding Termination Notice provided pursuant to
Section 3 of the Agreement to Lease.
"Prepayment Price" shall mean the aggregate
amount required to be paid pursuant to the last
sentence of Section 6.02(b) of the Indenture which
amount shall be the sum of the aggregate principal amount
of the Certificates, accrued interest on the Certificates
to the date of prepayment and all other aggregate sums due
to any Holder or the Indenture Trustee under the
Indenture, the Participation Agreement or the Lease.
"Scheduled Commencement Date" shall mean
____________.
"Settlement Date" shall mean, with respect to any
Partial Draw or Final Draw, the first Business Day to fall
on or after the fourth Frankfurt Business Day to occur
following the day of presentation pursuant to (and
determined in accordance with the provisions of) paragraph
4 of the Letter of Credit and otherwise in conformity with
all of the terms of the Letter of Credit.
"Sinking Fund Redemption Date" shall mean the
dates specified as such in Section 6.06 of the Indenture.
"Sinking Fund Redemption Price" shall have the
meaning set forth in Section 6.06 of the Indenture.
"Specified Investments" shall have the meaning
assigned thereto in the Collateral Agreement.
"Stated Amount" shall have the meaning assigned
thereto in paragraph 1 of the Letter of Credit.
"Termination Date" shall have the meaning
assigned thereto in paragraph 5 of the Letter of Credit.
EXHIBIT 1
to
Letter of Credit
[Place]
[Date], 199_
On [Settlement Date]
PAY TO U.S. $[not to exceed relevant
[Indenture Trustee] Partial Draw Amount or
Final Draw Amount] DOLLARS,
[Insert wire instructions]
FOR VALUE RECEIVED AND CHARGE TO ACCOUNT OF LETTER OF
CREDIT
NO. _______________
To: Westdeutsche Landesbank Girozentrale
New York Branch
1211 Avenue of the Americas, 24th floor
New York, New York 10036
[Indenture Trustee]
By ___________________________
[Name and Title of
Authorized Representative
of Indenture Trustee]
EXHIBIT 2
to
Letter of Credit
CERTIFICATE FOR A PARTIAL DRAW
(Letter of Credit Paragraph 3(a)(ii)(A))
To: Westdeutsche Landesbank Girozentrale
New York Branch
1211 Avenue of the Americas, 24th Floor
New York, New York 10036
Attn: Trade Services Group
The undersigned, duly authorized representatives of
[Indenture Trustee], beneficiary under that certain Irrevocable
Letter of Credit No. __________ dated __________ (the "Letter
of Credit") issued by Westdeutsche Landesbank Girozentrale, New
York Branch, hereby certify as follows:
1. The Exchange Date has not occurred prior to the
date hereof and the Payment Date to which this
Partial Draw relates is ____________, 199_.
2. The Partial Draw Amount for such Payment Date is
calculated as follows:
(a) The amount of cash expected to $_________
be in the Collateral Account on
such Payment Date (giving effect to any
income from or proceeds of any Specified
Investments scheduled to mature on or prior
to such Payment Date)
(b) The Debt Portion $_________
(c) The excess of (a) over (b) $_________
(d) The aggregate amount of interest $_________
and any Sinking Fund Redemption
Price due with respect to the
Certificates as of such Payment Date
(e) The excess of (d) over (c) $_________
(f) The Available Amount of the $_________
Letter of Credit
(g) The Partial Draw Amount (i.e., the $_________
lesser of (e) and (f))
3. The amount of the accompanying draft for the
Partial Draw does not exceed the Available
Amount under the Letter of Credit as of the date
for payment thereof (but without giving effect to
such payment).
4. The date hereof is a Business Day.
Capitalized terms used herein and not otherwise
defined herein shall have the meanings given to them in the
Letter of Credit (including Schedule I thereto).
IN WITNESS WHEREOF, the undersigned have executed this
Certificate as of ____________________, 19__.
[Indenture Trustee]
By________________________
[Name and Title of Authorized
Representative of Indenture Trustee]
By_______________________
[Name and Title of
Authorized Representative
of Indenture Trustee]
EXHIBIT 3
to
Letter of Credit
CERTIFICATE FOR A PARTIAL DRAW
(Letter of Credit Paragraph 3(a)(ii)(B))
To: Westdeutsche Landesbank Girozentrale
New York Branch
1211 Avenue of the Americas, 24th Floor
New York, New York 10036
Attn: Trade Services Group
The undersigned, duly authorized representatives of
[Indenture Trustee], beneficiary under that certain Irrevocable
Letter of Credit No. __________ dated __________ (the "Letter
of Credit") issued by Westdeutsche Landesbank Girozentrale, New
York Branch, hereby certify as follows:
1. The Exchange Date occurred on _________ and the
first Payment Date thereafter is ______________.
2. The Partial Draw Amount for such Payment Date is
as follows:
(a) The amount of cash expected to be in the $____________
Collateral Account on such Payment Date
(giving effect to income from or proceeds
of Specified Investments scheduled to mature
on or prior to such Payment Date)
(b) The excess of (i) the amount of any $____________
interest and any Sinking Fund
Redemption Price due with respect
to the Certificates as of such
Payment Date over (ii) the amount
of Basic Rent due on such Payment
Date pursuant to the Lease
(c) The excess of (b) over (a) $_________
(d) The Available Amount of the $_________
Letter of Credit
(e) The Partial Draw Amount (i.e., the $_________
lesser of (c) and (d))
3. The amount of the accompanying draft for the
Partial Draw does not exceed the Available Amount
under the Letter of Credit as of the date for
payment thereof (but without giving effect to
such payment).
4. The date hereof is a Business Day.
Capitalized terms used herein and not otherwise
defined herein shall have the meanings given to them in the
Letter of Credit (including Schedule I thereto).
IN WITNESS WHEREOF, the undersigned have executed this
Certificate as of ____________________, 19__.
[Indenture Trustee]
By________________________________
[Name and Title of Authorized
Representative of Indenture Trustee]
By________________________________
[Name and Title of Authorized
Representative of Indenture Trustee]
EXHIBIT 4
to
Letter of Credit
CERTIFICATE FOR A FINAL DRAW
(Letter of Credit Paragraph 3(b))
To: Westdeutsche Landesbank Girozentrale
New York Branch
1211 Avenue of the Americas, 24th Floor
New York, New York 10036
Attn: Trade Services Group
The undersigned, duly authorized representative of
[Indenture Trustee], beneficiary under that certain Irrevocable
Letter of Credit No. __________ dated __________ (the "Letter
of Credit") issued by Westdeutsche Landesbank Girozentrale, New
York Branch, hereby certify as follows:
1. The Indenture Trustee has received notice of
prepayment of the Certificates pursuant to
Section 6.02(a)(vi) of the Indenture and the Pre-
Funding Prepayment Date is to be ___________ __,
199_.
2. The Final Draw Amount is calculated as follows:
(a) The amount of cash expected $_____________
to be in the Collateral Account
on such Pre-Funding Prepayment
Date (giving effect to any
income from or proceeds of any
Specified Investment scheduled
to mature on or prior to such
Pre-Funding Prepayment Date)
(b) The aggregate Prepayment Price $_____________
due with respect to the
Certificates as of such Pre-
Funding Prepayment Date
(c) The excess of (b) over (a) $_____________
(d) The Available Amount of the $_____________
Letter of Credit
(e) The Final Draw Amount (i.e., the $_____________
lesser of (c) and (d))
3. The amount of the accompanying draft for the
Final Draw does not exceed the Available Amount
as of the date for payment thereof (but without
giving effect to such payment).
4. The date hereof is a Business Day.
Capitalized terms used herein and not otherwise
defined herein shall have the meanings given to them in the
Letter of Credit (including Schedule I thereto).
IN WITNESS WHEREOF, the undersigned have executed this
Certificate as of ____________________, 19__.
[Indenture Trustee]
By________________________________
[Name and Title of Authorized
Representative of Indenture Trustee]
By________________________________
[Name and Title of Authorized
Representative of Indenture Trustee]
EXHIBIT 5
to
Letter of Credit
REDUCTION CERTIFICATE
(Letter of Credit Paragraph 4)
To: Westdeutsche Landesbank Girozentrale
New York Branch
1211 Avenue of the Americas, 24th Floor
New York, New York 10036
Attn: Trade Services Group
The undersigned, duly authorized representative of
[Indenture Trustee], beneficiary under that certain Irrevocable
Letter of Credit No. __________ dated __________ (the "Letter
of Credit") issued by Westdeutsche Landesbank Girozentrale, New
York Branch, hereby certify as follows:
1. [The first Payment Date after the Exchange Date
has occurred.] [The date 30 days after the Cut-
off Date has occurred.]*
2. The Stated Amount is reduced to zero and the
Letter of Credit is returned herewith to
Westdeutsche Landesbank Girozentrale, New York
Branch.
Capitalized terms used herein and not otherwise
defined herein shall have the meanings given to them in the
Letter of Credit (including Schedule I thereto).
IN WITNESS WHEREOF, the undersigned have executed this
Certificate as of ____________________, 19__.
[Indenture Trustee]
By________________________________
[Name and Title of Authorized
Representative of Indenture Trustee]
By________________________________
[Name and Title of Authorized
Representative of Indenture Trustee]
* Insert appropriate language.
Exhibit 4.g
COLLATERAL AGREEMENT (Trust _____)
THIS COLLATERAL AGREEMENT (Trust ____), dated
as of March 1, 1994 (this "Agreement"), between First
Security Bank of Utah, National Association, not
individually but solely as Owner Trustee (the "Owner
Trustee") and NationsBank of Georgia, National
Association, as Indenture Trustee. Capitalized terms
used but not defined herein shall have the respective
meanings set forth in or pursuant to Section 1 hereof.
WHEREAS, pursuant to the Sales Agreement, the
Owner Trustee has purchased the Aircraft at the
Purchase Price, with the Purchase Price being payable
on the Commencement Date by the Owner Trustee.
WHEREAS, pursuant to the Modification
Agreement, the Owner Trustee has contracted for
modification of the Aircraft at the Modification Cost,
with the Modification Cost being payable by the Owner
Trustee on the Commencement Date.
WHEREAS, pursuant to the Parts and Services
Agreement, the Owner Trustee has contracted for
certain parts and services relating to the Aircraft at
the Parts Cost, with the Parts Cost being payable on
the Commencement Date.
WHEREAS, pursuant to the Agreement to Lease,
on the Commencement Date for the Aircraft, the
Aircraft is to be leased by the Owner Trustee to
Federal Express Corporation (the "Lessee") under the
Lease.
WHEREAS, pursuant to the Participation
Agreement, on the Closing Date the Owner Trustee
intends to issue and deliver to the Indenture Trustee
for authentication, and the Indenture Trustee intends
to authenticate and deliver to the Pass Through
Trustee, one or more Certificates, the aggregate
proceeds of which are to be used, among other things,
to finance a portion of the aggregate amount of the
Purchase Price, the Modification Cost and the Parts
Cost.
NOW, THEREFORE, in consideration of the
mutual covenants and agreements set forth herein, and
in order to provide additional collateral for the
Secured Obligations, the parties hereto agree as
follows:
SECTION 1. Definitions. The following terms
shall have the meanings set forth for such terms
below. Capitalized terms used but not defined herein
shall have the respective meaning set forth in
Schedule II hereto.
Collateral. All Liquid Collateral and Demand
Note Collateral.
Collateral Account. The deposit account
established and maintained pursuant to Section 3
hereof.
Demand Note Collateral. The Demand Notes
together with proceeds thereof.
Demand Note Collateral Account. Any separate
account established pursuant to Section 4(b) hereof.
Eligible Deposit Account. Either (a) a
segregated account with an Eligible Institution or (b)
a segregated trust account with the corporate trust
department of a depository institution with corporate
trust powers organized under the laws of the United
States or any state thereof, or the District of
Columbia, and whose deposits are insured by the
Federal Deposit Insurance Corporation, provided that
such institution also must have a combined capital and
surplus of at least $100,000,000 and a rating of A or
better from the Thomson Bank Watch.
Eligible Institution. A depository
institution organized under the laws of the United
States or any one of the states thereof, or the
District of Columbia, or any domestic branch of a
foreign bank, which in any such case at all times (a)
has either (x) a long-term unsecured debt rating of at
least Aa2 by Moody's or (y) a short-term certificate
of deposit rating of P-1 by Moody's, (b) has either
(x) a long-term unsecured debt rating of a least AA by
S&P or (y) a short-term certificate of deposit rating
of A-1+ by S&P and (c) is a member of the Federal
Deposit Insurance Corporation.
Extended Pre-Funding Period. The period from
the Scheduled Commencement Date to (and including) the
earlier of the Exchange Date and any Pre-Funding
Prepayment Date.
Liquid Collateral. All amounts deposited
from time to time in the Collateral Account and all
the products and proceeds of the foregoing, including,
but not limited to, all proceeds of the investment or
conversion thereof, voluntary or involuntary, into
cash, Specified Investments or other property, all
rights to payment of any and every kind, and other
forms of obligations, and instruments and other
property which at any time constitute all or part or
are included in the proceeds of any of the foregoing.
Partial Draw. Any draw under the Letter of
Credit contemplated by Section 6(b) or 6(d) hereof.
Partial Draw Amount. The amount drawn
pursuant to any Partial Draw.
Scheduled Pre-Funding Period. The period
from the Closing Date to (and including) the Scheduled
Commencement Date.
Specified Investments. Any of the following:
(a) direct obligations of the United States of
America, and (b) obligations fully guaranteed by the
United States of America.
SECTION 2. [Intentionally Omitted]
SECTION 3. Collateral Account. (a)
Establishment of the Collateral Account. The
Indenture Trustee shall establish, or cause to be
established, with itself or its designee, in its name
as secured party hereunder an Eligible Deposit Account
entitled "NationsBank of Georgia, National
Association, as secured party under the Trust
Indenture and Security Agreement (Federal Express
Corporation Trust ______) dated as of March 1, 1994,
with the Owner Trustee referred to therein".
(b) Maintenance of the Collateral Account.
If at any time the Collateral Account ceases to be an
Eligible Deposit Account, the Indenture Trustee shall
within 10 Frankfurt Business Days, establish a new
Collateral Account meeting the conditions specified in
the definition of Eligible Deposit Account, and shall
transfer any cash or any investments in the Collateral
Account to such new Collateral Account.
(c) Control of Collateral Account. The
Indenture Trustee shall have exclusive dominion and
control of the Collateral Account and all funds
therein, and shall make withdrawals from the
Collateral Account only in accordance with this
Agreement.
SECTION 4. Deposits and Delivery of
Collateral. (a) Liquid Collateral. On the Closing
Date, the Owner Trustee shall deposit, or shall cause
the deposit of, the Net Proceeds into the Collateral
Account, and the Indenture Trustee shall notify the
Owner Trustee upon receipt thereof.
(b) Demand Note Collateral. On the Closing
Date, the Owner Trustee shall deliver to the Indenture
Trustee the Demand Notes, in suitable form for
transfer by delivery, endorsed and assigned serially
by each holder thereof to the Indenture Trustee, or
accompanied by duly executed instruments of transfer
or assignment in blank, all in form and substance
satisfactory to the Indenture Trustee. Any funds
constituting Demand Note Collateral, including any
amounts paid pursuant to demands contemplated by
Section 6 hereof, shall be deposited into an Eligible
Deposit Account entitled "Demand Note Collateral
Account, NationsBank of Georgia, National Association,
as secured party under the Trust Indenture and
Security Agreement (Federal Express Corporation Trust
_____) dated as of March 1, 1994, with the Owner
Trustee referred to therein", to be opened by the
Indenture Trustee at the first time of its receipt of
any such funds. The Indenture Trustee shall have
exclusive dominion and control of any such Demand Note
Collateral Account and funds therein, and shall make
withdrawals from such Demand Note Collateral Account
only in accordance with this Agreement.
SECTION 5. Investment of Funds on Deposit in
the Collateral Account. (a) Specified Investments.
Funds deposited in the Collateral Account shall be
invested and reinvested by the Indenture Trustee, at
the risk of the Owner Trustee, in Specified
Investments selected by the Indenture Trustee in
accordance with Section 5(b) below; provided, however,
that if Specified Investments meeting the requirements
of Section 5(b) below are not available on any day on
which funds are to be invested as contemplated by the
preceding provisions of this Section 5(a), the
Indenture Trustee may leave such funds overnight in
the Collateral Account. The Indenture Trustee shall
maintain possession of the negotiable instruments or
securities, if any, evidencing such Specified
Investments and, in the case of any Specified
Investments in book-entry form, such Specified
Investments shall be credited to an account of the
Indenture Trustee or its designee with the applicable
clearing agency designated by the Indenture Trustee.
All proceeds of and any income, interest and other
payments and distributions on or with respect to any
Specified Investments shall be deposited in or
credited to the Collateral Account and thereafter
shall be held, invested and applied by the Indenture
Trustee in accordance with this Agreement. The
Indenture Trustee shall notify the Owner Trustee of
any losses incurred on Specified Investments in the
Collateral Account.
(b) Maturity of Specified Investments. On
the Business Day immediately following the Closing
Date, the Indenture Trustee shall invest the amount
deposited in the Collateral Account pursuant to
Section 4(a) hereof in the Specified Investments
set forth in Schedule I hereto; provided, however,
that if any amount remains on deposit after investment
in the Specified Investments set forth in Schedule I
hereto, such remaining amount shall be invested in
other Specified Investments which mature on or prior
to the first Payment Date after the Closing Date. Such
Specified Investments shall be held through maturity,
which Specified Investments shall mature on or prior
to the Scheduled Commencement Date. Any Specified
Investments made after the Closing Date but during the
Scheduled Pre-Funding Period shall mature on or prior
to the earliest of the next subsequent Payment Date,
any Pre-Funding Prepayment Date and the Scheduled
Commencement Date. Any Specified Investments made on
or after the Scheduled Commencement Date but during
any Extended Pre-Funding Period shall mature on or
prior to (i) if a Commencement Date has been proposed
pursuant to a Delivery Notice under Section 3.01 of
the Participation Agreement, such proposed
Commencement Date (or if such Commencement Date is
postponed pursuant to a Delivery Notice under
Section 3.02 of the Participation Agreement, the
rescheduled Commencement Date specified therein), or
(ii) if no such Delivery Notice has been given, the
earliest of the next subsequent Payment Date, any Pre-
Funding Prepayment Date and the Cut-off Date. Any
Specified Investments made on or after the Exchange
Date shall mature on or prior to the next subsequent
Payment Date.
SECTION 6. Calculations, Letter of Credit
Draws and Demand Note Collections. (a) Scheduled
Pre-Funding Period Debt Service. No later than
9:00 A.M., New York time, four Frankfurt Business Days
prior to each Payment Date during the Scheduled Pre-
Funding Period (except for any such Payment Date on a
Pre-Funding Prepayment Date, in which case Section
6(c) hereof shall apply), the Indenture Trustee shall
determine the lower of (x) the amount of cash expected
to be in the Collateral Account on such Payment Date
(giving effect to any income from or proceeds of any
then-existing Specified Investments scheduled to
mature prior to such Payment Date) and (y) the excess
of the amount of cash expected to be in the Collateral
Account on such Payment Date (giving effect to (1) any
income from or proceeds of any then-existing Specified
Investments scheduled to mature on or prior to the
Scheduled Commencement Date and (2) any payment to be
made on any other Payment Date prior to the Scheduled
Commencement Date) over the Debt Portion. The
Indenture Trustee shall, at or prior to such time of
determination, notify the Owner Trustee of (i) such
lower amount of (x) and (y) above and (ii) the
aggregate amount of interest due with respect to the
Certificates as of such Payment Date. If the amount
of clause (ii) above exceeds the amount of clause (i)
above, the Indenture Trustee shall demand the amount
of such excess pursuant to the Demand Notes.
(b) Extended Pre-Funding Period Debt
Service. No later than 9:00 A.M., New York time, four
Frankfurt Business Days prior to each Payment Date
during any Extended Pre-Funding Period (except for any
such Payment Date on a Pre-Funding Prepayment Date, in
which case Section 6(c) hereof shall apply), the
Indenture Trustee shall determine the excess of the
amount of cash expected to be in the Collateral
Account on such Payment Date (giving effect to any
income from or proceeds of any then-existing Specified
Investments scheduled to mature on or prior to such
Payment Date) over the Debt Portion. The Indenture
Trustee shall, at such time of determination, notify
the Owner Trustee of (i) such excess of the expected
amount over the Debt Portion and (ii) the aggregate
amount of interest and any Sinking Fund Redemption
Price due with respect to the Certificates as of such
Payment Date. If the amount of clause (ii) above
exceeds the amount of clause (i) above (any such
excess, the "Debt Service Shortfall"), the Indenture
Trustee shall draw the amount of the Debt Service
Shortfall pursuant to the Letter of Credit. If the
Debt Service Shortfall exceeds the amount then
available under the Letter of Credit, the Indenture
Trustee shall demand, pursuant to the Demand Notes,
the amount of such excess. For the purposes of the
first sentence of this Section 6(b), a Payment Date
shall be considered to be "during any Extended Pre-
Funding Period" if (x) it is to occur after the
Scheduled Commencement Date but before the Cut-off
Date and (y) the Exchange Date has not occurred prior
to the date that the determination referred to in such
sentence would otherwise be required.
(c) Pre-Funding Period Prepayments. No
later than 9:00 A.M., New York time, four Frankfurt
Business Days prior to the date of any prepayment of
the Certificates required pursuant to
Section 6.02(a)(vi) of the Indenture (a "Pre-Funding
Prepayment Date"), the Indenture Trustee shall
determine the amount of cash expected to be in the
Collateral Account on such Pre-Funding Prepayment Date
(giving effect to any income from or proceeds of any
then-existing Specified Investments scheduled to
mature on or prior to such Pre-Funding Prepayment
Date). The Indenture Trustee shall, at or prior to
such time of determination, notify the Owner Trustee
of (i) such expected amount and (ii) the aggregate
Prepayment Price due with respect to the Certificates
as of such Pre-Funding Prepayment Date. If the amount
of clause (ii) above exceeds the amount of clause (i)
above (any such excess, the "Prepayment Shortfall"),
the Indenture Trustee shall draw the amount of the
Prepayment Shortfall pursuant to the Letter of Credit.
If the Prepayment Shortfall exceeds the amount then
available under the Letter of Credit, the Indenture
Trustee shall demand, pursuant to the Demand Notes,
the amount of such excess.
(d) Debt Service on the First Payment Date
after the Exchange Date. No later than 9:00 A.M., New
York time, four Frankfurt Business Days prior to the
first Payment Date occurring after the Exchange Date
(unless Section 6(b) hereof shall be applicable to
such Payment Date), the Indenture Trustee shall
determine the amount of cash expected to be in the
Collateral Account on such Payment Date (giving effect
to any income from or proceeds of any then-existing
Specified Investments scheduled to mature on or prior
to such Payment Date). The Indenture Trustee shall,
at or prior to such time of determination, notify the
Owner Trustee of (i) such expected amount of cash and
(ii) the excess of (A) the sum of the interest and any
Sinking Fund Redemption Price due with respect to the
Certificates as of such Payment Date over (B) the
amount of Basic Rent due from the Lessee on such
Payment Date pursuant to the Lease. If the amount of
clause (ii) above exceeds the amount of clause (i)
above (any such excess, the "Accrued Shortfall"), the
Indenture Trustee shall draw the amount of the Accrued
Shortfall pursuant to the Letter of Credit.
SECTION 7. Withdrawals and Certificate
Payments; Release of Debt Portion. (a) Scheduled
Pre-Funding Period Debt Service. No later than 11:00
A.M., New York time, on each Payment Date as to which
Section 6(a) hereof shall be applicable, the Indenture
Trustee shall withdraw from the Demand Note Collateral
Account (to the extent of any demand made pursuant to
the last sentence of Section 6(a) hereof) and then
from the Collateral Account, and shall pay to the
Holders in accordance with Section 5.01(b) of the
Indenture, an amount equal to the aggregate amount of
interest then due with respect to the Certificates.
(b) Extended Pre-Funding Period Debt
Service. No later than 11:00 A.M., New York time, on
each Payment Date as to which Section 6(b) hereof
shall be applicable, the Indenture Trustee (i) shall
pay to the Holders in accordance with Section 5.01(b)
of the Indenture any Partial Draw Amount received by
the Indenture Trustee pursuant to a Partial Draw under
Section 6(b) hereof relating to such Payment Date and
(ii) shall withdraw from the Demand Note Collateral
Account (to the extent of any demand made pursuant to
the penultimate sentence of Section 6(b) hereof) and
then from the Collateral Account, and shall pay to the
Holders in accordance with Section 5.01(b) of the
Indenture, an amount equal to the excess of (A) the
aggregate amount of interest and any Sinking Fund
Redemption Price then due with respect to the
Certificates over (B) such Partial Draw Amount.
(c) Pre-Funding Period Prepayments. No
later than 11:00 A.M., New York time, on any Pre-
Funding Prepayment Date, the Indenture Trustee
(i) shall pay to the Holders in accordance with the
last sentence of Section 5.02(a) of the Indenture any
amount received by the Indenture Trustee pursuant to a
draw under the Letter of Credit pursuant to
Section 6(c) hereof and (ii) shall withdraw from the
Demand Note Collateral Account (to the extent of any
demand made pursuant to the last sentence of
Section 6(c) hereof) and then from the Collateral
Account, and shall pay to the Holders in accordance
with the last sentence of Section 5.02(a) of the
Indenture, an amount equal to the excess of (A) the
aggregate Prepayment Price then due with respect to
the Certificates over (B) such amount received
pursuant to such draw under the Letter of Credit.
(d) Payments after the Exchange Date. No
later than 11:00 A.M., New York time, on any Payment
Date as to which Section 6(d) hereof shall be
applicable, the Indenture Trustee (i) shall pay to the
Holders in accordance with Section 5.01(b) of the
Indenture, any Partial Draw Amount pursuant to a
Partial Draw under Section 6(d) hereof and (ii) shall
withdraw from the Demand Note Collateral Account (to
the extent of any demand made pursuant to the last
sentence of Section 6(d) hereof) and then from the
Collateral Account, and shall pay to the Holders in
accordance with Section 5.01(b) of the Indenture, an
amount equal to the excess of (i) the aggregate amount
of interest and any Sinking Fund Redemption Price then
due with respect to the Certificates over (ii) any
Basic Rent then due from the Lessee pursuant to the
Lease and such Partial Draw Amount.
(e) Release of Debt Portion on Exchange
Date. Subject to the satisfaction or waiver of the
conditions precedent to commencement of the Lease or
to the Indenture Trustee's obligations set forth in
Section 4 of the Agreement to Lease and Sections 4.02
and 4.03, as the case may be, of the Participation
Agreement (such satisfaction or waiver to be confirmed
by a certificate of the Owner Participant), on the
Exchange Date the Indenture Trustee shall release from
the Collateral Account (i) any Demand Note Collateral
then held by the Indenture Trustee and (ii) an amount
of Liquid Collateral equal to the lesser of (A) the
Debt Portion and (B) the amount actually in the
Collateral Account on the Exchange Date. Such amount
so released pursuant to clause (ii) above shall be
used to finance a portion of the Purchase Price, the
Modification Cost (or such greater amount as is then
payable by the Owner Trustee with respect to the
Aircraft pursuant to the Modification Agreement) and
the Parts Cost payable by the Owner Trustee as
contemplated by Section 3.03(ii) of the Participation
Agreement.
SECTION 8. Representations, Warranties and
Agreements of the Owner Trustee. (a) Representations
and Warranties. The Owner Trustee represents and
warrants that:
(i) except for the interests granted
hereby, the Owner Trustee is the owner and
holder of the Collateral free from any claim,
security interest, encumbrance, lien, charge,
or other right, title or interest of any
person; the Owner Trustee has full power and
lawful authority to enter into this Agreement
and to grant, transfer, pledge and assign the
Collateral to the Indenture Trustee and to
grant to the Indenture Trustee a first and
prior security interest therein as herein
provided, all of which have been duly
authorized by all necessary action; and
(ii) the Owner Trustee has not
heretofore pledged or signed any financing
statement or security agreement (other than
the Indenture) which covers any of the
Collateral.
(b) Further Assurances. The Owner Trustee
shall, at its own expense, take such actions and
execute such other writings as may be necessary or as
reasonably requested by the Indenture Trustee to
establish or perfect the security interest created or
purported to be created by the Indenture in the
Collateral and to assist the Indenture Trustee's
realization thereon. In the event of any default in
any execution by the Owner Trustee pursuant hereto,
the Indenture Trustee is authorized to execute any
writings as the Owner Trustee's agent and attorney-in-
fact. The Owner Trustee will not enter into or
execute any security agreement or any financing
statement covering the Collateral, other than those in
favor of the Indenture Trustee under the Indenture.
(c) Expenses. In the event the Indenture
Trustee shall incur or pay any taxes, assessments,
interests, costs, penalties or expenses incident to or
in connection with the holding, collection or
protection of the Collateral, or with the enforcement
of any obligation of the Owner Trustee hereunder, the
Owner Trustee shall pay to the Indenture Trustee the
full amount thereof upon demand, and so long as the
Indenture Trustee shall be entitled to any such
payment, this Agreement shall operate as security
therefor.
SECTION 9. Rights and Remedies of the
Indenture Trustee Upon Default. If an Indenture Event
of Default shall have occurred and shall be
continuing, or if the Owner Trustee shall have
defaulted in its obligation to pay any outstanding
Secured Obligation, the Indenture Trustee may exercise
any of the rights or remedies with respect to the
Collateral set forth in the Indenture.
SECTION 10. Standard of Care. The Indenture
Trustee may execute any of its duties hereunder by or
through agents or employees and shall be entitled to
retain or rely upon experts and to act in reliance
upon the advice of such experts concerning all matters
pertaining to the agencies hereby created and its
duties hereunder, and shall not be liable for any
action taken or omitted to be taken by it in good
faith in accordance with the advice of such experts.
The Indenture Trustee shall not be liable to the Owner
Trustee for any error of judgment or for any action
taken or omitted to be taken by it hereunder, or in
connection herewith, except for its own gross
negligence or willful misconduct; nor shall the
Indenture Trustee be responsible for the Specified
Investments (or any part thereof) or the performance
thereof, except for its own gross negligence or
willful misconduct. The Indenture Trustee shall be
entitled to rely on any communication, instrument,
paper or other document believed by it to be genuine
and correct and to have been signed or sent by the
proper person or persons. The Indenture Trustee shall
be deemed to have exercised reasonable care in the
custody and preservation of the Collateral if the
Collateral is accorded treatment substantially equal
to that which the Indenture Trustee accords its own
property.
SECTION 11. Termination. This Agreement and
the security interests created with respect to the
Collateral under the Indenture shall terminate upon
the earlier of (i) the payment in full of all Secured
Obligations and (ii) the Frankfurt Business Day after
the first Payment Date after the Exchange Date, at
which time the Indenture Trustee shall execute and
deliver to the Owner Trustee all documents which the
Owner Trustee shall reasonably request to evidence
termination of such security interest and shall return
physical possession of any Collateral then held by the
Indenture Trustee to the Owner Trustee.
SECTION 12. Miscellaneous. (a) Capacity in
Which Acting. Each of First Security Bank of Utah,
National Association (or its permitted successors or
assigns) and the Indenture Trustee acts hereunder not
in its individual capacity but solely as trustee
except as expressly provided herein and in the other
Operative Documents.
(b) Notices. Unless otherwise expressly
specified or permitted by the terms hereof, all
notices, requests, demands, authorizations,
directions, consents, waivers or documents provided or
permitted by this Agreement to be made, given,
furnished or filed shall be in writing and sent as
required pursuant to the Indenture, and shall be
effective as of the time specified therein.
(c) Severability. Any provision of this
Agreement 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 hereof, and any such prohibition or
unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in
any other jurisdiction.
(d) No Oral Modifications or Continuing
Waivers. No terms or provisions of this Agreement may
be changed, waived, discharged or terminated orally,
but only by an instrument in writing signed by the
party or other person against whom enforcement of the
change, waiver, discharge or termination is sought and
by any other party required to consent thereto
pursuant to Section 8.01 of the Indenture; and any
waiver of the terms hereof shall be effective only in
the specific instance and for the specific purpose
given.
(e) Successors and Assigns. All covenants
and agreements contained herein shall be binding upon,
and inure to the benefit of, each of the parties
hereto and the successors and permitted assigns of
each, all as herein provided. This Agreement and the
Collateral shall not be affected by any amendment or
supplement to the Trust Agreement or by any other
action taken under or in respect of the Trust
Agreement, except that each reference in this
Agreement to the Trust Agreement shall mean the Trust
Agreement as amended and supplemented from time to
time to the extent permitted thereby and by the
Indenture.
(f) Headings. The headings of the various
Articles and Sections herein are for the convenience
of reference only and shall not define or limit any of
the terms or provisions hereof.
(g) Governing Law; Counterpart Form. THIS
AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE. This Agreement may be
executed by the parties hereto 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.
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed this ___
day of March, 1994 by their respective officers
thereunto duly authorized and acknowledge that this
Indenture has been made and delivered in the City of
New York, and this Agreement shall be effective only
upon such execution and delivery.
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION,
not in its individual
capacity, except as
otherwise expressly
provided herein, but solely
as Owner Trustee
By: ______________________________
Title:
NATIONSBANK OF GEORGIA,
NATIONAL ASSOCIATION,
not in its individual
capacity, except as
otherwise expressly
provided herein, but solely
as Indenture Trustee
By: ______________________________
Title:
SCHEDULE I
[Specified Investments on the Closing Date]
Exhibit 23.c
CONSENT
I hereby consent to the reference to me under the
heading "Legal Matters" in the Preliminary Prospectus
Supplement dated February 23, 1994 and the Prospectus
Supplement dated March 16, 1994 relating to
$377,112,000 of Federal Express Corporation Pass
Through Certificates, Series A310-A1, A310-A2 and A310-A3.
In giving such consent, I do not concede that I am in the
category of persons whose consent is required under
Section 7 of the Securities Act.
FEDERAL EXPRESS CORPORATION
/s/ KENNETH R. MASTERSON
--------------------------
Kenneth R. Masterson
Senior Vice President
General Counsel
Dated: March 16, 1994
